Presentation on theme: "Marketing Information Management LAP 7 Explain the importance of marketing strategies to business. Explain the nature of the marketing mix."— Presentation transcript:
Marketing Information Management LAP 7
Explain the importance of marketing strategies to business. Explain the nature of the marketing mix.
Explain the importance of marketing strategies to business.
How do you get an item you want? How do you know about, and have access to, the items you want? The conditions of your purchase have been planned way in advance—but not necessarily by you.
Do customers really understand how much preparation goes into connecting them with producers of goods and services? Many purchases wouldn’t occur without marketers’ efforts. To achieve satisfying connections, marketers plan where they need to go and how to get there efficiently.
is an objective you plan to fulfill. is an objective you plan to fulfill. When determining their goals, strategies, and tactics, marketers first figure out where they’re headed. A A From their company’s overall plan, marketers determine where their firm needs to be by a particular date. Then, marketers assemble to discuss, and agree upon, their goal. A family-style restaurant wants to increase sales. Example Marketers agree to increase annual sales by 10% over last year’s sales. Marketers know this goal is specific and can be evaluated for success or failure at the end of a given time frame. What is the marketer’s destination?
Which route will the marketer take to get there? Marketers want to move toward their goal without wasting anything. So, they plan the route they believe to be most efficient. A strategy is a plan of action for achieving your goals and objectives.
One strategy the family-style restaurant might use is to add a kid’s menu in order to increase sales to parents in the area. Example By selecting this strategy, its marketers reject a couple of ideas: Staying open later— they think parents may put their kids to bed early. Staying open later— they think parents may put their kids to bed early. Reducing prices— they may not be able to make enough profit. Reducing prices— they may not be able to make enough profit. By sensibly evaluating their options, the restaurant’s marketers pick the strategy most likely to help them reach their goal.
Because marketers want to be efficient, they carefully choose the short-term actions, or tactics, they use to carry out their strategy. Marketers know their tactics must line up with where they plan to go and how they plan to get there, so they pay close attention to every detail. What small steps are needed to make it happen? Tactics are specific actions used to carry out strategies. Example To introduce the new kid’s menu, the restaurant might decide to use the following tactics: Introduce kid-tested meals such as: Spaghetti and meatballs Macaroni and cheese Hot dog with potato chips Hamburger and french fries Offer a free ice-cream cone to each child who selects a meal from the kid’s menu. Each of these simple actions leads the restaurant toward its desired destination— a little at a time.
Marketers plan thoroughly but stay flexible. No one knows for sure exactly how a plan will play out. Planning needs to be as complete as possible — but easily adaptable, too. Marketers plan for success and are ready to adjust at any given moment.
When deciding which strategy to use, marketers choose the best option. A firm’s strategy is important because it shows how its goal will be reached. To choose the best strategy for reaching their goal, marketers consider: Once they’ve made their selection, marketers set aside the funds to make it happen. How the marketing concept applies to their situation When they want to reach their goal Which resources are on hand Its strategy may not be the only option. There can be many appropriate marketing strategies.
Hearing about a new product with better features Changes in technology Changes in governmental rules Because business situations change, marketers are on the lookout for obstacles they can turn into opportunities for problem solving. Situations that might invite a change-of-plan include: Finding out the firm cannot handle distribution on its own Figuring out that the price is slightly high for customers Seeing the firm’s ad in the back of the newspaper—instead of the front, as expected Economic ups-and-downs
Not in today’s world. Each marketing situation requires a customized approach. To adapt, marketers adjust their strategies to fit their purposes. Does the same strategy work in every situation?
Explain the nature of the marketing mix.
To do this, marketers ask questions such as: The marketing mix is a combination of the four elements of marketing— Product Marketing Mix Price Place Promotion product, price, place, and promotion. The mix is a unique blend of elements that are valuable individually. Marketers research and use creativity to figure out what customers need and how they will meet that need. Should we offer one product—or more than one? Is the product a good, service, or idea? Does the product have special features? Does the product have multiple uses? What resources are necessary to research and develop the product? Others… At the end of the process, if the customer sees the product as the best solution, marketers have succeeded at this important first step. refers to what goods, services, or ideas a business will offer its customers.
Marketers try to achieve a good balance between value and satisfaction for the customer—and cost and profit for the firm. refers to the amount of money a firm asks in exchange for its products. The price element used to be the primary factor in a customer’s product choice—but not any more. To achieve a good balance for each, marketers first determine their pricing objectives, which may include one or more of the following: Getting their product into more customers’ hands Helping customers view their firm as distinct from competitors Bringing in the amount of income they desire Matching the product’s value with what customers expect to receive Product Marketing Mix Place Promotion Raising the product’s value in customers’ eyes
Customers feel that the benefits they receive outweigh the costs. The firm brings in enough revenue to make a profit, while keeping prices low enough to encourage sales. After determining objectives, marketers consider if they’re willing to accept cash or credit and if they will offer discounts. At the end of the process, there are two measurements for success: Product Marketing Mix Place Promotion
refers to getting a selected product in the right place at the right time. Which firms to buy the product from The place element can make or break the buying experience. It’s all about creating convenience for the customer. To be successful at distribution, marketers consider: When to buy the product How much of the product to order Product Marketing Mix Promotion Price How to protect the product from damage How to store the product until it’s needed Where to make the product available How to get the product where it’s needed How to process customer orders Which firms to involve in the process How to answer customer questions How to coordinate all of the steps involved
The product may be scratched. The product may be available in the wrong amount. The product may not be available at all. Product Marketing Mix Promotion Price If marketers make a mistake with this element, the results can be unfortunate: If done well, distribution can over- shadow other flaws such as a high price—because convenience might be worth the expense. Distribution is successful if the customer can buy the product when and where s/he wants.
refers to the various types of communication marketers use to inform, persuade, or remind customers of their products. Personal selling Promotion seeks a positive response from the customer. Product Marketing Mix Price Advertising It involves letting customers know the product’s value and the benefits that meet the customer’s current needs. Place Sales promotion Publicity It uses types of communication such as:
Which messages to send To use these types of communication effectively, marketers determine: Product Marketing Mix Price Which media to use Place Marketers also take into consideration things such as: When their messages will be delivered Frequency of communication Coordination of activities Evaluation of results If the customer is sure that making the purchase is the right thing to do at this time— then marketers have successfully promoted their product.
When they assemble the mix, marketers carefully determine which elements to include and to what degree. The marketing mix works as a unit. Marketing Mix Since so many different marketing circumstances exist, marketers adapt the mix to suit each one. The marketing-mix elements are interrelated: A change to one element affects the others. When marketers improve the product’s features, the price goes up. When distribution is simplified, the price goes down. Putting it all together
Marketers select a strategy before customizing the marketing mix. Product Marketing Mix Price Place Promotion Target’s strategy is to offer discount shopping for the fashionable crowd. Similar to the careful selection of each tactic, choosing the right blend of the marketing mix takes thorough planning. Example
Product —Target offers both typical household necessities and products unique to its stores. In support of this strategy, Target has designed a creative combination of the marketing mix. Since Target hires its own designers for some of its product lines, it’s impossible for competitors to carry the same brands. This individuality encourages customers to come back for things they won’t get anywhere else.
Price —Target features quality products at lower prices. In support of this strategy, Target has designed a creative combination of the marketing mix. Its prices are low enough to be considered “discount” but high enough to establish an image of quality. This offers chic shoppers a refreshing change from higher priced department stores— and from lower quality discount stores.
Place —Target is part of an extensive online system to get products from its suppliers. In support of this strategy, Target has designed a creative combination of the marketing mix. This system helps Target master efficient distribution. It allows the firm to stock its shelves as professionally as department stores do.
Promotion — Target’s advertisements sport a cutting-edge image. When customers notice the store’s advertisements, they conclude that this discount store accommodates customers’ style requirements.
Target’s marketing mix does two things: It puts together the image of quality and the convenience of discount shopping in a way few stores have demonstrated. It effectively supports Target’s strategy of catering to classy discount shoppers.
Strategies for increasing sales of a service may be quite different from strategies used to increase sales of a good. What strategies and tactics do you think your bank is using to reach its goal? C ompu B ank 24-hour online access just what you’d expect from the first virtual National Bank! …
Should Victoria’s Secret and Abercrombie & Fitch use sex to sell their products? If you were a marketing decision maker at one of these firms, how would you determine which strategy to use?
Acknowledgements Original Developers: Lelia Ventling and Mary C. Hollaway, MarkED Version 1.0 Copyright 2005 MarkED Resource Center
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