MARKETING 101

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MARKETING 101
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• What do you think the role of marketing is in the
  business world?

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• Marketing
• Sells what a business makes
• Manages a businesss brand or brands

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• Branding involves three things
• A brand name
• A logo or trademark
• Slogan
• Branding another word for creating an image
• What is a brand name?
• Can you think of any examples?

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• 1. Brand Name
• Word that a business uses to distinguish its
  products from competitors products
• Is the most important part of a product or a
  companys image, because it is how the company is
  identified
• Every time you mention a companys name or
  product you are providing them free publicity!!

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• What is genericide?
• Brand names or trade names that become generic
  (ex. Bandaid Adhesive Bandage)
• Can you think of any other genericide examples?
• Is genericide good or bad marketing on the part
  of the business?

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• 2. Logo and Trademark
• Helps create consumer awareness
• Logos can take 3 forms
• Monogram stylized rendering of the companies
  initials (ex???)
• Visual Symbols drawings of people and or
  animals
• Abstract Symbol shapes that carry a visual
  message but are not representative of actual
  things

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• 3. Slogan
• A short catchy phrase that is usually attached to
  the companys name and logo

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Contest

• Rules
• Groups of 3
• Come up with as many logos and slogans as
  possible in 10 minutes
• You must use 1 sheet of paper and put each logo
  in the correct category (monogram, abstract, or
  visual symbols). Create a separate column for
  slogans
• You must have 3 correct examples in each category
  to be eligible for victory
• You have 10 minutes!
• Winning team get donuts

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• Company Sketched
  Monogram Abstract Visual
  Slogan
• Name Logo
• Nike Abstract Just Do It

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• Which brands do you think were most commonly
  written down by the class? Why?

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Characteristics of a good Logo
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• Simple
• Too intricate can be confusing to the eye. Some
  of the best logos out there are the most widely
  recognized (ex. Nike, McDonalds, IBM, Lululemon,
  Coach)
• Memorable
• People will remember your logo and therefore
  remember your company.
• You dont want your logo to look like someone
  elses
• Timeless
• Your logo should stand the test of time and
  remain popular.

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• Versatile/Adaptability
• Your logo should be able to be put on everything
• Ex. Faxes, embroidery, letter heads, signs,
  benches etc.
• Appropriate
• Conveys the appropriate message about your brand
• Non-offensive

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Good or Bad Logos?
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• Brand Identification
• One a company develops a name, slogan and/or logo
  for a product it is crucial they stick with it
• Example Coca cola should keep the same name,
  writing font, colours, packaging, etc., that are
  associated with the brand.

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• Coca-Cola ???
• http//online.wsj.com/article/SB100014240529702040
  12004577070521211375302.html

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Product Life Cycle

• Impact of marketing can be measured in 2 ways
• Sales analysis
• Have sales increased/decreased?
• Have we sold more than our competitors?
• Measure consumer reaction to the brand based on
  marketing efforts
• Effective marketing increases brand equity
• brand equity value of the brand in the
  marketplace

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• Effective marketing develops
• Brand awareness consumers know about your brand
• Brand loyalty consumers prefer your brand over
  your competitors and support it
• Brand insistence customer will accept no
  substitutes (ex. people that only drink Coca-Cola
• or insist on only using BlackBerry as their
  personal hand held computer)

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• Are there any products or services where you
  insist that you only use that brand?

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• Why would you pay more for something when you can
  get a similar product or service for less?

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Why? Is the key to Branding

• http//www.ted.com/talks/simon_sinek_how_great_lea
  ders_inspire_action.html

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• A brands equity develops in a predictable way.
  We call this the product life cycle
• The product life cycle consists of 5 parts
• Introduction
• Growth
• Maturity
• Decline
• Decision point

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Product Life Cycle
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• Stage 1 Product Introduction
• Product launch product enters market place
• Marketers then market to early adopters consumers
  who like to be the first to own new products

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• Stage 2 Growth
• Other consumers follow early adopters/trendsetters
  
• Sales increase
• As popularity increases competitors enter the
  market
• Competition fuels growth
• Advertising (billboards, TV ads, news, etc).
• Product line becomes very visible (brand
  awareness)
• Some competitors survive, some drop out. Only a
  few will survive the growth phase

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• Stage 3 Maturity
• Growth is flat (plateau)
• New consumers replace those who leave to purchase
  a competing product
• Brand equity is at its highest
• All major costs/expenses (ex. loans) have been
  paid off. There for cost of distribution is lower
  and profits increase
• Now the business can use income generated to
  develop new products

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• Stage 4 Decline
• Product will fail to attract new customers at
  some point (usually)
• As sales decrease product enters decline stage
• Change in price, or new advertising campaign can
  reverse trend
• If brand equity drops then the business has a
  serious problem

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• Stage 5 The Decision Point
• Final stage
• Marketers must make important brand-management
  decisions
• Use what ever equity they have left in the brand
  and try to reposition it/reintroduce it in a new
  market
• Involves new promotion and repricing

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Non-traditional Product Life Cycle

• There are 3 main non-traditional product life
  cycles
• Fad
• Niche
• Seasonal

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• Fads
• Product that is extremely popular for a very
  short period of time
• A trend is not a fad. Trends last longer than
  fads
• Fads usually last about a year
• Can you think of any fads?

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Group Activity

• In groups come up with as many fads as you can in
  the 2000s.
• You have 10 minutes!
• Winning team gets a donuts. Dont worry, I didnt
  forget about donuts for the last group exercise

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• Businesses can make huge profits or huge losses
  on fads.
• To make money the business must sell most of its
  stock and get out of the market just as the fad
  reaches its peak
• Many fad marketers enter the market and create
  knock offs a cheaper version of the fad at the
  wrong time and lose money

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• Fads die quickly and can often leave a business
  with a lot of inventory

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• Niches
• A section of the market in which they dominate
  and into which very few competitors enter
• Products that have a short growth stage are
  called a niche
• Niche marketers usually invent their products and
  hold exclusive patents or formulas
• Original manufactures often have distributed
  their products to other businesses before
  competitors can enter the market this is an
  example of a barrier to entry

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• Other barriers to entry are
• small market size
• cost of research and development
• advertising expenses
• factory and equipment costs
• design costs
• High barriers to entry will deter competitors
  from entering the market leaving the niche
  marketer alone

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• Seasonal
• What are some examples of seasonal products AND
  services
• Retailers, wholesalers, importers, and
  manufacturers of seasonal products need to make
  te most of their selling season
• Businesses must keep adequate stock but not too
  much. We call this inventory management

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• The 4 Ps of Marketing

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4 Ps of marketing

• Product
• Price
• Place
• Promotion
• When all four parts are assembled, it is called
  the marketing mix

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• Products and Services
• Good product and service development takes into
  account
• Quality
• Design
• Features
• Benefits

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• Product Quality
• If you improve quality you will draw consumers to
  your product/service
• Can you think of products where quality matters?
• Can low quality products succeed in the
  marketplace? Why or Why not?

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• Product Design
• We often buy one product instead of another
  because of we like the way it looks over another.
  
• Sometimes its not the product that attracts, it
  can also be the packaging (ex. Coca-Cola)

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• Product Features
• Scent
• Size
• Taste
• Rules
• Features
• Product features are important to meet the needs
  of consumers

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• Benefits
• Each product or service has benefits that attract
  different consumers
• The consumer must perceive these benefits in
  order to be interested enough to buy

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Product Changes and Strategies

• Adding Products
• Only if there is enough demand for it and it is
  consistent with your business
• Example McDonalds
• Eliminating Products
• Eliminate products that yield poor sales
• Examples Vanilla Coke in Canada
• Changing Products
• Change style or design of product
• Examples Apple Iphones
• Identifying New Uses For Products
• Examples SUVs amd TUMS
• Changing Brands, Packages or Labels
• Eye catching packaging and labeling
• Make your brand appeal to different classes of
  people
• Examples Tims Roll Up The Rim

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PRICE

• Price
• Pricing decisions can make the difference between
  a successful product and a failure
• If you lower your price too much you will lose
  profit. If your price is too high you will not
  maximize your profit
• Example
• 50 for a polo shirt 500 sold/week
• 45 for a polo shirt 610 sold/week
• 40 for a polo shirt 670 sold/week
• If the product appears to be similar, but carries
  a much higher price, consumers should know that
  they are paying more for more.

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PRICE

• Profit Prices greater than costs and
  expenses
• Why is this easier said than done?
• Fixed costs vs Variable Costs

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PRICE

• Fixed costs and expenses stay the same (salaries,
  rent, insurance, etc.)
• Variable costs costs and expenses that are
  always changing (sales commissions, delivery
  charges, advertising, supplies, etc.)
• Variable costs change, therefore profit changes

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PRICE

• FACTORS THAT AFFECT PRICE
• Supply and demand
• Consumer perceptions
• Competition
• Technological trends

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PRICE

• Supply and demand
• key when it comes to pricing
• If there is high demand for your product (people
  really want it) they will pay a higher price for
  it.
• If there isnt a high demand for your product
  then you will need to lower your price to sell
  more of it.
• Can you think of a product that has a high
  demand? A low demand?

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PRICE
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PRICE

• Consumer perceptions
• The price you set for your product will create an
  image in your potential consumers mind
• Too cheap poor quality
• Priced too high may turn away customers but may
  also convey high quality, value and status
• Different target markets will have different
  perceptions when it comes to pricing

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PRICE

• COMPETITION
• Competition lowers prices!
• Why does competition lower price?
• However, if you can add value to your product
  (ex. warranties, convenience, quality, etc.) you
  can charge more.

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PRICE

• TECHNOLOGICAL TRENDS
• Adapting to technological trends can save you
  money, which you can then pass on to the
  consumer.
• Example Buying Books at a book store vs online
• Its cheaper for book stores to sell books online
• As a result the price of books has dropped

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PRICE

• Setting a Basic Price
• 1. Cost based pricing
• Consider your costs and your profit goals before
  setting a price
• 2. Demand-Based Pricing
• What are consumers willing to pay for your
  product
• 3. Competition-Based Pricing
• Find out what competitors are charging.

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PRICE
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Class activity

• What would you set the price for a 55 inch Sony
  LCD TV?
• What would you set the price to install a car
  starter in your average car?
• What would you set the price for an IPAD 3?

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Price Elasticity

• Elastic Products
• If a price is elastic, a small change in price
  may cause a significant change in demand.
• Elastic Products or Services
• Expensive
• Luxury items
• Big ticket items (cars, houses, etc)
• Can you think of any other examples?

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Price Elasticity

• Inelastic products
• If the price is inelastic, changing the price
  will have little or no effect on demand
• Inelastic products
• Necessities (asthma inhaler, diapers, gas))
• Lack of substitutes (eggs)
• Can you think of any other examples?

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• Marketing Clip

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PLACE

• 5 Factors to consider
• 1) Intensity of Distribution
• Intensive Distribution find it everywhere
• Selective Distribution limits the number of
  outlets
• Exclusive Distribution limits number of outlets
  to one per area. Example a museum might sell as
  special book for an exhibit.

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PLACE

• 2) Transportation
• How will your good be shipped?
• How fast can your product reach your consumer
• What are the costs?
• Air transportation is most expensive
• Water transportation is least expensive

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Place

• 3) Location, Layout and Availability
• Select high traffic areas to locate your business
• Areas that meet your target market
• How many entry points to your business
• Is it convenient (accessibility, hours of
  operation)

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Place

• 4) Impact of technology
• Internet?
• reduces time
• reduces excess inventory
• websites to sell and collect pricing information
• tracking software

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Place

• 5) Place (channels of distribution)
• Channels of Distribution are the paths of
  ownership that goods follow as they pass from the
  producer to the consumer
• 3 Main Channels of Distribution
• Direct Channels
• Indirect Channels
• Specialty Channels

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• Direct Channel of Distribution
• Manufacturer sells to consumer
• Ex. Services tax services

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• Indirect Channels of distribution
• Have more than 1 intermediaries (importers,
  wholesalers, or retailers)
• Importers
• Searches for businesses, negotiates distribution
  deals with foreign manufacturers, buys
  manufactured merchandise and then sells it

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• Wholesalers
• Buy goods from producers or importers and resell
  the goods to retailers
• Retailers use wholesalers, rather than suppliers
  for a few reasons
• Manufacturers often require retailers to purchase
  a minimum quantity of goods
• Wholesalers can afford to buy in volume and will
  sell to retailers in smaller quantities
• Retailers who use wholesalers pay more for a good
  than a business that buys straight from the
  manufacturer

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• Direct Channel
• Indirect Channel

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• Specialty Channels
• Any indirect channel of distribution that does
  not involve a retail store
• Examples include
• Vending machines
• Telemarketing
• Catalogue sales
• E-commerce
• Door to door sales

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Promotion

• Promotion
• Intended to persuade, inform, or remind a target
  market about a business or its products.
• Encourages consumers to buy a product by using
  coupons, contests, premiums, samples and special
  events
• More than just advertising

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Promotion

• Promotional Mix
• The combination of different promotional elements
  that a company uses to reach and influence
  potential customers
• Different combinations depending on your business

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Promotion - Advertising

• Advertising
• The paid non-personal presentation of ideas,
  goods, or services. It is directed toward a mass
  audience by an identified sponsor
• There are two traditional types of advertising
  media
• 1) Print
• 2) Broadcast

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Promotion - Advertising

• Types of Print Advertising
• Newspapers
• Magazines
• Direct Mail flyers
• Outdoor Advertising ads on benches, billboards
  etc
• Directories
• Transit Advertising adds on buses, subways

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Promotion Advertising

• Media-Broadcast Advertising
• Television
• Radio
• Internet

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Promotion - Publicity

• Publicity
• The placement in the media of newsworthy items
  about a company or product
• Call attention to yourself and your enterprise
• Examples of Publicity
• Write a news release/press release write a news
  worthy story to your local paper
• Write feature articles submit articles to your
  local paper
• Submit captioned photos send photos to the
  media for them to report on
• Call a press conference make a major
  announcement to the media
• Seek interviews hold interviews with the media
  to discuss something newsworthy about your
  business

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Examples of Sales Promotions

• Coupons
• Offer consumers money off of the price of a
  product
• Most coupons end up in the trash
• Advertisers measure the effectiveness of the
  promotion by the redemption rate the percentage
  of coupons that consumers actually use (avg.
  redemption rate is 5)

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Promotion Sales Promotions

• Examples of Sales Promotions
• Displays
• in the window or showroom to increase buyer
  awareness
• Premiums
• Anything you receive in addition to the product
  your are selling (coupons or gifts)
• Rebates
• A return of part of the purchase
• Samples
• Free trial size packages
• Sweepstakes and contests
• Get customers talking about your product/service
  and a chance for them to win something

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Promotional Mix

• Things to Consider
• Target Market
• Match your promotional option to your target
  market
• Ex. Pull up diapers should be promoted towards
  parents
• Promotional Channels
• Products have established lines of communication
  the same way they have established channels of
  distribution
• Ex. want to know what movie is playing people
  check the internet.

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Promotional Mix

• Time Frame
• Advertsing in advance of new products
• Post-sale advertising can help customers confirm
  their decision to buy
• Cost
• What combination will give you the most promotion
  or visibility for your dollar
• Determine an advertising budget first

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The 2 Cs of Marketing

• In order to for he marketing mix to come together
  two major external factors must be considered
• 2Cs
• Competition and Consumers

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• 1st C
• Competitive market consists of all sellers of a
  specific product
• Example All companies that sell televisions
  (Sony, LG, Samsung, Panasonic, Sharp, etc.)
• The percentage of the market that a company or
  brand (eg. Sony) has is called market share

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• Every business is in competition for
• 1. Discretionary Income
• the income that is not committed to paying for
  basic necessities such as food, clothing and
  shelter

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Types of Competition

• Indirect competition
• Products and services that are not directly
  related to each other but compete for the
  consumers money.
• Example 15 for movies or pizza
• Direct Competition
• Products that are similar to one another
• (ex. different brands of sunscreen)

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• 2nd C
• The Consumer Market (target market)
• Types of consumers who buy their product
• These consumers can be identified by
• Demographics
• Lifestyle

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• Demographics
• the study of obvious characteristics that
  categorize human beings
• are used to target specific consumers
• If you were asked to market a snapback what
  demographic would you target your marketing to?

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• Demographic Variables include
• Age
• Gender
• Family Life Cycle
• Income level
• Ethnicity and culture
• Lifestyle

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• Marketing Research
• the collection and analysis of information that
  is relevant to the marketing strategy

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• Marketing research tells businesses what
  consumers wants and needs are, what they will pay
  for their products and services.

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Marketing Research Tools

• Secondary Data
• Information that others have collected. Examples
  websites, databases, books, periodicals etc.

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• Researches collect data in a number of ways
• Test Marketing
• produce a limited quantity of a new product and
  introduce it into one or two specific areas
• Expensive
• Internal Information Sources
• Business can analyze their own data on sales,
  inventory production etc.

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• Surveys
• Questions used to gather data about consumer
  wants and needs
• Observation
• Watching people to see how they react in certain
  situations
• Focus Groups
• Company-arranged meeting of potential consumers
• Participants