2 Learning Objectives Product vrs Consumer based marketing Different market segments and how to approach themConsumer relationship intensityConsumer relationship life cycleAdvertising on the webmarketingConsumer Relationship ManagementBranding
3 Marketing Mix Elements responsible for SellingPromotingOfProductsServicesOnce the mix is decided, its called the marketing strategy
5 The Product No just physical product but also Manufacturing Packaging NamingAfter salesWarrantiesServicing
6 The Promotion All types of communication Extremely complex area Retailers, distributers, communication, purchase, end userExtremely complex areaPromoters have to chose betweenSeveral TV ChannelsVarious Radio StationsHundreds of newspapers and magazinesMillions of websitesBooksCinemasVideo GamesPosters
7 The Promotion Mix Direct Marketing Sponsorships Public Relations Involves direct communication Eg telephone, mail, etcSponsorshipsPay others often an NGO in return of positive PRHelps raise awareness and position the brandPublic RelationsCreates mutual understanding between organisations and its stakeholdersPersonal SellingDirect face-to-face contact Eg in a shopAdvertisingUsed mainly to build brand and raise awarenessSales PromotionsShort-term incentivesEffective against competitors
8 The Price How much should we charge? Some consumers purchase only on priceOthers judge qualityHigh price = High qualityPrice also effects demandWhat about commissions to intermediaries?
10 The Place How to move goods from the producer to the consumer Most goods are sold through intermediariesThus the training of retail staff is very important
11 Adding some more Ps? People Processes Physical Evidence The staff that offer the serviceEveryone has to work in line to the marketing strategyProcessesMust be in place to support the marketingEg Recipes in a restaurant, are they always followed? What about quality of the meal?Physical EvidenceAmbience and design of surrounding
13 Case Study: Vodafone’s Marketing Mix ProductA product with many different features provides customers with opportunities to chat, play games, send and receive pictures, change ring tones, receive information about travel and sporting events, obtain billing information, view video clips and send video messages.Vodafone live! provides on-the-move information services.
14 Case Study: Vodafone’s Marketing Mix PlaceVodafone UK operates over 300 of its own stores.It also sells through independent retailers e.g. Carphone Warehouse.Customers are able to see and handle products they are considering buying.People are on hand to ensure customers' needs are matched with the right product and to explain the different options available.
15 Case Study: Vodafone’s Marketing Mix PriceVodafone wants to make its services accessible to as many people as possible: from the young, through apprentices and high powered business executives, to the more mature users.It offers various pricing structures to suit different customer groups.Monthly price plans are available as well as prepay options. Phone users can top up their phone on line.Vodafone UK gives reward points for every £1 spent on calls, text messages, picture messages and ring tones.
16 Case Study: Vodafone’s Marketing Mix PromotionVodafone works with icons such as David Beckham to communicate its brand values.Advertising on TV, on billboards, in magazines and in other media outlets reaches large audiences and spreads the brand image and the message very effectively.Stores have special offers, promotions and point of sale posters to attract those inside the stores to buy.Vodafone's stores, its products and its staff all project the brand image.Vodafone actively develops good public relations by sending press releases to national newspapers and magazines to explain new products and ideas.
17 Different marketing strategies Media selection is especially important for online firmsThe web offers many advantagesPersonal contact sellingCost savingsBest modelTrust-based model of personal contact when selling on the web rather than mass marketing
18 Changing Times Rising consumer expectations Reduced product differentiationIncreasing competitionSplintering of mass marketsResulting in ...Reduction in the effectiveness of mass mediaInternet took over providing consumer-focused marketing strategies
20 Market Segmentation Identify specific portions of the market Target them with specific advertisingDivides potential customers into segments such asAgeGenderMarital statusIncome levelGeographic location
21 Micromarketing Precise Focused on niche markets Typically very small market segments
22 Geographic Segmentation Divides groups by location
23 Demographic Segmentation Make use of age, gender, family size, income, education, religion, ethnicity
24 Psychographic Segmentation Use social class, personality, approach to life
27 Steve Madden Vs. Talbots BothWell designedFunctionalSteve MaddenYoungFashion conscious buyersMake high fashion excitingTalbotsMore conservativeOlder established buyersEmphasises stability, home life
30 Segmentation using customer behaviour Create experiences based upon behaviourIf it is related to an event or time it is called occasional segmentationIf it is related to how they use the site, it is called usage-based segmentation
34 Consumer relationship Strengthened through marketingGood consumer experience will result in loyalty towards the company and its products/services
35 5 stage model of consumer loyalty AwarenessCustomers recognise name/brand/products of companyExplorationCustomers learn more about the company/productsFamiliarityCustomers completed several transactions and are aware of policies, pricing, flexibility, etcCommitmentAfter a number of successful transactions, customers develop a strong preferenceSeparationOver time the relationship might change, customer might be disappointed
37 Acquisition, Conversion and Retention Acquisition depends on the revenue model utilisedAdvertising supportAims to keep customers in the site as much as possibleShow them as many adverts as possibleCatalogue model, Fee for service or Subscription basedAttracting customers is just an initial stepThe cost to attract just one visitor is the acquisition costSecond step to convert the visitor to the customer is the conversion cost
39 Types of Web Advertisement (1) 1) Banner AdsIn the early stages of Internet, "advertising" on the Internet meant "banner ads"2) Pop-up and Pop under AdsA pop-up ad is an ad that "pops up" in its own window when you go to a page.
40 Types of Web Advertisement (2) 3) Floating AdsThese are ads that appear when you first go to a Web page, and they "float" or "fly" over the page for anywhere from five to 30 seconds.4) Unicast ads are TV commercial that runs in a pop-up window. It is animated and it has sound. The ads can last anywhere from 10 to 30 seconds.
41 Types of Web Advertisement (3) 5) Streaming Sidebar AdsA small video ad appears in the right sidebar on this CNN page, with sound, and plays for 30 seconds. The reader can control the ad with the three buttons (Play, Pause, Stop) underneath the ad.6) Pull Down Banner AdsTheir operation varies depending on the site. On some, when you mouse over the banner ad, it expands to fill much of the page. On others, the banner ad is expanded-size initially, then shrinks to normal size after several seconds.From:
42 Banner Ads Use banner exchange networks Find related websites Use banner advertising networkCosts are normally a dollar per thousand people (Cost per mille OR CPM)Type of adsPop-up vs. Pop-behind or underInterstitial ad (displayed before the content)Rich media ads or Active ads (floating on same page)
43 Site sponsorshipAllow advertisers to sponsor parts or all of their site in a more subtle waySport Site? Or are they selling water?
44 Effectiveness of online ads Difficult to measureNo standardA few rating companies are being consideredComScoreNetRatings
45 E-mail and Permission marketing Companies should obtain approval before sending promotionSome of them use automated messagesExtremely cheap (less than 1c)Purchase of target addresses cost between 1c and 1$Conversion rates are high10 to 30 %Banner click through are just 0.5%
46 Better email Not just spam but combine something useful ArticleCouponNewsTo help out, several companies offer managementCost between 1 and 2 c per validTake care of campaigns
47 BrandingYour brand is a vision, brought to life in each channel and at every touch point where your organization engages its audiencesAudiences can include customers, employees, prospects, vendors or any person your organization touches
48 What is a brand?“A brand is a distinguishing name or symbol intended to identify goods or services of a seller and to differentiate those goods or services from competitors.” Clyde C. Tuggle Coca-Cola, Senior Vice President Worldwide Public Affairs & Communications
49 Purpose Inspire Motivate Connect Simplify Inform Inject your organization with heart and soulMotivateSpur actionConnectUnify departments and divisions for “global” presence. Link products and services to a “promise.”SimplifyClarify and crystallize your missionInformConvey values, attributes, and advantages
50 Product Vs. Brand Diet Coke vs. Diet Pepsi in Blind Taste Test Prefer Pepsi Sample 51%Prefer Coke 47%No preference 2%Diet Coke vs. Diet Pepsi in Identified Taste Test (brand names revealed)Prefer Pepsi Sample 23%Prefer Coke 65%No Preference 12%
51 Elements of Branding Product differentiation Relevance Perceived value How is it different from other products?RelevanceHow useful is the product to the customer’s need?Perceived valueHow valuable is it?
52 Emotional Vs. Rational Branding A brand is an emotional shortcut between the company and its consumer.Works well on one way channelsProblematic on the internetNot absorbing passivelyBusy peopleQuickly click away from emotional appealsRational Branding more effectiveGoods given in exchange of viewing adverts
53 Brand leveraging strategies When a company extends its dominant position to other productsYahoo!Directory to Search Engine to Businesses, etc.Acquired GeoCitiesAcquired Broadcast.comEntered into a network with Fox EntertainmentThese new features attract web users thus increasing advertisement value
57 Cost of Branding Creating a new brand is hard Easier to In 1998 Transfer an existing brandMaintain itIn 1998Top 100 e-commerce sites spent $8 million to create an online brandAmazon spent $133BarnesAndNoble spent $70Most of the costs went to TV, Radio, Print
58 Exercise Think about your local bank. Write 10 point on how it transferred its brand image to the internet?
59 Affiliate marketing strategies Company A includes details of Company’s BOr its productsCompany A will receive a commission of whoever buys from company B through its siteAmazon.comToys R USResearch shows that click-through rates are much higher in these alliances
60 Viral MarketingUses satisfied customers to tell potential other customersSimilar to affiliate marketing where they use other websites, here they use other peopleCalled viral because it reaches potential customers like a virus
62 Search EnginesA search engine is a special kind of Web page software that finds other Web pages that match a word or phrase you enteredA Web directory is a listing of hyperlinks to Web pages that is organized into hierarchical categories Eg:Search engines contain three major parts: spider, index, and utility