fundamentals of marketing new[1],venky1

8/9/2019 Fundamentals of Marketing New[1],Venky1

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Marketing

Buzzwords of confusion

Sales versus Marketing

Market Research &Marketing Research

Event Marketing

SWOT, PEST, KPIs,

USPs, DINKYs etc


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As Event Managers,

why is it important we understandwhat Marketing is?


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Interactive

Media

Radio

Television

OutdoorPrint

Media

Internet

Below

the line

Events

Important Part of the Marketing Tactics


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Example of Events in Marketing

The PepsiChallenge has beenan ongoingmarketing promotion

run by PepsiCo forthe last 2 decades

1980s PepsiChallenge built

around a premisethat had to beestablished live


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The challenge takes the form of a taste test. At publiclocations, a Pepsi representative sets up a table with twoblank cups, one containing Pepsi and one with Coke.

Shoppers are encouraged to taste both colas, andcorrectly identify which is Pepsi and which is Coke. If

they can correctly identify the two, they win a prize.

Example of Events in Marketing


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Events within Marketing

Marketing(A Philosophy)

Events

The Marketing Mix (Tactics)

Product Price Place Promotion People Physical

Evidence

Process


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Agenda

Marketing What is it?

The Marketing Mix

The Environment The Marketing Plan

The Promotion Focus

Events (Face to Face Communication)


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What is Marketing ?


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The agrarian economy was largely self sufficientand trade was mostly through barter

The industrial revolution in early 19th centurysuddenly created surplus putting pressure onmanufacturers to find markets that could absorbthe produce

The need for labeling the produce, brands,trademarks and patents gradually began to

come in Mid 19th Century traveling salesman to

organized distribution

Marketing History


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The Sales Era lasted till the 2nd world war

Post war boom started the consumeristwave money in the hands of people, andlarger number of enterprises makingsimilar products

Product proliferation made business very

competitive It was this that paved the way for

Marketing

Marketing History


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Orientation Stages

Production Oriented

Firms tend to manufacture and offergoods that they are good at producing

Sales OrientedThe Hard Sell, firms now realise thatdue to competition the goods have tobe sold. Sales volume becomes themost important criterion

Marketing Oriented

The firm ascertains the genuine needsand wants of specifically defined targetmarkets and then produce goods andservices that satisfy the customerrequirements


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Marketing Some Descriptions

Marketing is a human activity directed at

satisfying human needs and wants

through exchange process

The customer is always right

The right product, in the right place, at the

right time, at the right price


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Marketing Definitions

Marketing is the management process whichidentifies, anticipates and supplies customerrequirements efficiently and profitably

Chartered Institute of Marketing

Marketing is the process of planning andexecuting the conception, pricing, promotion,

and distribution of ideas, goods and services tocreate exchanges that satisfy individual andorganizational objectives

American Marketing Association


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Sales process beginswith the producer

Based on what theproducer can make

Seller defines the price

Focus on finding buyersand selling them anyhow

The sale is the end of thetransaction

Product attributes static,as long as it sells

Marketing begins with theconsumer

Based on consumer needsand wants

Market demand decides

Focus on matching consumer

needs with product attributes The sale is the beginning of

the transaction relationship

Products must adapt to

changing customer trends


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Marketing is involved with the planning of

the presentation of the firms capabilities;

whereas Sales is the execution of the transfer or

exchange of the product, good or

service.


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Marketing is a strategic function and has anumber of tactical activities, of which selling isone.

The primary function of sales is to find andclose leads, turning prospective customers inactual ones

Sales definitionIncome (at invoice values) received for goodsand services over some given period of time


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Presentation Status


The Marketing Mix


The Promotion Focus



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The Marketing Mix


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The Marketing Mix The 4 Ps

The variables that the marketing manager can control in

order to best satisfy customers in the target market

Target

Market

2. Price

1. Product

4. Promotion

3. PlaceThe physical product

or service offered to

the consumer.

Channels of distribution

to get the product to the

consumer.

Producer-Wholesaler-

Retailer-Customer

Financial aspects of the

process; price levels,

profit margins etc.

The communication and

selling to potential

customers


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The Extended Marketing Mix

5. People

Employees are in direct

contact with customers

and therefore must be

considered the in the

developing the

marketing mix


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6. Physical Evidence

Service has an

intangiblecharacteristic, thereforeimportance is placed onmore tangible elementsof the service mix such

as facilities andequipment.


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7. Process

How the service is

provided is important.Procedures for dealingwith customers at thepoint of contact, and the

supply of a consistentquality service must bepre-planned andmanaged


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Presentation Status


The Marketing Mix


The Promotion Focus



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The Environment


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Components of Communication

Encoder Decoder

Channel

Message


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Organisational Buying Process

Need recognition

Determine specification (general)

Determine specification (specific)

Search

Evaluation

Selection

Post-purchase evaluation


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Comsumer Buying Process


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Market Analysis PEST A framework to scan the external macro-

environment in which a firm operates

Price

Product

Promotion

Place

Company Economic

Socio-Cultural

Techno-

logical

Political


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Target Markets

One of the reasons why marketing arose was

because of the diversity of markets and complex

human needs and wants

As competition increased and more producersstarted producing similar goods, the need to

carve out exclusive niches arose

This could be done by changes to the product

DIFFERENTIATION, or to the market definitions

- SEGMENTATION


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Segmentation & Targeting

If segmentation is about breaking up a massmarket into more specific subsets, targeting is allabout the decisions to appeal to them

Treating them all as one large group with acommon interest is called UNDIFFERENTIATEDmarketing

Selecting one small niche and catering to thatsegment is called CONCENTRATED marketing

Identifying several unique subsets and talking tothem individually is called DIFERENTIATEDmarketing


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Why Segment?

Better matching of customer needs

Enhanced profits, margins for the business

Better opportunities for growth Retain loyalty of customers

Targeted marketing communications

Gain share in the segment


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Some Examples of Profiles

Ultra Conservative - don't rock the boat, whatever they purchase

must be consistent with their current way of doing things.

Conservatives - are willing to change, but only in small increments

and only in a very cost effective manner.

Liberals - regularly looking for new solutions, willing to makechange (even major change) if the benefit can be shown.

Technical Liberals - enamored with the benefits provided by high

tech solutions and any purchase decision will be biased by the

technical content of the offering.

Self Helpers - consistently defines/designs solutions to theirproblems, likes to acquire tools that help in the innovation process.


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The Road to the Market

To get a product or service to the right

person or company, a marketer would

firstly

1. segment the market,2. then target a single segment or series of

segments,

3. and finally position within the segment(s)


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1. Market Segment

Segmentation is essentially the identification of subsets ofbuyers within a market who share similar needs and whodemonstrate similar buyer behavior.

by geography region, climate, population density andgrowth

by demographics - such as age, gender, occupation,income, education and family status

by psychographics - such as values, lifestyle or beliefs

by behaviour such as class, brand loyalty, pricesensitivity


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2. Targeting the Market

After the market has been separated intoits segments, the marketer will select asegment or series of segments and 'target'

it/them

It's like looking at a dart board or ashooting target. You see that it has areas

with different scores - these are yoursegments. Aiming the dart or the bullet ata specific scoring area is 'targeting'


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2. Targeting the Market (cont)

Eg. The Car Industry


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Eg. Rolls Royce


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Eg. Washing Powder


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3. Position in Market

After segmenting a market and then targeting aconsumer, you would proceed to position aproduct within that market

Positioning is all about 'perception

Products or services are 'mapped' together on a

'positioning map'. This allows them to becompared and contrasted in relation to eachother


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EG. Automotive

Positioning Map

3. Position in Market (cont)


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Presentation Status


The Marketing Mix


The Promotion Focus



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The Marketing Plan


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Marketing Plan

Marketing plans are vital to marketing

success. They help to focus the mind of

companies and marketing teams on the

process of marketing i.e. what is going to

be achieved and how we intend to do it.


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The Marketing Plan (cont)

The key stages of the plan are contained

under the acronym AOSTC

1. Analysis

2. Objectives

3. Strategies

4. Tactics

5. Control.


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1. Analysis

The environment (PEST) Internal Audit

Competitors

SWOT


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SWOT ANALYSIS

A tool for identifying and analysing the (internal)strengths and weaknesses of a corporation and the

(external) opportunities and threats.

Strong brand / reputation

Industry expertiseNatural resources

Patents

New product / service

Location

Quality process or procedure

Developing marketMergers or strategic alliances

Moving into new attractive market segments

New international markets

Loosening of regulations

Removal of international trade barriers

Market is led by weak competitor

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

Poor quality of goods or service

Damaged reputationLack of marketing expertise

Location of business

Competitors have superior resources

Weak HR and personnel

New competitor in home marketPrice war

Innovative product/service from competitor

New regulations

Increased trade barriers

Taxation on product / service


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2. Objectives (SMART) Specific

Be precise about what you are going to achieve

MeasurableQuantify you objectives

Achievable

Are you attempting too much?

RealisticDo you have the resource to make the objective happen (men,

money, machines, materials, minutes)?

Timed

State when you will achieve the objective (within a month? By

February 2010?)


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3. Strategies

Describe your target market.

Which segment?

How will we target the segment?

How should we position within the segment?

Define the segment in terms of demographics and lifestyle

Show how you intend to 'position' your product or service

within that segment. Use other tools to assist in strategic

marketing decisions such as Boston Matrix, Ansoffs Matrix


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4. Tactics

Convert the strategy into the marketing mix (4 ps)marketing

mix. These are your marketing tactics.

PRICE. Will you cost plus, skim, match the competition or

penetrate the market?

PLACE. Will you market direct, use agents or distributors?

PRODU

CT Sold individually, as part of a bundle, in bulk?PROMOTION Which media will you use? e.g sponsorship,

radio advertising, sales force, point-of-sale, etc? Think of

the mix elements as the ingredients of a 'cake mix


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5. Control

Remember that there is no planning withoutcontrol. Control is vital.

Start-up costs

Monthly budgets

Sales figure

Market share data

Monitor and Evaluate plan


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Marketing Budgets

Gear your marketing efforts to the most cost effectiveuse

Budgets include everything from equipment investmentsto soft company support of community events

Keys areas could be: (mix) Advertising; public relations Product packaging

Sales force / commercial incentives

Marketing budget should anticipate results; internallysell the expenditures for each piece; support most

important objectives Some marketing organizations have P/L responsibility

You cant make a buck, without spending a buck


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Campaign Framework

Marketing

Communication

Objectives &

Strategy

Marketing

Communication

Tactics

Campaign

Implementation

Campaign

Evaluation &

Control

Specific

Measurable

Short Term

Targets

Budgets

Creative

Media selection

Below the linepromotions

Sales forcePublic relations

Distributionchannels &management

National Launch orsmaller scalecampaign


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Presentation Status


The Marketing Mix


The Promotion Focus



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The Promotion Focus


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Events within Marketing

Marketing(A Philosophy)

Events

The Marketing Mix (Tactics)

Product Price Place Promotion People Physical

Evidence

Process


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Push & Pull Marketing Strategies

PUSH

Marketing efforts

targeted at the

middlemen and the

salesforce

PULL

Marketing efforts

targeted at consumers

Cash discounts

Dealer competitions

Salesforce cash incentives

Direct Mail shots

Credit facilitiesTrade Exhibitions & Events,

Demonstrations

Training schemes

Price reductions,

Coupons

Free samples/demos in

stores

Competitions

Buy one get one free,

Packaging,

Point of Sale displays,

ConsumerAdvertising

Sponsorship

CHANNELS

OF

DISTRIBU

TION


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The Promotion Cake The basic ingredients are always the same. However if you vary the amounts ofone of the ingredients, the final outcome is different. You can 'integrate' different

aspects of the promotions mix to deliver a unique campaign cake.

Personal

Selling

Advertising

PR

Direct

Mail

Sales

Promotion

Events

Sponsorship

Personal

Selling

Advertising

PR Direct

Mail

Sales

Promotion

Events

Sponsorship


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Advertising

Advertise make knownTo inform

An advertisement to be successful;

Must be seen Must be read

Must be believed

Must be remembered Must be acted upon


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Presentation Status


The Marketing Mix


The Promotion Focus In progress



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Presentation Status


The Marketing Mix


The Promotion Focus In progress



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Marketing Plan Example


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Presentation Status


The Marketing Mix


The Promotion Focus



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Events

(Face to Face Communication)


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An Overview of Events

Events

Award Ceremonies

Carnivals

Concerts

Conferences

Corporate Events

Exhibitions

Festivals Fashion Shows

Product Launches

Promotions

Road Shows Seminars

Sporting Events

Trade Fairs


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Award Ceremonies


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Carnivals


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Concerts


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Conferences


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CarLaunch


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Exhibitions


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Festivals


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Fashion Show


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Opening Ceremony


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Product Launch


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Sporting Event


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Tourist Events


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Weddings


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Presentation Status


The Marketing Mix


The Promotion Focus



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Brand

Building

Events

Product

Displays

Brand

Awareness

Merchandising

Promotions

PR

DriverEntertainment

Brand

Building

Brand

PositioningVisibility

Personal

Selling

Tangible

Sales

Research &

Planning

Brand

Communication Product

Sampling


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Event Communication

Advantages

Clean and customer direct

Direct benefit to the user (even enjoyment)

It is suggested that the advertising arena

(while growing in terms of size) is slowing

down and being replaced by the Face-to-facestyle medium of communication.


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Marketing Dictionary

Above the Line Advertising for which a payment is made and forwhich commission is paid to the advertising agency. See also'below the line' and 'push versus pull promotion

Advertising Promotion of a product, service, or message by an

identified sponsor using paid-for media.

Brand The set of physical attributes of a product or service,together with the beliefs and expectations surrounding it - aunique combination which the name or logo of the product orservice should evoke in the mind of the audience.

Brown Goods Electrical goods such as TVs, videos, stereosystems etc, used for home entertainment. So called becausethey were originally cased in bakelite, a brown plastic.


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Buzz marketing uses 'word-of-mouth' advertising: potentialcustomers pass round information about a product. See also 'viralmarketing

Channels The methods used by a company to communicate and

interact with its customers

Copyright The law that protects an author's original material,usually (in the UK) for 70 years after the author's death. Similarlaw covers logos and brand names

Copywriting Creative process by which written content isprepared for advertisements or marketing material


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Customer Relationship Management (CRM) The coherentmanagement of contacts and interactions with customers. (Thisterm is often used as if it related purely to the use of IT, but ITshould in fact be regarded as a facilitator of CRM.)

Decision MakingUnit (DMU) The team of people in anorganisation who make the final buying decision

Differentiation Ensuring that products and services have aunique element to allow them to stand out from the rest

DINKYDouble Income No Kids Yet - a demographic grouping


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Direct Marketing All activities which make it possible to offergoods or services or to transmit other messages to a segment ofthe population by post, telephone, e-mail or other direct means

Electronic Point of Sale (EPOS) System A system whereby

electronic tills are used to process customer transactions in aretail outlet

Endorsement Affirmation, usually from a celebrity, that a productis good

FMCG Fast Moving Consumer Goods - such as packaged food,beverages, toiletries, and tobacco


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Focus Groups A tool for market research where small groups ofcustomers are invited to participate in guided discussions on thetopic being researched

Grey Marketing (also called Parallel Importing) The illicit sale

of imported products contrary to the interests of a holder of atrademark, patent or copyright in the country of sale

Guerrilla Marketing The strategy of targeting small andspecialised customer groups in such a way that bigger companieswill not find it worthwhile to retaliate

Logo A graphic, usually consisting of a symbol and/or group ofletters, that identifies a company or brand


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Macro Environment The external factors which affect acompanys planning and performance, and are beyond its control:for example, socio-economic, legal and technological change.Compare 'micro environment

Market Penetration The attempt to grow one's business byobtaining a larger market share in an existing market - see'market share' and 'market development

Micro Environment The immediate context of a company'soperations, including such elements as suppliers, customers and

competitors - compare 'macro environment

Personal Selling One-to-one communication between seller andprospective purchaser


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PIMS Profit Impact of Marketing Strategies: a US databasesupplying data such as environment, strategy, competition andinternal data with respect to 3000 business. This data can beused for benchmarking purposes

Point of Sale (POS) (also called Point of Purchase) Thelocation, usually within a retail outlet, where the customer decideswhether to make a purchase. See also 'EPOS - Electronic Pointof Sale'

Portfolio (and PortfolioAnalysis) The set of products or

services which a company decides to develop and market

Product Life Cycle A model describing the progress of a productfrom the inception of the idea, via the main period of sales, to itseventual decline


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Promotional Mix The components of an individual promotionalcampaign, which are likely to include advertising, personal selling,public relations, direct marketing, packaging, and sales promotion

Relationship Marketing The strategy of establishing a

relationship with the customer which continues well beyond thefirst purchase.

Return on Investment (ROI)/Return on Capital Employed(ROCE) The value that an organisation derives from investing ina project

Skimming Setting the original price high in the early stages of theproduct life cycle in an attempt to get as much profit as possiblebefore prices are driven down by increasing competition


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Supply Chain The network of suppliers, manufacturers anddistributors involved in the production and delivery of a product

Unique Selling Preposition (USP) The benefit that a product orservice can deliver to customers that is not offered by any

competitor: one of the fundamentals of effective marketing andbusiness

Value Preposition The set of qualities of a good or service thatallows it to fulfill the customer's needs and desires, as opposed tosimply benefiting the seller

White Goods Large electrical devices for domestic use, such asfridges, freezers and dishwashers. Used to be cased in whiteenamel, hence the name

Boston Consulting Group


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Boston Consulting Group

Growth Share Matrix


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Boston Share Matrix


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Product Life Cycle


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Maslows Hierarchy


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Pricing Strategies Matrix


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Ansoff Matrix


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The Relationship

Determine marketing objectives

Identify and select marketing strategies

Identify and select marketing tactics

C


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Consumer Buying Process

ABTL & BTL


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ABTL & BTL

Above the Line

Direct Advertising

An artificial concept used by AdvertisingA

gencies to distinguish between promotionalexpenditures that were commissionable andthose that were not

Below

the Line Promotional activity

All non media promotion

Ad ti i


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AdvertisingOutdoor

Ad ti i ( t)


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Advertising (cont)Outdoor

Ad ti i ( t)


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Advertising (cont)Outdoor

Ad ti i ( t)


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Advertising (cont)Magasines

Ad ti i ( t)


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Advertising (cont)Newspapers

Ad ti i t S hi


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Advertising meets SponsorshipA MIX

P l S lli


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Personal Selling

One-to-one communication

between seller and

prospective purchaser

P l S lli ( t)


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Personal Selling (cont)Media Kit

P l S lli ( t)


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Personal Selling (cont)Sales and

Marketing

Barge

S l P ti


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Sales Promotion

A range of techniques used to engage

the purchaser. These may include

discounting, coupons, guarantees, free

gifts, competitions, vouchers,

demonstrations, bonus commission and

sponsorship.

P blic Relations


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Public Relations

The deliberate, planned and sustainedeffort to establish and maintain mutualunderstanding between an organisation

and its public Institute of Public Relations

Community, Employees, Government,

Financial community, Distributors,Consumers, Opinion Leaders, Media

Public Relations (cont)


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Public Relations (cont)Sponsorship



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Public Relations (cont)Visits to

Workplace



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Public Relations (cont)Press releases

Direct Mail


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Direct Mail

Delivery of an advertising or promotional

message to customers or potential

customers by mail.

Trade Fairs & Exhibitions


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Trade Fairs & Exhibitions A physical display of products and/or services. A trade fair where

exhibitors display their products for sale, or a museum exhibition,where the items displayed are not for sale

Sponsorship


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Sponsorship

Specialised form of sales promotion

where a company will help fund an event

or support a business venture in return

for publicity

GV Video

Marketing History


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1776, Adam Smith, the father of moderneconomics, wrote the following passage inhis famous work, The Wealth of Nations

Consumption is the sole end purpose of allproduction and the interests of theproducer ought to be attended to, only so

far as it may be necessary for promotingthat of the consumer

Marketing History

Marketing History


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Peter Drucker believes Marketing arose inaround 1650 in Japan, not America !

A member of the Mitsui family settled in Tokyo toopen a department store that would offer a

wide assortment of products rather than focusingon a craft , category or process.

In mid 1800s Cyrus McCormick of IHC inventedthe mechanized harvester, and also the tools of

marketing MR, service salesman, credit etc

Peter F. Drucker - writer, management consultant and university professor born 1909

Marketing History



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The seven main elements in the Selling Process

are;

The opening

Need identification and stimulation The presentation

Dealing with objections

Negotiation

Closing the sale The follow-up

The Marketing Mix


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The Marketing Mix

1. Product Quality

Features/options

Brand/Style

Services/warranty

Packaging Range/latest

2. Price Strategies

List price

Price changes

Allowances

Payment/finance Credit terms

3. Place Channel configuration

Intermediaries

Location

Market coverage

Order processingsystems

Warehousing/storage

4. Promotion

Advertising

Personal selling

Sales promotion

Public relations and publicity

Direct Mail

Trade Fairs & Exhibitions

Sponsorship

The weapons in themarketing armoury.

Regarded in todaysmarket as the mostimportant P tofocus on

Need for Segmentation


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Need for Segmentation

Need for businesses to find subtle differences to

stay ahead of competition

Catering to specialty markets more efficient unless it

is a mass, commodity product

Undifferentiated marketing works best in mass

markets and relies on economies of scale

Differentiated marketing relies in grouping

audiences on some basis into more homogeneousgroups for specialised targeting

Differentiated Marketing


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Differentiated Marketing

Builds greater loyalty and repeat

purchases

More focused sales efforts

Improves market position, better lock in

with customers

Efficient production, distribution, promotion

Markets can be segmented on various

bases viable segments necessary

How To Segment?


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How To Segment?

Key task is to find the bases or variables

for splitting the market

Two types of segmenting approaches

- Needs

- Profilers



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3. Strategies

Marketing Strategy is a set of objectives,

policies, and rules that guides over time

the firms marketing effort its level, mix,and allocation partly independently and

partly in response to changing

environmental and competitive conditions

Strategy and Tactics


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Strategy and Tactics

In any situation, strategy dictates long term

action and goals; tactics is concerned with

immediate or short term gains; (1 year plus vs 2

or 3 months)

Tactics may or may not be subservient to

strategy, but strategy should never be dictated

by tactics

There are three types of companies those whomake things happen, those who watch things

happen and those that wonder what happened

fundamentals of marketing new[1],venky1

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