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4 Marketing

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29 views4 pages

4 Marketing

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evelina.karklina
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Marketing strategy and product development ‘Business has only two functions ~ marketing and innovation, Peter Drucker (1909-2005), Austrian author of management-related literature Marketing strategy A marketing stategy includes the following © Analysis ofthe wider business environment. More specifically: the political legal, economic, social / cultural, and technological factors operating in the extemal world. (The acronym “PEST” is sometimes used here.) {© Wdentifcation and analysis oF target markets for new products «Sales goals in terms of volume and revenue “The marketing budget. © Bleavents of the markoting mix, and thes timing. “The term ‘marketing mix’ is another same for the well known four ‘P's: product, price, place (ie disteibution ‘hannel) and promotion. inthis book, product and price are covered in the mind map opposite, and disteibution and promotion n the next unit. Some writers would add a fifth “P' packaging. The importance of packaging is often ‘underestimated: it attracts the buyer's atontion, it explains the Benefits ofthe product inside, i describes the contents, and of course it also protects the product during handling and contebutes to convenience and ease-of-use, And these days environmentally-friendly packaging can give a product a competitive advantage. There is even a sith ‘P people. Ths refers to the knowledge, skills and personolity ofthe pre-sales and after-sales staff who come into contact swith the customer Marketers often use the tern ‘total product offer’ to reinforce the diversity of elements that make up a “product”. These include value-for-money (- relationship between quality and price), brand name and image, packaging, convenience of sales channel, store surroundings, service, speed of delivery, the guarantee, ete Market research How do marketers identify the need for new products? How do they docicle how to improve existing products? (One very important way is by collecting data using market research, Other ways are listed under ‘origin of new product ideas’ in the mind map opposite. The easiest data to collect is information that is already available (= secondary data). This may be internal company data such as the company’s sales figures broken down according 10 different categories (customers, product lines, territories, ete). Altesnatively, it may be extemal data found in published sources such as reporis fom government agencies, trade associations and professional research firms, Another important source of secondary data is simply to Took at consumer buying patterns in more developed markets where the product is already available Data collected for the frst time (= primary data) is more difficult and expensive to obtain, but witi give answers to the exact questions that marketers are interested in. It includes both quantitative information (eg carrying out a survey on a representative sample of people using @ questionnaire) and qualitative information (through focus roups, face-to-face interviews, et). Another important source of primary data is looking at the activity of competitors (= benchmarking), and this may include looking at thele product range or their marketing strategy A new area of research is ethnography: studying people's behaviour in natural environments. fall the techniques above, focus groups io particular can give very valuable information. A smal! group of constumers sit in a room and discuss a variety of pre- defined topics. They might be asked how they fee! about a particular brand, which of various possible new advertising ‘campaigns they prefer, what ideas they have for improving an existing product, etc. The interview is usually recoededt for later analysis Market segmentation Who is the target market for a product? An immediate distinction is whether iti an industrial product (B2B: business-to-business), or a consumer product (B2C: bousiness-to-consumer) aimed at end-users. A third category right be products for use in hospitals, schools, public transport, etc (B2G: business-o-government). Various categories of industrial products ae shown in the mind map. In gelation to consumer products, the ‘mass market is becoming an old-fashioned concept. Products are increasingly targeted at specific market segenents, There ace four basic methods for segmenting a market © Product-related: conor, safety, huxury, good valuetor money, convenience, durability ec © Demographic: age, gender, education, family life cycle, lncome, occupation, ete © Peychographic:atitudes, lifestyle, opinions, values, self image, ete © Geographical: region, post code, ete. Look back at “product-rlated’ segientation above and notice from the examples how marketers are interested it benefits (from the customer's pvint of view) eather than features (from a purely product design point of view. 0 Further information »wwbusinessink gavuk (> Sales and marketing) ® wuns.tookitéch com (+Marketing Your Prod) 7 MARKETING STRATEGY AND PRODUCT DEVELOPMENT Market research Pre-sales and after-sales stat listening 40 chstomers Customers making direct suggestions Congatitor activity Cincliding attengts ‘to ‘reverse engineer” prodlocts ~ finding ‘out how they were made and then ‘copying the process? The RAD departuent Exteraal changes in the market Cost-based pricing: add a specific percentage C= markup) to the base Cost to give the ‘selling price Breckeven analysis: determining the mininaaos Sales volume that covers all the costs Product line: grow of related products “that are physically Sinilar or intended for the Jana wareet Product mine Cproduct ranges assortment of product lines ‘and individual offerings Product life cycle: introductions ‘growth; maturity; decline Brand: a name, symbol or design “or soma combination) that identifies « product Tradensrk: & name or fypbol that cannat ba wed by another producer Brand loyalty passes through Uiree Feages: Profitability: the normal business aim oF ‘achieving return on investment by dicinaiRing PEVEAUE and minimizing Cosbs Market share: increasing your percentage of ‘the market by selling at a low price, even iP it mean! that wrofits are’also’ low (bBeand soars, esse 1, Brand reference 3. Brand insictence icc the mart drs sting yee ing twink 6 standard i te mattth, a than ongeting by haat alae Kaeasriscnt as aero sche a sn arin, ae Se ee) Bos qe are og eens eae secs ee eee Riles rear ee ae eevee iste Saas ee eee ee “- ict Raw materials: farm and natural II ns qercans a ot Res pare eee prices So that lenrincome groups can afford basic product Ctypical exangles Lugglies: expanse tens thet do not become part of the final product, ‘are utilities and farm products) 4 Cony paver © wera businessballs com (> business plans and marketing stategy - how to write) © wa. marketingteachercom 3 Marketing strategy and product development: Exercises 7.4 Fill in Yhe missing letters. 1 Data collected by market research can be ‘qu.__itative’ (© factual and numerical), oF ‘Gu__ tative’ (= opinions and attitudes that are difficult to measure) 2 Another word far the final consumer of a product isthe eur 3 The relationship between quality and price is referred to as. ‘v____sforsm_____’. This phrase often has the word good in front, 1o mean ‘cheap’ ‘cheap’ can have a egative connotation. 4 Marketers tend to ernphasize 'be__its' (= advantages for ‘the customer) rather than ‘fea___es' (from a product, design point of view. 5A nore oF symbol that has legal protection i called a ‘registered tr 6 Two key concepts ia pricing are 'm —-up' (= the % added to the cost 10 aive the selling price) and “ot___even volume’ {= the sales volume at which the product starts to make a profit) 7.2 Complete the text with the words in the box. brand awareness brand names brand loyalty ‘market leader mathe share product lines product mix profitability foctor & Gamble is a very welLknown company in tie household and personal goods sector. Ithras 22 diferent |_ including baby care, ‘cosmetics, household cleaners, laundry. oral cave, et. ‘The combination of al these mates up P&G (= product range). P&G has many wel-knovin ® suchas Ariel, Pampers, Pantene, but nalice that the brand is not the same as the company name (although in other ‘companies its). PAG spends 2 very (arg marketing ‘budget maintaining the *_. ot is customers - it wants them fo be satisfied and committed 19 turer purchases, Bu even larger sums are needed when itlaunches a new product -°__ rand recognition) has tobe bul up fom zero. ‘What about P&G's pricing policy? Wel, they are & 80 they don't have to set ania low prees 1 gain sales volume and i. ___.. Instead, they can focus on < ~ maximizing revenue and minimizing costs 7.3 Complete the text with the wards in the box. advertising budgets consumer tastes —_cifferentiate products early adopters making aloss reaches saturation Similar offerings withdrawn from the market The dassic product life cele is Introduction, Growth, Maturity and Dedine. in the Introduction stage the product is promoted to create awareness. It has low sales and wil still be! If the product hes few competitors, 2 skimming price strategy can be used (a high orice for which is then gradually lowered). In the Growth phase sales are ring vapid ad prea high However, competitors ae attracted to the market wath a a ‘The market is characterized by alliances, joint ventures and takeovers.“ ate large and focus on building the brand, In the Maturity phase sales growth slows and then stabilizes. Producers attempt to ° ‘and brands are ‘ey ta this. Price wars and competition occur as the market In the Decline phase there is 2 downturn inthe market, The producti starting to look: olde fashioned or? have changed. There Is intense price-cutting and many products are 7.4 Make phrases and then complete the text below. 1 canrying out sample of people 2 gapsin the asuney 3 consumer—____of competitors 4 published needs 5S arepresentative market 6 statistically sources 7 the activity reliable jarket research is the process by which a company [collects information about ‘__

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