Topic

Attracting Customer through Marketing

Objective
Define the marketing principles known as the four Ps/Seven Ps and explain how they apply to your business venture Identify what is needed for starting up your business venture

What Is Marketing?
Choosing target markets, getting, keeping, and increasing customers through creating, managing, communicating, and delivering superior customer value.

Like an iceberg, over 80-90% of marketing occurs out of the sight of the consumer

Peter Drucker on Marketing? Peter Drucker describes the process of marketing this way: the aim of
marketing is to know and understand the customer so well that the product or service fits him/her and sells itself.

Ideally marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.

Selling is only the tip of the iceberg

There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available. Peter Drucker

Selling The role/function of Selling (or Salesmanship) is to make a sale

The sales person in most companies is the single most important link with the customer.

The Chartered Institute of Marketing

Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably

What is Management?
Management consists of the interlocking functions of creating corporate policy and organising, planning, controlling, and directing an organization's resources in order to achieve the objectives of that policy.

 Identifies Research Anticipates Forecast Satisfies customer Customer Service Profitably Good Returns

 Marketing is the management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4P's (Marketing Mix) of marketing: (1) identification, selection and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy.

For example
New Apple products are developed to include improved applications and systems, are set at different prices depending on how much capability the customer desires, and are sold in places where other Apple products are sold. In order to promote the device, the new product is featured at tech events and is highly advertised on the web and on television.

Adcock et al

The right product, in the right place, at the right time, and at the right price

What is marketed?
Services
Products Events Experiences People Places Ideas

What is a product?

A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organisations, information and ideas.

The Marketing Mix (4Ps)

This is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market

The Four Ps

 Marketing mix decisions include:

Marketing Mix

Product: provides customer solution (price levels, credit terms, price changes and discounts).

Price: represents the customers cost (price levels, credit terms, price changes and discounts).
Place: customer convenience is key (inventory, channels of distribution and number of intermediaries). Promotion: communicates with customer (advertising, publicity, sales promotion, personal selling and sponsorship).

Advertising
Makes people aware of your product so they are persuaded to buy it Major goals Raise customer awareness of product Explain product's comparative feature and benefits Create an association between product and lifestyle
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Social Networking
Social networks sites, such as Facebook and MySpace, allow entrepreneurs to connect with potential and existing customers at little or no cost. More than half of Facebook users are over the age of 25. These sites now offer business survey tools and advertising functions for promotional purposes.
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The 7Ps of the marketing mix

The 7Ps components of the marketing mix

The 7Ps of Services Marketing

Traditional Marketing Mix Applied to Services
Product Place (and Time) Price

Promotion (and Education)

Extended Marketing Mix for Services

Process Physical Evidence People

People
As a service is intangible, it is the people/staff delivering the service that add value to customers, not the product features. It is through the quality of the service delivered by staff that customer satisfaction is affected. The people part of the mix, therefore, acknowledges the importance of training and motivating staff to deliver a good quality service and portray an appropriate image. Internal marketing techniques such as newsletters (to keep staff informed of changes), and staff incentives can be used to help the staff produce good levels of customer service.

Processes
A service is a set of processes and it is through these processes that an organisation differentiates its service from its competitors, thus gaining competitive advantage; for example speed of delivery, efficiency of booking/ enquires, can be used to gain competitive advantage. In recent years many businesses have used ecommerce functions to improve their service to customers, i.e. technical help online or online ordering and/or stock checking facilities. Additionally, it is through its processes that an organisation can develop closer customer relationships, for example, by sending customers reminders of appointments or reminders of expiry dates etc.

Physical Evidence
Services are intangible and cannot be seen or felt by customers. Therefore, marketers will use techniques to make their services as tangible as possible. The term physical evidence refers to techniques for making services more tangible in the eyes of the customer; examples would be the dcor in a restaurant, providing customers with programmes at concerts/theatre shows, certificates for success in examinations etc. The use of physical tools such as these can help create a brand image and improve customer recognition of the service brand

Figure 1.4

The product life-cycle curve

Product Life-Cycle
A companys positioning and differentiation strategy must change as the product, market and competitors change over the product life cycle (PLC). To say that a product has a life cycle is to assert four things:

Products have a limited life. Sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller. Profits rise and fall at different stages of the product life cycle. Products require different marketing, financial, manufacturing, purchasing and human resource strategies in each life cycle stage.

Markets
Target Marketing

There are three major steps in target marketing. The first is market segmentation, dividing a market into distinct groups who might require separate products and/or marketing mixes. The second step is market targeting, evaluating each segments attractiveness and selecting one or more of the market segments. The third step is market positioning, developing competitive positioning for the product and an appropriate marketing mix.

Industry / Target Market Feasibility Analysis

Target market The limited portion of the industry that the firm goes after or tries to appeal to
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Target Market Attractiveness

Target market Should be large enough for the new business but small enough to avoid attracting larger competitors
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Segmentation Subdividing of a market into distinct subsets of customers according to needs and buying habits Differentiation It is the act of designing a set of meaningful differences to distinguish the companys offering from competitors offerings Competitive Advantage In order to gain and/or maintain competitive advantages, organisations can adopt three basic strategies: 1. Cost Leadership 2. Differentiation 3. Focus

Segmentation Variables
Geographic
Region, city or metropolitan area, population density, and climate

Demographic
Age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality

Psychographic
Social class, lifestyle, attitudes toward various societal situations, and personality

Behavioural
Occasion of product use, user status, usage rate, loyalty status, readiness to purchase, and attitude toward product
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Differentiation Strategies

1. Differentiating the product itself 2. Differentiating on the basis of services offered

3. Differentiating by personnel
4. Differentiating by image
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Service
It is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.

Customers evaluate service quality using five issues:

Reliability: ability to perform the service dependably. Responsiveness: the ability to provide prompt service. Assurance: the knowledge and courtesy of employees and their ability to convey trust. Empathy: caring, individualised attention to customers. Tangibles: physical evidence of the service can be used to judge the service.

Characteristics of Services
Intangibility Inseparability Variability Perishability Lack of Ownership

Characteristics of Services
Intangibility they cannot be seen, touched or tried before purchase. Inseparability they are used or "consumed" at the time of purchase and, as such, cannot be separated from the provider.

Characteristics of Services
Perishability they cannot be stored for use at a later time. Variability they are dependent on the person who is providing the service and, as such, will vary from time to time in accordance with when they are being provided and the circumstances surrounding the provision.

Lack of Ownership
Services cannot be owned. As we have seen, there is no tangible element involved in a service and so the service terminates once the experience comes to an end. At the end of a plane journey the passenger alights from the aircraft and the experience, positive or negative, becomes a memory. The seat on the plane has been "rented" for a period of time for the price of the ticket. The seat remains the property of the airline and is available to be rented by other customers at other times.

Lack of Ownership
However service providers encourage the further use of the service through frequent flyer programmes to increase customer involvement in the service. As a result customers will also develop a perception of the brand through familiarisation with the service and the level of the experience enjoyed. It is for the marketer to ensure that this experience is positive in order to achieve good customer relationships and retention and manage these relationships effectively.

Branding
Brand It is a name, term, sign, symbol, design, or a combination of them, intended to identify the goods or services of one seller and to differentiate them from competitors

Develop a brand for your Business

Be able to develop a brand which may include any of the following: a logo a letterhead a shop front design a clothing range/uniform

Advantages of Branding
Easy Selling Legal Protection Customer Loyalty Easy Market Segmentation Image Building

Business Plan

Product/Service
What are your products/services

Price
How will you price your products/services

Promotion
How will you promote your products/service

Place
Where would customer reach you to buy your products/service
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Business Plan

State your Business Mission State your Business Objectives Who are your customers Who are your competitors What is your Competitive Advantage Do a SWOT analysis for your business
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