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Unit 3 - Coggle Diagram
Unit 3
Stages of a product
development 2. introduction (price skimming, penetration pricing, heavy advertisement, restricted access) 3. growth 4. maturity 5. saturation 6. decline
Extension strategies: selling the same product to new markets, find new uses for the product or adopt the product to teh market, change the packaging and layout, target different segments, develop new promotional strategies, rethink price and place.
The BCG Matrix: this matrix developed by the boston consulting group is used in product protfolio analysis. It is especially useful for companies that have several products being sold and would like to know how each one is performing in order to know which actions should be undertaken next. Divinded into four quadrants, stars, cash cows, problem child, dogs. The matrix derived four strategies; holding, building, harvesting and diverting.
Pricing: refers to the money customers pay or give up to acquire a good or service. Key is to know the production cost and use the profit formula (profit = revenue - cost) (penetration pricing, markup pricing, price skimming, psychological pricing, loss leader, price discrimination, competitive pricing)
Promotion: marketing efforts and actions that reflect to the community or the information about a company's products to its customers falls under the umbrella of promotion. Above the line ATL is a paid form of communication that uses independent mass media to promote a firms market/product. Informative: focus is to provide information in order to promote rational decisions. Pervasive: focus to convince customers to buy your products instead of the competitors (impulse/unplanned purchases). Reassuring, direct marketing, personal selling, sales promotions, public relations.
Social media marketing: a very recent form of promotion, which has quickly gained weight in promotional mix. Company doesn't spread the message but rather the consumer, makes receptors more eager. Benefits; wide reach. more engagement, constant updates, cost saving. Drawbacks; accessibility issues, distractions.
Guerilla marketing: uncommon media activity in order to spark interest and attention.
Promotional mix is the best way to go, must consider; costs, legal framework, target market, stage in the product lifecycle etc.
Place: how the product reaches teh customers, refers not only to the location of the business but also to the location of the customers, develop strategies to do so. Use of intermediaries help build and enhance the brand image. Distribution chanel, zero intermediary channel, one intermediary channel, two intermediary channels.
Market research
The process of collecting, analyzing and reporting data related to a particular market, including data on consumption of goods and services and on competitors 'behavior'.
Companies use this information to make better decisions in terms of their marketing efforts, as well as other processes of the company itself. Ex: product, needs, strategy, forecasting.
Primary research: all data is collected firsthand and is 100% tailored to teh needs of the research. Everything is new, fresh and most importantly propriety. Surgery's, interviews, focus groups and observation.
Secondary research: data that is collected secondhand from someone who has already done the field research. This method is cheaper and and faster but not as proprietary.
Sampling: after closing your research types, it is of vital importance to choose an appropriate sampling method. A sample is a group of people selected to represent a population or target under research. Sampling is important because if done statistically right it can represent an entire population without the need of surveying your actual population to its entirety.
International marketing
When products cross borders, international marketing comes to life. The essence of international marketing is globalization-the idea of products and whole businesses crossing geographical and political boarders in order to further expand your market. In this situation, a home country will send products to a host country.
A method of entry into an international market is a channel through which businesses gain entry into a specified market abroad. These methods are not mutually exclusive, meaning a company can employ more than one method at a time; internet, exporting, piggybacking, direct investment, joint venture, international franchising.
Benefits: amplified market, diversification, enhanced brand image, enhanced economies, beneficial business relationships.
Drawbacks: economic challenge, political challenges, legal challenges, social challenges, technological challenges, cultural challenges.
Implications: competition, changing consumer tastes and expectations, location decisions, economies of scale.
Functions of marketing
Market research, product design, pricing, advertising, distribution, customer service, packaging.
Marketing activities are all those associated with identifying the particular wants and needs of target-market customers and then trying to satisfy those customers needs better than your competitors do. Needed to identify and analyze customer needs. With this knowledge, strategic decisions must be taken about product design, pricing, promotion, and distribution.
Markets, the core "product" that marketing works with are markets. These can be described as specific sets of people of companies that are currently willing and able to purchase your goods and services. Markets don't physically exist in real life-rather, they are a way for you to organize your consumers into groups in order to tailor your business practices and have a higher chance of fulfilling your business goals.
Market traits
Size: how big or small a market is, based on the total amount of sales.
Growth: percentage change in the toal size of a market over a period of time.
Share: percentage of the market that is attributed to a company's sales
Consumer market (B2C): goods are sold directly towards the final consumer.
Industrial market (B2B) goods sold towards other businesses.
Marketing approaches: market-led, product-led, asset-led.
The marketing plan
A detailed document that contains all of the marketing strategies that are developed to achieve teh company's marketing objectives. This is key for organizations to plan ahead and be able to force their competition in their selected markets.
Mission and vision
S.M.A.R.T objectives (specific, measurable, achievable, realistic and time-specific).
Budget
Strategy
Tactics
Measurements and evaluation
Marketing mix: as you are developing your marketing plan, you also have to think about and define your marketing mix. This mix is a collection of elements that define how you will go about your marketing efforts.
The four Ps
Product: what am I selling? to whom am I selling? why would they be interested in my product? does it fulfill their needs? how does it compare to teh competition?
Price: what is the minimum price that I can change in order to break even? is the price that I am suggesting compatible with the perceived value of my customer? how much is my customer willing to pay for my product/service? how does my price compare with the competition?
Place: where will I sell my products? are my customers able to reach the point of save? do my customers have a good experience while shopping at my locations? are my points of sale appropriate fro both my customers and products?
Promotion: how am I reaching out to my clients? am I using the most appropriate channels to reach my clients? am I suing the correct messages? how can I spark interest for my products? how can I make my products and services more interesting than the competition?
Segmentation: dividing your consumers into subgroups based on similar characteristics and/or shopping styles.
Geographic, demographic, psychographic.
Targeting: the action of choosing a market segment to work with, which means that it is the next step to segmentation. Once you already have segmented your chosen market, you will choose one or more markets to be considered your target market(s).
ranging from mass (undifferentiated) to niche (concentrated).
Positioning: after defining the market plan and subsequent efforts, a company must define the positioning or its products. Positioning refers to the perception that consumers and customers have of your product or service in relation to the competition.
Extended 7 P's and E-commerce
People: people are the human capital, in terms of skills, attitudes, and abilities necessary in the production of goods and in the provision of services.
Physical evidence: the tangible or visible touch point that are observable to sutlers in businesses.
E-commerce: useful because it provides customization, wider reach, multimedia, universal standards. Drawbacks: capacity, device customization, system integration, maintenance and security.
The role of marketing
American association of marketing definition: "The activity, set of institutions, and process for creating, communicating, delivering, and exchanging offerings that value for customers, clients, partners, and society at large.
Marketing is the management task that links the business to the customer by identifying and meeting the needs of customers profitability, it does this by getting the right product at the right price to the right place at the right time.
Sales forecasting
The process of predicting how a company future sales will look like.
This is done by the use of quantitive methods to estimate future sales levels and identify any trends that could possibly happen in the future. This is an important process, as these predictions help define your marketing efforts as well as other processes, such as cash flow and your stock management.
By reducing the uncertainty of the future a company has higher chances of reaching its goals.
Sales forecasting is done by making an analysis of a time series, or most commonly known as a line graph. In its essence, the time series analysis predicts future sales levels by looking at past sales data, which means that it is backwards looking. Forecasting can identify trends of patterns, which give a sense of direction for sales.
Sales fluctuation types: seasonal, cyclical, random.
Moving average: a type of average thats commonly used in the stock market. It is mainly used to identify a possible trend and emphasize its directions. by default, it smoothes out the fluctuations of the actual points and creates a cleaner, more digestible trend line. Moving averages can be calculated in wither three-year or four-year period.