MKT 2311 – Marketing Management

1. Introduction to marketing
2. Marketing environment
3. Creating customer value and satisfaction
4. Consumer behavior
5. Segmentation, targeting and positioning
6. Marketing information and research
7. Product Strategy
8. Place strategy
9. Pricing strategy
10. Promotional strategy
11. Competition and driving growth
12. Digital marketing
13. Green marketing and ethical marketing
Lesson 01 – Introduction to marketing through creating, delivering and communicating
superior customer value
What is marketing?
What is a customer?
The American Marketing Association (AMA)
defines marketing as "the process of planning Customers are individuals or organizations who
and executing the conception, pricing, purchase, have purchased, or may potentially
promotion and distribution of ideas, goods and purchase a good, product, or service from the
services to create exchanges that satisfy business or organization.
individual and organizational objectives."
Difference between a customer and a
Another way of describing marketing is, consumer

A societal process by which individuals and Customer is the one who is purchasing the
groups obtain what they need and want goods.
through creating, offering and freely exchanging
Consumer is the one who is the end user of any
product and services of value to them (Kotler &
goods or services.
Keller, 2016)
Core concepts in marketing
The scope of marketing
1. Needs, wants and demands
Marketing deals with identifying and meeting
2. Target markets, positioning and
human and social needs.
segmentation
There are two perspectives to understanding 3. Offering and brands
marketing. 4. Marketing channels
5. Paid, owned and earned media
1. Social perspective
6. Impressions and engagement
2. Managerial perspective
7. Value and satisfaction
Social perspective states that marketing deliver 8. Supply chain
a higher standard of living 9. Competition
10. Marketing environment
Managerial perspective states that marketing
involve carefully analysis of markets to Needs, wants and demands
understand needs, selection of target groups of
Needs – state of felt deprivation including
customers and a/so tailoring the product
physical, social and individual needs
offering to achieve a customer satisfaction.
Wants – needs become wants when they are
What is marketing management?
directed to specific objects that might satisfy
Marketing management is identifying market the need
opportunities and implementing strategies to
Demand – A want combined with the
tell you consumer base about your
purchasing power can be considered as demand
product/services/business that can help you
become profitable and build a brand Maslow’s Hierarchy of needs

Formally it can be described as,

The art and science of choosing target markets,

and getting, keeping and growing customers
 Target markets, positioning and segmentation

Market

A set of actual and potential buyers for the

product. They have similar needs and wants and
will have the purchasing power and willingness
to buy through the exchange process

Types of customer markets

1. Consumer market
2. Business market
3. Global market
Types of needs 4. Nonprofit/government market

1. Stated needs – needs that customers Marketer and prospect

express or state when asked about their Marketer is someone who seeks a response
requirements from another party
2. Real needs – an actual requirement or
necessity that a person or group of A responded party is called prospect
people must have to survive, function
What is marketed?
properly or achieve a specific goal
3. Unstated needs – needs that customers Goods, services, events, experiences, persons,
may not be aware of, but which can be places, properties, organizations, information
inferred through observation and and ideas
analysis
Simple marketing system
4. Delight needs – needs that delight the
consumer when they are satisfied
5. Secret needs – needs that a customer
may not express or recognize, but
which might be one of the primary
reasons for selecting a specific product

Ways a customer satisfies needs and wants

1. Product
2. Person
3. Place
4. Organizations
5. Information
6. Ideas For an exchange to occur,
7. Experiences • There should be at least two parties
8. Events
• Each party should have something that
9. Properties might be of value to the other party
10. Services
 • Each party is capable of communication
and delivery
• Each party is free to accept or reject the
exchange offer
• Each party believes it is appropriate or
desirable to deal with the other party

Market orientations

1. Production concept – consumers prefer

products that are widely available and
inexpensive
2. Product concept – consumers favor
products that offer the most quality,
The four Ps/Cs
performance or innovative features
3. Selling concept – consumers will buy 1. Product – Customer solution
products only if the company 2. Price – Customer cost
aggressively promotes/sells these 3. Place – Convenience
products 4. Promotion – Communication
4. Marketing concept – focuses on
needs/wants of the target markets and
delivering value better than Traditional organizational chart
competitors
5. Holistic concept – connects all the
different marketing channels and
departments of a company. Focuses on
moving beyond the marketing
department to an enterprise wide role

The holistic marketing concept is based

on the development, design, and
implementation of marketing programs,
processes, and activities that recognizes
their breadth and interdependencies. Customer oriented organizational chart
Evolving views of marketing’s role Lesson 02 – Marketing environment

Marketing plan

Marketing plan is a document that lays out the

marketing efforts of a business in an upcoming
period which is usually a year.

It outlines the marketing strategy, promotional

and advertising activities planned for the year

Structure of a marketing plan

1. Marketing plan objectives

This section outlines the expected outcome of

the marketing plan. It contains specific targets
and time frames

2. Market research (market

analysis/consumer analysis)

Includes topics such as market definition,

market size, industry structure, market share
and trends and competitor analysis.

3. Target market

Defines the target customers by their

demographic profile such as gender, race, age
and psychological profile such as interests.

4. SWOT analysis

This will look at a company’s internal strengths

and weaknesses and external opportunities and
threats.

5. Marketing strategy

The overall game plan which includes actual

strategies according to the marketing mix in
Tasks of marketing management
order to reach prospective customers and
1. Developing marketing strategies turning them into customers of their products
2. Capturing marketing insights
The marketing mix is a set of controllable,
3. Connecting with customers
tactical marketing tools that a company uses to
4. Building strong brands
produce a desired response from the target
5. Shaping market offerings
market. (the four Ps)
6. Delivering value
7. Communicating value
8. Creating long-term growth
 6. Marketing budget 2. External environment

Outlines the budgeted expenditure for the Internal Environment

marketing activities documented in the
All the forces inside the organization which
marketing plan. Consists of revenues and costs
affects its marketing operations and these
stated in the marketing plan in one document
factors are fully controllable.
7. Performance analysis
It includes the vision, mission, members,
A performance assessment is a means of resources and other departments
measuring the success of a marketing campaign
Task environment
or ongoing marketing activity in order to
determine whether they can be improved upon Outside forces that are immediately relevant for
the future. the achievement of the goals of the business.
This include customer, suppliers,
Business environment
intermediaries, competitors and public
The surrounding factors and conditions that can
Macroenvironment – refers to the broader
affect the organization’s operations
social, economic, political and cultural forces
performance and overall success.
that shape the organization’s marketing
Marketing environment environment but cannot be directly controlled
by the organization.
Forces outside marketing that affect marketing
management’s ability to build and maintain Macroenvironment include,
successful relationships with its target market.
• Demographic environment
In other words, all the factors and conditions • Natural environment
that can impact an organizations marketing • Economic environment
effort and its ability to achieve its marketing • Technological environment
objectives. • Political and legal environment
• Socio-cultural environment

The microenvironment – the forces that are

closer to the organization and directly affect its
ability to serve its customers.

It can be divided into 02 as

1. Internal environment
Lesson 03 – Creating customer value and What is customer perceived value?
satisfaction
Indicates how much a customer is prepared to
Introduction to value pay for a product or a service.

This is determined by a product or service’s

ability to meet the customer’s needs and inspire
desire, especially in comparison with
competitors.

Determinants of customer perceived value

1. Total customer benefit

2. Product benefits
3. Services benefits
4. Personnel benefit
5. Image benefit
Stage 01 – Minimum requirements 6. Total customer cost
- Delivering what we promised 7. Monetary cost
- Meeting standards 8. Time cost
9. Energy cost
Stage 02 – Customer focus 10. Psychological cost
- Providing what customers want Total customer value
- Responding to customer complaints
Total customer value is the relationship
Stage 03 – Customer attitudes between what a customer pays and what he or
- Retaining our customers she receives when making a purchase.
- Getting them to recommend us
Total customer cost
Stage 04 – Customer focus on targeted
For the consumer, price is only one part of total
markets
cost of a product. The consumer has the
- Meeting critical needs of targeted additional costs of transportation, usage and
customers eventually, disposal of the product. Together,
- Outperforming competitors these costs are referred to as the total
- Creating new, and unique benefits customer cost (TCC).

Value proposition Customer delivered value

The whole cluster of benefits the company The difference between total customer cost and
promises to deliver. total customer value.

What is customer value?

Customer value is best defined as how much a

product or a service is worth to a customer.
Customer value management Loyalty

A deeply held commitment to re-buy or re-

patronize a preferred product or service in the
future despite situational influences and
marketing efforts having the potential to cause
switching behavior.

The customer loyalty grid

Customer satisfaction

The extent to which product’s perceived

performance matches the buyer’s expectation

Customer dissatisfaction

When the perceived performance does not

match the buyer's expectation

Important factors to create loyalty

1. Reliability – keeping your promise,

doing what you said and doing things
the first time
2. Assurance – making the customer feel
safe in their dealings with you, being
thoroughly professional and ethical
3. Tangibles – how the product/service
looks to the client, the appearance of
Measuring satisfaction
personnel and equipment
Periodic surveys 4. Empathy – the degree to which the
organization and service personnel
Customer loss rate understand the individual client and
Mystery shoppers their needs, the ability to adapt the
services to each client and the
Monitor competitive performance willingness to go extra for the client
Customer retention 5. Responsiveness – the availability,
accessibility and timeliness of the
A company’s ability to turn customers into services. The ability to respond to
repeat buyers and prevent them from switching enquiries and complaints in a timely
a competitor. fashion
Steps of building loyalty Lesson 04 – Consumer behavior

1. Basic The actions and decision-making processes of

2. Reactive individuals and households in the acquisition,
3. Accountable usage and disposition of goods, services, ideas
4. Proactive or experiences – Philip Kotler
5. Partnership
In other words, consumer behavior refers to
How to form strong customer bonds how consumers behave when making
purchasing decisions, including how they
• Add financial benefits
identify their needs to satisfy, search for
• Add social benefits information, evaluate alternative, make
• Add structural ties purchase decisions, and dispose of products or
Customer defection services after they have been consumed.

Losing customers or consumers Stimuli and sensory receptors

Any units of inputs from objects that are

perceived by any on of the five senses

Or in other words anything which can generate

reaction in consumer behavior

Model of buyer behavior – Black box model

(Stimulus response model)

What are stimuli – anything which can generate

a reaction in consumers mind

What is consumer black box – the consumer

mind

What is a response – whether to buy, or not buy

a certain product or service

This black box model represents how

consumers mind reacts on different stimuli
which eventually generates a particular
response
Marketer’s goal is to influence buyers’ black box Other factors
to get favorable responses for their marketing
Cultural factors
campaigns or towards their products.
1. Culture – refers to consumer’s values,
Factors affecting consumer behavior
beliefs and customs
Psychological factors (consumer psychology)
Social factors
• Perception
2. Social class – consumer aspirations,
• Motivation
values and attitudes towards different
• Learning
products or services.
• Attitude
3. Reference groups – groups of people
Other factors (consumer characteristics) consumers associate with (relatives,
family members, friends) or aspire to be
• Cultural factors (celebrities, heroes).
• Social factors There are 02 types
• Personal factors - Primary groups – set of people whom
we meet everyday and may have a
Psychological factors
strong impact on
1. Motivation – consumer behavior is - Secondary groups – usually formal and
driven by a consumer’s needs and they speak less frequently and influence
wants is less
2. Perception – how consumers interpret
Personal factors
and make sense of the information
about a product based on their past 4. Age
experiences, knowledge, beliefs, values 5. Occupation
and culture 6. Personality
3. Learning – consumers learn about new 7. Lifestyle and values
products and services through various
sources such as advertising, word of
mouth recommendations and personal The buying decision process
experiences and they use their learned
knowledge when making purchase The five-stage model of consumer buying
decisions process
4. Attitude – refers to overall evaluation of
a product or service based on beliefs
and values. There should be a
perception to form an attitude, but all
perceptions do not create positive or
negative attitudes
 1. Problem recognition 5. Post-purchase behavior

The first step of consumer buying process The consumer evaluates their satisfaction with
the product after the purchase
Consumers become aware of an unsatisfied
need or problem that requires a solution If the product meets or exceeds expectation,
the consumer may become a repeat customers
Internal stimuli (hunger, thirst) or external
or brand advocate
stimuli (advertising) can trigger a need
recognition If the product falls short of expectation, the
consumer may experience cognitive dissonance
Marketers can create effective campaigns to
(buyer’s remorse)
stimulate need recognition
Marketers should manage post-purchase
2. Information search
experiences and address customer concerns
The consumers seek information to find a
solution to their problem or need

Sources of information can be internal

(memory, past experiences) or external (friends,
family, online reviews and advertising)

3. Evaluation of alternative

The consumer evaluates different products or

brands on their attributes and benefits

Consumers use a set of criteria which may

include price, quality, features and other factors

Consumers may use heuristics (mental

shortcuts) or simplify decision making process

Marketers can highlight product benefits and

differentiate from competitors

4. Purchase decision

Consumers makes a decision on which product

or brand to purchase

Factors such as price, availability and

convenience may impact the final decision

The purchase intention can be influenced by

unexpected factors (peer influence, financial
concerns)

Marketers should create positive purchase

experiences and minimize barriers
Lesson 05 - Segmentation, targeting and nations, states, regions, cities and
positioning neighborhoods.

Introduction to target marketing For example, KFC and McDonalds uses

geographical segmentation to tailor its menu
Market consists of buyers and they are different
offerings to local tastes and preferences
Target marketing consists of three major steps
Parameters of geographical segmentation
1. Segmentation – Dividing the market includes,
into distinct groups of customers
- Location
(segments)
- Climate
2. Targeting – selecting the most
- Culture
attractive segments to focus on
- Population
3. Positioning – determining how to
- Language
position your product for each target
segment Demographic segmentation

STP helps allocate the resources of the Dividing the market into groups based on
organization to the most valuable customers variable or parameters such as,

Enables companies to identify the most - Age

profitable market segments, target them and - Gender
create a unique proposition - Family size
- Income
STP provides a basis for decision making on a
- Occupation
product, price, place and promotion
- Education
What is segmentation? - Religion
- Race
The act of dividing the market into distinct - Generation
groups of buyers who have different needs, - Nationality
characteristics or behavior and who might
require separate product or marketing Psychographic segmentation
programs
Dividing the market into different segments
The purpose of segmentation is to identify and based on social class, lifestyle or personality
serve different groups of customers more
Parameters include,
effectively by tailoring marketing efforts to their
specific needs and preferences - Personality
- Lifestyle
Bases for segmentation
Behavioral segmentation
• Geographic
• Demographic Dividing the market into groups based on
• Psychographic variable such as,
• Behavioral
- Occasions
Geographic segmentation – dividing the market - Benefits
into different geographical units, such as - User status
 - Usage rate 2. Difference – there should be a
- Loyalty status measurable difference between two
- Readiness stage segments
- Attitude towards product 3. Reachability – the segments should be
accessible to your sales and marketing
Criteria for effective segmentation
teams
1. Measurable – the size, purchasing 4. Profitability – the segment should have
power, and characteristics of the a low-to-medium customer acquisition
segment should be measurable cost (CAC) while bringing in high return

Targeting strategies
2. Accessible – the segment should be
effectively reached and served with 1. Micro marketing
marketing mix 2. Niche marketing
3. Segment marketing
4. Mass marketing
3. Substantial – the segment should be
Mass marketing – a market coverage strategy
large and profitable enough to serve
in which a firm decides to ignore market
segments differences and go after the whole
4. Differentiable – the segments are
market with one offer
conceptually distinguishable and
respond differently to marketing Segment marketing – a market coverage
elements and programs strategy in which a firm decides to target
several market segments and designs separate
to offer each market
5. Actionable – effective marketing
Niche marketing – A market coverage strategy
programs can be designed for attracting
in which a firm goes after a large share of one
and serving the segments
or a few segments or niches

Micromarketing – tailoring products and

What is targeting?
marketing programs to the needs and
The process of evaluating each market preferences of individual customers
segment’s attractiveness and selecting one or
Ethical consideration in targeting
more segments to enter
• Avoiding vulnerable or disadvantaged
The purpose of targeting is to focus marketing
groups
efforts on the most profitable and suitable
market segments • Inclusive marketing
• Privacy and data protection
Factors to consider when choosing targetable • Truthful and non-misleading
segments communication
1. Size – your audience segments must • Social and environmental responsibility
have enough potential customers to be • Encouraging responsible consumption
worth marketing
What is positioning? Deciding on a positioning requires,

The act of designing the company’s offering and 1. Choosing a frame of references by
image to occupy a distinctive place in the mind identifying the target market and
of the target market. relevant competition
2. Identifying the optimal points of parity
The purpose of positioning is to create a unique
and points of difference brand
and appealing value proposition for the target
associations given that frame of
customers
references
Perceptual map in positioning 3. Creating a brand mantra summarizing
the positioning and essence of the
A perceptual map is used to show consumers brand
perception of certain brands
Choosing a frame of reference
Consumer’s perception of the price and quality
of brands in the automobile industry Frame of reference is basically the market or
the content in which you choose to position
your brand

Advantages of frame of reference include,

- Parity
- Differentiation
- Consumer insight
- Brand positioning

Identifying the points of parity and points of

difference
Value proposition
Points of parity – are attributes or benefits
A value proposition expresses why a customer associations that are not necessarily unique to
should choose your products and examines the brand but may be shared with other brands
your company’s benefits
Points of difference – attributes or benefits that
The greatest value proposition examples usually consumers strongly associate with a brand
include a headline, sub headline, or short positively evaluate and believe they could not
paragraph and a visual to add extra interest, find to the same extent with a competitive
such as an image, video, or illustration. After brand
reading value propositions, customers should
have no misunderstandings about what a brand Creating a brand mantra
stands for and what it can offer them. Brand mantra, also known as a brand essence
Example – Nike or core brand promise. A brand mantra is a
short three- to five-word expression of the most
Nike bases its value proposition on the practice important aspects of a brand and its core brand
of sport as a generator of confidence and associations.
success, will and effort, going against what is
established, and bringing inspiration and A brand mantra serves the following purposes
innovation to every athlete in the world.
 - It communicates the idea behind the Lesson 06 – Marketing information
brand
Why marketing needs information
- It simplifies the message of the brand
- It clarifies the positioning of the brand Marketers need insights about customers and
- It inspires people and creates an markets to create value for customers
emotional connection
Customer (market) insights
Three step rules to create a brand mantra
Fresh information-based understandings of
1. Brand function – describes the nature customers and the marketplace that become
of the product or service or the types of the basis for creating customer value,
experiences engagement and relationships
2. The descriptive modifier – further
describes the brand Examples
3. Emotional modifier – describes how • Customers: Who are our current
consumers should feel about the brand customers (demographics, lifestyle)?
Why are they buying our products (to
satisfy what needs)? How do they use
them? How often do they buy?
• Markets: Who is in the target market
who are not our customers? What
products are they buying? Why are they
buying those products and not ours?
Are there potential new customers we
can target?
• Competitors: Who are our competitors?
What marketing strategies are they
using? What new things are they
planning for the future?
• Broader environment: What are the
trends in the broader environment
(technological, political, etc.)? How do
those trends affect our market and
marketing activities?

Is there enough information?

The problem is not the lack of information but

the information overload

Marketers need better information and make

better use of information
Difference between information and insights Analytic techniques

Insights refer to actionable deep • Data mining – extracting valuable

understandings in the customer and market information from large data sets
behavior through automated methods
• Data aggregation – summarizing and
Information should be analyzed to gain insights
consolidating large volumes of data
Marketing information system from multiple sources
• Statistical analysis – examining data
“A marketing information system (MIS) consists
using statistical methods to uncover
of people and procedures dedicated to
patterns and relationships
assessing information needs, developing the
• Data visualization – representing data
needed information, and helping decision
visually through graphs, charts, and
makers use the information to generate and
dashboards
validate actionable customer and market
insights Big data
It should find out what information is needed, Refers to large and complex datasets that
generate that information and help managers cannot be easily managed or analyzed using
to use it appropriately traditional data processing methods
It should give managers “the right information, Characteristics
in the right form, at the right time and help
- Volume: A large volume of data
them to use this information to create customer
generated through various means (e.g.,
value, engagement, and stronger customer
on web pages, mobile phones, social
relationships
media, etc.)
- Variety: Big data comes in various forms
(Structured: E.g., Customer profiles and
sales records; Semi-structured: E.g.,
Mobile app usage data; Unstructured:
Images, videos, and text (e.g., user
review comments on social media)
- Velocity: Data is generated at high
speed
- Veracity: There are problems with
Current trends trustworthiness and accuracy of data
- Value: Big data should be effectively
Marketing analytics
managed to create useful insights that
The process of tracking and analyzing data from can generate value for marketers
marketing efforts often to reach a quantitative
goal

Analytics uses advanced ICT tools to track and

analyze data
Lesson 07 – Product strategy 2. Basic product

What is marketing strategy? At the second level, you turn the core benefit
into an actual product, and you define the basic
Marketing strategy s the plan to achieve the
features the product must have
business objectives by managing the marketing
mix effectively and efficiently. For example, the raincoat must be waterproof
and may have a hood to keep your head dry
A Proper marketing strategy will guide a brand
as to how the marketing efforts need to be put 3. Expected product
in in order to achieve long-term business goals
The Expected Product is the set of attributes or
while satisfying the consumer.
features that customers expect when they
What is a marketing mix? purchase the product. This is in addition to
Basic Product features identified at the second
A marketing mix includes multiple focus areas
level.
as part of a comprehensive plan. The term often
refers to a common classification that began as For example, you might expect the raincoat to
the four Ps be made of breathable materials

The different elements of a marketing mix work 4. Augmented product

together to generate higher sales
Here, you identify any features that will exceed
This framework aims to create a comprehensive customer expectations. This is where you can
plan to distinguish a product or service from start distinguishing your product from your
competitors that create value for the competitors' products.
customers.
For example, the manufacturers could offer an
Often these elements are dependent on each Augmented Product by offering a free map
other. case, or by using top-of-the-line lightweight
materials.
What is a product?
5. Potential product
A product is anything that can be offered to a
market to satisfy a want or need, including The possible transformations the product could
physical goods, services, experiences, events, go through in the future, and the features and
persons, places, properties, organizations, value that you could add
information, and ideas.
For example, a potential product extension for
Customer perceived value hierarchy and the the raincoat could be a small bag that people
extended product model could carry their folded raincoat in, so that it
can easily fit into a bag or briefcase, or a new
1. Core product/benefit
design that allows you to see more around you
This is the benefit the customers get from the when using the hood.
product at its most basic level

For example, the core benefit of a rain coat is to

keep you dry in the rain
Product classification 3. Use – Industrial goods classification

1. Durability and tangibility Industrial goods are classified on the basis of

• Nondurable goods their relative cost and where they enter the
• Durable goods production process.
• Services
There are 05 major classes of industrial goods
2. Use – consumer goods classification
• Convenience goods - -The 1. Natural materials/parts
consumer usually purchases 2. Manufactured materials and parts
convenience goods frequently, 3. Capital items
immediately, and with minimal 4. Supplies
effort. Examples include soft 5. Business services
drinks, soaps, newspapers, Milk
Product and service differentiation
Bread, Laundry detergent,
Snack foods, Haircuts, Cleaning Product differentiation
product
1. Form – size, shape and physical
• Shopping goods - are those the
structure
consumer characteristically
2. Features – features additional to the
compares on such bases as
basic function
suitability, quality, price, and
3. Customization – customizations done to
style. They are items bought
the basic product
less frequently and more
4. Performance quality – the level at
durable and are commonly
which the product’s primary
more expensive than
characteristics operate
convenience goods. Examples
5. Reliability – the probability that the
of shopping goods include
product will not malfunction
furniture, clothing, and major
6. Repairability – ease of fixing the
appliances.
product when it malfunctions
• Specialty goods - are rare and
often considered luxury Services differentiation
purchases. They are often
marketed by brand or geared to 1. Ordering ease
a niche market. Sports cars and 2. Delivery
fine art are examples of 3. Installation
specialty consumer goods. 4. Customer training
5. Maintenance and repair
• Unsought goods - such as
smoke detectors, are readily Product and brand relationship
available but not often sought
by the consumer or the What is a brand?
consumer does not know about A brand is a name, term, symbol, design, or
or normally think of buying combination of them intended to identify the
goods and services of one seller or group of
sellers and differentiate them from other
products and services.
Difference between a product and brand Line extension and brand extension

A product is an item or service produced and Line extension

offered by a company for sale in the market.
A product line extension is the launch of a new
A brand is an entity, such as a logo, symbol, or product in a product line where the brand
name, used by companies to make their already sells products. The new product sells
products identifiable among other products in alongside the existing products. Typically, a line
the marketplace. extension is a new flavor, fragrance, formula,
color, size or style of a product in a current
Product mix
product line.
The product mix is the set of products a
Brand extension
company offers its customers.
A new product in a category it has never
A successful product mix strategy enables a
competed in
company to focus efforts and resources on the
products and product lines within its offerings New product development strategy
with the greatest growth potential, market
A frim can obtain new products through,
share, and revenue.
1. Acquisition
The product mix can be broad or narrow, and it
2. New product development
can be deep or shallow.
Reasons for new product failure
A broad product mix includes a wide range of
products, while a narrow product mix includes a - Overestimation of market size
limited range of products. - Poor design
- Incorrect positioning
Width - total number of product lines provided
- Wrong timing
by a company. The wider the width, the more
- Priced too high
types of products are offered by the company.
- Ineffective promotion
Depth - number of variations of every product - Management influence
in a particular product line. The variation could - High development cost/ sunk cost
be in the form of size, color, or any other fallacy
product characteristic. - Competition

Length - total number of products that the Stages in new product development
company is providing to the customers

Consistency - how similar the products in a

product line are to each other
 1. Idea generation 3. Concept development and testing

The systematic search for new product ideas Product idea is an idea for a possible product
that the company can see itself offering to the
Sources of product ideas include,
market. Customers don’t buy product ideas;
• Internal sources – refers to the they buy product concepts.
company’s own formal research and
Product concept is a detailed version of the idea
development
stated in meaningful consumer terms.
• External sources – refers to sources
outside the company such as Product ideas can be turned into several
customers, competitors, distributors, concepts.
suppliers and outside design firms
• Who will use this product?
• What primary benefits should this
product provide?
2. Idea screening
• When will people consume the
This stage involves the evaluation of a pool of product?
ideas and discarding the lesser effective ones
Concept testing - Once you’ve developed your
This is done by defining and evaluating the product concept, it’s time to test that concept
ideas based on the following elements with consumers in what you believe to be your
target market. This is what’s known as concept
• Compatibility testing.
• Relevance
• Assumptions Concept testing is a market research method in
• Constraints which customers are presented with a
• Feasibility description of a product or service
• Value 4. Marketing strategy development
• Risks
Once concept testing has been completed and
The idea screening stage serves as a filter to the decision has been made to proceed further,
prevent the business from two types of errors it’s time for the product team to develop a
occurring in the new product development preliminary marketing strategy plan.
process.
This plan will address the target market for the
• Drop error - For instance, the popular product.
television show “Friends” was almost
not produced, which could have been a It will outline product positioning, pricing,
significant drop error in the distribution, promotion (4Ps), budget, and both
entertainment industry. short- and long-term goals for sales, market
• Go error - Selecting the wrong idea to share, and profit.
move further
 5. Business analysis 9. Evaluation of results

Business analysis is the next step after the it’s important after commercialization for the
product and its marketing strategy are finalized. company to review the marketing performance
It is the evaluation of the product as a business of the new product. Is the new product
by reviewing the following points. accepted by consumers? Is there sufficiently
high demand, sales, and profits? Are there
• Expenses incurred in manufacturing,
competitors who are introducing a similar new
marketing and selling
product in the market? Depending on the
• Projected sales answers to these questions, savvy marketers
• Projected profits will closely monitor the performance of the new
product and make changes as needed in both
the marketing plan and the marketing mix
6. Product development strategy.
Product development Until now, our product
concept has existed only as words or perhaps a
drawing. Product life-cycle

Product life cycle is the course that a product’s

sales and profits take over its lifetime
7. Test marketing
1. Product development
Test marketing If the product team is satisfied 2. Introduction
with how the prototype performs functionally, 3. Growth
the product is introduced in a limited number of 4. Maturity
stores or in a few geographic regions in order to 5. Decline
gauge customer acceptance before it’s
launched on a large scale.

This is the stage at which the product and

marketing program are introduced into more
realistic marketing settings.

8. Commercialization

Commercialization In this stage, the company

launches the product, complete with full-scale
production, distribution, advertising, and sales
promotion. The cost of launching a new product
varies depending on the product itself, the Introduction stage
industry, and the competition
Sales – Low

Cost – High

Profit – Negative
Marketing objectives – create product • Add new models and products of
awareness different sizes
• Enter new markets
Product – offer a basic product
• Increase distribution coverage
Price – use cost plus • Shifts from product awareness
advertising to product preference
Distribution – Selective distribution
advertising
Promotion – build awareness • Lower prices to attract the next layer of
price sensitive buyers
Marketing strategies during the introduction
stage Maturity stage

• Rapid skimming – launching the new Sales – peak sales, slowdown in sales
product at high price and high
Cost – low cost per customer
promotional level
• Slow skimming – launching the new Profit – high profits
product at a high price and low
Marketing objectives – maximize profit while
promotional level
defending the market share
• Rapid penetration – launching of
products at low prices and heavy Product – diversify brand and models,
promotions substitute products
• Slow penetration – launching of the
Price – price to match best competitors
new product at a low price and high
promotional level Distribution – build more intensive distribution
Growth stage Promotion – increase promotion and R&D to
support sales and profits
The stage where the product satisfies the
market Marketing strategies used in maturity stage
Cost – average cost per customer Marketers consider modifying strategies at the
maturity stage
Profit – rising profit

Marketing objectives – maximize market share • Market modifying - when a company

tries to increase consumption of the
Product – offer product extensions, services, current product (New users, Increase
warranty, quality increase and new features usage of existing users, New market
segments)
Price – psychological pricing
• Product modifying - changing
Distribution – build intensive distribution characteristics (quality, features, or
style) to attract new users and to
Promotion – build awareness and increase in
inspire more usage.
mass marketing
• Marketing mix modifying - when a
Marketing strategies in the growth stage company changes one or more of the
marketing mix elements (price,
• Improved product quality promotion, and distribution)
Decline stage Lesson 08 – Pricing strategy

The stage when sales decline or level off for an What is price?
extended time, creating a weak product
The amount of money charged for a product or
Sales – declining sales a service

Cost – low cost per customer The basic rule in pricing is to price your product
or service at the level which your customer
Profit – declining profits
expects to pay for the quality you are delivering
Marketing objectives – reducing expenditure
Factors to consider when setting prices
Product – phase out weak items
Internal factors
Price – cut price
1. Marketing objectives (e.g. survival,
Distribution – go selective current profit maximization, market
share, product quality etc.)
Promotion – trying to retain loyal customers 2. Marketing mix strategy
Marketing strategies used in the declining 3. Costs
stage External factors
• Save money by, 1. Nature of the market and demand
Reducing promotional expenditure on 2. Cross-selling and upselling
the product
Reduce the number of distribution Cross selling - when you suggest or show your
outlets customers products or services that are related
Implement price cuts to get customers to or complement what they are buying or have
to buy the product bought
Find another use for the product
Upselling - when you persuade or encourage
Maintaining the product and waiting for
your customers to buy a more expensive or
the competitors to withdraw
premium version of what they are buying or
Harvest the product or service before
have bought.
discontinuing
• Sell the brand to another business 3. Consumer perceptions of price and
• Significantly reduce the price to get rid value
of all the inventory 4. Competition

Criticisms for the product life cycle concept New product pricing strategies

• Cannot be generalized Market skimming

• Marketers cannot say which stage a Setting a High Price for a New Product to skim
product is in off the cream of the customers who are price-
insensitive. – suitable for small price incentive
markets
Market penetration Price adjustment strategies

Setting a Low Price for a New Product in Order 1. Discounts (cash discounts, quantity
to Attract a Large Number of Buyers. discounts, seasonal discounts)

Product mix pricing strategies

2. Segmented pricing – differences
A strategy that helps in setting the price of amongst customers, locations and
products in a way that each of the products products are allowed by the
plays a specific role within the product mix organization by adjusting their basic
prices
The product mix is a collection of every product • Customer segment pricing – different
line that a brand owns along with all the
customer pays different prices for the
products included in those product lines
same product or service
Product mix = total product lines (including all • Product form pricing – different
the product items) versions of the product are priced
differently
When a product is part of a product mix, there • Location pricing – the company charges
often arises the needs to change the strategy different prices for different locations
for setting its price.
• Time pricing – a firm values its prices by
In this case the firm tries to set a price that can seasons, months, days etc.
maximize the profits on the total product mix
3. Psychological pricing - a pricing
Major product mix pricing strategies strategy that impacts the consumers
1. Product line pricing – it is where a sub conscious mind
company sets different prices for • Prestige pricing – companies set
different products within the same the prices higher that the actual
product cost of the product
2. Optional product pricing – it is where • Charm pricing – strategy to
the firm offers to sell optional or entice the customers with
accessory products along with the main lower prices
product 4. Promotional pricing – involves setting
3. Captive product pricing - this involves the prices of their products lower that
setting the price for the products that the list price or even lower than the
must be used along with the main cost
product • Buy one get one free
4. By-product pricing – refers to the • Discounting (seasonal sales,
process of determining the price of a flash sales and cash backs)
secondary product that is generated 5. International pricing – organizations
during the production of the main that operate in different countries of
product the world have to decide the prices of
5. Product bundle pricing – where firms their products in different countries
offer a bundle of products or services
together at a discounted price 6. Dynamic pricing – refers to adjusting
prices continually to meet the
 characteristics and needs of the Lesson 09 – Promotional strategy
individual customers and situations.
What is promotional strategy?
7. Geographical pricing - adjusting an Strategies to make the consumer aware of the
item's sale price based on location to existence of a product or service. Not just
reflect shipping costs or to meet advertising.
the market-clearing price in that area.
The aims of promotion are to,

• Raise awareness
• Encourage sales
• Create or change the brand image
• Maintain market share
• Increase market share

Promotional mix

Refers to the strategic combination of various

promotional tools used by a firm to advertise
and sell its products effectively.

The main promotional tools or activities which

make up the promotion mix are personal
selling, advertising, publicity and sales
promotion. These are also known as elements
of the promotion mix.

The concept of promotional mix assumes that

there is a variety of means for communicating
with consumers.

Why do we need promotional mix?

• Build awareness
• Create interest
• Provide information
• To face competition
• Stimulate demand

Promotional mix

1. Advertising
2. Public relations
3. Direct marketing
4. Personal selling
5. Sales promotion
Advertising of outdoor advertising include
billboards, bus benches, interiors and
Advertisement can be defined as the “paid form
exteriors of buses, taxis and business
of non-personal presentation and promotion of
vehicles, and signage posted on the
idea, goods or services by an identified sponsor
exterior of your own brick-and-mortar
It is an impersonal presentation where a location.
standard or common message regarding the • Covert advertising - also known as
merits, price and availability of a product or stealth marketing or undercover
service is given by the producer or marketer marketing, is a strategic approach
business use to promote their products
Impersonality - There is no face-to-face contact or services subtly and disguisedly. It
between customers and advertisers. It creates a aims to seamlessly integrate
monologue and not a dialogue promotional messages into the target
Advantages of advertising audience's daily lives without them
realizing that they are being marketed
• Reach to
• Choice • Public service advertising - Public
• Legitimacy Service Advertising uses commercial
• Expressiveness advertising techniques for non-
• Economic commercial purposes. It is mainly used
• Enhance customer satisfaction and as a tool to promote social welfare.
confidence Business concerns may also be
undertaken in the public interest.
Disadvantages of advertising
Sales promotion
• Impersonal
• Less effective Sales promotion refers to short-term incentives
• Difficulty in media choice or other promotional activities that stimulate
• Inflexibility the customer to buy the product.
• Lack of feedback
Advantages of sales promotion
Types of advertising
• Short and immediate effect on sale
• Printed advertising - Print advertising • Stock clearance is possible with sales
means advertisements that are printed promotion
in hard copy in publications • Sales promotion techniques induce
(newspapers, magazines, journals) likely customers as well as distribution
to be read by your target audience. channels.
• Broadcast advertising - Broadcast • Sales promotion techniques help to win
advertising is the advertising of services over the competitor
or products that use out-of-home
Sales promotion techniques
mediums to reach broad audiences,
Such as TV and radio. 1. Rebate - It refers to selling a product at
• Outdoor advertising - Any advertising a special price which is less than the
done outdoors that publicizes your original price for a limited period of
business's products and services. Types
 time. This offer is given to clear off the Personal selling
stock or excessive inventory.
Personal selling, a technique that underscores
2. Discounts - This refers to a reduction of
the importance of human connection, is a direct
a certain percentage of the price from
interaction between individuals, specifically the
the list price for a limited period. The
prospective buyer and seller.
discounts induce the customers to buy
and to buy more. Generally, at the end Personal selling involves developing customer
of the season, big companies offer their relationships, discovering and communicating
products at a discounted price to clear customer needs, and matching the appropriate
off the stock products with these needs.
3. Refunds - It is a technique of sales
promotion in which part of the price Features off personal selling
paid by the customer is refunded with • Personal interaction
some proof of purchase. • Two-way communication
4. Premiums/ gifts - These are the most • Better response
popular and commonly used promotion • Relationship
tools. It refers to giving a free gift on
• Better convincing
the purchase of the product. Generally,
the free gift is related to the product, Types of personal selling
but it is not necessary for example, Mug
• In store sales (retailing selling) - When
free with Bourn vita, Shaker free with
you walk into a store, and there’s
Coffee, Toothbrush free with
someone to help you find what you
Toothpaste, etc.
need, That’s in-store sales. The
5. Quantity discounts - These refer to the
salesperson is available to converse
offer of extra quantity in a special
with you, respond to inquiries, and
package at less price or on extra
persuade you that those shoes are
purchase some quantity free, for
essential.
example, buy three get one free
• Outside sales (field sales) - Outside sales
6. Samples - It refers to the distribution of
take place when a member of the sales
free samples of products to the
team engages in sales activities with
customers. These are distributed when
clients or customers in the field.
the seller wants the customer to try the
product. Generally, when a new • Telemarketing
product is launched • Online personal selling
7. Contests - These refer to the • Consultative selling
participation of consumers in Public relations
competitive events organized by the
firm, and winners are given some Public relation means maintaining public
reward relations with the public. By maintaining public
8. Instant draws and assigned gifts - : It relations, companies create goodwill. PR refers
includes offers like ‘scratch a card’ and to managing how others see and feel about a
instantly win a refrigerator, car, Tshirt, person, brand, or company.
computer, etc.
Public does not mean only customers; it Lesson 10 – Place Strategy
includes shareholders, suppliers,
What is the place/ distribution strategy?
intermediaries, customers, etc.
Place strategy is an aspect of a company's
Types of PR
marketing mix that focuses on where the
• Media relations company sells its products so that they're easily
• Crisis management available to the target market.
• Corporate social environment
Place strategy is also known as a distribution
• Government relations
strategy wherein the mode of distribution for
• Community relations the product is decided by the organization

The place doesn't refer merely to a physical

Types of promotional activities location or distribution point where the product
is sold. Instead, it encompasses the entire
1. Above the line - Above-the-line distribution and logistics strategy for getting
advertising traditionally refers to mass products from the producer to the consumer.
media strategies that target a wide
audience through channels like Types of distribution
television, radio ads, print media, and Intensive - An intensive place strategy is when a
outdoor advertising. company places its product in as many stores as
2. Below the line - a promotion technique possible.
that uses targeted campaigns designed
to generate consumer interest and Selective - A selective place strategy is when a
awareness about a product or service. company places its product in only a few retail
Common BTL activities include in-store stores.
promotions, point-of-purchase displays,
Exclusive - An exclusive place strategy is when a
sampling, and coupons.
company places its product in one retailer. This
3. Through the line - a marketing strategy
is usually for luxury products that require
that targets a wide audience and adopts
salespeople to convey a lot of information
a direct approach to raise brand
about the product during the sale, such as cars.
awareness, target specific potential
customers and convert them into Channel of distribution
quantifiable and measurable sales.
A distribution channel is how you distribute
your products to the customer.

There are mainly three different distribution

channels

1. Direct
2. Indirect
3. Hybrid
Direct distribution Retailers do not manufacture goods, rather buy
from firms or wholesalers and resell them to
A direct distribution channel is when the
consumers
producer sells a product to the consumer
without an intermediate wholesaler or retailer Distributors

Indirect distribution Distributors are similar to wholesalers, but a key

difference is that they ally themselves with the
Indirect distribution is when a producer sells
product
their product to an intermediate company that
sells the product to the customer. Agents

This is the most common form of retail with They act as an extension of the manufacturing
which consumers are familiar. company, with their main job being to sell
goods on behalf of the manufacturer and to the
Clothing stores, supermarkets, and general
customer.
merchandisers are all intermediaries that
purchase goods from producers at wholesale The customer here could be a distributor, a
prices to sell to consumers for profit. wholesaler, or a retailer.

Hybrid distribution How to establish an effective place strategy

Hybrid distribution channels use both direct 1. Identify the target market
channels and indirect channels. 2. Find locations
3. Consult the marketing strategy
A product or service manufacturer may use
4. Determine a budget
both a retailer to distribute a product or service
and may also make sales directly with the Benefits of an effective place strategy
consumer.
• Diversifying distribution channels
• Controlling your production
• Calculating the risk
Main types of intermediaries
Online distribution platforms
• Retailers
• Wholesalers Online distribution platforms are websites or
• Distributors apps that provide a convenient and efficient
• Agent way for businesses to sell their products or
services to customers directly or through
Wholesalers
intermediaries.
Wholesalers sell their products to other
They can be general, such as Amazon, eBay,
intermediaries such as retailers, for a higher
Kapruka, and Ikman. Lk, or specialized, such as
price than they paid
Airbnb or Spotify
They rarely sell to the final consumer
Features of online distribution platforms
Retailers
• Wider reach and lower costs
Retailers are where the goods are reached to • Increased competition and dependence
the final consumer • Convenience and personalization
• Privacy and security
• Innovation and collaboration