Download Marketing Concepts

Marketing Concepts
4 Ps of Marketing
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Product
Price
Place
Promotion
These are referred to as the
marketing mix, and they must be
properly combined for an effective
marketing campaign
Product/Service Mix
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Mixing of product and service
e.g. retail stores such as Sears add
extras to the products they sell such
as delivery, installation and
extended product warranties
Can also have a service business,
such as a movie theatre, that also
sells products, e.g. popcorn
Price
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How much is charged for the
product or service
Can determine the success or
failure of a product
Consumers are very aware of price
and compare brands and stores
Marketers need to know if
consumers are price sensitive
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How much sales will go up or down
based on changes in price
Place
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Also known as channels of
distribution
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Paths of ownership or control that
goods follow as they pass from
producer to consumer
Methods that a business uses to sell
and distribute its products
Types of Place
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Direct
Indirect
Specialty
Direct Channel
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Connects buyers to businesses that
are selling the goods or providing
services
No intermediaries (middle person)
to increase the cost
Known as maker-user relationship
Indirect Channel
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Have one or more intermediaries
Could be an importer, wholesaler or
retailer
Importer
 Someone who searches for foreign
businesses that want to sell their
product to Canadian consumers
 Can have exclusive rights to distribute
the product in a certain region/country
Wholesalers
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Individuals or companies that buy
goods from producers or importers
and resell the products to retailers
Why use a wholesaler?
 Can buy in smaller quantities vs.
buying directly from manufacturer
 Usually located closer to the
wholesaler
Specialty Channels
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An indirect channel of distribution
that does not involve a retail store
Examples:
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Vending machines
Telemarketing
Catalogue sales
E-commerce
Door-to-door sales
Promotion
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Any attempt to sell a product or
service
Sales promotions encourage
consumers to buy products using:
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Coupons
Contests
Premiums
Samples
Special events
Coupons
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Offering consumers money off of the price
of a product
They are treated like cash
Most coupons end up in the garbage
Redemption Rate
 Measures the effectiveness of a coupon
program
 The larger the coupon, the higher the
redemption rate
 Average is about 5%
Contests
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A way to increase brand recognition
and sales
Law requires people to demonstrate
a skill or answer a skill-testing
question
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e.g. Tim Hortons Roll up the Rim
contest
Premium
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Giveaways
Sometimes the consumer gets
something for free when purchasing
a product
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e.g. a toy in cereal box
Customer loyalty cards are another
method
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Stamped each time the consumer
makes a purchase
Samples
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Encourage consumers to try a
product
Often small “trial” sizes of the
product
Sometimes distributed door-to-door
or at the supermarket
An effective way to increase sales
but expensive
Special Events
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Organizing special events to attract
consumers and increase product
sales
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e.g. book signing, celebrities that
promote shoes, perfume
Two Cs of Marketing
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Consumer
Competition
Must consider these when
developing the marketing mix
Consumer Market
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Companies study the types of
consumers that buy their products
Can be identified by:
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Demographics
Lifestyle
Demographics
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The study of obvious characteristics
that categorize people, such as:
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Age
Gender
Family life cycle
Household income
Ethnicity and culture
Lifestyle
Competition
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Competitive market
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Consists of all the sellers of a specific
product
Often expressed in terms of annual
spending on a specific product
Market share
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The % of the market that a company or
brand has
Competition continued…
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Market Segment
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Part of the overall market that has
similar characteristics
e.g. soft drink market would have a
diet segment, flavoured segment
Competition continued…
Direct Competition
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Competition between products that
are very similar
 e.g. Ritz Crackers vs. Premium
Plus crackers
Indirect Competition
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Competition between products or
services that are not directly related
to each other
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e.g. movie and pizza
Income
Discretionary Income
 The portion of disposable income
that is not already committed to
paying for necessities and can be
used to buy items for comfort and
pleasure
Income continued…
Disposable Income
 The amount of income that is left
after taxes have been paid
 Could be used for basic necessities
such as food, shelter and clothing