PRINCIPLES OF MARKETING

CHAPTER FIVE

5. MARKETING MIX

AYANA.Y
AYANA.Y 1
 The Marketing Mix
• Also known as the 4 Ps (Product,
Place, Promotion, Price), or

• Known as the 7 Ps in the

Extended Marketing Mix (adding
People, Physical Evidence and
Process)
The Marketing “Mix”
 Marketing Mix – 4Ps
The marketing mix elements that make up an orga-
nization’s marketing program:

1. Product
2. Promotion
3. Price
4. Place
These are management decisions, control-
lable factors
 MARKETING MIX -Kotler-Amstrong and Booms-Bitner
• The set of controllable tactical marketing tools
• Everything the firm can do to influence the demand of
its products

Sellers view Customers view

4 Ps: 4 Cs:
> Product > Customer solution
> Price > Customer cost
> Place > Convenience
> Promotion > Communication
3 more Ps:
> People
> Process
> Phycical evidence

AYANA.Y 5
MARKETING -Jankkila 2004 -
 4 Ps
PRODUCT PRICE
Variety, Quality List price, Dis-
counts
Design, Features Allowances, Pay-
ment
Brand name, Packaging period, Credit
terms
Services TARGET
CUSTOMERS
INTENDED POSITIONING

PROMOTION PLACE
Advertising Channels, Coverage
Personal selling Assortments, Loca-
tions
Sales promotion Inventory, Transporta-
AYANA.Y MARKETING -Jankkila 2004 - 6
tion
 The 7 – Ps – Extended Marketing Mix
–Booms-Bitner -

1. Marketing Strategy tool that expands the number of control-

lable variables from the four in the original Marketing Mix
Model to seven.

1.People ( explicit factor )

2.Process ( explicit factor )
3.Phycical Evidence ( implicit factor )

2. The traditional Marketing Mix model was primarily directed

and useful for tangible products.
3. The 7-Ps model is more useful for services industries and ar-
guably also for knowledge-intensive environments.
•
AYANA.Y MARKETING -Jankkila 2004 - 7
 7- Ps
People
All people directly or indirectly involved in the consumption of a
service are an important part of the extended marketing mix.
Knowledge Workers, Employees, Management and other Consumers
often add significant value to the total product or service offering.
Process
Procedure, mechanisms and flow of activities by which services are
consumed (customer management processes)
Physical Evidence
The ability and environment in which the service is delivered
both tangible goods that help to communicate and perform the service
and intangible experience of existing customers and the ability of the
business to relay that customer satisfaction to potential customers.

AYANA.Y MARKETING -Jankkila 2004 - 8

 7 Ps
• Booms and Bitner also suggest that Place in a ser-
vice-oriented company includes the accessibility
of the service, and that Promotion in a service-
oriented company includes the input of front-line
service personnel.

AYANA.Y 9
MARKETING -Jankkila 2004 -
PRODUCT / SERVICE
Kotler-Amstrong 2004, Lancester-Reynolds 2004

• PRODUCT = Anything that can be offered to a market for

attention, acquisition, use or consumption that might satisfy
a want or need
>industrial goods = installations, assessories, raw materials, com-
ponent parts and materials, supplies
>consumer goods =convenience goods, shopping goods, speciality
goods, unsought goods
• SERVICE = Any activity or benefit that one party can offer
to another that is essenntially intangible and does not result
in the ownership of anything
• EXPERIENCE = memorable, personal, take place in minds

AYANA.Y MARKETING -Jankkila 2004 - 10

THREE LEVELS OF PRODUCT–Kotler-Amstrong-

AUGMENTED PRODUCT
Delivery Credit After
sale
ACTUAL PRODUCT service
Brand CORE Features
name BENEFIT
Core product
Quality Design

Packing

Installation Warranty
AYANA.Y
MARKETING -Jankkila 200411
-
PRODUCT/SERVICE CLASSIFICATIONS
–Kotler-Amstrong 2004 -

• CONSUMER PRODUCT
> bought by final consumer for personal consumption
• CONVENIENCE PRODUCT
> consumer product that the customer usually buys frequently with
a minimum of comparison and buying efforts ( fast food, newspaper )
• SHOPPING PRODUCT
> consumer good that the customer in the selection and comparison
process and purchase buys ( suitable, quality, price, style )
• SPECIALTY PRODUCT
> consumer product with unique characteristics or brand identifications
( specific brands and types of cars, cameras, phones, clothes, wines )

AYANA.Y MARKETING -Jankkila 2004 - 12

PRODUCT/SERVICE CLASSIFICATIONS
• UNSOUGHT PRODUCT
> consumer product that the consumer either does nor
know about or knows about but does not normally think of
buying ( life insurance, consulting )

• INDUSTRIAL PRODUCT
> product bought by individual or organizations for further
processing or use in conducting business
1. Materials and parts ( raw materials, manufactured materi-
als )
2. Capital items ( installations and accessory equipments )
3. Supplies and services ( operating supplies, repair items,
business services, business advisory services )
AYANA.Y MARKETING -Jankkila 2004 - 13
PRODUCT DEVELOPMENT STRATEGIES
-Kotler-Amstrong, Lancester-Reynolds

ANSOFF MATRIX ( Igor Ansoff 1957 )

New markets Existing markets

New products True innovators Product develop-

ment
Risky strategy strategy

Existing products Market development Market penetrations

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NEW PRODUCT DEVELOPMENT
–Kotler-Amstrong, Lancester-Reynolds -

• ACQUISITION
> By buying a whole company, a papent or a licence to
produce someone else’s product

• NEW PRODUCT DEVELOPMENT

> innovative, original products
> replacement products, product improvements, product
modifications
> Imitative products ”me to” products
> Relaunced, products, new brands

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NEW PRODUCT DEVELOPMENT STAGES
-Kotler-Amstrong, Lancester-Reynolds

IDEA GENERATION
IDEA SCREENING
CONCEPT DEVELOPMENT AND TESTING
MARKETING STRATEGY
BUSINESS ANALYSIS
PRODUCT DEVELOPMENT
TEST MARKETING
COMMERCIALIZATION

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NEW PRODUCT PROCESS …

ÍDEA GENERATION
*The systematic search for new-products ideas
*Internal = new-product managers, committees, departments,
venture teams
*External = customers, competitors

IDEA SCREENING
*Go or drop decisions- spot good ideas and drop poor ideas
as soon as possible

AYANA.Y 17
 NEW-PRODUCT PROCESS …
CONCEPT DEVELOPMENT AND TESTING
*Product concept = A detailed version of the new-product
idea stated in meaningsful consumer terms
*Concept testing = testing a new-product concept with a group
of tarket consumers to find out if the concepts have strong
consumer appeal.
MARKETING STRATEGY
*The target market; positioning, sales, market share, profit
goals
*Outlines of the product; price, distribution, marketing budget
*Long run sales, profit goals, marketing mix strategy

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 NEW-PRODUCT PROCESS …
BUSINESS ANALYSIS
* A review of the sales, costs and profits projections for a new
product to find out whether these factors satisfy the firm’s
objectives

PRODUCT DEVELOPMENT
• Developing the product concept into a phycical product in
order to ensure that the product idea can be turned into a
workable product

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 NEW PRODUCT PROCESS ….
PRODUCT DEVELOPMENT
*prototypes, product appraisal tests
*product refinement and modification by feedback,
> development cost increace sharply !
TEST MARKETING
*The product and marketing program are tested in more
realistic market settings –Standard, Controlled, Simulated
- Problem = competitors see your product !
- Test marketing does not guarantee succees !
COMMERCIALIZATION
*Introducing a new-product into the market –
- few new-product ideas succeed !

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 PRODUCT LIFE CYCLE MATRIX
by Barksdale-Harris

PIONEERING GROWTH MATURITY DECLINE

-sales- stars cash cows war horses
high markethigh market high market
share, high share, low hare, nega-
tive growth growth
growth

infants problem children dogs/cash dogs dodos

low market share low market share low market
share
high growth low growth negative growth
Entry - time -
AYANA.Y 21
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INDIVIDUAL PRODUCT / SERVICE DECI-
SIONS – Kotler-Amstrong -
Product attributes

Branding

Packaging

Labeling

Product support services

AYANA.Y 22
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 PRODUCT QUALITY – Kotler-Amstrong-
”When our customers come back and our products do not”

• Ability of a product to perform its functions

• Characteristics of a product or service that satisfy cus-
tomer’s stated or implied needs
• Is closely linked to customer value and satisfaction
• One of the marketer’s major positioning tools
• Has a direct impact on product or service performance
• Freedom of defects – is it enough ?

AYANA.Y 23
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ATTRIBUTES OF PRODUCT – Kotler-Amstrong -
• Core benefit of the product
• Product features;
- stripped-down model
- more features as a tool of differentiating the
product from competitors
• Product and Design
• Trademark
• Brand = Manufacturer’s brand, Private/Store brand,
Licencing, Co-Branding, Multibrands, New Brands,

With the help of Customer Relationship Market-

ing !
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 BRAND – BRANDING –Kotler-Amstrong -

• A name, term, sign, symbol, design

or a combination of these
• Intended to identify the goods or services of one
seller or group of another sellers
• To differentiate these goods from these of competi-
tors
• Consumer view a brand is an important part of
product – may add value
• Branding = Perhaps the most distinctive skill of profes-
sional marketers in their ability to create, maintain, protect
and enhance brands of their product and services

AYANA.Y MARKETING -Jankkila 2004

25
PACKAGE – PACKAGING – Lancaster-Reynolds , Kotler-
Amstrong--

• The end part of the product development; an external ap-

pereance

• A part of the promotion

• The activities of designing and producing te container or

wrapper for the product
– primary container
– secondary package
– package for storing
– labeling = printed information

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26
THE FUNCTIONS OF PACKAGING
-Lancester-Reynolds-

• Protect and preserve its contents

• Help the distribution of the goods via a number of lo-
gistics intermediaries from the factory/producer to cus-
tomer; transfering, stocking
• Selling; the promotional appeal, design, information,
trademark, brand
• For conceniency of users; storage of contents, suitable
sizes of package
• To conform the statutory and voluntary regulations in
providing a list of contents/weight/the origin of
product, E-numbers, ingrediants
AYANA.Y MARKETING -Jankkila 2004
27
 LABELING –
PRODUCT SUPPORT SERVICES –
LABEL
= identifies and promote the product or brand,
= describes several things of the good; who, where,
when made, contents, how to use, price per unit,
open dating, nutritional labeling, health-related
term
SUPPORT SERVICES
= Augmented parts of product

AYANA.Y MARKETING -Jankkila 2004 - 28

PRODUCT LINE / MIX
PRODUCT LINE
= A group of products that are closely related together; func-
tion in similar manner, sold to same customer group, mar-
keted through same types of outlets, given price ranges
”Nike athletic apparel” Nokia telecommunication products”

PRODUCT MIX – PRODUCT ASSORTIMENT

= Set of all product lines and items which a particular seller
offers for sale
*widht = number of different product lines
*lenght = total number of items
*depht = number of versions of each product in the line
*consistency = closeness of items ( distribution channels,

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 PRICE – PRICING –Kotler-Amstrong, Lancecter-Reynolds -

PRICE =
• The amount of money charged for a product or service or
the sum of the values the customers exchange for the
benefits of having or using the product or service
• The means whereby an organisation covers costs of all activ-
ities
• The major factor affecting buyer choice – usually
• A flexible element in the marketing mix – can change
quickly

DYNAMIC PRICING =
• Charging different prices depending on individual
customers and situations

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PRICING PERCPECTIVES – Lancecter-Reynolds -

• ECONOMIST’s approach
The price is the means through which supply and de-
mand is brought into equilibrium

• ACCOUNTANTS’s approach
The price covers the costs and make profits

• MARKETER’s approach
Effect of price on the organisation’s competitive
market position

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31
 FACTORS AFFECTING PRICING DECI-
SIONS –Kotler-Amstrong,--

INTERNAL EXTERNAL
FACTORS P FACTORS
Marketing objectives R Nature of the market
Marketing mix strategy I and demand
Costs C Competition
Organisational I Other environmental
considerations N factors ( economy,
G resellers, government

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32
PRICING IN DIFFERENT TYPES OF
MARKETS –Kotler-Amstrong, Lancecter-Reynolds –
PURE COMPETITION
-Many buyers and sellers trading in uniform
commodity – many fully informed buyers and sellers of
similar products
-No single seller or buyer has much effect on the going
market price > going pricing
PURE MONOPOLY
A single producer of a product – no substitudes for product
– free price setting
OLIGOPOLISTIC COMPETITION
Few sellers who are highly sensitive to each other’s
pricing and marketing strategies

AYANA.Y MARKETING -Jankkila 2004 33

MAJOR CONSIDERATIONS IN SETTING
PRICE –Kotler-Amstrong-

Product Competitor’s Consumer

costs prices and other perception
of
internal and external of value
factors
PRICE PRICE
FLOOR CELLING
No profits below No demand
this price above this
price
AYANA.Y MARKETING -Jankkila 200434
 COST-BASED PRICING “Cost-plus”

• Adding a standard markup ( profit ) to the costs of the

product
• Product driven pricing
 >Fixed costs = do not vary with production or sales level
 Variable costs = vary diriectly with the level of production
 Total costs = fixed costs + variable costs

PRODUCT COST PRICE VALUE CUSTOMER

MARKETING -Jankkila 2004

AYANA.Y 35
 TARKET PROFIT PRICING –Kotler-Amstrong-
• Setting price to break even on the costs of making and
marketing a product or
• Setting price to make a target profit

• Target pricing uses the concept of a break-even chart –

it shows the total cost and total revenue expected at dif-
ferent sales volume levels TOTAL REVENUE
Costs
Target profit
TOTAL
COSTS

FIXED
COSTS

AYANA.Y MARKETING -Jankkila

Sales volume in 36 2004
units
VALUE-BASED PRICING –Kotler-Amstrong 2004-

• Setting price based on buyer’s perceptions of value

rather than on the seller’s costs
• Offering just the right combination of quality and good
service at the fair price
• Pricing begins with analyzing consumer’s needs / wants
and value perceptions and the price is set to match con-
sumer’s percieved value > design the product

CUSTOMER VALUE PRICE COST PRODUCT

AYANA.Y MARKETING -Jankkila 2004 37

COMPETITION-BASED PRICING –Kotler-Amstrong-

• Setting prices based on the price that competitors

charge for similar products

• Going rate pricing

• Price represents the ”collective wishdom” of the in-

dustry sector when demand elasticity is hard to mea-
sure

AYANA.Y MARKETING -Jankkila 2004 38

PRICING STRATEGIES –Kotler-Amstrong-

• MARKET-SKIMMING PRICING
>Setting high price for a new product to skim maximum
revenues from the segment willing to pay the high price.
-Company makes rewer but more profitable sales
-Product’s quality and image must support the high price
-Enough buyers must want the product at that price
-Competitors should not be able to enter the market and
undercut the price
1. MARKET-PENETRATION PRICING
>Setting a low price for a new product in order to attract a
large number of buyers and a large market share

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 PRICING STRATEGIES –Kotler-Amstrong-
• PRICE ADJUSTMENT STRATEGIES
> Discount = price reduction > Allowance = promotional
money
• BY-PRODUCT PRICING -Setting a price for by-products in
order to make the main product’s price more competitive
• SEGMENTED PRICING – two or more prices at same product
• PSYCHOLOGICAL PRICING – price says something of the
product
• REFERENCE PRICE - prices that buyers carry in their minds
• PROMOTIONAL PRICING – temporarily, increase short-run
sales
• GEOGRAPHICAL PRICING – different price on different
regions / or not
INTERNATIONAL PRICING – prices in the
international market
AYANA.Y MARKETING -Jankkila 2004 40
 PRICING > PRICE
+VARIABLE COSTS / product unit:
raw materials, other variable costs, labour costs,
costs connected wit labour costs ( social costs,
assurance )
+COVER = fixed costs, charges, rates, incometaxes, profit
=NET RRICE
+VALUE ADDED TAX
=SELLING PRICE
+SELLING REWARDS
+FREIGHTS THAT WILL BE PAYD
+DISCOUNTS PROVISOS,
=TOTAL PRICE
AYANA.Y 41
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CHANNELS OF DISTRIBUTION
- Kotler-Amstrong, lancester-Reynols-

DISTRIBUTION

Channels /Supply chain Phycical distribu-

tion
Agents Logistics
Wholesalers
Retailers Right place !
= intermediaries Right time !
Suitable amounts !
With greatest ease
!
AYANA.Y MARKETING 42
-Jankkila 2004
Favourable costs !
 MARKETING CHANNEL = DISTRIBU-
TION CHANNEL –Kotler-Amstrong-
A set of interdependent organizations involved in the process
of making a product or service available for use or
consumption by consumer or business user

SUPPLY CHAIN = VALUE DELIVERY NETWORK,

-Information; gathers and distribute information
-Promotion; developes and spread information about offers
-Matching; shapes and fits the offer to the buyer’s need
-Negotiation; reach the agreement of price and
-Phycical distribution and stocking
-Financing, invoicing
-Risk taking / dealing
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43
DIRECT – INDIRECT MARKETING
CHANNELS -Kotler-Amstrong, Lancester-Reynolds-
DIRECT CHANNEL = no intermediaries
INDIRECT CHANNEL = one or more intermediaries

AFFECTING TO THE CHANNEL DECISIONS:

* Numbers of potential customers in the market
* How concentrated or dispersed the customers are
* How much each will buy in a given period = buying sensity
* Costs including transportation, warehousing, stockholding
* Product imago positioning, market share objective
* The need of by-services
* Absolute price of the product and the profit objective
* Firm’s recources
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44
DIRECT DISTRIBUTION INDIRECT

Small Amount of customrs Large

Rarely Density of purchase Often
Large Size of one purchasing Small
Large Profit marginal Small
Concentrated The buyer placement Disperced

High Complexity of product Low

No need Need of by-services Yes
Yes Completely product No
lines

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45
MULTICHANNEL DISTRIBUTION SYS-
TEM –Kotler-Amstrong-

Catalogs, telephone, internet, home-selling Cus-

tomer 1
Own resailer places /warehouses Cus-
tomer 2

Retailers Cus-
tomer 3

Distributors Dealers Business seg-

ment 1
AYANA.Y MARKETING -Jankkila 200446
 NUMBER OF MARKETING INTERME-
DIARIES –Kotler-Amstrong-
INTENSIVE DISTRIBUTION
-stocking the product in as many outlets as possible
-usually convenience products
EXCLUSIVE DISTRIBUTION
-giving a limited number of dealers the exclusive right to
distribute the products in their territories
-for exclusive products, product’s image, higher markups
SELECTIVE
-more than one dealer but not all dealers who are willingly
to carry company’s produts, ”Label-retailer”
-good market coverageto producer with more control and less
cost than intensive distribution

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47
MARKETING CHANNELS DECISIONS ?
Questions for a countryside firm

DIRECT MARKETING
• reach few customers,
• direct producer/customer contact,
• not effective?
• is product suitable for direct marketing?
• larger profit marginal?
• have producer time enouhg for producing and marketing?
• small amounts of products can be marketed,
• Important; quality, producers own capasity and knowledge
of marketingco, co-operation with other small producers?

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 MARKETING CHANNELS DECISIONS ?
Questions for a countryside firm
RETAILER
• more customers, customers find the products in the same
place as other products=easier for customers,
• is the retailer interested in the small producer’s prod-
ucts?
• do the customers find the products among other prod-
ucts?
• important; quality, reliable distribution, is it sure you
can produce the amounts of products you aimed,
AYANA.Y 49
MARKETING -Jankkila 2004
producer’s own activity to reach retailers,
 MARKETING CHANNELS DECISIONS ?
Questions for a countryside firm
LARGE-SCALE KITCHENS ( restaurangs ..)
• one good possibilit for small firms, business to business
relation > product development together? easily to get feed
back from custemers, fresh raw materials, bigger ( suitable )
amounts to one place, saves distribution and packaking

SPECIAL / EXECUTIVE RETAILERS

• the importance of quality and package and image !
• better profit by pricing strategy

AYANA.Y MARKETING -Jankkila50

2004
MARKETING CHANNELS DECISIONS ?
Questions for a countryside firm

WHOLE SAILERS
• large-scale, concentrated distribution
> producers’s work decrease
• can you produce large amounts?
• is a long chain suitable for your ( fresh? ) goods?
• is the price competitive by the customers?
• packaging for the wholesailing and distribution >costs?
• logistics if the distribution ways are long?
• who does pay the freight?

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51
 MARKETING CHANNELS DECISIONS ?
Questions for a countryside firm

CONTRACTUAL CO-OPERATION ( franchising .. )

PRODUCER NET WORK - THE SAME TRADEMARK-
SUBCONTACTOR PRODUCING
• small-scale producing is possible
• producer’s own name not seemed in the products
• the producer can concentrate to producing/marketing /deliv-
ering/retailing
EXPORT
• a long, difficult and expencice process
• co-operation ! export know how !

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52
LOGISTICS – PHYSICAL DISTRIBUTION–
Kotler-Amstrong

MARKETING LOGISTICS
The tasks involved in planning, implementing, and
controlling the phycical flow of materials, final goods, and
related information from points of origin to points of
concumption to meet customer requirements at a profit

SUPPLY CHAIN MANAGEMENT =

Managing upstream and downstream value-added flows of
material, final goods, and related information among
suppliers, the company, resellers and final consumers

AYANA.Y MARKETING -Jankkila 2004 53

LOGISTICS – PHYSICAL DISTRIBUTION–
Kotler-Amstrong

SUPPLIERS
Inbound logistics
COMPANY Reverse
Outbound logistics
RESELLERS logis-
tics

CUSTOMERS
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PROMOTION –
MARKETING COMMUNICATION MIX
The specific mix
advertising, personal selling, sales promo-
tion, public relations and information

MARKETING -Jankkila 2004

AYANA.Y 55
PROMOTION –
MARKETING COMMUNICATION MIX –
Kotler-Amstrong -

• The specific mix of advertising, personal selling,

sales promotion , public relations and information

ADVERTISING = any paid form of nonpersonal

presentation and promotion of ideas, goods, or services by
an identified sponsor

SALES PROMOTION = short-term incentives to en-

courage the purchase or sale of a product or a servi´ce

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56
PROMOTION – MARKTING COMMU-
NICATION MIX –Kotler-Amstrong -
PERSONAL SELLING = personal presentation by the
firm’s sales force for the purpose of making sales and
building customer relationships
PUBLIC RELATIONS = building good relations with the
firm’s various publics by obtaining favourable publicity,
good corporate image, and handing or heading un-
favourable stories and events
DIRECT MARKETING = direct connections with
carefully targeted individual consumers to obtain new
or cultivate lasting relationships

AYANA.Y MARKETING -Jankkila 2004 57

ELEMENTS OF COMMUNICATION PROCESS

SENDER RECEIVER
IDEA MESSAGE IMAGE
Encoding to Decoding to
an
a message MEDIA image

Disruptions
Disorders

FEEDBACK = knowledge that the receiver

has reacted to the communication
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58
ADVERTISING Kotler-Amstrong-
OBJECTIVE SETTING
communication objectives, sales objectives

BUDGET DECISIONS
affordable approach, percent of sales, competitive parity,
objective and task

MESSAGE DECISIONS MEDIA DECISIONS

- message strategy - reach, frequenc, impact
- message execution - major media types
- specific media vehicles
- media timing

CAMPAINGN EVALUATION
Communication and sales impact

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59
POSSIBLE OBJECTIVES
-Kotler-Amstrong-

• INFORMATIVE ADVERTISING
gives information about a new product, the firm, new uses
of product, price change, explain how the product works ..

• PERSUASIVE ADVERTISING
brand building, changing customer’s perceptions of prod-
uct attributes ..
• REMINDER ADVERTISING
remind consumer of the goods and services, remind the
selling palaces..

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60
SALES PROMOTION TOOLS–Kotler-Amstrong-
• SAMPLE
• COUPON
• CASH REFND OFFER ( RABATE )
• PRICE PACK
• PREMIUM
• ADVERTICING SPECIALITY
• PATRONAGE REWARD
• POINT-OF-PURCHASE ( POP )
• PROMOTIONAL EVENTS

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61
 BUSINESS PROMOTION TOOLS

• DISCOUNT
a straight reduction in price on purchase during
stated period of time

• ALLOWANCE
promotional money paid by manufactures to re-
tailers in return for agreement to feature the
manufacture’s products in some way

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62
DIRECT MARKETING Kotler-Amstrong -

• FACE TO FACE MARKETING

• TELEMARKETING
• DIRECT-MAIL MARKETING
• CATALOG MARKETING
• DIRECT RESPONSE TELEVISION MARKET-
ING
• KIOSK MARKETING
• ONLINE MARKETING

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63
COMPETITION -Porter 1980-
-
Potential new firms
Threat

Suppliers Competitions in Buyers

Negotiation the branch Negotiation
power power
Threat
Substitutes

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 COMPETITION STRATEGIES –Porter 1980-
• Overall cost leadership
-producing a standard product at low cost or engaging in
heavy advertising in order to undercut competetion – price
competition
• Differentiation
-selling at a higher price than average, in the product unique
feature of quality, image or design
• Focus concentrates
-focusing on a specialist product range or a unique segment of
the market or a combination of them both

AYANA.Y MARKETING -Jankkila 2004 - 65

PRACTICE 1. Analyse the business idea of the ( small/medium size,
countryside branch ) firm and give ideas to develop the business concept by
using the theoretic knowledge you got on the lectures and from the books
-
The firm identification:

WHAT TO WHOM
-product, service, experience - market, segmentation, market region
-quality - custome’s needs/wants for the product
-price, pricing strategy - competition situation
-how they have developed the product

HOW IMAGES/POSITION
-organization structure -positioning on the market,
-how they use the parts marketing -profiling; trademark, brand ….
of marketing mix -your own opinion or image of the product
-quality policy and the quality
management
-why the company has choosed this
way of operating?

AYANA.Y MARKETING -Jankkila 200466

PRACTICE 2. Create a new product / service /experience idea on the basis
of local ( in Hungry+ in Finland ) possibilities or renew an old product; what,
customer segment, quality, pricing strategy, distribution, marketing, feature,
package, marketing communicatio …Compare the Hungrian and Fnnish
cases; are there similarities / dissimilarities?
USE SWOT ANALYSIS TOO
Strengt ( Strengthen ) Weakness ( Improve )

Opportunities ( Utilize ) Threats ( Avoid )

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MARKETING -Jankkila 2004
 From an idea to a product
Type of product: Identification number: Date:

• Name of product and the description of the product:

• Origin of the idea?
• Why the idea have been produced?
• What kind of need or want the product does solve?
• Competing products and substitudes?
• Critical and hazardous points on tproduct development,
production and marketing? SWOT-analysis
• Objectives: Product quantity, marketing share, returns?
• What next? Item Timing Responsible
-core product
-packing
-pricing
-distribution
- - promotion
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MARKETING -Jankkila 2004
 BLUE PRINT FOR A TOURIST PROGRAM

• CONCRETE ELEMENTS; hotel, means of transfer,

accomandation during the program, food, reindeer,
snowmobile
• THE CUSTOMER PROCESS; what / how does the
customer do during the program
• VISIBLE SERVICE PROCESS – front office personnel,
responsible persons
• INVISIBLE SERVICE PROCESS – back office personnel
• THE TIMING OF THE PROGRAM – from the
beginning to the end minutes, hours, days

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END OF UNIT FIVE
THANK YOU

AYANA.Y 70