1. Marketing Concepts

2. 4 Ps of Marketing  Product  Price  Place  Promotion  These are referred to as the marketing mix, and they must be properly combined for an effective marketing campaign

3. Product/Service Mix  Mixing of product and service  e.g. retail stores such as Sears add extras to the products they sell such as delivery, installation and extended product warranties  Can also have a service business, such as a movie theatre, that also sells products, e.g. popcorn

4. Price  How much is charged for the product or service  Can determine the success or failure of a product  Consumers are very aware of price and compare brands and stores  Marketers need to know if consumers are price sensitive How much sales will go up or down based on changes in price

5. Place  Also known as channels of distribution Paths of ownership or control that goods follow as they pass from producer to consumer  Methods that a business uses to sell and distribute its products

6. Types of Place  Direct  Indirect  Specialty

7. Direct Channel  Connects buyers to businesses that are selling the goods or providing services  No intermediaries (middle person) to increase the cost  Known as maker-user relationship

8. Indirect Channel  Have one or more intermediaries  Could be an importer, wholesaler or retailer Importer  Someone who searches for foreign businesses that want to sell their product to Canadian consumers  Can have exclusive rights to distribute the product in a certain region/country

9. Wholesalers  Individuals or companies that buy goods from producers or importers and resell the products to retailers Why use a wholesaler?  Can buy in smaller quantities vs. buying directly from manufacturer  Usually located closer to the wholesaler

10. Specialty Channels  An indirect channel of distribution that does not involve a retail store  Examples: Vending machines Telemarketing Catalogue sales E-commerce Door-to-door sales

11. Promotion  Any attempt to sell a product or service  Sales promotions encourage consumers to buy products using: Coupons Contests Premiums Samples Special events

12. Coupons  Offering consumers money off of the price of a product  They are treated like cash  Most coupons end up in the garbage Redemption Rate  Measures the effectiveness of a coupon program  The larger the coupon, the higher the redemption rate  Average is about 5%

13. Contests  A way to increase brand recognition and sales  Law requires people to demonstrate a skill or answer a skill-testing question e.g. Tim Hortons Roll up the Rim contest

14. Premium  Giveaways  Sometimes the consumer gets something for free when purchasing a product e.g. a toy in cereal box  Customer loyalty cards are another method Stamped each time the consumer makes a purchase

15. Samples  Encourage consumers to try a product  Often small “trial” sizes of the product  Sometimes distributed door-to-door or at the supermarket  An effective way to increase sales but expensive

16. Special Events  Organizing special events to attract consumers and increase product sales e.g. book signing, celebrities that promote shoes, perfume

17. Two Cs of Marketing  Consumer  Competition  Must consider these when developing the marketing mix

18. Consumer Market  Companies study the types of consumers that buy their products  Can be identified by: Demographics Lifestyle

19. Demographics  The study of obvious characteristics that categorize people, such as: Age Gender Family life cycle Household income Ethnicity and culture Lifestyle

20. Competition  Competitive market Consists of all the sellers of a specific product Often expressed in terms of annual spending on a specific product  Market share The % of the market that a company or brand has

21. Competition continued…  Market Segment Part of the overall market that has similar characteristics e.g. soft drink market would have a diet segment, flavoured segment

22. Competition continued… Direct Competition  Competition between products that are very similar e.g. Ritz Crackers vs. Premium Plus crackers

23. Indirect Competition  Competition between products or services that are not directly related to each other e.g. movie and pizza

24. Income Discretionary Income  The portion of disposable income that is not already committed to paying for necessities and can be used to buy items for comfort and pleasure

25. Income continued… Disposable Income  The amount of income that is left after taxes have been paid  Could be used for basic necessities such as food, shelter and clothing