Peer Lecture Topic

MBA GENERAL MANAGEMENT SMM108 Seminar grouping (Sem B -2007/2008)

Presented on 10/04/08

Mass Marketing

Maximum Market Share Mass marketing aims to reach as many people as possible QUANTITY

Example: Coca-Cola. Burger King. K-mart. Broadcast networks (ABC, CBS). TV is more mass than publications Network TV more mass than cable TV

The Evolution Into Mass Marketing

1880-1890 commerce emerged 1920s Mass radio Usage 40s-50s-It Expanded after Great Depression 60s-70s-slowed in anti capitalist era Telegraph & Railroads development enhanced communication

Sources: Tedlow, /Richard S (1997) The beginning of mass marketing in America: George Eastman and photography as a case study journal of macro marketing fall 67-81 Gardner, Dana.(1998) E-Mail status is elevated as mass marketing tool InfoWorld June 1:84

Proctor and gamble

coca-cola

Ford T Model

Kodak

Quaker Oats
Sears

Sources: Tedlow, /Richard S (1997) The beginning of mass marketing in America: George Eastman and photography as a case study journal of macro marketing fall 67-81 Gardner, Dana.(1998) E-Mail status is elevated as mass marketing tool InfoWorld June 1:84

The Origins Of Mass Marketing

Mass marketing started alongside mass production at the turn of the twentieth century Henry Ford

Ford decided that he wanted to see every American family owing a Ford car

Producing a standardised product from standardised parts means Ford could reduce costs

Ford famously joked that you could have a Model T in any colour, so long as its black.
Source: Niche v Mass Marketing www.schoolportal.co.uk/GroupDownloadFile.asp

Mass Marketing
This involves a business aiming at whole markets rather than particular parts of them the idea is that they have a universal appeal

Everyone should be a consumer of the product

The company aims its products at young and old and is still the market leader today

The goal of mass marketing is to achieve market domination the ultimate prize being the creation of generic brands

Source: Niche v Mass Marketing www.schoolportal.co.uk/GroupDownloadFile.asp

Why Mass Marketing

Low costs

Which created

Increased sales

Low prices

Which in turn created

Source: Niche v Mass Marketing

www.school-portal.co.uk/GroupDownloadFile.asp

Mass Vs Targeted Marketing

Mass Marketing Target everyone Simple Use Existing resources Simple evaluation Targeted Marketing Identify & Pursue a Market Require sophisticated resources Can be expensive Evaluation can be difficult

(Using Your Library's Electronic Resources to Market Library Programs, Materials, and ServicesAugust 10, 2005 Eric Graham, Senior Library Consultant, SirsiDynix Inc.)

Mass Marketing No more!

Reasons Demography Preferences
Specialized magazines Specialized TV channels (as video-on-demand ) TV & Radio channels Internet-search engines

In

2003, P&G spent $4.4 billion, or 10.1% of sales, on advertising. In 1998, the last time its spending reached 10%, unit sales volume rose by nearly 4%. Today, P&G's unit growth rate is running closer to 9%. "You can draw the inference that they are spending smarter on advertising (Business Week, Cover Story, July 12,2004)

P&G shifting from Mass Marketing to millions of particular consumers. "You find the people. You are very focused on them," Stengel( P&G's global marketing officer) says. "You become relevant to them. (Business Week, Cover Story, July 12,2004)

only 10% of the 6,200 consumer magazines published today in the U.S. are generalinterest titles, down from 30% two decades ago. (Samir Husni, a journalism professor at the University of Mississippi)

Research shows that viewers watch 20% to 30% more television after getting a PVR, but use it to skip about 70% of ads. Today, only 4% of U.S. households are equipped with PVRs, but Starcom MediaVest predicts a surge to as much as 30% within three years

By

2002, the networks' average cost per thousand viewers, or CPM, had soared to $16.79 in prime time, compared with $1.96 in 1972, according to the Television Bureau of Advertising.

Readership

of daily newspapers fell to 55% of households in 2002, from a high of 81% in 1964

David Martin, president of Interbrand Corp.

Says,

"All the research we're doing tells us that the driver of demand going forward is all about products that are 'right for me"
(Business Week, Cover Story, July 12,2004)

Scenario of Pharmaceutical industry

Before

Pharmaceutical products worked successful for last 30 years by using Mass Marketing

Now Regulators became more sophisticated Customers are becoming reluctant

Resultant- Return on sales diminishing therefore relevant data being provided to the customers
Business Week, Cover Story, July 12,2004)

Ads Actively ignored on TV

Ads skipped using personal videos

Beer Movie trailers Soft drinks Drug Specialty clothing Home products Fast food Cars (national) Pet-related Credit cards Mortgage financing Upcoming program

4.8% 11.6 21.6 32.3 33.4 41.6 45.1 52.8 55.5 62.7 74.1 75.3

31.9% 44.1 82.7 45.6 62.4 90.3 95.7 68.8 81.5 94.2 94.7 94.4

Survey of the 15 largest U.S. television markets, done in 2003 Data: CNW Marketing Research Inc. The McGraw-Hill Companies, Copyright 2004

Right For Me?

marketers
personal information

attitudes

habits desires

(Business Week, Cover Story, July 12,2004)

Mass Marketing & Scams

Crackdown on mass-marketing scams

The OFT1 estimates that scams such as bogus competitions, lotteries and pyramid schemes cost UK consumers at least 1bn a year

1. Office of fair Trading http://news.bbc.co.uk/1/hi/business/4669670.stm Last Updated: Wednesday, 1 February 2006, 15:48 GMT

The Great Mass Marketing Mistakes

Mistake No. 1.
It is wrongly believed that simply more customers and more sales marks the road to profitability The wrong belief that almost everyone wants to hear from them The search for magic bullets

Mistake No. 2.

Mistake No. 3.

(Andrew R. Thomas, College of Business Administration, Centre marketing is now direct marketing)

for Organizational Development, The University of Akron, Akron, Ohio, The end of mass marketing: or, why all successful

Understanding Customers

Who your customers are? What they want ? What Motivates them to buy? How does the potential customer normally buy similar products in store, on the web or door to door)? Who is the primary buyer and primary buyer influencer in the buying process husband, wife, children, project leader, secretary)? What kind of habits does my customer have?
(David, (available online)6 deadly small business marketing mistakes, p4-5)

Conclusion
Challenges And Threats

the right way to send the right message to the right person at the right time

(Business Week, Cover Story, July 12,2004)