What is Marketing?

A- Met Needs = good companies sell.

B- Unmet needs = Great companies sells.

Marketing is All about!

1- Public Relation

2- Sales Promotion

3- Advertising

4- Pricing

5- Distribution

6- Profit

Public Relation:

Public relations include ongoing activities to ensure the overall company has a strong public image. Public

relations activities include helping the public to understand the company and its products.

How does it differ from advertising?

Public relations are the opposite of advertising. In advertising, you pay to have your message placed in a

newspaper, TV or radio spot. In public relations, the article that features your company is not paid for.

The reporter, whether broadcast or print, writes about or films your company as a result of information

he or she received and researched.

Sales Promotion

Sales promotion aims to provide a short-term boost to sales. Sales promotion looks for alternatives that

are more cost-effective - costing less to implement but providing a bigger increase in sales.

There are two basic types of sales promotions

1. Trade Promotions: The schemes, discounts, freebies, commissions and incentives given to the trade

(retailers, wholesalers, distributors.) to stock more, push more and hence sell more of a product come

under trade promotion.

2. Consumer sales promotions: are advertised in public media to attract consumer’s attention, this

schemes are floated mostly in festival times, like EID days New year’s or Christmas.

Advertising

Advertising is a means of communication with the users of a product or service. In today's world,

advertising uses every possible media to get its message through.

1. Television

2. Print (newspapers, magazines, journals etc)

3. Radio

4. Press

5. Internet (Facebook, Google, Twitter, Instagram, Linked in ….)

6. Direct selling

7. Billboards

8. Mailers

9. Sponsorships

10. Posters

11. Clothes

12. Colors

13. visuals and even people.

Pricing

Pricing is the process whereby a business sets the price at which it will sell its products and

services. Pricing is a fundamental aspect of seven Ps of the marketing mix.

A. Efficient price is a price that is very close to the maximum that customers are prepared to pay

B. Objectives of Pricing

To achieve the financial goals of the company (i.e. profitability)

To fit the realities of the marketplace (will customers buy at that price?)

Distribution

Distribution channels in marketing are one of the element of “7 Ps of marketing mix” placement

(distribution). It helps the companies to expand its reach and grow its revenue.

Types of Distribution.

1. Business-to-business (B2B) distribution: occurs between a producer and industrial users of raw

materials needed for the manufacturer of finished products.

2. Business-to-customer (B2C) distribution: occurs between the producer and the final user.

B2B and B2C, Companies can sell through a single distribution channel or through multiple

channels that may include:

– Wholesaler/Distributor

– Direct/Internet

– Direct/Sales Team

– Consultant

– Dealer

– Retail

– Sales Agent/Manufacturer’s Representatives

Profit

A financial gain, especially the difference between the amount earned and the amount spent in buying,

operating, or producing something.

This simple statement is often expressed as the profit identity, which states that

Total profits = total revenue (TR) – total costs (TC)

Marketing Mix Strategy

- Deliver your products or services in a way that satisfies your customers.

- An effective marketing strategy will help you to define the overall direction and goals for your

marketing.

- Your strategy should articulate how you are going to deliver your products or services in ways that

will satisfy your customers.

- Once you have defended your customers or target market, you need to start developing and

implementing tactics to reach them. The marketing mix will make up the tactical elements you

will use to carry out your strategy and reach your target market.

Marketing Mix Tactics

Identify the tactical action steps which will turn your strategy into a reality in your marketing plan, using

the guide below. The seven tactics below are sometimes referred to as the 7Ps because they all start with

the later p.

1. Your product or service

What product or services are you going to offer? Discuss the branding, the packaging (where applicable),

and ongoing product or development. You should consider the features and benefits you offer, your

unique selling points (What makes your product/service different from everyone else's) and what

potential spin-of products of services might be.

2. The pricing of your product or service

Price is a critical part of your marketing mix. Choosing the right price for your products or services will

help you to maximize profits and also build strong relationships with your customers. By pricing

effectively, you will also avoid the serious financial consequences that can occur if you price too low (not

enough profit) or too high (not enough sales).

3. Your positon (place) in the marketplace

Whether it's a retail store, online shop or on social media, 'place' refers to the channels and locations for

distributing your product, related information and support services. This is how you will positon your

product in the marketplace, it's the location where a product can be purchased. Often referred to as the

distribution channel, this can include any physical store (e.g. supermarket) as well as virtual stores (e.g.

eBay) online.

4. The promotion of your product of service

How do you promote and market your business now (or intend to)? Regardless of how good your business

is, if you don’t promote it and tell people you exist, it’s unlikely you will make many sales. Promotion is

about attracting the right people to use and reuse your business. There are a number of techniques to use

and they can be combined in various ways to create the most cost effective strategy for your needs. This

can include online, branding, public relations and advertising.

5. The people in your business

(e.g. salespeople, staff)

If you have employees in your business, they can influence the marketing of your products and services.

Knowledgeable and friendly staff can contribute to creating satisfied customers, and can provide the

unique selling experience that an organization is often seeking. If an outstanding team provides a

competitive advantage, then the quality of recruitment

6. The process represents the buying experience

Process represents the buying experience the customer gets when they buy your product or service.

7. The physical environment where the good/services are presented

The physical environment where your products or services are sold and delivered can have a significant

impact on how your customers' experience your business.

Business Environmental Analysis

- Business Environmental Analysis is all about Macro environment.

- Everyday our market is changing the way it is. Many new things are developed and in a matter of

about some seconds, the whole scenario stands different in front of us. Among them, there are

many things that we can control and then there are other things that fall beyond our control and

those are called systematic factors.

macro-environment

- A detailed analysis of the macro-environment or the environment as a whole is called PESTLE

analysis, which precisely means a bird’s eye view of the PESTLE analysis business conduct. The

PESTLE analysis ascertains for the managers and the strategy builders as to where their market

currently stands and where it will head off in the future.

PESTLE

- P for Political factors

- P for Economic factors

- S for Social factors

- T for Technological factors

- L for Legal factors

- E for Environmental factors

P for Political factors: These factors take into account the political situation of a country and the world in

relation to the country. For example, what sort of government leadership is affecting what decisions of a

country? All the policies, all the taxes laws and every tariff that a government levies over a trade falls

under this category of factors.

E for Economic factors: Economic factors include all the determinants of an economy and its condition.

The inflation rate, the interest rates, the monetary or fiscal policies, the foreign exchange rates that affect

imports and exports, all these determine the direction in which an economy might move, therefore

businesses analyze this factor based on their environment so as to build strategies that fall in line with all

the changes that are about to occur.

S for Social factors: Every country is different and every country has a unique mindset. These mindsets

cast an impact on the businesses and the sales of their products and services; therefore, PESTLE analysis

includes these factors as well. The cultural implications, the gender and connected demographics, the

social lifestyles, the domestic structures; all of these are studied by companies to understand the market

and the consumer better.

T for Technological factors: Technology greatly influence a business, therefore PESTLE analysis is

conducted upon these factors too. Technology changes every minute and therefore companies need to

stay connected along the way and integrate as and when needed. Also, these factors are analyzed to

understand how the consumers react to technological trends and how they utilize them for their benefit.

L for Legal factors: Legislative changes occur from time to time and many of them affect the business

environment. For example, if a regulatory body would set up a regulation for the industries, then that law

would impact all the industries and business that strife in that economy, therefore businesses also analyze

the legal developments happening in their environment.

E for Environmental factors: The location of countries influences on the trades that businesses do. Adding

to that, many climatic changes after the trade of industries and the way consumers react towards a certain

offering that is launched in the market. The environmental factors include geographical location, the

climate, weather and other such factors that are not just limited to climatic conditions. These in particular

affect the agri-businesses, farming sectors etc.

GENERIC COMPETITIVE STRATEGIES

Introduction

- Michael Porter suggested that businesses can secure a sustainable competitive advantage by

adopting one of three generic strategies.

- He also identified a fourth strategy "middle of the road" strategy, which although adopted by

some businesses, is unlikely to create a competitive advantage.

Generic strategies

- Cost Leadership Strategy

- Differentiation Strategy

- Focus Strategy

- Stuck in The Middle

Cost Leadership Strategy

- This strategy involves the organization aiming to be the lowest cost producer and/or distributor

within their industry. The organization aims to drive cost down for all production elements from

the sourcing of materials, to labor costs.

- by reducing production costs and therefore increasing the amount of profit made on each sale as

the business believes that its brand can command a premium price or

- by reducing production costs and passing on the cost saving to customers in the hope that it will

increase sales and market share

Example

- Low cost producers include Easy Group, Ryan Air, and Walmart.

Differentiation Strategy

- To be different, is what organizations strive for; companies and product ranges that appeal to

customers and "stand out from the crowd" have a competitive advantage.

- With a differentiation strategy the business develops product or service features which are

different from competitors and appeal to customers including functionality, customer support

and product quality.

Example

- Brompton folding bicycles when folded are more compact than other folding bikes. Folding bikes

are usually purchased by people with limited storage space at home or on the move; a compact

bike is therefore a valued product feature and differentiates Brompton bicycles from other folding

bicycles.

Focus Strategy

- Under a focus strategy a business focuses its effort on one particular segment of the market and

aims to become well known for providing products/services for that segment. They form a

competitive advantage by catering for the specific needs and wants of their niche market.

- A focus strategy is known as a narrow scope strategy because the business is focusing on a narrow

(specific) segment of the market.

Example

- Roll Royce, Bentley and Saga a UK company catering for the needs of people over the age of 50.

Are You "Stuck in The Middle"

- Some businesses will attempt to adopt all three strategies; cost leadership, differentiation and

niche (focus).

- A business adopting all three strategies is known as "stuck in the middle".

- They have no clear business strategy and are attempting to be everything to everyone. This is

likely to increase running costs and cause confusion, as it is difficult to please all sectors of the

market. Middle of the road businesses usually do the worst in their industry because they are not

concentrating on one business strength.

Conclusion

- To create a competitive advantage business should review their strengths and pick the most

appropriate strategy cost leadership, differentiation or focus.

- Although each of these strategies are known as generic strategies (because they can be applied

to every industry) they will not suit every business.

- Whatever strategy a business decides to adopt they should make sure that it isn't middle of the

road because one business cannot do everything well.

Market Structure

What is Market Structure?

A market is a set of buyers and sellers, commonly referred to as agents, who through their interaction,

both real and potential, determine the price of a good, or a set of goods. The concept of a market structure

is therefore understood as those characteristics of a market that influence the behavior and results of the

firms working in that market.

Things to be considered

- Number and size of sellers and buyers

- Type of the Product

- Conditions of entry and exit

- Transparency of Information

Types of Market Structure

1. Pure (Perfect) Competition

2. Monopoly

3. Monopolistic Competition

3. Oligopoly

Pure (perfect) competition

- Many and small sellers, so that no one can affect the market

- Homogeneous Product

- Free entry and exit from the industry

- Transparent information

Monopoly

- A single seller: The firmed industry is synonymous.

- Unique Product: No close substitutes for the firm’s product.

- The firm is the price maker: The has considerable control over the price because it can control the

quantity supplied.

- Entry or exit is blocked.

Monopolistic Competition

- Multiple firms produce similar products

- Firms face down sloping demand curves

- in the limit, firms compete away economic profits

Oligopoly

- Few large firms: Each must consider its rival’s reactions in response to its decisions about prices,

output, and advertising.

- Standardized or differentiated products.

- Entry is hard: Economies of scale, huge capital investment maybe the barriers to enter

-

Role of Consumer behavior in advertising

- Marketers need to understand the buying behaviour of consumers while designing their

advertisements for the desired impact. Advertisements play an essential role in creating an image

of a product in the minds of consumers. Advertisements must be catchy and communicate

relevant information to consumers.

- Understanding the needs of the consumer is really important when it comes to creating the right

advertisement for the right audience.

Remember it is only through advertisements; individuals are able to connect with your brand.

Identify your forget customer

- Identify your target audience. The advertisement in some way must touch the hearts of the end-

users for them to buy the product.

- It is really essential to show what the consumers like. Meet your target audience and find out

what they expect from your product and brand on the whole. Do not show anything which might

offend any religious group or community. Make sure the message is relevant and crisp. Overload

of information null if ies the effect and the advertisement might go unnoticed. Don’t try to confuse

the consumers. They will never buy your product. Understand their psychologies well.

- The advertisement must show what the product is all about. It should, in a way give some kind of

information about its price, benef its, usage, availability and so on.

- Consumers perceive Women Horlics as a health and energy drink which is a must for all working

women as well as expecting mothers for their overall well -being. A Horlics advertisement with a

male model does not make sense as the target audience would never be able to connect with the

product.

- A lean and inactive off ice going female drinking Women’s Horlics and thereafter beaming with

energy and cone idence would be the ideal concept for the advertisement. Through

advertisements, the company actually tries to win over the cone idence of consumers who would

not mind spending on their product.

- A Tag Heuer, Omega, Mercedes, I phone advertisement ought to be classy for people to recognize

these products as status symbols. Use expensive props, unique concepts and well known faces for

all premium and exclusive brands.

- Advertisements meant for younger people (college goers, young professionals) ought to be

colourful and trendy for them to be able to relate themselves with the product. Serious

advertisements do not go very well with the youngsters. It is essential to understand the mindsets,

attitudes and preferences of target audience.

- Advertisements for insurance plans, medical benef its, hospitals ought to be sensible as they

convey much serious information and target a mature segment of individuals altogether.

- The time slot of commercials also needs to be taken care of. Advertisements for products meant

for children should ideally be aired during afternoon or early evening hours as this is the time

when they watch maximum television. Understand the lifestyle of your target audience. Prime

time commercials are the ones which are viewed by maximum people.

- Choose the right theme for your advertisement. The advertisements ought to create the need

among the consumers for them to buy the product. Commercials ought to give complete

information to the consumers. All tobacco and alcohol commercials must show the warning

message.