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MARKETING
Topic 4
SUSIE ROBERTS
11/15 REV
Definition of Marketing
 The “Bridge” between the producer and the
consumer.
 The PROCESS of getting customers interested in a
product; giving customers what they want or need in
products (GOODS, SERVICES, IDEAS)
 The management task that links the business to the
consumer by meeting the needs of the customers
profitably; “getting the right product at the
right price to the right place at the right
time”.
MARKET SIZE
HOW IS MARKET SIZE Measured?
Definition: the total level of sales of all producers within a
market
 Two
Ways: Volume
and
Value
 Market size can be measured by volume but is usually
measured by VALUE.
 4.2
Market Growth and Decline
Market VS Product Orientation

External Factors on GROWTH or DECLINE include:
State of the Economy
 Technology
 Demographic and Social Change
________________________________________
 Market Orientation vs Product Orientation

Market-oriented: what customers want; an outward –looking
approach basing product decisions on consumer demand as
established by market research VS Product-the concerns and
convenience of internal production
 Product oriented: an inward-looking approach that focuses on
making products that can be made or have been made for a long time
and then trying to sell them; companies quickly lose market share as
customers move to product more tailored to customers’ needs.
 4.1

MARKET SHARE
 Measures what proportion of the total market’s sales
is held by one organization.
 Businesses can gain market share at the expense of
competitors through a successful advertising
campaign (example).
 4.1
Goods, Services, Ideas-things that are marketed
 Goods: Tangible items that you can touch and hold
 Services: Intangible items that must be used and can’t be
returned; they can’t be touched-think TIME, Accounting
and Legal Advice and Athletic Trainers
 Ideas: “Litter and it will hurt”, “Friends don’t let friends
drink and drive”, the pink ribbon. Non-profits often
market for donations.
 4.1
Marketing Plan and Objectives
 The Marketing Plan includes:
 Key Marketing Objectives
 Strategic Plans
 Specific Marketing Actions
 Marketing Budget
 4.2P263
The Marketing Mix- the 4 P’s plus 4
“Marketing is a PROCESS”
Product
Price
The 4 P’s
Place
Promotion
_______________________________
People
Physical Evidence
Packaging
Process
“ONLY WHEN ALL THE ELEMENTs are combined in
the correct way will the marketing objectives be
met”.
 4.2-P264
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MARKET Segmentation-Refers to the process of
dividing a market into smaller sub-groups.
 MASS Marketing:
 NICHE Marketing:
 Looking at the market as a
 Segmenting a market such
whole, rather than
segmenting it.
 Targeting:
as by
 1)Geographics,
2)Demographics, and
3)Psychographics
The process of marketing to a
specific market segment.
 Businesses try to identify
 4.2-P267
key sub-groups in a market
and aim to generate profit
by meeting specific needs
of those consumers.
Consumer
Profiles
Businesses create
consumer profiles
which are detailed
characteristics of the
consumers of a
particular product.
DEMOGRAPHICS:
 Age
 Gender
 Income
 Social Group
 May also include: Profession,
Education Level, Ethnicity
PSYCHOGRAPHICS:
 Attitudes
 Beliefs
GEOGRAPHICS:
Location (Urban or Rural, Latitude,
Country)
 4.2-P266
What is the difference?
Define:
Compare and Contrast:
 Market Segment vs.
 Contrast Segmented
 Niche Market vs.
(Differentiated)
Marketing to Mass
Marketing.
 Contrast Mass
Marketing to Niche
Marketing.
 Target Market
 4.2P267
What is a Consumer/Customer Profile?
 Consists of information
provided about the
characteristics of
consumers of a
particular product in
different markets.
 May include details of
spending patterns in
terms of the # and
frequency of products
bought by consumers.
The TARGET MARKET: the market segment that
a particular product is aimed at.
Positioning
Unique Selling
Proposition USP’s
 Businesses analyze the
 USP’s are key in
current state of the
market.
 Using a Market or
Position Map allows the
business to see where
existing brands are
aimed and identify
profitable niches in the
market.
protecting a niche once
a business has
identified it.
 Companies spend time
and money ensuring
that their product is
differentiated in design
and branding.
 PRODUCT
The Marketing
Mix (4 P’s)
Marketing is a
PROCESS; it is more
than 1 activity.
 PRICE
 PLACE
 PROMOTION
 4.2
PRODUCT
 Good, Service, or Idea that is offered in the market.
 Tangible-Something that can be touched or held.
 Intangible-Something that can be purchased but is
not tangible (Dental work, accounting services).
 4.2
PRODUCT
The Product Mix:
The Product Life Cycle:
 The complete range of
 5 Stages of the Product
products produced by a
business including
product lines and
individual products.
 A product line is a group
of products within the
mix that are closely
related to each other.
Life Cycle:
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Development
Introduction
Growth
Maturity
Decline
Product Life Cycles do not
have a set duration.
4.5
Product (continued)
Extension Strategies
Product Diffusion Curve
or Adopters
 Extending the life of
 This describes how
quickly customers adopt
a new product:
existing products by
updating to prevent it’s
decline.
 Examples: Oreos,
Monopoly, Lays chips,
Uggs
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Innovators
Early adopters
Early majority
Late majority
Laggards
PRICE -The amount that
consumers are charged for the
product.
THIS INDICATES THE VALUE THAT
CONSUMERS PERCEIVE A PRODUCT TO HAVE.
PRICING STRATEGIES:
1)COST-BASED PRICING
2)COMPETITION-BASED PRICING
3)MARKET-BASED PRICING (PRICE
PENETRATION AND PRICE SKIMMING)
PRICE TO BE FAIR,
TO BE COMPETITIVE, AND
TO MAKE A PROFIT
PROMOTION-Refers to the various ways in which consumers are
informed about the persuaded to purchase a product.
Above the Line Advertising:
 Above the Line: Direct
Advertising through
consumer channels.
 Persuasive advertising is
aimed to convince consumers
to buy a particular product.
 Informative advertising aims
to make consumers aware of
the features and
characteristics of the product.
Below the Line Advertising:
 Price Promotions/Price Deals
 Direct Marketing
 Direct Personal Selling
 Loyalty Cards
 Point of Sale Displays
 Public Relations
 Money-Off Coupons
 Buy One-Get One Free
 Contests/Games/Competitions
 Sponsorship
 Factors to Consider:
Promotional
Mix
All the forms of
promotion in
the list will be
effective for
certain
businesses in
certain
situations.
 Who is the product aimed at?
Whole market or smaller
segments?
 How much will it cost?
 How effective will my promotion
be?
 Advertising-What you say about
PROMOTIONAL
MIX
Advertising
Publicity/Public
Relations
Selling
Sales Promotion
yourself
 Publicity-What others say about
you
 Selling-Planned one-on-one
communication
 Sales Promotion-Used to Inform,
Persuade, or Remind consumers
about products; Above the Line,
Below the Line
Other marketing techniques:
Viral Marketing
Guerilla Marketing
 The use of social
 Was invented as an
networking sites or text
messages to increase
brand awareness or sell
products.
 YouTube and other
online outlets are
commonly used.
 Also called “marketing
buzz”.
unconventional system of
promotions that relies on time,
energy and imagination rather
than a big marketing budget.
Typically, guerrilla marketing
campaigns are unexpected and
unconventional, potentially
interactive, and consumers are
targeted in unexpected places.
 Examples: Graffiti, sticker
bombing, flash mobs.
PLACE-Refers to the product’s
location or channels of
distribution.
DISTRIBUTION CHANNELS:
1)MANUFACTURER TO CONSUMER
2)MANUFACTURER TO RETAILER TO CONSUMER
3)MANUFACTURER TO WHOLESALER TO
RETAILER TO CONSUMER
4)AGENTS MAY ALSO EXIST, PARTICULARLY IN
SERVICE INDUSTRIES
4.2
Distribution Channels
BRANDING
“BRANDS ARE WELL-KNOWN NAMES OF
INDIVIDUAL COMPANIES OR PRODUCTS.
THE MOST SUCCESSFUL BRANDS BECOME
SYNONYMOUS WITH THE NAME OF THE
PRODUCT ITSELF”.
EXAMPLES: KLEENEX, Q-TIPS,
ROLLERBLADE
Branding
A strong
brand will
allow a
business to
differentiate
itself from its
rivals.
 Brand Awareness-Ensuring
that customers recognize the
offerings, name, and products of a
particular business.
 Brand Development- Trying to
increase the power of the name or
logo in order to increase the
brand awareness and therefore
gain higher sales.
 Brand Loyalty-The willingness
of consumers to purchase the
same brand repeatedly.
Definitions
 Marketing Audit: looks at the cost and
effectiveness of marketing activity on a periodic
basis.
SWOT: strengths and weaknesses are internal to a
business; opportunities and threats consider the
external environment
Market Research: A collection of objective data
about a market, competitors, and consumers;
essential to creating a successful product and in
marketing it effectively; Primary and Secondary.
Primary and Secondary Research Data
 Primary is collected directly from consumers; first hand
directly from the market i.e. focus groups, interviews, surveys,
and observation.
 Secondary is data that has already been collected and then
published; trade journals, gov’t reports, consumer groups,
market analysis reports, media.


General
May not be current
>Quantitative including random samples and cluster samples may be used to
identify trends.
>Qualitative looks in far more depth at the buying process.
Potential for BIAS. TECHNOLOGY allows businesses to target customers.

4.4
Why do Market Research?
 To identify consumer needs and wants.
 To understand consumers’ satisfaction levels and
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purchasing behaviors.
To make predictions about future business trends
To reduce the risk of product failure by establishing likes
and dislikes of consumers
To measure the effectiveness of a marketing strategy by
assessing or evaluating the effectiveness of the 4 P’s in
specific target markets
To keep current; to keep up to date for first=mover
advantage
4.4
Quantitative VS Qualitative
Quantitative
Qualitative
 Involves collecting
 Involves collective data
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numerical data or
measurable data
Objective
Key question-”How
many?”
Narrow and Focused
4.4
about opinions,
attitudes, beliefs
 Subjective
 Key question-”Why?”
 Focus is complex and
broad
Sampling
 Sample-A group of people selected to represent the population or
target market under research
 Sampling-The process of selecting an appropriate sample
 Types of Sampling:
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>Quota
>Random
>Stratified
>Cluster
>Snoballing
>Convenience
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Read the EXAM TIP on page 289.
Now Discuss the Advantages and Disadvantages of one type of sampling by table
group and be able to explain to the class in 5 minutes.
Assignment: Read the Safaricom Case Study on page 290 and answer the two
EXAM style questions on a paper to turn in on Friday.
Pages 287-289 4.4
The Product Portfolio Analysis
The Boston Matrix (BCG)
Growth Rate and Market
Share
 Cash Cow
 Cash Cow-Low growth
 Star
 Question Mark or
Problem Child
 Dog
and high market share
 Star-High growth and
high market share
 Question Mark-High
growth and low market
share
 Dog-Low growth and
low market share
21st Century Marketing Issues
 International Marketing: must take into account how
the marketing mix (4 P’s) needs to be adapted to fit the
different cultural, political, legal, social, and economic
issues of each new market.
 E-Commerce: Business to Business Commerce and
Business to Consumer Commerce; The 4 P’s- Product can
be customized and the “Longtail” affect; Price is more
competitive; Promotion is a two-way process; Place is a
low cost alternative to “brick and mortar”.
 HL
What is the “Longtail”?
SELLING A LARGE NUMBER OF UNIQUE
ITEMS IN SMALL QUANTITIES, USUALLY IN
ADDITION TO SELLING FEWER POPULAR
ITEMS IN LARGE QUANTITIES.
EXAMPLES: NETFLIX, AMAZON
And…that’s a wrap!
HERE’S THE CHALLENGE:
CAN YOU GET A PRODUCT
FROM THE PRODUCER TO
THE CONSUMER
(AND MAKE A PROFIT)?