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Marketing and Selling

Marketing and Selling. The Marketing Mix. 4 P’s vs. 4 C’s. Product vs. co-creation of experience Promotion vs. communication in a community Price vs. customizable personal value Place vs. convenience. Five Levels of Product Concept. Core product (Core Benefit  Basic Product ).

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Marketing and Selling

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  1. Marketing and Selling The Marketing Mix

  2. 4 P’s vs. 4 C’s Product vs. co-creation of experience Promotion vs. communication in a community Price vs. customizable personal value Place vs. convenience

  3. Five Levels of Product Concept Core product (Core Benefit  Basic Product) Augmented product (beyond expectation  transformed product) installation packaging Delivery and credit Core benefit or service After sales service quality styling Tangible product (attributes/conditions that are expected Brand name warranty

  4. Principles for Product Differentiation Be Simple!! • Be a pioneer • Attribute Ownership • Leadership • sales, technology, efficiency • Traditional • Marketing

  5. Product Differentiation “Any product can be differentiated” Ted Levitt Unique selling propositions - “used by more dentists and consumers than any other brand in the U.S. and in many international markets” So… What are the consumer’s value propositions ? "Here's To Your Health" “Real is better" "It helps build strong bones 12 ways" “Rediscover the web” “What if there was a marketplace for goodness?”

  6. Price Strategy Implementation • Odd Pricing • Leader Pricing • Multiple-Unit Pricing • Bundled Pricing • Unbundled Pricing • Price Lining • E.g. Marriott Corp • International business • CIF vs. FOB Berman & Evans, 2001

  7. Above Competition Skim strategy Neutral strategy (same as competition) Penetration strategy Below Competition

  8. Value-based Pricing Cost f,a Price a Value a Value f $/unit 0 Profit for offering a Customer incentive (i) to purchase offering a Incremental value (Value f ,a) (Value f - Price f ) > (Value a - Price,a )

  9. Value Map - Buyers’ Perceptions of Value Offerings of Brands A-E Inferior Value Zone Value Equivalence Line Share Loser B E Perceived Price C A Share Gainer D Superior Value Zone PerceivedValue

  10. iPhone- a Case in Pricing

  11. About the iPhone… • A combination of iPod and AT&T cell phone • Touch-pad interface • Interactive interface • Original price with 8Gb: $599 (not including tax, and AT&T plans)

  12. Question: Do you think the price of iPhone reasonable? Comparing to a similar product… LG KE850 Prada • Video/ music player • Touch-pad interface • Interactive interface • $495 (not including tax, and AT&T plans)

  13. Announcement of price cutting • Price of iPhone is cut from $599 to $399 on Sep. 7. • “This is correct decision to cut the price at this time.” • “It benefits both Apple and every iPhone users to get as many new customers as possible in the iPhone ‘tent’.” • “The technology way is bumpy”. • “There is always change and improvement”. • Why do Apple cut their price? • Is it reasonable of this decision? • What will result from the decision?

  14. Who are the early adopters? • Adventurers: always perusing new things • Social opinion leaders • Usually educated • Loyal customers This man was the first person in the line in front of the Apple center on 5th Ave, NYC. They lined up for buying an iPhone on its launch day.

  15. Compensation for the loyal customers • For the early buyers, they may receive in store credits or cash refund • For early low-end 4GB iPhone buyers, they may receive cash refund for that Apple will not produce the low-end models anymore. • Would the compensation policy retain the early buyers? • How would this policy influence on those who are not yet iPhone users?

  16. Supply Chain/Value Chain In-bound Production Out-bound Sales/marketing Customer Service Value Chain for Innovative Process Design Produce Market Delivery Support

  17. The concept of value net • In the value net, the business is around by other businesses including suppliers ,partners and customer companies • A value net of one business may be included in another bigger value net. • Integration of the organizations in the value net • Information/ resources are open for sharing • Real-time sharing

  18. Comparing value chain and value net

  19. Physical possession Ownership Promotion Negotiation Risking Financing Ordering Payment Marketing Flows

  20. Value NetCase study- Plantania

  21. Plantania • Plantanina is a Netherlands based floriculture program

  22. The growers The retailers The consumers Traditional floriculture supply chain auction Product oriented • Low quality standards. • High price. • High cost in transportation

  23. The consumers Traditional floriculture supply chain The growers Demanding for one-year round products The retailers Consumer oriented • Higher quality standards. • Reasonable price. • More service/ information accessibility

  24. Actors involved

  25. Value Net-type of Operation

  26. MOS Lemkes OBI Marketing plan Data Warehouse Quality care in the chain Multimedia Marketing System Chain transaction- system Quality care of individual growers

  27. The result • Increased sales (25%) • Less wastes (40% - 60%) • Lower stocks (10%) • More mutual trust • Better knowledge of each others activities

  28. Value net of Plantania Floricultures National advisory organization for farmers and growers. Collecting consumers’ needs Product planning Royal Lemkes Purchasing Greensystem (IT company) Decorum plants (Retailer) Selling End Customer OBI (DIY retailer) Flower Council of Holland Product consultancy Greencard (consumer organization for gardening lovers)

  29. Developing the Promotion Strategy Market Target(s) Positioning Strategy PROMOTION OBJECTIVES ROLE OF PROMOTION COMPONENTS Coordination with Product, Distribution, and Price Strategies PROMOTION BUDGET PROMOTION COMPONENT STRATEGIES Advertising Sales Public Personal Direct Promotion Relations Selling Marketing

  30. Seven Cardinal Principles for DM Success • Establish your objective before you start. • Target the right audience and market segments. • Write copy to show what your product will do for the prospect. • Make it easy for your prospect to respond. • Think campaign, not 1-shot. • Research and test every year. • Make your promotions fit your "USP," your audience, and your product. -- DMA 2008 --

  31. Integrated Promotional Management Model Micromarketing: long-term relationship building Market Structure Proactive situation analysis Monitoring and Managing the Environment Customer Satisfaction Market offerings:positioning, competitive advantages Satisfy customers; outperform competition Promotion Decision Process General Choices: Target markets Objectives Budgets Modes & mixtures Specific Plans: Messages Media Momentum Program Evaluation: Measured results

  32. Controlling and Optimizingthe mindset Time Positive Zone Sale Sale Contact Honeymoon Re-Interest Interest ReassuranceRe-awarerelationship Negative Zone Aware Ignorant Product AdvertisingEvent MarketingDatabase MarketingTelemarketingProduct Sampling Database MarketingCross SellingRelationship Direct MarketingDirect SellingPromotions Database MarketingRelationshipCatalog Marketing Public RelationsBrand AdvertisingEvent marketingEvent Sponsorship

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