Role of Marketing !• Marketing is total system of interacting activities designed to plan, price, promote and distribute

products to target market !!Strategic Role of Marketing Goods and Services!

• Translate the overall business goals into a reality by devising a marketing plan that can attain greater sales !

• Involves finding most suitable market !• Design product suited to their identified needs !• Make sure resources ensure that customers in those markets buy the product !

• By satisfying needs, business can make profit and acquire financial means to achieve its mission and broad goals !!

Marketing Plan!• Document listing activities aimed at achieving particular marketing outcomes !• Template for future action aimed at achieving business goals !• Outlines strategy business will use to bring customer and seller together !• Ensures that customer base is identified, developed and then maintained !• Who what when where why and how often !• Successful ones are based on research and design is always centred on customer !!

Interdependence !• Marketing concept- all functions of business involved in satisfying customer and business

needs !• Marketing plan therefore integrated into all aspects of business and marketing concept adopted

by all employees !• Success of marketing plan may require good or service ready by certain date (OM)!

• Product features that consumers want !• Finances for expensive advertising campaign !• Appropriate staff employed to create good or service desirable to customers !!

Marketing Approaches!

Approach Description

Production (1820-1920) • Focused solely on production !• If we make it, they will buy it (customers seek

goods based on level of quality)!• Prominent during IR when demand was greater

than supply due to little competition !• Business centred around scientific production

techniques !• Emphasis on quantity, quality and reducing costs !• Henry Ford, Model T, scientific approach, only

black

!Types of Markets !

• A market can be defined as a group of individuals that:!• need or want a specific product!• have the money to purchase !• are willing to spend their money to purchase!• are socially and legally authorised to purchase !

Sales (1920-1970) • After WWI, output begins to catch up to demand and business cannot sell everything they produce!

• Emphasis on selling because of increased competition !

• Increased spending on advertising and other promotional techniques to convince consumers on the need to purchase !

• Marketing was still rather a method business could make product then get a sales rep to create demand through high-pressure techniques

Marketing approach: Stage One (1960-1980) • Began with economic boom after WWII !• Find what customers want through market

research then satisfy it !• Families begin to have discretionary income and

use this to satisfy wants!• Higher competition !• Customer orientation in all business functions

Marketing approach: Stage Two (1980 to NOW) • CSR- growing public concern over environmental pollution has shifted marketing plans !

• Customer orientation - process of collecting information from customers and basing marketing decisions and practices on it !

• Results in relationships with customers that go beyond the point of sale !

• Relationship marketing- priority on customer retention and continual satisfaction as repeat business is more effective than new customers !

• Loyalty program, customer care and sales service

Approach Description

Market Description

Resource • Individuals/groups engaged in primary production!• Where raw materials are bought and sold !• Buyers look for products of high and consistent

quality at cheapest price!• Farmers purchasing seeds

Industrial • Secondary or tertiary that purchase products to use in production of other products

Intermediate • Wholesalers and retailers who purchased finished products and sell them again to make a profit

Consumer • Individuals who plan to consume to products!• Mass- one product to all buyers with same needs

and wants (mass distribute, produce, promote)!• Niche- divided mass market consisting of buyers

with specific needs

Influences on Marketing!Factors Influencing Customer Choice!

• Buying behaviour is what motivates customers to purchase something and not something else!• Understanding this aids business in predicting customer trends and how customers react to

particular marketing strategies !!Psychological!• Internal but often influenced by sociocultural forces!!Perception!• Process through which people select, organise and interpret information to create meaning!• Different customers think differently of certain products and therefore marketing managers must

create favourable perception !• Done through advertising and creating image that may not necessarily be true !!Motive!• Reason that makes an individual do something and reason why person needs product !• Health, safety, pleasure !• Advertising attempts to motivate customer to buy particular product!!Attitudes!• Person’s overall feeling about an object or activity !• Customers attitude determines success of marketing strategy!

• negative attitude requires change to strategy !!Personality and self image!• Personality is collection of behaviours and characteristics that make up individual!

• influence brands as certain brands have certain styles that suit personality !• influence type of product (sport vs non sporty)!

• Self-image is important as customers want to express identity through what they buy !• celebrity endorsements as people want image like celebrities !!

Learning!• Customers learn something about a product each time they consume or try it !• Learning refers to changes in an individuals behaviour caused by information and experiences!• Learning can be achieved through advertising or word of mouth !• Successful marketing strategies assist customers to learn and encourage brand loyalty!• Product should be made in a way that customers learn good things and want to purchase it

again. !!!!!!!!

Sociocultural Influences!• External forces exerted by other people !!Social Class!• Socio-economic status determined by education, occupation and income !• Influence type, quality and quantity of what person buys !!Culture and subculture!• Learned values, beliefs and traditions shared by society!• Influence buying behaviour because its intrinsic part of day to day life !• Determines what people wear, eat and how they lie !!Family and Roles!• Roles within family influence buying behaviour as well as roles in society as a whole !• Women still largely make buying decisions related to food, healthcare, laundry!!Reference (peer) groups!• Groups of people with whom a person closely identifies, adopting their attitudes, values and

beliefs !• Customer buying behaviour may change to match the rest of groups beliefs and attitudes !• Peer group with distinctive clothing as well as word of mouth !• Apple has developed apps like Ping to create social bonds between iPhone users !!Economic influences!• Economic influences impact the customers willingness to spend as well as the business’s

capacity to compete !!Boom!• Low unemployment, high income, increased optimism!• Business increase production and promotion!• Customers spend more feeling secure with income and employment!• Sales respond to all forms of production !!Recession !• Unemployment reaches high and incomes fall, lack of confidence in economy!• Business and cutovers spend less and look for value and dependability!• Marketing stresses value and usefulness of product !• GFC lead to declining sales of iPhone in the US and Europe and thus older models are

continued at a lower price !!Government influences !• Laws, regulations, policies!• Economic policies influence level of economic activity —> influence marketing plan !!!!

Consumer Laws !• Business laws that relate to dealings between consumers and business !• Provide protection for customers and clarify rights and responsibilities of business !!Australian Consumer Law!• Single, national law introduced in 2011, replacing 17 existing laws at all levels !• Offers same rights and protections to all businesses, customers in Australia !• Promotes fair and competitive behaviour and prevents deception and misleading of consumers !• Enforced by ACCC and implemented by Competition and Consumer Act of 2010 !!Competition and Consumer Act 2010 !• Major purposes are:!

• Protect consumers against undesirable business practices (misleading, place of production)!• Restricting competition (cartels, price fixing, predatory pricing, exclusive deals with suppliers)!

• Enforced by ACCC, state consumer agencies and ASIC in respect of financial services !• Unconscionable conduct is any business practice deemed illegal or unreasonable !• Breaches of act can lead to legal action taken by ACCC!

• Courts penalties of $1.1 million to companies and $222,000 for individuals !• On the spot infringement notices and warning notices to consumers (no courts needed

benefit)!• Qantas was fined $20m by ACCC in 2008 for colluding with other airlines to fix fuel surcharges !!Deceptive and misleading advertising !• Most serious breach because of influential nature of advertising !• Business gets away with it by:!

• fine print!• before and after advertisements !• unsubstantiated claims from tests and surveys!• country of origin!• packaging!

• Two most common illegal ones are:!• bait and switch advertising- advertising few products at reduced and therefore entice

customers but quickly sold out and customers directed to more expensive goods !• dishonest advertising!• specials and gifts that are not genuine !

• Optus claimed that consumers could gain unlimited broadband however once consumers reached a certain amount of GB, the service speed was throttled !!

Price Discrimination!• Setting of different prices for same product in separate markets !• Prohibited if it is used to substantial decrease competition !• Generally done through discounts, credits, rebates !!Implied Conditions/Guarantees !• Unspoken and unwritten terms of a contract!• ACL brought about single set of consumer guarantees!

• assurance that you get what you pay for and a set of rights and remedies for defective goods and services!

• most important is that quality of product must be acceptable !• product must be fit for purpose, acceptable in terms of appearance and finish, free from

defects, safe and durable !!Warranties!• Obligation by business to offer degree of protection to customer if good is faulty/if service is not

carried out with care !• Must clearly state terms and conditions of warranty !• Must provide refund if:!

• faulty!• does not match description!• fail to do job intended !!

Ethical Influences!Truth and Accuracy in Advertising !Untruths due to concealed facts!• Pieces of information purposely omitted from an advertisement to conceal facts !!Exaggerated claims!• Referred to as puffery and often cannot be proven or confirmed !!Vague Statements!• Statements using words so ambiguous that consumer will assume the intended message!• “Helps”!!Invasion of privacy!• Tracking of web users and using this information to target them with advertisements !!Good Taste in Advertising!• Subjective as some people may find certain advertisements offensive while others do not !• Common agreement as to what society considers to be acceptable and marketers must be

aware of community sensitivities !• KFC had an add that shut Jamaicans up by providing a bunch of KFC !• Sexualisation of children in advertising can lead to depression and identity disorders !!Advertising standards bureau !• Ensures that acceptable advertising standards are followed !• Self regulated through different Advertising Standards and Claims Board !• Deals with consumer complaints but some believe it should be regulated by the government !!Products that may damage health!• Marketing of junk food is criticised due to rising rates of childhood obesity !• No advertising should be allowed during programs for pre-school children- heavily manipulated !• Advertising for smoking is banned and plain packaging (tobacconists can’t display cigarettes)!

Engaging in Fair Competition !• Some businesses engage in unfair marketing strategies that exploit customers !• Unethical towards competitors as they unfairly gain market share !

• False promises!• Exaggerated product descriptions !• High pressure selling methods !• Placing restrictions on suppliers !

• Unlawful and can lead to customer dissatisfaction, penalty and poor word of mouth !• Business needs to monitor marketing actions of competitors through direct observation, journals,

media and research!• These are really the only ethical ways !!

Sugging !• Selling under the guise of a survey !• Sales technique disguised as market research!• Not illegal but raised ethical issues like invasion of privacy and deception !• Long term negative consequences include people who immediately disapprove of legitimate

marketing research in fear of being sugged.!!The Marketing Process !

Marketing Plan!• Steps involved in marketing plan are outlined in the following dot points !• All marketing plans must be realistic in light of the situational analysis and be achievable within

the business’s resources and budgets !• Look at first page for more !!

Situational Analysis!• Allows business to gain understanding of current position and a clear picture of where it is

headed!• Involves investigation of market opportunities, potential problems!!SWOT Analysis !• Gives business clear understanding of internal and external business conditions !• Internal is SW and external is OT but some can overlap !• Provides information needed to complete SA and give indication of business position in market !• Marketing plan is modified according to SWOT in order to make most of opportunities as well as

current threats, minimising weaknesses and threats !• Good businesses direct strengths towards opportunities outside the business !• Convert threats and weaknesses into strengths and opportunities through appropriate responses !• iPhone strengths are: low production costs, customer loyalty, own operating system!• iPhone weaknesses are: high price, incompatibility, smaller screen !• iPhone opportunities are: products for markets in India and china, future models that are

differentiated !• iPhone threats are: increased competition, shortening life cycle of products, breaches in patents !!!

Product life cycle !• Consists of stages a product passes through and enables business to make decisions as to

changes that might need to be made !• Different marketing strategy/promotional mix needed for each stage !• Undertaken after SWOT !!

!Market Research!

• Collecting, recording and analysing information about particular marketing issue!• Strategies require up to date, reliable information that is detailed and relevant !• Understanding buying behaviour and patterns of customers can put business in strong position

and minimise risk !• Products released more accurate and responsive to customer trends, minimising risk of failure !• During establishment, research is especially concerned with finding a target market !• Apple utilises sales data for different regions in order to determine its launch dates and whether

to continue the run of older models (like in India and China)!• They conduct surveys on what is driving consumers towards iPhone products rather than other

competitors as well as what features they most use !!!!

Stage Description

Introduction • Attempt to increase consumer awareness to build market share !

• Establish strong product brand !• Keep prices low to gain foothold and avoid bad

publicity by keeping reliable !• Selective distribution in order to slowly gain the

market !• Promotion educate buyers about product benefits

Growth • Try to gain brand acceptance and increase market share !

• Product quality improve with more support services!

• Price per unit maintained as increased demand !• Promotion seeks wider audience and distribution

channels increased

Maturity • Sales plateau and market saturated!• Product features must be differentiated and price

adjusted according to market!• Promotion shows why it is better than competitors!• Distribution incentives offered, mainly by

establishing lines of credit

Decline • Product stays same with possible improvements!• Price reduced to sell of remaining stock!• Promotion no longer invested!• Distribution channel reduced to cater to only loyal

segment !• decline caused by change in taste and as new

products replace old ones

!The Three Steps!1. Determine information needs !

• Identify what needs to be found !• Information must be relevant to issue !• Deemed useful if it results in better marketing strategies for target market and assists

business in achieving marketing objectives !!2. Collect data through both primary and secondary sources !

• Marketing data refers to information relevant to defined marketing problem !• Primary data are facts and figures collected from original sources (surveys, observations test

marketing) for the purpose of the specific problem!• Can be collected by business/ outsourced !• Business can identify exactly what a customer is thinking !• Test marketing is used to determine whether changing one of the factors will alter

behaviour!• Secondary Data is information already collected by some other person!

• Internal- annual reports, customer feedback!• External- internet reviews and private data !!

3. Analyse and interpret the data !• Conclusions drawn from data through statistical interpretation analysis, focusing on

averages or patterns !• Number of people should interpret to gain a wider perspective and avoid bias !!!

Establishing Marketing Objectives!• Market objectives are realistic, measurable goals achieved through the marketing plan !• Important to decide what to achieve so it can be aligned with business goals and implemented

into marketing plan!• Must be SMART !• Achievable means that the business has the financial and human resources to achieve the goal!!Increasing Market Share!• Market share refers to business’s share of total industry sales for particular product !• Use extensive product range and different brand names to gain extra percentage of market share!• Measured by total units sold rather than profit !• TV channels have started to release a lot more sub channels to offer a broader range of TV

programs and achieve higher ratings, as they bring in more advertising money !!Expanding the product mix !• Product mix is total range of products offered by business !• Expanding product mix is necessary as having same one will not remain effective due to external

changes !• Product range must understand customer needs and each product line should attempt to satisfy

needs of different target markets !

• Yamaha expanded from a motorbike company to a company that successfully produces high end stereo and home theatre products !!

Maximising customer service (responding to the needs of the customer)!• Customer service means responding to the needs of the customer !• Most important objective as higher level of customer service leads to improved satisfaction !• Customer service establish sound customer base with possibility of repeat purchase and good

word of mouth!• Attitude adopted by everyone in the business !• Can be maximised by:!

• asking what customers want !• training employees to establish customer orientation!• establish and maintain long term relationships!• anticipate market trends !

• Genius Bar! !Identifying Target Markets !

• Target market- group of present and potential customers to which business intends to sell its product!

• Generally share similar characteristics like income, lifestyle, spending patterns !• Primary target market is segment at which most marketing resources are directed!• Secondary is smaller and less important !• Allows business to better satisfy needs and wants of group as well as use marketing resources

more efficiently!• As they better understand their consumer buying behaviour !

• Allow for more effective collection of data as well as promotional material that is more relevant !!Mass Marketing Approach!• Mass promote one product to all buyers and seek large range of customers !• Assume customers in target market have similar needs and thus develop single market mix for

entire market !• One price, one distribution system, one promotional program !• Apple has a mass market approach but with multiple strategies to target different segments of

the global market for smartphones.!!Market segmentation approach!• Divide market into distinct segments of people who share common characteristics !• Enables business to design a marketing plan that meets the needs of relatively uniform group!• Concentrated market- single market segment elected from wider market and business service

needs more precisely!• Differentiated market- business sell differentiated versions of the one basic product to different

segments (shoes like Nike and Reebok)!!Niche marketing approach!• Narrowly selected target market segment or segment within a segment !• Large businesses don’t use this approach because they don’t see it as overly profitable !

• Boutiques can avoid direct competition from large department stores by doing so !!Developing Marketing Strategies !

• Marketing strategies are actions undertaken to achieve business’s marketing objectives through marketing mix !!

Marketing Mix !• Business has control over 4 Ps and uses them to reach target market !• Different emphasis on each P depending on position and stage in life cycle !• Product- features, quality, packaging, brand name. Also intangibles like security, prestige. !• Price- creates perception of product. Competition analysed alongside cost of production/demand!• Promotion- methods to inform, persuade and remind customers about products !• Place/distribution- channels of distribution, kinds of intermediaries !!

Implementing the Marketing Plan!• Implementation is process of putting marketing strategies into operation !• Daily, weekly and monthly decisions made to make sure plan is effective !• Marketing plan outlines why, implementation involves how, where and when!!

Monitoring and Controlling the Marketing Plan!• Monitoring involves checking and observing actual progress of marketing plan by gathering

information !• Control requires establishment of KPIs as actual performance indicated by budgets and

statistics must be evaluated against them !• Businesses can then identify effectiveness of marketing plan and make changes !!Developing financial forecast!• When evaluating alternative marketing strategies, business must develop financial forecast that

details costs and revenues for each strategy!• Also helps decide how to allocate marketing resources !• Requires!

• Cost estimate- market research product development!• Revenue estimate- how much revenue through sales is expected to be generated !

• In doing so, business can identify best marketing strategy!!Comparing actual and planned results !Sales Analysis!• Use sales data to evaluate a business’s current performance and effectiveness of marketing

strategy !• Relatively inexpensive to collect and process but data does not reveal exact profit level !!Market share analysis/ratio!• Business evaluate market strategy compared to its competitors!• Reveals whether changes in sales have resulted from accreting strategies or external factors!• If total sales revenue decline but market share remains same, overall industry sales have fallen!!

Marketing profitability analysis!• Business breaks down total marketing costs into specific activities !• Compare costs of these with results achieved and then manager can assess effectiveness of

each strategy!• Shows how to best allocate marketing resources in the future !!Revising the marketing strategy!Changes in the marketing mix !• Product modification- no product is perfect!• Price modification- changes in the external environment!• Promotion modification- change in product life cycle!• Place modification- ongoing success means expansion of distribution channels!!New product development!• Product lifespan is between 5 to 10 years and business must continually introduce new products!!Product deletion!• Outdated products may create unfavourable image and rub off on other products sold!• When product is in decline, it should be redeveloped regardless of history!!

Marketing Strategies!• Extended marketing mix refers to the combination of people, processes and physical evidence

alongside other four elements of marketing mix!• Came to prominence due to expansion of service-based businesses !!

Market Segmentation!• Business implement specific marketing mix for each target !• Leads to increased sales and market share due to better understanding of consumer desires !!Segmenting consumer markets!• Segmentation variable is characteristic that is used by marketing managers to divide total

market into segments !!Demographic!• Divide market through features like size, age, sex, income and cultural background !• Widely used because easily measured !!Geographic!• Divide market according to geographical region as consumers have different needs, tastes and

preferences!• City size as major businesses don’t establish in small places !• Urban, suburban, rural, city size, climate, landforms !!Psychographic!• According to personality, motives, socio-economic group and lifestyles !• Focus on why people behave the way they do!

• brand preferences !• reading habits !• values !

• Hard to measure !!Behavioural!• Process of dividing total market according to customer relationship to it !• Includes customers knowledge of, attitude towards and use of the product!• Total market divided into users and nonusers !• Users then classified as heavy, moderate or light!• To encourage light to purchase more, business may redesign product or implement special

promotional activities!• By determining benefits desired, marketers can design products that directly satisfy these desires !!

Differentiation and Positioning of product/service!• Occurs when products that are similar are made to appear different or better than competitors !• Better able to gain more control in the marketplace with price !!Points of differentiation!• Packaging, labelling, features, convenience are the obvious ones !!Customer service!• Pre and after sales service is important particularly for expensive items!• Includes presentation of premises, atmosphere, range of products that capture consumer’s

interest !!Environmental concerns!• People are more concerned with quality of life issues these days !• Businesses that are ecologically sustainable are also marketed that way and gain support!!Convenience!• Busy customers select products that are most convenient to use, particularly food products !!Social and ethical issues!• Consumers are becoming more ethically minded and purchase products/brands that do not

exploit workers or environment!• Ethical consumerism provides opportunities to satisfy demands of this growing number of

consumers !• GM Free, Fair Trade movement wants more guarantees of fair labour practices and sustainable

organic products. Not animal tested !!Product/service positioning !• Refers to technique in which marketers try to create an image or identify for a product/service

compared to other competing products/services !• Must always be done in the minds of target market and how potential buyers perceive product !

• Helps sale in highly competitive markets due to consumer care about self-image and other psychological factors !

• Exclusivity, high price, high quality product of Ferrari makes it an absolute gem of a car amongst other sporting car manufacturers !!

Products- goods and/or services !• Total product concept- combination of tangible and intangible benefits that customer purchases !

• Intangibles are collection of satisfactions that include brand name or warranty!• Can be used as a point of differentiation from competitors !

• Intangibles can be used to differentiate, especially with mass-produced products !!Product Branding !• Brand is a term, symbol or name that identifies a specify product and distinguishes it !• Trademark signifies that brand name is registered for exclusive use !• Symbol/logo is graphic representation that identifies a business or product !• National/Manufacturer brands are owned by manufacturer !

• high appeal as recognised across the country!• reliable and widely available at consistent quality !

• Private/House Brand is owned by retailer !• cheaper because retailer or wholesaler can buy at a lower cost !

• Generic brand are products with no brand name at all and carries only the name of product and plain packaging!

• Strong brand awareness allows a product to remain in the minds of customers and is likely to influence customers’ purchasing decisions !!

!Packaging!• Involves development of container and graphic design for product !• Source of positive impression in order to encourage first timers !• Preserves product whilst attracting attention and create image of exclusiveness !• Certain colours now come to represent certain things !• Shape of packaging can become trademark !• Label is presentation of information on product !

• Can be used to encourage proper use of products for maximum satisfaction!• Provides useful information about country of origin and ingredients !• Must be truthful !• Makes it easy for customers to compare products !!

Benefits of branding to customer Benefits of branding to business

Easier to identify specific products they like Gain repeat sales due to instant recognition

Way of evaluating quality Introduce new products easily

Reduce perceived risk of purchase Promotion of one product indirectly promotes others

Psychological reward comes with status and prestige

Encourage customer loyalty

Price and Pricing Methods !Pricing Methods !• Marketing objectives and cost of production indicate what they should charge !• Competition, regulations and economic activity are also important !!Cost based pricing!• Business determines total cost of producing one unit then adds amount to cover additional

expenses and provide profit !• this is known as the mark up !

• Drawbacks are that it is hard to accurately determine appropriate mark up percentage !• Product is priced without taking into account other elements of marketing mix or the state of the

market !!Market based pricing!• Involves setting price according to level of supply and demand or what market is prepared to pay!• Not the easiest to apply as levels of supply and demand constantly change !• Bananas are cheaper in summer months as the supply is greater than the demand !!Competition based!• Setting price that covers the cost whilst being comparable to competitors price !• Important step as consumer always compare prices to look for best deal !• Used when there is a high degree of competition in an undifferentiated product market !• Undercutting is great way to break into established market !• Equal to competitors means business can follow price leader without taking market research !• Above competitors is favoured by businesses who wish consumers to perceive products as

superior !!Pricing Strategies!• Used once the basic price is set by the ricing methods !• Lets business to fine tune its price in line with the pricing strategy!• Business can use severals strategies at once for the same product but it must be continually

modified depending on changes in external environment !• Depends on:!

• marketing objectives!• life cycle!• market in which product is in !• degree of differentiation !• economic activity levels !!

Price skimming !• Occurs when the business charges the highest possible price for product during introduction !• Consumers willing to pay high price for novelty features because of prestige that ownership gives !• Objective is to recover costs of R and D as quickly as possible !!Price penetration!

• Business charges lowest possible price in order to quickly achieve market share and discourage competitors from entering market !

• More difficult to raise prices than it is to lower them, generally requiring a substantial modification to do so !!

Loss leader!• Product at or below cost price for special promotion in order to attract customers to retail stores !• Business makes loss but customers will go and buy other products as well !• Generally used when good is overstocked/slow to sell or to build reputation of high traffic !!Price points !• Selling products only at certain predetermined price and is used in clothing stores !• Business choose limited number of key prices for product lines regardless of how much they cost

at wholesale !• No fixed markup, making it easier for customer to find the type of product they need and

encouraging them to trade up to more expensive model !!Promotion!

• Describes methods used by a business to inform, persuade and remind target market about products !

• Attracts new customers, brand loyalty, encourage existing and new customers to purchase more !!Elements of promotion mix !• Various promotion methods a business uses in its promotional campaign!!Advertising!• Involves communicating a paid, non-personal message through a mass medium!• Main advantage is that it provides business with flexibility as to reach of the message !• TV, leaflets, internet banner advertisements, telemarketing !• Type of advertising depends on:!

• type of product and its positioning!• size of target market !• businesses budget !!

Personal selling!• Involves activities of sales consultant directed to a customer to make a sale !• Products generally require personal contact of sales rep to familiarise customer with it !• Expensive and time consuming gut leads to:!

• modified message to suit customer circumstances !• create long term relationship resulting in repeat sales !• provide after sales customer service in relation to features, installation and servicing !!

Relationship marketing !• Development of long term, cost-effective and strong relationships with individual customers !• Ultimate aim is to create customer loyalty by meeting needs of customers on an individual basis !• Creates reasons for customer to keep coming back to business !

Sales promotion!• Use of activities or materials as a direct inducement to customers in an attempt to sell more

product !• Entice new customers, increase sales to existing customers and encourage trial of product !• Achieved through coupons, gifts, refunds, samples and point of purchase displays !!Publicity and Public Relations!• Publicity is any free news story about a business’s products !• Free and timing is not controlled by business!• Enhances image and awareness of product and highlights business’s favourable features !• PR are activities aimed at creating and maintaining favourable relations between a business and

its customers!• It can increase sales due to promotion of positive image and effective communication of

messages !!Communication process!• Inability to communicate clearly and effectively can lead to lost sales !• Channel is any method used for carrying a message !• Any interference that affects this communication is known as noise!

• Common noises include faulty printing, competing messages and misinterpretation !• Customers may be more willing to purchase product if message is communicated via respited

channel !• Opinion leader is person who influences others and opinions are respected !• Consumers also trust word of mouth and this has grown in prominence due to social media!!

Place/distribution !Distribution Channels!• Routes taken to get product from business to consumer !• Common intermediaries include wholesaler, broker, agent !

• Enable business to access customer in more efficient way than they originally could !• Provides extra customer reach !!

Traditional distribution channels !• Producer to customer Tax advice, car repairs !• Producer to retailer to customer Bulky or perishable goods like furniture/fruit !• Producer to wholesaler to retailer to customer Most goods !• Producer to agent to wholesaler to retailer to customer Paid commission by the producer and

used for inexpensive, frequently used products when a business doesn't have sales reps.!!Innovative distribution methods !• Non-store retailing is activity conducted away from the traditional store:!

• door to door selling, mail order catalogues, telemarketing !• As more people use the internet for shopping, traditional distribution methods will be modified

and electronic post and parcel delivery channels used more frequently!!!

Channel Choice!• Depends on location of business’s market or market coverage !• Market coverage refers to the number of outlets a firm chooses for its products !• Intensive distribution- saturate market with product, often through local outlets !• Selective distribution- moderate proportion of all possible outlets. Customers willing to travel

and seek out specific retail outlets that stock a specific brand !• Exclusive distribution- use of only one retail outlet in a large geographical area. Used for

exclusive, expensive products. !!Physical Distribution Issues!• Physical distribution is all those activities concerned with the efficient movement of products

from producer to consumer !!Transport!• Intricate network of transportation required to driver vast array of products on supermarket

shelves!• Method of transport depends on type of product !!Warehousing !• Set of activities involved in receiving, storing and dispatching goods !• Acts as a central organising point for the efficient delivery of products !!Inventory!• If business carries too much stock, it will experience high storage but too little stock results in lost

sales !• Correct balance required to ensure optimum business performance !!

People, processes and physical evidence!People!• Essential that businesses use appropriately recruited, qualified and trained employees as

services are performed by people!• Quality of interaction between customer and business is important !• Consumers base perceptions and judgements on how employees treat them !• Developing culture of customer focus is necessary !!Processes!• Refer to flow of activities that a business will follow in its delivery of a service !• Must be efficient to achieve customer satisfaction!

• Otherwise business will lose customers and damage reputation !!Physical evidence!• Refers to environment in which the service will be delivered, including materials needed to carry

it out !• Business should provide high quality physical evidence to create an image of value and

excellence !!

E-marketing !• Practice of using the internet to perform marketing activities !• Provide faster and more efficient way of doing business and attracting new customers !• Australian retailers have been slow to adopt e-marketing compared to other countries and

provide little opportunity for customers to purchase online !!E-marketing technologies !

!!!!!

Technology Description

Web Pages • Utilise www to convey information through a variety of different mediums !

• Number of related web pages form a website !• Homepage could contain basic information about

business and link to other pages with detailed information about location and products available !

• Can be powerful marketing tool if well designed !• Selling online can often reduce costs as it is

cheaper to run an online store than a physical one

Podcast • Regular distribution of digital video or audio files via internet which are directed to number of users who are subscribed to the service!

• Independent podcasters sell advertising time!• Businesses can market through podcasts and aim

at the same target audience as podcast

SMS • More recipients without needing to log in !• Can be used to alert regular customers about

special deals or notify suppliers of arrival of goods shipment

Blogs • Online journal which enables users to add comments and share opinions!

• Communicate with potential and existing customers as well as announce products and gain feedback!

• Help business build relationship with customer and ask for feedback for new ideas for products and services

Web 2.0 • Interactive platform on the internet as opposed to merely means of retrieving information !

• Can be used as cheap and easy PR told as they do not require expertise to manage

Social media advertising • Has positive results when combined with traditional advertising methods !

• Inexpensive, easy to monitor !• No control on what people comment and can’t

measure reach !• Build good and interactive relationships with

customers

Global Marketing!• Marketing plan must be modified and adapted to suit overseas markets as it differs from

domestic scene !• Some TNCs treat the globe as one large market but others believe that each country should be

treated differently!• Regardless market research is necessary !

• Economic, political, social and cultural features gathered !!Global Branding !• Use of a worldwide name, term, symbol or logo to identify seller’s products!• Can be const effective because one advertisement can be used in a number of locations and

provide a uniform worldwide image !• Successful brand name can be linked to new products introduced in the market !

• Valuable resource and equates to global recognition irrespective of language barriers !• Even if business has to modify products, companies will not alter the brand name on their

products !!Standardisation!• Assumes the way product is used is the same everywhere !• Marketing mix for standardised product will be same in all markets and promotional techniques

too !• Cost savings and production runs can be longer!

• Achieve EOS easily !• Reducing R and D costs !• Simplifying after sales service !!

Customisation !• Assumes product is used and needs it satisfies are different between countries !• Requires marketing plan to be customised according to economic, political and sociocultural

characteristics of the target country !• Costs more but provides access to more customers !• Sometimes a combination of standardisation and customisation can be achieved !!Global Pricing!

Method Description

Customised Pricing • Consumers in different countries charged different prices for same product !

• Businesses use cost plus method to cover added costs of exportation !

• Costs include tariffs and warehousing

Market customised pricing • Sets prices according to local market conditions to avoid competition or set according to demand !

• Price may have to be lower in competitive market !• Also affected by foreign currency exchange rates

!Competitive Positioning!• Relates to how a business will differentiate its products and centres on how a business will find

its place amongst competition !• Global businesses must clearly show how its products are better than competitors !• Business strive to develop product leadership, positive customer relationships and operational

excellence !• Understand the dynamic environments in which they operate and form strategies according to

them !• Apple has positioned its products in the higher end of the market in terms of quality and design,

pricing its products accordingly

Standard Worldwide Price • Charge customers the same price for product anywhere in the world !

• Only succeed if foreign marketing costs remain low enough to affect overall costs !

• Very risky as changes in exchange rate can make things ugly!

• Domestic business may undercut

Method Description