Unit 3 revision note (part 2): 
Promotion
Price
Products
Place
Definition
The term "product" includes consumer and industrial goods and services, can be defined as "the end result of the production process sold on the market to satisfy a customer need.
Product is a key part of the marketing mix, met by these categories:
Unique selling points is the special characteristic that differ the product from the other in the market
Question Businesses need to answers to decide a distribution channel
Attributes
Above the line (advertisement)
Distribution channel
Below the line (sales promotion)
The amount paid by a customer for a product
Pricing level
Determine value added by companies to add-in components
Is the chain of intermediaries that a product passes through from producer to consumer
Influence the revenue and profit made
Reflect on marketing objectives and help establish psychological image, identity of a product
Why is it inportain?
PED
Measures the responsiveness of demand following a change in price
Formula: % change in quantity demanded / % change in price
General Knowledge about marketing mix
Made up of 4 inter-related decision
The role of customers - 4Cs
Marketing mix is a range of tactical marketing decisions for a product
Definition
Consumer may need easy access to the product
Manufacture need outlets for their product but with the desired image of the product appropriately promoted.
x < 0 :perfectly inelastic
Informative advertising
a form of promotion that is undertaken by a business by paying for communication with consumers.
0 < x < 1 :inelastic demand
Retailers will demand a mark up so using a few or no intermediaries would be an advantage.
Adverts that gives information to potential purchasers of a product
Objective of distribution channel
x=1 :unit elasticity
Convennient for the customer
Persuasive advertsing
1 < x < infinity :elastic demand
Adverts trying to create a distinct image or brand identity for the product
x= infinity :perfectly elastic demand
Determining factors
Product
Cheap cost for the business
Price
Promotion
Place
How necessary the product is
How many similar competing products and brands
Important note: Marketing mix can be made up by more than 4ps
Level of consumer loyalty
Price as proportion to consumers' income
Other methods
Factors to consider
How long should the channel be ?
Should the product be sold directly to consumers?
How much control does the business want to have over the
marketing mix?
Customers solution
Cost to customers
Communication with customers
Convenience to customers
These 4Cs will often correlate with the 4Ps
Type of distribution channel
Cost
One-intermediary channel
Two-intermediary channel
Direct selling
Size of audience
The profile of the target audience in term of age, income levels, interests and so on.
Internet marketing
E-commerce is buying and selling of goods and services through the internet
Key features of Customer relationship management (CRM)
Message to be communicated
Applications
Other aspects of the marketing mix
Making more accurate sales forecast
Assist in pricing decisions
Legal and other constrains
Definition
Promotion that is not a directly paid-for means of communication, but based on short term incentives to purchase
Sales promotion
Price promotions
CRM is using marketing activities to establish successful customer relationships so that existing customer loyalty can be maintained.
Money-off coupons
Customer loyalty schemes
Money refunds
BOGOF
Point-of-sale displays
CRM is at the hear of the customer-focus concept
Personal selling
Direct mail
Trade fair and exhibitions
Sponsorship
Public relations (PR)
Branding
Objectives
Increase sales
Remind customer of an existing product
Attract new customers
Create or reinforce brand image
Correct misleading reports of a product
Encourage retailers to stock and promote product
Promotional budget
Limitations
Definition
Get outdated quickly
Not easy or sometimes not possible to calculate PED
Assumes that nothing else changed
The financial amount made available by a business for spending on marketing/promotion during a certain period of time
Viral marketing is the use of social media to increase awareness or sell product
Advertising and marketing activities that use the Internet, email to encourage direct sales
Benefit and Limitation
A percentage of sales
Objective-based budgeting
Competitor-based budgeting
What the business can afford
Incremental budgeting
Pricing Decisions
Affecting factors
Cost of production
Competitive conditions in the market
Competitor's price
Business and marketing objectives
PED
Whether it is a new or existing product
Methods
Benefits
Limitations
World wide audience
Cheaper
Lower fix cost
Dynamic pricing
Convenient
Accurate consumer records
Goods can not be touch or felt
Unreliable and internet security
Slow internet speed
Competitor pricing
Price discrimination
Contribution pricing
Full cost pricing
durability
performance
quality
appearance
if these categories is not met, then no matter how adjusting the other parts of marketing mix, the product will not sell well
Benefit of an effective USP
Free publicity
Higher sales than those of undifferentiated products
Opportunities to charge higher prices
Customers are more willing to be identified with the brand
Promotion
Tangible attributes of a product: Measurable features of a product that can be easily compared with other products
Intangible attributes of a product: subjective opinions of customers about a product that cannot be measured or compared easily
Products and brands
Brand is an identifying symbol, name, image or trademark that distinguishes a product from its competitors.
For new products
Branding can have real influence on marketing
Penetration pricing
Market skimming
Can leave a perception on every product from the brand
Give one firm's products a unique identity
It can create a powerful image of the product associate with the brand
Product positioning is the consumer perception of a product or service as compared to its competitors
Product life cycle
Def: the pattern of sales recorded by a product form launch to withdrawal from the market and is one of the main forms of product portfolio analysist
Product portfolio analysis: Analyzing the range of existing products of a business to help allocate resources effectively between them
Stages:
Growth
Maturity or saturation
Decline
Introduction
Extension strategies
Selling the product to a new market
Repackaging
Relaunch the product
Uses of product life cycle
Def: Marketing plan to extend product life cycle
Identify how cash flow might depend on the cycle
Recogniszng the need for a balanced product portfolio
Assisting with planning marketing-mix decision
Assist the planning of marketing mix decision
Growth
Maturity
Introduction
Decline
Promotion: High level of informative advertising
Place: Restricted outlets
Price: May be high compared to competitor
Product: Basic Model
Price: Rising in price
Promotion: Convince customer to repeat purchase
Place: Increase number of outlets
Product: Planning on the development of the produc
Price: Keep prices of competitive levels
Promotion: Stress the important differences of the product with competitors
Place: Maximize the number of outlets
Product: New models
Promotion: Limited advertisement
Place: Eliminate unprofitable outlets
Price: Lower price to sell off stock
Product: Prepare other products to replace
Cash Flow
At introduction and growth, extensive promotion and unused storage may keep cash flow negative, but overtime as sale are made, cash flow should improve
At maturity stage, cash flow should be the highest
Cash flow is negative during the development stage
At decline stage, sale drop would likely reduce cash flow
Cash flow is very related to product life cycle
Balanced product portfolio
click to edit