marketing 4 non marketing
TRANSCRIPT
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Marketing For Non
MarketingAhmed Kamel
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over the long run, the ability tolearn faster than your competition
may be the only sustainablecompetitive advantages.Arie De Geus
Head, Strategic Pla
Royal Dutch Sh
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What Is Marketing?THE OFFICIAL (AMAs) DEFINITION
Marketing is the process ofplanning and executing the
conception, pricing,
promotion and distribution of
ideas, goods and services to
create exchanges that
satisfy individual and organization
objectives
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Marketing
A social and managerial process wherindividuals and groups obtain what theneed and want through creating and
exchanging products and value withothers.
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Marketing Management
The art and science of choosingtarget markets and getting,
keeping, and growing customers throu
creating, delivering,and communicating superior
customer values.
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Core Marketing Concepts
Markets
Exchange,
transactions and
relationships
Value,
satisfaction,
and quality
Products and
services
Needs,
wants,
& demands
Core
Marketingconcepts
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Core Marketing Concepts
Markets
Exchange,
transactions and
relationships
Value,
satisfaction,
and quality
Products and
services
Needs, wants,
and demands
Core
Marketing
concepts
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Marketing Is A Managerial Process
ImplementationControl
Conception
Pricing
Promotion
Distribution
Products
Ideas
Goods
Services
Planning
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Marketing As An Exchange Activi
Two parties They should each possess something the
other wants
They must be able to communicate and de They must be free to accept the others offe
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Marketing & Prospects
A Marketeris someone seeking a respons(attention, a purchase, a vote, a donation)from another party, called the prospect.
If two parties are seeking to sell somethingeach other, we call them both marketers.
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Simple Marketing System
Industry
(a collection
of sellers)
Market
(a collection
of buyers)
Information
Money
Products-services
Communication
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Needs, Wants & Demand
Needsare the basic human requirements(food, water, air, clothing).
These needs become wants when they aredirected to specific objects that might satis
the need. Wantsare shaped by ones society.
Demandsare wants for specific productsbacked by an ability to pay.
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Product, Offering & Brands
Companies address needs by putting forth a valuproposi t ion, a set of benefits they to customers satisfy their needs.
The intangible value proposition is made physicaan of fer ing, which can be a combination of produ
services, information, and experiences. A Brandis an offering from a known source.
A brand name such as McDonalds carries manyassociations in the minds of people.
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Value & Satisfaction
The offering will be successful if it delivers value satisfaction to the target buyer.
The buyer chooses between different offerings onbasis of which is perceived to deliver the most va
Value can be seen as primarily a combination of
quality, service, and price (QSP), called the custvalue tr iad. Value increases with quality and service and
decreases with price.
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Value & Satisfaction
Value is a ratio between what the customegets and what he gives.
Customers gets benefits and assumes cos
Benefits include functional benefits andemotional benefits.
Cost include monetary costs, time costs,energy costs, and psychic costs.
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Value & Satisfaction
Value=Benefits
Costs
=Functional benefits + Emotional bene
Monetary + Time + Energy + Psych
Marketers can increase the value by:
Raise benefits
Reduce costs
Raise benefits by more than the raise in costsLower benefits by less than the reduction in costs
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Marketing Mix
Seven Ps
Product
Place
Price
Promotion People
Process
Physical evidence
Four Cs Customer solution
Customer cost
Convince
Communication
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Evolution Of The Business Philosophy
Socie
MarkeConc
MarketingConcept
Sellers Market Buyers Market
SellingConceptProductConceptProductionConcept
1930-1950 1950-1980 1980-
Focus on
product
design andquality
Focus on
aggressive
selling andpromotion
Focus onidentifyconsumer
needs anddevelopingmarketingprograms tosatisfy them
1880 - 1930
Balanccustomneeds,
firmsprofitssocietywell-be
Focus onincreasingproduction
andreducingcosts
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The Marketing Concept
The MARKETING CONCEPT holds that thkey to achieving organizational goalsconsists of being more effective than
competitors in integrating marketingactivities toward determining andsatisfying the needs and wants of targmarkets
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Production Concepts
The philosophy that the consumers will favproducts that are available and highlyaffordable and that management shouldtherefore focus on improving production an
distribution efficiency.
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Product Concept
The idea that consumers will favor productthat offer the most quality, performance, anfeatures and that the organization shouldtherefore devote its energy to making
continuous product improvements.
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Selling Concept
The idea that the consumers will not buyenough of the organizations products unlethe organization undertake a large-scaleselling and promotion effort.
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Marketing Concept
The marketing management philosophy thholds that achieving organizational goalsdepends on determining the needs and waof target markets and delivering the desire
satisfactions more effectively and efficientlthan the competitors do.
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Selling & Marketing Concepts
Existing
ProductsFactory
Selling &
Promotions
Profits through
sales volume
MarketCustomer
needs
Integrated
marketing
Profits through
Customer satisfaction
The selling concept
The marketing concept
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Customer Needs
As a marketer we should con sider:
Stated needs (the customer wants an inexpensive car)
Real needs (the customer wants a car whose operating cnot the initial price, is low)
Unstated needs (the customer expects good service from
dealer) Delight needs (the customer would like the dealer to inclan onboard navigation system)
Secret needs (the customer wants to be seen by friends savvy consumer)
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The Societal Marketing Conce
The SOCIETAL MARKETING CONCEPTholds that the organizations task is tdetermine the needs, wants, andinterests of target markets and to
deliver the desired satisfactions moreeffectively and efficiently thancompetitors in a way that preserves o
enhances the consumers and thesocietys well-being
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The Societal Marketing Conce
The societal marketing concept calls upmarketers to build social and ethicalconsiderations into their marketingpractices.
They must balance and juggle the oftenconflicting criteria of company profits,consumer want satisfaction, and publicinterest.
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Old Economy Vs New Econom
Old Economy New EconomyOrganize by product units
Focus on profitable transactions
Looks primarily at financial scorecard
Focus on shareholders
Marketing does the marketingBuilds brands through advertising
Focus on customer acquisition
No customer satisfaction measurements
Overpromise, underdeliver
Organize by customer segments
Focus on customer lifetime value
Look also at marketing scorecard
Focus on stakeholders
Everyone does the marketingBuild brands through performanc
Focus on customer retention
Measure customer satisfaction &retention rate
Underpromise, overdeliver
S li C t R l ti h
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Supplier-Customer Relationsh
Buying
(Traditional Structure)
ExecutivesMarketing
Systems
Sales
Finance
Manufacturing
Supplier Customer
ExecutiveMerchandise
Systems
Buyers
Finance
Warehousing(a)
Executives
Marketing
Systems
Sales
Finance
Manufacturing
Executive
Merchandise
Systems
Buyers
Finance
Warehousing
Supplier Customer
(New Economy Structure)
(b)
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Defining Customer Value
& Satisfaction
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Customer Perceived Value
CPV is the difference between the prospeccustomers evaluation of all the benefits anthe costs of an offering and the perceivedalternatives.
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Total Customer Value
TCV is the perceived monetary of the bundof the economic, functional, and psychologbenefits customers expect from a given maoffering.
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Total Customer Cost
TCC is the bundle of costs customers expeto incur in evaluating, obtaining, using, anddisposing of the given market offering.
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Customer Delivered Value
CustomerDelivered
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Value
Total
Customer
Value
Product
Value
Services
Value
Personnel
Value
Image
Value
Total
Customer
Cost
Monetary
Cost
Time
Cost
Energy
Cost
Psychic
Cost
Hi h P f B i
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High Performance Business
Companies that navigate all these pitfalls to reactheir customer value and satisfaction goals.
Arthur D. Little proposed a model of characteristica high performance business as follow:
Stakeholders
Processes
Resources
Organization
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D i R l ti hi
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Dynamic Relationship
Employee
satisfaction
High growth
& profits
Stockholders
satisfaction
High
effort
High quality
products
Higher
satisfaction
Repeat
business
C t C lt
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Corporate Culture
Its the shared experiences, storie
beliefs, and norms that character
an organization
C t Lif ti V l
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Customer Lifetime Value
Its the case for increasing the customer retention
rate.
CLV describes the present value of the stream offuture profits expected over the customers lifetim
purchases.
The company must subtract from the expectedrevenues the expected costs of attracting, sellingservicing that customer.
C t Lif ti V l
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Customer Lifetime Value
Cost of an average sales call (includingsalary, commission, benefits, and expenses)
Average number of sales calls to convert anaverage prospect into a customer
Cost of attracting a new customer $
C stomer Lifetime Val e
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Customer Lifetime Value
Annual customer revenue $5,00Average number of loyal years X 2
Company profit margin .10
Customer lifetime value (CLV) $1,00This company is spending more to attract
new customers than they are worth
Strategic Planning
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Strategic Planning
Strategic planning calls for action in threkey areas:
I. Managing the companys business as aninvestment portfolio
II. Assessing each businesss strength byconsidering the markets growth rate and th
companys position and fit in that market
III. Establish a strategy
Organizational Levels
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Organizational Levels
Corporate level
Division level
Business unit level
Product level
Corporate Level
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Corporate Level
Corporate headquarter is responsible fordesigning a corporate strategic plan to guithe whole enterprise.
It makes decisions on the amount of resou
to allocate to each division, as well as onwhich businesses to start or eliminate.
Division Level
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Division Level
Each division establishes a division plancovering the allocation of funds to eachbusiness unit within the division.
Business Unit Level
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Business Unit Level
Each business unit develops a strategic plto carry that business unit into a profitablefuture.
Product Level
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Product Level
Each product level (product line, brand) wia business unit develops a marketing planachieving its objective in its product marke
Marketing Plan
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Marketing Plan
Strategic marketing plan lays out the targemarkets and the value proposition that willoffered based on an analysis of the bestmarket opportunities.
Tactical marketing plan specifies the marktactics, including product features, promotmerchandising, pricing, sales channels, anservice.
Buying Role
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Buying Role
Initiator: The person who first suggests the idea o
buying the product or service. Influencer: The person whose view or advice
influences the decision. Decider: The person who decides on any compo
of a buying decision: whether to buy, how to buy,
where to buy. Buyer: The person who makes the actual purchas User: The person who consumes or uses the pro
or service.
Buying Behavior
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Buying Behavior
Complex buying
behavior
Dissonance-reducing
buying behavior
Variety seeking
buying behavior
Habitual buying
behavior
Significant differences
between brands
Few differences
between brands
High Involvement Low Involvement
Complex Buying Behavior
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Complex Buying Behavior
Involves the following steps:
Buyer develops beliefs about the productHe/She develops attitudes about the productHe/She makes a thoughtful choice
Consumers engage in complex buying behaviorswhen they are highly involved in purchase and aw
of significant differences among brands. This is usually the case when the product is
expensive, brought infrequently, risky, and highlyexpressive.
Complex Buying Behavior
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Complex Buying Behavior
The marketer must understand consumers
information gathering and evaluation behavior. Marketers need to develop strategies that assist t
buyer in learning about the products attribute andtheir relative importance.
Marketers need to differentiate the brands featuruse print media to describe the brands benefits, motivate sales personnel and the buyersacquaintances to influence the final brand choice
Dissonance Buyer Behavior
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Dissonance Buyer Behavior
Sometimes the consumer is highly involved in a
purchase but sees little difference in brands.
The high involvement is based on the fact that thpurchase is expensive, infrequent, and risky.
If the consumer finds quality differences in the brathey might go for the higher price.
If the consumer finds little difference, they mightsimply buy on price or convenience.
Habitual Buying Behavior
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Habitual Buying Behavior
Many products are bought under conditions of low
involvement and absence of significant brand differenc Consumers have low involvement with most low-cost,frequently purchased products.
For low involvement products, the buying process begiwith brand beliefs formed by passive learning and is foby purchase behavior, which might be followed byevaluation.
Marketers find it effective to use price and sales promoto stimulate product trial.
Variety-Seeking Buying Behavio
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Variety Seeking Buying Behavio
Some buying situations are characterized by low
involvement but significant brand differences. Consumers often do a lot of brand switching (ex. Cook Market leader will try to encourage habitual buying beh
by dominating the shelf space, avoiding out of stockconditions, and sponsoring frequent reminder advertisi
Challenger firm will encourage variety seeking by offerilower prices, deals, coupons, and free samples.
The Outline of Marketing
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Marketing BusinessPhilosophyMarketinTactics
MarketingStrategies
The Outline of Marketing
STP Marketing
SegmentationTargeting
Positioning
Marketing Concept
Customer needsTarget market
Integrated marketing
Profitability
Marketing
ProductPricing
Promotion
Place
Demographic/
economic
Technical/
physical
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Suppliers
environment
p y
environment
Political/
legal
environment
Social/
cultural
environment
Publics
Competitors
Marketingintermediaries
Target
Customer
PriceProduct
Promotion Place
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THE CORE CONCEPTS
The Core Concept
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Want
Need
Demand
Human need is a state of felt deprivation
Needs are not invented by marketingThey are basic part of human make-up
Human wants are the form taken by human needThey shaped by culture and individual personalitWants are expanded when people are exposed
more want-satisfying productsDemands are human wants that are backed by
buying power
The Core Concept
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Good
Service Idea
The Core Concept
Product A product is anything that can be offeredto a market to satisfy a need or want
A product can consist of as many as
three components:Physical goodService, andIdea
The Core Concept
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The Core Concept
Value CostSatisfaction
Value is the satisfaction of customer requirementsat the lowest possible cost of acquisition,
ownership and use
The Core Concept
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The Core Concept
Conditions for exchange potential to existExchange
Is the act of obtaining a desire product from
someone by offering something in return
At least two parties Each party has something of value to the other party
Capable of communication and delivery
Free to accept or reject the exchange offer
Desirable to deal with the other party
The Core Concept
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A MARKET consists of all the potential
customers sharing a particular need or wantwho might be willing and able to engage inexchange to satisfy that need or want
Industry(a collection
of sellers)
Market(a collection
of buyers)
Information
Communication
Money
Goods / services
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The Places of MarketingWithin an Organization
Marketing As an Equal Function
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Marketing As an Equal Function
Production Finance
Marketing HumanResources
Marketing As a More Important Functio
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Marketing As a More Important Functio
Production Finance
Marketing
Human
Resources
Marketing As the Major Function
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Marketing As the Major Function
Human Resources
Marketing
The Customer AsTh C t lli F ti
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Human Resources
Marketing
The Controlling Function
P
roduction
Financ
e
Customer
The Consumer As the Controlling Function andMarketing As the Integrative Function
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Marketing As the Integrative Function
Human Resources
Customer
Marketing
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MARKETING IN THE NEWECONOMY
The New Economy
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e e co o y
A substantial increase in the buying power
A greater variety of available goods andservices
A great amount of information about particulaanything
A greater ease in interacting and placing andreceiving orders
Ability to compare notes on products andservices
Impact of Information Technolo
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1. Transportation and Communication havebecome faster and cheaper
GLOBALISATION
GLOBALISATION
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More competition
Consumer behavior
Different competitive st
Higher level of compet
Transparancy & inform
Larger action radius
ar e ng oo s n e eEconomy
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y
Brand
PRODUCTPRICE
(Yield)
Acquisition
Retention Logistics
DatabaseManagementResearch
ACCESS
The Definition of Product
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A product is an idea, a service, a good o
any combination of them It is everything one receives in an
exchange: a complexity oftangible and
intangible attributes including functional utilities social utilities and psychological utilities Bundle of
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Total Product Concept
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AUGMENTED PRODUCT
ACTUAL PRODUCT
CORE PRODUCT
Corebenefit
Packaging
Brand
name
Features
Quality
level
Styling
Installation
Warranty Credit
After-sale service
Delivery
The total product concept: example tooth paste
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CLEAN
TEETH
TOTAL PRODUCT
AUGMENTED
PRODUCT
romance money saved
on dental bills
brand name
size
flavor
color
packaging
fresh breathsafety
white teeth
social
confidence pleasa
taste
What Is A Brand?
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A name, term, sign, symbol, ordesign, or a combination of theseintended to identify the goods orservices of one seller or group of
sellers and to differentiate themfrom those of competitors
Brand Equity
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The value of a brand, based on theextent to which it has high brand loyalname awareness, perceived quality,strong brand associations, and other
assets such as patents, trademarks anchannel relationship
Brand Equity Based on Awareneand Preference
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Brand
awareness
Brand
acceptability
Brand
preference
Brand
unawareness
Bra
loya
Brandval
ue
Characteristics of a Good Brand NamS
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Short and simple
Easy to spell and read
Easy to recognize and remember
Pleasing when read or heard--and easy to pronoun
Pronounceable in only one way
Pronounceable in all languages (for goods exporte
Always timely (does not get out of date)
Legally for use (not in use by another firm)
Not offensive, obscene, or negative
Suggestive of product benefits
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COMMUNICATIONSTRATEGY
Definition Of Promotion
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Communication withpotential buyers about anitems existence and uses
with the objective of
changing orconfirming their behaviorin order to stimulate sales
There is nothing wrong withproducing ads that people in yo
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p g p p y
company like. In fact, it is nice
they do. It is good for compan
morale. But the people inside
your company are not the targmarketSergio Zyman
The Aya Cola
Tasks of communications
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Tell consumers where they can buy
Get consumers to trade up to more expensiveproducts
Alert consumers of sales
Justify the price of a product or service Answer questions
Close transactions
Provide after sale service
The Communication Proce
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Sender Encoding DecodingMessage Re
Feedback
Noise
Response
Media
ENCODING
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We keep your promises DHL
Make sure home knows where your heartGSM PTT
World currency American Express
World proof Samsonite Lets make things better Philips
Communication Goals
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ADVERTISMENTS ARE EXPECTED TO:
generate attention
be understood
be believed
be remembered
THE PROMOTION MIX
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ADVERTISING PERSONAL
SELLING
SALES PUBLICITY
PROMOTION PUBLIC
RELATIONS
Communication Mix Advertising any paid form of nonpersonal present
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Advertising-- any paid form of nonpersonal presentand promotion of ideas, goods, and services by an
identified sponsor Sales promotion-- short term incentives to encoura
purchase of a product or service
Publicity-- Nonpersonal stimulation of demand for a
product or service by planting commercially significantabout in in some type of media
Personal selling-- face-to-face interaction betweencustomer and sales person with the purpose of makingsale
Common Communication Tool
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Common Communication ToolAdvertising
Print ads Broadcast ads Packaging Mailings Catalogs
Brochures Billboards Point-of-sale
displays
Sales Promotion
Contests& Games Premiums Samples Exhibits Coupons
Rebates Low Interest Financing Trade in allowance
Publicity
Press kits Speeches Seminars Annual reports Charitable
donations Public
relations
Personal
Salespresent
Salesmeeting
Tele-ma Trade sh
Steps in DevelopingEffective Communication
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1. Identifying and analyzing the target
audience2. Determining communication objectives3. Designing the message4. Selecting the communication channel
5. Establishing the total promotional budget6. Deciding on the promotional mix7. Measuring promotional results
Determining communicationobjectives
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Why do marketers go to work every day a
launch hundred million dollar campaignswithout having clearly figured out what res
they are hoping to achieve
Sergio ZymanThe Aya Cola
Strengths and Weaknesses of major kinds of meMEDIA
Maybe expensive
FlexibleNewspaper
WeaknesseStrengths
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Expensive in totalClutterShort exposureLess selective audi
Offers sight, sound,and motion
Good attentionWide reach
Television
Maybe expensiveShort lifeNo pass-along
FlexibleTimelyLocal market
Newspaper
Offers audio only
Weak attentionShort exposure
Wide reachSegmented audiencesInexpensive
Radio
InflexibleLong lead time
Very segmented audiencesCredible sourceGood reproductionLong life
Good pass-along
Magazine
The question is not how man
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q
promotions can we buy, buinstead how many more sale
can we get
Sergio ZymanThe Aya Cola
Example of objective and task metho Want 8% of market --100,000 total means 8,000 customers nee
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Hope to reach 50% of the market
40% of people who try the product will become regular users. N8,000 regular users, therefore must get 20,000 people to try theproduct ( 20% trial rate)
Advertiser estimates that 10 exposures for every 1% of the popuwould bring about trial rate of 20%.
A Gross rating point is one exposure to 1% of the target populatSince it is desired to achieve 10 exposures to 50% of the populait will need to buy 500 GRPs
If an average GRP costs $2,500, the budget must be set at$1,250,000
Relative Spending on Promotional Tools inConsumer Versus Business Markets
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Relative spending
Sales promotion
Advertising
Personal selling
Personalselling
Sales promotion
Advertising
PRPR
Consumer goods Industrial goods
Relative spending
Cost Effectiveness of Different Promotional Tat Different Buyer Readiness Stages
eness
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Awareness Comprehension Conviction Ordering Reord
Salespromotion
Personal
selling
Advertisingand publicity
Promotionalcosteff
ective
Stages of buyer readiness
Cost Effectiveness of Different Promotional ToolDifferent Stages of the Product Life Cycle
eness
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Salespromotion
Advertisingand publicity
Personalselling
Introduction Growth Maturity Decline
Stages of product life cycle
Promo
tionalcosteffective
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Product Mix Strategies
Classification Of Consumer Good
CONVENIENCE GOOD Bought frequently a
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CONVENIENCE GOOD
SHOPPING GOODS
SPECIALTY GOODS
Bought frequently awith minimum buyineffort
Brand loyalty, producomparison, monetsocial risks
Seldom purchased,substitutes accepteinformation search
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MARKET POSITIONING
What Is Market Positioning?
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Arranging for product to occupy a clear,distinctive, and desirable place relative tocompeting products in the minds of targetconsumers
Formulating competitive positioning for aproduct and a detailed marketing mix.
Touch of class
Car to be proud of
Distinctive*Mercedes
*Lincoln*Porsche
*BMW
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Spiritedmance,
people,
drive
Very practical
Good gas mileage
Affordable
Conservative*Cadilac
Appeals to older*Oldsmobilepeople
*BMW
*Ford
*Pontiac
*Buick*Dodge
*Plymouth *Hyundai *Isuzu
*Chevrolet
*Toyota
*VW
A PRODUCTS POSITION IS THE CUSTOMERS PERCEPTIO
OF THE BRAND IN RELATION TO COMPETITIVE OFFERS
PRODUCT LIFE CYCLE (PLC
I t d ti G th M t it Decline
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Introductionstage
Growthstage
Maturitystage
Declinestage
Time
Revenue
Industryprofits
Industrysales
Product Life Cycle
$)
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Time
Introduction Growth Maturity Dec
Sales
Profit
Salesandprofits($
Industry, Product Line and BraLifecycles
Sales
Computer
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T
Computer
industry
lifecycle IBM prodline lifec
IBM1401 IBM120 IBM130 IBM1135&145 IBM1158
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MARKETING PLANNING
Marketing Management Tasks
Identifying target markets
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Identifying target markets
Marketing research Product development
Marketing mix
Monitoring
Marketing Plan
A written statement of marketing objective
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A written statement of marketing objective
strategies and specific courses of action totaken when (or if) future events occur. Itincludes the marketing mix, personnelresponsibilities, a budget and a timetable
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You dont want your airline pil
deciding before he takes off th
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deciding before he takes off th
he is going to fly over Omaha athen sticking to his plan when th
thunderstorms roll inSergio Zyman
The Aya Cola
MARKETING PLAN
MISSION D l ti f k t d fi iti
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MISSION Declaration of market definition
Revlon: We sell hope
OBJECTIVE Increase profit
Capture new markets
Introduce new products , etc.
STRATEGY What to do to achieve objectives
(use of 4 Ps)
TACTICS How to carry out these measures
Timin - media choice etc.
SWOT Analysis
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Strengths Weaknesses
Opportunities Threats
Check Feasibility
Costs
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Costs
Feasibility
Results
Market Reaction
The discipline of marketing is
science and spending on
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science and spending on
marketing is an investment thapays returns. Marketing must b
measured. It needs to be
accounted for.Sergio Zyman
The Aya Cola
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The Internal Environment
TWO DETERMINANTS OF PROFITABILIT
Advantage
etitive
n
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Disadvantage
Low High
Compe
Posit
ion
Environmental Attractivenes
Product Portfolio
MARKET
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MARKET
GROWTH
MARKET SHARE
STARS QUESTIONMARKS
MILK COWS DOGS
Tomorrows breadwinner Developments
Sleepers
Ego trips
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?
Todays breadwinner Yesterdays breadwinners
Failures
Balanced Portfolio
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market sharehigh
Unbalanced Portfolio
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market sharehigh
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