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7/30/2019 13.Planning the Marketing Mix
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Planning theMarketing Mix
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A Good Marketing Plan
Looks at the Big Picture
Leads to Changes
Estimate Production & Profit Risks
Anticipates the Reactions ofCompetitors
Looks at a Longer Time Horizon
Meet Your Business and Family Goals A Written Plan
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Products
PricePlace
Promotion
TargetMarket
Marketing is finding, developing, and
profiting from opportunities
Your target markets will determine your production and
marketing practices, Not vise versa.
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Setting Pricing Policy
1. Selecting the pricingobjective
2. Determining demand
3. Estimating costs
4. Analyzing competitorscosts, prices, and offers
5. Selecting a pricingmethod
6. Selecting final price
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Quantitative:gross margin/mark-up
Qualitative:unique value, no close
substitutes, difficult to compare.
Relative to competitors
Select Pricing Strategies
First Step is to Know Your Costs!
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Types of Costs
Total CostsSum of the Fixed and Variable Costs for a Given
Level of Production
Fixed Costs(Overhead)
Costs that dontvary with sales or
production levels.
Executive SalariesRent
Variable Costs
Costs that do varydirectly with the
level of production.
Raw materials
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Select Pricing Strategies
Price Making vs Price Taking
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The Three Cs Model
for Price Setting
Costs Competitorsprices andprices ofsubstitutes
Customersassessmentof uniqueproductfeatures
Low Price
No possibleprofit at
this price
High Price
No possibledemand atthis price
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Some important pricing dimensions
Utility: The attribute that makes itcapable of want satisfaction
Value: The worth in terms of other
products
Price: The monetary medium of exchange.
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Pricing Methods
Markup Pricing
Target Return Pricing
Perceived Value Pricing Value Pricing (demand)
Going-Rate Pricing
Sealed-Bid Pricing
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Promotional Pricing
Loss-leader pricing
Special-event pricing
Cash rebates Low-interest financing
Longer payment terms
Warranties & service contracts
Psychological discounting
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Psychological Pricing
Most Attractive?
Better Value? Psychological
reason to price this
way?
A
32 oz.
$2.19
B26 oz.
$1.99Assume Equal Quality
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Wholesale channels through a wholesaler
through a retailer
marketing cooperatives
Direct-to-consumer channels Home-based shopping: e-commerce, mail order
Store-based shopping
Select Place/Distribution Strategies
Customers, Customers, Customers!
Location, Location, Location?
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Five Promotion Tools
1. Advertising
2. Sales Promotion Activities3. Public Relations
4. Sales Force
5. Direct Marketing
Selecting Promotion Strategies
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Most effective when trying to reach largeamount of people to build awareness
Most effective when narrowly targeted
Select a media
will reach the target audience
is appropriate for the message conveyed
Does not increase sales quickly - Changes
minds but does not change behavior.
Advertising
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Coupons, discounts, in-store displays, trade
shows, samples, in-store demonstrations, contests,
and sponsoring retailers.
Motivate consumers to change behaviors
Overused?Weaken brand loyalty
To supplement efforts in the advertising and personal
selling. Most sales promotion lost money - except a superior
product paired with low awareness
Sales Promotion
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Publicity (or public relation) uses non-paidcommunication presented by the media.
Publications, Events, News, Community
involvement, Identity media, Lobbyingactivity, Social responsibility
A broad effort to influence publics
attitudestoward the firm or its products.
Create an image
Public Relations
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Sales Force
Direct Marketing
Most expenses (30% of time is spending on selling)
One on one selling can effectively find what customer
really want
Evaluate the costs to sale ratio
Hire good sales people, help them do a better job
Retail stores, direct selling, direct mailing, internet
Data -base marketing
Product demonstration
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Who is the target?
The role of promotion
$ Provide product information
$Stimulate demand
$ Differentiate products and/or build a brand image
$ Remind current customers about product benefits
$ Counter competitors
$Respond to the news
$ Smooth out seasonal demand fluctuation
Multi-media approach
Which promotion strategy to use?
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Implementing Phase
Determine Objectives
Measurable, quantifiable, and realistic Budgeting
Percentage of sales approach
Match the competitor approach
Task or objective approach
Action Plan:
Who is responsible?
What tasks are they responsible for?
When the tasks are to be completed?
DO IT!
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The Control Phase
Set Performance Targets
Monitor progress
Evaluate key indicators
Sales by weekly/monthly
Cost on key items Orders and profit at key times of the year
Consumer feedback
Marketing plan can be modified. It is an
ongoing process.
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Activity 1