Market offer / Marketing mix Flashcards
7 P’s
Product
Price
Place / Distirbution
Promotion
Process
People
Physical Evidence
Basic model of product has three layers
Core product
Actual product
Augmented product
Core product is
The product itself
Actual product is
- Features
- Quality
- Styling
- Package
Augmented product is
- Installation
- Delivery
- Guarantee
- Brand
- Service
Why strong brands are important
- Company value
- Barriers to competition
- High profits
- Base for brand extensions
- Quality certification
- Trust
Four stages of the Product lifecycle
Introduction
Growth
Maturity
Decline
Strategic objectives in markets
Build (High growth rate, low-high market share)
Hold (low growth rate, high market share)
Harvest (High-low growth rate, low market share)
Divest (High-low growth rate, low market share)
Product strategiesfor growth, Existing markets + existing products =
Market penetration
Product strategiesfor growth, Existing markets + new products =
Product development
Product strategiesfor growth, New markets + existing products =
Market development
Product strategiesfor growth, New markets + new products =
Diversification
Three pricing methods
Cost-oriented (B2B)
Competitor-oriented (based on competitors)
Market-oriented (based on customers)
Cost-oriented pricing
- What does it cost to produce and sell?
- Full-cost or Direct-cost
- Minimum price
Competitor-oriented pricing
- Price set due to the influential competitors’ prices
- Going-rate (Most similar to perfect competition) or Competitive bidding
Market-oriented pricing
- Marketing strategy – New prods, in line with positioning. Old prods, in line with strategy
- Customer value – Trade off Analysis / Experimentation / Econ Value to the Customer
- Price-quality relationships – Relation ship between price and quality
- Product line pricing – Price in line with other products in the company’s prod line
- Negotiating margins
- Political factors – In line with public interest
- Costs
- Effects on supply-chain – Profits in all parts of a chain
- Competition – Many levels of competition
- Explicability – Can the price setting be explained
Price strategies for product launch: High price + high promotion =
Rapid skimming
Price strategies for product launch: High price + low promotion =
Slow skimming
Price strategies for product launch: Low price + high promotion =
Rapid penetration
Price strategies for product launch: Low price + low promotion =
Slow penetration
Conditions for charging a high or low price
High price:
* Product provide high value
* Customers have high ability to pay
* Lack of competition
* Excess demand
Low price:
* Only alternative
* Market penetration or domination
* Experiece curve effects / low costs
* Make money later
* Make money else where
Functions of channel intermediaries (retailers, wholesalers)
- Reconciling the needs of producers and consumers
- Improving efficiency
- Improving accessibility
- Providing specialist services
Distribution channels for consumer goods
Producer
Agent
Wholesaler
Retailer
Consumer
Distribution channels for B-2-B
Producer
Agent
Distributor
Bussiness customer
Distribution channels for services
Service provider
Agent
Consumer or business customer
Pull or Push system means
Pull – Work with the “consumers” demand
Push – Work with the distributors wish to sell
Channel strategy three components
Channel selection
Distirbution intensity - Intensive, selective, exclusive
Channel integration - Conventional, franshising, ownership
In advertising, AIDA means
Attention
Information
Desire
Action
Communications Decisions for promotional campaign
- Identify target audience
- Set communication objectives
- Create messages
- Decide on promotional mix
- Set the budget
Promotional mix is the
Combination of marketing channels we choose to use
Examples of mass marketing
Advertising
Public relations
Sales promotion
Examples of direct marketing
Personal selling
Exhibitions
Direct mail
Telemarketing
Email marketing
Example of digital marketing
Digital promotions
social media communications
Search engine marketing
Influences on the promotion mix
- Available resources
- Push or pull strategy
- Buyer readiness stage – where in the decision process
- Product life cycle
- Product characteristics
- Market size and concentration
Characteristics of services
Inseparability - Simultaneous production and consumption
Intangibility - Pure services cannot be seen, tasted, touched, or smelled
Perishability - Cannot be stored, hard to match supply/demand
Variability - Execution is dependant on the person who performs the service
Four causes of poor perceived service quality
Misconception - We don’t understand what the customer expects
Inadequate resources - We don’t/can’t provide resources to meet customer expectations
Inadequate delivery - We deliver poor or inconsistent service quality
Exaggerated promises - We promise more than we can deliver
Managing service productivity is a balance between productivity (P) and quality (Q).
However, there are ways to improve P without compromising Q
Technology
Customer involvment in production
Balancing supply and demand
Managing service staff
- Selection of suitable people
- Empower staff
- Maintain a motivated workforce
- Evaluate services
Staff-customer interpersonal relationships is key
Staff can provide vital input for R&D
People who stop buying a service, do it because of staff being indifferent or unhelpful
Triangle/Pyramid of Service Marketing
Company
Employees
Customers
(Technology)
Value should be created…
..at every point where a customer touches a firm
Benifits of successful relationship for company
- Increased purchases
- Lower cost
- Lifetime value of a customer
- Sustainable competitive advantage
- Word of mouth
- Employee satisfaction and retention
Benifits of successful relationship for customer
- Risk and stress reduction
- Higher-quality service
- Avoidance of switching costs
- Social and status benefits
Channel management
issues to adress (5)
Selection
Motivation
Training
Evaluation
Managing conflict
Business to business marketing (B2B) is characterised by
Few actors (long term relationshiops)
Each market is unique
Complexity of buying is often high.
E-commerce is common.
Risks and uncertainty affects the buying decision
Often very specific requirements apply
Prices are negotiated
Derived demands
