Principles of Marketing Chapter 4 PDF

PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject CHAPTER 4 DEVELOPING THE MARKETING MIX Lesson 1: Product Produ...

PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject CHAPTER 4 DEVELOPING THE MARKETING MIX Lesson 1: Product Product is a key element in the overall market offering. Marketing-mix planning begins with formulating an offering that brings value to target customers. This offering becomes the basis upon which the company builds profitable relationships with customers. PRODUCT DEFINED Product is anything in the form of good, service, or idea consisting of a bundle of tangible and intangible attributes that can be offered to a market that might satisfy a want or need and is received in exchange for money or something else of value. 3 Components of a Product: 1. Core Product – This is the end benefit for the buyer. The core product is what the buyer really buying. 2. Formal Product – This is the actual physical or perceived characteristics of the product including its level of quality, special features, styling, branding and packaging. 3. Augmented Product – These are the support items that complete the total product offering such as after-sales service, warranty, delivery and installation. 2 Types of Products: 1. Consumer Products –wide array of manufactured good which are purchased for personal, family and/or household purposes. 2. Industrial Products – are goods that are sold to other businesses, and used to produce other goods. Categories of Consumer Products: 1. Convenience Products –products that appeal to a very large market segment 2. Shopping Products –products consumers purchase and consume on a less frequent schedule compared to convenience products. 3. Specialty Products –products that are likely to carry a high price tag relative to convenience and shopping products. 4. Unsought Products –products whose purchase is unplanned by the consumer but take place as a result of marketer’s actions. Categories of Industrial Products: 1. Raw Materials – products obtained through mining, harvesting, fishing, and other trades, that are key ingredients in the production of higher-order products. 2. Processed Materials – these are products created through the processing of basic raw materials. 3. Equipment –products used to help with production or operations activities. 4. Basic Components – products used within more advanced components. 5. Advanced Components –products that apply basic components to produce products that offer an important function required within a larger product. 6. Product Component –products used in the assembly of a final product though these could also function as stand-alone products. 7. MRO (Maintenance, Repair and Operating) Products –products used to assist with the operation of the organization but are not directly used in producing goods or services. Differentiate: Goods, Services and Experiences Goods Attributes 1. Physical objects for which a demand exists 2. Their physical attributes are preserved over time 3. Ownership rights can be established 4. They exist independently of their owner 5. They are exchangeable 6. Unit ownership rights can be exchanged between institutions 7. They can be traded on markets 8. They embody specialized knowledge in a way that is highly advantageous for promoting the division of labor Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 1  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject Services Features 1. Intangible – intangible things that are not physical objects and only exist in connection to other things. 2. Heterogeneous – heterogeneous refers to the multifaceted different experience that may had from a single type of service is considered as a factor to distinguish goods from services. 3. Inseparable – services may be said to be inextricably linked with customers in terms of production and consumption and so it is said that service is inseparable. 4. Perishable – services are not a stock of fixed assets and it is not possible store services in inventories. Experiences Among these two extremes (goods & services), many goods-and-services combinations are possible. Today, as products and services become more commoditized, many companies are moving to a new level in creating value for their customers. In order to make a distinction of their offers, beyond just making products and delivering services, they are creating and managing customer experiences with their brands or company. Experiences have constantly been an essential part of marketing for some companies. Experiences come about whenever a company intentionally uses services as the stage and goods as props to engage an individual. Tangible goods and intangible services are brought as one to create a memorable experience for customers at a point in time. Today, all kinds of firms are recasting their traditional gods and services to create experience. Companies that market experiences become conscious that customers are really buying much more than just products and services. They are buying what those offers will do for them. “A brand, product, or service is more than just a physical thing. Humans that connect with the brand add meaning and value to it,” says one marketing executive. “Successfully managing the customer experience is the ultimate goal,” adds another. PRODUCT LIFE CYCLE As consumers, people purchase millions of products every year. Just like humans, these products have a life cycle. Older, long- established products eventually become less popular, while in contrast, the demand for new, more modern goods usually increases quite rapidly after they are launched. Since most companies know the different product life cycle stages, and that the products they trade all have a limited life span, the majority of them will invest a lot in new product development in order to make certain that their businesses continue to grow. Four Stages of Product Life Cycle 1. Introduction Stage – this stage of the cycle could be the priciest for company launching a new product. 2. Growth Stage – this stage is normally characterized by a strong growth in sales and profits. 3. Maturity Stage – at this stage, the product is established and the aim doe the manufacturer is now to keep the market share they have built up. 4. Decline Stage – eventually, the market for a product will start to get smaller. As that life cycle nears an end, the company must decide what to do. Decisions could be to retire the product altogether or extend the life cycle of the product through a number of strategies. Strategies in Extending the Product Life Cycle 1. Re-Packaging – provides a way for the company to give a mature product a new image, particularly if the product’s earlier image has limited its target audience. Fresh packaging can draw in a new part of the market by tapping into that market’s visual preferences. 2. Discounting – designing a new pricing strategy does not have to be a short-term alternative for a mature product. In some cases, re- pricing the product by discounting it can reach out to a target market that has normally seen the product as being just out of reach. 3. Re-Branding – can be somewhat extreme approach to extending its life cycle, but it can also be a valuable method. This results in changing not only the packaging, but the name and total appearance of the product could be changed also. 4. Expanding Abroad – in some cases, a product life cycle can only go so far in one place. Expanding the product in a foreign country to reach out to a totally unserved market can make longer the product life cycle on a different level. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 2  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject THE PRODUCT MIX Product mix, also known as product assortment, refers to the total number of product lines that a company offers to its customers. Firms ought to pick their product mix cautiously as they will need to generate a profit from each of the products in the product mix. Firms may choose to split their product mix into groups knowns as product lines. A product line is a number of products grouped together based on similar characteristics. Four Dimensions of a Company’s Product Mix 1. Product Mix Width – the number of product lines in the product mix. 2. Product Line Length – the number of different products in a product line. 3. Product Line Depth– the number of subgroups the product line contains. 4. Product Consistency – pertains to how closely related product lines are to one another in terms of use, production and distribution. Product line manager’s takes product line decisions considering the sales and profit of each items in the line and comparing their product line with the competitors’ product lines in the same markets. Product mix decision refers to the decisions about adding a new or getting rid of any existing product from the product mix, adding a new product line, lengthening any existing line, or bringing fresh variants of a brand to enlarge the business and to boost the profitability. 1. Product Line Length– marketing managers have to settle on the best length of the product line by adding fresh items or dropping existing items from the line. 2. Product Line Expansion a. Product Line Stretching Decision – takes place when a business adds fresh product to the product line and the latest product types are of a higher or lower quality than present products in the product line. i. Downward stretching means adding low-end items in the product line. ii. Upward stretching means adding high-end items in the product line. iii. Two-way stretching means stretching the line in both directions if an organization is in the middle range of market. b. Product Line Filling Decision–it means adding more items within the present range of the product line. PRODUCT STRATEGIES Product strategy is often called the roadmap of a product and outlines the end-to-end vision of the product and what the product will become. Companies utilize the product strategy in strategic planning and marketing to identify the direction of the company’s activities. Good product strategies either meet an existing need with a quality solution or create a need by offering something so modern and special that customers decide they don’t want to live without it. Types of Product Strategies: 1. Product Positioning – placing a brand in that part of market where it will have approving acceptance compared with competing brands. 2. Product Elimination – cuts in the composition of a company’s product portfolio by pruning the number of products within a line or by totally divesting a division or business. 3. Product Repositioning – reviewing the current position of the product and its marketing mix and seeking new position for it that seems more appropriate. 4. New Product – a set of the following alternatives: Product improvement/modification, Product imitation, Product innovation 5. Product Overlap – competing against one’s own brand through introduction of competing products, use of private labels and selling to original equipment manufacturers. 6. Diversification– developing unfamiliar products and markets through: a. Concentric diversification – product/s introduced are related to existing ones in terms of marketing or technology b. Horizontal diversification – new product/s are unrelated to existing ones but are sold to the same customers c. Conglomerate diversification – product/s are entirely new 7. Product Scope–determined by taking into account the overall mission of the business unit. 8. Value Marketing–delivering on promises made for the product or service. 9. Product Design – deals with the degree of standardization of a product. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 3  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject Lesson 2: Pricing Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The remaining 3p’s are the variable cost of the organization. It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price is a key element relating directly to total revenue and ultimately to the profit of the organization. However, it is the most flexible component of the marketing mix. PRICING DEFINED Price is the amount of money charged for a product or a service. More broadly, price is the sum of all the values that customers give up to gain the benefits of having or using a product or service. Traditionally, price has been the major factor affecting buyer choice. Although in recent years, non-price factors have gained increasing importance. PRICE DETERMINANTS Beyond customer value perceptions, costs, and competitor strategies, the company must consider several additional internal and external factors. Internal Factors 1. Marketing Strategy – Price is only one element of the company’s broader marketing strategy. Thus, before setting price, the company must settle on its overall marketing strategy for the product or service. 2. Objectives – Pricing may play an essential function in helping to achieve company objectives at many levels. A firm can set prices to draw new customers or profitability keep existing ones. It can set prices low to avoid competition from entering the market. It can help continue the loyalty and support of resellers or ignore government intervention. 3. Marketing Mix – Price choices must be harmonized with product design, distribution, and promotion decisions to structure a reliable and valuable integrated marketing program. Decisions prepared for other marketing mix variables may influence pricing decisions. 4. Other Organizational Considerations – Management must fix on who within the organization should set prices. Companies handle pricing in a variety of ways. In small companies, prices are often fixed by top management rather than by the marketing or sales departments. In large companies, pricing is typically handled by divisional or product line managers. In industrial markets, salespeople may be permitted to bargain with customers within definite price ranges. Even so, top management sets the pricing objectives and policies, and it often approves the prices planned by the lower-level management or salespeople. In industries in which pricing is a key factor, companies usually have pricing departments to set the best prices or help others in setting them. External Factors 1. Nature of the Market – Both consumer & industrial buyers weigh the price of a product or service against the benefits of possessing it. The seller’s pricing freedom varies with different types of markets presenting a different pricing challenge for each. a. Pure Competition – market consists of many buyers and sellers trading in a uniform commodity. b. Monopolistic Competition – market consists of many buyers and sellers who trade over a range of prices rather than a single market price. c. Oligopolistic Competition – market consists of not many sellers who are extremely responsive to each other’s pricing and marketing strategies. d. Pure Monopoly – market only has one seller. 2. Demand – Buyers are less price conscious when the product they are buying is inimitable or when it is high in quality, prestige, or exclusiveness. Or substitute products are hard to find or when they cannot easily compare the quality of substitutes. 3. Economy – Economic conditions can have a strong impact on the firm’s pricing strategies. Economic factors like a boom or recession, inflation and interest rates affect pricing decisions because they affect consumer spending, consumer perceptions of the product’s price and value, and the company’s costs of producing and selling a product. 4. Other Environmental Factors – Companies should distinguish what impact its prices will have on other elements in its environment. The company must set prices that offer resellers a reasonable profit, push their support, and assist them to sell the product well. The government is another vital external pressure on pricing decisions. Lastly, social concerns may require to be taken into consideration. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 4  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject NEW PRODUCT PRICING Pricing strategies typically alter as the product passes through its life cycle. The introductory stage is especially demanding. Companies launching a new product and face the challenge of setting prices for the first time. They can decide between two broad strategies which are market-skimming pricing and market-penetration pricing. Market-Skimming Pricing Many companies that create new products set high initial prices to “skim” revenues layer by layer from the market. This is sensible under the following conditions: 1. Product’s quality and image have to support its higher price, and sufficient number of buyers must desire the product at that price. 2. Costs of producing a smaller volume are not so high that they can call off the advantage of charging some extra. 3. Competitors must not be able to penetrate the market without difficulty and destabilize the high price. Market Penetration Pricing Companies set a low preliminary price to break in the market fast and deeply to draw a large number of buyers quickly and gain a huge market share. The high sales volume results in declining costs, letting companies to trim down their prices even more. Quite a few conditions have to be met for this low-price strategy to succeed: 1. The market must be extremely price conscious so that a low price creates more market growth. 2. Production and distribution costs must decline as sales volume raises. 3. The low price should assist ban the competition, and the penetration price must preserve its low price situation. Or else, the price lead may be merely short-term. GENERAL PRICING APPROACHES Demand-Oriented Approaches – consider the underlying expected customer tastes and preferences more heavily than cost, profit and competition. 1. Skimming – pricing strategy in which marketer sets a relatively high price for a product/service at first, then lowers the price over time. 2. Penetration –technique of setting a relatively low initial price, often lower than the eventual market price, to attract new customers. 3. Prestige – physiological pricing strategy that sets prices of luxury products to the expectations of a niche class of customers who associate higher prices with superior quality. 4. Price-Lining – also referred to as product line pricing, is a marketing process wherein products or services within a specific group are set at different price points. 5. Odd-even – psychological pricing where price is set based on customer’s perception of a significant difference in cost between products priced at a whole number value and products priced slightly below this whole number. 6. Target – pricing method that involves identifying the price at which product will be competitive in the marketplace. 7. Bundle – companies sell a package or set of goods or services for a lower price than they would charge if the customer bought all of them separately. 8. Yield management – process of understanding, anticipating, and influencing consumer behavior to maximize yield or profits from a fixed, perishable resource. Cost-Oriented Approaches – the cost side of the pricing is given emphasis not the demand side. 1. Cost Plus Pricing – involves adding a certain percentage to cost in order to fix the price. 2. Break-Even Pricing – firm determines the level of sales needed to cover all the relevant fixed and variable costs. 3. Experience Curve – the most experienced producer benefits from having lower costs than its competitors. Profit-Oriented Approaches – involves setting prices for products that will guarantee to make money on each sale. 1. Target Profit – pricing method in which a seller sets prices with the purpose to make a certain amount of money. 2. Target Return on Sales – setting typical prices that will give companies a profit that is a specified percentage. 3. Target Return on Investment – one way of considering profits in relation to capital invested. Competition-Oriented Approaches – involve setting prices based on competitors’ strategies, costs, prices, and market offerings. 1. Customary – some products where tradition, a standardized channel of distribution, or other competitive factors dictate the price. 2. Above, at or Below – subjective feel for the competitors’ price or market price using benchmark. 3. Loss Leader – deliberately sells a product below its customary price to attract attention to it. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 5  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject Lesson 3: Distribution Distribution channels consist of physical access point where the product is provided to customers and the methods of transporting or storing goods before making them available for clients. They also refer to the sales channels used, like online or via shops and distributors or other intermediaries. STRUCTURE OF DISTRIBUTION CHANNELS Distribution function of marketing is comparable to the place component of the marketing mix in that both center on getting the goods from the producer to the consumer. A distribution channel in marketing refers to the path or route through which goods and services travel to get from the place of production or manufacture to the final users. Business-to-business (B2B) distribution occurs between a producer and industrial users of raw materials needed for the manufacture of finished products. Business-to-customer (B2C) distribution occurs between a producer and final user. Four Main Types of Marketing Channel Producer  Customer – producer sells the goods or provides the service directly to the consumer. Bakery sells cakes and pies to customers. Producer  Retailer  Consumer – purchases are made by the retailer from the producer or manufacturer and then the retailer sells the merchandise to the consumer. Works best for manufacturers of shopping goods. Producer  Wholesaler/Distributor  Customer – wholesalers buy the products from the manufacturer/distributor and sell them to the consumer. Producer  Agent/Broker  Wholesaler or Retailer  Customer – involves more than one intermediary before product gets into the hands of the consumer. Fishermen contacts an agent, agent then distributes the fish to the wholesalers, wholesalers sells to the consumers. FUNCTIONS OF DISTRIBUTION CHANNELS 1. Information Provider 2. Price Stability 3. Promotion 4. Financing 5. Title 6. Help in production function 7. Matching demand and supply 8. Pricing 9. Standardizing transactions 10. Matching buyers and sellers CHOICE OF DISTRIBUTION CHANNELS The choice of distribution channels is a vital decision. Aside from being the link between producers to buyers, distribution channels provide the means in executing the marketing strategy. There are three considerations in the choice of distribution channels and intermediaries. Channel and intermediaries that will: 1. Offer the best coverage of the target market – knowing the density or the number of stores in a specific place. a. Intensive Distribution – company tries to place its products and services possibly in many outlets. b. Exclusive Distribution – only one outlet carries the company’s products in a particular place. c. Selective Distribution – company picks a few retails outlets in a particular place to distribute its products. 2. Best satisfy the buying requirements of the target market – channel and intermediaries need to satisfy at least some of the interests buyers would desire to be fulfilled when they buy a company’s products or services. a. Information – vital requirement when buyers have restricted knowledge or wants particular data regarding a product or service. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 6  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject b. Convenience – means less hassle. Channel and intermediaries must be proximate or driving time to reach is at a minimum. c. Variety – reflects buyer’s interests to have numerous choices of competing and complementary products. d. Attendant Services – requirement for intermediaries of large home appliances that needs delivery, installation and credit. 3. Be most lucrative – being profitable is determined by profit margins earned for each channel member and for the channel as a whole. NATURE OF SUPPLY CHAIN MANAGEMENT A supply chain consists of the various firms included in executing the activities needed to produce and transport a product or service to consumers or industrial users. Supply chain management (SCM) – is the supervision of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Main Goals of Supply Chain Management 1. Shared Efficiency 2. Optimized Transportation and Logistics 3. Quality Improvement 4. Long-Term Stability Key Processes of Supply Chain Management Business process consist of bundles of interlinked activities that stretch across firms in the supply chain. They are key areas that some or all of the involved firms are continuously working to reduce costs and generate earnings for everyone in the supply chain management. 1. Customer Relationship Management 2. Customer Service Management 3. Demand Management 4. Order-fulfillment 5. Manufacturing Flow Management 6. Supplier Relationship Management 7. Product Development and Commercialization 8. Returns Management Logistics Components of the Supply Chain Logistics is the strategic managing of the efficient flow and storage of raw materials, in-process inventory and finished goods from the point of origin to point of consumption. 1. Sourcing and Procurement – lessen the costs of raw materials and supplies, buyers and sellers can develop cooperative relationships that lessen costs and improve efficiency with the aim of trimming down prices and increasing profits. 2. Production Scheduling – goods are scheduled and produced based on past sales and demand and then sent to retailers to resell. 3. Order Processing – processes requirements of the customer and sends the information into the supply chain through the logistic information 4. Inventory Control – develops and maintains enough variety of materials or products to meet a manufacturer’s or consumer’s demands. 5. Warehousing and Materials Handling – storage aids manufacturers manage supply and demand or production and consumption. 6. Transportation – concerns the decision on the mode of transportation that will move the goods from supplier to producer and from producers to customers. a. Cost – the total amount of charge by the carrier to move the product from point of origin to destination. b. Transit Time – the total time for the carrier to pick-up, delivery, handling and movement from point of origin to destination. c. Reliability – consistency of the carrier on delivering the goods on time and satisfactory condition to. d. Capability – ability of the carrier to provide applicable equipment and conditions for moving the goods e. Accessibility – ability of the carrier to transport the goods a particular route or network. f. Traceability – relative ease that a shipment of goods can be located and transferred. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 7  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject Lesson 4: Promotion Promotion is all the communication methods used by a company to inform both customers and prospects about their products or services. PROMOTIONAL MIX TOOLS Promotions refer to the entire set activities, which communicate the product, brand or service to the user. The idea is to make people aware, attract and induce to buy the product, in preference over others. Advertising Advertising is bringing a product or service to the attention of potential and current customers. Every single tactic available to the advertiser falls into one of the following: 1. Print Advertising – an advertisement printed on paper, be it newspapers, magazines, newsletters, booklets, flyers, direct mail, or anything else that would be considered a portable printed medium. 2. Guerrilla Advertising – broadly used term for anything unconventional and usually encourages the consumer to participate or interact with the piece in some way. Flash mob is one perfect example. 3. Broadcast Advertising – a mass-market form of communication comprising of television and radio. 4. Outdoor Advertising – also known as out-of-home (OOH) advertising, this is a broad term that describes any type of advertising that gets to the consumes when they are outside of the home. 5. Public Service Advertising – are mainly designed to enlighten and educate instead of to sell a product or service. 6. Product Placement Advertising – promotion of branded goods and services within the context of a show or movie, instead of an explicit advertisement. 7. Cellphone and Mobile Advertising – latest form of advertising, one that’s spreading fast, uses cellphones, iPads, Kindles, Nooks and other portable electronic devices. 8. Online Advertising (Digital) – internet users see an advertisement via the Internet (World Wide Web). There are ads on this very page, and most other websites being visited, as they are the prime revenue driver for the Internet. Sales Promotion Sales Promotion is the process of persuading a possible customer to purchase the product. Sales promotion is designed to be used as a short-term tactic to boost sales. 1. Money Off Coupons – customers receive coupons or cut coupons out of a newspapers or a product’s packaging that enables them to purchase the product next time at a reduced price. 2. Competitions – buying the product will let customer to take part in a chance to win a prize. 3. Discount Vouchers – a voucher works like a money-off coupon. Examples would be Gold’s gym tied up with Metrodeal offering vouchers for membership services at a discounted rate. 4. Free Gifts – it is a free product when customers buy another product. 5. Point of Sale Materials – posters or display stands, ways of presenting the product in its best way or show the customer that the product is here. 6. Loyalty Cards – customer earn points for buying certain goods or shopping at certain retailers that can later be exchanged for money, goods, or other offers. Personal Selling Personal Selling is a promotional method in which the sales person uses skills and techniques for building personal relationships with another party (those involved in a purchase decision) that result in both parties obtaining value. Personal selling is a strategy that salespeople use to convince customers to purchase a product. The salesperson uses a personalized approach, tailored to meet the individual needs of the customer, to demonstrate the ways that the product will benefit him. 1. Ask Questions – salesperson needs to know why the customer is interested in the product or service. 2. Address Concerns – salesperson should ask the customer to share any concerns he has about the product or service. 3. Ask for the Sale – salesperson can directly ask if the customer has decided to buy the company’s product or service. 4. Follow-up – a good salesperson always follow-up with both prospects and clients subsequent to making a presentation. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 8  PRINCIPLES OF MARKETING Senior High School – Accountancy, Business and Management (ABM) Specialized Subject Public Relations Public Relations includes ongoing activities to ensure the overall company has a strong public image. Public relations activities include helping the public understand the company and its products. Public relations involves cultivation of favorable relations for organizations and products with its key publics through the use of a variety of communications channels and tools. These days, the role of public relations is much broader and includes: 1. Building awareness and a favorable image for a company or client within stories and articles found in relevant media outlets 2. Closely monitoring numerous media channels for public comment about a company and its products 3. Managing crises that threaten company or product image 4. Building goodwill among an organization’s target market through community, philanthropic and special programs and events Like other aspects of marketing promotion, public relations is used to address several broad objectives including: 1. Building Product Awareness 2. Creating Interest 3. Providing Information 4. Stimulating Demand 5. Reinforcing the Brand Marketing have at their disposal several tools for carrying out public relations. The key tools available for PR include: 1. Media Relations – efforts to publicize products or the company to members of the press such as TV and radio, newspaper, magazine, newsletter and Internet. a. Press Kits – information such as a news release, organization background key spokesperson biographies b. Audio or Video News Releases – prerecorded features distributed to news media that may be included within media programming. c. Matte Release – small local newspapers may accept articles written by companies often as filler material when their publication lacks sufficient content. d. Website Press Room – online press room that caters to media needs and provides company contact information 2. Media Tours – new products can be successfully publicized when launched with a media tour. 3. Newsletters – marketers who captured names and addresses of customers and potential customers can use a newsletter for regular contact with their targeted audience. 4. Special Events – these run the range from receptions to elegant dinners to stunts. 5. Speaking Engagements – speaking before industry conventions, trade association meetings, and other groups provides an opportunity for customers. 6. Sponsorships – companies and brands use sponsorships to help build goodwill and brand recognition by associating with an event or group. 7. Employee Communications – for many companies communicating regularly with employees is important in keeping employees informed of corporate programs, sales incentives, personal issues, as well as keeping them updated on new products and programs. 8. Community Relations and Philanthropy – for many companies fostering good relations with key audiences includes building strong relationships with their regional community. DIRECT MARKETING Direct Marketing occurs when businesses address customers through a multitude of channels, including mail, e-mail, phone and in person. Direct Marketing messages involve a specific “call to action”, such as “Call this toll-free-number” or “Click this link to subscribe.” The results of such campaigns are immediately measurable, as a business can track how many customers have responded through a message’s call to action. Source: Principles of Marketing by Prof. Angelita Ong Camilar-Serrano, DBA Prepared by: Mc Gill Contreras Page 9