CHAPTER 8: Marketing strategies
(CHAPTER 8: Marketing strategies, page 211)
• The marketing mix consists of four major elements: product, price, promotion and place. • Combined with these four Ps are people, processes and physical evidence to create the extended marketing mix. • Together, these seven Ps make up the strategies of marketing and become the centrepiece of the marketing plan. • The main goal of a marketing manager is to develop and maintain a marketing mix that precisely matches the needs of the customers in the target market. • Marketing segmentation involves dividing the total market into segments. • A business selects one of these segments to become the target market. • The ultimate aim of market segmentation is to increase sales, market share and profits by better understanding and responding to the desires of the different target customers. • The consumer market can be segmented according to four main variables: demographic — features of a population
geographic — urban, regional and rural locations
psychographic — personality characteristics
behavioural — customers’ relationship to the product. • Product/service differentiation, in its broadest sense, is the process of developing and promoting differences between the business’s products or services and those of its competitors. • Product positioning refers to the technique in which marketers try to create an image or identity for a product/service compared with the image of competing products/services.
(CHAPTER 8: Marketing strategies, pages 218–19)
• A product is a good or service that can be offered in an exchange for the purpose of satisfying a need or want. • Most products are combinations of tangible and intangible benefits — the total product concept. • With mass-produced products, it is often on the differences in the intangible benefits that product competition is based. • A brand is a name, term, symbol, design or any combination of these things that identifies a specific product and distinguishes it from its competition. • A brand name is that part of the brand that can be spoken. • A brand symbol or logo is a graphic representation that identifies a business or product. • To guard against other businesses using its brand name or symbol, a business can apply to have the name registered. • Manufacturer’s or national brands are those owned by a manufacturer. • A private or house brand is one that is owned by a retailer or wholesaler. • Generic brands are products with no brand name at all.
• To assist sales, the packaging of a product is sometimes as important as the product itself. • Marketers can use labels to promote other products or to encourage proper use of products and therefore greater consumer satisfaction with products.
(CHAPTER 8: Marketing strategies, page 225)
• Price refers to the amount of money a customer is prepared to offer in exchange for a product. • There are three main pricing methods:
Cost-based (mark-up) pricing is a pricing method derived from the cost of producing or purchasing a product and then adding a mark-up. Market-based pricing is a method of setting prices according to the interaction between the levels of supply and demand. Competition-based pricing is where the price covers costs (cost of raw materials and the cost of operating the business) and is comparable to the competitor’s price. A business can select a price that is below, equal to or above that of the competitors. • Once the basic price has been set using the preferred pricing method, the business then fine-tunes this price in line with its pricing strategy. • The four main pricing strategies include:
price skimming, which occurs when a business charges the highest possible price for the product during the introduction stage of its life cycle price penetration, which occurs when a business...
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