| | Marketing mix for innovations Seppo Mönkkönen M.Sc Agric., Senior Lecturer in Business Economics Savonia University of Applied Sciences Iisalmi, Finland Innotools 16th April 2008 © Savonia University of Applied Sciences

| | Marketing Plan Two aspects: 1 Understand markets and customers behavior Point 1Diffusion of innovations Point 2Producut life cycle (PLC) Point 3Market Segmentation 2 Marketing actions (Four P´s) Product Price Place Promotion

| | Marketing mix - History The four P’s concept is explained in most marketing textbooks and classes One version of the origins of the marketing mix starts in 1948 when James Culliton said that a marketing decision should be a result of something similar to a recipe This version continued in 1953 when Neil Borden took the recipe idea one step further and coined the term 'Marketing-Mix‘ A prominent marketer, E. Jerome McCarthy, proposed a 4 P classification in 1960 Philip Kotler has made four P’s world wide known concept Concept has also several extra versions (6 or 7 P’s)

| | Four P’s for new innovations (SME business) 1 Product Decisions The term "product" refers to tangible, physical products as well as services Here are some examples of the product decisions to be made: Brand name Functionality Styling Quality Safety Packaging Repairs and Support Warranty Accessories and services

| |

Example

| | Four P’s for new innovations (SME business) 2 Price Decisions Price is the only element in the marketing mix that produces revenue; all other elements represent costs Some examples of pricing decisions to be made include: Pricing strategy (skim, penetration, etc.) Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling Price flexibility Price discrimination

| | Companies bringing out an innovative product, that may face the challenge of setting prices for the first time In the narrowest sense, price is the amount of money charged for a product More broadly, price is the sum of all the values that consumers exchange for the benefits of having or using the product Price is also one of the most flexible elements of the marketing mix

| |

Four P’s for new innovations (SME business) 3 Distribution (Place) Decisions Distribution is about getting the products to the customer Some examples of distribution decisions include: Distribution channels Market coverage (inclusive, selective, or exclusive distribution) Specific channel members Inventory management Warehousing Distribution centers Order processing Transportation Reverse logistics

| |

Four P’s for new innovations (SME business) 4 Promotion Decisions In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response Marketing communication decisions include: Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions Public relations & publicity Marketing communications budget

| | A - Attention (Awareness): attract the attention of the customer. I - Interest: raise customer interest by demonstrating features, advantages, and benefits. D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs. A - Action: lead customers towards taking action and/or purchasing. Nowadays some have added another letter to form AIDA(S): S - Satisfaction - satisfy the customer so they become a repeat customer and give referrals to a product.

| | EXAMPLES Teno river

| | EXAMPLES

| | Evaluation – is the 4 P’s concept history? It is good checklist for all marketers Mainly used for consumer markets (do not offer an appropriate model for industrial product marketing) Marketing mix approach may lead to unprofitable decisions because it is not grounded in financial objectives

| |