What Is Markeitng? Essay, Research Paper
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WHAT IS MARKETING
DEFINTION OF AMA:
1-identifing the wants and needs of the consumer and coordinately create products to satisfy these needs profitably and efficiently.
2- process of planning and executing the conception, pricing, promotion, place (distribution), ideas, goals and services to create exchanges that satisfy objectives.
HISTORY OF MARKETING:
PHASE 1: This was the production-oriented period. There were few products and many customers (demand * supply). As a result the focus of the companies was on the transportation and distribution.
PHASE 2: This was the sales oriented period (50 years ago). The principle of this period was ?produce then sell? or we can say, ?sell no matter what. So in this environment the ads were lying.
PHASE 3: This was the marketing oriented period. As the ideology of this period was ask the main question first which is ?WHAT DO THE PEOPLE WANT?? This way is chartered by being easy and cheaper. This was started by ?GENERAL ELECTRIC COMPANY?.
TASKS OF THE MARKETING DEPARTMENT:
1.To discover, locate, measure. This means that the marketing dept. has to discover what the people want and how they want it and how much they want it (demand)
2.To interpret this information for management, so they can produce products. This means mixing the information gathered in task 1 and give a result, either produces or not.
3.Develop and implement a plan to make these products available. I think that this is the most important this about marketing as a good marketing plan means that tasks 1&2 are made right.
USEFUL CONCEPTS:
A- COMPETITION:
The big question here is ?WHAT IS Competition?? Well I think that whenever there is more than one person wants the same thing there is competition. Completion is two types PRODUCT completion and CATECORY competition. Product competition is the competition that occurs between substituted products. Category competition is the competition that occurs between different products but targets the same people.
B- SEGMENTATION:
Segmentation is the process that divides the market in to smaller units that the company can survey effectively or we can say that it is grouping the market in to TARGET ADUIENCE with similar characters and needs. This part is important because it makes focusing on the people that the company rely benefit from or target on.
This were the 80%-20% rule jumps in to the subject as the company?s profit come from 20% of the target audience, so it is more correct to focus on these people and not loosing them, this is easy with the right segmentation.
C-COMPETITIVE ADVANTAGE:
An advantage is the difference between to things. So the competitive advantage is the difference between to competitive products. I think that this advantage is the source of the commerce as trade is based on advantages. So to make a position to your product you must have an advantage. Competitive advantage is two types price & quality. Price advantage is delivering the same quality at a lower cost. Quality advantage is delivering a better quality at the same cost. The quality advantage is also called the marketing advantage.
D-POSITIONING:
Positioning is not a thing you do with your product it is a thing you do with you consumer mind. Positioning is the space or the image your product occupies in the prospect?s mind. It can also be defined as ?how does the consumer see our product?. The positioning gives the product its personality and its image.
E-FEATURES VS BENEFITS:
A feature is a character while the benefit is the added value that is obtained on using a product. So it is not correct to try to deliver a massage that is feature oriented, as you rely sell the benefit not the feature. As an example when you sell a lady an eye shadow, you are not selling the chemical components, but you are selling the hope of being beautiful to this lady.
F-FEEDBACK:
The meaning of the word is when you feed you must have a feedback. This is the same as when you feed the market with product do not forget to have your feedback because it is a tool of indication of corrections. As many mangers forget this feedback, it is called THE FORGOTTEN ART. It also means the response or reaction from the target audience, which is made by research.
G-MARKETING MIX:
Some call the mix ?THE 4 P?S? and some call it ?THE 6 P?S?. This happened due to the difference of looking to importance between marketers.
vPEOPLE: who? It means to whom we are talking.
vPRODUCT: what? It means what are we going to give.
vPLACE: where? It means where are we going to give. (Distribution)
vPACKAGE: what?
vPRICE: How much does our product should cost?
vPROMOTION: Is the element that involves policies and procedures related to {personal selling, advertising, publicity, and budget and trade promotion.}?
THE FIVE ?C?S?:
1.CUSTMER: find their needs ? listen to them ? get their input early.
2.COMMUNICATION: thru promotion you can make the consumer know your product.
3.CINVENIENCE: available ? package
4.COST: price ? time ? usage
5.COMMUNITY: impact on the community (public relation)
The 5 c?s are what we can say, the equation of marketing success. You will be marketing successful if you: find your consumers, detect their needs, closed the loop and listen to them, communicated with them, made your product convenient to them, at a suitable cost and effects the community with the correct way.
FIND YOUR TARGET AUDIENCE
DETECT THEIR NEEDS
COMMUNICATE AND LISTEN TO THEM
COST=PRICE, TIME, USAGE, ??????????.
THE EFFECT ON THE COMMUNITY
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CLASSIFICATION OF MARKETS
It means the different types of markets:
1-CONSUMER MARKET:
We can say that this is the end-user market. People in this market purchase final products to use.
2-INDUSTRIAL MARKET:
The people in this market are companies that buy the final products of another company to make process on it to produce another product. Example for that is a company that produces car tiers buys rubber from another company that produces rubber. In this type of markets the retail selling is not effective as the personal selling and it is almost the only way. This market is also called the bissnsee-to-bissness market.
3- RESELLER MARKET:
This market consists of stores that buy to sell, to consumer or other stores. This chain varies from one product to another.
4-GOVERNMENT MARKET:
This market resembles the industrial market, but it has it?s own rules and it is very sensitive market. Buyers in this market are governments so the products are used in a governmental usage.
5-SERVICE MARKET:
Products here are invisible, example: airlines ? hotels ? accountants. The most, hard part here is measuring the quality level. This market is increasing in competition.
6-NON PROFITABLE MARKET:
This market consists of companies that do not aim to making profit. Example: hospitals ? educational institute.
7-INTERNATIONAL MARKT:
This market consists of all the above kinds of markets, but out side your home country or over seas.
Market segmentation
?IT IS THE STRATEGY OR THE WAY TO DIVIDE A MARKET IN TO GROUPS OR SEGMENTS OF CUSTOMERS WITH THE SIMILLER NEEDS AND MEETING THESE NEEDS WITH MARKETING EFFORTS.?
In that way it allows you to focus on your target audience (80%-20%).
MARKET SEGMENTATION PROCESS:
1.The company conducts a situation analysis.
2.The company identifies marketing opportunities (niche).
3.The company estimates the market potential.
4.The company makes a marketing research and evaluate competition.
5. The company segments the marketA-Identifying the segment.B-Target the segment.
6.The company develops a marketing mix (the p?s).
7.Evaluate results and implementation.
Identifying the segment:
1.GEOGRAPHICAL SEGMENTATION: This is the simplest way to identify segments. People are segmented thru their geographical position. Example: people in Alex. ? In Cairo.
2.DEMOGRAPHIC SEGMENTATION: The study of numerical characteristics of population. Example: sex-age-religion-education-occupation-income-??It means any character that can be measured.
3.BEHAVIORESTIC SEGMENTATION: It is dividing people according to their use of the product.
a.Purchase occasion: Buyers are distinguished by when do they use the product. Example: traveling-making party ?every day.
b.BENEFITS: Sought what kind of benefits people are looking for. Example: rebox(comfort)-nesscafe(pleasure)
c.USER STATUS: People are gathered according to their type as users. Example: old users-new users-potential users.
d.USAGE RATE: Defines consumers according to their rate of usage. Example: heavy user-moderate users-light users. This type of segmentation is also called the volume segmentation.
e.BRAND?S PURCHASEST: People are divided according to what brand do they use or buy. Example: the lipton?s-the rebox?s.
4-PSYCHOGRAPHIC SEGMENTATIOM: In that way we segments the market on the basis of the psychological make up of the consumer, such as personality, life style, attitude.
PERSONALITY TYPES:
1.INNOVATORS: Ready to try new ideas and willing to risk a bad experience.
2.EARLY ADOPTERS: They are people that other people refer to. They are careful and successful innovators.
3.EARLY MAJORITY: They are people that think then buy.
4.LATE MAJORITY: They are people that buy after all people had bought.
5.LAGGARDS: They are people that are past oriented, very late adaptation. Example: people that did not buy video player till now.
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CRITERIA FOR SELECTING A TARGET SEGMENT
1.SIMILARTY OF NEEDS: No matter what you use to segment the market, people in the segment need to have similar needs.
2.UNMET NEEDS: You must target a particular segment who?s needs are not met by a competitor.(MARKETING NICH)
3.THE SAIZE OF THE SEGMENT: The size of the segment does link to profitability but not all the time. A small segment can be highly profitable as long as they can establish a very unique competitive advantage. Example the JAGWAR segment. (this kind of segment must be sustainable)
4.GROWTH POTENIAL: We must ask our selves here does this segment likely to attract more customers in the future or not.
5.ACCESSIBILITY: Does the segment accessible. Can I reach my target audience thru media or some other means. If a segment does not have distinctive demographic characteristics then accessibility would be difficult.
STRATEGIES FOR SELECTING A TARGT SEGMENT
PRODUCTS
ONE SEVERAL
SEGMENTSONE SEVERALCONSENTRATEDSEGMENTATIONPRODUCT-LINESEGMENTATION
MARKETSEGMENTEXPENIONDIFFRENTIATEDSEGMENTATION
vCONSENTRATED SEGMENTATION: Smaller companies with limited resources can only serve one segment with one product.
vMARKET SEGMENT EXPANSION: As well as the segment have a well defined need for the same product then company can expend the segment. Example: the Kellogg serial (from children to adults), j&j shampoo (no more tiers), secret deodorant (from women to men)
vPRODUCT-LINE SEGMENTATION: In this case you serve one segment with many products. Example: el shamadan (many products are delivered to children)
vDIFFERNTIATED SEGMENTATION: In this case you deliver many products to several segments. This is mostly done with big companies as the marketing cost (ads, promotion,?) are so high. Example: P&G shampoo (h&d for dandruff-ponten for female-pert plus for youth)
THE PRODUCT
DEFINETION: A bundle of benefits and attributes designed to satisfy customer?s needs.
Any product consists of 3 dimensions:
1.Core product: The benefits.
2.Tangible product: The futures.
3.Augmented product: Delivery, credit, service, added value.
PRODUCT DEFFERENTIATION: It means how is one product different from another product.
1.Perceptible difference: This kind of difference is very clear and obvious.
2.In perceptible difference: This kind of difference is not clear or not ready apparent. Example: cigarettes-car engines.
3.Induced difference: This kind of difference is created by advertising, between similar products. Example: mobile oil and shell oil both are gasoline, siwa water and barka water both are mineral water.
PRODUCT CLASSIFICATION: There are two ways to classify products.
1.Degree of tangibility: Products are classified by their degree of tangibility. Starting from the most tangible, passing by moderate tangibility, ending by the least tangible. Most and moderate tangibility are sub-classified in to durable and non durable as shown in the diagram.
air conditioning foods service
Durable goods: Products that are used along a long interval of time. Consumer needs a lot of thinking and comparison on purchase, so personal selling is effective in this case. Example: air conditioning devices.
Non- durable goods Products that are used or consumed on a short interval of time. This kind does not need a lot of thinking and comparison from the consumer on purchase, so advertising is effective in this case. Non- durable goods are sub divided in to packaged goods like food and sun dry paste and non- packaged goods like bread and gasoline.
2.Buyer: This classification is made by the one who buys the product. Example: personal products which are bought by consumers- industrial products which are bought factories.
WHAT IS A NEW PRODUCT?: a new product is
Invention: Creating a product from no where. Example: sony invented the cd rom.
Innovation: Development of an existing idea and it is done by two ways.
vNew product duplication: A product that is known to the market but new to the company. Example: Panasonic producing cd roms.
vProduct extant ion: A product that is known to the company but new to the market. Example: coca cola 2 liter.
WE CAN SAY THAT A NEW PRODUCT IS:
vStarting to produce a product. (new product duplication)
vResearch and develop a new product. (invention)
vSame product and different segment. (product expansion)
vRevise or add a product ( product expansion).
vRepositioning (change image).
USEFUL DEFINETIONS
BRAND: A name or a symbol that represents a product.
PRODUCT CATEGOTY: The category of a product is the generic class to which the brand belongs. Example: shampoo-asprin-trencolizers.
PRODUCT LINE; In the books it refers to a line of offerings with in a product category. But in the practical life it refers to al the products the company produce.
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WHY NEW PRODUCTS SUCCSSEED?
1.The consumers ?s satisfaction degree. It means to what degree the product matches the consumers needs.
2.The existence of expertise in the company or what is called the know-how.
3.The product has established competitive advantage.
4.An organizational environment that encourages entrepreneur ship.
5.The established new product development process.
WHY NEW PRODUCTS FAIL?
1.The poor marketing research and analysis, or the misreading of the consumers needs.
2.The poor product positioning.
3.The poor product performance or quality.
4.The poor competition analysis.
ETHICAL ISSUES IN PRODUCTS DEVELOPMENT
1.PRODUCT SAFTY: Control and expenses for safety. Example: food, children toys.
2.PRODUCT PREFOMANCE: Measuring the product performance, to be sure that the products are up to standard through quality control. We can say that there is a direct link between performance and profitability.
3.PRODUCT INFORMATION: Example: writing the product?s ingredients on the package.
FUNCTIONS OF PACKAGING
1.CONTAINTMENT AND PROTECTION: This gives the product its safety and makes it possible to take the product home.
2.CONSUMER APPEAL: Example: shape-size-color-reusable containers (sales promotion ex.la vach ceree cup). This appeal could be your competitive advantage in some cases. Example: milk-mineral water.
3.IDENTIFICATION: This gives the product its personality. Example: trade mark-company name-brand name. The examples give the product its visibility and belonging in the out let.
4.CONVENIANCE: The product packaging must survive the storage and shipping. Exemple : milk cartons.
5.COMMUNICATE INFORMATION: This gives the consumer the way or directions using the product. Example: macaroni and rice.
PRODUCT LIFE CYCLE
The life cycle of a product consists of four phases or stages. Introduction, growth, maturity and decline. The marketing strategy to be implemented depends on the phase the product is in. this life cycle helps to understand the position of products more clearly.
1-INTRODUCTION PHASE: I n this phase the new product is introduced in to the market for the first time. The company aims to create awareness and simulating the primary demand. Losses occur in this phase.
Phase strategy:
vAdvertising role is to stress on information about the product and what does it do.
vPromotion is directed to trade to increase distributors and retailers to carry the product to the market.
The goal of the phase: Creating awareness or BRAND ESTABLISHMENT and building a distributing network to make the product available to the consumer.
2-GROWTH PHASE: In this phase the sales volume increase rapidly and the product becomes profitable. The demand consists of first purchase consumers and repurchase consumer. The repurchase consumers make up the sustainability of the product. Also they are the link to the maturity phase. The competition emerges in this phase.
The goal of the phase: The goal in the growth phase is the BRAND REINFORCEMENT (repurchase). The company aims to reinforce the brand?s position by getting the consumer who had tried the product to repurchase it and continue to attract new users.
3-MATURUTY PHASE: In this phase the industrial sales reaches a plateau market saturated. The brand here attracts few new consumers and relives on repurchases. The competition increases and wars between different products starts. Profits diminish and increasing the company sales is on the expense of the competitive sales. In this phase the product differentiation and competitive advantage are very important.
The goal of the phase: Brand revitalization, which is the constant try to counter a decreasing product or market share.
Strategies to be implemented in the maturity phase
1.Market expansion: It means finding new users and new uses. Example for new users for the product: J&J [from children to adults]-COMPAG [from bissness to bissness computers to home computers]-secret deo. [From women to men]. Example for new uses for the product: ARM & HAMMER BAKING SODA [cooking-refrigerator-polish silver-cleaning carpets-litter box-laundry-bathing].
2.Product modification: Is an attempt to revitalize a product by changing it some way to increase demand (new and improved). Example for that: GOHAINA and its plastic cover.
3.Brand repositioning: It means replacing or re segmenting. Example for that: JCPENNY AND OMAR AFENDY.
4-THE DECLINE PHASE: The product enters this phase by the cause of a change in the consumer tastes or the change of technology. Example: typewriters-camera-vcrs&cassets (are on the way). The sales and profits decreases, that might happen because the hard competition. The company must to choose between two ways.
1.Deleting the brand
2.A- BRAND HARVESTING: It means decreasing the costs to almost zero, and allowing the brand to count surviving on its own. Example the drugs companies.
B- BRAND REVIVAL: Brings a brand back to life depending on the brand?s name strength. Example for that is BARBIE.
PLACE
It is the next p of the 6 p?s that makes the marketing mix. Simply it answers the question {how does a producer or a manufacturer get his product to the consumer?}.
There are two main ways to distribute your product, direct marketing and indirect marketing. When distributing a product through direct marketing, the producer sell directly to the consumer, while distributing a product through indirect marketing, the producer uses intermediates to deliver the product.
Definition of a distribution channel
A distribution channel is composed of all firms or individuals that take title or assist on taking title of a product, as it moves from the producer to the consumer.
Types of intermediates
1.RETAILERS: they sell to final consumer, used mostly by producers of fast consumer goods.
2.WHOLESALERS: they buy (take title) and resell products to other wholesaler or a retailer. They are also called distributors.
3.AGENTS: they represent the producer, they do not take title, they get a commission, and they sell on behalf of the producer in a specific geographic area.
4.BROKER: they are the link between the buyer and the seller, with out representing any of them. They do not take title, they do not have a continuing relationship with the sell, and they get a commission.
Why we use a middle man?
1.Transactional function: on making a buy and a sell, the middleman takes risks of stoking the products in an inventory (administration function).
2.Logistical function: the requiring of assembly, storage to go to retail shelf.
3.Facilitating function: obtaining information that producers need, about marketing conditions, promotion of the products, extending credit.
Types of distribution systems
1.Direct marketing: it is the avoiding of the middleman. Examples:
vMail orders
vCatalogs
vDoor-to-door (it is an open chance for theft)
vCo-owned retail outlets, this way the producers by pass the retailers and the wholesalers. Example: the public sector stores.
vTelephone sales (telemarketing).
vInteractive shopping. Example: the Internet, the television shop
2.Producer to retailer: in this case the producers by pass the wholesalers, in order to have more control on the product. This action depends to some extent on the product. This way is used mostly in durable goods (furniture, electronics). This way is expensive and time consuming so it is done in large bulks, example: fine foods in the past.
3.Franchise system: a company gives to a distributor the right of selling the company?s product under the company?s name, exclusively in an area. The distributor pays the company money in the form of royalty.
4.Producer to wholesaler: the wholesaler takes title of the product and this is used in fmcp (fast moving consumer goods), example: fine foods now.
5.Agents and brokers: they are used to sell to wholesalers and consumers, example; auto mobile.
?The longer the chain is the least the control is.?
Evaluation of distribution channels
1.The characteristics: the characteristics of your consumer and your product, influences the distribution channel. It is direct marketing if your consumers are few, and you need to reach them more closely. But it is indirect marketing if your consumer segment is large, and you do not need to reach them closely.
2.Gaining a competitive advantage: as we all know competitive advantage could be any thing, it would be the distribution channel. Example: L?eggs (stockings), they put their product where least expected, in the super market, mineral water is another example, where the company?s competitive advantage is not quality nor price as they are all the same, but it is the distribution channel and the demand.
3.Legal regulations: this may restrict the choice of the middleman. Examples: 1- a company requests that a middleman only handle the company?s product line, it is called ?exclusive dealing contract?. 2- a company gives the wholesaler the sole right to sell the company?s product in a certain area, it is called ?exclusive sales territory?. 3- a company requests a middleman to take a slow product, to get another fast product.
4.Product characteristics: depends on the movement of the product, is it an fmcg or not, the technology level.
5.Company characteristics: a company just starting may have enough leverage to get its product exactable by wholesalers.
Structure of a distributing system
1.Length of the channel: the shorter the channel is the more the control is
2.Intensity of distribution: this depends on the nature of the product, it is sub classified in to: A-intensity distribution: sells in many out lets (super market, pharmacy), it is non-durable goods and frequently used. In this case you have less control on the price and display. B-selective distribution: you distribute your product in a limited number of out lets. Example for that is television and microwave (durable goods). C- exclusive distribution: the company grants middlemen the exclusive territorial right to sell their product in a certain area (some times for prestige image).
3.Selecting specific intermediates: you have to know if they can deliver your product to the final market at a reasonable cost, their size (known or unknown), financial resources, experience, coverage, service level and delivery, reptilian, product expertise.
Channel strategy
1.Push policy: pushes the product down to promote the product to the next level down the channel. Example for the push strategy is a new unknown company.
2.Pull strategy: you promote your product directly to the consumer to increase consumer demand, which pulls the product demand up. Example for the pull strategy is a well-known company like Procter and gable.
the pull and push strategy
Place:
Pricing can determine the success or the failure of a product. The price must be consistent with the quality.
?What increased the importance of pricing?
1.Sharp recession: the recession makes the consumers more prices sensitive, because of the decrease in the purchase power. This makes price a prime weapon in competing brands.
2.Foreign competition: competition creates a down wards force on prices.
3.Fragmentation (separation) of many segments: different segments demanding different price levels.
4.Deregulations: privatization and the government took its hand out, increased private sector intense price competition.
?Influential factors that determine price.
1.Market demand: the law of demand and supply.
2.Production and distribution cost: mass production enables producers to produce more products to more consumers cheaply.
3.Competition: you lower your prices to compete (availability vs. price).
4.Corporate objectives: prestige and positioning. Example L?Oreal (hair color), their slogan is ?because you worth it?. Price is influenced by corporate objectives.
5.Other factors: segments, consumer income, supply and raw materials, government.
Pricing strategy:
1.Competitive pricing
This strategy is applied mostly in the fast moving consumer goods, as every food company in the world, they try to reduce the cost and sell cheaper.
2.Comparative pricing
You show the consumer the regular price and the selling price.
3.Skimming pricing
If you are the only one that produces a product, then you start with high prices to recover that start-up cost. After a time interval you reduce the price.
4.Penetration pricing
Start with very law prices to penetrate the market quickly. Then after a time interval you higher your prices, example cigarettes, you create loyalty and traffic then higher the prices.
5.Promotional pricing
? Buy one get one free?, ?buy one take two?. Most of the cases it happen to clean inventory.
6.Loss leader pricing (retail only)
You advertise one product with very low price to create traffic in your store, and you sell another products.
7.Prestige pricing
Example: L?Oreal, BTM, Marie laui. This is not competition on the basis of price.
PROMOTION
Definition of promotion: promotion is a combination of communication strategies to convey brand benefits (information) to customer (target audience) and influence to buy.
Objectives of promotion:
1-To create awareness: especially for new products, or an old product as a particular new aspect.
2-Stimulating the demand:
1)Primary demand for the whole category, sometimes it occurs with old products to simulate the category demand, with out a specific product. The government, industry, and trade do this. In case of new product or inventions it is called pioneer promotion example cd rom.
2)Selective demand; trying to simulate demand for a particular brand.
3-Encouraging product trail: even after awareness is created, it is worth it to try it.
4-Identifying prospects: through phones, mails, coupons, and magazines.
5-To retain loyal customer: it is more cheaper and more profitable to retain loyal customer than getting new one. Example laughthansa ?miles and more?.
6-Facilitate reseller support: two-way relation ship between the retailer and the producer to share promotion costs.
7-Combat competition: you have to use promotion to fight back. This helps you to protect your market share, but it may not necessarily increase profit.
Types of promotion:
1)Sales promotion: (non-media advertising), example offers, discounts, special deals, coupons, premiums, sampling, displays, conferences, contests.
2)Advertising: (mass promotion, non-personal selling). Reaches many people, very difficult to measure but not impossible. The objective of advertising is to inform, educate, persuade, and remind.
3)Publicity: ?any time you are news?. It is a free advertisement. It is done by public relations (contacts, reputation).
4)Personal selling: it is an industrial type of selling, store clerk, sales reps.
5)Collateral materials: It is an accessory advertisement material prepared by companies to achieve marketing and public relations objectives. Example brochures, booklets, catalogs, videotapes, annual reports.
Promotion through the product life cycle:
1.Introduction stage: advertisement role is to create awareness. Spending more money on trade promotion to push the product to the market, and to pull the consumer to try the product. Advertisement and sales promotion expenses are high.
2.Growth stage: advertisement expenses increase little or maintain. Adv. Strategy shifts from awareness to product benefits. Sales promotion drops as many consumers have already tried the product.
3.Maturity stage: sales promotion is likely to increase because of the competition strategies that are applied in this stage.
4.Decline stage: cut back in all promotion expenses.
Promotional mix:
1.Sales promotion: why does it becoming popular?. Because of the increase of competition, the large adv. Expenses, less people reading and watching television. The problem with the sales promotion is that the consumer get used to it, and the company cannot stop it, and this leads to a decrease in the company?s profit.
2.Publicity: The advantages of publicity are the creditability because it is in the news, cheap, supports the company?s image. The disadvantage of the publicity is the no control on your reputation ? it can back fire in your face?.
3.Advertising: there are two main types of adv. The broadcast media and the print media.
1-Television: although people are less watching television but they are still watching.
2-Radio: the radio is phasing out.
3-News paper: good for timely adv. And geographic segmentation and psycho graphic section.
4-Magazines: more psycho graphic than geographic, but does not have the newspaper reach, also it is picked up more than one person and more than one time.
5-Direct mail: very specific segment, by the name. It is not well known in EGYPT.
6-Outdoor: billboards, side of transportation. It has fantastic and wide exposure.
7-Interactive: C.D., computers, internat, e-commerce.
8-Non-traditional media: not one from the above, video rentals, television screens in stores.
Advertising Plan
1-Identifying the target market: this should influence the positioning of your product and of your advertisement.
2-Establish advertising objectives: this means that we must determine how much adv. Effort is needed to influence the targeted group. Example (I want to reach a certain percent of my target audience) then (increase the number of times the TA see your ad.)
3-Develop the advertising budget: the size of the budget depends on your objective, is it reaching or frequently reaching.
4-Develop the advertising strategy
A)Information oriented maintenance: the strategy designed to reinforce the positioning of a brand by giving information about it.
B)The image oriented maintenance strategy: this strategy reinforces the brand or the company?s positioning through imaginary. Example (dove soap is associated with softness and smoothness)
C)Information oriented change strategy: designed to revitalize brands by advertising to a new product features.
D)Image oriented change strategy: designed to revitalize a brand through imaginary and symbolism. Example (new slogan)
5-Develop an advertising massage:
A)Emotional vs. rational appeal: usually emotions play a great role because an emotion increases involvement.
B)Fear appeal: focuses on the potential problems of using and not using a certain product. Example (insurance)
C)Hummer appeal: people do like to laugh, but using this tool may be negative. Example (stupid, too good so people do not remember the product) and it is too risky.
D)Spots persons: very effective tool that makes the advertisement memorable.
E)Comparative appeal: comparing your product with your competitor. Example (Arial and Persil)
F)Subliminal appeal: massage is shown subconscious, so quickly, consumer conscious perceive it only at a subconscious level.
6-Selects the media: print, TV, interactive, radio, or what?
7-Evaluate the effectiveness of the advertisement :
?Sales increases compared to the advertising expenses.
?Effects of the advertisement on the consumers and your focus group.
?You can use various ways to measure media on message delivery rate and so.
Criticism and defense of promotion
1-Although it does inform and help consumers to make decisions, it has its flaws. It invades every day life and it is everywhere.
2-Keeps prices lower. Promotion creates demand, which leads to more profitability.
3-Does promotion creates need? No it does no create a need, but capitalizes them.
Marketing research:
Definition: systematic gathering, recording, and analyzing of data about problems or situations related to the marketing of goods and services.
The research starts by initial assumptions (idea. Theory, opinion) based on our experience. Then to be sure about such assumptions we make research, which either confirm or modify or deny our assumptions. Then you end up with new assumptions, which in fact is a marketing plan.
The difference between market research and marketing research:
Marketing research:
Internal wider in scope, qualitative, creative.
Why do we make a marketing research?
qConsumer needs.
qDevelopment of new products.
qCompetition.
qSize and nature of the target audience.
qProblems.
Market research:
External, quantitative, deals with measurements.
Research steps:
1.Define your situation or the problem:
A)Find causes of the problem, not only symptoms.
B)Make the information gathered measurable.
C)The various pieces of data must be related. (The profits decreases by X percent. The research must answer why is that happening)
2- exploratory research:
A)Assuming the current knowledge, meaning to look in side your company first.
B)The objective of that kind of research is simply to learn more about the current situation, market, and competition before the formal research iis done.
C)You can analyze and collect
1-Internal data: company records, sales records, product shipments, advertising expenses, and customer?s letters.
2-External data: data that already exists or published somewhere, having been already used for another purpose. Example (governmental reports, dept. of commerce, market research firms, trade association)
D)Problems attached to that research: example (not accurate, compliance, may not be relevant, it may be not valid or reliable, out dated)
4-Primary Research:
This research is done to gain additional information directly from the market place.
There are 3 main ways for gathering primary data:
A)Observation: researchers watch their consumers and monitor their actions. Example (standing in the super market)
B)Experimental: researchers design actions to measure actual causes and effects relation ship. This research is used mainly for test marketing new product and advertising campaign.
C)Survey: it is simply asking people. It is the most commonly way used for gathering primary data. It may be done by mail, phone, and personal interview. It is called also quantitative research as it deals with numbers. The data collected through this research, must be valid and reliable so it must be {as close as possible, if you repeated the research it gives the same data}
Questionnaire design:
Problems occur when designing questionnaire.
?Asking the wrong questions
?Too many questions
?Wrong form of a question
?Too difficult and hard to tabulate.
?Wrong choice of words.
Phrasing a question:
1.Open ended: hard to tabulate.
2.Dichotomous: yes or no.
3.Multiple choices.
4.Scale system: from 1 to 5 as from poor to excellent.
After the data is collected it must be validated and tabulated and coded and summarized.
International Marketing
A- examine the international business environment
1.Social: you must know and examine people, culture, language, and education level. This is in order to match your business to the social elements in the foreign country.
2.Legal system: the legal systems vary from a country to another. In the international, the laws of the host country bind the foreign company.
3.Economic system: you must know where this country is moving economically and in what stage does it stand on the international economical map. You must also understand the trade agreements in this country.
4.Political system: you must know the government attitude to wards business and degree of freedom, which allow the business to operate freely. Also the type of the political system is important (ex: library, democratic, national).
5.Technology: the technology level tends to be a major driving force to wards globalization. Also it reflects the ability to gather data and information, establishment of communication channels.
6.Competition: the competition is stronger in the international market, as the market is open for many nations. Also the domestic products are cheaper and governmentally subsidized.
B-Why should a company expand to the international market?
1.More money and profit potential.
2.Stability through diversification.
3.Large market size (ex: mineral water)
4.Proximity to market.
5.Unsolicited orders.
6.Utilize execs capacity.
7.The high level of competition in the local market,
8.An offer from a foreign distributor.
9.The position in the product life cycle. (Ex: cigarettes in usa)
10.The identification of a marketing niche.
C-Barriers to international marketing
1.Bureaucracy or redtops.
2.Trade barriers (ex: Egypt will not allow the import of textiles)
3.Transportation difficulties.
4. Lack of trained personnel
5.Lack of export incentives.
6.Lack of coordinated assistance.
7.Unfavorable conditions overseas.
8.Slow payments by buyers.
9.Payments default.
10.Communication.
How do we enter the international market? (Ways and forms form entering the international market.)
1.Import and export agent: this form is the most common form in Egypt. Its main job is to sell goods form another party with a very little risk involved and they spend a small amount of money and effort. The problem in such form that these middle men is not aggressive marketers.
2.Company sales branch: this form usually is concerned about sales not marketing. This operating sales branch enables the company to promote its products more aggressively and develop foreign markets more effectively. The control of the sales effort is closer and stronger. The problem or disadvantage in this form is that the sales men do not know the market in such foreign company.
3.Licensing: foreign producers produce the goods ?(my goods with their my name) for a fee or a royalty payment (ex: McDonalds and Bentton).
4.Contract agreement: foreign producer contract with foreign company to produce products that the foreign company will sell in the producer?s country.
5.Joint venture: it is a partner agreement where foreigner and local jointly own a company. (Ex fine foods 51% and unilever 49%)
6.Wholly owned subsidiary: it is opening a full companies factories. In that form there an absolute control of every thing. It is a very advanced stage.
7.Worldwide enterprise: example Microsoft.
International marketing research
1- customer information:
The willingness of people responds to accurately (they will lie, suspicious of strangers, there is a distrust of the government, scarcity of reliable data in other countries is worse than Egypt). Cultural influences and differences are very important, when analyzing the consumer?s economic abilities to buy we must study 3 things:
1.Distribution of the income.
2.Rate of growth of buying power.
3.Extent of available financing.
2- cultural elements:
It is elements that can influence a company ?s marketing program:
1.Family: the concept of what family is, as the family in some cultures is close (china), but in other are not. This affects the usage of the promotional tools.
2.Social costumes and behavior.
3.Educational system and liberty rate.
4.Language difference: you cannot always translate every thing.
5.Religion: you must find out what is acceptable and what is not.
?All above gapes are in their way to close because of the increasing effect of globalization and standardization.??
The international marketing p?s
1.Product planning:
Q: To what extent can a company market the same product in several different countries? (Ex: electronics)
You have to be careful when branding and labeling. (You must write the label in another language.
2.Pricing
Exporters face many currency conversions, lack of control over middleman pricing. The price in the foreign country is usually higher than in the original country, because of the additional expenses that are added to the original price like taxes and distribution.
Dumping cartel is a group of companies that produce simile products that combine to restrain competition (ex: OPEC).
3.Distribution
Physical distribution expenses count for much more larger share of the final selling price in case of international distribution. (Ex: laws on packaging and shipping, humidity, marine insurance, and bribery)
4.Advertising and promotion
In this case your contacts and research are the most promotional tool used.
Q: To what extent can we standardize and use the same advertisement in different countries?
Sometimes the ads are customized to match with specific countries. Some countries have governmental laws for advertising.
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