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4 Ps of Marketing Mix

4 Ps of Marketing Mix. Utilities created by marketers for customers: Product or service utility Possession utility / price utility Time utility Place utility. Product. Price. Place. Promotion. What is promotion……?.

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4 Ps of Marketing Mix

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  1. 4 Ps of Marketing Mix Utilities created by marketers for customers: • Product or service utility • Possession utility / price utility • Time utility • Place utility Product Price Place Promotion

  2. What is promotion……? • Modern marketing calls for more than just developing a good product, pricing it attractively, and making it available to target customers. Companies also must communicate with their customers, and what they communicate should not be left to chance. For most companies, the question is not whether to communicate, but how much to spend and in what ways.

  3. What is promotion……? • “ Promotion is the co-ordination of seller’s efforts to set up channels of information and persuasion to facilitate the sales of goods/services or acceptance of an idea. ”

  4. PROMOTION What is promotion……? To Inform To Persue To Modify Behavior To Remind

  5. What is promotion……? • “Promotion is an act of communication” • “It includes all those activities which are aimed at creating and stimulating demand” In our daily life we all are exposed to various tools of promotion aiming at communicating one thing on other to us. For our convenience, all those promotional tools can be categorized in five major components, constituting the promotion mix

  6. PROMOTION PROMOTIONAL TOOLS(THE PROMOTION MIX) Advertising Publicity Sales Direct Personal Promotion Marketing Selling

  7. THE PROMOTION MIX • The Promotion Mix (5 tools of promotion) is the company’s primary communication activity, the entire marketing mix (4 Ps) - promotion and product, price and place - must be coordinated for greatest communication impact. • Actually, communication goes beyond the 5 specific tools of promotion. The product’s design, its price, the shape and colour of package, and the stores that sell it - all communicate something to buyer.

  8. ELEMENTS OF PROMOTION MIX Five Major methods used for promotion (Promotion Mix) 1.Advertising : Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. 2.Publicity : Non-personal stimulation of demand for a product or service or business unit by planting commercially significant news about it in a published medium or obtaining favorable presentation of it upon radio, T.V., or stage that is not paid for by the sponsor.

  9. ELEMENTS OF PROMOTION MIX 3.Personal Selling: Oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales. 4.Sales Promotion : All those marketing activities – other than advertising, publicity and personal selling that stimulate consumer purchasing and dealer effectiveness such as displays, shows & exhibition, demonstrations and various non – recurrent selling efforts. These are usually short term activities

  10. ELEMENTS OF PROMOTION MIX 5.Direct Marketing : Has several forms - direct mail, telemarketing, electronic marketing and so on. It has a few distinctive characteristics non – public / customized / Up- to- Date (Messages can be prepared very quickly for an individual) .

  11. NATURE OF EACH PROMOTIONAL TOOL • Each Promotional Tool has unique characteristics and costs. 1. ADVERTISING • Public Presentation (Public mode of communication) • Pervasiveness (Permits seller to repeat the message many times. It also allows buyer to receive and compare the massage with competitors.)

  12. NATURE OF EACH PROMOTIONAL TOOL (1. ADVERTISING…….contd.) • Amplified Expressiveness (Provides opportunities for dramatizing the company and its products through the artful use of print, sound, colour etc.) • Impersonality (It can not be as compelling as a co’s sales representative.)

  13. NATURE OF EACH PROMOTIONAL TOOL 2. PUBLICITY • High credibility (news features and stories seem more authentic and credible to readers/viewers than ads do.) • Off guard (can reach many prospects who might avoid sales people and ads. The message gets to the buyers as news.) • Dramatization (like advertising it also has a potential for dramatizing a co. or its products.)

  14. NATURE OF EACH PROMOTIONAL TOOL 3. PERSONAL SELLING • Personal confrontation (Both way communication) • Cultivation (all kinds of relationships - short time or long time) • Response (makes the buyer feel under some obligation)

  15. NATURE OF EACH PROMOTIONAL TOOL 4. SALES PROMOTION • Communication (they gain attention and usually provide information that may lead the consumer to the product) • Incentives (gives value to the consumer) • Invitation (to engage in the transaction now)

  16. NATURE OF EACH PROMOTIONAL TOOL 5. DIRECT MARKETING • Non–public (message is addressed to specific person/group) • Customized (to appeal to the addressed individual ) • Up–to–date (messages can be prepared very quickly for delivery to an individual)

  17. ADVANTAGES AND DISADVANTAGES OF PROMOTIONAL COMPONENTS

  18. OBJECTIVES OF PROMOTION • To Increase Sales • To Increase Market Share • To Build Brand Loyalty • To Build Product Differentiation in Consumers’ mind

  19. DETERMINING THE PROMOTION MIX(FACTORS IN SETTING THE PROMOTION MIX) I. Type of Product : • For consumer products – Heavy Advertising • For Industrial products – More Personal Selling Personal Selling Personal Selling Sales Promotion Sales Promotion Publicity Publicity Advertising Advertising Consumer Products Industrial Products

  20. DETERMINING THE PROMOTION MIX(FACTORS IN SETTING THE PROMOTION MIX) II. Nature of Market : • Locational Characteristics of consumers • Demographics of the customers • Intensity of the competition • Requirements of channel members

  21. DETERMINING THE PROMOTION MIX(FACTORS IN SETTING THE PROMOTION MIX) III. Buyer Readiness stage : • Un-aware Informed Aware • Interested Not-interested • Having full knowledge • Comprehension • Conviction • ordering • Reordering etc

  22. DETERMINING THE PROMOTION MIX(FACTORS IN SETTING THE PROMOTION MIX) IV. Product Life Cycle Stage: Sales Growth Decline Intro. Maturity Time

  23. DETERMINING THE PROMOTION MIX(FACTORS IN SETTING THE PROMOTION MIX) V. Push v/s Pull strategy: Marketing Activities Demand Push Mfr Intermediaries End User Demand Marketing Activities Demand Demand End User Pull Mfr Intermediaries

  24. DETERMINING THE PROMOTION MIX(FACTORS IN SETTING THE PROMOTION MIX) VI. Co. Market Rank : (Top ranking brands derive more benefitfrom advertising than sales promotion.) VII. Available Budget VIII. Company Policy and Objectives IX. Competitive Promotional Strategy(Competitors’ role and reaction) X. Market Trend and Consumer Attitude

  25. “PROMOTION IS AN ACT OF COMMUNICATION” • The word ‘communication’ is based on the Latin word meaning “COMMON”. Thus the term communication has come to mean sharing something of common use. • Since, marketing communications aim at influencing the consumer behavior in favour of the firm’s offerings, these are persuasive in nature. These persuasive communications are more commonly called “PROMOTION” and constitute one of the 4Ps of the marketing mix.

  26. “PROMOTION IS AN ACT OF COMMUNICATION” • Modern marketing calls for more than developing a good product, pricing it correctly and making it easily available to the customer. The company that wants more than ‘walk in’ sales must develop an effective program of communication & promotion. • Persuasive communication is said to take place when a communicator very consciously develops his messages to have a calculated impact on the attitude and/ or behavior of a target audience. • A study of ‘Marketing communication’ is a study of promotion function of marketing.

  27. Comm-unicator Channels Audience Message THE COMMUNICATION MODEL WHO…... SAYS WHAT….. HOW..… TO WHOM...… (In what channel) With what effect

  28. HOW COMMUNICATION WORKS .........? THE PROCESS OF COMMUNICATION Sender (Source) Encoding (of message) Message and Media Decoding Of Message Receiver Noise Response Feedback

  29. ELEMENTS OF THE COMMUNICATION PROCESS • (1) Source or sender or communicator • (2) Encoding (Putting the thought or idea in symbolic form) • (3) Message ( The set of symbols for transmission) • (4) Media (The path through which the message moves) from Sender to Receiver. • (5) Decoding (Assigning meanings to the symbols transmitted by the sender) • (6) Receiver or audience or destination • (7) Response ( The set of reactions that the receiver has after having been exposed to the message) • (8) Feedback

  30. COMMUNICATION PROCESS (a view) • In view of the new electronic technologies, companies must ask not only “How can we reach our customers?” but also “How can we find ways to let our customers reach us?” • For a message to be effective, the sender’s encoding process must mesh with the receiver’s decoding process. Thus the best messages are essentially signs that are familiar to the receiver.

  31. COMMUNICATION PROCESS (a view) The sender’s task is to get his or her message through to the receiver. The target audience may not receive the intended message for any of three reasons- • Selective attention • Selective distortion ( people may twist the message to hear what they want to hear.Receivers have set attitudes, they will hear what fits into their belief system.) • Selective recall

  32. COMMUNICATION PROCESS (a view) Fiske and Hartley have outlined some general factors that influence the effectiveness of a communication : • 1. The greater the monopoly of the communication source over the recipient, the greater the recipient’s change effect in favour of the source. • 2. Communication effects are greatest where the message is in line with the receiver’s existing opinions, beliefs, and disposition. (contd.)

  33. COMMUNICATION PROCESS (a view) • 3. Communication can produce the most effective shifts on unfamiliar, lightly felt, peripheral issues, who do not lie at the center of the recipient’s value system. • 4. Communication is more likely to be effective where the source is believed to have expertise, high status, objectivity, or likability, but particularly where the source has power and can be identified with. • 5. The social context, group, or reference group will mediate the communication and influence whether or not the communication is accepted.

  34. Models That Help to Conceptualize the Buying Process • Two very specific models that aid in understanding the buying process, as well as in framing communication are:- (1) A I D A Model (2) Hierarchy–of–effects model

  35. (1) A I D A MODEL Attention (awareness) Interest Desire Action According to ‘AIDA’ model, A marketer should begin by winning attention or gaining awareness, creating interest, inspiring desire and precipitating the action for purchase, in the prospects in order to enable its product to be adopted by the target public.

  36. (2) Hierarchy–of–effects model Awareness Knowledge Liking Preference Conviction Purchase

  37. (2) Hierarchy–of–effects model • The buyers’ purchase decision is preceded by such as conviction about the product benefits, preference for the brand, liking for the brand, knowledge relating to the benefits and features of the product after an awareness of the product has been gained.

  38. PERSONAL SELLING • Personal Selling consists of Individual Personal Communication. • It is oral presentation in a conversation for the purpose of making sales. • The successful salesperson cares first for the customer, second for the products.

  39. ADVANTAGES OF PERSONAL SELLING • Flexible in operation • Minimum of wasted efforts • Many times results in actual sales • Sales persons can perform many other services • Recognizing and solving customers’ problems

  40. LIMITATIONS OF PERSONAL SELLING • High cost • High caliber of SRs is required • Large number of SRs is required to to cover the total market • Administration is complex

  41. THE PERSONAL SELLING PROCESS ( consists of 5 Ps ) PREPARATION PROSPECTING PRE-APPROACH POST-SALES ACTIVITIES PRESENTATION

  42. SPECIFIC TASKS TO BE PERFORMED BY SALESPEOPLE • Prospecting : (searching for prospects,or leads) • Targeting : (deciding how to allocate their time among prospects and customers) • Communicating : (communicating information about the company’s products and services) (contd.)

  43. SPECIFIC TASKS TO BE PERFORMED BY SALESPEOPLE • Selling : (approaching, presenting, answering objections, and closing sales) • Servicing : (providing various services to the customers - consulting on problems, rendering technical assistance, arranging financing,, expediting delivery) • Information Gathering : (conducting market research and doing intelligence work) • Allocating : (deciding which customers will get scarce products during product shortages)

  44. RANGE OF POSITIONS COVERED BY SALESFORCE Mc Murry distinguished six sales positions, ranging from the least to the most creative types of selling. • Deliverer : (a salesperson whose major task is the delivery of a product - milk, bread, cig., agarbatti etc. • Order taker : (a salesperson who acts predominantly as an inside order taker i.e. the salesperson standing behind the counter, or outside order taker i.e. booking orders with merchants in the market)

  45. RANGE OF POSITIONS COVERED BY SALESFORCE • Missionary : (a salesperson who is not expected or permitted to take an order but whose major task is to build goodwill or to educate the actual or potential user e.g.. Pharmaceutical selling) • Technician : (a salesperson with a high level of technical knowledge e.g.. The engineering salesperson who is primarily a consultant to the client companies)

  46. RANGE OF POSITIONS COVERED BY SALESFORCE • Demand creator : (a salesperson who relies on creative methods for selling tangible products e.g.. Vacuum cleaners, refrigerators, etc. or intangibles e.g.. Insurance, advertising services, and education etc.) • Solution vendor : (a sales person whose expertise is in the solving of a consumer’s problem, often with a system of the company’s products and services e.g.. Computer and communications systems)

  47. MEETING OBJECTIONS • Salesmanship is a difficult job. It is persuasion and inducement of an unwilling buyer to make him buy. Since majority of buyers object, salesmen must cope with objections.

  48. REASONS FOR OBJECTIONS • Natural Process • Not appreciate the benefits of product • Have not understood presentation properly (Poor sales talk) • Sometimes to test salesman • In comparison to competitive products • Un-pleasing experience with product • unqualified prospect ( not fulfilling requirements ) • Un-pleasing experience with tricks of salesman • To secure more information

  49. SOME COMMON OBJECTIONS • Price Objection : ( salesman can offer - some substitute product, discount offer, justify the price - show profits ) • Quality Objection • Payment Objection • Service Objection

  50. HANDLING THE OBJECTIONS • Listening attentively • Cushioning the jolt (make the shock of objection lighter by giving examples of third party) • Anticipating objection • Preventing objection

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