Marketing in Business

The Four C's

The four Cs were introduced by Robert F. Lauterborn in 1993. Marketing used to be all about mass markets, but now niche markets are being aggressively targeted by companies. The four C's were made to address those niche markets more accurately than the 4 P's. 4 C's include: Consumer, Cost, Communication, Convenience.

Information

The package helps influence the customer into making a purchase. Especially in stores, packaging that lists essential features of a product is necessary, because customers are able to look at and compare features and options. Remember differential advantage?

Price

The price is the amount a consumer is willing to pay for a certain product. Pricing is a very delicate issue, and many of the same products can have very different prices, often influenced by consumer perception or demographics as well.

Promotion

The promotion part of packaging attracts customers. A brightly colored product is easily noticeable and may be different than its nearby competition, which can be a benefit for selection.

Business Analysis

The purpose of this step is to identify the product's possible contribution to the growth of the company in regards to sales, costs, profit and demand in the market.

Wholesaling

Wholesaling is part of the distribution chain. Usually, wholesalers will not sell directly to consumers. Instead, they buy bulk goods from the manufacturer and then break them into smaller lots for sale to retailers. Wholesalers are often assisted in these transactions by brokers and agents.

Convenience

With tools like the internet available, people are less likely to travel to multiple stores and comparison shop. Instead, they'll stay home and compare items online. Convenience is how easy it is for the customers to find your products and information about them.

Distribution Channel

Also known as a channel of distribution (or marketing channel), this refers to the chain of people or companies that a product goes through from the manufacturer to the consumer. The purpose is to make sure the product gets to the target audience.

Environmental Factors

Environmental factors are broken into 2 categories when it comes to marketing (micro and macro).

Idea Generation

Here the company searches for product ides that would help them in attaining their objectives. This could mean doing market research for unsolved customer problems or brainstorming.

Horizontal Channel Integrat9oin

Horizontal channel integration occurs when a company owns distribution units horizontally in a distribution channel. If a company owns multiple retail stores, they have horizontal integration at the retail level.

Promotion (Advetising)

How are we going to advertise this product? To whom? How are we going to answer questions about this product? Letting your target market know about your product is incredibly important. This can be done with online advertising, Tv ads, newspapers and magazines, or even word of mouth.

Place

How are we going to get the product into the customers' hands? This refers to the actual distribution of your product. Can your customers find your products? Can they buy them once they've found them? You can have the greatest product in the world, but if it's not put in front of your target customers, it will fail.

Marketing Plan

How you are going to achieve those marketing goals.

Selective Distribution Strategy

In a selective distribution strategy, only selected outlets are allowed to distribute the said products. Apple laptops are only sold in Best Buy or Apple stores for example.

Intensive Distribution Strategy

In an intensive distribution strategy, products are distributed in as many outlets as possible. This allows consumers to have access to the product at their own convenience.

Exclusive Distribution Strategy

In and exclusive distribution strategy, the reseller is only allowed to carry the producer's products and no others. A Movado retailer in the mall has an exclusive distribution deal worked out with Movado to only sell Movado watches in their store.

Test Marketing and Commercialization

In this final step, a certain number of the new products are created and are distributed in the market. It serves as a test to check how the consumers would accept or reject the product.

Industrial or Business Goods

Industrial goods are goods that are produced and marketed directly to businesses in B2B marketing. These types of goods include: Raw Materials, Component Materials, Process materials, Major Equipment, Accessory Equipment, Consumable Supplies.

Major Equipment

Installations are materials that are also called major equipment. This refers to large tools or a machine that is used in production. Major equipment is usually quite costly.

Intensity of Market Coverage

Intensity of market coverage refers to the number and different kinds of intermediaries that are involved in the distribution of a product at wholesale and retail levels. Coverage comes in three types: Intensive, Selective and Exclusive Distribution strategy.

Manufacturer Brands

Manufacturer Brands are brands that are given by the producer of the product. It allows consumers to associate the manufacturer with the product that they are buying. E.g.include general electric, Microsoft or ford.

Marketing Strategy

A Marketing strategy could be described as the company's marketing roadmap. It describes in detail the products offered, the competitions, the target market, and what steps will be taken to reach that market. The Marketing strategy is usually made up of the marketing Mix. Is an explanation of the goals you want to achieve.

Broker

A broker usually concentrates on one type of product, and brings a buyer and seller together. They don't carry inventory themselves and take no personal risk in the transaction. Whoever hired the broker to make introductions ends up paying them. For example for chick may make the introductions between a bulk food wholesaler and his contacts on a chicken farm.

Marketing Objective

A company's marketing objective refers to what the company is aiming for over a certain period of time. An example marketing objective would be to increase sales of a product by 5% over the next fiscal year. These are usually found in a company's marketing plan and are specific and measurable in nature.

Marketing Mix

A marketing mix is a business tool first described by James Culliton in the 1940s. He said that a marketer needs to be like a chef, sometimes using recipes thought up by others, and sometimes creating his own. The marketing mix uses the 4 P's of marketing (price, product, promotion, and place as its primary ingredients). Marketers use this too to answer questions about the product and market to ensure maximum profit.

Modified Rebuy

A modified rebuy is a buying situation where a customer or consumer purchases a product he previously had bought though this time had changed the source of the item or had some modifications on certain element of the former purchase (last time 10 packs of x now only 5 packs).

Straight Rebuy

A straight rebuy is when a company makes the same purchase it always has before. They would purchase the same product with the same quality and quantity, from the same supplier and with the same terms or mode of payment. A good example of this is a bulk purchase for something like printer paper. It's almost always the same brand, quality, and amount.

Tariff

A tariff is a tax charged by the government of a country for products not produced in that country. For example the US charges a tariff of 4.4 cents per Kilo of imported cotton goods.

Accessory Equipment

Accessory Equipment are industrial goods used in production activities and are purchased routinely.

Agent

Agents are usually long term employees of one (or more) companies and differs from a broker in that they have the authority to conduct business in that company's name. They are the ones handling the specific terms between the manufacturer and wholesaler, or wholesaler and retailer.

Brand Equity

Brand Equity refers to the value of a brand in terms of cash. This is based on the idea that a well recognized brand can generate more money from the same product. People tend to buy brands they like, so there is value in the name. Apples brand equity is significant, since there are many people who will quickly buy almost anything new of Apples.

Business to Business (B2B) Marketing

Business to business marketing is the marketing of products or services, by one business to another business. It is also called industrial marketing. The primary difference between B2B marketing and B2C (Business to Consumer) is in "how" you market. A business doesn't care about emotion, so your main focus should be on providing information and logic to show the value. Consumers on the other hand should be shown the "benefit" of the product and you can play on emotional triggers. B2B transactions happen much more often than B2C transactions.

Channel control

Channel control is the ability to influence the action of another member of the channel. For example, a manufacturer usually has significant influence over its distributors or shippers, because without the manufacturers's support, the distributor will be out of a job!

Channel length

Channel length refers to the number of levels involved in a distribution channel. It is the number of mediators or middle men that a product would go through before it would reach the customer. The longer the channel, the longer it usually takes for a product to reach the consumer.

Channel width

Channel width is the number of entities that are involved in one particular level of distribution. For example, if only one store will retail your product, you have a very slim or narrow channel. If you are able to get 5-6 stores chains to retail your product, you have a wide channel.

Component Materials

Component materials or fabricated parts are either finished products or ready to be assembled items that becomes a part of another product. They could easily be identified and could be easily distinguished as it becomes a part of the finished product. These include many electronic parts, and also processed food items such as flour or sugar.

Dealer Brands

Dealer brands ( or private brands) are brands that are created and owned by resellers (wholesalers or retailers). These brands are usually general goods, and include Walmart's Great Value Brand Costco's Kirkland Signature Brand etc.

Marketing Myopia

Marketing myopia is a term used to describe when a company focuses on the product instead on the customer's needs. This term was used in a marketing paper by Theodore Levitt and occurs especially when a company believes the product is useful, but in reality a consumer does not need it. An example is kodak not getting into the digital market.

Micro environmental Factors

Micro environmental factors affect only a specific company or business in an industry. These are uncontrollable but could be managed at some degree, only macro-environmental factors which are completely uncontrollable. Micro environmental factors for a company include their employees, suppliers, shareholders, and media/press relating to the company. For example, if a company's cell phones suddenly starting bursting into flames due to poor battery design, that would likely be a micro environmental factors. Unless other brands used the same battery supplier... then it would be a macro factor.

Multiple Channel Distribution

Multiple channel distribution is also know as dual distribution. It is when a producer distributes similar products through many different channels. In this sense, a channel might be a retail store, web site, mail order catalogue, or direct personal communications. The objective of the companies doing the marketing is to make it easy for a consumer to buy from them in whatever way is most appropriate.

New Task Buying

New Task buying is when the company buys something for the first time. The company purchases the product to use in a new job or to use in solving a particular issue. If the company is satisfied with the product, bulk purchases might follow. Since it is the first time the purchase is happening, the decision making process takes much longer than any of the other types of buying situations.

Types of Buying situations

New Task, Straight Rebuy, Modified Rebuy

New Product Development

New product development or NPD is the full process of creating a new product and introducing it to a market. Process includes: Idea Generation, Screening, Business Analysis, Product Development, and Test marketing and Commercialization.

Consumable supplies

Operating supplies are industrial goods that are also called consumable supplies. Essentially, these are office supplies.

Process Materials

Process materials are products that are used in the production of another product. This material becomes indistinguishable once it becomes a part of the final product.

Prodcut Development.

Product development is where the product is first created. This is when prototypes are built into their working models. As this stage goes on, producers decide on the packaging, labeling, pricing and possible promotions for the product.

Protection

Protects the product as it is shipped, handled or stocked. Delicate products need good protective packaging. Otherwise, if the product is damaged when delivered, the brand can get a bad reputation for quality.

Raw Materials

Raw materials are defined as basic materials that are produced to become part of a physical product. This includes ores, metals, or crop products.

Consumer

Refers to the person or group of people who become the end users of a product or service.

Product Packagin

Since we've talked about how perception and appearance is so important in the buying processes, you probably wouldn't be surprised to know how much effort goes into product packaging. The style, shape, and ability to protect are all very influential in the marketing of a product and this is the reason that many companies spend more on the packaging than the product inside.Benefits of packaging include Protection, promotion and information.

The 4 or 7 P's of marketing

TThe first 4 are Price, Product, Promotion, and place. The additional 3 are Physical Evidence (Packaging), Process and People.

Decision Making Unit

The Person or group who makes the final decision on buying a product. Marketers target the DMU.

Wheel of Retailing

The wheel of retailing theory states that retail stores follow a set cycle. When first starting, retailers tend to win at the outset by offering customers low prices made possible by highly efficient operations. Walmart did this in the 1970s-1990s. However, as the retail store matures, they begin to offer more services and products, resulting in higher costs of doing business and higher prices for the customer. In time, other new retail stores are able to enter the market offering lower prices and the wheel begins again.

Macro environmental factors

These are the factors that affect not only a firm or one comany, but all businesses in a certain industry. It includes factors such as political, cultural and technological factors, economic condition, material supply and demographics. For example, if you have a shortage of iron whether by trade barriers or mining accidents, it will likely affect all steel companies. This is a macro factor.

People

These are the people of your company that interact with your customers. They may be salespeople, customer service representatives, or marketing and PR personnel. Customers judge your company by its people.

Physical Evidence (Packagin)

This is how people look at your business or products. If I want to buy a Rolex watch, I'm going to pick a place that looks like it actually sells nice watches and has salespeople who are professional looking. I wouldn't spend that kind of money in a run down store.

Cost

This is not only the initial price of product, but also other things like cost of additional warranties and how much it would cost the consumer to change to another brand.

Screening

This is the step where ideas are evaluated and are subjected to customer's scrutiny. In screening, customers could be asked about what kind of features they would like to see added. It involves a long screening of the product and concept testing.

Trade Barrier

Trade barriers refer to problems that exist when trying to trade internationally. Trade barriers include a lack of interest in your product, failure to penetrate a market, or high tariffs set by governments.

Communication

Unlike the old Promotion from the 4 P's, communication takes into account all forms of communication between the business and the customer. It even includes things like viral marketing campaigns and word of mouth.

Vertical Channel Integration

Vertical channel integration refers to a company who owns two or more of the distribution channels. A good example of vertical channel integration was Andrew Carnegie, who was famous for owning every part of the steel distribution channel, from iron mines all the way to retailers.

Product- HOw does our product target this market?

When a marketer looks a product, they need to decide whether the consumers' needs or wants are being fulfilled. If not, then no matter how much marketing or advertisement is done, the product is likely to fail.

Process

Your process is how hard (or easy) it is to do business with your company. Everything from shipping the product to the customer or having a great customer service department to handle compliants. If people hate doing business with your company, they won't buy your products. You need to make it easy for them to buy and walk away happy.