Principles of Marketing

2. Principles of Marketing 4 P’s of Marketing Product Place Promotion Price The Marketing Mix (features, quality, service, support, product line etc.) (channel of distribution, exclusive vs. intensive, etc.) (advertising, sales force, brochures, coupons, etc.) (list price, discount, deals, both end-user and channel) Developed by IQ Fall 2007

3. Principles of Marketing 4 P’s of Marketing Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need Product Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything Service Developed by IQ Fall 2007

4. Principles of Marketing 4 P’s of Marketing Augmented Product Product Actual Product Delivery & Credit After sales service Brand Name Features Core Benefit Design Quality Level Packaging Warranty Installation Developed by IQ Fall 2007

5. Principles of Marketing 4 P’s of Marketing • CONSUMER PRODUCTS • Convenience goods • Shopping goods • Specialty goods • Unsought goods • INDUSTRIAL GOODS • Marketing Considerations to Consumer Productions table 8.1 pg 235, Principles of Marketing Product Types Developed by IQ Fall 2007

6. Principles of Marketing 4 P’s of Marketing • Product Attributes • Branding • Packaging • Labeling • Product Support Services Product Product and Services Decisons Developed by IQ Fall 2007

7. Principles of Marketing 4 P’s of Marketing • Product Features • Product Quality • Product Style and Design Product ProductAttributes e.g Shopping Cart e.g Pink Santro Club Developed by IQ Fall 2007

8. Principles of Marketing 4 P’s of Marketing Product ProductAttributes Developed by IQ Fall 2007

9. Principles of Marketing 4 P’s of Marketing Product ProductAttributes Developed by IQ Fall 2007

10. Principles of Marketing 4 P’s of Marketing Product BRANDING A name, term, sign, symbol or design. Or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Developed by IQ Fall 2007

11. Principles of Marketing 4 P’s of Marketing Product PACKAGING - Labeling The activities of designing and producing the container or wrapper for a product Product information given on package Nutritional Labeling and Educational Act 1990, FDA Developed by IQ Fall 2007

12. Principles of Marketing 4 P’s of Marketing Product Product Support Services • Customer Support Service • Return Policies • Replacement Policies • Warranty • Guarantee Developed by IQ Fall 2007

13. Principles of Marketing 4 P’s of Marketing PRODUCT LINE A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets or fall within given price ranges Product PRODUCT MIX The set of all product lines and items that a particular seller offers for sale Developed by IQ Fall 2007

14. Principles of Marketing 4 P’s of Marketing BRAND EQUITY The positive differential effect that knowing the brand name has on customer response to the product or service Product • BRAND POSITIONING • Product Attributes • Benefits • Beliefs and Values Developed by IQ Fall 2007

15. Principles of Marketing 4 P’s of Marketing • BRAND NAME SELECTION • Selection • Protection Product • BRAND SPONSORSHIP • Manufacturer’s brand • Private brand • Licensing • Co-branding Developed by IQ Fall 2007

16. Principles of Marketing 4 P’s of Marketing • BRAND DEVELOPMENT • Line Extension • Brand Extension • Multibrands • New brands Product Developed by IQ Fall 2007

17. Principles of Marketing 4 P’s of Marketing PRODUCT DEVELOPMENT LIFE CYCLE Product PDLC • Product Idea • Screening • Concept Development &Testing • Marketing Strategy • Business Analysis • Product / Prototype Development • Test marketing • Commercialization Developed by IQ Fall 2007

18. Principles of Marketing 4 P’s of Marketing PRODUCT LIFE CYCLE Costs are high, Profits are low Product PLC • Introduction • Growth • Maturity • Decline Profits start and keep growing, Market share increases Sales are maximum then tail-off, Maximum profits New products replace products, sales become low Developed by IQ Fall 2007

19. Principles of Marketing 4 P’s of Marketing PRODUCT LIFE CYCLE A basic and distinctive model of expression Product PLC • Style • Fashion • Fad A currently accepted or popular style in a given field A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity Developed by IQ Fall 2007

20. Principles of Marketing 4 P’s of Marketing PRICING The amount of money charged for a product or service or the sum of the values that consumers exchange for the benefits of having or using the product or service Price DYNAMIC PRICING Changing different prices depending on individual customers and situations Developed by IQ Fall 2007

21. Principles of Marketing 4 P’s of Marketing FACTORS EFFECTING PRICING DECISIONS Internal Factors • Marketing Objectives - Depends on PLC • Survival, Current Profit Maximization, Market Share leadership, Product Quality Leadership • Marketing Mix Strategy – Depends on PLC • Target Costing • Costs • Elasticity of Demand, Elasticity of Price • Organizational considerations Price Developed by IQ Fall 2007

22. Principles of Marketing 4 P’s of Marketing FACTORS EFFECTING PRICING DECISIONS External Factors • Nature of the market and demand • Competition • Other environmental factors (economy, resellers and government) Price Developed by IQ Fall 2007

23. Principles of Marketing 4 P’s of Marketing PRICING APPROACHES Price • Cost based Pricing • Cost Plus pricing – Add standard profit (mark-up) to the cost of the product • Break-Even Analysis and Target Profit Pricing • Value-based pricing Setting price based on buyer’s perceptions of value rather than on the seller’s cost Developed by IQ Fall 2007

24. Principles of Marketing 4 P’s of Marketing NEW-PRODUCT PRICING STRATEGIES Price • Market Skimming Pricing Selling a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price - Fewer but more profitable sales • Market-Penetration Pricing Setting a low price for a new product in order to attract large number of buyers and a large market share Developed by IQ Fall 2007

25. Principles of Marketing 4 P’s of Marketing PRODUCT MIX PRICING STRATEGIES Price • Product Line Pricing Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features and competitor’s prices • Optional-Product Pricing The pricing of optional or accessory products along with a main product Developed by IQ Fall 2007

26. Principles of Marketing 4 P’s of Marketing PRODUCT MIX PRICING STRATEGIES Price • Captive Product Pricing Setting a price for products that must be used along with a main product e.g blades for razors, cartridges for printers • By-Product Pricing Setting a price for by products in order to make the main product’s price more competitive Developed by IQ Fall 2007

27. Principles of Marketing 4 P’s of Marketing PRICE ADJUSTMENT STRATEGIES Price • Discount • Allowance • Segmented Pricing • Psychological • Geographical • Promotional • International Developed by IQ Fall 2007

28. Principles of Marketing 4 P’s of Marketing Place • Distribution or Supply Chain Management • Retailing and Wholesaling Developed by IQ Fall 2007

29. Principles of Marketing 4 P’s of Marketing Distribution or Supply Chain Management Value Delivery Network: The network made up of the company. Suppliers, distributors and eventually customers who partner with each other to improve the performance of the entire system Marketing Channel or Distribution Channel: A set of interdependent organizations in the process of making a product or service available for use or consumption by the consumer or business user Place Developed by IQ Fall 2007

30. Principles of Marketing 4 P’s of Marketing Distribution or Supply Chain Management Marketing Channel or Distribution Channel: Place Producer Producer Producer InDirect Marketing Channel InDirect Marketing Channel Direct MarketingChannel Wholesaler Retailer Retailer Consumer Consumer Consumer Developed by IQ Fall 2007

31. Principles of Marketing 4 P’s of Marketing Distribution or Supply Chain Management Conventional Distribution Channel: A channel consisting of one or more independent producers, wholesalers and retailers, each a a separate organization seeking to maximize its own profits even at the expense of profits for the system as a whole Vertical Marketing System (VMS): A distribution channel structure in which producers, wholesalers and retailers act as a united system. One channel member owns the others, has contracts with them or has so much power that they all cooperate Place Developed by IQ Fall 2007

32. Principles of Marketing 4 P’s of Marketing Distribution or Supply Chain Management Horizontal Marketing System: A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity Multichannel distributin system or hybrid marketing channel: A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments Place Developed by IQ Fall 2007

33. Principles of Marketing 4 P’s of Marketing Distribution or Supply Chain Management Marketing Logistics: A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity Supply Chain Management: A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments Place Developed by IQ Fall 2007