MARKETING

Marketing

Marketing

is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing

Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling.

Marketing

Marketing is influenced by many of the social sciences, particularly psychology, sociology, and economics.

Marketing

is a complete process within the business which includes:

-Finding out what the customer wants – this is called market research and involves finding out what types of products are wanted (product policy) and what prices consumers are prepared to pay.

-Helping to produce the right product at the right price.

-Persuading customers to buy it – by means of advertising and packaging.

-Getting the product to the customer in the most convenient and efficient way – distribution.

Market research

Marketing

Marketing Mix contained 4 elements: product, price, place, and promotion.

Marketing

Product

: The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants.

-It involves decisions about the product’s quality, its style and design, the branding policy (what to call it and how to ensure that customers recognise the ‘brand name’), how to package it, and what guarantees to offer.

Marketing

Price

: This refers to the process of setting a price for a product, including discounts.

Marketing

Place:

This refers to the channel by which a product or service is sold.

Marketing

Promotion

: This includes advertising, sales promotion, publicity, and personal selling. Branding refers to the various methods of promoting the product, brand, or company.

Marketing

Marketing- product

Product policy

in marketing involves:

-Finding out what people want in a particular product and what they use it for.

-Deciding what the product should look like: this involves making sure that the design is not only up-to-date but that it is suitable for people to use.

-Making sure that the price is right for the people who the company thinks will be likely to buy the product.

-Getting the ‘slot’ in the market right with regard to other factors such as status.

Marketing- product

Product life cycle

Almost all products have a lifetime during which they are used.

-Firstly, the product will be very new to the market and only a few people will know about it.

-After a while the product will become widely known and, its producers hope, popular.

At the end of a product’s life it will become less popular and will be replaced by other newer products.

Marketing- product

The product variation

is a change of the product properties in timing, i.e. an "old" product is changed and replaced by a new.

Marketing- product

Product differentiation

(also known simply as "differentiation") is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as ones own product offerings.

Marketing-product

Product innovation

involves the introduction of a good or service that is new or substantially improved. This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use.

Marketing-product

Product elimination:

The removal of products from the PRODUCT PORTFOLIO once they have reached the decline stage of the life cycle. Usually the choice rests between immediate withdrawal and phasing it out slowly.

Marketing-product

A durable good or a hard good is a good which does not quickly wear out, or more specifically, it yields services or utility over time rather than being completely used up when used once.

Marketing-product

Perishable goods: the goods that can not last for a long time without going to be bad or decay.

Marketing-product

Convenience goods: Widely

distributed and relatively inexpensive goods which are purchased frequently and with minimum of effort, such as gasoline (petrol), newspapers, and most grocery items.

Marketing-product

Specialty good:

Item that is extraordinary or unique enough to motivate people to make an unusual effort to get it.

Examples are designer clothes, exotic perfumes, limited-edition cars, stunning designs, works of famous painters.

Marketing-price

Cost recovery pricing: setting the price to cover costs.

Costs

Direct costs

are costs to make the product including such things as raw materials, pay and energy (these can also be called Variable Costs). The direct costs increase as the amount produced increases and decrease as the amount decreases.

Indirect costs

(or fixed costs or overheads) are costs to provide the firm in which the product is to be made or, simply, for the firm to remain in existence. Indirect costs consist of rent for offices and factories, management salaries, and administrative costs. They are usually the same however many units of the product are made. 

Marketing-price

Penetration pricing

is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price.

Marketing-price

Price skimming

is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.

Marketing-place

—

Distribution channel: Path

or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer). A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer. Also called channel of distribution or marketing channel.

Marketing-place

Direct Sales:

a retail channel for the distribution of goods and services.

Marketing-place

—

Indirect sales through partners, is a strategic possibility for growth and incremental sales for vendors. Though invaluable, no direct sales force, can hope to achieve the same coverage and breadth of expertise as an effective channel partner network. For sustainable growth, vendors and distributors are looking beyond their internal resources to extend their sales opportunities with the right partners.

Marketing-promotion

—

Promotion involves disseminating information about a product, product line, brand, or company. Promotion is generally sub-divided into two parts:

—

Above the line promotion: Promotion in the media (e.g. TV, radio, newspapers, Internet and Mobile Phones in which the advertiser pays an advertising agency to place the ad

—

Below the line promotion: Much of this is intended to be subtle enough for the consumer to be unaware that promotion is taking place. E.g. sponsorship, product placement endorsements, sales promotion, merchandising, direct mail, personal selling, public relations, trade shows.

Marketing-promotion

 Promotional mix:

1 Advertising- Any paid presentation and promotion of ideas, goods, or services by an identified sponsor. Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and emails.

Marketing-promotion

 Promotional mix:

2 Personal Selling - A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation. Examples: Sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing. Can be face-to-face or via telephone.

Marketing-promotion

 Promotional mix:

3 Promotions- Incentives designed to stimulate the purchase or sale of a product, usually in the short term. Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions.

Marketing-promotion

 Promotional mix:

4 Public relations - Paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media. Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars.

Marketing

•

AIDA

•

USP

•DAGMAR

•

Symbolic pricing

•

Benefit claim

•

Pioneering advertising

•Competitive advertising

•

Retention advertising

Marketing

9. MIS.

10.Contest

11. Refund

12. Premium

13. Price-off

14. Coupon

o

PRICING

oQuestions to answer

1. What is the price you pay for your apartment?

-rent

2. What is the price you pay for your education?

-tuition

3. What is the price you pay to your doctor or dentist?

-a fee

4. What is the price you pay to the airline, taxi and bus companies?

-a fare

5. What is the price you pay for the local services?

-a rate

o

Questions to answer

6.What is the price you pay for the money you borrow?

-charges and interest

7. What is the price you pay for driving your car on a motorway?

-a toll

. What is the price you pay to the company that insures you?

-premium

9. What is the price you pay to the guest speaker?

-an honorarium

10. What is the price paid to the government official to help some character steal?

oQuestions to answer

8-a bribe

11. What is the price collected by the trade union?

-dues

12. What is the price you pay to your regular lawyer to cover his/her services?

-a retainer

13. What is the price of an executive?

-a salary

14. What is the price of a salesperson?

-a commission

15. What is the price of a worker?

-a wage

o

The role and perception of price

o

Price is the value that is placed on something.

oPrice is any common currency of value to both buyer and seller.

o

Price directly generates the revenues, serves as a communicator, a bargaining tool and a competitive weapon.

o

The customer’s perspective

o

Price represents the value they attach to whatever is being exchanged.

oIn assessing price, the customer is looking specifically at the expected benefits of the products:

o

The seller’s perspective

o

Profit

= Total revenue – Total cost

o

Total revenue

= Quantity sold *                         Unit price

oTotal cost

= Production cost +           Marketing cost + Selling cost

o

Psychological effects of price

o

Low price = negative statement about the product’s quality.

o

A sudden reduction in price of an established product = quality has been compromised.

oHigh price might actually attract customers.

o

External influences on pricing

•

Customers and consumers

•

Demand and price elasticity

•Channels of distribution

•

Competitors

•

Legal and regulatory framework

o

External influences on pricing

1. Customers and consumers

o

The bigger the area, the more discretion the marketer has in setting price.

o

External influences on pricing

2. Demand and price elasticity

o

Demand determinants

n

Changing consumer taste and needs

n

Recession

nCompetitors’ products and price

o

Price elasticity of demand

n

Sales respond to price variations: elastic.

n

Sales stable after price change: inelastic.

oExternal influences on pricing

3. Channels of distribution

oExternal influences on pricing

4. Competitors:

oMonopoly

: only 1 supplier - rare

o

Oligopoly

: a small number of powerful providers dominate the market.

o

Monopolistic competition

: competitors, each with differentiated product.

o

Perfect competition

: competitors, each with products undistinguishable - rare

oExternal influences on pricing

5. Legal and regulatory framework:

oWatchdog bodies

o

Internal influences on pricing

•Organisational objectives

•

Marketing objectives

•

Costs

o

Internal influences on pricing

1. Organisational objectives

o

Corporate strategy: target volume sales, target value sales, target growth, target profit figures

oMarket leader or niche

o

New entrant or established

o

Can be both short-term and long-term

o

Internal influences on pricing

2. Marketing objectives

o

Focus on specific target markets and the position desired with them.

oDepends on product’s life cycle:

n

Intro. stage

: lower price - invite trial

n

Growth & early maturity

: raise price

n

Late maturity & decline

: price reduction

oInternal influences on pricing

3. Costs

oTotal costs

include:

n

Operating and

n

Servicing costs

o

A product’s selling price generally represents:

nIts total cost (unit cost plus overheads), &

n

Profit or “risk reward”

o

The process of price setting

o

1. Pricing objectives

o

Financial objectives

: short/long-term

oSales and marketing objectives

n

Market share and positioning

n

Volume sales

n

Status quo: preserve the status quo – happy with current situation

oPrice war (undercutting), price matching, improve product / service / communication

o

Survival 

o

2. Demand assessment

o

Marketers need to assess demand levels for a product at any given price.

oThis involves a great deal of managerial skills as there are many variables.

o

3. Pricing policies and strategies

oNew product pricing strategies

n

Price skimming

: high price, then lower

n

Penetration pricing

: low price, then high up

o

Product mix pricing strategies:

nA product range starts with basic products, then price steps up with additional features

o

Managing price changes:

n

Price are not static because of competitive pressure, Cost inflation, new opportunities

o

4. Setting the price range

oThe cost-volume-profit relationship

n

Fixed costs

n

Variable costs

n

Marginal costs

nTotal costs

o

Setting the price range

n

Cost-based method

n

Demand-based method

nCompetition-based method

o

The cost-volume-profit relationship

o

Fixed costs

: do not vary with output in the short term (salaries, rent, etc.)

o

Variable costs

: vary according to the quantity produced (raw materials, etc.)

oMarginal costs

: change that occurs to total cost if 1 more unit is added

o

Total costs

: all the cost incurred

o

Breakeven analysis

: the point at which total revenue = total cost

o

A. Cost-based methods

oMark-up price = costs + profit

  (giá cộng lời vào vốn)

o

Cost-plus pricing = costs + fix %

(định giá có lãi)

o

Experience curve pricing

(định giá theo đường cong kinh nghiệm)

o

B. Demand-based pricing

o

When demand is strong, the price goes up; when it is weak, the price goes down.

oNeed a good understanding of the nature and elasticity of demand.

o

Psychological pricing: customer-based

n

Rely on the consumer’s emotive responses, subjective assessments and feelings.

n

Applicable to higher involvement products.

o

C. Competition-based pricing

o

Depends on:

nThe structure of the market

n

The product’s perceived value in the market

o

Can be:

n

Cost-leader

with price-oriented approach

nPrice-follower

bases on the going-rate for the product

o

5. Pricing tactics and adjustments

o

Price can vary to reflect specific customer needs, the market position.

oMarketers should set up a framework for pricing discretion.

o

Special adjustments can be made for short-term promotional purposes

o

Discounts, allowances, trade-in

o

Zoned