Introduction

ProblemtoSolving
marketing
concepts
Ch2

1
What you’ll learn...
What is
marketing?

Marketing

What does it
involve?
What is the
marketing mix?

2
Marketing Management

The Marketing Mix

How Marketing became so
important?

4
The Marketing Mix Q

The marketing mix is the combination of

variables that a business uses to carry out
its marketing strategy and meet customer
needs.
The marketing mix is often called the 4Ps:
• Product
• Price
• Place
• Promotion 5
The Marketing Mix Integrated
marketing program & Q
•The marketing mix is the set of tools (four Ps)
the firm uses to implement its marketing strategy.
It includes product, price, promotion, and place.
Traditional 4Ps extended to cope with today's changing
environment
•7Ps – Price, Product, Promotion, Place, People,
Process, Physical Environment
Integrated marketing program is a
comprehensive plan that communicates and
delivers the intended‫ المخطط‬value to chosen
customers. 6
The Marketing Mix Q

7
Product

8
Product Q
• Product’ refers to the functions and features
of a good or service
• Should satisfy the needs of the customer
• May have a Unique Selling Proposition (USP)
• ‘Product’ also includes a range of factors such as
packaging, quality, warranties, after-sales
service and branding

9
THREE LEVELS OF PRODUCT – CORE VALUE,
ACTUAL PRODUCT, AUGMENTED PRODUCT
Three Levels of a Product Q
The CORE product is NOT the tangible physical product. You can’t
touch it. That’s because the core product is the BENEFIT of the
product that makes it valuable to you. So with the car example, the
benefit is convenience i.e. the ease at which you can go where you
like, when you want to. Another core benefit is speed since you can
travel around relatively quickly.
The ACTUAL product is the tangible, physical product. You can get
some use out of it. Again with the car, it is the vehicle that you test
drive, buy and then collect. You can touch it.
The AUGMENTED product is the non-physical part of the product. It
usually consists of lots of added value, for which you may or may
not pay a premium. So when you buy a car, part of the augmented
product would be the warranty, the customer service support
offered by the car’s manufacturer and any after-sales service. The
augmented product is an important way to tailor the core or actual
product to the needs of an individual customer.
The Product Life Cycle Q

• The product lifecycle looks at the sales of

a product over time

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Stages in the Product Lifecycle
PLC QQ

Development:– high costs but no sales

Launch –introduction stage high expenditure on
promotion and product development, low sales
Growth – sales increase and product should
break-even
Maturity – sales stabilise, less expenditure on promotion
needed, revenue & profit should be high
Decline – sales decline, extension strategies can be
adopted or the product withdrawn
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Stages in the Product Lifecycle
PLC
Extension Strategies Q

Extension strategies should maintain or

increase sales. They include:
• Modifying the product
• Reducing the price
• Adding a feature
• Promoting to a
different market
sector
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Price Q

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Price Q
The price of a product will depend on:
• The cost to make it
• The amount of profit desired
• Other objectives of the business
• The price competitors charge
• The price customers are willing to pay
– Is there a high demand?
– Is demand sensitive to changes in price?
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 Price Q
• The price must be one that
the customer thinks is good
value for money.
• This is not the same as
• Pricing Strategy being cheap!
- International • Prices have a great
– Comparative psychological effect on
– Cost plus customers.

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Price Leader/Taker

Price leader – businesses that dominate

the market can often dictate the price
charged for a product. Other businesses
follow this lead
Price taker – businesses have to charge
the market price. This is often the case
where there are many small firms
competing against each other
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Pricing Strategies & Tactics Q

• Skimming
• Launching with a high price when there is
little competition, then reducing the price
later. Often used with technology. I
Phone
• Penetration
• Low price charged initially to penetrate the
market and build brand loyalty; price is
then increased 21
Pricing Strategies & Tactics Q
• Competitive
• A similar price is charged to that of
competitors’ products.
• Leader Pricing
• Products may be sold at a price lower than the
cost to produce it. Often used by supermarkets
to encourage people into the store where it is
hoped they will buy other products. Examples:
bread, eggs, milk, disposable diapers

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Pricing Strategies & Tactics Q

• Psychological (Odd Pricing )

• A price is set which customers perceive as
lower than it is e.g. $39.99 instead of$40

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Promotion

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Promotion Q • Strategies
to make the
consumer aware of
the existence of a
product or service
• NOT just advertising
• Traditional promotion :
television, radio and
newspapers, direct mail,
sales promotions and
publicity
• Non traditional promotion:
sponsorship, social media,

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Promotion Q

The aims of promotion are to:

• Raise awareness
• Encourage sales
• Create or change a brand image
• Maintain market share
• Increase market share

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The Components of Promotion Q

Product Price Promotion Distribution

Advertising Sales Promotions Personal Selling

Direct
Database Sponsorship E-Active Social Alternative Public
Response
Marketing Marketing Marketing Media Marketing Relations
Marketing
28
Promotional Activities Q

• Advertising e.g. TV, billboards and

internet.
• Sales promotions e.g. Loyalty cards,
BOGOF, discounts & free gifts
• Sponsorship – a business pays to be
associated with another firm, event or
cause

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Promotional Activities Q

• Direct mailing – promotional material is

sent to potential customers by post/email
• Public relations – building the
relationship between the firm and the
public by enhancing its reputation
• PUPLICITY : ?????

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Promotional Mix Q

Most businesses use a combination of

different promotional activities.
The chosen promotional mix will depend on:
• Cost
• Target market
• Product
• Competitors

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Place

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Place Q
• The means by which products and
services get from producer to consumer
and where they can be accessed by the
consumer ‫حيث يسهل الوصول لها‬
• The more places to buy the product and
the easier it is made to buy it, the better
for the business (and the consumer?)

34
Place Q

• Products should be conveniently available

for customers to buy
• ‘Places’ include:
• Stores
• Mail order
• Telesales
• Internet - The use of e-commerce (promoting and
selling on the internet) has grown massively over recent years
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36
People Q

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People Q
• People represent the business
• The image they present can be important
• First contact often human – what is the lasting image
they provide to the customer?
• Extent of training and knowledge of the product/service
concerned
• Do staff represent the desired culture
of the business? SURE

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Process Q

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Process
• How do people consume services?
• What processes do they have to go through
to acquire the services?
• Where do they find the availability
of the service?
– Contact
– Reminders
– Registration
– Subscription ‫اشتراك‬
– Form filling

40
Physical Environment

41
Physical Environment Q
• The ambience, mood or physical presentation of the
environment
• Packaging.
• Internet/web pages.
• Paperwork (such as invoices, tickets,…..).
• Brochures.
• Furnishings.
• Uniforms.
• Business cards.
• The building itself (such as prestigious offices or scenic
headquarters).
• Mailboxes and many others . . . . . .

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Physical Environment
• The ambience, mood or physical presentation of
the environment
– Smart/shabby?
– Trendy/retro/modern/old fashioned?
– Light/dark/bright/subdued?
– Romantic/chic/loud?
– Clean/dirty/unkempt/neat?
– Music?
– Smell?

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Developing Competitive Advantage

Competitive
Advantage

Customer Customer
Value Satisfaction

Customer
Relationships

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Evolving Marketing Mix

• The marketing mix will evolve over time

• The product portfolio may grow as a
business becomes more established
• More expensive promotional activities may
be adopted as a firm’s revenue increases
• More outlets may be opened, or products
sold via the internet
• Price may change as demand changes
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 Value and Satisfaction Q

Expectation Performance Expectation Performance

8 10 10 8

If performance is lower than expectations, satisfaction is low.

If performance is higher than expectations, satisfaction is high.

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Why Do So Many Products Fail? Q
Assignment ch 2

1. What are the aims of promotion ?

2. Why Do So Many Products Fail?
3. Explain on diagram the Stages in
Consumer Decision Process?
4. Discuss in details the Pricing Strategies &
Tactics?
5. What Extension strategies should
maintain to increase sales and avoid
decline? .