TOPIC 6

MARKETING

ASM401/Chapter 6 1
WHAT IS MARKETING

 Marketing is the process of planning and

executing the conception, pricing, promotion,
and distribution of ideas, goods, and services to
create exchange that satisfy individual and
organizational objective

ASM401/Chapter 6 2
 Marketing
Delivering Value
 Value and benefits: value - relative comparison of a
product’s benefits with its costs.
 Benefits include not only the functions of the product
but also the emotional satisfactions associated with
owning, experiencing, or possessing it.
 The satisfied buyer perceives the benefits derived from
the purchase to be greater than its costs.

Value = Benefits/Costs

ASM401/Chapter 6 3
 Marketing
Delivering Value
 The marketing strategies of leading firms focus on
increasing value of customers – add value to products in
order to satisfy customers’ need and wants.
 Satisfying customers may mean developing an entirely
new product that perform better than existing product.
 Some firms offer price reduction

ASM401/Chapter 6 4
 Marketing
Delivering Value
 Value and Utility – Ability of a product to satisfy a
human want or need
 4 kinds of utility
 Form utility- Marketing has a voice in desiging products with
features that customers wants.
 Time utility- Marketing creates a time utility by providing
products when customers will want them.
 Place utility- Marketing creates a place utility by providing where
customers will want them.
 Possession utility- Marketing creates a possession utility by
transferring product ownership to customers by setting selling
price, setting terms for customer credit payments.

ASM401/Chapter 6 5
 Marketing
Goods, Services, and Ideas
 Consumer Goods – Products purchased by consumers
for personal use.
 Firms that sell products to consumers for personal
consumption are engaged in consumer marketing.

 Industrial Goods – Product purchased by companies to

produce other products.
 Firms that sell products to other manufacturers are engaged
in industrial marketing.

ASM401/Chapter 6 6
 Marketing
Goods, Services, and Ideas

 Services – Intangible products, such as time,

expertise, or an activity that can be purchased
 E.g. Insurance companies, Airlines etc.

Relationship Marketing
 Marketing strategy that emphasizes lasting
relationship with customers and suppliers.
 Stronger relationships – including stronger economic and
social ties – can result in greater long-term satisfaction and
customer loyalty.

ASM401/Chapter 6 7
Marketing Environment
 Political-legal environment
 E.g.: Political push for alternative energy sources is
creating new markets and products for emerging
company power plants by Spain’s Gamesa Corporation.
 To gain public support for products and activities,
marketers use ad campaigns to raise public awareness of
important issues.
 Sociocultural Environment
 E.g.: A growing number of wellness programs are
available to companies for improving employees’ health.

ASM401/Chapter 6 8
Marketing Environment
 Technological Environment
 New technologies create new goods and services.
 Economic Environment
 Economic conditions influence marketing plans for
product offerings, pricing and promotional strategies.

ASM401/Chapter 6 9
The Marketing Mix

 A company’s Marketing managers are responsible for

planning and implementing all the activities that
result in the transfer of goods and services to its
customers.
 This activities culminate in the marketing plan – a
detailed strategy for focusing marketing efforts on
consumer needs and wants.
 The combination of Products, Pricing, Promotion, and
Distribution strategies used to market products .

ASM401/Chapter 6 10
 The Marketing Mix – Four Ps
(Product, Pricing, Place, promotion)

 PRODUCT – a good, service, or an idea designed to

fill a consumer needs or want.
 Developing new products is a constant challenge for
marketers, who must always consider the factors of
change – changing technology, changing consumer
wants and needs, and changing economic conditions.
 Product Differentiation – is the creation of a product
image that differs enough from existing products to
attract consumers.
 E.g. Volvo – better safety features to set them apart from
competitors

ASM401/Chapter 6 11
 The Marketing Mix – Four Ps
(Product, Pricing, Place, promotion)

 PRICING – selecting the best price at which to sell it .

 Price must support a variety of costs – operating,
administrative, and research costs as well as marketing
cost
 Both Low and High price strategies can be effective in
different situation.
 Low prices – lead to larger sales volume
 High price – limit market size but increase profits per
unit – product is high quality.

ASM401/Chapter 6 12
 The Marketing Mix – Four Ps
(Product, Pricing, Place, promotion)

 PLACE (Distribution) – parts of the marketing mix

concerned with getting products from producers to
consumers.
 Placing a product in proper outlet – retail store
 Decision about warehousing, transportation and inventory
control
 Firm also must make decision about the channels through
which they distribute products.

ASM401/Chapter 6 13
 The Marketing Mix – Four Ps
(Product, Pricing, Place, promotion)

 PROMOTION – techniques for communicating

information about products.
 It is the most highly visible component of the marketing
mix.
 The most important promotional tools include
advertising, personal selling, sales promotions, and
public relations.

ASM401/Chapter 6 14
 The Marketing Mix – Four Ps
(Product, Pricing, Place, promotion)

 Advertising
 Advertising is any form of paid non-personal
communication used by an identified sponsor to
persuade or inform potential buyers about a
product.
 Personal Selling
 Many products (insurance) are best promoted
through personal selling, or person-to-person sales.

ASM401/Chapter 6 15
 The Marketing Mix – Four Ps
(Product, Pricing, Place, promotion)

 Sales Promotions
 Relatively inexpensive items are often marketed
through sales promotions, which involve one-time
direct inducements to buyers. Premiums (usually
free gifts), coupons – meant to tempt customers to
buy product.
 Public Relations
 Includes all communication efforts directed at
building goodwill. It seeks to build favorable
attitude toward the organization and its products.

ASM401/Chapter 6 16
ASM401/Chapter 6 17
Target Marketing and Market Segmentation

 Buyers have different taste, goals, lifestyles.

 The emergence of the marketing concept and the
recognition of customer needs and wants led
marketers to think in terms of target markets.

 Target Market – Group of people that has similar

wants and needs and that can be expected to show
interest in the same product.
 Selecting target markets is usually the first step in the
marketing strategy.

ASM401/Chapter 6 18
 Target Marketing and Market Segmentation

 Target marketing requires market segmentation –

Process of dividing a market into categories of
customer types or segments.
 Once they have identify segments, company may
adopt a variety of strategies.
 E.g. General Motors offers compact cars, vans,
trucks, luxury cars and sports cars with various
features and at various price levels.

ASM401/Chapter 6 19
 Target Marketing and Market Segmentation
Identifying Market Segments

 Five of the most important are :

 Geographic segmentation
 Demographic segmentation
 Geo-demographic segmentation
 Psychographic segmentation
 Behavioral segmentation

ASM401/Chapter 6 20
 Target Marketing and Market Segmentation
Geographic Variables

 Geographical Variables are the geographical

units, from countries to neighborhoods, that may
be considered in segmentation strategy.
 These patterns affect decision about marketing
mixes for a huge range of products.
 E.g. Coke – 70% of it sales from international
markets

ASM401/Chapter 6 21
 Target Marketing and Market Segmentation
Demographic Variables

 Demographic Variables – Characteristics of

populations that may be considered in developing a
segmentation strategy.
 Describe populations by identifying such traits as
age, income, gender, ethnic background, marital
status, race, religion, and social class.

ASM401/Chapter 6 22
 Target Marketing and Market Segmentation
Geo-demographic Variables
 Geo-demographic variables are a combination of
geographic and demographic traits.
 E.g.: “Young Urban Professionals” defined well-
educated, 25 – 34 year olds with high paying
professional jobs living in the cities.

ASM401/Chapter 6 23
 Target Marketing and Market Segmentation
Psychographic Variables

 Psychographic Variables – consumer characteristic,

such as lifestyle, opinions, interests, and attitude,
that may be considered in developing a
segmentation strategy.

ASM401/Chapter 6 24
 Target Marketing and Market Segmentation
Behavioral Variables

 Behavioral Variables – behavioral patterns

displayed by groups of consumers and that are used
in developing a segmentation strategy.
 E.g.: heavy users, situation buyers, specific purpose.

ASM401/Chapter 6 25
The Consumer Buying Process

 Problem /Need recognition

 The process begins when the consumer recognizes a
problem or need
 Also occurs when you have a chance to change your
buying habits
 Information Seeking
 The search is not always extensive, but before making
major purchases, most people seek information from
personal sources, public source and experience.

ASM401/Chapter 6 26
 The Consumer Buying Process

 Evaluation of Alternative
 Perhaps accumulated knowledge during the
information-seeking stages is combined with what you
knew beforehand.
 By analyzing product attributes (color, price, prestige,
quality, service record) you will compare products
before deciding which one best meets your needs.

ASM401/Chapter 6 27
 The Consumer Buying Process

 Purchase Decision
 Based on Rational motives and Emotional motives.
 Rational motives – reason for purchase a product that
are based on a logical evaluation of product attributes
(cost, quality, and usefulness)
 Emotional motives – Reason for purchasing a product
that are based on nonobjective factors (sociability,
imitation of others, and aesthetics)

ASM401/Chapter 6 28
 The Consumer Buying Process

 Post purchase Evaluations

 Not all consumers are satisfied with their purchases.
These buyers are not likely to purchase the same
product(s) again and are much more apt to broadcast
their experience than are satisfied customers.

ASM401/Chapter 6 29
Organizational Marketing and
Buying Behavior
 Business Marketing
 Industrial Market
 Includes businesses that buy goods to be converted into other
products.
 E.g.: Farmers selling flour to the bakery.
 Reseller Market
 It consisting of intermediaries including wholesalers and
retailers that buy and resell finished goods.
 E.g.: Car accessories shop

ASM401/Chapter 6 30
Organizational Marketing and
Buying Behavior
 Government and Institutional Market
 Government spends for durable goods, nondurables, services
and constructions.
 Institutional market consists of nongovernmental
organizations such as hospitals, museums, mosque and etc.

ASM401/Chapter 6 31
Organizational Marketing and
Buying Behavior
 B2B Buying Behavior
 Differences in Buyers
 Organizational buyers purchase in large quantities and are
professional, specialized and well informed.
 Differences in the Buyer-Seller Relationship
 Consumer-seller relationship often impersonal, short-lived
and one-time interactions.

ASM401/Chapter 6 32
Product
 In developing marketing mix, marketers must consider
what customers really want when they purchase
products to plan strategies effectively.
1. The Value Package
 Product features- tangible and intangible qualities
that a company builds into its products.

ASM401/Chapter 6 33
Product
2. Classifying Goods and Services
• Classifying consumer products such as convenience
goods and services, shopping goods and services and
specialty goods and services. (Table 11.2)
• Classifying organizational products such as
production items, expense items and capital items.
(Table 11.3)

ASM401/Chapter 6 34
Product
3. The Product Mix
 It can be defined as the group of products that a
company makes available for sale to consumer and
industrial.
 Product Lines is a group of products that are closely
related because they function in a similar manner or
are sold to the same customer group who will use them
in similar ways.

ASM401/Chapter 6 35
Developing New Products
 The process of expanding or diversify product lines.
 The New Product Development Process
 It is a long and expensive process.
 It requires many resources in R&D department to
exploring product possibilities because of these factors:
1. High mortality rates for new ideas mean that only a few new
products reach the market.
2. Speed to market with a product is as important as care in
developing it.

ASM401/Chapter 6 36
Product Mortality Rates
 It is estimated that it takes 50 new product ideas to
generate one product that finally reaches the market.
 The greatest factor in product failure is the lack of
significant difference.
 Speed of market – The more rapidly a product moves
from the laboratory to the marketplace, the more
likely it is to survive.

ASM401/Chapter 6 37
Product Life Cycle
 It is a series of stages through which it passes during
its commercial life.
 Stages in product life cycle are:
1. Introduction
2. Growth
3. Maturity
4. Decline

ASM401/Chapter 6 38
Identifying Products - Branding
 Branding Products – it is a process of using names and
symbols.
 Brands are designed to signal uniform quality;
customers who try and like a product can return to it
by remembering its name or its logo.
 Brand awareness is the extent to which a brand name
comes to mind when a consumer considers a particular
product category.

ASM401/Chapter 6 39
ASM401/Chapter 6 40
Identifying Products - Packaging
 Products need some form of packaging to reduce the
risk of damage, breakage or spoilage and to increase
the difficulty of stealing small products.
 It serves as an in-store advertisement that makes the
product attractive, displays the brand name and
identifies features and benefits.

ASM401/Chapter 6 41
 Thank You

ASM401/Chapter 6 42