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(We carry out market research) We must SUPPLY exactly what the customer wants. We can do this by offering the right MARKETING MIX: “The Four Ps” = the right PRODUCT at the right PRICE available through the right channels of distribution: PLACE presented in the tight way: PROMOTION. The Four Ps PRODUCT = the goods or the service that you are marketing A “product” is not just a collection of components. A “total product” includes the image of the product, its design, quality and reliability – as well as its features and benefits. In marketing terms, political candidates and non-profit-making public services are also “products” that people must be persuaded to “buy” and which have to be “presented and packaged” attractively. Products have a live-cycle, and companies are continually developing new products to replace products whose sales are declining and coming to the end of their lives. PRICE = making it easy for the customer to buy the product Pricing takes account of value of a product and its quality, the ability of the customer to pay, the volume of sales required, and the prices charged by the competition. Too low a price can reduce the number of sales just as significantly as too high a price. A low price may increase sales but not as profitably as fixing a high, yet still popular, price. As fixed costs stay fixed whatever the volume of sales, there is usually no such thing as a “profit margin” on any single product. PLACE = getting the product to the customer Decisions have to be made about the channels of distribution and delivery arrangements. Retail products may go through various channels of distribution: (1) Product - end-users (the product is sold directly to the end-user by the company’s sales force, direct response advertising or direct mail (mail order) (2) Producer - retailers - end-users (3) Producer- wholesalers/agents - retailers - en-users (4) Producer – wholesalers – directly to end-users (5) Producer – multiple store groups / department stores / mail order house – end-users (6) Producer – market – wholesalers – retailers – end-users Each stage must add value to the product to justify the costs: the person the middle is not normally someone who just takes their “cut” but someone whose own sales force and delivery system can make the product available to the largest number of customers more easily and cost-effectively. One principle behind this is “breaking down the bulk”: the producer may sell in minimum quantities of, say, 10,000 to the wholesaler, who sells in minimum quantities of 100 to the retailer, who sells in minimum quantities of 1 to the end-user. A confectionery manufacturer doesn’t deliver individual bars of chocolate to customers: distribution is done through wholesalers and then retailers who each “add value” to the product by providing a good service to their customers and stocking a wide range of similar products. PROMOTION = presenting the product to the customer Promotion involves the packaging and presentation of the product, its image, the product’s brand name, advertising and slogans, brochures, literature, price lists, after-sales service and training, trade exhibitions or fairs, public relations, publicity and personal selling. Every product must possess a “unique selling proposition” (USP) – the features and benefits that make it unlike any other product in its market. Thinking marketing Marketing affects every aspect of a company’s operations, as shown here: Everyone who works for the company must “think marketing” To think marketing we must have a clear idea of What the customers need What the customers want What causes them to buy What the product is to the customer: its functional, technical and economic aspects as well as the aesthetic, emotional and psychological aspects “FEATURES” (what the product is) + “BENEFITS” (which means that ..) We must be aware of our firm’s strengths and weaknesses as well as the opportunities and threats we face in the market (“S.W.O.T”). This unit deals with various aspects of marketing: market research, applying marketing principles, promotion and advertising. Section 10.4 covers the notions of expressing degrees of certainty, possibility and probability. 10.1 The marketing mix (about 90 minutes) Vocabulary Brand promotion Image publicity Design P.R. = public relations Distribution threats Demand outlets hire purchase opportunities posters tastes buying habits labels end-users This section introduces the topic of marketing, including some crucial concepts and vocabulary. Step B Let’s discuss just one of the items listed in Step A – Luxun Cinema, a particular local cinema, for example: What competition does the cinema face from other cinemas, from other leisure industry products, from non-leisure related products? Does it have a up-market or a down-market image? Where do customers receive their information about its products? Is promotional material generated by the owner of the cinema or by the distributors of the films shown? Are its customers regular customers or one-time customers? If you were running the cinema, would you market it more strongly and if so how? 10.2 Advertisements and commercials (about 90 minutes) Vocabulary USP = Unique Selling Proposition nostalgic AIDA = Attention, Interest, Desire, Action desirable Features rate Tense nervous headaches updated cross-referenced package benefits commercials The ads in the Students’ Book show the following products: First Choice Holidays – the first poster is a “tease” which arouses the public’s interest by apparently advertising a mystery product. The last poster on the page is the “reveal” ad which makes sense of the “teaser”, while still keeping the comic image alive in the public’s mind. Ben & Jerry’s Ice Cream – an interesting combination of cartoon-style drawing and real photograph of Ben Cohen and Jerry Greenfield, whose luxury ice cream ranks second to Haagen-Dazs in the USA. Their “product mission” is to make the finest all-natural ice cream in innovative flavors from Vermont diary products. Their factory is Vermont’s number one tourist spot. Michelin Maps and Guides – as described in the recording – Michelin’s main business is making tyres, but their maps and guides are an important part of their income. United Colors of Benetton – one of a series of posters on the theme of “black and white” promoting racial harmony. These posters don’t show any Benetton products, but promote the brand name and its positive image. 10.3 Promoting products and brands (about 45 minutes) Vocabulary Brochures showrooms comic Leaflets stands portable Direct mail trade fair brand name Point of sale displays sponsorship bubble gum Press releases word of mouth liqueur 10.4 Possibility, probability and certainty (about 50 minutes) Vocabulary Degree of probability break into manure trend global brands luxury brands sales literature Sales forecast Sales figures over-optimistic prediction sales-wise Step A – talking about degrees of probability Certain (100%) -- likely (75%) -- possible (50%) -- unlikely (25%) – impossible (0%) 10.5 marketing your own region (about 90 minutes) Vocabulary Questionnaire hospitality Misconception wilderness Gloomy landscape Specialist skills outside agencies consultants package tour