Marketing Mix and Logistics Management

MARKETING OF MARKETING OF TRANSPORT AND LOGISTICS TRANSPORT AND LOGISTICS SERVICES/PRODUCTS USING SERVICES/PRODUCTS USING

THE 7Ps MODELTHE 7Ps MODEL(MARKETING MIX)(MARKETING MIX)

Presented ByPresented By

EBO HAMMONDEBO HAMMOND (CMILT)(CMILT)

PROFESSIONAL DIPLOMAPROFESSIONAL DIPLOMA

CILT GIMPA PROGRAMMECILT GIMPA PROGRAMME

03/03/1003/03/10 EBO HAMMOND-CMILTEBO HAMMOND-CMILT

TOPIC OBJECTIVESTOPIC OBJECTIVES

• Explain the meaning of Marketing and Explain the meaning of Marketing and marketing exchangemarketing exchange

• Acquire the key principles underpinning Acquire the key principles underpinning the 7Ps Model (Marketing Mix)the 7Ps Model (Marketing Mix)

• Understand the role and application of 7Ps Understand the role and application of 7Ps Model in transport and logistics services Model in transport and logistics services and productsand products

• Identify how to gain competitive Identify how to gain competitive advantage through effective management advantage through effective management of the Psof the Ps


• LECTURE PREVIEWLECTURE PREVIEW• What is Marketing ? What is Marketing ?

• A simple marketing A simple marketing exchange processexchange process

• Four Ps and Three extended Four Ps and Three extended PsPs

• Gaining competitive Gaining competitive advantageadvantage


What is Marketing?What is Marketing?

• There are about 50 definitions of There are about 50 definitions of marketing. Marketing could be marketing. Marketing could be categorized into three main categorized into three main definitions as follows:definitions as follows:

– Marketing as a process; concerned Marketing as a process; concerned with connecting supplier and customerwith connecting supplier and customer

– Marketing as an orientation; mindsetMarketing as an orientation; mindset– Marketing as a concept; ideaMarketing as a concept; idea


• The key definitions could be as follows:The key definitions could be as follows:– ‘‘It is the action or business of bringing or sending It is the action or business of bringing or sending

to the market’-Oxford English Dictionaryto the market’-Oxford English Dictionary– ‘‘It is the human activity directed at satisfying It is the human activity directed at satisfying

needs and wants through an exchange process’-needs and wants through an exchange process’-Kotler, 1980Kotler, 1980

– ‘‘It is a social and managerial process by which It is a social and managerial process by which individuals and groups obtain what they want and individuals and groups obtain what they want and need through creating, offering, and exchanging need through creating, offering, and exchanging products of value with others’-Kotler 1991products of value with others’-Kotler 1991

– It is the management process responsible for It is the management process responsible for identifying, anticipating and satisfying customers’ identifying, anticipating and satisfying customers’ requirements profitably’-CIM (UK)requirements profitably’-CIM (UK)

WHAT IS MARKETING? Cont.. WHAT IS MARKETING? Cont..

THE EXCHANGE PROCESSTHE EXCHANGE PROCESS

08/03/1108/03/11 EBO HAMMOND-CMILTEBO HAMMOND-CMILT 66

Customer

Something of ValueMoney, Goods, Services

Something of ValueGoods, Services, Benefits

Supplier


Products and Services Offered By Products and Services Offered By Logistics and Transport CompaniesLogistics and Transport Companies• Physical ProductsPhysical Products

– Consumers goodsConsumers goods– Industrial goodsIndustrial goods

• ServicesServices– Freight haulageFreight haulage– Freight ForwardingFreight Forwarding– Passenger transportationPassenger transportation– Packaging Packaging – Courier servicesCourier services– PurchasingPurchasing– Waste disposalWaste disposal– Storage/warehousingStorage/warehousing– StevedoringStevedoring– ITIT– othersothers


• It refers to those marketing variables which are internal It refers to those marketing variables which are internal and can be influenced by the organization to enhance the and can be influenced by the organization to enhance the exchange processexchange process

• It is also known as Marketing MixIt is also known as Marketing Mix• It was first developed by Neil Borden in 1953 (covering 4Ps)It was first developed by Neil Borden in 1953 (covering 4Ps)• McCarthy coined the term 4Ps in 1960McCarthy coined the term 4Ps in 1960• They have been developed as Acronyms; with 4Ps being They have been developed as Acronyms; with 4Ps being

the traditional Ps and 3 Extended Ps developed later. the traditional Ps and 3 Extended Ps developed later. • While the 4 traditional Ps were developed for tangible While the 4 traditional Ps were developed for tangible

products, the 3 extended Ps were developed for the non-products, the 3 extended Ps were developed for the non-tangible products (services)tangible products (services)

• The full meanings of the 7Ps are The full meanings of the 7Ps are Product, Price, Product, Price, Promotion, Place, Physical Evidence, People, and Promotion, Place, Physical Evidence, People, and ProcessProcess

• The Key objective for strategic management of the 7Ps is to The Key objective for strategic management of the 7Ps is to achieve effective communications to customers of products achieve effective communications to customers of products and services offered by logistics and transport and services offered by logistics and transport organisations to help attract patronageorganisations to help attract patronage

WHAT IS Marketing Mix?WHAT IS Marketing Mix?


• A product is made A product is made up of three up of three attributes namely attributes namely the:the:– PhysicalPhysical– FunctionalFunctional– SymbolicSymbolic

PRODUCT PRODUCT

99

Product Body

(Tangible)

Product Spirit(Augmented)

Product Soul(Core)


• A product is made up of three attributes A product is made up of three attributes namely the (1) namely the (1) PhysicalPhysical (2) (2) Functional Functional and and (3)(3) Symbolic Symbolic attributes. attributes.

• The The physical (Tangible product) physical (Tangible product) attributes attributes refer to those aspects of the product that refer to those aspects of the product that could be could be felt, touched, seen, smelled or felt, touched, seen, smelled or heardheard. It is the products’ tangibility.. It is the products’ tangibility.

• The The functional (Core product) functional (Core product) attributes attributes refer to the refer to the perceived need that the product perceived need that the product satisfies satisfies e.g. A soft drink has a functional e.g. A soft drink has a functional attribute of satisfying thirst, or a car is attribute of satisfying thirst, or a car is purchased to aid mobility purchased to aid mobility

PRODUCT PRODUCT

1010


• The The symbolic symbolic (Augmented product) (Augmented product) attribute refers to the attribute refers to the image or image or value that the customer expects value that the customer expects from the productfrom the product. People tend to buy . People tend to buy particular products as opposed to particular products as opposed to others because of the prestige they others because of the prestige they are likely to obtain from it.are likely to obtain from it.– The physical aspects of the product The physical aspects of the product

do carry marketing communications. do carry marketing communications. The packaging of a product creates The packaging of a product creates certain perceptions that certain perceptions that communicate. The material used, communicate. The material used, colour, size, shape, packaging colour, size, shape, packaging attracts attention and communicate attracts attention and communicate a message sufficient enough to a message sufficient enough to attract a customerattract a customer

•

PRODUCT Cont..PRODUCT Cont..

1111


• The price is the amount a customer pays for a The price is the amount a customer pays for a product.product.

• The price of a product of service indicates its ‘value’ The price of a product of service indicates its ‘value’ to the customer. Low price may connote cheap to the customer. Low price may connote cheap product and high price, great value. An ‘expensive product and high price, great value. An ‘expensive product’ may bestow great status, or be over – product’ may bestow great status, or be over – priced compared to functionally similar competition.priced compared to functionally similar competition.

• Price is a major cue in the purchase decision Price is a major cue in the purchase decision processprocess

• Low priced products normally receive more Low priced products normally receive more patronage and vise versapatronage and vise versa

• Low price, high quality is the best formula to get Low price, high quality is the best formula to get customerscustomers

PRICE PRICE


•Cost –Plus pricing; Cost –Plus pricing; This is a pricing This is a pricing method that set the price at production cost, method that set the price at production cost, including both cost of goods and fixed costs at including both cost of goods and fixed costs at your current volume, plus a certain profit your current volume, plus a certain profit marginmargin. .

•Return on Investment pricing; Return on Investment pricing; Set your Set your price to achieve a target return-on-investment price to achieve a target return-on-investment (ROI).(ROI).

•Value based pricing; Value based pricing; Price your product Price your product based on the value it creates for the customer. based on the value it creates for the customer. This is usually the most profitable form of This is usually the most profitable form of pricingpricing

PRICING PRICING METHODS/STRATEGIESMETHODS/STRATEGIES

1313


Popular price points/Psychological Pricing; Popular price points/Psychological Pricing; There are certain "price points" (specific There are certain "price points" (specific prices) at which people become much more prices) at which people become much more willing to buy a certain type of product. They willing to buy a certain type of product. They feel they are having a good dealfeel they are having a good deal

Fair/Ethical pricing; Fair/Ethical pricing; Sometimes it simply Sometimes it simply doesn't matter what the value of the product doesn't matter what the value of the product is, even if you don't have any direct is, even if you don't have any direct competition. competition.

Positioning pricing; Positioning pricing; This is where pricing is This is where pricing is done to provide psychological pride or done to provide psychological pride or esteem or any other relevant mental state esteem or any other relevant mental state that give satisfaction to customers. that give satisfaction to customers.

PRICING METHODSPRICING METHODS

1414

Price/Quality MatrixPrice/Quality Matrix

08/03/1108/03/11 EBO HAMMOND-CMILTEBO HAMMOND-CMILT 1515

Economy Pricing

Exploitative/Skimming(short Term)

Premium Pricing

Penetration Pricing(short term)

Low High

Low

Hig

h

Price

Quality


• Place represents the location where a product can Place represents the location where a product can be purchased. It can include any physical store as be purchased. It can include any physical store as well as virtual stores on the Internet. well as virtual stores on the Internet.

• It also refers to distribution and making products It also refers to distribution and making products available to customersavailable to customers

• The place a product or service is distributed plays The place a product or service is distributed plays a very important function in gaining competitive a very important function in gaining competitive advantage advantage

• There is no point in researching the consumer, There is no point in researching the consumer, designing a package to meet the identified needs, designing a package to meet the identified needs, establishing a price that is fair and acceptable establishing a price that is fair and acceptable and creating a brilliant promotion campaign if the and creating a brilliant promotion campaign if the package cannot be accessed by the consumer. package cannot be accessed by the consumer.

PLACE PLACE


• The producer must plan for the availability The producer must plan for the availability of the product and the distribution of the product and the distribution channels to be usedchannels to be used

• The product must be readily available The product must be readily available where consumers would expect to find itwhere consumers would expect to find it

• The product distribution model could be The product distribution model could be the followingthe following– Manufacturer to CustomerManufacturer to Customer– Manufacturer to Retailer to CustomerManufacturer to Retailer to Customer– Manufacturer to Wholesaler to Retailer to Manufacturer to Wholesaler to Retailer to

Customer Customer

PLACE Cont…PLACE Cont…


PLACE Cont… (DISTRIBUTION PLACE Cont… (DISTRIBUTION CHAIN)CHAIN)Manufacturer/Service Provider

Customer

Wholesaler

Retailer


• Type of product (specialised vs general)Type of product (specialised vs general)

• Length of supply chainLength of supply chain

• Purchase volumesPurchase volumes

• Protection of intellectual property rightsProtection of intellectual property rights

• Level of control over outbound supply chainLevel of control over outbound supply chain

• Financial implications Financial implications

• Speed of market penetration to customerSpeed of market penetration to customer

• Technological considerations (internet)Technological considerations (internet)

• Can you think of any other considerations?Can you think of any other considerations?

FACTORS CONSIDERED IN ADOPTING A FACTORS CONSIDERED IN ADOPTING A PARTICULAR DISTRIBUTION MODELPARTICULAR DISTRIBUTION MODEL


• The tools that the marketer The tools that the marketer uses to communicate ideas uses to communicate ideas and to stimulate a particular and to stimulate a particular perception of products and perception of products and services by individuals or services by individuals or people who have been people who have been aggregated into a target aggregated into a target market are referred to as the market are referred to as the Promotional Mix (Marketing Promotional Mix (Marketing communication mix)communication mix)

• The key elements comprising The key elements comprising the Promotional Mix are the Promotional Mix are advertising, public relations, advertising, public relations, sales promotion, personal sales promotion, personal selling, direct marketing. selling, direct marketing. These elements each have a These elements each have a variety of sub-classifications.variety of sub-classifications.

PROMOTION PROMOTION


• People or personnel are very People or personnel are very important in marketing important in marketing communication because they are communication because they are the first point of contact with the the first point of contact with the customer or prospective customer. customer or prospective customer.

• If they are not intellectually capable If they are not intellectually capable they cannot be trained in they cannot be trained in specialized products. If their dress, specialized products. If their dress, manner and bearing are not correct, manner and bearing are not correct, the image will suffer. the image will suffer.

• Above all they have to be concerned Above all they have to be concerned to help the customer make the best to help the customer make the best choice and to go away pleased with choice and to go away pleased with the service received. the service received.

• Key factors considered are dress Key factors considered are dress code, mannerism, appearance and code, mannerism, appearance and countenance, educational level, countenance, educational level, sense of duty, multilingual skills and sense of duty, multilingual skills and othersothers

• People add a human touch to the People add a human touch to the exchange processexchange process

PERSONNEL/PEOPLE/PERSONSPERSONNEL/PEOPLE/PERSONS


PHYSICAL EVIDENCEPHYSICAL EVIDENCE• This refers to the point-of-This refers to the point-of-

sale environmentsale environment• The physical aspects of the The physical aspects of the

point-of-sale, the store point-of-sale, the store image, etc have image, etc have implications for implications for communicating a message communicating a message to customersto customers

• A customer’s perception of A customer’s perception of the point-of-sale can be the point-of-sale can be crucial to the success of crucial to the success of the whole package. For the whole package. For example, if the ambience example, if the ambience is wrong, the target is wrong, the target customer may never enter customer may never enter the chosen store(s). the chosen store(s).

• Issues considered are Issues considered are cleanliness, temperature, cleanliness, temperature, comfort, colour, interior comfort, colour, interior design/décor, location, etcdesign/décor, location, etc


PROCESSPROCESS• This refers to the format This refers to the format

for dealing with or for dealing with or processing customers processing customers

• An efficient processing An efficient processing system provides system provides convenience for convenience for customerscustomers

• Key issues considered are Key issues considered are waiting time, privacy, waiting time, privacy, secrecy, safety, security, secrecy, safety, security, speed, integrity and speed, integrity and others.others.

• Logistics and Transport Logistics and Transport Organizations that Organizations that provide a hassle free provide a hassle free processing method for processing method for customers stand to attract customers stand to attract and retain customersand retain customers


4Ps vs. 4As4Ps vs. 4As

Supplier Decisions (4Ps)

Product

Price

Place

Promotion

Customer Reactions (4As)

Awareness

Availability

Affordability

AcceptabilityPeoplePhysical EvidenceProcess

Service Support (3Ps)

MARKETING MIX

STRATEGIES FOR ACHIEVING COMPETITIVE ADVANTAGE

Product Appealing designs, new product introduction, attractive colour, quality packaging, superior performance, effective positioning

Price Competitive pricing, Premium pricing

Place Appointing and managing distributors effectively, effective push/pull mix in the supply pipeline, effective transportation system

Promotion Effective Promotion Mix

Physical Evidence

Mindful of cleanliness, ambient temperature, lighting, aesthetics, architecture, etc

People Use of celebrities, revered or people popular for a particular course to endorse products/services

Process Less waiting time, hassle free product access, adequate security at point of sale, protection of customer privacy



CONCLUSIONCONCLUSION

• Broadly defined, optimizing the Broadly defined, optimizing the marketing mix is the primary marketing mix is the primary responsibility of marketing. responsibility of marketing.

• By offering the product with the right By offering the product with the right combination of the Seven Ps, marketers combination of the Seven Ps, marketers can improve their results and marketing can improve their results and marketing effectiveness. effectiveness.


• LECTURE REVIEWLECTURE REVIEW• What is Marketing ? What is Marketing ? • A simple marketing A simple marketing

exchange processexchange process• Four Ps and Three extended Four Ps and Three extended

Ps (7Ps)Ps (7Ps)• 4Ps vs. 4As4Ps vs. 4As• Gaining competitive Gaining competitive

advantageadvantage
