Topics:

Marketing Strategy Overview:

Defn: Marketing strategy consists of the analysis, strategy development, and implementation activities in:
Developing a vision about the market(s) of interest to the organization, selecting market target strategies, setting objectives, and developing, implementing, and managing the marketing program positioning strategies designed to meet the value requirements of the customers in each market target. Overview: 1. Introduction

Simply put, customers are no longer a givenjust because you make it, doesnt mean anyone will buy it. In order to continue to thrive, companies must acquire and keep customers. Because it is the only business function that deals directly with customers, marketing and sales has become an area of increasing focus for companies of all sizes. How should companies approach the process of marketing products and services? The process of marketing occurs in five steps: Step 1: Understanding the market climate and marketing strengths and weaknesses Step 2: Developing a marketing strategy Step 3: Building a marketing plan Step 4: Implementing the plan Step 5: Monitoring the success of the plan

Though this five-step-process may appear straightforward, many companies demonstrate a great deal of confusion about developing a marketing strategy. In fact, many confuse solid marketing strategy with pure tactics, or what we like to call, "brand juice." Visual identity, clever tag lines, creative "essence" advertising, edgy names, well-designed Web sites, big ticket giveaway promotions, publicity buzz-making are all key ingredients in brand juice and elements of marketing, but they are supporting elements. To be effective, such supporting elements must be part of a more comprehensive

2. What is a Strategy?

Real marketing strategy provides a roadmap to creating and delivering true value to distinct groups of customers. All successful marketing strategies must begin and end with the customerthey cannot be an afterthought or taken as a givenso marketers must test their assumptions about their customers

constantly What goes into a marketing strategy? A cohesive combination of: Targetingto whom are you going to market your products and services? Positioninghow are you going to differentiate yourself from competitors? Product/Service Attributeswhat attributes/features will the product/service have? Marketing Communicationshow are you going to reach the target and with what message? Pricingwhat price will you charge the target? Distributionwhat channels will you use to sell the product or service? Customer Servicehow will you manage additional customer needs?

Of these components, targeting and positioning are the two most critical elements. To paraphrase marketing guru Phil Kotler, if you nail the targeting and positioning, everything else falls into place.

3. Nailing the Targeting

The targeting decision identifying the people you want to direct your marketing efforts towards is one of the first issues a marketer considers. Targeting is knowing where to concentrate forces. "To win a war you need to know where to attack," Dwight Eisenhower might have said to an audience of business managers. "We wouldnt have brought the Nazis to their knees if we had landed the Allied forces at Calais instead of the beaches of Normandy." Most marketers agree that focusing on subsets of current and potential customers is the most efficient way to develop a marketing program, but this immediately begs the question, which subset? There are literally hundreds of thousands of different ways to divide customers into subsets, also called segments. Consider just a few of the popular market segmentations we have observed among a variety of businesses: heavy, medium, light users; 18-to-49 year-old-women, 18-to-49 year-old men, older women, older men; people who look like current customers, people who dont; current buyers, non-users; big customers the largest 10 percent versus nine other customer size groups; five different benefit segments; five different personality segments; and six different attitude segments. In this day and age of increasing personalization, some might even argue that the U.S. offers a number of potential target markets equal to the U.S. population.

4. Segmenting the Market

We recommend marketers discover segments by looking at a combination of all possible market

drivers such as: Category involvement: how important purchases in this category are to the buyer? Product preference motivators: what characteristics are most motivating? Product purchasing patterns: how frequently do they buy? Media habits: what do buyers watch, read, listen to? Sociographics: how strong is their ethnic affiliation and religiosity? Demographics: what is their income, age, and level of education? Psychographics: what are their lifestyle attitudes?

The key to nailing targeting is finding the most efficient, scientific way of segmenting the market and to choose a target group based on its potential profit contribution. Dont believe the hype that companies cant evaluate target groups in terms of profit potential. Marketers can calculate with reasonable accuracy how much it will cost to reach people in a target group, how many will buy the product or service, and how much money they will give to one particular company using both secondary and primary data. For example, for two decades the major gasoline brands were in a state of pax gasolinathey went comfortably about doing their business, market shares changing only slightly from one year to the next. True, there were periodic price wars and promotions characterized by giving away NFL glasses and selling discounted Coca-Cola, but nothing so substantial as to wake the industry up from a deep complacency. By the mid-1990s, however, new low-price brands began showing up everywhere, and the major brands started to work hard to differentiate themselves, with an aim toward gaining more margin from the business. In that context, Mobil Corporation (now ExxonMobil), one of the most innovative marketers, commissioned a large-scale study to better understand its customers and prospects. The study results, reported in the Wall Street Journal, form the basis for the Mobil Friendly Serve campaign. The study found five distinct consumer groups, all roughly the same size numerically. The labels and numbers have been changed to maintain confidentiality. Car Buffs are generally high-income, middle-aged men who drive 25,000 to 50,000 miles a year. They buy a premium gasoline with a credit card, purchase sandwiches and drinks from the convenience store, and will sometimes wash their cars at the car wash. Loyalists are men and women with moderate to high incomes who are loyal to a brand and sometimes to a particular station. They frequently buy premium gasoline and pay in cash. Speedsters are upwardly mobile Gen Xers. They are constantly on the go, live in their cars and snack heavily from the convenience store. Soccer Moms are usually housewives who shuttle their children around during the day and use whatever gasoline station is based in town or along their route of travel. Price Shoppers generally are not loyal either to a brand or to a particular station and rarely buy the premium line. They are frequently on tight budgets and efforts to woo them have been

the basis of marketing strategies for years. Analysis of the data revealed that while Car Buffs and Loyalists represented only 38 percent of the population, they accounted for 77 percent of the potential profitability. Once Mobil knew the target, it knew whom to talk to and where to find them, how to communicate with them, in which media, about which products and services, at what price. As the Journal reported: These targets want classier snacks from the convenience store; human contact; quality products; top-notch, quick service; privileges for loyal users; attendants who recognize them; and a nationally available brand. They also want a reasonably competitive price, but thats not the most important consideration. Mobil addressed the needs of these two groups with Friendly Serve a marketing campaign characterized by clean restrooms, cappuccino in the convenience stores, a concierge to assist customers, and more recently a Speedpass payment system. Stations that have implemented the Friendly Serve program have seen double-digit sales and profit increases. Clearly making the right targeting decision takes time certainly more than the five minutes most marketers dedicate to it. Intuitively obvious target groups are rarely the most profitable so marketers that take the time to devise a market segmentation plan and discover the most profitable target will find themselves far ahead of the competition even this early in the marketing strategy process. How to Nail Positioning Once a marketer has identified the financially optimal target group, the next step is positioning. In an increasingly cluttered environment where buyers have very little time to ponder product decisions, products and services that stand for something important or remembered for something significant have an advantage. A powerful positioning leads to a powerful brand. But positioning is a difficult concept because it embodies the value proposition the bundle of benefits and attributes a company wants to offer buyers at a certain price to positively differentiate the product or brand from competitors. Its a message so clear, so succinct but so powerful that, once launched, it begins to move customers and prospects toward the brand. Most importantly, it is a message to the target group. Usually, the positioning is a one- or two-sentence statement even a word that captures the message a marketer wants to imprint in the minds of customers and prospects. It describes your product or service and how it is different from and therefore better than the competitions. Examples of long-running positioning strategies for companies or brands include: Easy to useApple Exceptional Performance for driving enthusiastsBMW SoftnessCharmin tissue Authentic, real, originalCoke Guaranteed next-day deliveryFederal Express Wholesome family entertainmentDisney Improves the quality of lifeGE

StrengthHefty plastic bags Accepted everywhereVisa SafetyVolvo For the youthful, hip generationPepsi Thrills and excitement for preteens and adultsUniversal Studios Theme Park Nutritious, low-fat, low-calorie foodHealthy Choice Pure, clean, naturalIvory Soap Good value for family mealsTaco Bell

At its core, positioning is the reason why people buy one product rather than another. They believe it offers greater value, strength, prestige, fun, safety or nutrition (or some combination of elements) than another product or service.

5. The Message

If marketers had unlimited time and a prospects undivided attention, they could tell him everything about the product or service. But a company does not have endless time, and prospects are notoriously inattentive. The most any business can say are those few things prospects care about and will remember. Marketers want to fix a succinct message in peoples heads to induce trial and use among prospective buyers or reinforce current purchasing among current customers. Positioning is valuable because when you have it, the other marketing elements follow naturally: pricing, marketing communications and promotion, and distribution. As you segment a market, simultaneously investigate all potential attributes and benefits that might motivate customers in a category. These include all the ways a business can differentiate itself: product, service, personnel, image. At this point the company does not know if any of them actually motivate behavior. The goal is to generate a long list of attributes and benefits that might form the basis for a powerful positioning strategy. These should represent both attributes and benefits of the product and tangible and intangible facets. To uncover these attributes and benefits, a company might do a category scan, exploratory research, personality assessment, social values analysis, emotional exploration, or some combination of all five: A category scan is a close review of all the attributes and benefits, tangible and emotional, that competitive brands in the category employ. Exploratory research includes focus groups, in-depth interviews, or both. The focus groups do not produce the positioning, but rather ideas for the list of attributes and benefits. Marketers should not rely on the outcome of focus groups to make the final positioning decision.

Personality assessment is an analysis based on primary or secondary data on the key personality traits that potentially underlie behavior in the product or service category. Since there are literally thousands of potential personality traits, it takes an expert to provide some insight into which ones might be relevant in the product category and to select the measures of those relevant traits a study ought to include. Social values analysis breaks social values and how they drive human behavior into eight categories. A marketer can establish how relevant each of these values is to consumers either directly, by measuring relevance in a research study, or indirectly, by inspecting secondary sources closely. Emotional exploration looks at peoples psychological needs and how a particular product or service category addresses them. All of these techniques are just as appropriate for businessto-business as for consumer marketers and appropriate for both services and products

Finalizing the Positioning Decision Like the targeting decision, the positioning decision is not one that should be made in a one-hour meeting. Since the items on the list become the elements of the brands positioning and the connecting threads of an entire strategy, the list must be as all encompassing and creative as possible. Once a company has a list, management reduces it so it can go into a questionnaire to determine how motivating each of the attribute and benefit characteristics is to the market target and how buyers perceive competing brands on each of them. After marketers discover what motivates consumers and the perception of their products or services and those of competitors, they can rank-order a final list of category characteristics or potential positioning themes. Now the task becomes a creative one. Marketers develop a message strategy that puts the product or service in the most positive light. From there the advertising and marketing communications people go to work. For example, facing deregulation, a tiny company called Green Mountain Power (now Green Mountain Energy) located in Burlington, Vermont, started to worry about competing with national power companies that could afford price cuts to attract customers. The company could not become the low-cost provider. Instead, it began to look at other differentiating factors for power. The company discovered a significant number of customers wanted clean energy and would pay more for environmentally friendly power. Green Mountain created a powerful positioning statement, Power provided by the raging rivers of North America, the prevailing winds, and the sun. No coal, no nuke, no kidding. As the Green Mountain example illustrates, do not automatically select a low-price positioning even in a commodity category. Although many companies use the low-price positioning, offering the lowest price only works in the long run when the company is in fact the categorys lowest cost producer. Otherwise the lowest-price

positioning is not sustainable and will drive the company toward bankruptcy.

6. Pulling it Together

Formulating the remaining components of marketing strategy should reflect the needs, interests, habits, and behaviors of the target group and the motivating attributes of the positioning. As emphasized throughout this tutorial, building a marketing strategy takes time. We often hear marketers say, I dont have time to do the research. I need to make a decision now! They go on to make decisions based on intuition and gut-instinct about what they feel customers want. Yet these same marketers somehow find the time to make the same decisions over again later when the marketing plan is not working. They make the same mistakes repeatedly, rather than try to get it right in the first place. These marketers have learned the hard way that, while just about anyone can make a decision, not everyone can turn the decision into a sustainable competitive advantage and profits. Those that have discovered and sustained an advantage recognized the critical nature and inherent complexity of the components of marketing strategy. Many tools and technologies exist today to help marketers make these complex decisions; all thats required is the will to use them.

STPD Strategy: see the scan doc. Market Domaince strategies: leaders challengers followers nichers:

Market dominance strategies

These calculations of market dominance yield quantitative metrics, but most business strategists categorize market dominance strategies in qualitative terms. Typically there are four types of market dominance strategies that a marketer will consider: There are market leader, market challenger, market follower, and market nicher.

Market leader
The market leader is dominant in its industry. It has substantial market share and often extensive distribution arrangements with retailers. It typically is the industry leader in developing innovative new business models and new products (although not always). It tends to be on the cutting edge of new technologies and new production processes. It sometimes has some market power in determining either price or output. Of the four dominance strategies, it has the most flexibility in crafting strategy. There are few options not open to it. However it is in a very visible position and can be the target of competitive threats and government anti-combines actions. Research in experience curve effects and the PIMs study during the 1970s concluded that market leadership was the most profitable strategy in most industries. It was claimed that if you cannot get enough market share to be a major player, you should get out of that business and concentrate your resources where you can take advantage of experience curve effects and economies of scale, and thereby gain dominant market share. Today we recognize that other less dominant strategies can also be effective. The main options available to market leaders are:
o o o o o o o o o

Expand the total market by finding New users of the product New uses of the product More usage on each use occasion Protect your existing market share by: Developing new product ideas Improve customer service Improve distribution effectiveness Reduce costs Expand your market share: By targeting one or more competitor Without being noticed by government regulators

Market challenger
A market challenger is a firm in a strong, but not dominant position that is following an aggressive strategy of trying to gain market share. It typically targets the industry leader (for example, Pepsi targets Coke), but it could also target smaller, more vulnerable competitors. The fundamental principles involved are:

Assess the strength of the target competitor. Consider the amount of support that the target might muster from allies. Choose only one target at a time. Find a weakness in the targets position. Attack at this point. Consider how long it will take for the target to realign their resources so as to reinforce this weak spot.

Launch the attack on as narrow a front as possible. Whereas a defender must defend all their borders, an attacker has the advantage of being able to concentrate their forces at one place. Launch the attack quickly, then consolidate. Some of the options open to a market challenger are:

Price discounts or price cutting Line extensions Introduce new products Reduce product quality Increase product quality Improve service Change distribution Cost reductions Intensify promotional activity

Market follower
A market follower is a firm in a strong, but not dominant position that is content to stay at that position. The rationale is that by developing strategies that are parallel to those of the market leader, they will gain much of the market from the leader while being exposed to very little risk. This play it safe strategy is how Burger King retains its position behind McDonalds. The advantages of this strategy are:

No expensive R&D failures No risk of bad business model best practices are already established Able to capitalize on the promotional activities of the market leader No risk of government anti-combines actions Minimal risk of competitive attacks Dont waste money in a head-on battle with the market leader

Market nicher
In this niche strategy the firm concentrates on a select few target markets. It is also called a focus strategy. It is hoped that by focusing ones marketing efforts on one or two narrow market segments and tailoring your marketing mix to these specialized markets, you can better meet the needs of that target market. The niche should be large enough to be profitable, but small enough to be ignored by the major industry players. Profit margins are emphasized rather than revenue or market share. The firm typically looks to gain a competitive advantage through effectiveness rather than efficiency. It is most suitable for relatively small firms and has much in common

with guerrilla marketing warfare strategies. The most successful nichers tend to have the following characteristics:

They tend to be in high value added industries and are able to obtain high margins. They tend to be highly focussed on a specific market segment. They tend to market high end products or services, and are able to use a premium pricing strategy. They tend to keep their operating expenses down by spending less on R&D, advertising, and personal selling.

BCG n GE matrix:
1) BCG matrix:
Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in its portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of SBUs (Strategic Business Units). In other words, it is a comparative analysis of business potential and the evaluation of environment. According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share. Relative Market Share = SBU Sales this year leading competitors sales this year. Market Growth Rate = Industry sales this year - Industry Sales last year. The analysis requires that both measures be calculated for each SBU. The dimension of business strength, relative market share, will measure comparative advantage indicated by market dominance. The key theory underlying this is existence of an experience curve and that market share is achieved due to overall cost leadership. BCG matrix has four cells, with the horizontal axis representing relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if all the SBUs are in same industry, the average growth rate of the industry is used. While, if all the SBUs are located in different industries, then the mid-point is set at the growth rate for the economy. Resources are allocated to the business units according to their situation on the grid. The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular type of business.

Stars- Stars represent business units having large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest. SBUs located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. If successful, a star will become a cash cow when the industry matures. Cash Cows- Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units. These SBUs are the corporations key source of cash, and are specifically the core business. They are the base of an organization. These businesses usually follow stability strategies. When cash cows loose their appeal and move towards deterioration, then a retrenchment policy may be pursued. Question Marks- Question marks represent business units having low relative market share and located in a high growth industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question marks are generally new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. Most businesses start as question marks as the company tries to enter a high growth market in which there is already a market-share. If ignored, then question marks may become dogs, while if huge investment is made, then they have potential of becoming stars. Dogs- Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitors/rival firms. These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim, it should be liquidated if there is fewer prospects for it to gain market share. Number of dogs should be avoided and minimized in an organization.
Limitations of BCG Matrix

The BCG Matrix produces a framework for allocating resources among different business units and makes it possible to compare many business units at a glance. But BCG Matrix is not free from limitations, such asBCG matrix classifies businesses as low and high, but generally businesses can be medium also. Thus, the true nature of business may not be reflected. Market is not clearly defined in this model. High market share does not always leads to high profits. There are high costs also involved with high market share.

Growth rate and relative market share are not the only indicators of profitability. This model ignores and overlooks other indicators of profitability. At times, dogs may help other businesses in gaining competitive advantage. They can earn even more than cash cows sometimes. This four-celled approach is considered as to be too simplistic.
OR

See the BCG matrix pdf

2) GE matrix:

GE Matrix or McKinsey Matrix is a strategic tool for portfolio analysis. It is similar to the BCG Matrix and actually the GE / McKinsey Matrix is an extension of the BCG Matrix - multifactor portfolio analysis tool. This tool compares different businesses on "Business Strength" and "Market Attractiveness" variables, plus the size of the bubbles represents the market size instead of business sales used in the BCG Matrix, and the share of the market or business sales vs. market size is represented as pie chart inside the bubbles. This allows the business user to compare business strength, market attractiveness, market size, and market share for different strategic business units (SBUs) or different product offerings. This strategic portfolio analysis tool has been initially developed by GE and McKinsey. GE Matrix Positions and Strategy: The GE / McKinsey Matrix is divided into nine cells - nine alternatives for positioning of any SBU or product offering. Based on the strength of the business and its market attractiveness each SBU will have a different position in the matrix. Further, the market size and the current sales will distinguish each SBU. Based on clear understanding of all of these factors decision makers are able to develop effective strategies. The nine cells in the matrix can be grouped into three major segments: Segment 1: This is the best segment. The business is strong and the market is attractive. The company should allocate resources in this business and focus on growing the business and increase market share.

Segment 2: The business is either strong but the market is not attractive or the market is strong and the business is not strong enough to pursue potential opportunities. Decision

makers should make judgment on how to further deal with these SBUs. Some of them may consume to much resources and are not promising while others may need additional resources and better strategy for growth.

Segment 3: This is the worst segment. Businesses in this segment are weak and their market is not attractive. Decision makers should consider either repositioning these SBUs into a different market segment, develop better cost-effective offering, or get rid of these SBUs and invest the resources into more promising and attractive SBUs.

New product strategy:

With a well-considered new product development (NPD) strategy, you can avoid wasting time, money and business resources. An NPD strategy will help you organise your product planning and research, capture your customers' views and expectations, and accurately plan and resource your NPD project. Your strategy will also help you avoid:

overestimating and misreading your target market launching a poorly designed product, or a product that doesn't meet the needs of your target customers incorrectly pricing products spending resources you don't have on higher-than-anticipated development costs exposing your business to risks and threats from unexpected competition. There are several important steps you will need to plan into your NPD strategy.

Define your product

An accurate description of the product you are planning will help keep you and your team focused and avoid NPD pitfalls such as developing too many products at once, or running out of resources to develop the product.

Identify market needs

Successful NPD requires a thorough knowledge of your target market and its needs and wants. A targeted, strategic and purposeful approach to NPD will ensure your products fit your market. Ask yourself:

What is the target market for the product I am proposing? What does that market need? What is the benefit of my proposed new product? What are the market's frustrations of existing products of its type? How will the product fit into the current market? What sets this product apart from its competition?

Draw on your existing market research. You may need to undertake additional research to test your new product proposal with your customers. For example, you could set up focus groups or a customer survey.

Establish time frames

You need to allow adequate time to develop and implement your new products. Your objectives for developing new products will inform your time frames and your deadlines for implementation. Be thoughtful and realistic. Some objectives might overlap but others will be mutually exclusive.

Your objective to race against your competition will require efficiency from your team. Your aim to achieve a specific launch date will be influenced by demand for seasonal products and calendar events. Your aim to be responsive to your customers' needs and demands will require time for research to ensure you develop the right products at the right time. Your objective to stick to business as usual and maintain other schedules will affect the resources you make available for NPD.

Identify key issues and approaches

There are many tasks involved in developing a product that is appropriate for your customers. The nature of your business and your idea will determine how many of these steps you need to take. You may be able to skip or duplicate certain stages, or start some of them simultaneously. Key tasks include:

generating and screening ideas developing and screening concepts testing concepts analysing market and business strategy developing and market testing products implementing and commercialising products.

Communication strategy:
What are Communication Strategies? Communication strategies are common in the business world, where they are used as part of a business plan, detailing how to communicate with various groups of people. A single business may have multiple strategies for different categories of people, such as clients, investors, competitors, or employees. Some companies even have an internal communication strategy for communicating within the business itself. These strategies are used to determine things like what information to share with the clients or investors, as well as how that information should be presented. Benefits of a Communication Strategy For most people, talking comes naturally, and everything is run by instinct. This is a reactive way of dealing with problems, and oftentimes the instinctive reaction is not the best one. Strategies for communication, on the other hand, are proactive, which means that they provide a solution to the problem before the issue even arises. With a communication strategy, the solution is carefully planned out in advance. This way, the reaction to the issue will be logical and advantageous to the companys overall goals, rather than instinctive and rash. Dont Just Talk the Talk

To quote Ursula from Disneys The Little Mermaid, Never underestimate the importance of body language. Approximately 90 percent of communication is nonverbal. The tone of voice used, the posture adopted, and the accompanying hand motions can drastically change the spoken words meanings. Since body language is such an important part of communication, it should be included in any communication strategy. Keep in mind that in the current digital era, the medium chosen to convey the message can also be considered a part of nonverbal communication. The Most Important Part of Communication There are some people who are constantly talking, but they never stop and listen. As a general rule, such people are not very good communicators because they fail to understand that are two parties involved in every act of communication. The most important part of communication is listening, not talking. An effective communication strategy should be based on feedback from the person to whom the message is directed. In addition, the strategy should include tips and techniques for good listening, and encourage behaviors like active listening. The Audience An important part of listening is realizing to whom the message is directed. When creating a communication strategy, it is important to keep in mind who the audience will be. Shareholders are not particularly interested in the details of the marketing campaigns and customers dont really care about quarterly reports. Just as the two groups would be addressed in completely separate ways, individuals from different cultural backgrounds should not all get the same message. Culture greatly affects social interaction and communication strategies should take that into account. Communication is an important part of every aspect of life and as a result, these strategies can help with just about anything. They are particularly important for businesses who want to give the right message to their clients or shareholders. An effective communication strategy ensures that the right message gets across in the very best manner, rather than leaving things ad hoc and potentially disastrous. Marketing Communications Strategy #1: Understand Your Market NM Marketing Communications has decades of accumulated industry experience. We work closely with our clients to develop an accurate profile of the market situation.

Who are the key players in your industry? What is your position in the market? What other factors influence the market? How is the market changing? Once we have a thorough understanding of the market, we can move on to the next step. Marketing Communications Strategy #2: Assess Your Business Needs Clients come to NM Marketing Communications, Inc. for help in solving their marketing dilemmas. They are unhappy with their current program or provider, or they are ready to take their campaign to the next level. So before recommending a solution, we spend time with our clients to build an in-depth perspective of their business needs, their goals, and the ways that we can measure success.

What are your sales/communications objectives?

Do you have pressure from competition or other sources? What hurdles to success exist? Marketing Communications Strategy #3: Evaluating Available Resources NM Marketing Communications will help you use your existing resources to develop the perfect communication strategy for your company. This includes a realistic, objective assessment of your companys current capabilities. We can help you guide your marketing strategy to make the best use of the resources you have at hand, and work with you to create a plan that will fit open new doors of opportunity. Creating an effective marketing communications strategy requires a realistic appraisal of the resources our clients have available. The customized marketing strategy that we are ready to develop for you takes into account the unique picture of the clients business.

Business strengths and weaknesses Budgets Staffing Time constraints

Marketing Communications Strategy #4: Choosing Appropriate Strategies & Tactics There are numerous ways to advertise your products and services to others, but using a combination of methods usually yields the best results. NM Marketing Communications is an integrated marketing communications company. We maximize your marketing budget and resources to provide the optimum combination of marketing tactics. The proven communications tools we use include:

Public Relations Advertising Brand Development Direct Mail Literature Digital Communication Internet Presence and Marketing Marketing Collateral Materials Marketing Communication Strategy #5: Creating a Timeline An effective marketing communications strategy addresses both the clients immediate needs and future plans. One of the keys to effective marketing is consistency and well-timed action. NM Marketing Communications, Inc. creates an implementation plan that sets a realistic timetable for achieving sales and communications goals. This timeline addresses:

Short-term and long-term objectives Phased implementation to accommodate market cycles Link to company developments or industry events

Brands building:
What factors are important in building brand value? Several factors are crucial in building successful brands, 1)Quality Quality is a vital ingredient of a good brand. Remember the core benefits the things consumers expect. These must be delivered well, consistently. The branded washing machine that leaks, or the training shoe that often falls apart when wet will never develop brand equity. Research confirms that, statistically, higher quality brands achieve a higher market share and higher profitability that their inferior competitors. 2)Positioning Positioning is about the position a brand occupies in a market in the minds of consumers. Strong brands have a clear, often unique position in the target market. Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, packaging and the way in which it is delivered. In fact, successful positioning usually requires a combination of these things. 3)Repositioning Repositioning occurs when a brand tries to change its market position to reflect a change in consumers tastes. This is often required when a brand has become tired, perhaps because its original market has matured or has gone into decline. The repositioning of the Lucozade brand from a sweet drink for children to a leading sports drink is one example. Another would be the changing styles of entertainers with above-average longevity such as Kylie Minogue and Cliff Richard. 4)Communications Communications also play a key role in building a successful brand. We suggested that brand positioning is essentially about customer perceptions with the objective to build a clearly defined position in the minds of the target audience. All elements of the promotional mix need to be used to develop and sustain customer perceptions. Initially, the challenge is to build awareness, then to develop the brand personality and reinforce the perception. 5)First-mover advantage Business strategists often talk about first-mover advantage. In terms of brand development, by first-mover they mean that it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers

before the competition enters the market. There is plenty of evidence to support this. Think of some leading consumer product brands like Gillette, Coca Cola and Sellotape that, in many ways, defined the markets they operate in and continue to lead. However, being first into a market does not necessarily guarantee long-term success. Competitors drawn to the high growth and profit potential demonstrated by the market-mover will enter the market and copy the best elements of the leaders brand (a good example is the way that Body Shop developed the ethical personal care market but were soon facing stiff competition from the major high street cosmetics retailers. 6)Long-term perspective This leads onto another important factor in brand-building: the need to invest in the brand over the long-term. Building customer awareness, communicating the brands message and creating customer loyalty takes time. This means that management must invest in a brand, perhaps at the expense of short-term profitability. 7) Internal marketing Finally, management should ensure that the brand is marketed internally as well as externally. By this we mean that the whole business should understand the brand values and positioning. This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives. Think of the brands that you value in the restaurant, hotel and retail sectors. It is likely that your favourite brands invest heavily in staff training so that the face-toface contact that you have with the brand helps secure your loyalty.

Distribution strategy:
Distribution is achieved by using one or more distribution channels, including:

Retailers Distributors / Sales Agents Direct (e.g. via e-commerce) Wholesalers

A distribution channel can be defined as:

"all the organisations through which a product must pass between its point of production and consumption" Looking at that definition, you can see that a product might pass through several stages before it finally reaches the consumer. The organisations involved in each stage of distribution are commonly referred to as intermediaries. Retailers Retailers operate outlets that trade directly with household customers. Retailers can be classified in several ways: Type of goods being sold( e.g. clothes, grocery, furniture) Type of service (e.g. self-service, counter-service) Size (e.g. corner shop; superstore) Ownership (e.g. privately-owned independent; public-quoted retail group Location (e.g. rural, city-centre, out-of-town) Brand (e.g. nationwide retail brands; local one-shop name) Wholesalers Wholesalers stock a range of products from several producers. The role of the wholesaler is to sell onto retailers. Wholesalers usually specialise in particular products. Distributors and dealers Distributors or dealers have a similar role to wholesalers that of taking products from producers and selling them on. However, they often sell onto the end customer rather than a retailer. They also usually have a much narrower product range. Distributors and dealers are often involved in providing after-sales service. Franchises Franchises are independent businesses that operate a branded product (usually a service) in exchange for a licence fee and a share of sales. Agents Agents sell the products and services of producers in return for a commission (a percentage of the sales revenues)

Distribution Channel strategy

Each layer of marketing intermediaries that performs some work in bringing the product to its final buyer is a "channel level". Channel 1 contains two intermediary levels - a wholesaler and a retailer. A wholesaler typically buys and stores large quantities of several producers goods and then breaks into the bulk deliveries to supply retailers with smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense. This arrangement tends to work best where the retail channel is fragmented - i.e. not dominated by a small number of large, powerful retailers who have an incentive to cut out the wholesaler. A good example of this channel arrangement in the UK is the distribution of drugs. Channel 2 contains one intermediary. In consumer markets, this is typically a retailer. The consumer electrical goods market in the UK is typical of this arrangement whereby producers such as Sony, Panasonic, Canon etc. sell their goods directly to large retailers and e-tailers such as Comet, Tesco and Amazon which then sell onto the final consumers. Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells directly to customers. An example of a direct marketing channel would be a factory outlet store. Many holiday companies also market direct to consumers, bypassing a traditional retail intermediary - the travel agent.

Pricing strategy:
Pricing - introduction
Setting the right price is an important part of effective marketing . It is the only part of the marketing mix that generates revenue (product, promotion and place are all about marketing costs). Price is also the marketing variable that can be changed most quickly, perhaps in response to a competitor price change.

Put simply, price is the amount of money or goods for which a thing is bought or sold.
The price of a product may be seen as a financial expression of the value of that product.

For a consumer, price is the monetary expression of the value to be enjoyed/benefits of purchasing a product, as compared with other available items. The concept of value can therefore be expressed as:

(perceived) VALUE = (perceived) BENEFITS (perceived) COSTS

A customers motivation to purchase a product comes firstly from a need and a want:e.g. Need: "I need to eat Want: I would like to go out for a meal tonight") The second motivation comes from a perception of the value of a product in satisfying that need/want (e.g. "I really fancy a McDonalds"). The perception of the value of a product varies from customer to customer, because perceptions of benefits and costs vary. Perceived benefits are often largely dependent on personal taste (e.g. spicy versus sweet, or green versus blue). In order to obtain the maximum possible value from the available market, businesses try to segment the market that is to divide up the market into groups of consumers whose preferences are broadly similar and to adapt their products to attract these customers. In general, a products perceived value may be increased in one of two ways either by: (1) Increasing the benefits that the product will deliver, or, (2) Reducing the cost. For consumers, the PRICE of a product is the most obvious indicator of cost - hence the need to get product pricing right. Factors affecting demand Consider the factors affecting the demand for a product that are (1) within the control of a business and (2) outside the control of a business:

Factors within a businesses control include: Price (assuming an imperfect market i.e. not perfect competition) Product research and development Advertising & sales promotion Training and organisation of the sales force Effectiveness of distribution (e.g. access to retail outlets; trained distributor agents) Quality of after-sales service (e.g. which affects demand from repeat-business) Factors outside the control of business include: The price of substitute goods and services The price of complementary goods and services Consumers disposable income Consumer tastes and fashions Price is, therefore, a critically important element of the choices available to businesses in trying to attract demand for their products.

Pricing - the link with business objectives

Objective 1: To Maximise Profits Although the maximisation of profits can have negative connotations for the public, in economic theory, one function of profit is to attract new entrants to the market and the additional suppliers keep prices at a reasonable level. By seeking to differentiate their product from those of other suppliers, new entrants also expand the choice to consumers, and may vary prices as niche markets develop Objective 2: To Meet a Specific Target Return on Investment (or on net sales) Assuming a standard volume operation (i.e. production and sales) target pricing is concerned with determining the necessary mark-up (on cost) per unit sold, to achieve the

overall target profit goal. Target return pricing is effective as an overall performance measure of the entire product line, but for individual items within the line, certain strategic pricing considerations may require the raising or lowering of the standard price. Objective 3: To Achieve a Target Sales Level Many businesses measure their success in terms of overall revenues. This is often a proxy for market share. Pricing strategies with this objective in mind usually focus on setting price that maximises the volumes sold. Objective 4: To Maintain or Enhance Market Share As an organisational goal, the achievement of a desired share of the market is generally linked to increased profitability. An offensive market share strategy involves attaining increased market share, by lowering prices in the short term. This can lead to increased sales, which in the longer term can lead to lower costs (through benefits of scale and experience) and ultimately to higher prices due to increased volume/market share. Objective 5: To Meet or Prevent Competition Prices are set at a level that reflects the average industry price, with small adjustments made for unique features of the companys specific product(s). Firms that adopt this objective must work backwards from price and tailor costs to enable the desired margin to be delivered.

Pricing - key influences on pricing

The factors that businesses must consider in determining pricing policy can be summarised in four categories: (1) Costs In order to make a profit, a business should ensure that its products are priced above their total average cost. In the short-term, it may be acceptable to price below total cost if this price exceeds the marginal cost of production so that the sale still produces a positive contribution to fixed costs. (2) Competitors If the business is a monopolist, then it can set any price. At the other extreme, if a firm operates under conditions of perfect competition, it has no choice and must accept the

market price. The reality is usually somewhere in between. In such cases the chosen price needs to be very carefully considered relative to those of close competitors. (3) Customers Consideration of customer expectations about price must be addressed. Ideally, a business should attempt to quantify its demand curve to estimate what volume of sales will be achieved at given prices (4) Business Objectives Possible pricing objectives include: To maximise profits To achieve a target return on investment To achieve a target sales figure To achieve a target market share To match the competition, rather than lead the market

Pricing Strategies - Skimming

The practice of price skimming involves charging a relatively high price for a short time where a new, innovative, or much-improved product is launched onto a market. The objective with skimming is to skim off customers who are willing to pay more to have the product sooner; prices are lowered later when demand from the early adopters falls. The success of a price-skimming strategy is largely dependent on the inelasticity of demand for the product either by the market as a whole, or by certain market segments. High prices can be enjoyed in the short term where demand is relatively inelastic. In the short term the supplier benefits from monopoly profits, but as profitability increases, competing suppliers are likely to be attracted to the market (depending on the barriers to entry in the market) and the price will fall as competition increases.

The main objective of employing a price-skimming strategy is, therefore, to benefit from high short-term profits (due to the newness of the product) and from effective market segmentation.

There are several advantages of price skimming Where a highly innovative product is launched, research and development costs are likely to be high, as are the costs of introducing the product to the market via promotion, advertising etc. In such cases, the practice of price-skimming allows for some return on the set-up costs By charging high prices initially, a company can build a high-quality image for its product. Charging initial high prices allows the firm the luxury of reducing them when the threat of competition arrives. By contrast, a lower initial price would be difficult to increase without risking the loss of sales volume Skimming can be an effective strategy in segmenting the market. A firm can divide the market into a number of segments and reduce the price at different stages in each, thus acquiring maximum profit from each segment Where a product is distributed via dealers, the practice of price-skimming is very popular, since high prices for the supplier are translated into high mark-ups for the dealer For conspicuous or prestige goods, the practice of price skimming can be particularly successful, since the buyer tends to be more prestige conscious than price conscious. Similarly, where the quality differences between competing brands is perceived to be large, or for offerings where such differences are not easily judged, the skimming strategy can work well. An example of the latter would be for the manufacturers of designer-label clothing.

Pricing Strategies - Penetration Pricing

You often see the tagline special introductory offer the classic sign of penetration pricing. The aim of penetration pricing is usually to increase market share of a product, providing the opportunity to increase price once this objective has been achieved. Penetration pricing is the pricing technique of setting a relatively low initial entry price, usually lower than the intended established price, to attract new customers. The strategy aims to encourage customers toswitch to the new product because of the lower price. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume. In the short term, penetration pricing is likely to result in lower profits than would be the case if price were set higher. However, there are some

significant benefits to long-term profitability of having a higher market share, so the pricing strategy can often be justified. Penetration pricing is often used to support the launch of a new product, and works best when a product enters a market with relatively little product differentiation and where demand is price elastic so a lower price than rival products is a competitive weapon. Amongst the advantages claimed for penetration pricing include: - Catching the competition off-guard / by surprise - Encouraging word-of-mouth recommendation for the product because of the attractive pricing (making promotion more effective) - It forces the business to focus on minimising unit costs right from the start (productivity and efficiency are important) - The low price can act as a barrier to entry to other potential competitors considering a similar strategy - Sales volumes should be high, so distribution may be easier to obtain Penetration pricing strategies do have some drawbacks, however: - The low initial price can create an expectation of permanently low prices amongst customers who switch. It is always harder to increase prices than to lower them - Penetration pricing may simply attract customers who are looking for a bargain, rather than customers who will become loyal to the business and its brand (repeat business) - The strategy is likely to result in retaliation from established competitors, who will try to maintain their market share

Pricing - expansionistic pricing

Expansionistic pricing is a more exaggerated form of penetration pricing and involves setting very low prices aimed at establishing mass markets, possibly at the expense of other suppliers. Under this strategy, the product enjoys a high price elasticity of demand so that the adoption of a low price leads to significant increases in sales volumes.

Expansionistic pricing strategies may be used by companies attempting to enter new or international markets for their products. Lower-cost version of a product may be offered at a very low price to gain recognition and acceptance by consumers. Once acceptance has been achieved more expensive versions or models of the offering can be made available at higher prices. The extreme case of expansionistic pricing, where offerings are made available to the (overseas) market at a price that is actually less than the cost of production is known as dumping. This practice is closely scrutinised by governments since it can force domestic producers out of business and many countries have enacted anti-dumping legislation. Markets that might benefit from expansionistic pricing strategies include those of magazine and newspaper publishers. Where low prices (annual subscription rates) attract a large number of subscribers, publishers can benefit from the higher rates that they are able to charge advertisers for their advertising space. Book and CD clubs also use expansionistic to attract new members.

Pricing - other pricing strategies

Prestige pricing Prestige pricing refers to the practice of setting a high price for an product, throughout its entire life cycle as opposed to the short term opportunistic, high price of price skimming. This is done in order to evoke perceptions of quality and prestige with the product or service. For products for which prestige pricing may apply, the high price is itself an important motivation for consumers. As incomes rise and consumers become less price sensitive, the concepts of quality and prestige can often assume greater importance as purchasing motivators. Thus advertisements and promotional strategies focus attention on these aspects of a product, and, not only can a prestige price be sustained, it also becomes self-sustaining. Pre-emptive pricing Pre-emptive pricing is a strategy which involves setting low prices in order to discourage or deter potential new entrants to the suppliers market, and is especially suited to markets in which the supplier does not hold a patent, or other market privilege and entry to the market is relatively straightforward. By deterring other entrants to the market, a supplier has time to

 Refine/develop the product Gain market share Reduce costs of production (through sales/ experience effects) Acquire name/brand recognition, as the original supplier Extinction pricing Extinction pricing has the overall objective of eliminating competition, and involves setting very low prices in the short term in order to under-cut competition, or alternatively repel potential new entrants. The extinction price may, in the short term, be set at a level lower even than the suppliers own cost of production, but once competition has been extinguished, prices are raised to profitable levels. Only firms dominant in the market, and in a strong financial position will be able survive the short-term losses associated with extinction pricing strategies, and benefit in the longer term. The strategy of extinction pricing can be used selectively by firms who can apply it either to limited geographical markets (making up any losses by increasing prices in other geographical markets), or to certain product lines. In the latter case, the low price of a product at one end of the product range might attract new purchasers to the product line, and sales of different, more profitable items might increase.

Marketing planning:
Marketing planning - introduction
A plan is a way of achieving something. Your revision plan is a way of helping to achieve success in business studies exams. The Christmas present shopping list is a simpler example of a plan a way of ensuring that no-one gets missed on 25 December. In business, it is no different. If a business wants to achieve something, it is more likely to do so with a well-constructed and realistic plan. What does planning involve? Planning involves: Setting objectives, quantifying targets for achievement, and communicating these targets to people responsible for achieving them Selecting strategies, tactics, programmes etc for achieving the objectives.

The whole topic of planning brings with it some important terminology that it is worth spending time getting to know well. You will come across these terms many times in your study of marketing (and business studies in general): Strategy Strategy is the method chosen to achieve goals and objectives Example: Our strategy is to grow sales and profits of our existing products and to broaden our business by introducing new products to our existing markets Tactics Tactics are the resources that are used in the agreed strategy Example: We will use our widespread distribution via UK supermarkets to increase sales and existing products and introduce new products Goals Goals concern what you are trying to achieve. Goals provide the intention that influence the chosen actions Example: Our goal is to achieve market leadership in our existing markets Objectives Objectives are goals that can be quantified Examples: - We aim to achieve a market share of 20% in our existing markets - We aim to penetrate new markets by achieving a market share of at least 5% within 3 years - We aim to achieve sales of growth of 15% per annum with our existing products Aims Aims are goals that cannot be measured in a reliable way. However, they remain important as a means of providing direction and focus. Why are values important in marketing?

Many Japanese businesses have used the value system to provide the motivation to make them global market leaders. They have created an obsession about winning that is communicated at all levels of the business that has enabled them to take market share from competitors that appeared to be unassailable. For example, at the start of the 1970s Komatsu was less than one third the size of the market leader Caterpillar and relied on just one line of smaller bulldozers for most of its revenues. By the late 1980s it had passed Caterpillar as the world leader in earth-moving equipment. It had also adopted an aggressive diversification strategy that led it into markets such as industrial robots and semiconductors. If values shape the behaviour of a business, what is meant by vision and how does it relate to marketing planning? To succeed in the long term, businesses need a vision of how they will change and improve in the future. The vision of the business gives it energy. It helps motivate employees. It helps set the direction of corporate and marketing strategy. What are the components of an effective business vision? Davidson identifies six requirements for success: - Provides future direction - Expresses a consumer benefit - Is realistic - Is motivating - Must be fully communicated - Consistently followed and measured

Marketing planning - the link with strategy

Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (competitive advantage). The main problem with this process is that the environment in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.

Where does marketing planning fit in with the overall strategic planning of a business? Strategic planning (which you will cover in your studies of strategy is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.
Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the environment. Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!). However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of marketing decision-making in such a complex situation? This calls for well-organised marketing planning. What are the key issues that should be addressed in marketing planning? The following questions lie at the heart of any marketing (or indeed strategic) planning process: Where are we now? How did we get there? Where are we heading? Where would we like to be? How do we get there? Are we on course? Why is marketing planning essential? Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected. It makes sense to try to bring some order to this chaos by

understanding the commercial environment and bringing some strategic sense to the process of marketing products and services. A marketing plan is useful to many people in a business. It can help to: Identify sources of competitive advantage Gain commitment to a strategy Get resources needed to invest in and build the business Inform stakeholders in the business Set objectives and strategies Measure performance

Adv sales n promo strategy:

Advertising
Advertising is defined as any paid-for method of promotion. Advertising is the main form of above the line promotion. Advertising presents or promotes the product to the target audience through a variety of media such as TV, radio, cinema, online and magazines to encourage them to buy. The problem with advertising is that consumers are bombarded with advertising messages every day. How can a business cut through the advertising noise and get a message across effectively? And how can a business measure the effectiveness of an advertising campaign. It is often said that businesses waste half their advertising spend the problem is that they dont know which half! When deciding which type of advertising to use known as an advertising medium a business needs to consider the following factors:

Reach of the media national or local; number of potential customers it could reach; how long before the message is seen Nature of the product the media needs to reflect the image of the product; a recruitment ad would be placed in a trade magazine or newspaper but a lipstick ad would be shown on TV or womens magazines

Position in product life cycle launch stage will need different advertising from products undergoing extension strategies

Cost of medium & size of advertising budget e.g. local newspaper advertising is cheaper than radio, which in turn is cheaper than TV. But the business will also want to consider cost per head if reaching a larger audience

Online or offline there has been substantial growth in businesses that advertise online as they swap some (sometimes all) of their advertising budgets to reach Internet users. The rapid growth of Googles advertising revenues in the UK is an illustration of how powerful online advertising has become

Advertising can also be split into two main types:

Persuasive advertising - this tries to entice the customer to buy the product by informing them of the product benefit Informative advertising - this gives the customer information. Mostly done by the government (e.g. health campaigns, new welfare benefits)

Sometimes a business will employ an advertising agency to deal with its needs. An agency plans, organises and produces advertising campaigns for other businesses. The advantage of an agency managing the campaign is that it has the expertise a business may not have, e.g. copywriters, designers and media buyers. Businesses need to be fully aware of the laws that govern advertising. The main law is the Trade Descriptions Act goods advertised for sale must be as they are described. Also the advertising industry has its own Code of Practice, and is regulated by the Advertising Standards Authority where complaints about the nature of advertising can be dealt with. The main advantages and disadvantages of advertising as method of promotion are: Advantages Wide coverage Control of message being promoted Repetition means that the message can be communicated effectively Can be used to build brand loyalty Disadvantages Often expensive Impersonal One way communication Lacks flexibility Limited ability to close a sale

Sales Promotion
Sales promotion is the process of persuading a potential customer to buy the product. Sales promotion is designed to be used as a short-term tactic to boost sales it is rarely suitable as a method of building long-term customer loyalty. Some sales promotions are aimed at consumers. Others are targeted at intermediaries and at the firms sales force. When undertaking a sales promotion, there are several factors that a business must take into account:

What does the promotion cost will the resulting sales boost justify the investment? Is the sales promotion consistent with the brand image? A promotion that heavily discounts a product with a premium price might do some long-term damage to a brand

Will the sales promotion attract customers who will continue to buy the product once the promotion ends, or will it simply attract those customers who are always on the look-out for a bargain?

There are many methods of sales promotion, including:

Money off coupons customers receive coupons, or cut coupons out of newspapers or a products packaging that enables them to buy the product next time at a reduced price

Competitions buying the product will allow the customer to take part in a chance to win a prize Discount vouchers a voucher (like a money off coupon) Free gifts a free product when buy another product Point of sale materials e.g. posters, display stands ways of presenting the product in its best way or show the customer that the product is there. Loyalty cards e.g. Nectar and Air Miles; where customers earn points for buying certain goods or shopping at certain retailers that can later be exchanged for money, goods or other offers

Loyalty cards have recently become an important form of sales promotion. They encourage the customer to return to the retailer by giving them discounts based on the spending from a previous visit.

Loyalty cards can offset the discounts they offer by making more sales and persuading the customer to come back. They also provide information about the shopping habits of customers where do they shop, when and what do they buy? This is very valuable marketing research and can be used in the planning process for new and existing products. The main advantages and disadvantages of sales promotion are: Advantages Effective at achieving a quick boost to sales Encourages customers to trial a product or switch brands Disadvantages Sales effect may only be short-term Customers may come to expect or anticipate further promotions May damage brand image

Push & Pull Strategies

Marketing theory distinguishes between two main kinds of promotional strategy - "push" and "pull". Push A push promotional strategy makes use of a company's sales force and trade promotion activities tocreate consumer demand for a product. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher volumes. A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools.

Pull A pull selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.

OR Marketing planning:

Marketing Planning

Ethics of Marketing: Ethics is the study of principles relating to right or wrong. It involves having morals These are the standards that govern the conduct of a person ( especially a member of a profession) Business ethics provide moral guidelines for the conduct of business affairs Ethical decisions involve more than just simply calculating costs, benefits and profits Ethical Code of Practice is a document setting out the way a business believes its employees should react to situations that challenge their integrity or social responsibility

Ethical values from the AMA (American Marketing Associaion): 1. 2. 3. 4. 5. 6. Honesty to be honest and forthright in our dealings with customers and stakeholders Responsibility to accept the consequences of our marketing decisions & strategies Fairness to try to balance justly the needs of the buyer with the interests of the seller Respect to acknowledge the basic human dignity of all stakeholders Openness to create transparency in our marketing operation Citizenship to fulfill the economic, legal, philantrophic and societal responsibilities that serve stakeholders in a strategic manner

In business ethics you have to beware of 3 main types of differences:

1. Cultural 2. Religious 3. Political - a marketing plan outlines a firms marketing objectives and the strategies to achieve

A marketing audit is basically a review of the current position. It can be done through SWOT (strengths, weaknesses, opportunities & threats) testing which can be either internal (analysis of marketing mix, people, finance & the production process) or external (PESTLE)

Porters 5 Forces:

A tool that provides a simple perspective for assessing and analyzing the competitive strength and position of a business.

1. New entrants: these can raise the level of competition, thereby reducing its attractiveness. The threat of new entrants depends upon the barriers of entry. Key barriers to entry include: a. economies of scale (possibly due to monopolistic markets), b. capital/investment/set up requirements/costs, c. customer switching costs, d. access to industry distribution channels, e. the likelihood of retaliation from existing players, f. restrictive and anti-competitive behaviour such as predatory pricing 1. 2. Threat of substitutes: presence of subsitutes can lower industry attractiveness and profitability as they limit price levels. The threat of substitutes depend upon: a. buyers willingness to use subs, b. relative price + performance of subs, c. costs of switching to subs 2. Buyer bargaining power: Power is greater when: 3. a. Few dominant buyers and many sellers 4. b. Products are standardized 5. c. Buyers threaten to integrate backward into the industry 6. d. Suppliers do not threaten to integrate forward into the buyers industry 7. e. The industry is not a key supplying group for buyers 8. Supplier bargaining power: suppliers price can significantly impact companies profitability. If suppliers have high bargaining power over a company, then in theory the companys industry is less attractive. It will be high when: 9. a. Many buyers & only a few dominant suppliers 10. b. There are undifferentiated, highly valued products 11. c. Suppliers threaten to integrate forward into the industry (e.g. brand manufacturers threatening to set up their own retail stores) 12. d. Buyers do not threaten to integrate backwards into supply 13. e. The industry is not a key customer group to the suppliers 1. Competitive rivalry: This is all dependent upon the intensity of the rivalry which will depend upon: a. structure of competition e.g. rivalry is more intense where there are many small or equally sized competitors. Competition is less when an industry has a clear marke leader b. the structure of industry costs e.g. industries with high fixed costs encourage competitors to fill unused capactity by price cutting c. Degree of differentiation industries where products are commodities have greater rivalry as they cannot differentiate their products

d. Switching costs rivalry is reduced where buyers have high switching costs i.e. there is a significant cost associated with the decision to buy a product from an alternative supplier. e. Strategic objectives when competitors are pursuing aggressive growth strategies, rivalry is more intense. Where competitors are milking profits in a mature industry, the degree of rivalry is less f. Exit barriers when barriers to leaving an industry are high (e.g. the cost of closing down factories) then competitors ten to exhibit greater rivalry.

Porter explains that that these 5 forces are those that determine industry attractiveness and longrun industry profitability. An industry is a group of firms that market products which are close substitutes (e.g. car/tourism industries)

Marketing Objectives:

Must be aligned with corporate objectives Must be realistic and backed up in terms of possibility through market research Must have a sufficient budget

Exemplar Objectives & what needs to be done to make it successful: 1. 1. Growth:

Higher targets set for sales and/or market share May motivate if targets are realistic Need to ensure that other aspects such as quality, customer service, etc. do not suffer

2. Continuity:

ensure that the brands survive in the long term ensure strategies do not damage the image of the brand. Price cuts may increase sales, but damages image of brand

3. Increase product differentiation:

ensure products remain distinctive looking for alternative distribution channels displaying products in a distinctive way promoting the image of products more

4. Innovation:

developing new ideas key factors affecting success in fashion and technology industries get it right and get in first attitude needed

Constraints to marketing objectives:

Internal Constraints

External Constraints

Financial

Competition

Costs of production

The economy

Personnel

Tastes and fashions

Market positions

Political & Legal

Size of firm