Operational Marketing product, price, place, promotion

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Operational Marketing product, price, place,
promotion
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Product

• ....since we spoke about product as first tool
  of operational marketing during previous class,
  we wont discuss it here..
• ...we will continue with other three marketing
  mix tools price, place, promotion

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PRICE

• Broadly, price is the sum of all the values that
  consumers exchange for the benefits of having or
  using the product or service.
• Price decisions must be coordinated with product
  design, distribution and promotion decisions to
  form a consistent and effective marketing
  program.
• Price depends on many factors, including
• Economic conditions (inflation) Competitive
  situations
• Laws and regulations Costs,
  market share...
• Development of the wholesaling and retailing
  system

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Price Policy
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Marketing-oriented pricing
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Price/Quality Strategy
Quality H
Premium
Penetration
Price L
H
Skimming
Economy
L
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Characteristics of high price market segments

• Product provides high value
• Customers have high ability to pay
• Customer and bill payer are different
• Lack of competition
• High pressure to buy

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PRICE

• To compete with other companies and to choose a
  suitable price according to its level in sales,
  you need to choose a good pricing policy and you
  could achieve this in a number of ways
• Competitive pricing (products basically the same)
• Penetration pricing (price reduced, introduction
  phase)
• Price skimming (luxury items)
• Differential pricing (product in different
  economic area Price are different according to
  the country, in France Cereals cost about 10/Kg
  and in Slovakia about 5/Kg!
• Psychological pricing (99, 5,99, 9999....)

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New product launch strategy
Promotion
High
Low
Slow skimming
Rapid skimming
High
Price
Rapid penetration
Slow penetration
Low
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DISTRIBUTION/PLACE

• - distribution as marketing activities - transfer
  of
• products from producer to consumer,
• choose of intermediators, physical movement
• of goods in distribution channels (DC)
• A set of interdependent organizations involved in
  the process of making a product or service
  available for use or consumption by the consumer
  or business user.
• place placement, interior, discrete zone,
• furniture, colors

Distribution
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Types of DC
- According participation of intermediators
direct - indirect
- According number of participants
short - long
- According importance for producer
basic - remedial
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How a channel intermediary increases distribution
efficiency
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Distribution channels for consumer goods
Consumer
Producer
Retailer
Consumer
Producer
Wholesaler
Retailer
Consumer
Producer
Wholesaler
Retailer
Consumer
Agent
Producer
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Distribution channels for industrial goods
Producer
Producer
Producer
Producer
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Distribution channels for services
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Channel strategy
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Channel management
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Conventional vs. Vertical Marketing System
A distribution channel structure in which
producers, wholesalers, and retailers act as a
unified system One channel member owns the
other, has contracts with them, or has so much
power that they all cooperate.
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Number of Intermediaries
Distribution strategies

• Intensive distribution
• Exclusive distribution
• Selective distribution

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Exclusive Distribution
Luxury car makers sell exclusively through a
limited number of dealerships. Such limited
distribution enhances the cars image and
generates strong dealer support.
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Key Promotional Mix Tools
Integrated Marketing Communication
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The communication process
Noise
Noise
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Communication mix
Coupons, exhibitions, gifts, testing, 21, point
of sale..
Sale promotion
Fairs, exhibitions, DM, presentations, personal
selling, multilevel M
Personal selling
selling
TV, radio, print, www, catalogue, posters, 3D,
truck, package...
Ad
Newspapers articles, books, sponsoring, lobbing,
letters
PR
image
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ADVERTISING

• Scope
• Any paid form of non-personal communication of
  images, sounds etc. In the prime media (TV,
  cinema, press, posters, radio, internet)
• Characteristics
• Good for awareness building as research can be
  wide and quick
• Repetition allows simple messages to be
  effectively communicated
• Impersonal and one-way (effectiveness)
• Limited capacity to close the sale

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Strong and weak theories of how advertising works
Strong (AIDA)
Weak (ATR)
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Media Class Options

• Press
• National
• Regional

Television

• Magazines
• Fashion
• Technical
• Trade

Radio
Cinema
Posters
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Magical words in a message

• gtYour, you, I, me, my, now, today,
• gtFast, easy, cool, new, fun, free, exciting,
  astonishing,
• gtSuccess, love, money, comfort, protection,
  freedom, luck...

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Advertising

• can be concentrated on the general image of the
  company, like BENETTON

• Or on the product itself

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Consumer and trade promotions
Consumerpromotions
Tradepromotions
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(No Transcript)
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Personal selling

• Scope
• Oral communication directly with consumers
• Characteristics
• Interactive (two-way, personal) hence multiple
  and flexible objectives achievable
• Complex message can be communicated
• Relationship building potential
• Provides opportunity to close the sale
• Significant fixed and variable cost

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Sales responsibilities
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The selling process
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Personal selling skills

• Asking questions
• Providing product information, making comparisons
  and offering evidence to support claims
• Acknowledging the viewpoint of the customer
• Agreeing with the customers perceptions
• Supporting the customer
• Releasing tension

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PUBLIC RELATIONS

• Scope
• Communication by placing information in media
  without direct payment. Media produce own
  message(s).
• Characteristic
• Highly credible (independent, source credib.)
• Greater readership as not seen as an advert
• Potentially high information content
• Cost benefit no direct payments made
• Speed can be delivered very quickly
• Lack of control (message distortion)

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DIRECT MARKETING

• Scope
• Any personalized, targeted and interactive
  communication (e.g. direct mail, database
  marketing, telemarketing...). Links to CRM
• Characteristics
• Highly personalised message to highly targeted
  audience
• Possible to build long-term relationship
• Not easily visible to competitors
• Low response rate
• Poor targeting (wrong address) can irritate

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Direct Marketing - Database sources

• Company records
• Responses to sales promotions
• Warranty and guarantee cards
• Offering samples that require the customer to
  give name, address, telephone number etc.
• Enquiries
• Exchanging data with other companies
• Salesforce records
• Application forms e.g. store loyalty cards
• Complaints
• Previous DM responses
• Organised events e.g. wine tastings

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A marketing database
Marketing database
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WORD OF MOUTH How many people would you tell
about the service you have received after you
complained about it?
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CONCLUSION

• The goal of Marketing Mix is to have the right
  product, sold it at the right price and right
  place and using the right promotion
• All elements of the Marketing Mix have to be
  adapted to the target market

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Review

• Price definition, methods, factors, strategies
  and policies
• Place definition, distribution channels,
  strategies
• Promotion definition, communication process,
  communication mix

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Thank you for your attention?