Professional Documents
Culture Documents
Marketing 2011 05 06
Marketing 2011 05 06
Marketing 2011 05 06
Retail price/wholesale
Discounts
Advertising
Public relations
Marion Harper:
To manage a business well is to manage its future; and to manage the future is to
manage information.
Customers need TP
Marketings Role
Marketing should try to mobilize resources to develop
customer satisfaction.
Requests to increase product design, material costs, disrupt
production schedules, increase costs and create budget
headaches.
DISTRIBUTION 3P
Lecturer R. Rukuiien
Lithunian University of Agriculture
Faculty of Economics and Management
DEPARTMENT OF BUSINESS MANAGEMENT
2011-05-06
DISTRIBUTION CONCEPTION
Learning Objectives of Distribution Theory:
Understanding of decisions range concerning
distribution planning.
Alternative distribution channels structure and
relevant criteria of their choice.
Distinctive characteristics of distribution
management.
Contributions to distribution process and marketing
strategy.
DISTRIBUTION CONCEPTION
Distribution is a process of identification and appliance of
production distribution shifts.
Distribution as supply system applied for customers to find
the useful products at determined place and moment.
Distribution as communication system of producers,
purchasers, customers in concrete area and time period.
DISTRIBUTION
DISTRIBUTION CONCEPTION
Market of products
Producer organizations
Distributors
Trade organizations
Wholesalers
Retailers
DISTRIBUTION CONCEPTION
Distribution process
Distribution process is focused on:
Order of processing and its management.
Purchasing and selling of products (raw materials and other
resources).
Production possession and storing.
Transportation and protection.
Production delivery and money transfers.
Reserve store formation and quality management.
DISTRIBUTION CONCEPTION
Distributor acceptance
Distributor elimination
Distributor change to more competitive
Distributors are available to act in distribution channel
as long as they have power
to impact distribution service scope and price
concerning suppliers requirements to sale management
DISTRIBUTION
System of distribution channels is organizations
(intermediaries) which coordinate the products flows
and make contracts.
Length of distribution channel amount of members
(intermediaries) in distribution chain.
With of distribution channel amount of independent
members in each distribution chain.
Wholesaler
Trader
Consumers
1 level
2 level
Producer
Wholesaler
Trader
Consumers
Producer
Wholesaler
Trader
Consumers
DISTRIBUTION CONCEPTION
Distributor
Trader
Consumers
DISTRIBUTION CONCEPTION
DISTRIBUTION CONCEPTION
M
ar
g
in
5 primary activities
n
gi
ar
M
PRICING APPROACHES
High price
DETERMINATION OF PRICING
GOALS (1-3)
1. ORIENTED TO PROFIT
Efficiency of invested capital or sales
Maximization of profit under perfect demand
elasticity, low prices and market enlargement
Maximization of profit under imperfect demand, high
prices (cream skimming strategy) and concentrated
market segments
DETERMINATION OF PRICING
GOALS
2. ORIENTED TO SALES
Up-grade products value and sales
Sales of new products and advertising of new
enterprises
DETERMINATION OF PRICING
GOALS
3. ORIENTED
PROTECTION
TO
MARKET
POSITION
Maturity
Decline
PRICING METHODS
1. ORIENTATION TO COSTS
Orientation to production costs under calculation
the direct fixed costs and percentage of fixed profit
rate.
PRICING METHODS
2. AGREGATION METHOD
Orientation to product price under summing
prices of separate products elements.
PRICING METHODS
3. PARAMETRIC METHOD
Orientation to product price under analysis of
products quality parameters, evaluation and
comparison of them.
PRICING METHODS
4. ORIENTATION TO COMPETITION
Orientation to product price under competitors
actions, but not to production costs or market
demand.
PRICING METHODS
5. ORIENTATION TO PROFIT SHARE
Orientation to product price under determined
profit rate.
A past
k I
k int
Product not
becoming
obsolete
Product
becoming
obsolete
O
(1)
Launch
(2)
Growth
(3)
Maturity
(4)
Decline
Time
PRICING STRATEGIES
PRICING STRATEGIES
Cream skimming price strategy is oriented to reach high
profitability rate, and helpful:
a) in short terms the changes of competition level are
invisible under impact of business licenses, high
expenditures to market entrance, new technologies and etc.;
b) unique features of TP make the barriers in pricing
under creation imperfect demand elasticity;
c) demand limitation depends on TP quantity for sales;
d) efficiency of TP requires the quick investment
return.
PRICING STRATEGIES
Scrolling price strategy is the modification of
cream skimming price strategy, and effectively
implementing after mentioned strategy.
The amount of consumers is very important under the
conditions when in long term period prices are going
down, and market share is growing, then the
conditions for competitors access to market is limited
of limited profit rate.
PRICING STRATEGIES
Penetration
pricing
strategy
is
effectively
implementing with low prices by launching TP to new
market segments or trying increasing market share
under creation successful position in market.
PRICING STRATEGIES
To pursuance of new TP producers or new TP come to
target market.
To get advantage against competitors who not necessary
react applying with low prices.
To get additional share of market and receive
investment as quicker as possible.
PRICING STRATEGIES
Elasticity pricing strategy is oriented to the needs of consumers
after long experimental measures in target market segments
concerning the demand elasticity to price.
According to the level of price (high or low), elasticity strategy
effectively impacts:
Market reaction to lower prices in activating the purchase.
Market reaction to higher price in activating purchase in low
level.
PRICING STRATEGIES
Passing the leader pricing strategy is oriented to price definition
according the leaders prices in economical sector.
After implementation this strategy the progressive investigation of
market parameters has to applied and prognostication of changes
in the market concerning the leaders actions.
According to this strategy the adoptions acts in the market have to
realized:
PRICING STRATEGIES
Pricing strategy only for TP segments is oriented to the
application of different products prices in different markets or
for different customers.
This strategy is important when customers are very different,
and the purchase of TP with small different features in
products design has to be high.
Differentiated product strategy impacts the differentiated
pricing strategy.
Pricing in segments creates special segment as niche of market.
PRICING STRATEGIES
Pricing strategy of segments is useful when:
Product is easily applicable in different market segments.
Product is easily changeable has substitute to be as
adequate in different market segments.
Different market segments are not competing
interdependently.
PRICING STRATEGIES
Costs plus pricing strategy is oriented to costs level contrary
as oriented to market and cant be flexible, and is available
when:
Product is under state regulation market.
Total costs are not predictable.
Product is testes as new product.
PRICING STRATEGIES
Flexible pricing strategy is oriented to determined product
price, which depends upon changeable preconditions of market.
This strategy is available when:
Exists important competitive challenge.
Competitors use penetration pricing.
Demand level is flexible.
PRICING STRATEGIES
Road gate pricing strategy is oriented to deter the
competitors from entrance to target market.
This strategy help to defend in dominant market:
To keep strong position in the market and fight with
competitors.
To satisfy market needs by creating loyalty.
PRICING STRATEGIES
Product life cycle (PLC) pricing strategy is oriented to price identification
in each PLC period.
Old product is well-known for customers, and amount of purchase can be
produced by the help of high price.
This strategy is available when:
Product is demanded, but long perspective demand is going down.
Substitutes create new demand.
Product line is constructed according production level.
PRICING STRATEGIES
Loss leaders pricing strategy is oriented to attract customers
for purchasing other products.
This strategy is available when:
Intermediary wants to make market noise.
Complement product details price is higher, when low price is
presenting for whole product.
(St. L. Montgomery)
PROMOTION MIX
STRATEGIES OF PROMOTION
2011-05-06
Pasvalys
PROMOTION - element of
marketing mix, which is oriented to
initiate purchase or initiatives of
consumers.
Product
Price
Personnel selling
Advertisement
Distribution
Promotion
Inducement of purchase
Public relations
Promotion
Promotion the system of information and persuasion
acts oriented to consumers and their attraction.
Main promotion methods:
advertising;
personnel sale.
Additional promotion methods:
popularization;
inducement of purchase.
Promotion
Advertising
impersonal
profitable
presentation of products/services/ideas.
Sales Force verbal presentation of product
in communicating with customers in case to
sell the product.
PROMOTION
Popularization impersonal inducement of
products/services/ideas demand concerning the
information dispersion in media.
Inducement of purchase short term sale and
purchase measures, various non repeatable efforts to
sell product/service hardly connected with standard
promotion types (advertising, personnel sale and
popularization).
GOALS OF PROMOTION
PROMOTION
Advertising
Personnel sale
Main goal:
Problems:
INDUCEMENT OF DEMAND
To sell product
Inducement
of product
Popularization
Inducement of purchase
To form image
of company
Inducement
of demand
Product features
(price, form, color, package, novelty)
Product Positioning
Consumers
Information
Conveyance
Allusion
Persuasion
Sales stimulation
Personal selling
Public relations (popularization)
Advertising
Sales stimulation
... aggregation of promotion methods
applied for stimulation consumer needs
to purchase concrete product under
implementation of special stimulation
means, ex.: testers to home, lotteries,
prizes.
Sales Force
... satisfaction of consumers interests
concerning communication and personnel
selling under suggestion to purchase product
repeatedly and actively inform about new
products and additional services.
Public Relations
... interactive impersonal communication
process with consumers expansive generality
concerning correct information about
incoming origin new products, their features,
functionality, utility and value, - image
creation philosophy and technology.
Advertising
... impersonal communication method for
coverage huge target consumers groups.
Advertising conception
Conveyance
Propaganda
Opinion formation
Informative advertisement
Convincing advertisement
Allusive advertisement
Supportive advertisement
Comparative advertisement
PURCHASE
Public relations
MIX
OPINION
INDUCEMENT
PROMOTION
CONSUMERS
PERSONNEL
SELLING
INTERMEDIARIES
ORGANIZATION
ADVERTISMENT
CONTACT
AUDITORIUM
Preconditions of advertising
efficiency
Supply stimulation
Purchase stimulation
Stimulation of competitors activity or
partners in supply chain
Promotion strategies
PUSHING STRATEGY
Aggressive personal selling
Delegation of selling functions to distribution
channel (wholesalers and retailers).
PULLING STRATEGY
Promotion process directly oriented to consumers.
Promotion strategies
Aspirations about optimal promotion strategy
implementation cover implementation of promotion
mix elements applied to separate cultural and public
market development preconditions and legal restraints
concerning defined promotion strategys elements
applied in different EU countries.
Promotion strategies
Marketing communication (promotion)
systems
Characteristics of European Marketing Communication
(Promotion)
Promotion goal decisions concern appropriate
marketing communication (promotion) means upon their
options.
TV, Radio, Press, Shows, Events, External Advertisement
INTERNET
Promotion strategies
Marketing communication (promotion) systems
Important European aspect of promotion choice is definition of role
and importance of international communication means in EU statemembers territory.
Promotion strategies
Marketing communication (promotion) systems
Goal of promotion option of promotion mix elements and
their appropriate combination according to standardization
and differentiation problems.
Promotion mix elements under implementation of EuroCorporate-Identity strategy:
Advertising.
Direct communication.
Sales stimulation.
Product positioning.
Sponsoring of consumers.
Promotion strategies
Marketing communication (promotion)
systems
Structure of impersonal communication channel
Media post means, mass information means, electronic
means and external advertisement.
Atmosphere - concentrated environment for information
consumers and stimulation purchases.
Events and shows actions to inform consumers.
Promotion strategies
Marketing communication (promotion) systems (396)
Stimulation means of communication channel:
to identify impact entities (customers/consumers and
comapnies) and to concentrate efforts upon them;
to inform leaders of ideas;
to make apply well-known and popular persons of target
community;
to embrace inner persons;
to use attractive advertising as verbal metaphor for current
implications;
to create verbal communication channels for consumers;
to organize e-forum.