Operational Marketing

Intermediary Role

- distribution effectiveness

The Brand's field of action

Consumers see the brand as an important part of the product and brand establishment can add value to the product(Note: Depends on the product and brand) The brand is a perceptual entity that is rooted in reality but reflects the perceptions (and perhaps even the idiosyncracies) of consumers. •Branding a product requires teaching consumers who the product is, what the product does, and why it is relevant to consumers.

Products classification

Durability Consumer Goods Industrial Goods

Price Regulation

In Portugal there is a general system of free prices. The liberalization of the price policy and the incentive to establish free competition require surveillance and regulation by the State.

Emerging Communications Mix

Interactive Marketing Events Experiences Word of mouth

Product development

New product launch Why? •New technologies •Changing consumer tastes •Consumer sophistication • Competition •Offer more added value •Synergies (commercial, production, etc.) •Positioning reinforcement How? •Acquisition •Innovation • Partnership •Me too

Retailing-mix: communication

Objectives of marketing communication in retail: Attract new Customers Maintain the "loyalty" of existing customers Stimulate consumption of all store assortment items Directing demand toward more profitable or more readily available products Why are sales promotions growing? ▪ Increased pressure on product managers to increase sales▪ Increased number of competing brands (including Private Labels) ▪ Perceived similarity between brands▪ More price-oriented consumers ▪ Trade requires more and better collaboration from producers ▪ Decrease in advertising effectiveness Main goal of sales promotion Stimulate interest and incitement to purchase Reasons justifying promotion Attracting new regular customers Sell more to regular customers Offer something more to customers Create or stimulate interest in a new productResponding to competitionBecome more competitive

Costs for Services 2

PURCHASE PRICE From the customer's point of view, the price charged by the service provider may be the first of many costs + FINANCIAL COSTS OF THE SERVICE • It includes, in addition to the price of the service, costs such as the fuel needed to get to the store, parking, meals, etc. The total of these expenses is called the FINANCIAL COSTS OF THE SERVICE. + NON-FINANCIAL COSTS OF ACQUIRING THE SERVICE • They represent costs of time, effort, anxiety about waiting, etc. associated with the demand and acquisition of the service.

Retail Sales Revenue formula

RETAIL SALES = REVENUE # OF CUSTOMERS X FREQUENCY X AVERAGE SPEND

Packaging relevance

Self-service Consumer affluence Company/brand image Innovation opportunity

Management of Service Systems

Service Communication System (Service Marketing)The part of the system where the company has any form of contact with customers (advertising, invoicing, sending information, contacts in the store). Examples: clinic website, brochure indicating the services offered, uniform of contact personnel, signage, waiting room decoration, ... Moment of Truth (Service Encounter)Moment in which the customer interacts directly with the service - with the Contact Personnel and/or Physical Support. Examples: When scheduling an appointment, the dialog with the Contact Person who answers the phone; entry and waiting at reception; ordering in a restaurant, ...

New brands

The company chooses to create a new brand to enter a new product category, when none of its brands are suitable. It can also be used when a brand is in decline and a new brand is needed. Companies can also acquire new brands through mergers/acquisitions. The biggest risk of this option is the dispersion of the allocation of resources.

Pricing policies for New Products

above: SKIMMING below: PENETRATION

Link between Strategic and Operational decisions

operational decisions materialize strategic decisions, so they must be coherent and consistent with them, being aligned with the target and the positioning Strategic Decisions are intentions: • Segmentation/ Targeting: I want to have a particular profile of customers • Positioning: I want my target to perceive my brand as having some specific attributes Operational Decisions are concrete actions: • Product: design the offer • Placement: define the ways my target will have access to my offer • Price: determine the price my target has to pay • Communication: define the message and the tools to use

Break-even point

the point at which the costs of producing a product equal the revenue made from selling the product

Producer Distribution Channels

▪ Distribution Channel: system consisting of several entities (companies, equipment, people,...) Leading and directingthe flow of goods and services from producer tofinal customer

Merchandising dimensions

● DECOR ● SHOP WINDOW ● SIGNAGE ●● INTERACTIVE SYSTEMS ● SHELVES ● POSTERS ● ● COUNTERS ● BRAND EXHIBITORS ● VIDEO WALL ● ● DISPLAYS ● SHOWCASES ● ... Understand the shopper ́s mind Join related products / connections that make sense Boost cross selling

Packaging objectives

❑ Identify the brand ❑ Convey descriptive and persuasive information ❑ Facilitate product transportation and protection ❑ Assist at-home storage ❑ Aid product consumption

Distributor brand (DB)

Also known as private label. It belongs to a distributor and is marketed exclusively through its stores or its network. You may or may not use the distributor's insignia as a brand for the products

Types of digital products

Digital products are materials and content created, distributed and consumed digitally. That is, through computers, tablets or smartphones. Digital products have as main characteristics that they do not have a physical structure, do not need storage or delivery services. Examples of digital products: ebooks, online courses, webinars, tutorial videos, music, applications (apps), software, games, podcasts, among others.

Costs for the company

Fixed costs Direct These are costs that are directly linked to a product Amortization of equipment and facilities Distribution and sales, among others Indirect Administrative managementother amortizations ... Variable costs •Labour •Raw materials and subsidiaries •Other consumption inherent in production •Variable sales and distribution costs Cost per unit = Variable costs+fixed costs___ Number of manufactured units

Distribution strategies (# intermediaries)

INTENSIVE •Many outlets as possible •Mass market selling •Fast moving consumer goods SELECTIVE •Less than all possible distributors •Market coverage, less cost •Limits and selects locations; Image protection EXCLUSIVE •Limited number of outlets (one) per territorial area •Prestigious image, brand loyalty •Luxury and prestige goods

Traditional channels

Independent organizations (producer, wholesaler, retailer,...), each with their trade policy. Relations between organizations can be explained by the theoretical model of supply and demand (e.g., Traditional clothing Sector) Characteristics :•Frequent conflicts •Lack of economies of scale

Experience curve

Systematic production cost reductions that occur over the life of a product.

Digital Product

The digital medium has brought new products and services, as well as enhancing existing ones. This transformation is easily identifiable in the world of music and content in general. Consumers started to buy what they want and not what was imposed on them (eg CDs, linear television). There is also a reinforcement of pre- and post-sales services through digital platforms. New products and services also emerged, related to multiplatform content, specific software for devices, apps and a number of specialized services associated with access to the digital environment and its use.

Range management \ portfolio

The evolution of the current market presents us with an increase in the diversity of consumer preferences. Thus, companies feel the need to increase and complement their offer to respond to this trend. This option is intended to take advantage of: ▪Production flexibility ▪Synergies and economies of scale This results in the increase of product ranges and lines in companies.

Retailing-mix: Service policy

Type of strategy Advantages Disadvantages FULL SERVICE - Image and Shop style Avoids direct price competition Satisfies most of the consumers - Trend towards poor control and cost inflation It supports non-users the cost of services LIMITED SERVICES - Image and Shop style Reduced costs that allow low prices Satisfies a part of the clientele - Doesnotcapitalizeona service image It only satisfies the clientele who is interested in the price OPTIONAL SERVICES - The consumer has the decision to choose Service is only paid by those who use it Service can become a profit center - Competition is exercised on products and services Servicescannolonger excuse the high margins

Components of marketing-mix: Price

Variable of the Marketing-Mix which deals with: • Determination of price policies for products Importance of price: • as a competitive weapon • as a reflex of the image of a product • as an indicator of value obtained in the exchange

Components of marketing-mix: Placement

Variable of the Marketing-Mix which deals with: • Providing products in the necessary amounts to the biggest possible number of consumers, • Control of inventory, transportation and storage systems at the lowest possible cost Variables of the Place decision include, e.g.: • Distribution system • Distribution network/channels • Types of transport

Components of marketing-mix: Communication

Variable of the marketing-mix which deals with: • Communication activities used to inform one or more groups of people about the organization and its products. Variables of the Communication decision include, e.g.: • Publicity • Public Relations (external relationship, Sponsorhip, Press) • Sales Promotions • Sales forces • Direct Marketing

Brand or branding

What is it? It is a name, term, design, symbol or other that (1) identifies and (2) differentiates a product (good or service) from other competitor products. 'the brand is the first feature that differentiates products' This differentiation can be: ❑Functional, rational, or tangible (related to product performance) ❑Simbolic, emotional or intangible (related to brand equity)

Line Extension

When a company launches an additional item in a given product category under the same brand name (eg, new flavors, shapes, colors, ingredients or package sizes). Companies use line extensions to launch new products, reducing launch costs and risk, while satisfying consumers who need variety and differentiated options. The use of the line extension has as a negative point the overextension of the brand, which can lead to loss of meaning or confusion and frustration in the consumer.

Product life cycle

introduction, growth, maturity, decline

Brand Value

- brand name awareness, loyalty, perceived quality, and associations form equity

Organization of Distribution Channels

- conventional marketing system - vertical marketing system - horizontal marketing system - hybrid marketing system

Consumer Product Adoption Process

1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption

Introduction phase

1. Generation of ideas2. Selection of ideas3. Concept and potential analysis4. Product development5. Product testing and marketing mix 6. Commercialization

Setting the Price - Steps

1. Selecting the Pricing Objective 2. Determining Demand 3. Estimating Costs 4. Analyzing Competitors' Costs, Prices, and Offers 5. Selecting a Pricing Method 6. Selecting the Final Price

Product concept - Revision

A product is something that can be offered in a particular market for appreciation, acquisition, use or consumption. The product should respond to a latent desire or need in the market and consumers. A product can be a good, a service, or an idea (or any combination of the three).

Pricing Methods - demand-based

A. Demand-based pricing The marketer should be able to estimate consumer demand: • High demand High price• Low demand Low price Ex: theater and cinema show higher prices on weekends The marketer should be able to segment demand intensities (by consumer type, distribution channel type, time of purchase, among others) in order to distinguish when placing the highest or lowest price. Consumer price perception must be considered: • Reference prices - There is a minimum psychological price below which the consumer does not accept purchase, as well as a maximum psychological price above which he also does not accept to buy. • Price-quality inferences - Consumers use price as an indicator of quality. • Price endings - Customers see an item priced at €299 in the €200 rather than the €300 range (they tend to process prices in a "left-to-right" manner rather than by rounding); '9' endings convey the notion of a discount Note: this method may lead to insufficient price levels to cover costs.

Type of intermediaries

B2C Intermediates Agent or Broker Wholesaler Retailer B2B Intermediates • Agents • Wholesale Generalists: Specialized: They act on behalf of a producer without purchasing the goods or services Ex: Mediators (Insurance) Storers where part of their customers are end consumers Ex: Makro Sell directly to the consumer Ex: Bertrand Stores They act on behalf of a producer without purchasing the goods or services Ex: Agents for foreign markets in ceramics Storers with a diverse range that resell only to other organizations Ex: Recheio Storer that markets limited product lines to other organizations Ex: pharma (medicines), stationer

Brand equity value

Brands vary in their power and value in the marketplace. A powerful brand has high equity value, and brands have greater equity value to the extent that they have greater loyalty, name awareness, perceived quality, brand associations, etc. High equity value gives a company many competitive advantages, such as negotiating power. Customers want to find these brands in stores, brands leverage this power in negotiating with distributors. Brands can be considered the main durable asset of a company.

Internal Situation analysis (Strengths and Weaknesses)

Company review (History, organizational structure and culture, availability of resources, current objectives, strategy and performance) - marketing - finance - manufacturing - organization

Price determination under marketing guidance

Considers external factors from the perspective of consumers and channel members, in addition to management thinking traditionally focused on internal costs. The company should consider a wide range of factors.• The price should not be determined on the assumption that all other factors are constant, as the marketing environment changes (and increasingly quickly): • The needs and wants of consumers change during time • Competitors are always modifying their marketing-mix • There are sudden developments that alter the market with great impact on the product value (E.g., technological innovation) ---------------------- Note: Price remains the easiest marketing-mix variable to adjust

Retailing-mix: Price policy

Decision on Prices depends on Price structure Relation between costs and demand Managing the forces presence in the market (competitors, consumers, ...) Calculation method Pricing from the costs Pricing from demand Pricing from competition

Horizontal systems

Either non-compulsory or permanent alliances between several companies, working in the same sector and at the same level. These companies get together to gain scale and can focus on specific functions such as purchases, or transport, or common subsidiaries, ... Ex: Media agencies (advertising space buyers), pharmacy groups

Business models for digital products

Freeware Products that, while copyrighted, are available at no cost for unlimited use. They are 100% free and can be accessed and used by anyone. (eg Facebook; Whatsapp) Freemium is a business model based on the creation and availability of a free product or service, which is paid when you want to access extra features. (eg Dropbox; Spotify) Premium (or subscription) The consumer pays on a recurring basis for a product or service. You can choose how long and how often you want to be a customer, and most of these products offer the option to renew or cancel at any time. (Eg Netflix; Dollar Shave Club)

Product concept

Goods - Tangible product; It has physical existence. e.g. cosmetic products Services - Intangible product; It provides intangible benefits to the consumer. e.g. stay in a hotel Idea - Concepts that provide stimulus to solve problems or adapt to the environment. Consumer Products or Business-to-Consumer B2C• Purchased to meet personal or family needs (goods or services) Industrial products or Business-to-Business B2B• Purchased by organizations (and not individuals) for regular use or to transform in the creation of new products (goods or services) Products exist in a continuum between pure tangible (goods) and pure intangible (services)

Different roles in the purchase decision process - Different audiences

INITIATOR The one who first suggests the idea of buying a product/service INFLUENCER The one whose advice/opinion has weight in the decision (social/personal influence) PRESCRIPTOR The one whose advice/opinion has weight in the decision (recognition/tech nical credit) DECISION MAKER Who decides to buy, what to buy, where to buy, when to buy PURCHASER The person who makes the purchase C O N S U M ER One who uses or consumes the product/service

What is a service?

Intangible Product: Service • Invisible, immaterial• Ownership is not normally transferred• Cannot be resold• Usually not possible to demonstrate (does not exist before purchase)• Cannot be stored•Production and consumption are usually coincident• Production, consumption and sale often take place in the same space• Cannot be transported• The consumer/client intervenes in the production• Direct contact is usually required

Vertical systems

Integrated - The different levels of production and distribution belong to the same company (Ex: Vista Alegre, Zara, Samsung Stores, ...) Controlled - Non-contractual relationship with predominance of one of the parties (leading products)(Ex: Olá Ice Creams, Coca-Cola, Dove, ... ) Contractual - Coordination of programs of Contractual- based action(Ex: Franchising, cooperatives, ...)

Integration between digital and physical (phygital)

Integrating the physical and digital environments of a business has become increasingly relevant, as well as enabling the most fluid interaction possible and giving consumers the option to buy in the channel they want. Phygital is the term for these hybrid operations, uniting the digital aspects and the physical environment of the business. Phygital will be able to use, for example, IoT and predictive technology to build bridges between services and offerings in the physical and digital worlds, creating up-to-date and cross-cultural experiences. Phygital will be able to use, for example, IoT and predictive technology to build bridges between services and offerings in the physical and digital worlds, creating up-to-date and cross-cultural experiences.

Multi-brand

It involves launching different brands in the same category. It has the advantage of appealing to different purchase reasons combined with different characteristics of the products. It also ensures more shelf space in distributors. The biggest disadvantage of this strategy is the division of market shares and being able to make a profit (if no brand is particularly profitable).

Brand Extension

It involves using a successful brand to launch new or changed products in a category. Brand extension gives a new product immediate recognition and acceptance, facilitates the communication process and makes use of economies of scale. The associated risks are the possibility of image confusion of the main brand, as well as the brand name losing its positioning due to overuse.

Retailing-mix: Location

Location of the point-of-sale conditions the success of the business by not being easily alterable Location should consider: Consumers - Access Competition - proximity/actions Associated with location are the size/dimension and environment decisions of the point of sale

Brand Management

Managing the brand is endowing goods and services with the power of a brand. The Brand has several roles in itself: • Identifies the manufacturer • Simplifies your handling • Offers legal protection • Associates the quality level with the product • Creates barriers to entry for competitors • Serves as a competitive advantage• Ensures price positioning (ex: premium)

MARKETING STRATEGY - Producer Vs Distributor

Marketing Strategies Commercial Negotiation Producers Targeting Positioning MARKETING-MIX ProductPrice Distribution Communication I ▪ Sales force▪ Advertising▪ Public relations ▪ Sales Promotion ▪ Merchandising I Distributors Targeting Positioning RETAILING-MIX Location Assortment PriceServices Communication

Quality-Price Ratio

Marketing managers will not be able to ignore the psychological effects of prices on the market: • In the absence of other information, the price may be a reference for the assessment of the quality level of a product. • The price is linked to the product image, and a wrong decision may decrease sales and affect the positioning of. • The price determines the positioning of the product against competition. • Once a pricing policy is implemented, all possible changes should be carefully considered.

Price - consumer perception of value

More than the objective question of monetary price, consumer perception of price depends on: • The characteristics of the target market - Buying power and value for money perception. E.g., airline ticket price for tourist (lowest) Vs business trip (highest) • The price charged by competitors - The consumer's choice is made by comparing the value between the various • From the purchasing situation - High price of products at service stations opening at night (convenience) • The type of purchase - Higher sensitivity to an increase in price of gasoline (regular consumption) vs. citizen card price increase (occasional consumption) offers (perception of benefit vs. costs)

Marketing Variables

Non controllable variables (analysis): - market environment - market structure - company/history - market agents: -> distributors, wholesalers -> suppliers -> competitors -> customers -> opinion leaders Controllable variables (decision) - strategic decisions (STP) - operational decisions (marketing mix)

Marco environment (External Situation analysis (Opportunities and Threats))

PESTEL Factors: • Political, legal/ regulatory• Economic and competitive • Socio-cultural• Technological• Environmental• Legal • Changes in the environment create uncertainties and marketing opportunities • Organization has little or no control over the macro factors • They have an impact on all organizations operating in a particular market, from the supplier to the final consumer

Pricing Policy for Services

PRICE STRATEGIES TO REDUCE UNCERTAINTY Incorporate a higher price into the attributes most valued by the customer; Return guarantee in case of dissatisfaction; Set a fixed price before delivery of the service, in order to eliminate surprises (e.g., advantage of budgets). • It makes sense in fast-changing contexts where suppliers do not easily control their costs and the speed of the service RELATIONAL PRICING STRATEGIES • • When the goal is to maintain long-term relationships, lowering the price may not be enough to prevent customers from looking for a competitor who has a better offer at the first opportunity. Customer loyalty mechanisms can be created (e.g., creation of shopping packages - telecommunications -, loyalty cards with associated discounts) LOW-PRICE LEADERSHIP STRATEGIES Low-priced services specifically target low-budgets customers Allow bargaining power and large volume purchases (e.g., discounts for purchases over €500) The big challenge is to convince customers that the low price is not associated with equally low quality A second challenge is to manage low-cost maintenance to ensure profit (e.g., New trends of low-cost air line carriers)

The Merchandising role

PRODUCER Maximize the sales volume of its products (and prevent competitors from increasing theirs). Enhance the image of its brands. Develop partnership relations with distribution. RETAILER Sell all exposed products. Try to maximize its sales volume and maximize the profitability of its investments. Privileges the sale of products that guarantee a strong gross margin and a fast stock rotation. To offer maximum customer satisfaction - facilitating choice, reducing fatigue and minimizing customer movements. Create a good shopping experience for the consumer (customer loyalty).

Traditional Communication Mix

Paid, non-personal form of communication from an identifiable source via mass media Advertising Sales promotion Public relations Sales force Direct Marketing Form of interpersonal communication Short-term incentive (activity or material) that offers extra value for the purchase of the product Two-way communication between the org and stakeholders aiming at a favorable reputation All forms of direct communication between organization and consumer (eg direct mail, telemkt, internet mkt)

Price competition (products already on the market)

Policy in which the product competes based on price (equal to or less than that of competitors) •It is a strategic option for positioning value for money at the low price •By reaction to competition actions,•By reducing costs (institutional or marketing), •By decreasing demand,•among others...

Non-Price competition/differentiation(products already on the market)

Policy in which the product differs from the competition by focusing on factors other than price (in this case, generally higher than competitors). • For the greatest/best service,• For the highest quality,• Through differentiated communication, • by attractive packaging,• ...

Price Decisions

Price based on value to the customer The higher the perceived value the more the customer is willing to pay: the customer do not pay more for a service than the amount they think the service is worth. Price based on costs Companies determine a minimum price that allows them to cover all their costs - fixed and variable. Price based on competition Consumers compare the offers and if they don't see differences between them, they'll choose the cheapest.

Creation of the marketing mix for the target market

Product Promotion Price Placement

Decline phase

Product Discontinuation Why? Technological Obsolescence Production costsChanging consumer tastes How? Product Extension Exclusion Products

Product Quality

Quality is a fundamental tool for defining product attributes. Product quality in Marketing has two dimensions: level and awareness. The development of a product must begin with the choice of a level of perceived quality that will support the positioning of the product in the market. It is rare to deliver the highest level of performance possible, as few consumers are willing or able to purchase products at this level.(ex: Rolls Royce, Rolex). Instead, companies opt for a quality level that fits their target audience needs and competitors' quality levels.

Product range and lines

Range - specific group of products offered by the company defined around the same technology, business, market or market segment (ex: women clothing) Line - product group that are close together and considered as a unit for marketing, technical, or end-use considerations (ex: dresses) Item - Specific version of the product that can be perceived as a unique offer among exiting products. (a specific dress model)

Maturity phase

Range and product line management Why? • Competition •Safety•Reduction of costs •Legislation •Offer more value How? •Quality modifications•New features and performance •Durability and reliability•Functional Modifications •Associated Services•Design Modifications

Price - marketing perspective

Relates directly to profit / performance: profit= (price X quantity sold) - total costs Produces revenue Quickly changeable: → changes in demand → competitors' actions Psychological impact on the consumer → price increase = emphasis on product quality/status → Price decrease = emphasis on value for money

Merchandising dimensions (producer and retailer)

SEDUCTION Visual (and animation) merchandising ORGANIZATION Assortment Display Organization MANAGEMENT Maximize Space Profitability

Development of the strategic triangle

Segmentation, Positioning, and Differentiation

Costs for Services

TOTAL COSTS = MONETARY PRICE + + TIME COSTS • Associated with the concept of "opportunity cost" + PHYSICAL COSTS • Unwanted physical consequences such as fatigue or physical discomfort (having to wait standing without being able to sit down) • Unwanted mental consequences such as mental stress, insecurity, fear, frustration, anger... + SENSORY COSTS • Negative sensations experienced by the client through his 5 senses such as excessive noise, unpleasant smells, excessive heat or cold...

Advertising

Television •High audience•Medium segmented and increasingly fragmented•Strong advertising saturation•High costs•Greater accuracy in audience measurement Radio • Repetition and speed of distribution of contacts •Few technical restrictions •Poor build quality •Advertising saturation Press • Heterogeneous set of formats stronger loyalty •Greater freedom of consumption strong segmentation •Only means that it is necessary to buy directly and frequently Cinema • Limited quantitative audience, young, urban •Impact medium•Strong seasonality•Kinda expensive•Good geographic selection Outdoor •Pasta medium•Wide variety of supports•Strong repetition of the message •Lower accuracy in audience measurement Internet •Strong growth•Reduced costs•Limited crafting quality•Possibility of response / interactivity•Larger audience on generalist sites

Skimming (new products)

Temporary strategy High Price to be decreased Objective: To skim profits of the market layer by layer Appropriate with: New product in the market Innovations Advantage: generates cash flow to recover costs (e.g., R&D for digital TV) Disadvantage: attracts competitors to a seemingly lucrative market

Penetration (new products)

Temporary strategy Low Price to be increased Objective: To increase sales To increase market share Appropriated wiht: Price sensitive markets Mass market Stiff competition Economies of scale available Advantages: generates market share quickly; discourages competitors in easy entry markets Disadvantage: it is less flexible than the skimming price (easier to lower a skimming price than to increase a penetration price)

Brand Establishment

The key to Branding is that consumers should not think that all brands in the same category are the same. Brand names help consumers identify products that benefit them. Brands are also synonymous of quality. When consumers buy a particular brand, they know that they will receive the same features, benefits and quality every time they buy it.

Trade Marketing

Trade Marketing - common effort of the brand (producer) and the retailer in order to improve the customer's shopping experience and sales revenue

Components of marketing-mix: Product

Variable of the Marketing-mix which deals with: •the study of the desires of the consumer •the conception of the product with the characteristics desired by the consumer. Variables of the Product decision include, e.g.: •quality •packaging •brand names •design •guarantees and repair services

Retailing-mix: Assortment

Width - Diversity of product lines present at the point of sale Ex: Clothing store with section of Man, Lady, child and sportswear; it has a good width in the clothing sector Depth - Variety of models or items of a line or family Ex: • • An ultra-specialized store like Tie Rack has a great depth of necktiesHappy Socks Defensive Assortment: - Wide - Little Deep Offensive Assortment: - Narrow - Deep Convenience: Assortment: - Narrow - Little Deep Attraction Assortment: -Wide - Fairly Deep

What is placement?

be in the right place attheexactmoment insufficientquantity withthedesiredcharacteristics withthenecessaryservices

Profile Strategy

influence a range of stakeholders presentation of organization as a whole; normally no reference to specific products target audience: all relevant stakeholders communication goal: build reputation

Types of brands

institutional brand - Sony, HP, Nokia product brand - SKIP, DOVE, Confort (Unilever) umbrella brand - Yamaha (Motorcycles, musical instruments) family brand - Nestum, Néscafé, Nespresso (Nestlé) double branding -Matutano (Ruffles); Vichy (Dercos)

Brand Strategies

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Consumers reaction to new product introduction

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Product 3 levels of products as (tangible) Goods

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Push Strategies Vs Pull Strategies

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From the 4 P's to the 7 P's of Marketing

product price placement communication physical evidence people process

Communication Strategies

profile, push, pull

Retail Channels evolution

tradition e-commerce multichannel omnichannel

MICRO Environment

• Industry and Market actors who interact with the organization in the development of its activity ❑ buyers ❑ suppliers and middlemen ❑ competitors ❑ stakeholders (ex: government, local communities) • Organization has relative control over the actors of the micro environment

Price Objectives

• Maximummarketshare • Maximumcurrentprofit • Survival(short-runobjective) • Other(public/non-profitorg): partial cost recovery (university, museums, ...) geared to client income (social service agency) full cost recovery (non-profit hospital)

Lessons from product life cycles

• Products (market offerings) have a limited life.• Sales and profits go through different phases.• Each stage has different characteristics and challenges. • Products require different marketing, financial, manufacturing, purchasing and human resource strategies at each stage.

Strategic Triangle

• Segmentation: to group the consumers into smaller markets with homogeneous characteristics/ needs in order to, later on, select the interesting target-markets to the company. • Positioning: to create an image for the product in the mind of those target-markets; • Differentiation: process of creating the competitive edge through the creation of attributes which are unique to a product.

Types of distribution channels organization

• Traditional channels • Vertical Marketing Systems • Horizontal Marketing Systems

Price - consumer perspective

• the price is evaluated according to the perceived value of the product (benefits utility / satisfaction) that it provides Perceived Value = Benefits vs. Costs • Benefits - tangible or intangible • Costs - monetary price + nonfinancial costs (time + effort + ...) • How to increase value for the consumer? → Increase benefits or → Download costs

Increase value in Services

•Add benefits to the primary service•Add supplementary services, or•Reduce the costs associated with providing the service: Reduce the time involved in the service acquisition, delivery and consumption process; Minimize psychological service costs throughout the process; Eliminate the physical costs of the service, namely in the service search and delivery process; Lowering unpleasant sensory costs, creating a more pleasant visual environment, reducing noise, installing more up-to-date furniture, etc. Reducing costs can drive price increaseif there is a higher perceived customer value