Marketing Concepts Overview

Summary of Marketing Concepts

• Pricing: Price is the amount of money charged for a product or service. Companies should focus on selling value, not just price, regardless of the economic situation.
• Pricing Strategies (Value-Based Pricing): This approach uses customer perceptions of value rather than the seller's cost to set prices. This method is customer-driven, contrasting with cost-based pricing which is product-driven. Good value pricing focuses on providing the right combination of quality and service at a fair price. Everyday Low Pricing (EDLP) maintains a steady, low price, without temporary discounts.
• Cost-Based Pricing: Sets prices based on the costs of producing, distributing, and selling a product, plus a desired profit margin. Cost-plus pricing adds a standard markup to the cost.
• Break-Evan Pricing (or Target Return Pricing): Determines the price needed to cover all costs (both fixed and variable).
• Competition-Based Pricing: Pricing products based on competitors' strategies, prices, and market offerings. A company may charge premium prices to compensate for perceived greater value over the lifetime of a product.

Marketing Channels and Logistics

• Supply Chains and Value Delivery: Upstream partners supply raw materials, components, and expertise required to create products or services. Downstream partners (like retailers and wholesalers) bring products to the customer. The demand chain "sense and respond" view starts with customer needs. The value delivery network involves cooperation between companies, suppliers, distributors, and customers to improve performance.
• Types of Marketing Channels: A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for the consumer. Channels may include pure competition, monopolistic competition, oligopoly competition, and pure monopoly.
• Channel Members Add Value: They transform product assortments, bridge time, place, and possession gaps separating goods and services from consumers.
• Public Policy and Distribution Decisions: Exclusive distribution limits the number of dealers to distribute products, and Exclusive territorial agreements set geographic limits.

Integrated Marketing Communications

• The Promotional Mix: A blend of communication tools to create customer relationships. Tools include advertising, sales promotion, personal selling, and public relations.
• Advertising: Any paid form of nonpersonal presentation and promotion of goods or services. This can take various formats, including broadcast, print, digital, mobile, and outdoor.
• Sales Promotion: Short-term incentives (like discounts, coupons, displays, or demonstrations) to encourage immediate sales.
• Personal Selling: Direct interaction by a company's sales force with customers to make sales and build customer relationships.
• Public Relations: Activities aimed at building positive relationships with the public. It includes news stories, sponsorships, events, and handling unfavorable rumors.

Socially Responsible Marketing Communication

• Companies must be socially responsible, communicating honestly and avoid false or deceptive advertising. Fair competition rules should be followed. Honest practices and avoiding the disparagement of competitors are key aspects to consider.

Key Marketing Concepts (Overall):

• Integrated Marketing Communications (IMC): The coordination and integration of marketing communications channels for a clear, consistent, and powerful brand message.
• The New Marketing Communications Model: Incorporates digital technology (smartphones, IoT, social media) into the way companies communicate with customers. This method also takes into account the shifts in customer behavior and marketing strategies.