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Topic
Attracting Customer
through Marketing
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Objective
Define the marketing principles
known as the four Ps/Seven Ps
and explain how they apply to yourbusiness venture
Identify what is needed for starting
up your business venture
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What Is Marketing?
Choosing target markets, getting, keeping, and
increasing customers through creating,
managing, communicating, and delivering
superior customer value.
Like an iceberg, over 80-90% of
marketing occurs out of the
sight of the consumer
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Peter Drucker on Marketing?
Peter Drucker describes the process
of marketing this way: the aim ofmarketing is to know and understand the
customer so well that the product orservice fits him/her and sells itself.
Ideally marketing should result in a
customer who is ready to buy. All thatshould be needed then is to make the
product or service available.
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Selling is only the tip of the iceberg
There will always be need for
some selling. But the aim of marketing is
to make selling superfluous. The aim of
marketing is to know and understand thecustomer so well that the product or
service fits him and sells itself. Ideally,
marketing should result in a customer whois ready to buy. All that should be needed is
to make the product or service available.
Peter Drucker
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Selling
The role/function of Selling
(or Salesmanship) is to make a sale
The sales person in most
companies is the single mostimportant link with the customer.
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The Chartered Institute of Marketing
Marketing is the
management process thatidentifies, anticipates and
satisfies customerrequirements profitably
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What is Management?
Management consists of theinterlocking functions of
creating corporate
policy and organising, planning,
controlling,
and directing an organization'sresources in order to achieve the
objectives of that policy.
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Identifies
Research Anticipates
Forecast Satisfies customer
Customer Service Profitably
Good Returns
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Marketing is the management process through
which goods and services move from concept to
the customer. It includes the coordination of fourelements called the 4P's (Marketing Mix) of
marketing:
(1) identification, selection and development ofa product,
(2) determination of its price,
(3) selection of a distribution channel to reachthe customer's place, and
(4) development and implementation of a
promotional strategy.
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For example
New Apple products are developed to include
improved applications and systems, are set at
different prices depending on how much
capability the customer desires, and are sold in
places where other Apple products are sold.
In order to promote the device, the new product
is featured at tech events and is highly
advertised on the web and on television.
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Adcock et al
The right product, in the
right place, at the righttime, and at the right
price
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What is marketed?
Services
Products
Events
Experiences
People
Places
Ideas
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What is a product?
A product is anything that canbe offered to a market to satisfy
a want or need, including
physical goods, services,
experiences, events, persons,
places, properties,organisations, information and
ideas.
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The Marketing Mix (4Ps)
This is the set ofmarketing tools that the
firm uses to pursue its
marketing objectives inthe target market
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The Four Ps
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Marketing Mix Marketing mix decisions include:
Product: provides customer solution (price levels,credit terms, price changes and discounts).
Price: represents the customers cost (price levels,
credit terms, price changes and discounts).
Place: customer convenience is key (inventory,channels of distribution and number of
intermediaries).
Promotion: communicates with customer(advertising, publicity, sales promotion, personal
selling and sponsorship).
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7-18
Advertising
Makes people aware of yourproduct so they are persuaded to
buy it
Major goals
Raise customer awareness of
product
Explain product's comparative
feature and benefits Create an association between
product and lifestyle
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8 - 19
Social networks sites, such as Facebook andMySpace, allow entrepreneurs to connect with
potential and existing customers at little or no
cost.
More than half of Facebook users are over the
age of 25.
These sites now offer business survey tools and
advertising functionsfor promotional purposes.
Social Networking
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The 7Ps of the marketing mix
The 7Ps components of the marketing mix
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The 7Ps of Services Marketing
Traditional Marketing Mix Applied to Services Product
Place (and Time)
Price Promotion (and Education)
Extended Marketing Mix for Services
Process
Physical Evidence
People
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People As a service is intangible, it is the people/staff
delivering the service that add value to customers,not the product features. It is through the quality ofthe service delivered by staff that customersatisfaction is affected.
The people part of the mix, therefore, acknowledgesthe importance of training and motivating staff todeliver a good quality service and portray anappropriate image.
Internal marketing techniques such as newsletters(to keep staff informed of changes), and staffincentives can be used to help the staff producegood levels of customer service.
P
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Processes A service is a set of processes and it is through these
processes that an organisation differentiates its
service from its competitors, thus gainingcompetitive advantage; for example speed ofdelivery, efficiency of booking/ enquires, can beused to gain competitive advantage.
In recent years many businesses have used e-commerce functions to improve their service tocustomers, i.e. technical help online or onlineordering and/or stock checking facilities.Additionally, it is through its processes that anorganisation can develop closer customerrelationships, for example, by sending customersreminders of appointments or reminders of expirydates etc.
Ph i l E id
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Physical Evidence Services are intangible and cannot be seen or felt
by customers. Therefore, marketers will use
techniques to make their services as tangible aspossible.
The term physical evidence refers to techniques
for making services more tangible in the eyes ofthe customer; examples would be the dcor in arestaurant, providing customers with programmesat concerts/theatre shows, certificates for success
in examinations etc. The use of physical tools such as these can help
create a brand image and improve customerrecognition of the service brand
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Figure 1.4 The product life-cycle curve
P d t Lif C l
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Product Life-Cycle A companys positioning and differentiation strategy must
change as the product, market and competitors change over the
product life cycle (PLC). To say that a product has a life cycle is toassert four things:
Products have a limited life.
Sales pass through distinct stages, each posing
different challenges, opportunities and problemsto the seller.
Profits rise and fall at different stages of the
product life cycle. Products require different marketing, financial,
manufacturing, purchasing and human resourcestrategies in each life cycle stage.
Markets
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There are three major steps in target marketing. The first is market segmentation, dividing a
market into distinct groups who might require
separate products and/or marketing mixes. The second step is market targeting, evaluating
each segments attractiveness and selecting one
or more of the market segments.
The third step is market positioning, developing
competitive positioning for the product and an
appropriate marketing mix.
Target Marketing
Markets
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3-28
Target marketThe limited
portion of theindustry that the
firm goes after ortries to appeal to
Industry / Target Market Feasibility Analysis
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3-29
Target Market Attractiveness
Target marketShould be large
enough for thenew business but
small enough to
avoid attracting
larger competitors
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Segmentation
Subdividing of a market into distinct subsets of customers
according to needs and buying habitsDifferentiation
It is the act of designing a set of meaningful differences to
distinguish the companys offering from competitors
offeringsCompetitive Advantage
In order to gain and/or maintain competitive advantages,
organisations can adopt three basic strategies:
1. Cost Leadership2. Differentiation
3. Focus
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Segmentation Variables
Geographic
Region, city or metropolitan area, population density, andclimate
Demographic
Age, gender, family size, family life cycle, income,occupation, education, religion, race, and nationality
Psychographic
Social class, lifestyle, attitudes toward various societalsituations, and personality
Behavioural
Occasion of product use, user status, usage rate, loyaltystatus, readiness to purchase, and attitude toward product
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Differentiation Strategies
1. Differentiating the productitself
2. Differentiating on the basis ofservices offered
3. Differentiating by personnel
4. Differentiating by image
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Service
It is any act or performance thatone party can offer to another
that is essentially intangible and
does not result in the ownership
of anything. Its production may or
may not be tied to a physicalproduct.
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Customers evaluate service quality
using five issues:
Reliability: ability to perform the servicedependably.
Responsiveness: the ability to provide prompt
service. Assurance: the knowledge and courtesy of
employees and their ability to convey trust.
Empathy: caring, individualised attention tocustomers.
Tangibles: physical evidence of the service canbe used to judge the service.
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Characteristics of Services
Intangibility
Inseparability
Variability
Perishability
Lack of Ownership
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Characteristics of Services
Intangibility they cannot be seen,
touched or tried before purchase.
Inseparability they are used or"consumed" at the time of purchase and,
as such, cannot be separated from the
provider.
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Characteristics of Services Perishability they cannot be stored for
use at a later time.
Variability they are dependent on theperson who is providing the service and, as
such, will vary from time to time in
accordance with when they are being
provided and the circumstances
surrounding the provision.
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Lack of Ownership Services cannot be owned. As we have seen, there is
no tangible element involved in a service and so the
service terminates once the experience comes to an
end.
At the end of a plane journey the passenger alightsfrom the aircraft and the experience, positive or
negative, becomes a memory.
The seat on the plane has been "rented" for a period
of time for the price of the ticket. The seat remains
the property of the airline and is available to be
rented by other customers at other times.
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Lack of Ownership However service providers encourage the further use of
the service through frequent flyer programmes to
increase customer involvement in the service.
As a result customers will also develop a perception of
the brand through familiarisation with the service andthe level of the experience enjoyed.
It is for the marketer to ensure that this experience is
positive in order to achieve good customer relationships
and retention and manage these relationships
effectively.
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Branding
Brand
It is a name, term, sign, symbol,
design, or a combination of them,intended to identify the goods or
services of one seller and to
differentiate them from
competitors
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Develop a brand for your Business
Be able to develop a brand whichmay include any of the following:
a logo a letterhead
a shop front design a clothing range/uniform
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Advantages of Branding
Easy Selling
Legal Protection
Customer Loyalty
Easy Market Segmentation
Image Building
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Business Plan
Product/Service
What are your products/services
Price
How will you price your products/services Promotion
How will you promote your products/service
Place
Where would customer reach you to buy
your products/service2-43
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Business Plan
State your Business Mission
State your Business Objectives
Who are your customers
Who are your competitors
What is your Competitive Advantage
Do a SWOT analysis for your business