Ch # 15 Marketing Essentials Flashcards
what is marketing approach?
Business success is achieved by providing goods or services to customers in a way that meets customer needs successfully
Customers will buy from the business entities that meet their needs most successfully.
so marketing approach is defined as the the aim of a business entity is to deliver products or services to customers in a way that meets customer needs better than competitors.
what are the customer needs?
customer preferes price of the products particularly when they cannot see any significant difference between the competing products.
if decision is not the price then customers needs are a
better-quality product
better design features
availability: not having to wait to obtain the product
convenience of purchase
the influence of advertising or sales promotions
what is marketing
In summary, marketing can be described as a process of:
1. identifying customer needs and wants
2. designing products or services that meet those needs and wants
3. creating a customer awareness of these products or services, and an understanding of how they meet those needs and wants (= an understanding of the value they provide)
4. creating a desire by potential customers to have the product or service
5. making the products or services available to customers through suitable channels of distribution
6. persuading customers to buy the product or service
IDACAP
identifying
designing
awareness
desire
availability
persuading
explain the product strategy
it is concerned with designing new products or new variations of existing products
three levels of product design
1. core product
reflects core customer value is the major reason the product is being bought for. such as cars for transport
- Actual product
where the core benefit is turned into an actual product. - Augumented Product
builds around the core value and the actual product, it refers to the additional services and benefits being offered along with the product.
*aspects of product design
Quality Rating Score of Football Club C.U.P
explain price strategy
customer expect the value for money therefore pricing is important aspect of marketing strategy
pricing can also be used for selling products or services such as
good credit terms and bulk purchase discounts
money back coupons
personal loans (terms of finance deals)
pricing strategy when new products are launch can be different as
market penetration price
market skimming price
explain the place strategy
Place strategy is concerned with getting products to the places where customers want to buy them.
This involves making products available all the time in the supermarkets and developing an adequate distribution channel
or delivering products to the customer’s home or office.
In case of export sales the choice of distribution network is very important for entities which do not have the foreign subsidiary or branches
Place strategy can also be used as the competitive advantage for example offering to sell the products at the place where rival companies do not use or reach.
explain the promotion startegy
Promotion is concerned with making the customer conscious of a product and wanting to buy it. There are several different aspects to promotion:
*Advertising(easy,quick/expensive)
*Sales promotions(persuasive in short term/expensive in penetrate in large market)
*Direct selling (personal selling). (highly effective/pressurising the customers)
*Sponsorship(brand awareness/expensive and counter productive)
*Public relations.(highly persuasive in awkward relation/harmful can be difficult to reverse)
explain the push and pull strategy in promotion strategy
push strategy is aimed at getting distributors to buy the product for resale in their supermarkets or other retail outlets. The aim is to ‘push’ the product through the distributor to the end consumer. To persuade distributors to buy its products, an entity will need to use a direct sales force, and use marketing tools such as low prices and generous credit terms to persuade the distributor to buy.
pull strategy is aimed at getting the end-consumer to want to buy the product, so that they expect their supermarkets or other retail store to have the product available. If consumers demand the product, distributors
will be more willing to stock it because they will expect to sell it easily. Advertising and sales promotions are an important element in a ‘pull’ strategy.
explain physical environment strategy
The physical environment can be an important element in the marketing mix for services, including retail services. Customers can be attracted to a sales location by the qualities of the environment. With internet shopping, the design and layout of the seller’s website can be a crucial factor in persuading visitors
to the site to make a purchase.
explain the poeple strategy
People’ is an important element in the sale of services and also some products. Customers will be loyal to
companies that serve them well and efficiently – in face-to-face dealings or in dealing with telephone queries by
call centre staff.
The quality of a service often depends on the people who provide it: the way they deal with customers, the
friendliness or concern that they show, and the promptness in dealing with customer requests.
explain the processes strategy
Processes are an element in the marketing mix for services. A customer might be attracted or deterred by the processes that he must go through to obtain service. Efficient processes can help to win business.
Processes involved in obtaining service might include receiving reminders, having to register, annual subscriptions and form filling. Internet technology can help to make these processes much more efficient and convenient for the customer.
explain the life cycle of product and its phases
A ‘life cycle’ is the period from birth or creation of an item to the end of its life. Products, companies and industries
all have life cycles
introduction phase
there is some sales demand but total sales are low. Firms that make and sell the product incur investment costs, and start-up costs and running costs are high. The product is not yet
profitable.
Growth Phase
total sales demand in the market grows at a faster rate. New entrants are attracted into
the market by the prospect of high sales and profits. At an early stage during the growth phase, companies in the market begin to earn profits.
Maturity Phase
Annual Sales remain stable opportunity for more growth no longer exists however the life of the product can be extended and profits can by increased by the differentiating the product.
Decline phase
Eventually, total annual sales in the market will start to fall. As sales fall, so too do profits. This leads to companies leaving the market, which continues until it is no longer possible for any company to turn a profit from the
product. When the last supplier exits the market the product lifecycle is complete.
what are the costs associated with each phase of the product life cycle?
Introduction phase
this includes the product development for which R&D and capital expenditures are needed and during the introduction into the market operating costs marketing and advertisement costs and set up or expansion of distribution channel is used.
Growth
Costs of increasing capacity
Maybe learning effect and economies of scale
Increased costs of working capital
Maturity
Incur costs to maintain manufacturing capacity
Marketing and product enhancement costs to extend maturity
Decline
Close attention to costs needed as withdrawal decision might be expensive
Withdrawal
Asset decommissioning costs
Possible restructuring costs
Remaining warranties to be supported
what are the benefits of product life cycle costing?
- potential profitability of products can be assessed before major development of the product is carried out and costs incurred.
- Techniques can be used to reduce costs over the life of the product.
- Pricing strategy can be determined before the product enters production.
- Attention can be focused on reducing the research and development phase to get the product to market as quickly as possible.
- By monitoring the actual performance of products against plans, lessons can be learnt to improve the performance of future products.
what role does product life cycle serve in strategic management?
Analysis of product life cycle can help in strategic decisions in the following ways
- Timing market entry and market exit
Entreprenurial companies might enter into the new market in introductory phase while more cautious companies will enter in growth phase and no company will enter the market in maturity phase. - Life cycle analysis as a technique for competition analysis
For assess the Number of competitors now and number of competitors in future will be influenced by the phase of product life cycle.
