BUS 101 Chapter 12: 4Ps- Marketing Management

Marketing Mix

areas under the control of the marketing manager

The 4 Ps

Product
Promotion
Price
Place

Product

describes the physical goods, services, and ideas

Physical Goods

tangible- computers, cars, and soft drinks are examples

Services

intangible products- meaning the product cannot be held in your hand- are called services

Ideas

products that can be marketed to specific groups of customers

Three Types of Consumer Products

convenience, shopping, or specialty products

Convenience Product

inexpensive product that a consumer purchases on a regular, routine basis without much thought or effort

Shopping Products

consumers will expand some efforts to compare brands and invest some time to investigate product features and price points

Specialty Product

consumers expend both time and effort to purchase

Installations

major equipment or processes that are complex and expensive

Accessory Equipment

less expensive, less complex equipment purchased more frequently

Raw Materials

most basic materials used by producers

Component Parts

products purchased in finished form from other suppliers

Process Materials

products used in production that become part of the finished product

MRO Supplies

products used in production that do not become part of the finished product

Business Services

processes required in running the business that are often outsourced to other businesses

Product Mix

describes the overall group of products that a business offers and consists of a combination of product items, product categories, and product lines

Product Class

class of the product (i.e., Whirlpool brands).

Product Categories

categories of the product (i.e., refrigerators, cooking, dishwasher, etc.).

Product Lines

different lines of products for a company (i.e., in the dishwashing and cleaning product category: dishwashers, compactors, and disposers).

Product Items

the different items available for each product line (i.e., Whirlpool offers 48 product items)

View of Product Mix

viewed as either being narrow or broad

Broad Product Mix

would be comprised of more product categories that are often less closely related

Deep

comprised of 60 different product items

Shallow

comprised of 3 different product items

Cannibalization

when a business experiences an unintended reduction in sales in of one product due to its introduction of another similar product

Planned Cannibalization

can be part of a growth strategy designed to circumvent a sales decrease due to competitive introductions

New Product Development Process

commonly known process used when companies develop new products

Steps of New Product Development Process

Idea Generation
Screening
Concept Testing
Business Analysis
Product Development
Test Marketing
Commercialization

Brand

totality of that which an organization delivers to its customers

Brand Elements

brand name, logo, slogan, jingle, and packaging style are all examples of brand elements

Brand Name

spoken part of the brand

Brand Mark

symbol or design associated with the brand

Manufacturer's Brand

brands are owned and controlled by a producer

Private Label Brand

brand is owned or controlled by an intermediary, such as a distributor or retailer

Generic Product

to not brand the product at all

Trade Name

identifies the company

Family Brand

a marketing practice involving the use of a single brand name for the sale of two or more related products

Individual Brands

branding strategy in which products are given brand names that are newly created and generally not connected to names of existing brands offered by the company

Functions of a Product's Packaging

-protection of the product during shipping, handling storage, and use
-promotion of the product

Four Characteristics Unique to Services

intangibility
Inseparability
Perishability
Heterogeneity

Intangibility

a service, unlike a good, cannot be held, touched, examined or taken home and put on a shelf for the customer's future use

Inseparability

a service is both produced and consumed at the same time

Perishability

characteristic that describes the fleeting nature of a service

Heterogeneity

services are difficult to standardize

Four Stages of the Product Life Cycle (PLC)

introduction
growth
maturity
decline

Introduction

industry contains few competitors and sales are just beginning to take hold

Growth

customer demand increases, sometimes quite dramatically

Two Stages of Maturity

early and late maturity

Early Maturity

industry sales remain high but growth in industry sales slows

Decline

ultimately, industry sales fall to the point at which it is no longer in the company's best interest to continue to support the product

Promotion

communications arm of marketing. It's a way that a business informs, persuades, and reminds the target market about its product, brands, company, or people

Promotional Mix

optimize the impact of a limited promotional budget

Advertising

placement of announcements and persuasive messages purchased in any form of mass media by businesses who seek to inform and/or persuade members of a target market about their products, services, organizations, or ideas.

Personal Selling

selling that involves a face-to-face interaction with the customer

Sales Promotion

media and non-media marketing pressure applied for a predetermined, limited period of time at the level of consumer, retailer, or wholesaler in order to stimulate trial, increase consumer demand or improve product availability

Public Relations (PR)

form of communication management that seeks to make use of publicity and other non-paid forms of promotion and information to influence the feelings, opinions or beliefs about the company, its products or services, or about the value of the product or service or the activities of the organization to buyers, prospects or other stakeholders

Social Network

a network of social interactions and personal relationships.

Influencer Marketing

use of influencers to increase brand awareness and generate sales has become more popular with the growing power of social media

Pull Promotional Strategy

companies attempt to influence customers to ask for a branded product at their favorite retailer

Push Promotional Strategies

companies build demand within the distribution channel, at the wholesaler or retailer level, by spending promotional dollars on sales calls to the wholesaler or retailer or by offering them quantity discounts

Integrated Marketing Communications

planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time

Value

what the customer is willing to give up to get the desired benefits

Pricing Objectives

consist of profit maximization, sales maximization, and status quo

Profit Maximization

business may choose a selling price designed to maximize the profit it earns on a product

Sales Maximization

business that pursues a growth strategy is concerned with maximizing sales or market share through pricing

Status Quo

company sets a price at the same level as competitors in the same industry

Cost Structure

imperative that a business understands its underlying cost structure in arriving at a selling price

Demand

desire for certain good or service supported by the capacity to purchase it.

Competition

companies make the pricing decision based on competitors' prices

Marketplace Dynamics

product's price can change over time

Objectives

differing pricing objectives influence price setting

Price Elasticity of Demand

measure of the relationship between a percentage change in the market price of a product and a consequential percentage change in the quantity demanded of a product

Marketing Channel

organized network of agencies and institutions which perform all the functions required to link producers with end customers to accomplish the marketing task (aka distribution channel)

Channel Structure

strategic choice by a business; a producer selects the channel of distribution that helps to best accomplish its marketing objectives.

Direct Channels

indicates that there are fewer intermediaries operating between the producer and the end user

Indirect Channels

imply a larger number of intermediaries and are more commonly seen in consumer markets

Supply Chain Management

encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities

Intensive Distribution

most commonly used for low-priced convenience products that are routinely purchased by customers

Selective Distribution

best employed for highly shopped brands that are considered using limited problem solving

Exclusive Distribution

reserved for specialty products that require extended problem solving to purchase

Channel Relationships

marketing channel consists of separate entities that each have their own objectives and strategies