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Professional, Practical, Proven
Academy 2019/20
Business ManagementLecture 21
Marketing Revision
1) Understanding the concept and evolution of marketing2) Characteristics of a marketing-orientated organisation
3) Essential elements of marketing
Contents
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Introduction to Marketing
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• “the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit” Kotler
Marketing defined
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Evolution of Marketing Function
Production Concept
ProductConcept
SellingConcept
MarketingConcept
Societal MarketingConcept
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Marketing-Orientated Organisation
Customer Driven Quality focused before, during and after sales
Centred on satisfying customer needs
Profit‐driven
Capable of change Responsive to society'swell‐being
Responsive to customer needs
It should have a competitive advantage
• The customer is the reason the business exists
• Happy customers keep coming back
• Repeat business = profitability
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Marketing Management: The STP Process
• Select the most profitable and viable customers to serve
• Reach them with an offering that has a competitive advantage
• Communicate a position that is clearly perceived
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• Mass Marketing• Mass production, mass promotion, mass distribution
• Segment marketing• Broad segments isolated and needs matched
• Niche Marketing• Small section of a large market
• Micro Marketing• Focus on individuals and locations, one-to-one marketing
Levels of segmentation
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Segmentation Variables (needs to be SMART)Demographic Age, gender, income, social class
Geographic Nations, states, regions, counties, cities, towns
Psychographic Consumer lifestyles, activities, interests, and opinions
Behavioural Relationship between the customerand the productGift buying, usage rates, loyalty,
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• Evaluating each segment and selecting which segments to enter
Market Targeting
Levels of competition Growth opportunities
Substitute products Buyer behaviour
Market size Political orientation
Supplier power Firm’s resources
Market tastes New product introduction
Competitor strategies
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Market Targeting Strategies
Undifferentiated - full market coverage
Differentiated - separate marketing mix for different segments
Concentrated – more specific or niche strategy. Trying to capture a large share of one or a few sub-markets
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Market Positioning
The perception that customers have of a particular product or company
Marketers create an image or identity in the minds of consumers
Strongly linked to branding
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The process of distinguishing a product/service from others thus making it more attractive for customers to buy. Can be based on
PRODUCT, SERVICES,CHANNELS,PEOPLE
Differentiation
Less for much less
More for More
Same for less
More for the same
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Ansoff’s Growth Matrix
Market Penetration
Product Development
Market Development
Product/Market Diversification
Existing Markets
New Markets
Existing Products
New Products
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• Market Penetration
• Focuses on further exploiting existing products
• Promotions, pricing etc., to attract more customers and wider distribution
Ansoff’s Growth Matrix
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• Product Development
• New products are introduced into existing markets
• Modify existing products, (appearance, efficiency, effectiveness, “new” or “improved”)
Ansoff’s Growth Matrix
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• Market Development
• Market extension, new geographic markets, new distribution channels, new packaging, different pricing
Ansoff’s Growth Matrix
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• Diversification
• New products to new markets
• Related diversification – same industry• Unrelated diversification – different industry
Ansoff’s Growth Matrix
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Marketing in Business
1) Describe the service organisation2) Managing Products, PLC, NPD3) The role of pricing4) The role of promotions5) The role of distribution6) The sales function7) The role of marketing communications
Contents
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Introduction to Marketing
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• A service is essentially intangible and does not result in the ownership of anything.
• It may or may not be tied to a physical product
INTANGIBLEINSEPARABLE
VARIABLEPERISHABLE
The Service Organisation
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Elements of the Marketing Mix
the set of controllable tactical marketing tools - product, price, place, promotion – that the firm blends to produce the response it wants in the target market”.
(Kotler, 2007)
PRODUCTPRICEPLACE PROMOTION
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Product
A physical good, idea, person, or place that is capable of offering tangible and intangible attributes that consumers are willing to exchange money/value for
Variety of factors to consider – size, features, quality, branding, benefits, packaging and presentation, positioning
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The Product Life Cycle (PLC)
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The Product Life CyclePhase Characteristic
Introduction Newly introduced (awareness)
Low salesHigh costsPurchased by innovatorsLimited competition
GrowthBecoming more popular with early adopters
Rising salesCosts decliningGrowing competitorsIncreasing market share
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The Product Life Cycle (PLC)
Phase Characteristics
MaturityApproaching its peak sales and profits (middle majority)
Intense competitionMaximising profitsMaintain market shareCost per customer is low
DeclinePast its best (purchased by laggards)
Sales declineProfits declineCompetition is reducedReplacement is an option
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BrandingThe marketing practice of creating a name, symbol or design that identifies and differentiates a product from others products
Distinctiveness
Memorability
Relevance
Flexibility
Benefits• Aids product identification• Communicates benfits/risks• Creates interest• Creates loyalty• Defends against competition• Helps positioning• Allows premium pricing• Increases power over
retailers• Transfers to successor
product
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Developing New Products
Solomon (2013) suggests a success rate for new product ideas of 3% approx.Why?
Over estimating the market size
Poor Positioning
Poor Pricing
Heavy Competition
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The New Product Development Process
1 Idea Generation Seek new ideas to help achieve objectives
2 Screen Ideas Evaluate and shortlist
3 Concept Testing Potential buyer responses
4 Business Analysis Sales, costs profit potential
5 ProductDevelopment
Technical and financial feasibility and prototype
6 Test Marketing Launch in a chosen area representative of the wider market
7 Commercialisation Full‐ scale manufacturing and selling
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The amount of money charged for a product or service. What can realistically be charged?What are customers willing to pay?
Gaining revenue or gaining market share?
Considerations- Fixed and variable costs, competitionPrice controls, willingness to pay
Price
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• The mechanism through which goods/services are exchanged between the manufacturer/service provider and the buyer/consumer• Direct channels – no intermediaries• Indirect channels – numerous intermediaries
• Distribution Strategies • Intensive -FMCGs• Selective -Household appliances• Exclusive –Luxury goods
Place (distribution)
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• The process of communicating with customers• Tries to influence the perceptions, understanding and actions of
the target audience
• The marketing communications mix• Advertising• Sales Promotion• Direct Marketing and Personal selling• Publicity/Public Relations• Selling and Sales Management
Promotion
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Promotion
Advertising Paid, non‐ personal communication, informs
Sales Promotions Short‐term incentives, encourage purchase/sale
Publicity and Public Relations Publicity = Not paid, non‐ personalPR = management of communication to create and maintain a positive image
Selling and Sales Management Planning, organising, controlling, and evaluating sales force activities
Direct Marketing/Personal Selling
Face‐to‐face
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• The fastest growing sector in Ireland
• Technology• Need or product support• Globalisation
• Tax benefits• Cost effectiveness• Emerging markets• Wider margins
• Competitive factors• Multi lateral trade• New innovations
Services Marketing
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• The marketing mix is extended for services
Services Marketing – The 7 Ps
People Interaction between peopleImportant influencer of service quality
Process Procedures by which the service is acquiredDirect involvement of consumers in service production
Physical Evidence Environment in which the service is offered and consumedInfluences consumer understanding, perceptions, enjoymentExperiential
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• Intangibility – offer tangible evidence e.g. brochures, tickets, symbols, prices
• Inseparability – “educate” the consumer about their role in service production
• Perishability – Synchronize supply and demand
• Heterogeneity/Variability – standardise procedures, recruitment requirements
Characteristics of Services
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High versus Low Involvement Purchases
High Involvement Low Involvement
Risk for the consumer is highe.g. expensive purchases such as houses or cars
Consumer will actively search for information about the product/service
Risk for consumer is relatively lowe.g. inexpensive, disposable s such as FMCGs
Consumer is less likely to actively search for information relating to the product/service
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• Strategic in nature and works in an integrated fashion with marketing, production, finance, and HRM
• Determining sales objectives• Selection, recruitment, training• Motivating the sales force• Design and Planning• Evaluation and control of sales force• Forecasting and budgeting• Organising the sales force size and territories
The Nature and Role of Sales Management
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Functions of Sales ManagementPlanning In the context of overall organisational strategy
Organising To match customer requirements, personnel required, workloads
Recruitment Key traits?
Training What needs to be taught?
Motivation Financial rewards, recognition, work/life balance
Control Accurate and timely information, compare actual performance with pre‐set standards
Monitoring Effective communication, feedback, allow for quick decisions where changes might be required
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• “Make it simple. Make it memorable. Make it inviting to look at. Make it fun to read.” (Leo Burnett, Pioneering American Advertising Executive
• Success requires the ability to communicate benefits in innovative, creative and very appealing ways.
• Advertising• Sales Promotions• Direct Marketing• Sales and Sales Management • Publicity and Public Relations
The Role of Marketing Communications
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• Any paid form of non-personal communication• Key purpose is to inform and persuade• Choice of media depends on
• Cost• Target market• Reach• Flexibility• Advertising objectives• Engagement with audience• Geographic coverage• Public perception• Type of product/service
Advertising
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Advertising
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Advertising
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Advertising
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Advertising
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Advertising
Newspapers
Benefits Limitations• Priority for local ads• Excellent location for coupons
and special response features• High credibility• Strong audience interest• Longer copy/message possible• Flexibility
• Major clutter• Short life-span• Poor colour quality• Limited audience
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Advertising
Internet
Benefits Limitations• High reach• Very targeted• Easier to evaluate• Potentially lower cost• Link to corporate website• interactive
• Clutter• Excludes people who are not
connected• May be hard to target older
audiences• Intrusive• Security concerns
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The Full Service Advertising Agency
Account Management/ClientService
Liaison between agency and client
Creative Department Ideas for communicating the message
Media Department Co-ordinate different media ,media buying and scheduling
Planning Department Analyse market information to assist creative department
Traffic and Production Department
Art work and film scripts for the ads
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• Initiatives by the marketer to further sales of a product or service.
• Sampling, door-drops, direct mail, on-pack sampling, loyalty cards, buy one get one free, premiums, sponsored events, coupons, competitions, cash refunds, bonus packs
Sales Promotions
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• Extra incentive to purchase• Appeal to price sensitive consumers• Can measure their impact• Short term pushing
Benefits of Sales Promotions
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• Become too reliant on short term promotion• Often don’t establish or reinforce the brand• Consumer might become too reliant on promotions
Limitations of Sales Promotions
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• Looking after your reputation
• Planned and sustained effort to maintain goodwill and mutual understanding
Publicity/Public Relations
Benefits Limitations
• Credibility of publicity
• Low cost• News value
generates Word of Mouth discussion
• Lack of Control• Can be negative as
well as positive
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The publics with which a company may have to communicate
Competitors
Media
Financial Institutions
Local community
Pressure groups
Government
Distributors
Suppliers
Customers
Prospective customers
Lapsed customers
General public
Investors
Shareholder
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• Selling = making the sales
• Sales Management = more complex• Customer retention• Database/knowledge management• Customer relationship management
Selling and Sales Management
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• The promotion and sale of goods through direct contact with prospective customers
• Message delivered direct to the consumer at the place where the decision will be made
• Suits organisation who find traditional advertising expensive and partially counterproductive
• Televised infomercials• Door-to-door selling• Newspaper inserts• Emails, Telemarketing, mobile marketing • Catalogue marketing, coupons, social media
Direct Marketing
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• Carried out online• Social Media Marketing• Search Engine Optimisation• Search Engine Marketing• Content Marketing• Email Marketing• SMS Marketing• Video marketing/video infographics
Digital Marketing
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You are the newly appointed marketing executive in a group with a chain of hotels throughout the country. You have been requested to prepare a briefing paper on service marketing.
You are required to
(a) Explain the FOUR features which typically distinguish services from products. 10 Marks
(b) Briefly explain FIVE of the seven factors which make up the extended marketing mix for services. In developing your explanation you should outline how each factor might be applied in the hotel services sector. 15 Marks
MAY 2015
(a) Describe what is meant by the term “Market Segmentation”. Explain FOUR categories of variables which are commonly used to segment markets, giving examples in support of your answer in each case. 10 Marks
(b) Explain how the market for outward bound foreign holidays might be segmented, highlighting THREE different types of holiday maker that may be identified and explain how this information might be used in tailoring marketing effort.
10 Marks
(c) “Product Packaging has a purely functional protective role”. Do you agree? Give reasons in support of your answer. 5 Marks Total 25 Marks
MAY 2015
(a) List any THREE (3) of the FIVE (5) main stages through which marketing has evolved. 5 Marks
(b) ‘Ansoff’s growth matrix assists organisations in analysing alternative growth strategies for their products and markets’. Using the matrix as an illustration, outline any TWO (2) of the FOUR (4) strategies available to an organisation. 12 Marks
(c) Write a short explanatory note on any TWO (2) of the following; 8 Marks
i. Social Media marketing. ii. Search Engine Optimization (SEO): iii. Search Engine Marketing (SEM): iv. Content marketing. v. Email marketing. vi. SMS marketing. vii. Video marketing/video infographics. Total 25 Marks
MAY 2016,
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(a) Describe any TWO (2) of the following key marketing activities in a business;
‘Market Segmentation’, ‘Market Targeting’ andMarket positioning’. (16 Marks)
MAY 2017
(a) Explain what you understand by the concept of Marketing .
(9 Marks)
MAY 2018
(b) Describe in detail, the typical Product Life Cycle of a product. Use an illustrative diagram to support your answer. (9 Marks)
MAY 2018
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(a) OutlineFOUR (4) stages of the product life cycle. 8 Marks
(b) You are required to explain the additional THREE (3) ‘P’ elements that make up the extended marketing mix for services. Use examples to support your explanation where appropriate. 17 MarksTotal: 25 Marks
MAY 2019
DisclaimerCare has been taken to ensure that all data and information in Academy lectures is factual and that numerical values are accurate. To the best of our knowledge, all information in the Academy lectures is accurate at the time of publication. Accounting Technicians Ireland and its lecturers assume no responsibility for errors or misinterpretation of the information contained in these lectures or in its use.
