Unit 6
Unit 6
Promotion
Outline
▪ Marketing, competition and the customer
▪ Market research
▪ The marketing mix: product
▪ The marketing mix: price
▪ The marketing mix: place
▪ The marketing mix: promotion
▪ Technology and the marketing mix
▪ Marketing strategy
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Part 1. Marketing,
competition and the
customer
The Role of
Marketing
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If the marketing department is successful in identifying
customer requirements and predicting future customer Market share is
needs, it should enable the business to: the percentage of
total market sales
1. Raise customer awareness of a product or service of
held by one brand
the business or business
2. Increase revenue and profitability
3. Increase or maintain market share
4. Maintain or improve the image of the products of the
business
5. Target a new market or market segment
6. Enter new markets at home or abroad
7. Develop new products or improve existing products
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Understanding
Market Changes
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Mass marketing
The advantages of selling to a mass market are:
1. The total sales in these markets are very high Mass market
2. The business can benefit from economies of scale
is where there
is a very large
3. Risks can be spread, as often the business will sell several
different variations of products to the mass market
number of
sales of a
4. Opportunities for growth of the business due to large potential
product.
sales.
However, there are disadvantages, which include:
1. High levels of competition between businesses selling similar
products
2. High cost of advertising and promotion
3. Standardised products or services are produced and so may not
meet the needs of all customers, therefore, leading to loss of sales
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Niche marketing
The advantages of supplying to a niche market are:
1. Small businesses may be able to sell successfully in niche markets Niche market
as larger businesses may not have identified them but concentrated is a small,
on the mass market instead. This reduces competition usually
2. The needs of consumers can be more closely focused on, leading to specialised,
high levels of good customer relationships and customer loyalty. segment of a
However, there are some disadvantages: much larger
1. Niche markets are usually relatively small and therefore have market.
limited sales potential. If the business wants to grow, it will have to
look outside the niche market to develop products for mass markets
2. Often businesses in a niche market will specialise in just one
product. This means that if the product is no longer in demand the
business will fail as the business has not spread its risks.
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Market segments
Market segmentation is when a market is broken down into sub-groups
which share similar characteristics. A marketing department will divide
the whole market into different groups and categories; these are called
market segments. Segmenting a market will help a business to:
1. Make marketing expenditure cost effective by producing a product
which closely meets the needs of these customers and targeting its
marketing efforts only on this segment
2. Enjoy higher sales and profits for the business, because of cost-
effective marketing
3. Identify a market segment which is not having its needs fully met, and
therefore offer opportunities to increase sales.
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Ways of segmenting a market
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Potential benefits of segmentation to a
business
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Part 2: Market
Research
What is market research and what are its
roles?
A quota sample
A quota sample – people are is when people are
selected on basis of certain selected on basis
characteristics. of certain
characteristics,
also as a source of
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data
Secondary research
This is the use of information which has already been collected by others
beforehand.
Internal sources of secondary data include:
1. Sales Department records, pricing data, customer records
2. Opinions of Distribution and Public Relations personnel
3. Finance department
4. Customer Service department
External sources include:
1. Government statistics 2. Newspapers
3. Trade association 4. Market research
agencies
5. Online sources 26
Factors influencing accuracy of market
research data
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Part 3: The marketing
mix: product
The marketing mix
The marketing mix describes all activities which go The marketing
into marketing products (this includes both goods mix is a term
and services). which is used to
describe all the
activities which go
The producer, essentially, would carry out market
into marketing a
research so the business can adapt to the
product or service.
customer’s needs, then convince the customers to
These activities
buy their product and not the competitors’. This is
are often
done by branding product, which gives it a unique summarised as
name and packaging. It is then advertised to the four Ps –
differentiate the product from others, and sold in product, price,
many places so to reinforce the brand image. place and
These processes are all summarised as the ‘four promotion 31
Ps”
The four Ps of the
Marketing mix
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Price
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Place
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Promotion
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The role of product decisions in the
marketing mix
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Types of product
Products are usually grouped into the
following: The Apple iPhone
has sold over 1.2
1. Consumer goods – goods bought by the
billion units
worldwide since its
consumers for their own use. They can be
launch in 2007.
goods that do not last long, like foods, and
this makes it one
cleaning items of the best-selling
2. Consumer services – services bought by consumer
customers for their own use. Examples, products of all
repairing cars, education time.
3. Producer goods – goods produced for other
businesses to use.
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4. Producer services – services produced to
Producing the right product at the right price is an important part
of the marketing mix.
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What makes a product successful?
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Product development
Listed in the further slides are the processes for product development
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The costs and benefits of developing new
products
The benefits for the business of
developing new products are: The USP is the
special feature of
1. Unique Selling Point (USP) will mean the product that
the business will be the first into the differentiates it
market with the new product from the products
of competitors.
2. Diversification for the business
3. It allows the business to expand into
new markets
4. It may allow the business to expand
into existing markets
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Continued…
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The importance of brand image
Selling a product directly to the customer
The brand name
allows the customer to be aware of the is the unique
qualities of the product. It also allows the name of a product
salesperson to convince the customers. that distinguishes
Today, since products are sent to retailers it from other
brands
instead, the qualities and features are
displayed through making a brand, with a
unique brand name. Adverts and Promos will
refer to that brand name, listing the product’s
good points. And since branded products are
usually of higher quality than unbranded
ones, customers will be less hesitant to buy a 45
Continued…
Consumers may have brand loyalty which Brand loyalty is
means that they’ll constantly buy the same when consumers
brand of a product, rather than switching to keep buying the
same brand again
another.
and again instead of
Brand image is important. By carefully using choosing a
promotion and public relations, a business will competitor’s brand
try to create a complete image, surrounding
Brand image is an
that brand name. image or identity
Coco-Cola, for example, is sold throughout the given to a product
world and has an image of being superior which gives it a
personality of its own
quality drink which tastes better than its
and distinguishes it
rivals. Its advertising features young people from its competitors’
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enjoying it, hence making it popular among brands.
The role of packaging
Packaging has two functions to perform:
It has to be suitable for the product to be Packaging is the
physical container
put in. it should give protection, and allow
or wrapping for a
the product to be used easily. The product. It is also
packaging should also be such that the used for
product can easily be transported from promotion and
factory to the shops. selling appeal.
Packaging also promotes the product. It
should be appealing, with the brand image
being reinforced.
The labels on some products, should carry
vital information about the product. 47
The product life cycle
A typical cycle for the product is as follows:
1. The product is developed. A prototype is The product life
cycle describes
tested and market research is carried out
the stages a
before the actual sales. product will pass
2. The product is introduced, with sales through from its
growing slowly at first. To get the product introduction,
known, informative advertising is used. No through its growth
until it is mature,
profits are made at this stage
and then finally its
3. Sales grow rapidly, the advertising is now decline.
persuasive, hence encouraging brand loyalty.
To step into competition, prices are reduced
and profits generate. 48
Continued…
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How stages of the product life
cycle influence marketing
decisions
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Pricing
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Continued…
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Part 4: the marketing
mix:
price
The main methods of
pricing
Cost-plus pricing
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Cost-plus pricing: worked example
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Competitive pricing
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Penetration pricing
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Price skimming
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Promotional pricing
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The impact of psychology on price
decisions
The impact the price has on customers’ perceptions are:
1. A high price for a high quality product, may mean that high-income
customers would buy it as a status symbol.
2. If a price for a product is just below a whole number, like 99 instead
of 100, it creates an impression of the price being very low.
3. Supermarkets may charge low prices for products purchased on a
regular basis, which give customers the impression of being given
good value for money.
4. Repeat sales are often made when the price reinforces consumers’
perception of the product – this may be its brand image when the
price is set high.
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Dynamic pricing
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Price elasticity of demand
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Part 5: The marketing
mix:
Place
Distribution Channels
1. Direct to customers
A Distribution
2. Using a retailer as the only intermediary channel is the
3. Using a wholesaler and retailer as means by which a
product is passed
intermediaries
from the place of
4. Using an additional intermediary such as production to the
an agent customers.
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Part 6: The marketing
mix:
Promotion
Types of advertising
Informative Persuasive
advertising is advertising is the
where the advertisement or
emphasis of promotion trying
advertising or to persuade the
sales promotion is consumer that
to give full info they really need
about the product. the product and
should buy it.
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Different types of sales promotion
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Public Relations/sponsorships
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Part 7: technology
and the marketing
mix
How technology influences the marketing
mix
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Growth potential of new markets in other countries
Opportunities Solutions
Problems
1. Lack of
Markets in other knowledge
countries may have 2. cultural
much greater growth 1. Joint ventures
differences
potential than existing 2. licensing
3. exchange rate
ones 3. international
2. home markets may
fluctuations
franchising
be saturated 4. import
4. localising
3. wider choice of restrictions
existing brands
location 5. risk of non
4. lowering of trade payment
barriers in parts of the 6. increased
world
transport costs
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Thanks
!
Any questions?
You can find me at:
[email protected]
Syed Mehmood Hasan
drsmhasan
03202200115
© Dr. S M Hasan – NED UET Spring 2022