Marketing Strategies 2018 Workshop: First Session

The purpose of the workshop is to present Marketing Fundamentals while establishing a link with the recent trends in the Marketing Field, and the expectations for the year 2018.

The Marketing Mix, AKA the 4 Ps:

1. Product
2. Price
3. Place
4. Promotion

As Marketing is a continuously updated science based on new practices, scholars and professionals tried to change the theoretical framework of the Marketing Mix, turning it into 7 Ps, 8 Ps, 12 Ps… in attempts to provide better directions, however, they could all be viewed as expansions for the typical 4 Ps.

7 Ps example:

More on this approach: The 8 Ps of Services Marketing 

The Marketing Mix outlines the main roles of modern Marketing departments, getting involved with almost every business aspect. The mix perspective allows marketing professionals to consider choices that lead to creating a value proposition, and being able to come up with a USP (Unique Selling Proposition).

1- Product/Service:

This aspect is split into a core product/service and an augmented product/service. Being included in the Marketing mix means that marketing professionals should always be involved in the process of product development and innovation, whether for a brand new product, or enhancements to an already existing one.

A core product stands for the main reason a customer needs to buy it, which creates a need to choose between products that belong to a certain product category. An augmented product or service stands for the additional elements that help the customer decide between one of these options.

Also products have been classified into three levels instead of two, 1- Core product, 2- Actual product, and 3- Augmented product:

Image source cobo-cards

2- Price:

For financial purposes the price must be set in a cost+ manner; if the product costs the company a $100 to manufacture and promote for it, the company can’t sell it at $100 or less; a profit margin must be added.

The decision of a suitable profit margin depends on multiple factors, including the industry norms, the planned product positioning in its market, the expected turnover rate of the product (how many units is the company going to sell over a specific period of time?), and surely the inevitable question of how much profit are you planning to make?

From a competitive perspective the pricing strategy should either be “Skimming” or “Penetration”.

“Skimming” involves setting a price at the top of the market, targeting the customers with the highest level of disposable income within a target segment, and eventually letting the price fall in the market, to target more customers who have less income levels. The high price should logically be accompanied with a unique product positioning, being perceived as a better/more efficient/more prestigious alternative for products offered by the competition.

“Penetration” involves setting a price that is lower than the competitors’; letting the cheaper price help you sell more to target customers. With this pricing strategy, the product would better be placed as a cheaper product that serves the same purpose of more expensive ones.

More on Penetration Vs. Skimming from Chron.

Pricing is directly related with value proposition, or more accurately the perceived value of a product:

In the diagram above, both value and pricing (cost) are compared with the competitors’ offering. In a best case scenario, a company would be proving “More value” for the “Same Price”, or even for a “Less price”. More on that on Rick Gage’s blog.

3- Place:

Nowadays, place has two meanings, the brick and mortar place (AKA the physical place in which a customer can buy a product/service), and the e-commerce delivery reach, in case the product/service is available for purchase online.

A- Brick and Mortar

The physical location is directly linked with the place in which the customers are located, which is an element of convenience. Plus the relevance of the place with the product positioning strategy; for example a prestigious garments brand with overpriced products should always have its stores located in prestigious locations; districts and malls of the rich segment of the society.

B- The e-commerce component 

For years, many marketing professionals have been claiming that “If you’re not selling online, you won’t be selling soon”. Understanding the trends of the e-commerce industry might be as critical as understanding the nature of the company’s industry itself, in order to be capable of integrating both.

4- Promotion: 

Promotion has 6 elements; Direct Marketing, Sales Promotion, Personal Selling, PR/Publicity, Advertising and Internet/Interactive.

The best practices involve letting these elements cross serve one another to achieve the objectives a marketing plan, that’s the meaning of IMC (Integrated Marketing Communication).

IMC example: 

If you host a charity-oriented event under the name of your organization this is PR/Publicity. If you send emails before and after the event, inviting people to attend and covering news after it is over, you would be integrating Direct Marketing. If you advertise on social media, on Google, or any other platform, you would be integrating Advertising and Internet/Interactive. If you offer a promotion (voucher for example) for those who attended the event, this is Sales Promotion being integrated. Generate some leads within the event and you would be integrating Personal Selling.

1- Direct Marketing

“A form of  advertising where organizations communicate directly to customers through a variety of media including cell phone text messaging, email, websites, online adverts, database marketing, fliers, catalog distribution, promotional letters and targeted television, newspaper and magazine advertisements as well as outdoor advertising. Among practitioners, it is also known as direct response”.

2- Sales Promotion

Sales promotion is any initiative undertaken by an organisation to promote an increase in sales, usage or trial of a product or service (i.e. initiatives that are not covered by the other elements of the marketing communications or promotions mix). Sales promotions activities include free gifts, discount prices, joint promotions, free samples, vouchers and coupons, competitions and prize draws, cause related promotions, finance deals… more on Sales promotion here

3- Personal Selling

Personal selling is where businesses use people (the "sales force") to sell the product after meeting face-to-face with the customer. The same function is now being done by online sales representatives for certain products and services.

All other communication tactics should help serve sales people to achieve their objectives, more on Personal Selling here.

4- PR/Publicity

Public relations (PR) is the process of managing the brand’s reputation. Publicity involves attracting media attention to gain exposure, as the popular saying goes “Any publicity is good publicity”, because publicity is merely a concern of creating a buzz. More about both here

5- Advertising 

Advertising is the science and art of creating and sending persuasive messages to a group of target audience in order to influence opinions, attitudes, and behaviors.

Traditionally Advertisements are classified as “Above the Line” and “Below the Line”, based on the usual cost of ad spots.

Above the line includes advertisements on TV, radio, outdoors…

Below the line includes advertisements displayed on Flyers, banners, brochures…

Digital Marketing activities can either be placed as an “Above the Line” or a “Below the Line” tactic, as online ads may vary in cost according to need. Some professionals even refer to online ads as a “Through the Line” advertisements.

6- Internet/Interactive

Everything online including websites, social media channels, Search Engine Marketing… the “Interactive” part is what sets this tool apart from the rest, having to deal with customers on platforms where two-way communication is finally available.

It didn’t only influence marketing communication teams; it also influenced customer support and customer relationship management in general, making brands more vulnerable to criticism.

Check Social Media’s Impact on Modern Societies and World Events

The Marketing Process

•       Market research

•       Data analysis

•       Plan construction

•       Execution

•       Evaluation

We can logically think of the process backwards, a brand usually needs to “Execute”, market or promote for a certain product in order to sell it. As the nature of all scientific approaches indicates, the brand would better go with a concrete plan before starting this execution process. In order to have such a concrete plan, it needs to be built on facts and market insights, and this is why market research and data analysis are needed. The evaluation indeed helps enhance the next plan to be set by marketing professionals.

Due to the ever evolving marketing digitalization process nowadays, brands must evaluate campaigns’ performances on a daily basis, being agile enough to optimize, or even change the whole campaigns’ big ideas on the spot, as new methods of marketing involve a swift interactive two-way means of communication.

Next to the importance of interactive communication rises the importance of coping with the progressive nature of today’s markets, which enforces marketing departments to go through all of these stages of the process in parallel. Executing the current plan while evaluating performance and optimizing accordingly, at the same time, the data of the communication team and sales team should be delivered in reports to be considered as key findings while constructing the next plan…. All while asking the question “What other information may we need?” the answer to that question determines the market research questions which are the first step for research design. Once a new research process is designed, it should be executed as swift as possible, bringing back insights to analysts, who combine them with the feedback of sales and communication teams to provide the basis for the next marketing plan to be constructed.