CHAPTER A14 Managing the Marketing Mix: Product, Price, Place and Promotion McGraw-Hill/Irwin Copyright © 2015 by the McGraw-Hill Companies, Inc All rights reserved LEARNING OBJECTIVES Explain the concept of a total product offer and summarize the functions of packaging Contrast brand, brand name, and trademark, and discuss the concept of brand equity Describe the product life cycle Identify various pricing objectives and strategies, and explain why non-pricing strategies are growing in importance A14-2 LEARNING OBJECTIVES Explain the concept of marketing channels and the value of marketing intermediaries Discuss the differences between wholesale and retail intermediaries and explain the various kinds of non-store retailing Define promotion and list the traditional tools that make up the promotional mix Assess the effectiveness of various forms of sales promotion A14-3 REED HASTINGS Netflix • Almost singlehandedly ended the era of brick and mortar video rentals • In college, Hastings spent his summers training with the Marines and joined the Peace Corps • Was inspired to start Netflix after racking up a $40 late fee A14-4 NAME that COMPANY This U.S company is known for having low prices all the time One way it keeps prices low is by eliminating as many wholesalers as possible and doing all the wholesale function itself Name that company! A14-5 DEVELOPING VALUE LO A14-1 • Value Good quality at a fair price • What customers perceive as the best value depends on many factors • Adapting products to new markets is an ongoing challenge • Product development is a key activity in any modern business A14-6 PRODUCTS CONSUMERS WON’T GIVE UP LO A14-1 • Internet service • Cell phone service • Cable television • Discount apparel • Haircuts and coloring • Fast-food A14-7 PRODUCTS “EXPENDABLE” by SPENDING CUTS LO A14-1 • Luxury handbags • Satellite radio • Specialty apparel • High-end cosmetics • Facials A14-8 DEVELOPING a TOTAL PRODUCT LO A14-1 • Total Product Offer Everything consumers evaluate when deciding whether to buy something • Products are evaluated on many different dimensions, both tangible and intangible • Marketers must think like and talk to consumers to find out what’s important A14-9 PRODUCT INNOVATION DURING the GREAT DEPRESSION Source: BusinessWeek Small Biz LO A14-1 A14-10 WHOOPS! Sales Slip-Ups LO A14-7 • Not feeling the customer’s pain • Making money is the only goal • Seeing sales as just a job • Getting upset during the presentation • Failing to properly prepare or over-preparing • Not being yourself • Neglecting the relationship A14-76 STEPS in the B2C SELLING PROCESS LO A14-7 A14-77 USING PUBLIC RELATIONS in PROMOTION LO A14-7 • Public Relations (PR) Evaluates public attitudes, changes policies and procedures in response to the public, and executes a program of action and information to earn public understanding and acceptance A14-78 PUBLICITY LO A14-7 • Publicity Any information about an individual, product or organization that’s distributed to the public through the media and is not paid for or controlled by the seller • Advantages of Publicity: - Free - Reaches people who would not look at an advertisement - More believable than advertising A14-79 DISADVANTAGES of PUBLICITY LO A14-7 • No control over whether the media will use a story or when they may release it • It can be good or bad • Once a story has been run, it is not likely to run again A14-80 TEST PREP • What are the four traditional elements of the promotion mix? • Define advertising and explain why advertising today is moving from globalism to regionalism • What is the responsibility of the public relations department? • What are the advantages and disadvantages of publicity versus advertising? A14-81 SALES PROMOTIONS LO A14-8 • Sales Promotion The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities • Categories of Sales Promotions: B2B Sales Promotions Consumer Sales Promotions A14-82 SALES PROMOTION TECHNIQUES LO A14-8 A14-83 SOME KEY CONSUMER PROMOTIONS LO A14-8 • Coupons • Demonstrations • Sampling • Sweepstakes • In-store Displays • Contests A14-84 CLIP THESE Most Visited U.S Coupon Clearing Sites LO A14-8 • Coupons, Inc • EverSave • RetailMeNot • CouponCabin A14-85 USING WORD-of-MOUTH PROMOTION LO A14-8 • Word-of-Mouth Promotion People tell others about products they have purchased • Word-of-Mouth is important for products like: - Restaurants - Daycare and Eldercare - Car Repair Shops - Hair Stylists - Hotels A14-86 WHAT ARE COMPANIES YELPING ABOUT? • Many companies have a website, Facebook page or some online presence • However, on review sites like Yelp, they cannot control their public image • The Federal Trade Commission has received over 2,000 complaints about Yelp • Companies can respond to reviews But often the damage is already done A14-87 EMERGING PROMOTIONAL TOOLS LO A14-8 • Viral Marketing Paying customers to say positive things on the Internet or setting up multiple selling schemes whereby consumers get commissions • People who promote through viral marketing often receive SWAG which can include free tickets, shirts, and other merchandise A14-88 PUSH, PULL, AND PICK PROMOTIONAL STRATEGIES LO A14-8 • Push Strategy Producers use advertising, personal selling, sales promotion, and other tools to get their products stocked on shelves • Pull Strategy Directs heavy advertising and sales promotions efforts towards consumers and gets the public to request their products from retailers • Pick Economy Refers to consumers who pick out their products from online outlets A14-89 TEST PREP • What are the sales promotion techniques used to reach consumers? • How does a push strategy differ from a pull strategy? A14-90 ... what’s important A14- 9 PRODUCT INNOVATION DURING the GREAT DEPRESSION Source: BusinessWeek Small Biz LO A14- 1 A14- 10 ANYTHING YOU CAN DO… Products Replacing Products LO A14- 1 A14- 11 POTENTIAL... you want to ask an expert? A14- 22 The NAME GAME Source: Bloomberg Businessweek, www.businessweek.com, accessed March 2015 A14- 23 ESTABLISHING BRAND EQUITY and LOYALTY LO A14- 2 • Brand Equity – The... any modern business A14- 6 PRODUCTS CONSUMERS WON’T GIVE UP LO A14- 1 • Internet service • Cell phone service • Cable television • Discount apparel • Haircuts and coloring • Fast-food A14- 7 PRODUCTS