Podcast
Questions and Answers
The ______ mix consists of product, price, place, and promotion.
The ______ mix consists of product, price, place, and promotion.
marketing
Effective ______ is essential for understanding market trends and consumer preferences.
Effective ______ is essential for understanding market trends and consumer preferences.
marketing research
The purpose of ______ planning is to outline the objectives and actions related to a product.
The purpose of ______ planning is to outline the objectives and actions related to a product.
product
______ forecasting helps businesses predict future sales and demand for their products.
______ forecasting helps businesses predict future sales and demand for their products.
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The ______ decision process includes stages like need recognition, information search, and evaluation of alternatives.
The ______ decision process includes stages like need recognition, information search, and evaluation of alternatives.
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To combat or offset competitor's ______ efforts
To combat or offset competitor's ______ efforts
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One goal of sales promotion is to obtain more and better ______ space
One goal of sales promotion is to obtain more and better ______ space
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Merchandise allowances involve a manufacturer's agreement to pay resellers for providing special ______ efforts
Merchandise allowances involve a manufacturer's agreement to pay resellers for providing special ______ efforts
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The first step in new product planning is ______ generation
The first step in new product planning is ______ generation
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Concept testing is used to measure consumer ______ of a particular product
Concept testing is used to measure consumer ______ of a particular product
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Sales contests are designed to motivate ______, retailers, and sales personnel
Sales contests are designed to motivate ______, retailers, and sales personnel
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Publicity is any unpaid, non-personal mention of a firm or product in any of the mass ______
Publicity is any unpaid, non-personal mention of a firm or product in any of the mass ______
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Buying allowances are a temporary price ______ to resellers
Buying allowances are a temporary price ______ to resellers
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The ______ strategy focuses on stimulating final user demand through promotional efforts by sellers.
The ______ strategy focuses on stimulating final user demand through promotional efforts by sellers.
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The pushing strategy relies more on ______ selling to promote a product within the marketing channel.
The pushing strategy relies more on ______ selling to promote a product within the marketing channel.
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One of the objectives of promotion is to provide ______ to the consumers.
One of the objectives of promotion is to provide ______ to the consumers.
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Advertising can include various forms of messages such as those in newspapers, ______, and radio broadcasts.
Advertising can include various forms of messages such as those in newspapers, ______, and radio broadcasts.
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The objective of advertising includes attracting ______, arousing interest, and stimulating desire.
The objective of advertising includes attracting ______, arousing interest, and stimulating desire.
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Product advertising aims to build the ______ of a manufacturer's product through brand identification.
Product advertising aims to build the ______ of a manufacturer's product through brand identification.
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Sales promotion strategies include methods like price off, ______, and lotteries.
Sales promotion strategies include methods like price off, ______, and lotteries.
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The importance of promotion is to shorten the distance between the market and ______.
The importance of promotion is to shorten the distance between the market and ______.
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Study Notes
Marketing Management
- Marketing management involves analyzing, planning, implementing and controlling programs to achieve desired exchanges with target consumers.
- This is a purposeful activity focused on coordinating and adapting product, price, place, and promotion to get an effective response from target customers.
- Its function is to maximize the use of people and services, contributing to a higher standard of living.
Marketing Management Tools
- Marketing research
- Product planning
- Sales forecasting
- Marketing planning
- Marketing strategy
Marketing Mix (4Ps)
- Product: Anything offered for sale for consumer attention and acquisition.
- Price: The amount of money paid for goods and services.
- Place: The distribution channels used to get a product to the market.
- Promotion: The process of persuading a prospective customer to buy a product.
Marketing Environment
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Controllable factors: Product/service category, functions, geographic coverage, ownership, production, finance, accounting, distribution, and R&D.
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Directed by marketers - Selection of target market, marketing objectives, marketing organization, marketing plan, and control of the marketing plan.
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Uncontrollable factors:
- Consumer characteristics and purchases.
- Competition among marketers.
- Technology
- The organization's success or failure in reaching its objectives.
- Feedback.
- Adaptations.
Markets & Consumers
-
Basis of classifying customers:
- Demographic characteristics
- Socio-economic status
- Psychological/personality characteristics
- Product-specific characteristics
-
Kinds of consumers:
- Ultimate consumers (buy for own use and satisfaction).
- Industrial consumers (buy for further processing or assembly).
- Commercial customers (buy to resell).
- Institutional customers (buy goods for institutions).
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Social Characteristics of Consumers:
- Culture: Social class ranking within the culture. Social performance: how a person carries out roles as worker, family member, citizen, and friend.
- Reference group: influence on thoughts and actions.
- Family life cycle: how a typical family evolves.
- Time expenditures: changes in work week, family care, leisure.
The Consumer's Decision Process (6 Stages)
- Stimulus: cue (social, commercial, or non-commercial) or drive (physical).
- Social stimulus: from interpersonal sources.
- Commercial stimulus: messages from manufacturers, retailers, etc.
- Non-commercial stimulus: messages from impartial sources.
- Physical drive: when senses are affected (thirst, pain, hunger).
- Problem awareness: recognizing a shortage or unfulfilled desire.
- Information search: gathering information.
- Evaluation of alternatives: ranking and selection.
- Purchase: the act of purchasing.
Consumer Behavior
- The actions of individuals in obtaining and using goods and services.
- A function of personal influences and outside forces from the environment.
Basic Determinants of Consumer Behavior
- Needs
- Motives
- Perceptions
- Attitudes
Environmental Influences
- Social influences
- Group influences
- Reference groups
- Social classes
- Role of opinion leaders
- Cultural influences
Buying Motives
- Rational: Performance characteristics, economy, durability, serviceability.
- Emotional: Attractiveness, prestige, distinctiveness, comfort, innovation, recreation, security.
- Patronage: Location, store reputation, wide selection, customer service.
Marketing Strategy
- Outlines the manner in which marketing accomplishes organization objectives, increasing sales volume and profit.
- Continuous receipt of revenues and profits.
Target Market
- A defined set of present and potential customers an organization aims to satisfy.
Market Segmentation
- Aims at a narrow, specific consumer group (market segment) through a specialized marketing plan catering to that segment; subdividing a market into homogenous customer subsets.
Basis of Segmentation
- Geography: regions or marketing areas.
- Demography: sex, age, family size.
- Psychography: lifestyle and personality.
- Benefit segmentation: various benefits sought from the product.
- Volume segmentation: heavy, medium, light, and non-users.
- Marketing factor segmentation: responsiveness to factors like price, advertising, and brands.
Product Strategies
- Product: Anything offered for sale, aimed at consumer attention and acquisition.
Essential Elements of a Product
- Physical core.
- Function.
- Adaptability.
- Value.
Categories of Agricultural Products
- Raw or fresh.
- Semi-processed.
- Processed.
Product Classifications
- Consumption & Tangibility:
- Durables.
- Non-durables.
- Services.
- Effort & Risk:
- Convenience products.
- Preference products.
- Shopping products.
- Specialty products.
- Levels of Products:
- Core product.
- Augmented product
- Formal product
Product Mix
- Refers to the number of products a firm handles.
- Wide (many product lines).
- Deep (several products within each line).
- Consistent (related products).
Branding
- A letter, word, symbol, design, or combination used to identify products.
- Three parts: name, trademark, and logo/mark
Choosing a Brand Name
- Short, simple, easy to spell and read.
- Pleasing and easy to pronounce.
- Distinctive but not deceptive.
- Adaptable to packaging and labeling.
- Timely, does not go out of date.
- Not vulgar, offensive, or obscene.
Advantages of Branding
- Helps customers identify products and purchase quality goods.
- Branded products are more superior than unbranded ones.
- Good brand speeds up shopping procedures.
- Reduces selling time.
- Helps marketing management identify different products that appear similar.
Tests in Measuring Brand Effectiveness
- Association test: customer association with a product.
- Learning test: ease in reading and pronouncing brand names.
- Memory test: recalling brand names.
- Uniqueness test: determining brand uniqueness.
- Preference test: rating customer brand preference.
Degree of Brand Preference
- Brand recognition: customers remembering brands.
- Brand preference: insistence on buying a preferred brand due to satisfaction.
- Brand insistence: preference for a particular brand, no substitute accepted.
Packaging
- Total presentation of the product, encompassing physical elements and accessories needed for wrapping, protection, shipping, stacking and identification.
- Includes container, label, and inserts (e.g., cardboard box, cellophane, glass, aluminum or plastic jar, paper bag, Styrofoam).
- Labels contain brand name, company, logo, ingredients, instructions (for complex or dangerous products).
Packaging Objectives
- Attract attention, compete on counter/shelves
- Maximize use of display area.
- Maintain product line identity .
- Provide ease of use to consumers and retailers.
- Ensure product protection during handling.
- Provide measure/quantity for the purchaser.
- Serve as a medium for advertising.
Benefits of Packaging
- Protects products during storage and transit.
- Makes handling convenient.
- Promotes the product.
- Enhances the product.
Characteristics of a Good Package
- Attractive.
- Recognizable.
- Informative.
- Immediate.
- Textural.
- Dependable.
- Functional.
- Labeling.
Package Planning
- Consumer attitudes toward the package.
- Color.
- Protection from sunlight.
- Susceptibility to damage.
- Contamination.
- Pilferage.
- Warehousing considerations (e.g., space, stability).
Problems in Packaging
- Packaging variations across product types.
- Types of packaging materials, especially for food products.
- Costs of materials.
- Side effects of packaging materials.
Pricing Strategies
- Price is the amount of money paid for goods and services.
Pricing Objectives
- Maximize profits for the entire product line.
- Foster long-range firm welfare within the pricing strategy.
- Adapt to the diverse competitive situations encountered by differing products.
Manufacturer's and Retailer's Pricing Strategies
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Manufacturer:
- Skimming the market (high initial price).
- Moving down the demand curve (gradually decreasing price).
- Penetration pricing (lower initial price to attract market share).
- Preemptive pricing (price low enough to discourage competitors).
- Extinction pricing (price at variable costs to force out weak competitors).
- Formula pricing (negotiated price based on buyer requirements).
- Tie pricing (sale of sought-after product attached to purchase of unwanted product).
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Retailer:
- Comparative pricing (matching competitors' prices).
- Psychological pricing (using odd numbers).
- Unit pricing (items sold in groups).
- Price lining (various price points for product lines).
- Special pricing (temporary price reductions).
Pricing Problems
- Basic price (determining company pricing levels).
- Price discount structure (considerations of discounts, allowances).
- Product-line pricing (relating prices to product line members).
- Pricing new products.
Specific Pricing Policies
- Cost-plus pricing: adds percentage to goods' cost to cover expenses and profit.
- Flexible markup method: varying markups based on considerations.
- Intuitive pricing: setting prices based on estimated consumer willingness to pay.
- Less-than-cost pricing: selling below cost to clear out stock or manage sales volume
Geographical Pricing Policies
- FOB Factory: buyer pays transportation costs.
- CIF: seller pays transportation costs.
- Zone pricing: dividing the market into zones with varying prices.
- Basing-point system: pricing products relative to a set location.
Channels of Distribution
- Direct distribution (producer directly to consumer).
- Indirect distribution (various middlemen involved):
- Selective.
- Intensive.
- Exclusive
- Reverse channels involve collecting and disposing of products returned from consumers.
Considerations for Distribution
- Number of potential consumers.
- Complexity of the product.
- Distribution budget.
- Seller's sales and distribution experience.
- Geography.
Channel Functions
- Transportation: moving goods from production to sale.
- Inventory: temporarily holding goods during production and sale.
- Promotion: conveying information about products.
- Transaction: negotiation and transfer of ownership.
Classes of Middlemen
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Functional middlemen.
- Manufacturer's agent: commission-based sales.
- Manufacturer's sales agent: representing a single manufacturer's line.
- Commission merchant: handles commodities.
- Broker: negotiates sales for others on commission basis.
- Resident buyer: purchases for a group of buyers.
- Factor: finances production and performs other selling functions.
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Reseller systems (promoting smooth and harmonious relationships between distributors)
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Distribution Policies (intensive, selective, exclusive).
Factors Affecting Choice of Industrial Distribution Channels
- Nature of the market.
- Available middlemen.
- Company size.
- Costs of distribution channels.
- Promotion expenses.
Channels of Distribution (Examples)
- Producers to users/consumers
- Producers to retailers to consumers/users
- Producers to wholesalers to retailers to consumers/users
- Producers to agents to retailers to consumers/users
Buying Motives of Industrial Buyers
- Maintain supply continuity.
- Minimize investment in materials and inventory.
- Avoid duplication, waste, and obsolescence.
- Maintain quality and material suitability.
- Procure materials economically.
- Achieve competitive industry positions.
Factors Influencing Industrial Patronage
- Quality.
- Service (repairs, maintenance, delivery, contacts).
- Reliability.
- Price.
- Continuous supply availability.
- Liberal credit terms.
- Trade allowances.
Promotion Strategies
- Promotion: process of persuading prospects to buy, or favorably consider a product or service.
- Personal / Impersonal communications designed to help prospective buyers
Promotional Policies
- Pulling strategy: aimed at driving consumer demand and indirectly influencing channel member behavior.
- Pushing strategy: focused on motivating channel members, often using personal selling.
Importance of Promotion
- Aware of alternative goods/services.
- Shortens distance between market and manufacturers.
- Regulates demand levels and timing.
Objectives of Promotion
- Providing information.
- Stimulate demand.
- Differentiate the product.
- Accentuate product value.
- Stabilize sales.
Methods of Promotion
- Advertising: Paid, non-personal presentation.
- Personal selling: oral product presentation.
- Sales promotion: Price cuts, bonuses, and other incentives.
- Publicity: Unpaid, non-personal mention.
Advertising Media
- Newspapers.
- Magazines.
- Radio & Television.
- Transportation & Outdoor advertising.
- Direct mail advertising.
Advertising Objectives
- Attract attention.
- Arouse interest.
- Stimulate desire.
- Create action.
Types of Advertising
- Manufacturer's and dealer's advertising
- Product advertising and institutional advertising—
- Primary demand and selective demand advertising
- Other types of advertising
- Outdoor Advertising (billboards, highway signs)
- Point-of-purchase advertising (materials in stores)
- National advertising
- Local advertising
- Direct-mail advertising
Sales Promotion
- An activity and/or material designed to directly induce resellers, salespersons, or consumers to purchase a product or service.
Objectives of Sales Promotion
- Identify and attract new customers.
- Introduce new products.
- Increase users of established brands.
- Encourage current customer usage.
- Educate customers about product improvements.
- Bring more customers to retail stores.
- Establish fluctuating sales patterns.
- Increase reseller inventories.
- Counter or offset competitors' marketing efforts.
- Obtain better shelf space and display.
Management Decisions Related to Sales Promotion
- Determining policy.
- Analyzing the market.
- Deciding what to promote.
- Deciding where to promote.
- Determining when to promote.
- Determining promotion budget.
Tools of Sales Promotion
- Publicity: unpaid mention of the firm.
- Visual advertisement: merchandise displays.
- Special sales events: planned promotions.
- Contests.
- Premiums (incentives):
- Giveaways (free items).
- Self-liquidating (nominal cost).
Self-Promotion Aimed at Resellers
- Buy-back allowances: amount to purchaser for each unit bought.
- Buying allowances: Temporary price reductions.
- Merchandise allowances: payments to resellers for promotional efforts.
- Sales contests: motivate distributors, retailers, and sales personnel.
Product Planning and Development
- Includes activities to discover, develop, improve old products, identify new uses, and reduce product and packaging costs.
Steps in New Product Planning
- Idea generation.
- Screening product ideas.
- Concept testing.
- Business analysis.
- Product development.
- Test marketing.
- Commercialization.
Adoption Process
- Awareness.
- Interest.
- Evaluation.
- Trial.
- Adoption
- Confirmation
The Product Life Cycle
- Introductory stage.
- Maturity stage.
- Decline stage.
Industrial Marketing
- Marketing of industrial goods.
- Types of industrial goods:
- Raw materials
- Semi-manufactured goods
- Installations
- Supplies
- Accessories.
Scope of Industrial Markets
- Manufacturing.
- Construction,
- Transportation,
- Public utilities,
- Mines and quarries,
- Service industries.
- Institutions.
- Commercial establishments.
- Government institutions.
Characteristics of the Industrial Market
- Derived demand: demand for industrial goods derived from the demand for final consumer goods.
- Elasticity of demand: demand is less elastic compared to consumer goods.
- Geographical concentration: industrial buyers are often concentrated in particular locations.
- Limited number of buyers: Industrial goods are typically sold to a smaller number of buyers compared to consumer good
- Well-informed buyers: typically, well-trained and heavily researched.
- Quality considerations: Industrial buyers frequently focus on quality.
- Leasing equipment: leasing is a common practice.
Distribution of Industrial Products
- General line distributors: handle a wide range of products.
- Departmentalized distributors: specialized operations for better efficiency.
- Selected lines distributors: focus on specific product lines.
- Specialized distributors: intensive technical knowledge and application.
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Description
Test your knowledge on fundamental marketing principles including the marketing mix, product planning, and forecasting techniques. This quiz covers key concepts that are essential for understanding consumer behavior and market strategies.
