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Marketing mix for innovations
Seppo Mönkkönen
M.Sc Agric.,
Senior Lecturer in Business Economics
Savonia University of Applied Sciences
Iisalmi, Finland
Innotools
16th April 2008
© Savonia University of Applied Sciences
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Marketing Plan
Two aspects:
1 Understand markets and customers behavior
Point 1
Diffusion of innovations
Point 2
Producut life cycle (PLC)
Point 3
Market Segmentation
2 Marketing actions (Four P´s)
Product
Price
Place
Promotion
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Marketing mix - History
• The four P’s concept is explained in most marketing textbooks and
classes
• One version of the origins of the marketing mix starts in 1948 when
James Culliton said that a marketing decision should be a result of
something similar to a recipe
• This version continued in 1953 when Neil Borden took the recipe
idea one step further and coined the term 'Marketing-Mix‘
• A prominent marketer, E. Jerome McCarthy, proposed a 4 P
classification in 1960
• Philip Kotler has made four P’s world wide known concept
• Concept has also several extra versions (6 or 7 P’s)
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Four P’s for new innovations (SME business)
1 Product Decisions
The term "product" refers to tangible, physical products as well as
services
Here are some examples of the product decisions to be made:
• Brand name
• Functionality
• Styling
• Quality
• Safety
• Packaging
• Repairs and Support
• Warranty
• Accessories and services
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Example
http://www.saskatoonberry.com/products1.html
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Four P’s for new innovations (SME business)
2 Price Decisions
Price is the only element in the marketing mix that produces revenue; all
other elements represent costs
Some examples of pricing decisions to be made include:
• Pricing strategy (skim, penetration, etc.)
• Suggested retail price
• Volume discounts and wholesale pricing
• Cash and early payment discounts
• Seasonal pricing
• Bundling
• Price flexibility
• Price discrimination
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• Companies bringing out an innovative product, that may face the
challenge of setting prices for the first time
• In the narrowest sense, price is the amount of money charged for a
product
• More broadly, price is the sum of all the values that consumers
exchange for the benefits of having or using the product
• Price is also one of the most flexible elements of the marketing mix
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Four P’s for new innovations (SME business)
3 Distribution (Place) Decisions
Distribution is about getting the products to the customer
Some examples of distribution decisions include:
• Distribution channels
• Market coverage (inclusive, selective, or exclusive distribution)
• Specific channel members
• Inventory management
• Warehousing
• Distribution centers
• Order processing
• Transportation
• Reverse logistics
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Four P’s for new innovations (SME business)
4 Promotion Decisions
In the context of the marketing mix, promotion represents the various
aspects of marketing communication, that is, the communication of
information about the product with the goal of generating a positive
customer response
Marketing communication decisions include:
• Promotional strategy (push, pull, etc.)
• Advertising
• Personal selling & sales force
• Sales promotions
• Public relations & publicity
• Marketing communications budget
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•
•
•
•
•
A - Attention (Awareness): attract the
attention of the customer.
I - Interest: raise customer interest by
demonstrating features, advantages, and
benefits.
D - Desire: convince customers that they
want and desire the product or service
and that it will satisfy their needs.
A - Action: lead customers towards taking
action and/or purchasing.
Nowadays some have added another
letter to form AIDA(S):
S - Satisfaction - satisfy the customer so
they become a repeat customer and give
referrals to a product.
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EXAMPLES
• Teno river
•
http://www.tenojoki.fi/tenopaasivut/pages_in_english.htm
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EXAMPLES
•
http://www.arctictravel.fi/english_PHP/index_en.php
•
http://www.kuusamoholidays.com/ollilanlomamajat/english/index.html
•
http://www.tenojoki.fi/tenopaasivut/pages_in_english.htm
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Evaluation – is the 4 P’s concept history?
• It is good checklist for all marketers
• Mainly used for consumer markets (do not offer an appropriate
model for industrial product marketing)
• Marketing mix approach may lead to unprofitable decisions because
it is not grounded in financial objectives
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