Marketing final

Promotional strategies: push and pull

• A push strategy focuses on promoting a specific product to a relevant audience. The company actively brings the product to consumers by "pushing" it through different channels. This strategy is useful when launching a new product or operating in a niche market where consumers may not yet know about the product. Common push methods include social media advertising and discounts to retailers. Push strategies are mainly sales-oriented because their goal is to increase product sales directly.

  A pull strategy focuses on attracting consumers toward a product or brand. Instead of pushing products to customers, companies encourage consumers to actively search for information and engage with the brand before making a purchase. This strategy helps create loyal customers and followers and is especially useful when branding is important or when consumers already know what they are looking for. Common pull methods include SEO, word-of-mouth (WOM), relationship marketing, and content marketing. Pull strategies are mainly marketing-oriented because they focus on building long-term customer relationships and brand value.

Product: the object of exchange on the market 

• Intangible attributes 

• Tangible attributes 

• Utility  

• = consumer value 

 Total product concept:   

• Physical product

• Service

• Idea 

Product dimensions:

• Primary dimension: the main, essential feature of the product that defines what it is and its core purpose (e.g., a phone’s ability to make calls and use apps).

• Auxiliary dimension: extra or supporting features that add value but are not essential (e.g., phone color, camera filters, or ringtones).

Product classification B2C: 

• Convenience products:

  • Staple product (shower gel)

  • Impulse product (chocolate bar)

  • Emergency product (umbrella) 

• Shopping products: (TV) high price

• Speciality products: (phone: Iphone) high price, buy because of a specific brand 

Product classification B2B: 

• Raw materials 

• Manufacturing materials and parts 

• Installations 

• Accessory equipment 

• Consumable supplies 

• Services 

Product programme: categories by 

• Width - all the products in categories 

• Dept - specific category with different products (how many products in a specific product line)

• Length - (multiple categories by units)

• Consistency - the same or not main idea (product)

Elements of a product: 

• Product attributes (tangible or physical, intangible or non-physical)

• Product brand (brand name, brand mark, trade mark):

  • Manufacturer brand - ​​a product owned, produced, and marketed by the manufacturer itself rather than a retailer

  • Private brand - owned by a company (lidl and own production)

  • Generic brand - a consumer product sold without a widely recognized name or logo, typically characterized by plain packaging and lower prices than name-brand alternatives

• Packaging 

• Product labels 

• Product support 

Product innovation: 

• New product development (available niche or need)

• Bing licences  

• Improvements to existing products (e.g. packaging)

New product development process: 

• Idea generation 

• Idea screening 

• Product concept development 

• Business analysis 

• Product development 

• Test marketing 

• Commercialisation 

New product diffusion process:

• Innovators 25% young people, want to try new things, educated; rush the first to try a new product and share it

• Early adaptors 13.5% young people, want to try new things, educated; wait a bit and then buy it, after having info from innovators 

• Early majority 34%

• Late majority 34% 

• Laggards 16% - try to buy the product, when it almost leaving the market; when it becomes cheaper

Responses to product life cycle stages : 

The Product Life Cycle consists of four stages: introduction, growth, maturity, and decline.

During the introduction stage, businesses face high financial costs and barriers to entry. They use strong promotional activities and may adopt a high-price strategy (price skimming) or a low-price strategy (penetration pricing).

In the growth stage, sales and profits increase. Businesses focus on cutting costs, responding to competitors, and encouraging innovation to maintain growth.

At the maturity stage, market saturation slows sales growth. Firms aim to build customer loyalty, attract new consumers, improve distribution, and make product modifications to sustain sales.

In the decline stage, sales and profits fall. Businesses face price competition, reduce promotion, and may choose product elimination.

Products PLC category: 

• High learning products (drones)

• Low learning product 

• Fashion product (body lotion)

• Fads (a game)

The price pillar of product value-price: 

• Price is a measure of value 

• Price of a product is the only element of the marketing mix that generates revenue

• Price influences buying decision

• Important for:

  • Customers

  • Economy (macro level perspective)

  • Business (micro level perspective)

Pricing strategies:

• Price skimming strategy (Launches a new product at a high price to attract customers willing to pay more.)

• Value-based pricing strategy

  • Strive products that highly valuable for customers and making demand inelastic 

• Psychological pricing strategy (several strategies) 

  • how much consumers expect to pay for goods in relation to other competitors and previously advertised price (discounts)

• Price bundling - together cheaper (buy two for the price of one)

• Penetration pricing (Penetration pricing is a strategy where a company introduces a product at a low price to attract many customers quickly and gain market share.)

• Unit-based pricing (kg/100g)

• Prestige or premium (iphone, case, buttery)

• Odd pricing 99.99€

• Conventional pricing (same price always - gum)

• Price lining - iphone, pro, pro max 

Price - influencing factors:

• Internal: 

  • Business objectives 

  • Available resources 

  • Marketing mix elements

• External factors: 

  • Consumer responses 

  • Channel distribution operators 

  • Competitors 

  • Country´s economic policies 

Pricing methods: competitors-based vs cost-based

Cost-based pricing methods

1. Average-cost pricing method

– Set prices based on forecasted average total costs per unit of product manufactured

– Know cost of each product in production line

2. Mark-up method

– Adding to average total cost a certain amount expressed as a percentage of the selling price or cost

– Retail prices

3. Break-even point method

– Considers total cost/revenue and the volume of production

– New products

Competitor-based pricing methods: 

• Useful in situations in which price is the key factor of a business’s marketing strategy

• Suitable for:

      - Boosting sales 

      - Increasing market share

• Possibilities to set prices:

      - Below competitor level

      - At competitor level 

      - Above competitor level

Short vs long distribution channel

• Short distribution channel: 

–small number of consumers, consumers are concentrated in one location, complex  products

• Long distribution channel:

–large number of consumers, consumers are dispersed, simpler products

Three fundamental functions of distribution:

1. The transactional function (buying, selling, paying)

2. The logistical function (physical movement of products, stocking different products and retail) 

3. The facilitating function (market information, promoting products)

Market coverage (distribution)

–Intensive distribution 

–Exclusive distribution

–Selective distribution

Channel management decisions:

• Selecting channel members 

• Managing channel members 

• Motivating channel members 

• Evaluating channel members 

Distribution channel efficiency vs effectiveness vs adaptability

• Distribution channel efficiency

–linked to the costs of using the channel and the capacities engaged in marketing a product on the target market

• Distribution channel effectiveness

–reflected in the ability of a distribution channel to accomplish objectives

• Distribution channel adaptability

–seen as the ability of distribution channel to adapt to emerging situations and to initiate new solutions

Channels for B2C products vs B2B

–B2C – direct and indirect; combination of wholesalers and retailers

–B2B – mostly direct, but not always

Functions of wholesaling:

Wholesaling helps transport products from manufacturers to retailers.

One function is assembling the offerings of several manufacturers, meaning wholesalers collect products from different producers and offer them together in one place.

Another function is warehousing products, which means storing goods until retailers need them.

Wholesalers also regroup products for resale, meaning they divide large shipments into smaller amounts so retailers can sell them more easily.

Organisations receive from wholesalers:

1. Time utility (warehousing and regrouping)

2. Place utility (warehousing and transporting)

3. Possession utility (financing and deferred payment)

Two basic groups of wholesalers:

1. Wholesalers that operate independently

2. Wholesalers that are not independent

1. Merchant Wholesalers (Take Ownership of Goods)

These wholesalers buy products, own them, and resell them. They also take the risk of storage and price changes.

• Full-service merchant wholesalers

  • Handle a wide range of products

  • Provide many services (storage, delivery, credit, marketing support)

• Limited-service merchant wholesalers

  • Focus on a narrow/specialized product range

  • Provide fewer services to reduce costs

2. Agent Wholesalers (Do NOT Take Ownership of Goods)

These wholesalers do not buy or own products. They only help arrange sales between buyers and sellers.

• Agents

  • Work regularly with manufacturers

  • Represent them in selling products

  • Earn commission on sales

• Brokers

  • Work only when needed (occasional deals)

  • Simply connect buyers and sellers

  • Earn a fee per transaction

Retailers operations and their types

• Retailers perform several functions:

  • Procure products for reselling to end consumers

  • Providing information to end consumers

  • Stock products in retailing storage facilities

  
  

  Food retailers carry out their activities in:

  • Convenience stores

  • Self-service stores

  • Supermarkets

  • Superstores

  • Hypermarkets

  
  

  Retailers of product for personal and household use operate in:

  • Specialty stores

  • Department stores

  • Big stores

  • Discount stores
    

Non-store retailers
(online, catalogs, TV, vending machines, mail, door to door)

Physical distribution aims and process

• Physical distribution has two primary aims:

1. To cut the cost of delivering products to consumers

2. To enhance the level of consumer satisfaction

Physical distribution process: 

• Defining goals to be accomplished 

• Developing the ordering process 

• Managing inventory 

• Organising transportation 

• Controlling and evaluating the results 

Trends in distribution:

1. Increasing use of technology in distribution

Distribution is becoming more advanced through:

• EDI (Electronic Data Interchange)

• E-information (digital sharing of data)

• E-transactions (online ordering and payments)

• E-commerce (online selling)

• E-business (full digital business processes)

2. Extranets

• Private networks that connect a company with its suppliers, distributors, or partners

• Used to share information securely (orders, stock levels, delivery updates)

3. Portals

• Online access points for business partners

• Provide real-time information (orders, pricing, inventory, logistics)

4. Digital marketplaces

• Online platforms where multiple buyers and sellers interact

• Improve efficiency and widen market access

• Example: B2B platforms for bulk trading

Advertising goals:

•  INFORM

•  PERSUADE

•  REMIND

Types of sales promotion:

Sales promotion is focused on

• End consumer 

• Coupons

• Gifts and rewards

• Free samples

• Money refund

• Sponsorship

• Store as a consumer 

• In-store displays

• Store rewards

• Various payment options

• Cooperative advertising

• Warehousing services

• Other actors in the business market

Trade shows: information, closing deals, reminding of products, introducing and demonstrating products, advice and training,image boosting, PR building and socio-cultural atmosphere.

Public relations: 

• Public relations (PR) is the strategic management of communication between an organization and the public to build and maintain a positive image and good relationships.

  PR uses different tools and activities, such as:

  • Press conferences – sharing important news directly with the media

  • Printed materials or newsletters – informing audiences about updates and achievements

  • Organizing events – creating experiences that build relationships and brand image

  • Creating news stories – shaping information so it becomes newsworthy

  • Donations and sponsorships – supporting causes to improve reputation and goodwill

  It is important to understand that public relations is broader than publicity. Publicity is only one part of PR and focuses mainly on gaining media attention, while PR includes long-term communication, reputation management, and relationship building.

Publicity is not public relations 

Publicity

In marketing, publicity refers to the attention a product, brand, or organization receives through media coverage, social media, or word of mouth. It helps increase awareness without direct payment for the message.

Publicity can be positive or negative. Positive publicity improves brand image and builds trust, while negative publicity can damage reputation. It is important because it influences how the public perceives a brand and can strongly affect consumer behavior.

5 types of buyers in different stages of product life cycle

• Innovators (2.5%) – The very first people to try a new product. They are young, educated, and enjoy risk and new ideas. They test products early and help introduce them to the market.

• Early adopters (13.5%) – Also open to new products, but they wait until they see some information or feedback from innovators. They are often influential and help spread the product to more people.

• Early majority (34%) – Practical consumers who adopt a product once it has been proven useful and safe. They do not like risk and usually wait until many others are already using it.

• Late majority (34%) – More skeptical and often pressured by social norms or lower prices. They adopt a product only after it is very common and widely accepted.

• Laggards (16%) – The last group to adopt a product. They prefer traditional ways and only switch when they have no other option or when the old product is no longer available.