Marketing Final 6 7 8-9-10

8/13/2019 Marketing Final 6 7 8-9-10

http://slidepdf.com/reader/full/marketing-final-6-7-8-9-10 1/120

Introduction to Marketing


Ali Hasan Awan

8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10



Five stages of the PLC

• Product development - sales are zero,

investment costs are high

• Introduction - profits do not exist, heavy

expense of product introduction

• Growth - rapid market acceptance and

increasing profits

• Maturity - slowdown in sales growth. Profitslevel-off. Increase outlay to compete

8/13/2019 Marketing Final 6 7 8-9-10



• Decline - sales fall-off and profits drop

8/13/2019 Marketing Final 6 7 8-9-10



The Ideal Climate for New Product

Development• Goal clarity – the objectives of the task are

jointly understood

• Resources – adequate economic and non-

economic support for the task

• Encouragement – sincere emotional support

for the task

• Freedom – the ability to explore whatever

directions of inquiry that are needed

• Integrity – management does what it says it will

do

8/13/2019 Marketing Final 6 7 8-9-10



Stages in a Typical New Product

Development Process 1. Idea generation – conceptualize a list of new

product ideas

2. Idea assessment – evaluate the ideas based

on a previously created list of criteria. In this

stage ideas that are judged not to meet the

criteria are removed from consideration.

3. Concept testing – the idea is assessedthrough discussion with potential customers or

users. Or, representatives of the organization

explore the product idea and assess its overall

potential (No physical product yet exists).

8/13/2019 Marketing Final 6 7 8-9-10



Stages in a Typical New Product

Development Process 4. Idea choice – one or more ideas are selected

for initial investment

5. Idea prototype development – an initialworking model of the product is created for

testing and evaluation

6. Final version development – a model of the

final version of the product is created7. Commercialization – the product is put into

production and the distribution of the new

product to customers begins

8/13/2019 Marketing Final 6 7 8-9-10



Market Share

Market

Growth

High

Low

High Low

1. Stars

3. Question

Mark (Problem

Child)

2. Cash Cows 4. Dogs

The Boston Matrix (Growth/Share Matrix)

8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10



Diversification

Market Penetration Market Development

Product Development

Existing Markets New Markets

N e w

P r o d u c t s

Ansoff‟s Matrix (Product/Market Matrix)

For Market Growth Strategy

8/13/2019 Marketing Final 6 7 8-9-10



Diversification -

related or unrelated

E.g. Realignments of

the marketing mix

E.g. Geographical

expansion

Same outlets and

sales strategy

- new product

Existing Markets New Markets

N e w P

r o d u c t s

Ansoff‟s Matrix (Product/Market Matrix)

8/13/2019 Marketing Final 6 7 8-9-10



Pricing Decisions

• Pricing strategies

• Pricing exercise

• Ten ways to „increase‟ prices withoutincreasing price

8/13/2019 Marketing Final 6 7 8-9-10



Low High

Low

High

Economy

Strategy

e.g. Metro

spaghetti

Penetration

e.g. China‟s

mobile phones

Skimming

e.g. New film or

album

Premium

e.g. Emirates first

class

Price

Quality

8/13/2019 Marketing Final 6 7 8-9-10



Price

• What is Price ?

• The amount of money charged for a

product or service

• Price is the only element in the marketing

mix that produces revenue; all other

elements represent costs

8/13/2019 Marketing Final 6 7 8-9-10



Factors to be Considered While Setting

Pricea) Supply (or cost)

b) Demand (or revenue)

c) Competition and Competitors‟ pricingstrategies

d) Government Regulation

e) Company‟s desired pricing position

8/13/2019 Marketing Final 6 7 8-9-10



Considerations in Setting Price

8/13/2019 Marketing Final 6 7 8-9-10



Cost based Vs. Value Based pricing

8/13/2019 Marketing Final 6 7 8-9-10



Types of Costs

• Fixed costs (overhead) - Costs that do not

vary with production or sales level.

• Variable costs - Costs that vary directly with the

level of production.

• Total costs - The sum of the fixed and variable

costs for any given level of production.

8/13/2019 Marketing Final 6 7 8-9-10



Major Pricing Strategies

• Cost-based pricing - Setting prices based on

the costs for producing, distributing, and selling the

product plus a fair rate of return for effort and risk.

• Customer value-based pricing - settingprice based on buyer‟s perceptions of value rather than

on the seller‟s cost

• Cost-plus pricing (markup pricing) -

Adding a standard markup to the cost of the product.

8/13/2019 Marketing Final 6 7 8-9-10




• Good-value pricing - Offering the right

combination of quality and good service at a fair price

• Value-added pricing - Attaching value-added

features and services to differentiate a company‟s offersand charging higher prices.

• Competition-based pricing - Setting prices

based on competitor‟s strategies, prices, costs, and

market offerings

8/13/2019 Marketing Final 6 7 8-9-10




• Break-even pricing (target return

pricing) - Setting price to break even on the costs of

making and marketing a product or setting price to make

a target return.

8/13/2019 Marketing Final 6 7 8-9-10



Pricing strategies

• Premium pricing• Uses a high price, but gives a good

product/service exchange e.g. Concorde, The

Ritz Hotel

• Penetration pricing• offers low price to gain market share - then

increases price e.g. PTCL - to attract new

corporate clients

• Economy pricing• placed at „no frills‟, low price e.g. Soups,

spaghetti, beans - „economy‟ brands

8/13/2019 Marketing Final 6 7 8-9-10



• Price skimming

• where prices are high - usually duringintroduction e.g new albums or films on release

ultimately prices will reduce to the „parity‟

• Psychological pricing• to get a customer to respond on an emotional,

rather than rational basis .e.g 0.99Rs. not

1.01Rs. „price point perspective

• Product line pricing• rationale of a product range e.g. MARS 32Rs,

Four-pack 99Rs.

8/13/2019 Marketing Final 6 7 8-9-10



• Pricing variations

• „off -peak‟ pricing, early booking discounts,etce.g Cannon offers a „cash back‟ incentive for

expensive models

• Optional product-pricing

• Add on for the product e.g. optional extras -BMW famously under-equipped

• Captive product pricing• products that complement others e.g Gillette

razors (low price) and blades (high price)

• Product-bundle pricing• sellers combine several products at the same

price e.g software, books, CDs.

8/13/2019 Marketing Final 6 7 8-9-10



• Promotional pricing

• e.g. toothpaste, soups, etc• Geographical pricing

• different prices for customers in different parts

of the world e.g. Include shipping costs.

• Value pricing• usually during difficult economic conditions e.g.

Value menus at McDonalds

8/13/2019 Marketing Final 6 7 8-9-10



Ten ways to „increase‟ prices

without increasing price• Revise the discount structure

• Change the minimum order size

• Charge for delivery and special services• Invoice for repairs on serviced equipment

• Charge for engineering, installation

• Charge for overtime on rushed orders• Collect interest on overdue accounts

8/13/2019 Marketing Final 6 7 8-9-10



Marketing Channels

8/13/2019 Marketing Final 6 7 8-9-10



Over the past three decades, theoverwhelming emphasis in the

Marketing Mix has been on:

Product Strategy withPricing Strategy

and Promotional Strategy

also being stressed.

But.....

8/13/2019 Marketing Final 6 7 8-9-10



Marketing Channel Strategy (Place);the fourth “P” in the Marketing Mix has

been largely neglected

But this is changing....

8/13/2019 Marketing Final 6 7 8-9-10



Marketing Channel Strategy is

Growing in Importance. Why?Five Reasons

(1) Search for Sustainable Competitive

Advantage(2) Growing Power of Retailers in Marketing

Channels

(3) The Need to Reduce Distribution Costs(4) The Increased Role and Power of

Technology

(5) The New Stress on Growth

8/13/2019 Marketing Final 6 7 8-9-10



I. The Search for SustainableCompetitive Advantage

8/13/2019 Marketing Final 6 7 8-9-10



Sustainable Competitive Advantage:

A competitive advantage that

cannot be quickly and easilycopied by competitors

8/13/2019 Marketing Final 6 7 8-9-10



A sustainable competitive

advantage is becoming moredifficult to attain through:

• Product Strategy- rapid technology transfer

enables competitors to quickly produce similarproducts

• Pricing Strategy- global economy allows

competitors to find low cost production to match

prices

• Promotion Strategy- high cost, clutter, and short

life promotional campaigns limit competitive

advantage

8/13/2019 Marketing Final 6 7 8-9-10



Competitive Advantage Based on

• Superior Marketing Channel Strategy is

More Difficult for Competitors to Copy

Because

8/13/2019 Marketing Final 6 7 8-9-10



• Channel Strategy is Long Term• Requires a Channel Structure

• Depends on Relationships and People

• Requires Effective Interorganizational

Management

I t d ti t M k ti

8/13/2019 Marketing Final 6 7 8-9-10



II. Growing Power of Retailers inMarketing Channels

I t d ti t M k ti

8/13/2019 Marketing Final 6 7 8-9-10



Retailers....

• Are Growing Larger

• Enjoy Substantial Channel Power

• Act as Buying Agents for Customers Ratherthan Selling Agents for Suppliers

• Often Operate on Low Price / Low Margin

Model• Operate in Saturated Markets and Fight for

Market Share

I t d ti t M k ti

8/13/2019 Marketing Final 6 7 8-9-10



•Retailers Are Growing Larger

I t d ti t M k ti

8/13/2019 Marketing Final 6 7 8-9-10



77.6%

22.4%

Top 50

Rest

Concentration of Sales Among the

Top 50 Retail Firms

I t d ti t M k ti

8/13/2019 Marketing Final 6 7 8-9-10



69%

31%

56%

44%

79%

21%

55%

45%

58%

42% Four Largest

FirmsAll Other Firms

64%

36%

Kinds of Retailers Where Largest Four Firms

Account for At Least 50% of Total Sales

Conventional

Department Stores

Discount

Mass Merchandisers

Variety Stores

Misc. General

Merchandisers Athletic Footwear Toy Stores


8/13/2019 Marketing Final 6 7 8-9-10



62.8

7.01.8 1.6

83.5

14.615.613.1

$10,000,000or more

$5,000,000 to9 999 999

$1,000,000 to4 999 999

Less than1 000 000

Sales as a percentage of the total

Firms as a percentage

of the total

Percentage Distribution of Retail Firms and Sales

by Size of Firms


8/13/2019 Marketing Final 6 7 8-9-10



•Enjoy Substantial Channel Power

Retailer


8/13/2019 Marketing Final 6 7 8-9-10



• Retailers Act as Buying Agents for

Customers Rather than as Selling

Agents for Suppliers


8/13/2019 Marketing Final 6 7 8-9-10



• Retailers Often Operate on Low

Price / Low Margin Model


8/13/2019 Marketing Final 6 7 8-9-10



• Retailers Operate in Saturated

Markets and Fight for Market

Share


8/13/2019 Marketing Final 6 7 8-9-10



Power or Dominant Retailers are

therefore the “Gatekeepers” into theConsumer Marketplace

Thus, Effective Channel Strategy

for Dealing withPower Retailers is Crucial


8/13/2019 Marketing Final 6 7 8-9-10



III. The Need to Reduce Distribution

Costs


8/13/2019 Marketing Final 6 7 8-9-10



Distribution Costs Often Account for a

Significant Percentage of the Final Price

of Products

Sometimes Distribution Costs

are Higher than the ManufacturingCost or the Costs of Raw

Materials and Component Parts


8/13/2019 Marketing Final 6 7 8-9-10



Some Examples...

Autos Software Gasoline Fax Machines Packaged Foods

Distribution

Manufacturing

Raw Materials

and

Components

15%

40%

45%

25%

65%

10%

28%

19%

53%

30%

30%

40%

41%

33%

26%


8/13/2019 Marketing Final 6 7 8-9-10



While terms such as “restructuring”,

“flattening out”, “downsizing”, and“rightsizing” have usually been

mentioned in the context of corporate

organizations, they also apply to

Marketing Channels.

The latest term....

Disintermediation


8/13/2019 Marketing Final 6 7 8-9-10



IV. Increasing Role and Usefulness of

Technology


8/13/2019 Marketing Final 6 7 8-9-10



Technology has the power to greatly

enhance the effectiveness andefficiency of Marketing Channels and

could potentially change the entire

structure of distribution around the

world.


8/13/2019 Marketing Final 6 7 8-9-10



Some Examples...

• The Internet

• Wireless Communications

• B2C and B2B E-Commerce• Cell Phones

• Global Telecommunications

• Robotics & Automated Warehousing

• Computerized “Salespeople”


8/13/2019 Marketing Final 6 7 8-9-10



Firms that make effective use of these

technologies in their channel strategycan gain a substantial competitive

advantage

Competition


8/13/2019 Marketing Final 6 7 8-9-10


g

V. The New Stress on Growth Strategy


8/13/2019 Marketing Final 6 7 8-9-10


g

In Business Circles “Growth” has

Overtaken “Restructuring” as the #1Buzzword

OutReengineering

Restructuring

Downsizing

Flat Organizations

Lean and Mean

InGrowth

Expansion

New Markets

Market Share

Top Line Revenue


8/13/2019 Marketing Final 6 7 8-9-10


g

QUESTION

In a relatively slow growth economy, how

can an individual company selling matureproducts in mature markets grow?


8/13/2019 Marketing Final 6 7 8-9-10


g

ANSWER

Share of Mind = Share of Market

Translation

By getting channel members to focus on yourproducts to a greater extent than your

competitors, you gain market share and

growth


8/13/2019 Marketing Final 6 7 8-9-10


g

Summary

(1) Search For Competitive Advantage

(2) Growing Size and Power of

Retailers

(3) Need to Reduce Distribution Costs

(4) Power and Potential of Technology

(5) Stress on Growth Instead of

Downsizing


8/13/2019 Marketing Final 6 7 8-9-10


Bottom Line

Marketing Channel StrategyHas Become Critically

Important For MostBusinesses

8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


Channel Strategy

The broad principles by which a

firm expects to achieve itsdistribution objectives for

satisfying its customers

8/13/2019 Marketing Final 6 7 8-9-10


Introduction to MarketingThe Relationship between customer

8/13/2019 Marketing Final 6 7 8-9-10


The Relationship between customer

satisfaction and the company‟s

marketing mix can be represented as:

Cs = f (P1, P2, P3, P4)

where:Cs= degree of customer satisfaction

P1= product strategy

P2= pricing strategy

P3= promotional strategy

P4= place (channel strategy)


8/13/2019 Marketing Final 6 7 8-9-10


Distribution Channel Strategy should

receive especially heavy emphasis if

one or more of the following conditions

prevails:

• Distribution appears to be the most relevantvariable for satisfying customers

• Parity exists among competitors in the other

three marketing mix variables

• High degree of vulnerability exists because of

competitors‟ neglect of distribution

• Distribution channel strategy can foster synergies


8/13/2019 Marketing Final 6 7 8-9-10


Classic Marketing Channel Strategies

Still Relevant Today

• Dual Distribution

• Exclusive Dealing• Full-Line Forcing

• Price Differentiation

• Price Maintenance• Refusal to Deal

• Resale Restrictions

• Tying Agreements


8/13/2019 Marketing Final 6 7 8-9-10


The Most Basic Questions in the

Design of Marketing Channels

• When Do Customers Buy?• Where Do Customers Buy?

• How Do Customers Buy?

• Who Buys?Who makes the actual purchase?

Who uses the product?

Who takes part in the buying decision?


8/13/2019 Marketing Final 6 7 8-9-10


Supply Chain Management


8/13/2019 Marketing Final 6 7 8-9-10


QUESTION Is this just another “buzzword” for

logistics - getting the right product inthe right quantity, at the right time and

right place?

ORIs there something more substantive

to this term?


8/13/2019 Marketing Final 6 7 8-9-10


ANSWER

There is something more than

semantics here:

Supply Chain Management takes a

broader perspective by viewing

logistics as an integral part of themarketing channel relationship


8/13/2019 Marketing Final 6 7 8-9-10


Supply Chain Management Can

Therefore be Defined as:

A long-term “partnership” among marketing

channel participants aimed at reducing

inefficiencies, costs, and redundancies in the

logistical system in order to provide high levels

of customer service


8/13/2019 Marketing Final 6 7 8-9-10


Common Issues in Supply Chain Management

1. Order Processing Time

2. Order Assembly Time

3. Delivery Time

4. Inventory Reliability

5. Order Size Constraints6. Consolidation Stipulation

7. Consistency of Delivery

8. Frequency of Sales Visits

9. Ordering Convenience10. Order Progress Information

11. Inventory Backup During

Promotion

12. Invoice Formats

13. Physical Condition of Goods

14. Claims Response

15. Billing Procedures

16. Average Order Cycle Time

17. Order Cycle Time Variability18. Rush Service

19. Product Availability

20. Competent Technical Reps

21. Equipment Demonstrations

22. Availability of Literature

23. Accuracy in Filling Orders

24. Terms of Sale

25. Protective Packaging

26. Degree of Cooperation


8/13/2019 Marketing Final 6 7 8-9-10


Strategic Alliances and Partnerships in

Marketing Channels


8/13/2019 Marketing Final 6 7 8-9-10


Definition:

Continuing and mutually supportive

relationship between the manufacturer

and its channel members in an effort to

provide a more highly motivated team,

network, and alliance of channel partners


8/13/2019 Marketing Final 6 7 8-9-10


Traditional “us-against-them” mentality is

replaced with a new cooperative perception

of “us” in an effective channel partnership

or strategic alliance

Thus, partnerships or strategic alliances go

well beyond the ad-hoc, on-again / off-againinteractions typical of traditional

relationships among channel members


8/13/2019 Marketing Final 6 7 8-9-10


Requirements for Partnerships or

Strategic Alliances in MarketingChannels

(1) Recognition of interdependence of channelmembers

(2) Close cooperation between channel members

(3) Careful specification of roles, rights, and

responsibilities in the relationship

(4) Coordinated effort focused on common goals

(5) Good communications and trust between

channel members

8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


Relationship Marketing

The practice of building long-term relations with

key parties - customers, suppliers, distributors-

in order to retain their long-term preference and

business

Because of the importance of channels ofdistribution, building good relationships in the

marketing channel is key to successful

relationship marketing


8/13/2019 Marketing Final 6 7 8-9-10


Building Relationships with Channel

Members

• Find Out the Needs and Problems of Channel

Members-informal information system (“grapevine”)

-research studies of channel members

-research studies by outside parties

-marketing channel audit

-distributor advisory councils


8/13/2019 Marketing Final 6 7 8-9-10


• Offer Support to Channel Members that

is Consistent with Their Needs andHelps Solve their Problems

-cooperative arrangements

-partnerships and strategic alliances-distribution programming

• Provide Leadership to Motivate Channel

Members-use power effectively

-recognize causes of conflict

-resolve conflicts

8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


Causes of Marketing Channel Conflict

• Role Incongruities

• Resource Scarcities

• Perceptual Divergencies

• Expectational Differences

• Decision Domain Disagreements• Goal Incompatabilities

• Communication Difficulties


8/13/2019 Marketing Final 6 7 8-9-10


Ten Trends in Marketing Channels

as We Move into the Next Millennium1. Growing Emphasis on Marketing Channel

Strategy

2. More and More Stress on Technology

3. Focus on Efficiency and Reducing Distribution

Costs

4. Shortening and Flattening of DistributionChannels (Disintermediation)

5. Development of New Types of Intermediaries in

Channels (Reintermediation)


8/13/2019 Marketing Final 6 7 8-9-10


Trends Continued...

6. Continued Growth in Partnerships and Alliances

(Relationship Marketing)

7. Increasing Power for Retailers and Wolesalers

(Gatekeepers)

8. Mergers and Acquisitions to Gain Distribution

Influence

9. Flexible and Focused Distribution to Match Micro,Niche, and Database Marketing

10. Attention to the Behavioral Dimensions of

Distribution to Augment Technology


8/13/2019 Marketing Final 6 7 8-9-10


Understanding & Capturing Customer

Value


8/13/2019 Marketing Final 6 7 8-9-10


Building Customer Relationships

CRM – Customer relationship managementThe overall process of building andmaintaining profitable customer relationships

by delivering superior customer value andsatisfaction. It deals with all aspects ofacquiring, keeping and growing customers.


8/13/2019 Marketing Final 6 7 8-9-10


Value and Satisfaction

Perceived Value

The customer‟s evaluation of the difference

between benefits and costs.

Customers often do not judge values and costsaccurately or objectively.

Customer Satisfaction

Product‟s perceived performance relative tocustomer‟s expectations.


8/13/2019 Marketing Final 6 7 8-9-10


The Changing Nature of Customer

Relationships•Selective relationship management

•Companies now use customer profitability

analysis to weed out losing customers and

target winning ones for pampering

• Direct Marketing


8/13/2019 Marketing Final 6 7 8-9-10


Partner Relationship Management

• Partners inside the company: Every functional

area inside a company can interact with

customers, especially electronically

•Partners outside the company: Supply chain

management


8/13/2019 Marketing Final 6 7 8-9-10


Not All Customers are Equal

Basic Relationships

Low-margin customers

Full Partnerships

Key customers

Selective relationship management

Weeding out unprofitable customers


8/13/2019 Marketing Final 6 7 8-9-10


Customer Loyalty and Retent ion :

Customer delight leads to emotional

relationships and loyaltyCustomer Lifetime Value shows true worth

of a customer

Capturing Value from Customers


8/13/2019 Marketing Final 6 7 8-9-10


Share of Cus tomer:

Share of customer‟s purchase in a product

category. Achieved through offering greater variety,

cross-sell and up-sell strategies.



8/13/2019 Marketing Final 6 7 8-9-10


Customer Equ i ty :

• The combined customer lifetime values of

all current and potential customers.• Measures a firm‟s performance, but in a

manner that looks to the future.

• Choosing the “best” customers is key



8/13/2019 Marketing Final 6 7 8-9-10


Four customer relationship groups, according to

their profitability and projected loyalty. Each group

requires a different relationship management

strategy

1. Strangers show low profitability and little projected

loyalty

2. Butterflies are profitable but not loyal

3. True friends are both profitable and loyal4. Barnacles are highly loyal but not very profitable


8/13/2019 Marketing Final 6 7 8-9-10


What is Marketing

The process of building profitable customer

relationships by creating value for customers

and capturing value in return


8/13/2019 Marketing Final 6 7 8-9-10


Marketing Channel Members

• Also known as „Channel of Distribution‟ or„Distribution Channel”,

a marketing channel is the path through

which goods/services flow from one end toanother(marketer to consumer), and

monetary flow happens the other way

around(consumer to marketer).


http://marketingfaq.net/2011/11/what-is-marketing/



8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


Promotional Mix

Strategies

Push versus Pull and

More


Sales Promotion

8/13/2019 Marketing Final 6 7 8-9-10


• To gain trial among nonusers of a brand/service.

• To increase repeat purchase and/or multiple

purchases.

• To expand brand usage by suggesting newuses.

• To defend share against competition.

• To support advertising campaign, theme, image.• To increase distribution and/or dealer, retailer

cooperation.

• Short-term vs. long-term goals and relationships.

Sales Promotion:

8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


Sales Promotion

• Increasingly, the gimmicks are

going away. More scanning data.

• Step up to the challenge of real, brand building

value, the kind that sparks genuine consumer

and retailer interest.

• Contribute to marketing goals.

• More Events and Product Licensing


8/13/2019 Marketing Final 6 7 8-9-10


Influences

• Push Strategy

calls for using the

sales force and trade

promotion.

• Pull Strategy

calls for spending onadvertising and sales

promotion to build

consumer demand.


8/13/2019 Marketing Final 6 7 8-9-10


Push Strategy

• Persuade wholesalers and retailers to carrybrands.

• Give a brand shelf space.

• Promote a brand in coop advertising.

Producer Wholesaler Retailer Customer


8/13/2019 Marketing Final 6 7 8-9-10


Push Strategy:

• Be careful of those big displays at the end of the

aisles.

• End Aisle Displays. End Caps.

• Look at the prices. Only about 40% is

actually on sale.

• Because they are so bright, big and visual, wefeel it‟s on sale.



8/13/2019 Marketing Final 6 7 8-9-10


Pull Strategy:

• Entice customers to try a new product.

• Lure customers from competitive products.

• Hold and reward loyal customers.


8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


Pull Tools

• Sampling---in-store, events, newspaper, in-pack

• Cents Off Promotions and Coupons (-2%)

• Continuity/Frequency and Loyalty Programs

• Premiums• SLO (Self-Liquidating Offers/Premiums)

• Point of Purchase Displays

• Contests, Games and Sweepstakes

• Rebates and Cash refunds

• Advertising Specialty Items


8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


• Push strategy is appropriate with lowbrand awareness in a category and brand

choice is made in store. Can be an

impulse purchase and product benefits areunderstood.

• Pull strategy works best with high brand

awareness and loyalty, or highinvolvement in category and customers

look for product differences.

Summary


8/13/2019 Marketing Final 6 7 8-9-10


“Above Line” and “Below Line”

• Above the linePaid for communication in independent media

E.g. advertising on TV or in newspapers

• Below the linePromotional activities where business has direct

control

E.g. direct mail, point of sale displays,giveaways


8/13/2019 Marketing Final 6 7 8-9-10


Above the line advertising

• Done through media such as• TV

• Cinema

• Radio

• Print• Banners

• Search engines to promote brands

Major uses include television and radio advertising, web and

Internet banner ads.

This type of communication is conventional in nature and is

considered impersonal to customers.

8/13/2019 Marketing Final 6 7 8-9-10



8/13/2019 Marketing Final 6 7 8-9-10


BTL - Shop Intercept

• Another interesting and very effective BTL isShop Intercept.

• Trained sales personnel, often young women,

are deployed at Retail Stores, near the shelves

of targeted products.

• These young women convince customers

visiting these shelves about the better aspects of

their brand compared with others.• This is ideal for new launches as it generates

trials, which if successful result in repeat sales.


Benefits and Problems for Above the line

8/13/2019 Marketing Final 6 7 8-9-10


Benefits and Problems for Above the line

promotion

Advantages

• Wide coverage

• Control the message• Repetition

• Used to build brandloyalty

Disadvantages

• Expensive

• Impersonal• One way

communication

• Lacks flexibility

• Limited capacity toclose the sale


Benefits and Problems for Below the line

8/13/2019 Marketing Final 6 7 8-9-10


Benefits and Problems for Below the line

promotionAdvantages• Higher customer attention

• Message is customised

• Interactivity

• Potential to develop arelationship

• Adaptable

• Opportunity to close a sale

Disadvantages • Labour intensive

• Can only reach a limited

number of customers.


8/13/2019 Marketing Final 6 7 8-9-10


When to use Which

• Above the line is much more effectivewhen the target group is very large and

difficult to define.

• But if the target group is limited andspecific, it is always advisable to use BTL

promotions for efficiency and cost-

effectiveness.


You decide on which factors are + or – for

8/13/2019 Marketing Final 6 7 8-9-10


You decide on which factors are + or – for

above / below the line… • Adaptable• Can only reach a limited

number of customers.

• Control the message

• Expensive

• High cost• Higher customer attention

• Impersonal

• Interactivity

• Labour intensive

• Lacks flexibility

• Limited capacity to close thesale

• Message is customised

• One way communication

• Opportunity to close a sale

• Potential to develop arelationship

• Repetition

• Used to build brand loyalty

• Wide coverage


8/13/2019 Marketing Final 6 7 8-9-10


Thank you.

Marketing Final 6 7 8-9-10

Documents

Transcript of Marketing Final 6 7 8-9-10