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Lakeland College Japan Week 9 Lesson 1 Introduction to Business Week 9 Marketing mix, product and pricing Core Concepts Product What is a product? A product is a set of tangible and intangible attributes including packaging, colour, price, quality and brand, plus the services and reputation of the seller Branding A brand name is a term, sign and/or special design that is intended to identify the goods or services of one seller and distinguish them from all others. Packaging Defined as all the activities of designing and producing the container or wrapping for a product. Packaging performs several marketing functions: protection of the product and the people handling and using it; providing information; helping promote the product. Product warranty Protects the buyer and gives essential information about the product Confirms the quality or performance of a good or service Product innovation Product innovation is becoming increasingly important owing to rapid advancements in technology and successful product copying by competitors. The importance of product innovation Need for growth—products, like people, go through life cycles. Increased consumer selectivity—not spending as freely. Resources and environmental considerations—environmental factors will influence product decisions. The product life cycle Characteristics of 4 stages in Product Life Cycle (PLC) Introductory Stage Full-scale launch into marketplace Marketing and production costs high Growth is relatively slow Growth Stage Sales grow at an increasing rate, Maturity Stage Sales increase at a decreasing rate Decline Stage Long run drop in sales Lakeland College Japan Introduction to Business Week 9 Multi-brand strategy Multi-branding—firm using more than one brand name for similar products in its range in an attempt to reach different market segments Co-Branding Two companies use their brand names on the same product Brand extension Using a successful brand name on products in different product categories Sony Vaio Laptop Price Price is what we pay for what we get! It is the amount of money needed to acquire a product. Two common mistakes in pricing Companies are quick to reduce prices to keep the sales volume Instead we may convince customers that the offer is worth a higher price (increasing customer value) Companies pricing is too cost-oriented Instead we focus on value-oriented pricing Pricing Strategies Cost-based pricing Competition-based pricing Value-based pricing Lakeland College Japan Introduction to Business Week 9 Advertising Slogans Advertising slogans are claimed to be, and often are proven to be, the most effective means of drawing attention to one or more aspects of a product or products. Typically they make claims about being the best quality, the tastiest, cheapest, most nutritious, providing an important benefit or solution, or being most suitable for the potential customer. What makes an effective slogan? Advertising slogans often play a large part in the interplay between rival companies. An effective slogan usually: • • • • • • • • • • states the main benefits of the product or brand for the potential user or buyer implies a distinction between it and other firms' products - of course, within the usual legal constraints makes a simple, direct, concise, crisp, and apt statement is often witty adopts a distinct "personality" of its own gives a credible impression of a brand or product makes the consumer feel "good" makes the consumer feel a desire or need is hard to forget - it adheres to one's memory (whether one likes it or not), especially if it is accompanied by mnemonic devices, such as jingles, ditties, pictures or film sequences on televised commercials sounds good The following is a short listing of a few advertising slogans. • • • • • • • • "Nothing Runs Like a Deere" Deere & Company equipment manufacturer "I Am Canadian" Molson brewing company "Think different." - Apple "Because you're worth it" - L'Oréal "Connecting people" - Nokia "Empowering People" - Acer "FAN-TASTIC" National Basketball Association 1982, Margaret Dickey Roeder, TMC "Ideas for Life." - Panasonic Source: http://www.answers.com/topic/advertising-slogan Question 1. Explain why each of these companies has chosen the following advertising slogans: "Business made simple" "Make the most of now" "Yes you can." "Your World. Delivered." "And you're done." "Broadcast Yourself" Nortel Vodafone Sprint AT&T Amazon.com YouTube "Buy it. Sell it. Love it." "Think different" "Connecting people." "Designed for life" "It's a Sony" "It's so simple" 2. Suggest a good advertising slogan for the following businesses/products: (a) fast-food restaurant, offering healthy products; (b) University (any of your choice); (c) Travel company (any of your choice) eBay Apple Computer Nokia Siemens Mobile Sony Polaroid Lakeland College Japan Introduction to Business Week 9 Week 9 Lesson 2 Marketing mix, distribution and promotion Core Concepts Role of distribution A distribution channel is a set of people and firms involved in carrying out the distribution function A channel involves: A producer. Ultimate consumers. Business users. Intermediaries. Distribution Channel When looking at direct versus indirect, it often comes down to cost versus control. Direct distribution allows producer to retain complete control. Producer will have to fund and organise all of the infrastructure and operations of the channel. Direct Distribution What are the advantages and disadvantages of direct distribution? Advantages: reducing overall costs (margins), closer to customers, control, availability of good lists Disadvantages: higher advertising/contact costs, assumes inelasticity to some service reductions, shipping times, item availability Indirect distribution A channel involving a producer, final customer and at least one level of intermediary is known as indirect distribution. What is a promotion? Promotion is the element in an organisation’s marketing mix that serves to inform, persuade and remind the market about the organisation and/or its products. Developing effective communication follows 5 steps Integrated marketing communications Step 1: Identifying the Target Audience Step 2: Determining Communication Step 3: Designing a Message Step 4: Choosing Media Step 5: Collecting Feedback Personal selling—the presentation of a product to a prospective customer by a firm’s sales executive. Lakeland College Japan Introduction to Business Week 9 Advertising Sales promotion Direct Marketing connecting directly with the customers Public relations—a planned communication effort by an organisation to contribute to generally favourable attitudes and opinions toward an organisation and its products. Slogan – To help position the product in customer’s mind and distinguish it from competitors’ offerings, advertisements will contain a word or phrase that is repeated across several different messages and different media outlets Which medium should we choose? Newspaper Magazine Direct Mail Radio Television Internet Outdoor Sponsorships Celebrity Endorsement Personal Selling Direct Marketing Public Relations Sales Promotion