Marketing Mix – Introduction to 4 Ps Part 1 – Product

1. Marketing Mix – Introduction to 4 PsPart 1 – Product

2. Marketing • Marketing is a process by which people obtain what they need and want through creating, offering, and exchanging products and value with others.

3. Marketing Concept • Matching the customer needs and wants with company’s capability to meet and satisfy them. Matching

4. Marketing Mix • Marketing mix are the techniques used by marketing people to apply the marketing concept in order to match the products with customers’ wants.

5. Marketing Mix – Components

6. The Use of Marketing Mix

7. Product • Anything (goods or services) that can be offered to satisfy the needs or wants of the customers.

8. Product Strategy

9. Product Strategy • Quality • Good quality indicates the product is reliable and able to perform its intended function. • Customers may compare the quality of a product/service with different brands in the market and make their buying decision. • Design • The idea generation and concept development of a product can help attracting customers. • Feature • A function which is capable of satisfying consumers’ need and is therefore seen as a benefit of owning it.

10. Activity 1 – What do you feel about these brands? • Describe the following car brands with the descriptions provided. Rolls Royce Luxury Cheap Sporty Ferrari Good design Good quality Volvo Smart Speed Safety Toyota Comfortable Practical

11. Product Strategy • Product Variety • There are various types of products produced (or services rendered) by a company. • Each company has a product that is distinguishable in some way from its competitors. Therefore, it is able to make profits from product differentiation.

12. Activity 2 – Debate • Students are divided into two groups. • Compare the product strategy of the two largest smartphone manufacturers: Apple & Samsung Electronics. • Apple: only one type of smartphone i.e. iphone • Samsung: produce different types of smartphone such as Note series and S series and from low-end to high-end. • Which one you think is successful? vs

13. Product Strategy • Brand name • Exclusively identifies the product from others. • Improve the company prestige of products and expand the market share. • Packaging • Good packaging can attract customers’ attention and stimulate customers to buy. • After-sale service • Not just warranty but also consultation and support service after sale. • Warranty • Guarantee for repairs and maintenance for a specified period. • E.g. 3-year warranty on electronic products.

15. Marketing Mix – Introduction to 4 PsPart 2 – Price & Promotion

16. Price • Price is the amount of money a customer pays for the product. • It is determined by a number of factors including market share, competition, costs etc.

17. Pricing Strategy • Pricing is important as it will affect the followings of the company: • Product positioning. • Market share. • Profitability.

18. Pricing Strategy • Economy Pricing • Always set at a low price. E.g. supermarkets often have economy brands for household products. • Price Penetration • Set at artificially low price in order to gain market share, then increase the price when target market share is achieved. E.g. desk-top printer. • Price Skimming • Set at a high price when the product is less price sensitive. It will attract new competitors into the market, and then the price will fall due to increased supply and competition. E.g. high-tech products, medical products. • Premium Pricing • Always set at a high price. It is used where there is a unique brand such as for luxury products.

19. Activity 1 • Which pricing strategy may best fit the following products? • New model of digital camera • Famous brand handbag • Toilet paper • Telephone service fee

20. Activity 1 – Answer

21. Price Setting • Marketers have to determine prices to customers because it will affect the sales volume. • The price setting issues include: • List Price • The price regularly quoted to customers. • Usually printed on the price tags, catalogs etc. • Discounts & allowances • Reductions to a list/basic price of goods or services • Include: quantity discount; seasonal discounts; cash discounts; promotional discounts etc. • Credit terms & payment period • Allow customers to pay later e.g. 30-day credit period.

22. Promotion • All means of communications that a marketer may use in the market to communicate that the product attributes / benefits to customers and persuade them to buy the product. • The four major methods promotions (or known as promotion mix): • Advertising • Personal selling • Sales promotion • Public relations

23. Objectives of Promotion • To create awareness • To inform about a feature or benefit • To support sales increases • To create an image

24. Advertising • In mass media such as • radio, • TV, • newspaper, • Internet, • street, etc.

25. Personal Selling • Face-to-face • Tele-marketing

26. Sales Promotion • Free samples • Discount coupons • Free gifts with company logo/product ABC Co

27. Public Relations • Publics relations are where the communication is not direct delivery but by the following methods: • Press conference/release • Exhibition/Trade show • Brand Ambassador (star power) • Sponsorship • Word of mouth (internet forum)

28. Activity 2 • Can you give examples of different public relations promotion methods for any brands?

30. Marketing Mix – Introduction to 4 PsPart 3 – Place

31. Place • Place represents the location where a product is sold. • It is often referred to as the distribution channel a company chose to deliver the product. • Include physical store and virtual stores (e.g. internet).

32. Physical Distribution • Activities involved in transporting products from the Manufacturer to the consumer which include: • Mode of transport • Warehousing & storage • Order processing • Inventory control

33. Distribution Channels • Distribution channels are the routes through which the goods flow from the manufacturer to the customer. • Types of distribution: Direct vs Indirect Direct distribution: Agent Indirect distribution:

34. Channel intermediaries - Wholesalers • A wholesaler buys large amounts of goods from a manufacturers and then sells them to retailers. • Provides storage facilities. • Acting as an agent between manufacturers and consumers. • Wholesaler takes some of the marketing responsibility e.g. sales force (sales team), promotions etc.

35. Channel intermediaries - Retailer • Retailer is a business that sells goods to the consumers who • has stronger personal relationship with the consumer. • holds a variety of products. • promotes and sells products.

36. Product Life Cycle • A sequence of stages to describe the life of a commercial product from introduction, growth, maturity and decline. This sequence is known as the product life cycle.

37. Impact of Product Life Cycle on Marketing Mix • Introduction Stage (the manufacturer seeks to build up the awareness of the product and develop the market): • Product branding and design starts to establish, company may register the patent for their product. • Pricing strategy may be low penetration in order to build the market share, or use high skim pricing to recover development costs (e.g. high-tech products). • Promotion cost is high in order to build up the awareness of the product. • Placing is selective as the company commences implementation of the distribution plan.

38. Impact of Product Life Cycle on Marketing Mix • Growth Stage (a period of rapid revenue growth with increase in the market share): • Product brand is maintained and additional support and improvement of quality are required. • Pricing strategy is maintained at high level as the company enjoys increasing demand during this stage. • Promotion cost is increased in order to keep the customers’ awareness. • Placing is started to increase the distribution channels.

39. Impact of Product Life Cycle on Marketing Mix • Maturity Stage (most profitable but competition appears): • Product features is enhanced in order to differentiate the product from competitors. • Price may be reduced in response to the competition. • Promotion cost is increased to emphasize the product differentiation. • Placing is more intensive to compete in the market and incentive may be provided to resellers in order to avoid losing sales channel.

40. Impact of Product Life Cycle on Marketing Mix • Decline Stage (sales decline as market because saturated): • Product is no longer be interesting by the consumer which production should be reduced and new product should be developed. • Price may be even lower to sell out the remaining inventory. • Promotion cost is decreased and switched to promote another new product. • Placing strategy is to reduce the distribution channel as some channels are not profitable anymore.

41. Activity • State and explain the following items are in which stage of the product life cycle. • 3D LED HD TV • VCD • Google glasses – Head-mounted display, HMD • Smartphone

42. Activity – Answer Maturity Introduction Growth Decline