marketing ch-5 best presentation for all.pptx

Marketing

1. CHAPTER 5 MARKETING MIX ELEMENTS

2. Marketing mix Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. The four-factor classification of marketing mix namely the ‘4 P’s are:- Product, price, Place & Promotion. Marketers must decide on the allocation of the marketing budget to the product, channels, promotion media, and sales area.

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5. Meaning of a product A product is anything that can be offered to satisfy a need or want.   A product consists of as many as there components: Physical good(s) service(s ), idea (s ), etc. Products that are marketed include physical goods (automobiles, books etc), service (concerts, professional advice), persons ( Mr A, B, C), places ( Langano , Sodere ), organizations. (Health association, social clubs), and ideas (family planning, safe driving) etc .

6. PRODUCT CLASSIFICATION

7. classification BASED ON DURABILITY Non-durable goods : tangible goods that are consumed in one or few uses. Example soap. Since these goods are consumed quickly and purchased frequently, the appropriate strategy is to make them available in many locations, charge only a small mark up, and advertise heavily to induce trail and build preference. 2. Durable goods : Durable goods are tangible goods that normally serve many uses . Example machine tools, clothing etc. Require more personal selling and service, command a higher margin, and require more seller guarantees.

8. CLASSIFICATION BASED ON USE A. Consumer -Goods classification Convenience goods Shopping goods Specialty goods Unsought goods B . Industrial goods classification Material & parts Capital items, and Supplies and business services.

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10. Consumer Products Consumer products are purchased to satisfy personal and family needs ; they are categorized according to how buyers generally behave when purchasing a specific item . 1. Convenience Products Convenience products are relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort and the buyer spends little time planning. A convenience product normally is marketed through many retail outlets.

11. 2. Shopping Products Shopping products are items for which buyers are willing to expend considerable effort in planning and making the purchase . Buyers allocate considerable time to comparing stores and brands in prices, product features, qualities, services, and perhaps warranties. Although shopping products are purchased less frequently and are more expensive than convenience products, buyers of shopping products are not extremely loyal to their brands . They require fewer retail outlets than convenience products . Because they are purchased less frequently , causing lower inventory turnover.

12. 3. Specialty Products Specialty products have one or more unique characteristics, and buyers are willing to spend considerable effort to obtain them . Specialty items often are distributed through a limited number of retail outlets. Like shopping products, specialty products are purchased infrequently, causing lower inventory turnover.

13. 4. Unsought Products Unsought products are products purchased to solve a sudden problem , products of which customers are unaware , and products that people do not necessarily think about buying. Examples include emergency medical services and life insurance .

14. Specialty Products Unsought Products Shopping Products Buy less frequently Gather product information Fewer purchase locations Compare for: Suitability & Quality Price & Style Convenience Products Special purchase efforts Unique characteristics Brand identification Few purchase locations New innovations Products consumers don’t want to think about. Require much advertising & personal selling Buy frequently & immediately Low priced Many purchase locations Includes: Staple goods Impulse goods Emergency goods Consumer-Goods Classification

15. Business Product Classes Installations Building ( i.e. factories & offices) Component Parts & Materials Component materials Component parts Equipment Portable factory eq’t and tools ( hand tools, office equipment ( e.g. PC). Professional Services Maintenance & repair services Business advisory service e.g . legal, management, consulting , Raw Materials Farm products Natural products Supplies Operating supplies e.g . lubricants , writing paper,) maintenance and repair items 9-5 Industrial goods classification

16. The Product Life Cycle

17. Product development begins when the company finds and develops a new-product idea . During product development, sales are zero and the company's investment costs mount . b) Introduction stage The introduction stage starts when the new product is first launched. Introduction takes time, and sales growth is apt to be slow. In this stage, as compared to other stages, profits are negative or low because of the low sales and high distribution and promotion expenses. Much money is needed to attract distributors and build their inventories. Promotion spending is relatively high to inform consumers of the new product and get them to try it. It has the best chance of building and retaining market leadership if it plays its cards correctly from the start.

18. c) Growth Stage If the new product satisfies the market, it will enter a growth stage , in which sales will start climbing quickly. The early adopters will continue to buy , and later buyers will start following their lead, especially if they hear favorable word of mouth. Attracted by the opportunities for profit, new competitors will enter the market. They will introduce new product features, and the market will expand. In the growth stage, the firm faces a trade-off between high market share and high current profit.

19. d) Maturity Stage The maturity stage normally lasts longer than the previous stages, and it poses strong challenges to marketing management. Most products are in the maturity stage of the life cycle, and therefore most of marketing management deals with the mature product. Competitors begin marking down prices, increasing their advertising and sales promotions, and upping their R&D budgets to find better versions of the product.

20. e) Decline Stage The sales of most product forms and brands eventually dip. The decline may be slow or rapid. Sales decline for many reasons, including technological advances, shifts in consumer tastes, and increased competition. As sales and profits decline, some firms withdraw from the market. The Product Life Cycle can be extended by two ways either by modifying the target market by finding and adding new users etc or by modifying the product adding new features, variations,

21. New Product Development Process 21 Idea Generation Concept Development and Testing Idea Screening Business Analysis Product Development Market Testing Commercialization

22. 1. Idea generation 22 This is the continuous & systematic search few new product opportunities. It involves delineating the sources of new ideas and methods for generating them. Some of the major sources of new product are: Customer Employes Competitors Middlemens and sales representatives Governiment policies Other sourses include inventors, investors, Universities (Colleges), consultants and advertising agencies.

23. 2. Idea screening 23 In idea screening poor, unsuitable or unattractive ideas are weeded out form further considerations. developing a checklist 3. Concept testing A firm needs to acquire consumer feed back about its product idea so the screened ideas must be tested with appropriate group of target consumers. consumers are asked about the product idea and express their own opinion

24. 24 4. Business analysis The stage requires the study of the attractiveness of the business such as the extent of demand for the product; risk, sales, cost and profit estimates. 5. Product development This stage converts a product idea in to a physical form and identifies a basic marketing strategy. The goal of product development is to find the prototype

25. 25 6. Market testing This involves placing a fully developed new product for sale in one or few selected area and observing its performance. Learn from the customers and competitors reaction Based on the result of market testing the firm can decide whether to go ahead with its plan (production) in large sale, modify the product, modify the marketing plan or drop the product.

26. 26 7. Commercialization After testing is completed, the firm will be ready to introduce the product to its full target market. Promotion and distribution

27. Product Mix A product line is a group of products that are closely related because they perform similar function, are sold to the same customer group, are marketed through the same channel of distribution or fall within a given price ranges. 27 Width - number of different product lines Length - total number of items in the product mix or the sum of all product depth Depth - number of variety of products in each product lines Product Mix - all the product lines offered Consistency

28. Example

29. Brand Decisions What is Brand? Marketers recognize the powerful influence on customer behavior that creating and protecting a strong identity for products and product lines has. Branding is the process of creating that identify. A brand is a name, a term, a symbol, a design, or any other unique element of a product that identifies one firm’s product(s) and sets them apart from the competition.

30. There are three types of brand designations A band name – is a word, letter (a group of words or letters) that can be voiced. Eg . Mercedes Brand Mark – is a symbol, design or distinctive coloring or lettering that can be seen but not voiced. Eg . For Mercedes Trade mark – is a brand name or brand mark or combination there of that is given legal protection.

31. Brand marks 31 CONT’D

32. Benefits of Branding Provides benefits to buyers and sellers TO BUYER: Help buyers identify the product that they like/dislike. Identify marketer Helps reduce the time needed for purchase. Helps buyers evaluate quality of products especially if unable to judge a products characteristics. Helps reduce buyers perceived risk of purchase . Buyer may derive a psychological reward from owning the brand, like Apple

33. TO SELLER: Differentiate product offering from competitors Helps segment market by creating tailored images Brand identifies the companies products making repeat purchases easier for customers. Reduce price comparisons Brand helps firm introduce a new product that carries the name of one or more of its existing products Easier cooperation with intermediaries with well known brands Facilitates promotional efforts. Helps foster brand loyalty helping to stabilize market share. Firms may be able to charge a premium for the brand.

34. 2. PACKAGING Packaging includes the activities of designing and producing the container or wrapper for a product . Well-designed packages can create convenience value for the consumer and promotional value for the producer . A product must be packaged to meet the needs of wholesaling and retailing middlemen. For instance, a packages size and shape must be suitable for displaying and stacking the product in the store.

35. Advantages of Packaging It physically protect the products from damage, theft, … It helps in identifying the products It encourages impulse buying It is used as an advertising media It serves as an information tool It serves as a sales tool Convenient packages are easier to use, making purchase decisions easier for the customer as well

36. Labels 36 Labels perform several functions; first, it identified the product or brand. The label might also grade the product. The label might describe the product; who made it, where it was made, when it was made, what is contains & how it is to be used. Finally, the label might promote the product through its attractive graphics.

37. Labels 37 Identify Describe Promote