Marketing and

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

2
 Part 1. Marketing,
competition and the
customer
 The Role of
Marketing

The central role of marketing undertakes

the following:
 Customer loyalty
▪ Identify customer needs is when existing
customers
▪ Satisfy customer needs continually buy
products from the
▪ Maintain customer loyalty same business

▪ Gain information about customers

▪ Anticipate changes in customer needs

5
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
6
 Understanding
Market Changes

Why do trends change, and what are their

effects?
Why customer/consumer spending patterns
change

1. Consumer tastes and fashions change – A consumer

fashions may change for clothes and so consumers buys goods or
want something different from what they’d get last services for
year personal use –
2. Changes in technology – newer, updated not to re-sell
products mean older, outdated ones are no more
of consumer’s interest
3. Changes in incomes – if the economy grows
and unemployment falls, the sales of expensive
products will increase, and vice versa
4. Ageing populations – the greater percentage
of old people has changed what type of products
are increasing in demand. 8
What is meant by a market?

A market for a particular good or service is made up of the

total number of customers and potential customers, as well as
sellers, for that particular good or service. It can be measured
by the total number of sales or by the value of the sales for
that good or service by all suppliers of that particular good or
service. These can either be mass markets or niche markets.

9
 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.

11
 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.
12
Ways of segmenting a market

13
14
Potential benefits of segmentation to a
business

Businesses can use market segmentation to sell more products. They

hence make different brands of a product and aim each towards a
different market segment.
By finding different segments, a business can sometimes identify a
segment where the needs are not being fulfilled, meaning there is a
gap in the market. The business then can come up with a new suitable
product to fulfill needs and increase sales.
A marketing manager would take all these factors into account when
deciding which segments might buy new products or improved
products. Therefore, Identifying al segments might influence the way
the products are advertised.

15
Part 2: Market
Research
 What is market research and what are its
roles?

The role of market research is to find answers to the Market

following: research is
the process of
1. Would customers be willing to buy my products? gathering,
2. What price would they be prepared to pay? analysing and
interpreting
3. Where would they be most likely to buy my
information
product? about a
4. What type of customer would buy my product? market.
5. What type of promotion would be effective with
these types of customers?
6. How strong is the competition and who are the
17
main competitors?
 Product-oriented
and market-oriented
businesses
Product-oriented
Some businesses produce the
product first and try to find a A product-
market for it. This is known as a oriented
product-oriented business. This business is one
whose main
approach is not common today.
focus of activity
Such businesses often produce is on the product
basic necessities required for living, itself
like agricultural tools or fresh foods.
These products may not have a
brand name and are general
products consumers buy. The
producer and retailer are mostly
concerned with the price and 19
Market-oriented
A market-oriented
Businesses with national or international business is one which
markets usually are market oriented. It is risky carries out market
to produce products and hope they will sell research to find out
without first carrying out market research to consumer wants before a
product is developed and
find out if consumers will want the product.
produced
This approach, where market research is first
used, is called being market oriented. A marketing budget is
It requires the business to have a marketing a financial plan for the
marketing of a product or
budget. Market-oriented businesses are more
a range for a specified
successful since they are more adaptable to period of time. It outlines
changes in customer tastes, and because they how much money is
take advantage of new market opportunities available to market the
that arise. New products are hence launched product, so that the
with more confidence. marketing dept. is aware 20
Market research
methods
 Market research methods
Market research can find out: Primary research is
the collection and
1. Quantitative information (usually facts collation of original
and statistics) data via direct contact
2. Qualitative information (usually with potential or
existing customers
opinions or intangible thoughts from a
person or audience) Secondary research
uses information that
has already been
Both of these types of data are achieved
collected and is
through: available for use by
Primary research, or field research others
Secondary research, or desk research 22
 Primary research and its types
A questionnaire is a set
Primary research is the collection of
of questions to be
original data. It involves direct answered as a means of
contact with potential or existing collecting data for market
customers. research.
Online surveys require
the target sample to
answer a series of
Its types are: questions over the
1. Questionnaires internet.
Interviews involve
2. Online surveys asking individuals a
3. Interviews series of face-to-face or
over phone
4. Focus groups A focus group is a group
of people who are 23
representative of the
 The
process
of
primary
researc
h
24
Methods of sampling
A random
A random sample – every sample is when
population member has the equal people are
selected at
chance of being selected people
random as a
are randomly selected, mostly on a source of data for
computer. market research

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
25
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

1. How carefully the sample was drawn up

2. The formatting of the questions in the questionnaire
3. The selected sample – it should be representative and relevant to
the business
4. The sample size
5. The wording of the questions – making sure they can’t be
misinterpreted
6. The person who carried out the research
7. Bias
8. How old the information is (if it is secondary) 27
Writing the questions for a questionnaire
1. No more than 12 questions should be asked in a standard
questionnaire
2. Keep the questions short and clear – if the answers are
meant to be chosen, keep their options limited too
3. In obtaining sensitive information like age, giving a range of
ages instead of being very specific, is better
4. Avoid open-ended questions, unless opinion is asked
5. Don’t ask very direct questions – this runs the risk of
obtaining a slight invalid answer
6. Be logical in the order of the questions.
28
Presenting data from market research

Of the many ways to present the data, some are:

1. A table or tally chart – this records data in its original form

2. A chart – shows the total figures for each piece of data
3. A graph – shows the relationships between two sets of data.

29
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

Product, price, place,

promotion
Product

This applies to the good or service itself, its design, feature

and quality. How does the product compare with the
competitors’ products? Does the packaging of the good help
customers identify it? If it’s a service, is it any better than its
rivals?

33
Price

The price at which the product is sold to the customer is a key

part of the marketing mix. A comparison should be made with
the prices of the competitors’ products. Price should, in the
long run, also cover costs (explained in later slides).

34
Place

This refers to the channels of distribution that are selected.

That is, what method of getting the product to the market and
the customer is to be used? Will the manufacturer sell its
products to shops that sell to the public, or to wholesalers, or
direct to the customers?

35
Promotion

This is how the product is advertised and promoted. What

types of advertising media will be used? It includes discounts
that may be offered or any other types of sales promotions,
such as money0off vouchers or free gifts.

Some people also include packaging as the ‘fifth P’ but usually

it is included in product and promotion.

36
The role of product decisions in the
marketing mix

Simply put, if the product does not deliver the functionality

that is claimed, consumers will shortly turn away from the
product and no amount of promotion or competitive pricing
will make an impact in the marketability of the good or
service. At the same time, if the product meets or exceeds
customer expectations in terms of performance, there is a
good chance that sales of the good or service will progress
rapidly. Product features will also play a significant role in
placing the good or service for sale at retail outlets in which
the targeted customers can be found.

37
 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.
38
4. Producer services – services produced to
Producing the right product at the right price is an important part
of the marketing mix.

1. The product needs to satisfy consumer wants and needs. Or

else it would not sell.
2. The product also needs to be of the right quality
3. The product should not be so difficult to make that the cost is
higher than the price charged for the product.
4. Design of the product is very important. The quality should be
appropriate for the brand image. It should also meet standards of
customers, and meet legal controls.

39
What makes a product successful?

40
Product development
Listed in the further slides are the processes for product development

41
42
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

43
Continued…

The costs for developing new products are:

1. The cost of carrying out market research and analysing the
findings
2. The cost of producing trial products, including the costs of
wasted materials.
3. The lack of sales if the target market is wrong.
4. The loss of company image if the new product fails to meet
customer needs.

44
 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’
46
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…

4. Maturity. Sales increase slowly, and competition gets tense,

so competitive or promotional advertising is used. Profits are
at peak.
5. Sales reach saturation, and stabilise. Competition is high,
but there are no new competitors, so competitive pricing is
used. Profits decline, since the sales are static, and prices
reduced.
6. Sales decline as new products come or because the product
lost its hype. The product is withdrawn, with advertising being
reduced, then stopped
49
A typical product life cycle

Usually, product life cycle is displayed through a graph as

shown:

50
How stages of the product life
cycle influence marketing
decisions

51
Pricing

1. A branded product is likely to be sold at high price when it

is first introduced to the market.
2. Prices are likely to be relatively higher than those of
competitors in the growth stage as the product may still be
‘newer’ than those of rivals.
3. In the saturation or maturity stage, the prices may be
reduced as competitors might have launched new versions of
their products.
4. Some substantial discounts might be offered in the decline
stage
52
 Promotion

1. Spending on promotion will be higher at

Extension
the intro stage, since the business needs to
strategy is a way
inform customers of the arrival. If the brand of keeping a
is new, as in the case of start-ups, a clear product at the
brand identity will need to be established. maturity stage of
2. Advertising would lessen in later stages, the life cycle and
extending the
since the product is now known.
cycle
3. Promotion might be increased again if the
business adopts an extension strategy,
hence customers will have to be informed
again.
53
Extending the product life cycle
Some ways businesses might extend the life cycle of the
product is as shown:

54
Continued…

If these strategies prove effective, the maturity phase will

extend, with the graph looking something like this:

55
Part 4: the marketing
mix:
price
The main methods of
pricing
 Cost-plus pricing

It involves: Cost-plus pricing

1. Estimating the units of product produced is the cost of
manufacturing the
2. Calculating the total cost of producing this product plus a
output profit mark-up
3. Adding a percentage mark-up for profit

58
Cost-plus pricing: worked example

59
Competitive pricing

It involves setting prices in line Competitive

with your competitors’ prices or pricing is when
the product is
just below theirs.
price in line with
or just below
competitors’
prices to try to
capture more of
the market

60
Penetration pricing

This means the price is set lower Penetration

than the competitors’ prices. pricing is when
the price is set
lower than the
competitors’
prices in order to
be able to enter a
new market

61
Price skimming

With this method, the product is

usually a new invention, or a new Price skimming
is where a high
development of an old product.
price is set for a
Hence it can be sold on the market new product on
at a high price, which people will the market
surely pay because of a novelty
factor.

62
Promotional pricing

This would be used when a

business wants to price a Promotional
pricing is when a
product at a low price for a set
product is sold at
amount of time to increase a very low price
short-term sales. for a short period
of time.

63
 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.
64
Dynamic pricing

There have been some ethical

issues with this type, because it’s a Dynamic pricing
is when
sort of deception for the customers.
businesses change
Technology today, has allowed product prices,
businesses to track online what sort usually when
of products customers buy mostly – selling online,
this allows the businesses to depending on the
increase the products’ prices. demand.

65
Price elasticity of demand

The number of close competitors heavily influence how

customers react to an increase or decrease in price. If a
product is widely available and Business A sells it expensive,
customers will easily switch the brand. This is called price
elastic demand. If the product is unique, customers will buy it
even if it’s expensive. This is termed price inelastic demand.

66
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.

68
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.

70
Different types of sales promotion

1. After-sales services like warranties

2. Gifts Sales
promotions are
3. BOGOF – Buy One Get One Free incentives such as
4. Price reductions special deals
aimed at
5. Competitions customers to
6. Point-of-sale displays and demonstrations achieve short-term
increase in sales
7. Free samples
8. Product placement

71
Public Relations/sponsorships

PR can take many forms, like sponsoring events like football

matches or in publicity stunts.
Often times companies donate some of their products in times
of natural disaster or famine.

72
Part 7: technology
and the marketing
mix
How technology influences the marketing
mix

Social media Viral E-commerce

marketing is a marketing is is the ‘online’
form of when buying and
internet consumers are selling of goods
marketing that encouraged to and services
involves share info using computer
creating and online about systems linked
sharing content the products of to the internet
on social media a business and apps on
in order to phones
achieve
marketing
goals 74
75
Part 8: Marketing
strategy
Importance of marketing mix in influencing
customer decisions

77
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

78
Thanks
!
Any questions?
You can find me at:
[email protected]
Syed Mehmood Hasan
drsmhasan
03202200115
© Dr. S M Hasan – NED UET Spring 2022