1. NETA PowerPoint Presentations to accompany The Future of Business Fourth Edition Adapted by Norm Althouse, University of Calgary Copyright © 2014 by Nelson Education Ltd.

2. Creating Marketing Strategies Chapter 14 Copyright © 2014 by Nelson Education Ltd.

3. Making the Connection

4. Learning Outcomes 1. Describe what is meant by a product. 2. Explain the stages of the product life cycle. 3. Discuss the role of pricing and the strategies used for pricing products. 4. Explain distribution and distribution channels. 5. Discuss promotion, its elements, and factors that affect its use. 6. Illustrate how supply chain management can increase efficiency and customer satisfaction. 7. List some of the trends marketing. Copyright © 2014 by Nelson Education Ltd.

5. Creating the Marketing Mix Copyright © 2014 by Nelson Education Ltd. The creation of a marketing mix combines the four Ps into a concise plan that will meet or exceed the target market’s expectations. FRANK GUNN/THE CANADIAN PRESS/AP PHOTO

6. Describe what is meant by a product. Copyright © 2014 by Nelson Education Ltd.

7. Product – The Company’s Offerings Copyright © 2014 by Nelson Education Ltd. Any good or service, along with its perceived attributes and benefits, that creates value for the customer. Exhibit 14.1: Tangible and Intangible Attributes of a Product Create Value for the Buyer

8. Exhibit 14.2: Products Are Typically a Blend of Goods and Services Copyright © 2014 by Nelson Education Ltd.

9. Exhibit 14.3: Classification of Consumer Products by the Effort Expended to Buy Them Copyright © 2014 by Nelson Education Ltd.

10. Classifying Business Products Copyright © 2014 by Nelson Education Ltd. Expense Items Capital Products Items, purchased by businesses, that are smaller and les expensive than capital products and usually have a life span of less than one year. Large expensive items with a long life span that are purchased by businesses for use in making other products or providing a service.

11. Explain the stages of the product life cycle. Copyright © 2014 by Nelson Education Ltd.

12. Exhibit 14.4: Sales and Profits during the Product Life Cycle Copyright © 2014 by Nelson Education Ltd.

13. Introduction Stage Copyright © 2014 by Nelson Education Ltd.  Little competition.  Frequent product modifications.  Limited distribution.  Heavy promotion.  High failure rate.  High production and marketing costs.  Low sales volume.  Small or negative profits.

14. Growth Stage Copyright © 2014 by Nelson Education Ltd.  Sales growth at an increasing rate.  Healthy profits, which eventually peak as prices begin to fall due to increased competition and economies of scale.  Many competitors.  Large companies acquire smaller companies.  Aggressive brand advertising.  Increased distribution.  Priority is to increase or retain market share.

15. Maturity Stage Copyright © 2014 by Nelson Education Ltd.  Sales growth—but at a decreasing rate.  Saturated markets.  Product line extensions through product variations.  Global introduction of products.

16. Decline Stage Copyright © 2014 by Nelson Education Ltd.  Sales and profits fall.  Trade allowances eliminated.  Most advertising and sales promotions eliminated. The rate of decline is governed by: the rate of change in consumer tastes. the rate at which new products are introduced.

17. Exhibit 14.5: Strategies for Success at Each Stage of the Product Life Cycle Copyright © 2014 by Nelson Education Ltd.

18. Discuss the role of pricing and the strategies used for pricing products. Copyright © 2014 by Nelson Education Ltd.

19. Pricing Objectives Copyright © 2014 by Nelson Education Ltd. Target Return on Investment Price of a product is set to give the desired profitability in term of return on investment. Value Pricing Offering a high-quality product at a fair price and with good service. Profit Maximization Producing a product as long as revenues exceed the cost of producing it.

20. Value Pricing Copyright © 2014 by Nelson Education Ltd.  offers products that perform.  gives consumers more than they expect.  gives meaningful guarantees.  gives the buyer facts.  builds long-term relationships. A value marketer:

21. Product Pricing Strategies Copyright © 2014 by Nelson Education Ltd. Price Skimming Penetration Pricing Initial high price > lower over time Initial low price > secure market Leader Pricing Initial price below normal markup > attract customers Bundling Grouping two or more products > price as a single product Odd-Even Pricing Odd = bargain Even = quality Prestige Pricing Increasing the price > consumers will perceive it as being of higher quality

22. Break-Even Analysis Copyright © 2014 by Nelson Education Ltd.  Fixed costs – Do not vary with different levels of output.  Variable costs – Change with different levels of output. Break-even point = Total fixed costs (in units)Fixed-cost contribution* *(selling price per unit minus the variable costs per unit)

23. Markup Pricing Copyright © 2014 by Nelson Education Ltd.  Based on cost. Markup percentage = markup amount ÷ item cost  Based on selling price. Markup percentage = markup amount ÷ selling price $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

24. Explain distribution and distribution channels. Copyright © 2014 by Nelson Education Ltd.

25. Exhibit 14.8: Supply Chain Copyright © 2014 by Nelson Education Ltd.

26. Marketing Intermediaries Copyright © 2014 by Nelson Education Ltd. Agents – Sales representatives of manufacturers and wholesalers. Brokers – Entities that bring buyers and sellers together. Industrial distributors – Independent wholesalers that buy products and sell them to industrial users. Wholesalers – Sell finished goods to retailers, manufacturers, and institutions. Retailers – Sell goods to consumers and industrial users.

27. Exhibit 14.9: Channels of Distribution for Industrial and Consumer Products Copyright © 2014 by Nelson Education Ltd.

28. Functions of Distribution Channels Copyright © 2014 by Nelson Education Ltd. Reduce the number of transactions. Ease the flow of goods. Perform needed functions.

29. Exhibit 14.10: How Distribution Channels Reduce the Number of Transactions Copyright © 2014 by Nelson Education Ltd.

30. Easing the Flow of Goods Copyright © 2014 by Nelson Education Ltd. Sorting out – Breaking many different items into separate stocks (e.g., eggs sorted by size and grade). Accumulating – Bringing similar stocks together into larger quality (e.g., eggs put into packages of one dozen). Allocating – Breaking similar products into smaller and smaller lots (e.g., tank-car of milk put into jugs).

31. Exhibit 14.11: Marketing Channel Functions Performed by Intermediaries Copyright © 2014 by Nelson Education Ltd.

32. Intensity of Market Coverage Copyright © 2014 by Nelson Education Ltd. Selective Limited number of dealers in an area (more than two). Intensive Manufacturer tries to sell its products wherever there is potential customers. ExclusiveOne or two dealers in an area.

33. Discuss promotion, its elements, and factors that affects its use. Copyright © 2014 by Nelson Education Ltd.

34. Promotion – Selling Our Products Copyright © 2014 by Nelson Education Ltd. The attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process.  Create awareness.  Encourage consumers to try products.  Provide information.  Keep loyal customers.  Increase the amount and frequency of use.  Identify target customers.

35. The Promotional Mix Copyright © 2014 by Nelson Education Ltd. Advertising Personal Selling Public Relations Sales Promotion

36. Illustrate how supply chain management can increase efficiency and customer satisfaction. Copyright © 2014 by Nelson Education Ltd.

37. Supply Chain Managers Copyright © 2014 by Nelson Education Ltd. Responsibilities include:  Managing the logistical components of the supply chain.  Sourcing and procurement.  Production scheduling.  Choosing a warehouse location and type.  Setting up a materials-handling system.  Making transportation decisions.

38. Exhibit 14.13: Criteria for Ranking Modes of Transportation Copyright © 2014 by Nelson Education Ltd.

39. List some of the trends in marketing. Copyright © 2014 by Nelson Education Ltd.

40. The Future of Marketing Copyright © 2014 by Nelson Education Ltd.  Increased variety of mobile devices.  Marketing dollars going social.  Bargains, Bargains: Using technology to save.  Supply chain management; increasing its importance.