1 / 106


  • Uploaded on


I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript





Course outline

  • Introduction

  • The significance of information and research in marketing

  • Consumer behaviour

  • Market segmentation

  • Product

  • Price

  • Place

  • Promotion

Definitions of marketing
Definitions of Marketing

‘Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably’

The Chartered Institute of Marketing

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

American Marketing Association

Definitions of marketing1
Definitions of Marketing

‘Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others’ Kotler et al (2010)

‘The right product, in the right place, at the right time, and at the right price’

Adcock et al (2001)

The marketing concept
The Marketing concept

Choosing and targeting appropriate customers

Positioning your offering

Interacting with those customers

Controlling the marketing effort

Continuity of performance

The marketing concept1
The Marketing concept

  • Customer focus, profits, and integration of organizational efforts.

  • Customer orientation

    • Satisfying its customers at a profit…

    • Determining the needs and wants of target markets…

  • Discovering the wants of a target audience and then creating the goods and services to satisfy them

  • The marketing concept2
    The Marketing concept

    According to Levitt (1960), "the organization must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it."

    Since its publication, corporate leaders have moved from product-orientation toward market-orientation.

    Firms overemphasize the satisfaction of customer wants and needs and as a result ignore competition.

    The marketing concept3
    The Marketing concept


    Offensive (rather than defensive)


    Strategic (is future orientated)

    Effective (gets results)

    Davidson (1972)

    Marketing management process
    Marketing management process

    Analysis/Audit - where are we now?

    Objectives - where do we want to be?

    Strategies - which way is best?

    Tactics - how do we get there?

    (Implementation - Getting there!)

    Control - Ensuring arrival

    Marketing planning
    Marketing planning

    Systematic futuristic thinking by management

    better co-ordination of a company’s efforts

    development of performance standards for control

    sharpening of objectives and policies

    better prepare for sudden developments

    Building relationships with consumers
    Building relationships with consumers

    Firms that embrace the marketing concept seek ways to build a long-term relationship with each customer. This is an important idea. Even the most innovative firm faces competition sooner or later. And trying to get new customers by taking them away from a competitor is usually more costly than retaining current customers by really satisfying their needs. Satisfied customers buy again and again. This makes their buying job easier, and it also increases the selling firm’s profits. Building mutually beneficial relationships with customers requires that everyone in an organization work together to provide customer value before and after each purchase. If there is a problem with a customer’s bill, the accounting people can’t just leave it to the salesperson to straighten it out or, even worse, act like it’s “the customer’s problem.” Rather, it’s the firm’s problem.

    Marketing s role in non profit organisations
    Marketing’s role in non profit organisations

    The marketing concept is as important for nonprofit organizations as it is for business firms. However, prior to 1970 few people in nonprofits paid attention to the role of marketing. Now marketing is widely recognized as applicable to all sorts of public and private nonprofit organizations Ñranging from government agencies, health care organizations, educational institutions, and religious groups to charities, political parties, and fine arts organizations. Some nonprofit organizations operate just like a business. For example, there may be no practical difference between thegift shop at a museum and a for-profit shop located across the street. On the other hand, some nonprofits differ from business firms in a variety of ways. As with any business firm, a nonprofit organization needs resources and support to survive and achieve its objectives. Yet support often does not come directly from those who receive the benefits the organization produces.

    Marketing research
    Marketing Research

    Marketing research is the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services.

    A systematic inquiry whose objective is to provide information to solve managerial problems.

    Marketing research is the function that links the consumer, customer, and public to the marketer through information--information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.

    American Marketing Association

    Marketing research1
    Marketing Research

    • Market research will give you the data you need to identify and reach your target market at a price customers are willing to pay.

    • Research provides you with the knowledge and skills needed for the fast-paced decision-making environment.

    • Applied Research

      • Emphasis on solving practical (specific) problems

      • It could be exploring opportunities also

        • Rectifying an inventory system that is resulting into lost sales

        • Opportunity to increase stockholder wealth by acquiring another firm

    • Pure Research/Basic Research

      • Emphasis on problem solving but of a general nature (not specific)

        • Effect of coupon as against rebate to stimulate demand

    Consumer behaviour
    Consumer behaviour

    Those activities directly involved in obtaining , consuming and disposing of products and services, including the decision processes that precede and follow these actions

    ‘You cannot take the consumer for granted any more’

    Therefore a sound understanding of consumer behaviour is essential for the long run success of any marketing program

    Logical Positivism

    Understanding and predicting consumer behaviour

    Cause and effect relationships that govern persuasion and/or education

    Post Modern – to understand consumption behaviour without any attempt to influence it

    Consumer behaviour1
    Consumer behaviour

    • “MEET THE NEW CONSUMERand smile when you do because she is your boss. It may not be the person you thought you knew. Instead of choosing from what you have to offer, she tells you what she wants. You figure it out how to give it to her.”-Fortune Editor

    • A new product must satisfy consumer needs, not the needs and expectations of management

    • Understanding and adapting to consumer motivation and behaviour is not an option – it becomes a necessity for competitive survival

    Consumer behaviour2
    Consumer behaviour

    Consumer sovereignty presents a formidable challenge but skilful marketing can affect both motivation and behaviour if the product or service offered is designed to meet consumer needs and expectations.

    A sales success occurs because demand either exists already or is latent and awaiting activation by the right marketing offering.

    Consumer behaviour3
    Consumer behaviour

    Dominant forces shaping Consumer Research

    Factors that move an economy from Production-driven to Market-driven

    Level of sophistication with which human behaviour is understood in psychology and other behavioural sciences

    Consumer behaviour4
    Consumer behaviour

    Motivational Research

    It seeks to learn what motivates people in making choices. The techniques are such as to delve into the conscious, subconscious and the unconscious.

    ‘women don’t buy cosmetics, they buy hope.’

    ‘women bake cakes out of the unconscious desire to give birth’

    Consumer behaviour5
    Consumer behaviour

    The advice to footwear salesmen should be ‘Don’t sell shoes – sell lovely feet’

    Marketers must contend with small changing segments of highly selective buyers intent on receiving genuine value at the lowest price

    All managers must become astute analysts of Consumer motivation and Behaviour

    Three foundations for marketing decisions




    Consumer behaviour6
    Consumer behaviour

    Enhancing Consumer Value-added

    Marketers have to constantly innovate after understanding their consumers to strip out costs permanently by focusing on what adds value for the customer and eliminating what doesn’t.

    Individualised Marketing

    A very personal form of marketing that recognises, acknowledges, appreciates and serves individuals who become or are known to the marketer.

    Data – based marketing; DM

    Customized marketing

    Consumer behaviour7
    Consumer behaviour

    Variables involved in understanding consumer behaviour

    Stimulus – ads, products, hungerpangs

    Response – physical/mental reaction to the stimulus

    Intervening variables – mood, knowledge, attitude, values, situations, etc

    Overall model of consumer behaviour
    Overall Model of Consumer Behaviour

    External Influences

    Decision Processes




    Problem Recognition

    Social status

    Reference groups




    Information Search


    Marketing Activities

    Alt Eval & Selection

    Internal Influences

    Outlet select & Purchase










    Marketing environment
    Marketing Environment

    A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers.

    1). Being successful means being able to adapt the marketing mix to trends and changes this environment.

    2). Changes in the marketing environment are often quick and unpredictable.

    3). The marketing environment offers both opportunities and threats.

    4). The company must use its marketing research and marketing intelligence systems to monitor the changing environment.

    5). Systematic environmental scanning helps marketers to revise and adapt marketing strategies to meet new challenges and opportunities in the marketplace.

    Marketing environment1
    Marketing Environment

    • Includes:

      • Micro environment: actors close to the company that affect its ability to serve its customers.

      • Macro environment: larger societal forces that affect the microenvironment.

        • Considered to be beyond the control of the organization.

    Marketing environment2
    Marketing Environment

    1. Micro Environmental

    The microenvironment consists of five components.

    The first is the organization’s internal environment—its several departments and management levels—as it affects marketing management's decision making.

    The second component includes the marketing channel firms that cooperate to create value: the suppliers and marketing intermediaries (middlemen, physical distribution firms, marketing-service agencies, financial intermediaries).

    The third component consists of the five types of markets in which the organization can sell: the consumer, producer, reseller, government, and international markets.

    Marketing environment3
    Marketing Environment

    The fourth component consists of the competitors facing the organization.

    The fifth component consists of all the publics that have an actual or potential interest in or impact on the organization’s ability to achieve its objectives: financial, media, government, citizen action, and local, general, and internal publics.

    - So the microenvironment consists of six forces close to the company that affect its ability to serve its customers:

    a. The company itself (including departments).

    1). Top management is responsible for setting the company’s mission, objectives, broad strategies, and policies. 2). Marketing managers must make decisions within the parameters established by top management. 3). Marketing managers must also work closely with other company departments. Areas such as finance, R & D, purchasing, manufacturing, and accounting all produce better results when aligned by common objectives and goals. 4). All departments must “think consumer” if the firm is to be successful. The goal is to provide superior customer value and satisfaction.


    Marketing environment4
    Marketing Environment

    b. Suppliers.

    Suppliers are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. They are an important link in the company’s overall customer “value delivery system.”

    1). One consideration is to watch supply availability (such as supply shortages).

    2). Another point of concern is the monitoring of price trends of key inputs. Rising supply costs must be carefully monitored.

    Marketing environment5
    Marketing Environment

    c. Marketing channel firms (intermediaries).

    Marketing intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers.

    1). Resellers

    are distribution channel firms that help the company find customers or make sales to them.

    2). These include wholesalers and retailers who buy and resell merchandise.

    3). Resellers often perform important functions more cheaply than the company can perform itself. However, seeking and working with resellers is not easy because of the power that some demand and use.

    Physical distribution firms

    help the company to stock and move goods from their points of origin to their destinations. Examples would be warehouses (that store and protect goods before they move to the next destination).

    Marketing service agencies

    (such as marketing research firms, advertising agencies, media firms, etc.) help the company target and promote its products.

    Financial intermediaries

    (such as banks, credit companies, insurance companies, etc.) help finance transactions and insure against risks.

    Marketing environment6
    Marketing Environment

    d. Customer markets'. Competitors'. Publics.

    The company must study its customer markets closely since each market has its own special characteristics. These markets normally include:

    1). Consumer markets

    (individuals and households that buy goods and services for personal consumption).

    2). Business markets

    (buy goods and services for further processing or for use in their production process).

    3). Reseller markets

    (buy goods and services in order to resell them at a profit).

    4). Government markets

    (agencies that buy goods and services in order to produce public services or transfer them to those that need them).

    5). International markets

    (buyers of all types in foreign countries).

    Marketing environment7
    Marketing Environment

    e. Competitors.

    Every company faces a wide range of competitors. A company must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace. No single competitive strategy is best for all companies.

    Marketing environment8
    Marketing Environment

    f. Publics

    A public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. A company should prepare a marketing plan for all of their major publics as well as their customer markets. Generally, publics can be identified as being:

    1). Financial publics--influence the company’s ability to obtain funds.

    2). Media publics--carry news, features, and editorial opinion.

    3). Government publics--take developments into account.

    4). Citizen-action publics--a company’s decisions are often questioned by consumer organizations.

    5). Local publics--includes neighbourhood residents and community organizations.

    6). General publics--a company must be concerned about the general public’s attitude toward its products and services.

    7). Internal publics--workers, managers, volunteers, and the board of directors.

    Marketing environment9
    Marketing Environment


    The Company’s Macro environment

    The company and all of the other actors operate in a larger macro environment of forces that shape opportunities and pose threats to the company.

    The company and all of the other actors operate in a larger macro environment of forces that’s have opportunities and pose threats to the company. There are six major forces (outlined below)in the company’s macro environment. There are six major forces (outlined below) in the company’s macro environment.

    a. Demographic.

    b. Economic.

    c. Natural.

    d. Technological.

    e. Political.

    f. Cultural.

    Marketing environment10
    Marketing Environment

    a. Demographic Environment


    is the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistics. It is of major interest to marketers because it involves people and people make up markets. Demographic trends are constantly changing. Some more interesting ones are.1). The world’s population (though not all countries) rate is growing at an explosive rate that will soon exceed food supply and ability to adequately service the population. The greatest danger is in the poorest countries where poverty contributes to the difficulties. Emerging markets such as China are receiving increased attention from global marketers.2). The most important trend is the changing age structure of the population. The population is aging because of a slowdown in the birth rate (in this country) and life expectancy is increasing.

    The baby boomers

    following World War II have produced a huge “bulge” in our population's age distribution. The new prime market is the middle age group (in the future it will be the senior citizen group). There are many subdivisions of this group.

    a). Generation X--this group lies in the shadow of the boomers and lack obvious distinguishing characteristics. They are a very cynical group because of all the difficulties that have surrounded and impacted their group. b). Echo boomers

    (baby boom lets) are the large growing kid and teen market. This group is used to affluence on the part of their parents (as different from the Gen Xers). One distinguishing characteristic is their utter fluency and comfort with computer, digital, and Internet technology(sometimes called Net-Gens).

    Marketing environment11
    Marketing Environment

    c). Generational marketing is possible, however, caution must be used to avoid generational alienation. Many in the modern family now “telecommute”--work at home or in a remote office and conduct their business using fax, cell phones, modem, or the Internet. In general, the population is becoming better educated. The work force is becoming more white-collar. Products such as books and education services appeal to groups following this trend. Technical skills (such as in computers) will be a must in the future. The final demographic trend is the increasing ethnic and racial diversity of the population. Diversity is a force that must be recognized in the next decade. However, companies must recognize that diversity goes beyond ethnic heritage. One of the important markets of the future are that disabled people (a market larger any of our ethnic minority groups).

    Marketing environment12
    Marketing Environment

    b. Economic Environment

    The economic environment -includes those factors that affect consumer purchasing power and spending patterns. Major economic trends in the United States include:

    1). Personal consumption (along with personal debt) has gone up (1980s) and the early 1990s brought recession that has caused adjustments both personally and corporately in this country. Today, consumers are more careful shoppers.

    2). Value marketing

    (trying to offer the consumer greater value for their dollar) is a very serious strategy in the 1990s. Real income is on the rise again but is being carefully guarded by a value-conscious consumer.

    3). Income distribution

    is still very skewed in the U. S. and all classes have not shared in prosperity. In addition, spending patterns show that food, housing, and transportation still account for the majority of consumer dollars. It is also of note that distribution of income has created a “two-tiered market” where there are those that are affluent and less affluent. Marketers must carefully monitor economic changes so they will be able to prosper with the trend, not suffer from it.

    Marketing environment13
    Marketing Environment

    c. Natural Environment

    The natural environment -involves natural resources that are needed as inputs by marketers or that are affected by marketing activities. During the past two decades environmental concerns have steadily grown. Some trend analysts labelled the specific areas of concern were:

    1). Shortages of raw materials.

    Staples such as air, water, and wood products have been seriously damaged and non-renewable such as oil, coal, and various minerals have been seriously depleted during industrial expansion.

    2). Increased pollution

    is a worldwide problem. Industrial damage to the environment is very serious. Far-sighted companies are becoming “environmentally friendly” and are producing environmentally safe and recyclable or biodegradable goods. The public response to these companies is encouraging. However, lack of adequate funding, especially in third world countries, is a major barrier.

    Marketing environment14
    Marketing Environment

    3). Government intervention

    In natural resource management has caused environmental concerns to be more practical and necessary in business and industry. Leadership, not punishment, seems to be the best policy for long-term results. Instead of opposing regulation, marketers should help develop solutions to the material and energy problems facing the world.

    4). Environmentally sustainable strategies.

    The so-called green movement has encouraged or even demanded that firms produce strategies that are not only environmentally friendly but are also environmentally proactive. Firms are beginning to recognize the link between a healthy economy and a healthy environment.

    Marketing environment15
    Marketing Environment

    d. Technological Environment

    The technological environment -includes forces that create new technologies, creating new product and market opportunities.

    1). Technology is perhaps the most dramatic force shaping our destiny.

    2). New technologies create new markets and opportunities.3). The following trends are worth watching

    a). Faster pace of technological change. Products are being technologically outdated at a rapid pace.

    b). There seems to be almost unlimited opportunities being developed daily. Consider the expanding fields of health care, the space shuttle, robotics, and biogenetic industries.

    c). The challenge is not only technical but also commercial--to make practical, affordable versions of products.

    d). Increased regulation. Marketers should be aware of the regulations concerning product safety, individual privacy, and other areas that affect technological changes. They must also be alert to any possible negative aspects of an innovation that might harm users or arouse opposition.

    Marketing environment16
    Marketing Environment

    e. Political Environment

    The political environment

    includes laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. Various forms of legislation regulate business.

    1). Governments develop public policy to guide commerce--sets of laws and regulations limiting business for the good of society as a whole.

    2). Almost every marketing activity is subject to a wide range of laws and regulations. Some trends in the political environment include:

    - Increasing legislation to:

    a). Protect companies from each other.

    b). Protecting consumers from unfair business practices.

    c). Protecting interests of society against unrestrained business behaviour.

    Marketing environment17
    Marketing Environment

    -Changing government agency enforcement. New laws and their enforcement will continue or increase.

    3). Increased emphasis on ethics and socially responsible actions. Socially responsible firms actively seek out ways to protect the long-run interests of their consumers and the environment.

    a). Enlightened companies encourage their managers to look beyond regulation and “do the right thing.”

    b). Recent scandals have increased concern about ethics and social responsibility.

    c). The boom in e-commerce and Internet marketing has created a new set of social and ethical issues. Concerns are Privacy, Security, Access by vulnerable or unauthorized groups.

    Marketing environment18
    Marketing Environment

    f. Cultural Environment

    The cultural environment

    is made up of institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviours. Certain cultural characteristics can affect marketing decision-making. Among the most dynamic cultural characteristics are:

    1). Persistence of cultural values. People’s core beliefs and values have a high degree of persistence.

    Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government. Secondary beliefs and values are more open to change.

    2). Shifts in secondary cultural values. Since secondary cultural values and beliefs are open to change, marketers want to spot them and be able to capitalize on the change potential. Society’s major cultural views are expressed in:

    a). People’s views of themselves. People vary in their emphasis on serving themselves versus serving others. In the 1980s, personal ambition and materialism increased dramatically, with significant implications for marketing. The leisure industry was a chief beneficiary.

    b). People’s views of others. Observers have noted a shift from a “me-society” to a “we-society.” Consumers are spending more on products and services that will improve their lives rather than their image.

    Marketing environment19
    Marketing Environment

    c). People’s views of organizations.

    People are willing to work for large organizations but expect them to become increasingly socially responsible. Many companies are linking themselves to worthwhile causes. Honesty in appeals is a must.

    d). People’s views of society.

    This orientation influences consumption patterns. “Buy American” versus buying abroad is an issue that will continue into the next decade.

    e). People’s view of nature.

    There is a growing trend toward people’s feeling of mastery over nature through technology and the belief that nature is bountiful. However, nature is finite. Love of nature and sports associated with nature are expected to be significant trends in the next several years.

    f). People’s views of the universe.

    Studies of the origin of man, religion, and thought-provoking ad campaigns are on the rise. Currently, Americans are on a spiritual journey. This will probably take the form of “spiritual individualism.”

    Marketing mix

    The term "marketing-mix," was first coined by Neil Borden, the president of the American Marketing Association in 1953. It is still used today to make important decisions that lead to the execution of a marketing plan. The various approaches that are used have evolved over time, especially with the increased use of technology.

    Usually referring to E. Jerome McCarthy's 4 P classification for developing an effective marketing strategy, which encompasses: product, price, place (distribution) and promotion. When it's a consumer-centric marketing mix, it has been extended to include three more Ps: people, process and physical evidence, and three Cs: cost, consumer and competitor. Depending on the industry and the target of the marketing plan, marketing managers will take various approaches to each of the four Ps.

    Combination of marketing elements used in the sale of a particular product. The marketing elements center around four distinct functions, sometimes called the Four Ps: product, price, place (of distribution), and promotion. All these functions are considered in planning a marketing strategy, and any one may be enhanced, deducted, or changed in some degree in order to create the strategy necessary to efficiently and effectively sell a product.


    • Defining “Product”-Anything that you can “sell”

    • Product

      • Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.

    • Service

      • Any activity or benefit that one party can offer to another that is essentially intangible and does not result in ownership of anything.

    What is a product
    What is a product?

    • Products, Services, and Experiences

      • Market offerings, pure tangible goods, pure services, experiences

    • Levels of Product and Services

      • Core benefit, actual product, and augmented product

    • Product and Service Classifications

      • Consumer products

      • Industrial products

    Types of consumer products
    Types of Consumer Products






    Frequent purchases bought with minimal buying effort and little comparison shopping

    Low price

    Widespread distribution

    Mass promotion by producer


    Less frequent purchases requiring more shopping effort and price, quality, and style comparisons.

    Higher than convenience good pricing

    Selective distribution in fewer outlets

    Advertising and personal selling by producer and reseller


    Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity

    High price

    Exclusive distribution

    Carefully targeted promotion by producers and resellers


    Little product awareness and knowledge (or if aware, sometimes negative interest)

    Pricing varies

    Distribution varies

    Aggressive advertising and personal selling by producers and resellers

    Industrial goods
    Industrial goods

    • Materials and parts

      • Farm products

      • Natural products

      • Component materials

      • Component parts

    • Capital items

      • Installations

      • Equipment

    • Supplies and business services

      • Maintenance and repair

      • Advisory services

    Industrial goods1
    Industrial goods

    Installations -major capital items, such as new factories, heavy equipment and machinery, and custom-made equipment.

    Accessory equipment - includes less expensive and shorter-lived capital items than installations and involves fewer decision makers.

    Component parts and materials - become part of a final product.

    Raw materials - farm and natural products used in producing other final products.

    Supplies - expense items used in a firm’s daily operation that do not become part of the final product.

    Product classifications
    Product Classifications

    Durability and tangibility

    • Nondurable

      • Tangible

      • Rapidly consumed

      • Example: Milk

    • Durable

      • Tangible

      • Lasts a long time

      • Example: Oven

    • Services

      • Intangible

      • Example: Tax preparation

    Product mix dimensions
    Product mix dimensions

    • Width: number of product lines

    • Length: total number of items in mix

    • Depth: number of product variants

    • Consistency: degree to which product lines are related

    New product development
    New Product Development

    • Expensive, time-consuming, and risky.

    • Only 1/3 of new products become success stories.

    • Each step requires a “go or no-go” decision.

    New product development stages
    New Product Development Stages

    Stage 1: Generating ideas for new offerings

    Stage 2: Idea Screening

    Stage 3: Concept development and business analysis phase

    Stage 4: Product development

    Stage 5: Test marketing

    Stage 6: Commercialization

    Causes of new product failures
    Causes of New Product Failures

    • Overestimation of Market Size

    • Product Design Problems

    • Product Incorrectly Positioned, Priced or Advertised

    • Costs of Product Development

    • Competitive Actions

    • To create successful new products, the company must:

      • understand it’s customers, markets and competitors

      • develop products that deliver superior value to customers.

    Generating ideas for new offerings
    Generating ideas for new offerings

    Systematic Search for New Product Ideas

    Internal sources






    • Process to spot good ideas and drop poor ones

    • Criteria

      • Market Size

      • Product Price

      • Development Time & Costs

      • Manufacturing Costs

      • Rate of Return

    Concept development and business analysis phase
    Concept development and business analysis phase

    1) Develop Product Ideas into Alternative Product Concepts.

    2) Concept Testing - Test the Product Concepts with Groups of Target Customers.

    3) Choose the Best One

    Product development
    Product development

    Business Analysis

    -Review of Product Sales, Costs,

    and Profits Projections to See if

    They Meet Company Objectives

    If Yes, Move to Product Development

    Test marketing
    Test marketing

    Standard Test Market

    Full marketing campaign in a small number of representative cities.

    Controlled Test Market

    A few stores that have agreed to carry new products for a fee.

    Simulated Test Market

    Test in a simulated shopping environment to a sample of consumers.



    -Unleashing the Power of Branding through Trademarks

    The stages of the product life cycle
    The Stages of the Product Life Cycle

    • Development

    • Introduction/Launch

    • Growth

    • Maturity

    • Saturation

    • Decline

    • Withdrawal

    The product development stage
    The Product Development Stage

    • Initial Ideas – possibly large number

    • May come from any of the following –

      • Market research – identifies gaps in the market

      • Monitoring competitors

      • Planned research and development (R&D)

      • Luck or intuition – stumble across ideas?

      • Creative thinking – inventions, hunches?

      • Futures thinking – what will people be using/wanting/needing 5,10,20 years hence?

    Product development stage
    Product Development Stage

    • New ideas/possible inventions

    • Market analysis – is it wanted? Can it be produced at a profit? Who is it likely to be aimed at?

    • Product Development and refinement

    • Test Marketing – possibly local/regional

    • Analysis of test marketing results and amendment of product/production process

    • Preparations for launch – publicity, marketing campaign

    Introduction stage full scale launch of new products
    Introduction StageFull-Scale Launch of New Products

    • Advertising and promotion campaigns

    • Target campaign at specific audience?

    • Monitor initial sales

    • Maximise publicity

    • High cost/low sales

    • Length of time – type of product

  • High failure rates

  • Little competition

  • Frequent product modification

  • Limited distribution

  • High marketing and production costs

  • Negative profits

  • Promotion focuses on awareness and information

  • Intensive personal selling to channels

  • Growth offered in more sizes flavors options
    GrowthOffered in more sizes, flavors, options

    • Increased consumer awareness

    • Revenues increase-Initial healthy profits

    • Costs - fixed costs/variable costs, profits may be made

    • Monitor market – competitors reaction?

  • Increasing rate of sales-Sales rise

  • Entrance of competitors

  • Market consolidation

  • Promotion emphasizes brand ads

  • Goal is wider distribution

  • Prices normally fall

  • Development costs are recovered

  • Maturity many consumer products are in maturity stage
    MaturityMany consumer products are in Maturity Stage

    • Sales reach peak

    • Declining sales growth -Prices and profits fall

    • Cost of supporting the product declines

    • Ratio of revenue to cost high

    • Sales growth likely to be low

    • Market share may be high

    • Competition likely to be greater

    • Price elasticity of demand?

    • Monitor market – changes/amendments/new strategies?

  • Saturated markets

  • Extending product line

  • Stylistic product changes

  • Heavy promotions to dealers and consumers

  • Marginal competitors drop out

  • Niche marketers emerge

  • Saturation

    • New entrants likely to mean market is ‘flooded’

    • Necessity to develop new strategies becomes more pressing:

      • Searching out new markets:

        • Linking to changing fashions

        • Seeking new or exploiting market segments

        • Linking to joint ventures – media/music, etc.

      • Developing new uses

      • Focus on adapting the product

      • Re-packaging or format

      • Improving the standard or quality

      • Developing the product range

    Decline and WithdrawalRate of decline depends on change in tastes or adoption of substitute products

    • Product outlives/outgrows its usefulness/value

    • Fashions change

    • Technology changes

    • Sales decline -Long-run drop in sales

    • Large inventories of unsold items

    • Cost of supporting starts to rise too far

    • Elimination of all nonessential marketing expenses

    • Decision to withdraw may be dependent on availability of new products and whether fashions/trends will come around again?

    Managing the product life cycle

    Modifying the Product

    -Alter product quality

    -Enhance performance

    -Change appearance

    Modifying the Market

    -Finding New Users

    -Increase use

    -Create new use situations

    Extending the product life cycle repositioning

    Reacting to a Competitor’s Position-never compete

    head on

    Catching a Rising Trend-baby aspirin is now low dose

    aspirin to reduce heart attacks

    Changing the Value Offered

    Trading Up-add bells & whistles to raise price

    Trading Down- remove bells & whistles to lower price

    Downsizing-reduce contents but maintain price

    The boston matrix
    The Boston Matrix

    • A means of analysing the product portfolio and informing decision making about possible marketing strategies

    • Developed by the Boston Consulting Group – a business strategy and marketing consultancy in 1968

    • Links growth rate, market share and cash flow

    Classifies products into four simple categories
    Classifies Products into four simple categories

    • Stars – products in markets experiencing high growth rates with a high or increasing share of the market

    • - Potential for high revenue growth

    • Cash Cows:

      • High market share

      • Low growth markets – maturity stage of PLC

      • Low cost support

      • High cash revenue – positive cash flows

    Classifies products into four simple categories1
    Classifies Products into four simple categories

    • Dogs:

      • Products in a low growth market

      • Have low or declining market share (decline stage of PLC)

      • Associated with negative cash flow

      • May require large sums of money to support

    • Is your product starting to embarrass your company?

    Classifies products into four simple categories2
    Classifies Products into four simple categories

    Problem Child:

    Products having a low market share in a high growth market

    Need money spent to develop them

    May produce negative cash flow

    Potential for the future?

    Problem children – worth spending good money on?


    • Dogs:

      • Are they worth persevering with?

      • How much are they costing?

      • Could they be revived in some way?

      • How much would it cost to continue to support such products?

      • How much would it cost to remove from the market?


    • Problem Children:

      • What are the chances of these products securing a hold in the market?

      • How much will it cost to promote them to a stronger position?

      • Is it worth it?


    • Stars:

      • Huge potential

      • May have been expensive to develop

      • Worth spending money to promote

      • Consider the extent of their product life cycle in decision making


    • Cash Cows:

      • Cheap to promote

      • Generate large amounts of cash – use for further R&D?

      • Costs of developing and promoting have largely gone

      • Need to monitor their performance – the long term?

      • At the maturity stage of the PLC?

    Product identification
    Product Identification

    Branding and trademarks are keys to success in business and in the global market

    The AMA definition of a brand:

    “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 the competition.”

    What is branding
    What is Branding

    Branding -- is the process by which the name or the identify of an owner, a company/enterprise or organization, is communicated.

    Branding allows a company to differentiate its products and services from the competition by creating a bond with its customers. It aims to create customer loyalty.

    This way, a company takes a position in the marketplace.

    What is branding1
    What is Branding

    Brand - name, term, sign, symbol, design, or some combination that identifies the products of one firm and differentiates them from competitors’ offerings.

    Brand name - part of the brand consisting of words or letters included in a name used to identify and distinguish the firm’s offerings from those of competitors.

    Trademark - brand that has been given legal protection granted solely to the brand’s owner.

    What is branding2
    What is Branding

    A way by which companies launch and sell goods & services.

    A brand name is sometimes made of a part or the totality of a trademark name

    It communicates theessence of a products or its line, including why it is great and how it is better than all competing products.

    It reflects in general a prestigious (aesthetic) image in order to attract more consumers.

    Brands can convey six levels of meaning
    Brands can convey six levels of meaning

    • Attributes

    • Benefits

    • Values

    • Culture

    • Personality

    • User

    Brand identity decisions include
    Brand identity decisions include

    • Name

    • Logo

    • Colors

    • Tagline

    • Symbol

  • Consumerexperiences create brand bonding, brand advertising does not.

  • Brand categories
    Brand Categories

    Manufacturer’s brand - brand offered and promoted by a manufacturer. Examples: Tide, Jockey, Gatorade, Swatch, and Reebok.

    Private or store brand - brand that is not linked to the manufacturer but instead carries a wholesaler’s or retailer’s label. Examples: Sears’ DieHard batteries and Wal-Mart’s Ol’Roy dog food & Member’s Mark brand

    Family branding strategy - a single brand name used for several related products. Examples: KitchenAid, Johnson & Johnson, Hewlett-Packard, and Dole

    Individual branding strategy - giving each product within a line a different name. Examples: Procter & Gamble products Tide, Cheer, and Dash.

    Brand loyalty
    Brand Loyalty

    Brand recognition - consumer is aware of the brand but does not have a preference for it over other brands.

    Brand preference - consumer chooses one firm’s brand over a competitor’s.

    Brand insistence - consumer will seek out preferred brand and accept no substitute for it.

    Brand equity - added value that a respected and successful name gives to a product.

    Brand awareness - product is the first one that comes to mind when a product category is mentioned.

    Packages and labels
    Packages and Labels

    Important in product identification and play an important role in a firm’s overall product strategy.

    Choosing right package is especially important in international marketing.

    Must meet legal requirements of all countries in which product is sold.

    Universal Product Code- bar code read by optical scanner.

    Successful branding attracts catches the consumers
    SUCCESSFUL BRANDINGAttracts / catches the consumers

    • Marketers should attempt to create or facilitate awareness, acceptability, preference, and loyalty among consumers.

    • Valuable and powerful brands enjoy high levels of brand loyalty.

    • Attracts / catches the consumers

    • Developing a brand is part of every strategic business plan

    • Target what customers care about: articulate precise values and qualities that are relevant and of direct interest

    • Emphasize features that are both important to consumer and quite differentiated from competitors

    • Communicate constant innovating brand image at all levels of operation

    • Aaker identified five levels of customer attitudes toward brands:

      • Will change brands, especially for price. No brand loyalty.

      • Satisfied -- has no reason to change.

      • Satisfied -- switching would incur costs.

      • Values brand, sees it as a friend.

      • Devoted to the brand.

    Brand decions
    Brand Decions

    • Key Challenges

      To brand or not

      Brand sponsor

      Brand name

      Brand strategy

      Brand repositioning

    • Advantages of branding

      • Facilitates order processing

      • Trademark protection

      • Aids in segmentation

      • Enhances corporate image

      • Branded goods are desired by retailers and distributors

    Key challenges
    Key Challenges

    • Brand sponsor:

    • Options include:

      • Manufacturer (national) brand

      • Distributor (reseller, store, house, private) brand

      • Licensing the brand name

    • Brand name: Strong brand names:

      • Suggest benefits

      • Suggest product qualities

      • Are easy to say, recognize, and remember

      • Are distinctive

      • Should not carry poor meanings in other languages

    Key challenges1
    Key Challenges

    • Brand strategy

    • Varies by type of brand

      • Functional brands

      • Image brands

      • Experiential brands

    • Line extensions

    • Brand extensions

    • Multibrands

    • New brands

    • Co-branding

    Key challenges2
    Key Challenges

    Brand repositioning

    A brand report card can be used to audit a brand’s strengths and weaknesses.

    Changes in preferences or the presence of a new competitor may indicate a need for brand repositioning.

    Packaging and labeling
    Packaging and Labeling

    • Packaging and Labeling

    • Packaging includes:

      • The primary package

      • The secondary package

      • The shipping package

    • Many factors have influenced the increased use of packaging as a marketing tool.

    • Developing an effective package:

      • Determine the packaging concept

      • Determine key package elements

      • Testing:

        • Engineering tests

        • Visual tests

        • Dealer tests

        • Consumer tests

    Packaging and labeling1
    Packaging and Labeling

    • Labeling functions:

      • Identifies the product or brand

      • May identify product grade

      • May describe the product

      • May promote the product

    • Legal restrictions impact packaging for many products.

    What is a trademark
    What is a Trademark?


    “A sign distinguishing goods or services produced or sold by one enterprise (from those of other enterprises)”.

    Types of trademarks
    Types of Trademarks?

    Trade marks: to distinguish goods

    Service marks: to distinguish services

    Collective marks: to distinguish goods or services by members of an association

    Certification marks

    Well-known marks: benefit from stronger protection

    Tradename (Brand name)