Download Marketing - BA Dresden

BA Dresden
Industrie - 3ID10
15 April 2013
Extra: Examination preparation
Some more on advertising
Choose an ad, explain its content and assess it using the above-listed criteria
Either you have found an example yourself otherwise choose one of the ads below
© C. Schulz
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BA Dresden
Industrie - 3ID10
15 April 2013
Reminder: advertising assessment criteria
To find out if an ad is effective you should consider assessing criteria like:
 used methods / techniques
 used medium
 emphasised or highlighted information / details / features / benefits of a product or service
 memorable or recognisable (e.g. a specific jingle / a catchy slogan)
 addressed to a certain target group
 humour / fun elements
 other way to attract attention
Marketing
Before you will get a closer insight into the topic marketing – comment on the following questions:
What is your understanding of the term “marketing”?
Which role does marketing play in your company?
Does industry / industrial goods need marketing strategies? If so, explain your thoughts!
Vocabulary work
Translate the following words / word groups
to offer an aftersale service /
customer service
to set a goal
to assume assumption
to reach / achieve /
attain a goal
to afford –
affordability
to launch/bring out
a new product
to assess assessment
product life cycle
to hunt for bargains
product harvest
… is a well-known
brand.
pricing
market
research/survey
price-cutting vs.
price increase
to promote promotion
penetration pricing
market
segmentation
creaming
demand exceeds
supply
price plateau
in terms of
despite the fact
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BA Dresden
Industrie - 3ID10
channels of
distribution
15 April 2013
the current price
list
Translate the above-listed expressions / words
Reading comprehension
Marketing
Introduction
Marketing can be defined as the process by which the demand for goods and services is anticipated and
satisfied through the conception, production, distribution and sale of goods and services.
Market Research involves researching the market to assess consumer requirements. It is based on the
results of this research that the company will decide what to produce.
Marketing involves a wide range of different business activities:
finding out what the consumer needs market research
producing
manufacturing
pricing and promoting
advertising
getting the goods to the consumer
distribution
It is clear, of course, that every business or public organisation has its market which can be anything from
a limited/niche market to a mass market. In the past, different approaches were formulated regarding
existing and potential customers. An important principle is to view the customer as king.
Marketing Mix
We will now examine the four principal variables (4Ps). These are Product, Price, Promotion and Place,
collectively known as the Marketing Mix.
Product
Any discussion about the marketing mix must begin with the product. It can be a physical object or a
service of some kind. The range of products offered by an organisation is called the product mix, for
example, a car manufacturer can offer cheap basic models, medium-priced models, estate cars, executive
cars and sports cars.
One important way of selling products is through branding. This means applying the organisation's
“signature” to its product by the use of special names, signs or symbols. Branding has grown enormously,
we think of Coca Cola, Adidas or Levi's. In general, branding is a feature of consumer products and is far
less in industrial products. Repositioning of brands is also possible. One great example is the Lucozade
drink which transformed itself from a medicinal drink to an energy and sports drink for teenagers. Some
products are sold with a strong emphasis on after-sales services, guarantees and technical support.
Packing is another factor in the presentation of a product to the market. Not only does it provide protection
for the product but it can also reinforce the brand image and the point-of-sale attraction to the buyer.
Packaging has, on the other hand, become an environmental issue with some customers claiming that
excessive amounts of packaging are being used. Packing is now regarded as being so important that
some marketing experts refer to it as the fifth “P”.
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Industrie - 3ID10
15 April 2013
Another key factor is the product life cycle. This cycle
describes changes in the level of sales of a product over
a specified period of time. As you can see from the
graph, products have a life cycle which starts off with the
introduction stage where the product or service is
launched. The next stage is growth where the product
becomes much more widely available and sales begin to
rise. This is followed by the maturity stage where sales
are stabilising and rival products are entering the market.
Efforts must be made to increase consumption through
more effective marketing. Saturation is the stage where
everyone has the product and the price must fall. Decline
is where sales are falling back slowly, i.e. a downward
trend is occurring and new product emerges. Companies
can the engage in product harvesting which involves
eliminating all marketing and advertising costs but
continuing to sell the product and relying on past
advertising to help it sell.
A branded product will have a relatively long life cycle while fads such as pop CDs are products with a
short life cycle. Fashion tends to reappear over the course of a number of years.
Price
This is the second variable and it is a very complex and emotive issue indeed. One can price too cheaply
as well as too expensively. While the goal of marketing is to create a maximum satisfaction for the
consumer, it is not always the cheapest price that does that.
In general, the importance of the price will depend on the competition and on the market the product or
service is aimed at. Consumers usually have some idea they would pay, this is known as price plateau. A
company cannot move too far away from this price. In some cases, a company may decide on penetration
pricing, i.e. charging a low price when a new product or service is launched in order to gain market share.
Alternatively, a high price may be set simply because the product or service is new. This practice is know
as creaming.
Promotion
The area that most people associate with the term marketing as it is the most visible aspect. It can be
defined as the process of getting your message to the market, to create interest, build demand and
persuade potential customers. The main components are advertising, personal selling, sales promotion
and publicity.
Advertising is the communication of information about a product or service to it s market, usually in a
persuasive manner, using the printed and spoken word and visual material. However good the message
put over by advertising, there is no substitute for the face-to-face meeting or personal selling. This is the
most expensive form of promotion but is widely used in industrial markets where all stages involve
personal selling. In consumer and mass markets advertising plays the key role.
Sales promotion activities have the same aim as advertising. They are a form of indirect advertising
designed to stimulate sales mainly by the use of incentives such as trading stamps, free samples, twinpack bargains (two for the price of one) and competitions, e.g. win a free trip for two to Malta.
Finally, publicity involves such things as a video and audio promotions, e.g. corporate videos. Sponsorship
events in the arts and sports are becoming increasingly popular as are giving donations to academic or
research institutions. Publicity usually comes under the heading of public relations, which is concerned
whit the mutual understanding between an organisation and its public.
Place
Place is also referred to as distribution. This is primarily concerned with channels of distribution and
physical distribution. These channels are the marketing institutions which facilitate the movement of goods
and services from their point of consumption.
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Industrie - 3ID10
15 April 2013
The most common channels of distribution are as follows:
manufacturer
consumer
manufacturer
wholesaler
consumer
manufacturer
wholesaler
retailer
consumer
manufacturer
retailer
consumer
How you reach your customer will affect every other part of the process – the price, what you can sell and
the promotion methods. It is often forgotten that place can sometimes be more important than the product
itself. Depending on your marketing strategy, you can charge more for an exclusive product in a few
selected outlets than selling a standard-priced product in many outlets.
Physical distribution involves processing, warehousing, transport and related activities.
Market segmentation
Market segmentation can be defined as the sub-division of a market into identifiable buyer groups, or submarkets, with the aim of reaching such groups with a particular marketing mix. These sub-markets are
known as target markets, which can be defined as a group of people who have in common a need or
desire for a particular product or service. The product offered, the price range, the type of promotion an
the distribution arrangements must all be considered carefully in the light of the differing requirements of
the different market segments.
The most frequent methods of segmenting a market are based on the following variables:
Geographical
region, population, density, climate, ...
Demographic
age, sex, family size, occupation, social class, …
Buyer-behaviour usage rate, benefits, brand loyalty, life-style,…
Segmentation is aided by a social grading structure based on the occupation of the head of each
household.
Conclusion
Benefits of Marketing
From what we have covered so far it follows that marketing has a number of benefits.
Marketing
- creates consumer choice
- improves the quality of products
- reduces business risks as the firm produces what the consumer requires rather than what the firm
thinks is required
- increases sales and profits
Four keys to practical marketing
Finally, here are four keys to practical marketing which are perhaps the best pieces of marketing advice
that you may ever come across:
Specialisation:
Find a niche and dominate it
Differentiation:
Only enter a market if you can offer something different or unique
Segmentation:
Just as a solid object is made up of thousands of atoms and molecules, so a market is
made up of limitless market segments. Identify your market segment(s).
Concentration:
If you concentrate your resources long enough and hard enough, you can become
market leader in your chosen segment of any market.
© C. Schulz
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BA Dresden
© C. Schulz
Industrie - 3ID10
15 April 2013
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