Marketing mix for project marketing .pptx

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1. MARKETING MIX FOR PROJECT MARKETING 6

2. Learning objectives introduction Understand the marketing mix elements of a project marketing mix. The case for a separate marketing mix for projects Understand the connection between the marketing mix and the project marketing process.

3. Introduction The marketing mix is a set of controllable tactical marketing tools that a firm blends to produce the response it wants in the target market. Firms need to design a market offering and present it to the market to satisfy its needs and wants. The marketing mix is a tool that helps achieve The marketing mix, consisting of ‘four Ps’ (product, price, place, and promotion), is applicable to the consumer and industrial goods, while in case of services, an extended marketing mix of seven Ps (product, price, place, promotion, process, people, and physical evidence) is applicable.

4. The case for a separate marketing mix for projects We know that services differ from products on account of the characteristics of services; services are intangible, heterogeneous, produced and consumed simultaneously, and are perishable.. a project is a complex transaction covering a package of products, services, and work, specifically designed to create capital assets that produce benefits for a buyer over an extended period of time . it consists of industrial goods, services, and specialized work to be completed within a specific time period. A typical project is marked with characteristics such as discontinuity, uniqueness, complexity, and very high financial stakes.

5. Figure 6.1 Marketing mix elements for projects

6. Products the project marketing/contracting/subcontracting firm offers to execute the project to the specifications of the client. The client firm ‘buys’ the project from it. Thus the project itself may be looked upon as a product .

7. CONT.… Variety : A project marketing firm that can offer and execute a variety of projects is likely to be placed favorably its competitors . Range : A project marketing firm that can offer and execute a wider range or project size or specifications is in a better position with respect to its competitors to receive the contract . Qualit y: It is a common practice that the project firm does not execute the entire project all by itself or manufacture the entire range of equipment required for a project; a substantial portion is subcontracted or purchased from other sources . Design : Since each project is unique, the design of the complete project is also likely to be unique and supposed to be tailor-made. Feature s: The offer of a project marketing firm should not only meet the requirements and specifications of the customers but also offer some features over and above the requirements

8. Price Price may be defined as the amount of money clients have to pay to obtain the product. Attributes of price : The attributes of price are bid price, discounts, payment period, and credit terms, in particular, and commercial terms and conditions in general. Since each project is unique, every project would have a different bid price .

9. Cont..

10. Pricing strategies Three strategies are commonly found in practice.

11. Cont.… Cost-based pricing : Here the project marketer bases its price on the costs involved in executing the project and a mark up on the cost. Competition-based pricing : Here a project marketer tries to offer the lowest bid price in comparison to its competitors with the intention of becoming the ‘L1’ priced bidder and getting the contract Value-based pricing : Here the project marketer offers a higher price as compared to its competitors based on a certain differentiation in its offer. A minor deviation of this, termed a life-cycle cost, is occasionally seen in projects such as power generation and the like where equipment forms a significant component of the project.

12. Promotion Promotion includes all activities related to communication with the target market and also includes activities to persuade customers to buy a product. p romotion for products and services includes advertising, publicity, sales promotion , personal selling, and online selling . Buying a project from a project marketer cannot happen merely by seeing an advertisement or publicity efforts due to the complexity and uniqueness characteristics of the project and thus the role of advertising and publicity becomes restricted.

13. Process The process is generally described by the ‘method statement’ of a project. This statement describes the steps involved in completing a project. Project marketers that have a better method statement in comparison to competitors that results in some benefits to client firms, e.g. a shorter project delivery time, can often differentiate themselves from their competitors . A better method statement is a refection of the competencies of a project marketer.

14. Profile Profile suggests the stature of a project marketing firm with respect to its competitors. No of complex projects completed : A firm that has complex projects delivered to its account can impress a customer with its capability and is better placed to get business from a customer. Client list : A firm having a large number customers also reflects the capability of a project marketing firm. Specialization : Specialization by project marketing firms is instrumental in acquiring contracts that involve a high level of complexity.

15. Pooling Pooling suggests a network, which a project marketing firm establishes, for influencing the project customer. Cove and Hoskins (1997) strongly state that the networking approach provides improved chances of success while bidding for jobs.

16. Connect between the marketing mix and the process of project marketing