Principles of Marketing Lesson 02 Marketing Environment A companys - - PowerPoint PPT Presentation

Principles of Marketing Lesson 02

Marketing Environment

A company’s marketing environment consists of the actors and forces

• utside marketing that affect marketing management’s ability to build

and maintain successful relationships with target customers. (Philip Kotler -12th Edition)

Macro Environment

Marketing Environmental Framework

Micro Environment

Internal Environment

Marketing environment has 3 basic layers (levels) as shown below Forces

Political Economic Socio-cultural Technological Environmental Legal

Competitors Customers Intermediaries Suppliers Publics

To be successful, a marketer should monitor changes happening in the entire marketing environment Actors PESTEL factors

Marketing Mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. (Philip Kotler – 12th edition)

Marketing Mix

Marketing Mix/Tools

Product Price Place Promotion

Marketers need to

• ffer the right product

at right price in right channels (place) with right communication (promotion)

Marketing mix

Product Price Place Promotion People Process Physical Evidence

Extended Marketing Mix

Applicable for Services

EXTENDED MARKETING MIX ELEMENTS

Seven P’s might be better described as the seven C’s: Producers View (7P’s)

• Product
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence

Customers View (7C’s)

• Customer Value
• Cost
• Convenience
• Communication
• Consideration
• Co-ordination
• Confirmation

DEFINITION OF A PRODUCT

Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. (Philip Kotler – 12th Edition)

Product - Components

–Variety –Design –Quality –Features –Brand name –Packaging

Levels of Product

• Core Benefit - the fundamental need or want that consumers satisfy by consuming the

product or service

• Generic Product - a version of the product containing only those attributes or

characteristics absolutely necessary for it to function

• Expected Product - the set of attributes or characteristics that buyers normally expect

and agree to when they purchase a product

Potential Augmented Expected Generic Core

• Augmented Product
• inclusion of additional features, benefits, attributes or

related services that serve to differentiate the product from its competitors

• Potential Product
• all the augmentations and transformations a product might

undergo in the future

Products

Consumer Products

• Convenience products
• Shopping products
• Specialty products
• Unsought products

Industrial Products

• Convenience Products

These are relatively inexpensive and frequently purchased consumer

• products. The consumer puts little effort into the purchasing

decision and convenience takes priority over brand loyalty.

• Shopping Products

These are less frequently purchased consumer products that customers compare carefully on suitability, quality, price and style. This sort of purchase is usually only made after a good deal of advance planning and shopping around.

• Specialty Products

These are consumer products with unique characteristics or brand identification for which a significant group of buyers are willing to make a special purchase effort.

• Unsought Products. These are consumer products that the

consumer either does not know about or knows about but does not normally think of buying. Examples are life insurance, magazine subscriptions, encyclopedias, donations for charity and blood donations.

WHAT IS PRICE?

Price is the amount of money charged for a product or service, or the sum of all the values that consumers exchange for the benefit of having or using the product or service.

(Philip Kotler - 12th edition)

FACTORS TO CONSIDER WHEN SETTING PRICES

• Costs – Fixed costs, variable costs, marketing costs etc
• Demand
• Competition
• Marketing Objectives
• Government Regulation

• Cost Based/Internal oriented pricing
• Competitor-Based pricing
• Demand/Market Based pricing

PRICING STRATEGIES

DEMAND/MARKET BASED PRICING

• Price skimming
• Penetration pricing
• Psychological pricing
• Promotional pricing
• Value-based pricing

3.

• 3. Pla

Place ce (Di (Distribution) stribution)

The Role of Distribution To ensure that the products are available for customers at the right place, right time, in right quantities and in right conditions

Distribution is the process of making a product or service available for use or consumption by a consumer or business user, using direct means, or using indirect means using intermediaries.

Manufacturer Wholesaler Retailer Consumer

Manufacturer Agent Wholesaler Retailer Consumer

2-stage Channel 3-stage Channel

• Retailers
• Wholesalers
• Distributors
• Agents/Brokers
• Franchise
• Modern trade (supermarkets/Hypermarkets)
• Vending machines
• E-commerce (electronic retailing)

TYPES OF INTERMEDIARY

MARKET COVERAGE STRATEGIES

• INTENSIVE DISTRIBUTION
• SELECTIVE DISTRIBUTION
• EXCLUSIVE DISTRIBUTION

MARKET COVERAGE STRATEGIES

INTENSIVE DISTRIBUTION

Intensive distribution occurs when the product is placed in as many outlets as possible and no interested intermediary is barred from stocking the product. The key benefit to customer is that convenience and availability may be just around the corner. Example: convenience goods such as bread, newspapers, milk, soap, soft drinks etc.

SELECTIVE DISTRIBUTION

A more selective approach in using a small number of carefully selected

• utlets within a defined geographical area to distribute the products.

Example: shopping goods such as consumer durables, furniture, clothing etc which need a specialist retailer who might be expected to offer technical advice and after sales services.

EXCLUSIVE DISTRIBUTION

Exclusive distribution is the opposite of intensive distribution, and means that only one outlet is used in a relatively large geographical area to distribute the product. Example: specialty products of high value and prestigious. (higher image control) Mercedes, Rolex watches, Designer labels etc.

4.

• 4. P

Promoti

• motions
• ns

(C (Commun

• mmunication)

ication)

Marketing promotions are the means by which an organization attempts to inform, persuade (convince) and remind consumers – directly or indirectly – about the products it sells

Target Consumers

Remind Persuade Inform

MARKETING COMMUNICATION MIX ELEMENTS

• Advertising: Any paid form of non-personal presentation and promotion of

ideas, goods or services by an identified sponsor. (Philip Kotler)

• Sales Promotion: A variety of short-term incentives to encourage trial or

purchase of a product or service. (Philip Kotler)

• Public Relations: Building good relationships with the company’s various

publics by obtaining favorable publicity, building a good “corporate image” and handling or heading off unfavorable rumors, stories and events. (Philip Kotler)

• Personal Selling: Personal presentations by the firms sales

force for the purpose of making sales and building customer relationships. (Philip Kotler)

• Direct Marketing: Direct connections with carefully targeted

individual consumers to both obtain an immediate response and cultivate long term relationships. (Philip Kotler)

Print media – Newspapers, Magazines, directories Broadcast advertising – Radio, television, mobile phones Outdoor advertising – Billboards, posters Transport advertising – Buses, Trains Internet advertising – web based banners Cinema advertising – screen ads

AIDA MODEL

ATTENTION INTEREST DESIRE ACTION

The End Thank You