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Overview of Marketing Management for Technical Products


Overview of Marketing Management for Technical Products City University of Hong Kong Engineers in Society ( EE3014 ) Calvin CHUI 6 November, 2009 – PowerPoint PPT presentation

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Title: Overview of Marketing Management for Technical Products

Overview of Marketing Management for Technical
  • City University of Hong Kong
  • Engineers in Society ( EE3014 )

Calvin CHUI 6 November, 2009
  • Marketing
  • Product
  • Price
  • Delivery
  • Quality
  • QA

  • Cyr, Donald G., Gary, Douglas A., Marketing Your
    Product, Self-Counsel Press, 2003, pp. 53-58,
  • Jackson, Ralph W., Sales and Sales Management,
    Prentice Hall, 1996, pp. 50-65
  • Kotler P., Principles of Marketing, Prentice
    Hall, 1994, pp. 6-11, 535-539
  • Louis E. Boone, David L. Kurtz, Contemporary
    Marketing Wired, The Dryden Press, 1998,
  • Tony P., Strategic Marketing An Introduction
    New York Routledge, 2000, pp.47-48

  • Marketing is not only a sale selling and
    promotion but in the new sense of satisfying
    customer needs
  • Marketing is a social and managerial process by
    which individuals and groups obtain what they
    need and want through creating and exchanging
    products and value with others

Marketing Four Ps
  • Product
  • Price
  • Promotion
  • Placement

Marketing - Product Price
  • Product
  • The product management and product marketing
    aspects of marketing deal with the specifications
    of the actual goods or service, and how it
    related to the end-users needs and wants
  • Price
  • This refers to the process of setting a price for
    a product, including discounts

Marketing - Promotion Placement
  • Promotion
  • This includes advertising, sales promotion,
    publicity, and personal selling, and refers to
    the various methods of promoting the product,
    brand, or company
  • Placement
  • Placement or distribution refers to how the
    product gets to the customer for example, point
    of sale placement or retailing

Case iPhone 3G
  • Please apply marketing Four Ps on Apples iPhone

Source www.apple.com
Marketing 7Ps ( 3 more)
  • People
  • Any person coming into contact with customers can
    have an impact on overall satisfaction
  • Process
  • This is the processes involved in providing a
    service and the behavior of people, which can be
    crucial to customer satisfaction
  • Physical Evidence
  • Unlike a product, a service cannot be experienced
    before it is delivered, which makes it intangible

  • A successful product must benefit your customers
  • Identify the need of your customers
  • Understand your customers perceived needs
  • e.g. Sofa is not just a chair or a piece of
    furniture it provides comfort as well
    as reflecting personality and lifestyle

Source www.yanhodesign.com
Product - Product Value
  • Interest Value
  • The pleasure derived from using the product
  • Identity
  • Personality and lifestyle
  • Risk
  • Possibility and importance of a bad purchase
  • Packaging
  • Minor in the past important in today
  • Protection, attraction, transportation and

Example - Packaging
  • Functions of the product package
  • To attract target customers
  • To identify the product
  • To keep the product together

Example - Packaging
  • Functions of the product package
  • To provide a description of the product function
  • To protect the product

Product - Product Value
  • Branding
  • Name, symbol, or design to identify your products
    from those of your competitors
  • Helps customer identify your product
  • Protect your product features from imitation
  • Build a corporate image
  • Example A BMWs new Mini, you could get a bigger
    car at lower price, but that would be
    zero-prestige low-priced car. People will pay
    more for the small Mini instead. This is luxury
    defined, being able to pay extra for style

  • Pricing is an ongoing concern
  • Pricing relates to industry supply and demand
  • Pricing relates to customer perception of the
    product benefits
  • Todays pricing strategies need to combine hard
    data from an activity-based cost system with soft
    data from marketing

Price - Price Structure
  • Unit Cost (Total Variable Costs Fixed Costs)
    / Units Sold
  • Total Variable Costs 10,000
  • Fixed Costs 10,000
  • United Sold 5,000
  • then Unit Cost 4.0 per unit
  • Fixed cost represents the overhead expenses that
    dont change with the volume of work (e.g rent,
    depreciation, insurance and administrative
  • Variable cost represents expenses that can change
    based on the volume of work (e.g. material,
    labor, overtime pay and commission on sales)

Price - Price Structure
  • Markup
  • Selling Price Unit Cost (Unit Cost x Rate of
  • Selling Price 4.0 (4.0 x 15)
  • Selling price 4.60
  • Markup (Unit Price Unit Cost) / Unit Cost x
  • Markup (4.6 4.0) / 4.0 x 100
  • then Markup 15

Price - Price Structure
  • Margin
  • Selling Price Unit Cost / (1 Desired Return
    on Sales)
  • Selling Price 4.0 / (1 13)
  • Selling Price 4.6
  • Margin (Unit Price Unit Cost) / Price x
  • Margin (4.6 4.0) / 4.6 x 100
  • then Margin 13

Price - Pricing Strategy
  • Profit Maximization
  • Setting a price level to attain the highest
    possible current profit
  • Market Share
  • Pay attention to your competition and set your
    price to obtain market share
  • Of course this would happen when competitive
    products are similar and where the market is
    price sensitive

Price - Pricing Strategy
  • Obtain ROI (Return on Investment)
  • Establish a price that will provide a certain
    percentage return on investment
  • Such as 10 percent ROI after tax
  • Price Skimming
  • Setting a high price to maximize early cash
    recovery before catering to more price sensitive
    segment of the market

  • Bring your product to your target customer or
  • Make your product available at a time and place
    that is convenient to your target customer
  • Make it easy for your customer to buy

Delivery - Methods
  • Producer -gt Customer
  • The simplest and most direct marketing channel
  • From producer to customer
  • Open markets fish markets, meat and fresh
    produce markets and flea markets
  • Door-to-door
  • Trade shows
  • Street vending
  • Product inserts
  • Internet

Delivery - Methods
  • Producer -gt Retailer -gt Customer
  • Department stores
  • Manufacturers sales representative
  • Independent salesperson who distributes products
    to retailers
  • Producer -gt Wholesaler -gt Retailer -gt Customer
  • Small producers sell to wholesalers who then sell
    to small retailers
  • This approach allows indirect contact between
    thousands of producers and retailers
  • Producer -gt Agent -gt Wholesaler -gt Retailer -gt
  • Agents main function is to bring buyers and
    sellers together

Delivery Distribution Consideration
  • Customer
  • Number of customers
  • When we have a large number of customers, we may
    need a go-between (or middleman) to serve them
  • Purchasing patterns
  • If customers buy on a frequent basis, a greater
    number of go-betweens is required. E.g. drinks
    and sundries
  • Geographic dispersion
  • Producers may set up their own sales outlets in
    densely populated areas, but use go-betweens in
    less concentrated areas

Delivery Distribution Consideration
  • Product Characteristics
  • Perish-ability
  • Perishable products suitable for direct or short
    distribution route to the end user
  • E.g. fresh produce and fashionable goods
  • Product Value
  • Products of high value or custom-made products
    are generally sold directly to the customer
  • Convenience Goods
  • Products such as staples, impulse goods, and
    emergency supplies require a go-between to give
    the product maximum exposure

  • Todays customers have high expectations and they
    are managing their consumption more carefully
  • The customer defines quality, not the
    manufacturer. If you know what your customers
    want and what influences them, youve got the
    competitive edge
  • Customer demand more than just a fair price they
    are seeking added value. Value is the customers
    perception of the balance between the quality of
    goods or services that a firm provides and their
  • Example Lexus and Infiniti are in vogue because
    they emphasize quality and value

  • Quality consists of the capacity to satisfy
    wants (Edwards C.D., The Meaning of Quality,
    Quality Progress, Oct. 1968)
  • Quality is the degree to which a specific product
    conforms to a design or specification (Gilmore
    H.L., Product Conformance Cost Quality
    Progress, June 1974)
  • Quality is the degree of excellence at an
    acceptable price and the control of variability
    at an acceptable cost (Broh R.A., Managing
    Quality for Higher Profits, McGraw Hill 1982)

  • Product Quality
  • Performance
  • How well a product performs the task it was
    designed to do?
  • Durability
  • How long the product will last?
  • Features
  • What special features does the product have which
    makes it superior to competitive offering?
  • Reliability
  • Can one expect the same kind of quality every
    time that the product is used?
  • Fit and finish
  • Does the product look and feel like a quality

  • Service Quality
  • Tangibles
  • Do the physical facilities, equipment and
    appearance of personnel associated with the
    service promote confidence in the quality of the
  • Reliability
  • Is there evidence of an ability to perform the
    promised service properly the first time?
  • Competence
  • Do the personnel possess knowledge and skill and
    have they an ability to convey trust and
  • Communication
  • Are customers kept informed about the service
    offered in the language they can understand? Do
    the providers of the service listen to what the
    customers have to say?

Quality Customer Satisfaction
  • Quality is usually referred to several critical
    dimensions that can be identified and measured,
    such as number of defects, durability and
  • Quality also includes the intangible components
    of customer satisfaction, the ability of a good
    or service to meet or exceed buyer needs and
  • Quality is what your customer says it is not
    what you say it is. To find out about your
    quality, ask your customer. (Feigenbaum A.V.,
    Quality Management Consultant)

Quality Customer Satisfaction
  • Kanos model of customer satisfaction

Customer Satisfaction
Immediate happiness
Actual Product Performance
Not unhappy
Quality Customer Satisfaction
  • Kanos model explains that for some customer
    attributes, customer satisfaction is dramatically
    increased with only a small improvement in
    performance, while for other customer attributes,
    customer satisfaction is increased only a small
    amount even when the product performance is
    greatly improved

Thank You !
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