Discussion Plan

1. Discussion Plan Introduction Target Market Product Distribution Pricing Promotion Env. Factors

2. Marketing Mix + Environment Political, Legal, and Regulatory Forces Social Forces Product Customer Promotion Price Distribution Technological Forces Competitive & Economic Forces

3. Exchange Relationship • The act of giving up one thing, in return for something else • Examples: • Money, credit for work, labor, time • Goods, services, recognition • Marketing is about creating perceived value, not just value, for the exchange to occur "First get your facts; then you can distort them at your leisure."Mark Twain

4. Utility Theory • Can the product satisfy a human… • Needs and Wants • Four Types of Utility • Place: Where I want it? • Time: When I want it? • Ownership: Can I legally use it? • Receipts • Form: Was it produced the way I want it? • Automobiles: CD Players, tires, etc. Example

5. Functions of Marketing • Market Research • Trends in purchasing habits • Carbohydrate tendencies, clothing colors • Targeting a different audience with the same product • Trying to achieve form utility Research Grading Storage Transport Purchase Finance

6. Market Research • Instinct + Research = A powerful Combination • A systematic, objective process of getting information about potential customers to guide marketing decisions • Two types of Data

7. Primary Data Observed, recorded, collected directly Polls, surveys, ethnographic (passive, open ended, videotaped) Very Costly ($20,000 at some points) Secondary Data Information compiled in or outside of company in order to change the current situation Census bureau, general databases about consumer trends, Market Research

8. Functions of Marketing • Grading • Grading Products • Beef, steel, fruit subject to federal grading • Nutrition Facts • Labels to show quality and type Research Grading Storage Transport Purchase Finance

9. Functions of Marketing • Storage • Holding products at the warehouse for a certain period of time • Milk: Needed year round • Christmas Chocolates: Seasonal Research Grading Storage Transport Purchase Finance

10. Functions of Marketing • Transport • Logistical Process moving products to the location to achieve place and time utility Research Grading Storage Transport Purchase Finance

11. Functions of Marketing • Purchase • Buying Behavior • Making the right products, at the right price, in the perfect location, available Research Grading Storage Transport Purchase Finance

12. Functions of Marketing • Financing • Buying on Credit, or facilitating the purchase • “No Payments for 6 months” • “No Interest” • Free Delivery Research Grading Storage Transport Purchase Finance "Marketing is not an event, but a process . . . It has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, change it, even pause it. But you never stop it completely."Jay Conrad Levinson

13. Customer Relationship Mgmt. • Using information about the customer to create marketing strategies that develop and sustain desirable customer relationships • How can a company accomplish this? “The lifetime value of a Taco Bell customer is approximately $12,000…a Lexus customer…about $600,000."Libby Estell

14. Customer Relationship Mgmt. • Using information about the customer to create marketing strategies that develop and sustain desirable customer relationships • How can a company accomplish this? • Survey (Hotel, Vodafone promotion) • Communication (Websites, fax, email, personal) • Personal Attention • Listen 2/3 of the time, speak 1/3 of the time • Appreciation Gifts “The lifetime value of a Taco Bell customer is approximately $12,000…a Lexus customer…about $600,000."Libby Estell

15. Discussion Plan Introduction Target Market Product Distribution Pricing Promotion Env. Factors

16. Selecting the Target Market • Market • Group of people who have a need, purchasing power, and desire/authority to spend money on goods, services and ideas • Customer vs. Consumer: When a niño wants a toy • Target Market • Specific group of consumers on whose needs and wants a company focuses its efforts. "In marketing I've seen only one strategy that can't miss -- and that is to market to your best customers first, your best prospects second and the rest of the world last."John Romero Example

17. Market Segmentation • Firm divides the total market into groups of people that have similar product needs • Market Segment • Person, group, or organization with similar characteristics, and similar needs/desires • Proctor and Gamble spends $46 million to promote to the Hispanic population in the United States. Ads places in Telemundo Networks • US Presidential Candidates speaking in Spanish • (Market Research Trends)

18. Selecting a Target Market • Total Market Approach • Firms try to appeal to everyone and assume that all buyers have similar needs • What are some general product examples? Total Target Market Company Single Mktg. Strategy

19. Market Segmentation • Concentration Approach • Company develops one marketing strategy for a single market segment • Ability to specialize on one segment, or reach a segment ignored by other portions of the industry • Multi Segment Approach • Marketers aim its efforts at two or more segments, with a strategy for each

20. Market Segmentation Single Target Market • Concentration Approach: • Multi Segment Approach Single Mktg. Strategy 1 2 3 4 Market Strategy 1 1 2 3 4 Market Strategy 2 Multiple Target Markets

21. Niche Marketing Issues Has anyone heard of Sony Playstation ????? • Can the target market afford our product? • Can we reasonably expect to promote to them? • Is there a need in this market for the product? • Is our product good enough to serve this purpose? • What is the competition level? • Will this niche market lead to larger markets down the road?

22. Niche Marketing Issues • Can the target market afford our product? • Can we reasonably expect to promote to them? • Is there a need in this market for the product? • Is our product good enough to serve this purpose? • What is the competition level? • Will this niche market lead to larger markets down the road?

23. Basis for Segmenting Markets • Demographic • Age, sex race, ethnicity, income, education, occupation, family size, religion, social class • Think of your average clothing company? • Geographic • Psychographic • Behavioristic

24. Basis for Segmenting Markets • Demographic • Geographic • Climate, terrain, natural resources, population, • Montreal 40 Degrees below 0 in the winter • Psychographic • Behavioristic

25. Basis for Segmenting Markets • Demographic • Geographic • Psychographic • Lifestyles, personality, motives • Water, milk, food, in different size packaging • Behavioristic Example

26. Basis for Segmenting Markets • Demographic • Geographic • Psychographic • Behavioristic • Consumer actions toward the product • Consumer behavior when using the product • Automobiles to get to work, for the weekend, for the showroom with friends

27. Buying Behavior • The decision processes and actions of people who purchase and use products Psychological Variables Social Variables

28. Buying Behvavior: Psychological • Perception • Selecting, organizing, and interpreting information • Influenced by motivation: E.g. buying a new laptop • Learning • Attitude • Personality

29. Buying Behvavior: Psychological • Perception • Learning • Changes in behavior based on new info/experience • Attitude • Personality

30. Buying Behvavior: Psychological • Perception • Learning • Attitude • Knowledge or feelings about a given issue: the world • Personality

31. Buying Behvavior: Psychological • Perception • Learning • Attitude • Personality • Organizing individual´s traits, attitudes, and habits • “The clothes make the man.” Qfoos

32. Buying Behavior: Social • Reference Groups • Groups the consumer ID´s with • Family, friends, organizations • Social Class • Ranking of people into high position of respect/status • Products can serve this purpose • Culture • Patterns of behavior, thought, speech, acceptance "If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart."Nelson Rolihlahla Mandela Go Tiger

33. Remember 1998 in France…

34. Discussion Plan Introduction Target Market Product Distribution Pricing Promotion Env. Factors

35. Classifications: Consumer Prod. • Convenience Products • Eggs, milk, bread, cheese • For immediate consumption • Low involvement, high brand acceptance • Shopping Products • Furniture, sporting goods, • Comparisons, on price, quality • Specialty Products • Ethnic foods, designer clothes or exclusive products • People will go out of their way to achieve these products

36. Classifications: Industrial Prod. • Raw materials • Equipment for Machines used in production • Accessories • PC´s, Fax machines, etc, not part of final product • Components and processed materials • Battery, glass, varnish, used in final product • Supplies • Pens, paper, calculator, to make management easier • Industrial Services • Financial, legal, security, janitors

37. Indentifying Products • Branding • Naming and identifying products (may have trademark) • Types of Brands • Manufacturer Brands: Unilever (Dove Soap) • Ownership from production to point of purchase (POP) • Private Distributor Brands: Gap • Ownership after purchase from manufacturer to POP • Generic Products • No brand name, which package, lower price

38. Identifying Products • Packaging • 40% of consumers will try a product based on packaging • 2.5 seconds: amount of time spent looking • Convenience: 6.44 oz per gulp, squeeze or gulp? • Labeling • Nutrition fact, warnings, certifications, company logo • Quality "First get your facts; then you can distort them at your leisure."Mark Twain

39. Product Life Cycle • The lifespan of a product on the market. Introduction Growth Maturity Decline Sales Volume Profit Time

40. Different Product Life Cycles Sales Sales High Learning Product: PC´s (Dell) Low Learning Product: Gillette MACH 3 Razor Time Time Sales Sales Fashion Product: Skirt length, jean types, colors Fad Products Can´t think of anything, sorry Time Time

41. 34% Late majority 34% Early majority 16% Laggards 2 ½% Visionaries Crossing the Chasm Main Street The Chasm 13 ½% Pragmatists Time of adoption innovations Source: Inside the Tornado, G. Moore, Harper Business, 1995. Karl Moore, McGill University

42. Visionaries Love Rapid Innovation Play by their own rules, don´t care for others opinions Risk takers Motivation New opportunities Some will buy anything new, just to be the first to try it. Shoot for the moon What is possible? Pragmatists Love gradual innovation Consult others for their opinions Conformists Follow the pack Motivation Solving present issues More Analytical, less emotional Look for a calculator What is most likely? Characteristics

43. Visionaries Love Rapid Innovation Play by their own rules, don´t care for others opinions Risk takers Motivation New opportunities Some will buy anything new, just to be the first to try it. Shoot for the moon What is possible? Pragmatists Love gradual innovation Consult others for their opinions Conformists Follow the pack Motivation Solving present issues More Analytical, less emotional Look for a calculator What is most likely? Characteristics

44. Getting through the Bowling Alley • Having (or acting like you have) an innovative product that will revolutionize the world • Product will not only the present issue, but future issues that may arise • Need to show understanding of industry • Having one great product does not always work • Spread word of mouth, show accomplishment

45. 34% Late majority 34% Early majority 16% Laggards 2 ½% Visionaries Crossing the Chasm Main Street The Chasm 13 ½% Pragmatists Time of adoption innovations Source: Inside the Tornado, G. Moore, Harper Business, 1995. Karl Moore, McGill University

46. Bowling Alley Avoid Competition = Niche marketing strategy Value Based Pricing maximizes profits Value Added Distribution = “Customized Solutions.” Differentiate product for a specific use Specialized, focused approach Tornado Attack Competition = to Increase Market Share Price based competition maximizes competition Low Cost High Volume Distribution = higher exposure” Commoditize product = adjust for multiple uses Mass communication and world of mouth Differences between the two…

47. Bowling Alley Avoid Competition = Niche marketing strategy Value Based Pricing maximizes profits Value Added Distribution = “Customized Solutions.” Differentiate product for a specific use Specialized, focused approach Tornado Attack Competition = to Increase Market Share Price based competition maximizes competition Low Cost High Volume Distribution = higher exposure” Commoditize product = adjust for multiple uses Mass communication and world of mouth Differences between the two…

48. Bowling Alley Target Audience Pricing Placement Product Promotion Tornado Attack Competition = to Increase Market Share Price based competition maximizes competition Low Cost High Volume Distribution = higher exposure” Commoditize product = adjust for multiple uses Mass communication and world of mouth Differences between the two…

49. Post-Tornado Market Share by Revenue

50. Post-Tornado Market Share by Profits