A3

1.2: Evaluate the impact of relevant ethical issues on marketing planning for chosen organisations .............................................................................................................................. 23

- Segmented/discriminatory pricing – concessions for students, cheaper times of day - Psychological pricing - $1.99 instead of $2.00, using the ‘lucky’ number 8 in China - Promotional pricing – create awareness of product - Value pricing – according to delivered value (e.g. planes  first, business and economy classes - Geographic pricing – transportation costs increasing cost of goods - International pricing – certain products more popular in different countries 1.3 : Explain current trends in advertising and promotion, including the impact of ICT and social media. IMC media, tools and technologies Orgs need to divide budget among major marketing communication categories, specific media, tools and technologies. Mix of marketing communication needed to achieve marketing objectives defers greatly between companies, even those within the same industry. PART VI. MARKETING FUNCTION AUDIT A. Products A strategic plan in managing the existing product line of a company is, perhaps, the most important part of its marketing strategy. In conducting such an activity, it is necessary to consider the evaluation of the consumers of the existing products being offered by the company, especially in relation to competitors. The expected outcomes on sales, profits and market share should also be considered alongside the actual outcomes on these areas (Claycamp & Wind 1976). In addition, the objectives surrounding the product line of the company should be analyzed. The design of product lines is a problem faced by companies that are trying to introduce a product to both new and existing markets, as well as by companies that seek to diversify their product lines. Yet, the product should correspond to what the customers want (Dobson & Kalish 1988). B. Price

1.3 : Appraise the benefits of relationship marketing to organisations. Simple Marketing Concepts - Needs, wants and demands – products as bundles of benefits, look for best value for money  Needs – things that are vital for survival e.g. housing, food and water.  Wants – a non-necessary desire e.g. designer clothes and perfume.  Demands – wants backed by buying power

Promotion encourage purchase; alters price-value relationship sensitive - Generate extra interest - Can measure effect - Doesn’t contribute to brand image - Promotional wars Public Relations Non-personal communication in news story form through medium for free - More credible - Low cost - Lack of control - Can be negative The Marketing Evolution 1. Trade (bartering and exchange of products). 2. Production orientation – what could be made? Henry Ford said that “you can have any car that you want as long as it’s black (because black was the cheapest car to produce)” 3. Sales orientation – consumers won’t buy unless organisations undertake large-scale promotional efforts (e.g. life insurance). “Hey come and buy the blue car, we know you can get black but blue is better” says the used car salesman. 4. Marketing orientation – focus on the customer and finding out what they need and want. 5. Societal market orientation- used as a selling point and leverage to target socially aware customers i.e. Corporate Social Responsibility and Ethics. Selling and Marketing Concepts Philosophies 2. Social marketing concept – balance between ideas of SOCIETAL (HUMAN WELFARE) + COMPANY (PROFITS) + CONSUMERS (SATISFACTION) Preparing an Integrated Marketing Program 3. Outlines which customers the company will serve and how it will create value 4. Developed to deliver value to target customers 5. Builds relationships; consists of marketing mix 3.3 : Develop a plan to measure campaign effectiveness. A. Products . In conducting such an activity, it is necessary to consider the evaluation of the consumers of the existing products being offered by the company, especially in relation to competitors. The expected outcomes on sales, profits and market share should also be considered alongside the actual outcomes on these areas (Claycamp & Wind 1976). In addition, the objectives surrounding the product line of the company should be analyzed. The design of product lines is a problem faced by companies that are trying to introduce a product to both new

arrived on the scene. An approach to marketing that includes the whole marketing channel is, therefore, the ultimate consideration, a lesson which should be learned by not only rivals in the energy drink industry but other players in other industries as well. The success of Red Bull’s marketing planning system was dependent on information gathering and analysis. The employment of information and communication technology innovations are essential aids in this campaign. 3.2 : Justify recommendations for pricing, distribution and communication policies. Definition Benefits Limitations Advertising Paid, non-personal presentation and promotion of ideas, goods or services by an identified sponsor - Cost efficient - Repeats message - Can control message - Create favourable images - Hard to measure effectiveness - Delayed feedback - Credibility problems - Clutter in media Sales Promotion Short-term incentives, encourage purchase; alters price-value relationship - Appeal to price- sensitive - Generate extra interest - Can measure effect - Short-term impact - Doesn’t contribute to brand image - Promotional wars Public Relations Non-personal communication in news story form through medium for free - More credible - Low cost - Lack of control - Can be negative Two types of non probability sampling methods are quota sampling and convenience sampling. A quota sample divides the population into groups based on a number of characteristics. In a convenience sample, participants are selected based on convenience e.g. interviewing your friends and family for a project. 3.3: Evaluate factors that might affect the implementation of the plan and how they might be mitigated. . Challenges :  Keen competition

3.2 : Explain the relationship between the marketing mix and consumer behaviour, including: product, branding, packaging, promotion, advertising. Importance of Pricing:  Pricing is getting more and more important due to better informed customers (e.g. through new media) and mistakes in companies’ communication  Pricing has a huge impact on competitors: Competitors can expect effects from a price change that are twice as high as those from a change in another marketing variable Companies often have more than one objective, which may lead to a conflict of interests! Company Resources:  size of the company  resources. Pricing will be a function of costs:  fixed cost  variable cost  total cost  experience cost curves, costs decline over time as a result of accumulated production experience Marketing Mix Strategy: Product:  how important is the product?  is it part of a range or accessory?  quality? Promotion:  who does the promotion?  is price a major selling point? Place:  wholesale and retail margins store image External Factors Affecting Pricing Decisions: The Market and Demand:  Pricing in different types of markets  Consumer Perceptions of Price and Value  Price and Demand Relationship  Price Elasticity of Demand (sensitivity)  Competitor’s Prices and Offers  Other External Factors  Government regulations

The 7Ps – Price - Generates income for the firm; key part of costs to obtain wanted benefits for consumers - Firms need to minimise non-monetary costs to customers ( e.g. time waiting, finding parking spot, unwanted physical effort of getting to salon ) The 7Ps – Promotion - Provides information and advice ( promotions at hair expo’s ) - Persuades the target customers of merit of service product or brand ( e.g. advertising in magazines ) - Encourages customer to take action at specific time ( discount coupons in magazines, 10% discounts to students ) - Customers may be involved in co-production and taught how to move effectively through service process and shape customers’ roles and manage their behaviour The 7Ps – Process - Actual procedure, mechanisms and flow of activities through which service is delivered - Length: number of steps - Duration: time it takes - Logistical effectiveness: smoothness in delivery - Service delivery may follow standardised procedure that comprises a number of activities - Activities may occur frontstage (in view of customer) or backstage (not seen) e.g. frontstage at T&G is the process of the wash, haircut and blow-dry; backstage is washing the towels The 7Ps – Physical Evidence - Setting where service is delivered; tangible components - Servicescapes – physical environment where the customer and provider interact ( the salon ) - Any tangible components that facilitate performance or communication of the service ( the shampoos used, the scissors and other tools ) - The intangibility of service offerings makes tangible cues an essential part of the service process The 7Ps – People - All humans who play a role in service delivery who influence the perceptions of customers - Service delivery employees (front-line staff) the hairdressers themselves - General staff of the service company ( the receptionist when making a booking ) - The customer - Other customers present in the servuction (service -prod uction) and delivery process

2.2 : Evaluate the suitability of below the line techniques for particular products or services. Sales promotion - short term incentives to encourage purchase of a product or service; act of influencing customer perception and behaviour to build market share and sales which reinforces brand image. They are value-adding tools used to prompt an immediate sale by adding urgency. May take many forms depending on the objectives to be met, type of market and product and the budget available and has its origins in Fast Moving Consumer Goods (FMCG). Sales promotion is used to:  Attract new triers (non-users, loyal users of another brand and brand switchers)  Reward and retain brand-loyal customers  Turn light users into medium or heavy users  Regain past purchasers who have ceased buying Sales promotion objectives - are as varied as the methods used. Sellers may use consumer promotions to increase ST sales or to help build LT market share . The objectives may be one of the following:  Entice customers to try a new product/brand  Lure consumers away from competitor’s products/brands  Get consumers to ‘ load up’ on a mature product  Hold and reward loyal customers In general terms, sales promo should promote the product’s positioning and include a selling message along with the deal. Ideally, the objective is to build positive consumer attitudes, stronger brand equity, > market share and increased profitability rather than to prompt temporary brand switching. If properly designed, every sales promo tool has consumer franchise-building potential, even where a price cut is included. Sales promotion tools- 1. Consumer promotion tools

TOOL DEFINITION EXAMPLE/APPLICATION Samples Free or discounted goods provided at store level or through the media designed to facilitate product trial. Offers of a trial of a product. Expensive but effective way to create awareness of and trial a new product. Often low-priced categories and FMCG. Redeemable coupons Coupons carried on-pack or in another media that can be forwarded to a marketer or appointed agent and will be redeemed for a product or service, even a discount on the next purchase. On back of shopping dockets Cash-back offers (rebates) Cash discounts usually received by forwarding a proof-of-purchase where state legislation permits. Cents-off deals or price packs Price deals , usually offered at retail level but also by direct marketers. Most common form of promotion at store level in Australia. 2 for 1 deals & in those lines where they complement each other well Premium offers Goods offered free of charge or at reduced price as an incentive to buy a product. Part of the augmented product. Pack itself may be a reusable commemorative mug Advertising specialties Useful articles imprinted with an advertiser’s name, given as gifts to consumers. Pens, key rings and other novelty items. Found a lot at hotels Patronage rewards Cash , merchandise or service rewards offered to consumers who make continual use of a company’s product or service. Loyalty programs e.g. Qantas Frequent Flyer programs Point-of- purchase (POP) promotions Offers ranging from theme promotions in- store to specially arranged selling areas . 1. Displays- at cash register 2. Demos- e.g. cooking in supermarkets (food draws us in by our senses) Contests and games of chance and skill Promotional events that give consumers the chance to win something of value by luck or skill. It creates interest and involvement. 2.Trade promo tools  Many sales promos aimed at consumers are accompanied by trade promos whereby the various dpt managers at store level can win prizes for the best merchandising display or the highest sales levels during a promo  Manufacturers also pay allowances to retailers for such activities as advertising, displays and physical distribution  In some industries push money (cash or incentives) is paid to dealers or their sales force to ‘push’ the manufacturer’s goods. 3. Business-to-business promo tools  Industrial markets also use promos to gain awareness for new products or to increase penetration of a particular industry by increasing business leads for their sales force.

 Concentrate on conventions and trade shows and sales contests  Conventions and tradeshows- used by vendors to find new sales leads, contact customers, introduce new products, meet customers, sell more to existing customers and educate customers with publications and audio-visual presentations  Sales contest- organised by business marketing to other businesses is an attempt to give incentive to a firm’s sales force, a distributor’s sales force or a dealer network to increase their sales performance during a specified period. Decisions to be made in order to develop a sales promotion program include  Size of the incentive-not too large (can you cover costs, decreases brand image e.g. luxury products)  How to promote and distribute the program (other medias, sales staff, PR campaign)  Length of the promotion  Sales promotion budgeting (% of total budget or the marketer can choose the promos and estimate their total cost) Task 4: Marketing Planning LO 1 1.1 : Evaluate an organisation’s capability for planning marketing activity. A new product is a product that is new in any way for the company concerned. It can be; 1. New to the world – innovations 2. New category entries 3. Additions to product lines- eg vehicles 4. Product improvements 5. Repositioning- products re-targeted for new use, application or to a new user 6. Variations of the above-variations such as new to the country or new to the channel are not commonly accepted as new products Organisations must develop new products . Their current products face limited life spans and must be replaced by newer products. But new products can fail —95% never reach the market, <3% of those that survive last for 5 years-the risks of innovation are as great as the rewards. The key to successful innovation lies in a total company effort, strong planning and a systematic new- product development process. A new product can be obtained through acquisition or internal new-product development process. New product success is based on; Reasons for product failure;  Product superiority/quality  Economic advantage to the user- value for money  Overall company/project fit  Bad timing  Insignificant point of difference  Poor quality  Poor marketing execution markets

 Technological capability  Familiarity with the company  Market needs, growth, size  Competitive situation-ease of entry into the market  Defined opportunity  Project definition-how well defined the product & project are internally too small or inaccessible  Lack of top management commitment  Must have an adequate budget to meet sales goals 1.2: Evaluate the impact of relevant ethical issues on marketing planning for chosen organisations. Privacy concerns- A major direct and online m issue in most countries is PRIVACY. Cross referencing of data  When an ind’s personal info such as health status and work attendance level is interconnected and used without permission. Unwanted post and email  One solution is to ask people which product categories- if any- they would like to receive information about.  Spamming - sending unsolicited email, usually to large #s of people, with a view to making a sale.  Concerns also exist about the means used to build the database and the possibilities of database abuse, particularly in online m where spamming threatens many commercial uses of the Net. Privacy guidelines are now in place. Direct and online database marketing - entails dev and maintenance of electronic databases to interact with past, present and/or potential customers and others in marketing channel. Uses of databases 1. Identifying prospects  Ads generally have a response feature, such as a business reply card or toll-free phone number  Database is built from these responses 2. Deciding which customers should receive a particular offer  Companies identify the profile of an ideal customer for an offer  Search of databases for individuals most closely resembling the ideal type  By tracking individual responses, the company can improve its targeting precision over time 3. Deepening customer loyalty  Create customised information, gifts or other materials  Customised to individual customers preferences 4. Reactivating Customers  Create attractive offers of product replacements, upgrades or complementary products  Deciding on right timing of offering

5.Data mining  Entails checking databases for patterns and trends that are hypothesised to exist  Entails finidng new connections between data item Evaluating database performance Profitable use of a database requires customer relationship mgt and keeping track of sales so as to be able to predict future sales levels more accurately. Three criteria to use are:  Recency of purchase  Frequency of purchase  Monetary value of purchase