Assignment 226

Chapter Eight

Developing Marketing Strategies

Copyright © 2018 by McGraw-Hill Education. All rights reserved.

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Learning Objectives

Describe the marketing concept and explain how it can be used by a small business.

Show how marketing research can be used to implement the marketing concept.

Explain how to develop and implement a marketing strategy.

Explain how the product life cycle affects marketing strategies.

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Learning Objectives (cont.)

Explain how packaging affects marketing.

Describe how prices are set and administered.

Show how marketing services differs from marketing goods.

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Basic Strategies for
Successful Marketing

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The Marketing Concept

Marketing concept

Involves giving special consideration to the needs, desires, and wishes of present and prospective customers.

Involves customer orientation, a goal orientation, and use of the systems approach.

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Implementing the
Marketing Concept

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Be Conscious of Image

Show what is unique about your product—its positive benefits.

Find future stories and explain how your company “fits.”

Be helpful, offer your research.

Be unique and to the point; present your expertise.

Don’t be pushy.

Speak with integrity, explain as if explaining for the first time and use current examples.

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Practice Consumerism

Consumerism

Involves prodding businesses to improve the quality of their products and to expand consumer knowledge.

Rights of Consumers:

To buy safe products.

To be informed.

To be able to choose.

To be heard

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Danger Signals Indicating Marketing Problems

Table 8.1

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Seeking a Competitive Edge

Competitive edge (competitive advantage)

A particular characteristic that makes one firm more attractive to customers than its competitors.

Quality, reliability, integrity, courtesy, service.

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Seeking a Competitive Edge

E-commerce

Technology-mediated exchanges between parties as well as the electronically based intra- or inter-organizational activities that facilitate such exchanges.

Social Media plays a major part. Ads appear sponsoring a web page or as sidebars to your personal account.

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Using Marketing Research to Implement the Marketing Concept

Market research

The systematic gathering, recording, and analyzing of data relating to the marketing of goods and services.

Marketing research can help you decide:

1. Whether to develop new or different products.

2. Whether to expand the original location or open additional locations.

3. When and where to change emphasis on activities sauch as channels of distribution, and advertising strategy.

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How Does Marketing Research
Aid Marketing?

Identifying customers for the firm’s products.

Determining their needs.

Evaluating sales potential for both the firm and its industry.

Selecting the most appropriate channel of distribution.

Evaluating advertising and promotional effectiveness.

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How to Do Marketing Research

Define the problem.

Gather and evaluate the information.

Check returned items to see if there is a pattern.

Ask old customers why they have not returned.

Study competitors’ ads.

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Gathering and Evaluating Information

Use Primary Data, first hand research, done by you or your employees, verifying facts.

Use Secondary Data, existing data done by others.

Use Specialized Research Techniques, involving studies and so forth at a prime cost.

Use Test Marketing, simulates the conditions under which the product will be sold.

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Guidelines on Using the Internet for Marketing Research

Figure 8.1

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Using Computerized Databases

Database marketing

A marketing process for acquiring customers that involves obtaining meaningful, individual-level, consumer information; respecting consumers’ privacy; analyzing this information to estimate consumer response to various offers; and making marketing decisions based on this expected response.

Computer programs hooked to caller id can create a database that can increase efficiency, enhance security control inventory improve marketing, and simplify contact with customers.

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No Cashiers?

Figure 8.2

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Developing a Marketing Strategy

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Choosing Target Markets

Target market

The part of the total market toward which promotional efforts are concentrated.

Should be the business customers most likely to buy or use its products.

Market segmentation

Identifying and evaluating various layers of a market.

Identify customer demographics.

Determine size and buying power.

Align your marketing effort.

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Selling to Older Consumers

Figure 8.3

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Developing an Effective
Marketing Mix

Marketing mix

The proper blending of the basic elements of product, price, promotion, and place into an integrated marketing program.

The Four Ps of Marketing:

1. The right Product for the market.

2. Place refers to distribution channels.

3. Promotion refers to method to target market.

4. The right Price to attract customers and profit.

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Sales and Profits during the Product Life Cycle

Figure 8.5

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Product Life Cycle

Introduction stage

Prices are usually high, sales are low, and profits are negative because of high development, promotion, and distribution costs.

Growth stage

Sales rise rapidly and profits peak.

Marketing strategy typically encourages strong brand loyalty.

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Product Life Cycle

Maturity stage

Declining prices and profits. Promotion costs climb; competitors cut prices to attract business; new firms enter.

Decline stage

Sales fall rapidly.

Promotion efforts may be cut and plans may be made to phase out the product.

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Four C’s of Pricing

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Effect of Product Life Cycle

Skimming price

One set relatively high initially in order to rapidly skim off the “cream” of profits.

Penetration price

One set relatively low to secure market acceptance.

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Potential Pricing Policies
for a Small Business

Table 8.2

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Potential Pricing Policies
for a Small Business

Table 8.2

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Markup

Markup

The amount added to the product’s cost to determine the selling price.

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Discounts and Allowances Provided by Small Businesses

Table 8.3

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Discounts and Allowances

Discount

A reduction from the list price given to customers as an inducement to buy more of a product.

Allowances

Given to customers for accepting quality or quantity reduction.

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How Prices Are Set by Small Businesses

Customary Price is what customers expect to pay because of custom, tradition, or social habits.

Unit Pricing is listing the product’s price in terms of some unit, as a pound, pint, or yard.

Loss Leader is an item priced at or below cost to attract customers into the store to buy more profitable items.

Cost-plus Pricing is basing the price on its costs, plus a makeup for profit.

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Nature of Service Businesses

Personal services

Performed by a business for consumers.

Business services

Provided to another business or professional.