More important, he could also estimate her due date to within a small window, so Target could send coupons timed to very specific stages of her pregnancy. One Target employee I spoke to provided a hypothetical example. Take a fictional Target shopper named Jenny Ward, who is twenty-three, lives in Atlanta, and in March bought cocoa-butter lotion, a purse large enough to double as a diaper bag, zinc and magnesium supplements, and a bright blue rug. They know that if she receives a coupon via e-mail, it will most likely cue her to buy online.
They know that if she receives an ad in the mail on Friday, she frequently uses it on a weekend trip to the store. He accused Target of encouraging is daughter to get pregnant. The customer-service employee he spoke with was apologetic but knew nothing about the mailer. All this data-driven direct marketing might seem a little creepy or even nefarious, and certainly it can be when marketers are insensitive or unethical in their use of consumer data.
However, direct marketing also offers significant value to consumers by tailoring their experience in the market to things that most align with their needs and interests. Over time, as companies use consumer data to understand their target audiences and market dynamics, they can develop more effective campaigns and offers.
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Organizations can create offers that are more personalized to consumer needs and preferences, and they can reach these consumers more efficiently through direct contact. Because it is so data intensive, it is relatively easy to measure the effectiveness of direct marketing by linking it to outcomes: did a customer request additional information or use the coupons sent? Did he open the email message containing the discount offer? How many items were purchased and when? And so forth. Although the cost of database and information infrastructure is not insignificant, mobile and email marketing tend to be inexpensive to produce once the underlying infrastructure is in place.
As a rule, direct marketing tactics can be designed to fit marketing budgets.
4 Principles of Marketing Strategy In The Digital Age
If it is too low, you may have difficulty obtaining profits. You will also have to consider the price of the competition. Some models of common prices include the cost price plus a profit, in which a fixed percentage of the cost of production is added, and the price based on the value of the product, in which the price is set according to the value consumers perceive the product.
The latter kind of price is often used in more expensive luxury items. The concept of place refers to the distribution channels; this is where the product will sell and how to hit the market. If you operate a business whose headquarters is home, as sales on eBay, it is likely that the market is Internet, and you want to send your products directly to consumers. Larger businesses, such as consumer goods manufacturers can sell their products at a grocery wholesaler, who then distributed to retail stores in the field.
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Promoting the product or service involves raising awareness among potential customers about its existence. It is likely that advertising is the most famous form of promotion, using media such as television, radio, newspapers and magazines. The websites are also used as an advertising medium.
Retailing technologies have become important as competitive tools.
There is also a trend of green retailing, where retailers are adopting environmentally sustainable practices. Wholesaling includes all the activities involved in selling goods and services to those buying for resale or business use. A wholesaler is a firm engaged primarily in wholesaling activities.
Wholesalers add value by performing one or multiple of the following channel functions:. Merchant wholesalers are independently owned wholesale businesses that take title to the merchandise it handles. They include full-service wholesalers , who provide a full set of services and limited-service wholesalers who offer less services to their customers. Industrial distributors sell to manufacturers, while wholesale merchants sell primarily to retailers.
Cash-and-carry wholesalers carry a limited line of fast moving goods.
Drop shippers never carry stock, but select manufacturers who ship the product upon order. Brokers and agents. A broker is a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation. An agent is a wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions and does not take title to goods.
Purchasing agents often have long-term relationships with buyers and make purchases for them. Like retailers, wholesalers must also decide upon the product, prices, promotion and place of their services.
The promotion mix marketing communication mix is the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships. It consists of five major promotion tools:. Advertising : any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.
Sales promotion : short-term incentives to encourage the purchase or sale of a product or a service. Direct marketing : direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. First, consumers are changing: they are better informed and more empowered. Also, marketing strategies are shifting away from traditional mass marketing.
Finally, communications technology is changing the way companies and customers communicate with each other. IMC recognizes all touchpoints where the company and customers meet and ties together all messages. In order to develop marketing communications, an understanding of the communication process is required. Determining the communication objectives. The target audience can be in any stage of the buyer-readiness stages. The buyer-readiness stages are the stages consumers normally pass through on their way to a purchase, including awareness, knowledge, liking, preference, conviction and finally the actual purchase.
1. Readability and Scalability
A goal of a marketer is to move target customers through the buying process. Designing the message. The message should get attention, hold interest, arouse desire and obtain action. Attention, interest, desire and action come together as the AIDA model. The marketer determines the content of the message. Rational appeals relate to the audience self-interest and their benefits. Emotional appeals attempt to stir up emotions that can motivate purchase. Marketers must also decide the message structure and the format.
Choosing the channels of communication. There are two broad categories. Personal communication channels are channels through which two or more people communicate directly with each other, including face to face, on the phone, via e-mail or even through Internet chat. Personal communication channels include word-of-mouth influence : personal communications about a product between target buyers and neighbours, friends, family members and associates.
Buzz marketing is cultivating opinion leaders and getting them to spread information about a product or a service to others in their communities. Non-personal communication channels are media that carry messages without personal contact or feedback, including major media, atmospheres and events. Affordable method : setting the promotion budget at the level management thinks the company can afford.
Percentage - of-sales method : setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales prices. Objective - and-task method : developing the promotion budget by 1 defining specific promotion objectives, 2 determining the tasks needed to achieve these objectives and 3 estimating the cost of performing these tasks. The sum of these costs is the proposed promotion budget. The promotion mix consists of five tools. Advertising can reach masses of geographically dispersed buyers at a low cost, but it cannot be as persuasive as people.
Personal selling is the most effective in certain stages of the buying process, but is quite costly. Public relations PR is believable but is often underused. Direct marketing is less public and delivered to a certain person. Marketers can choose from two basic promotion mix strategies. A push strategy calls for using the sales force and trade promotion to push a product through channels. A producer promotes a particular product to channel members, who in turn promote it to final consumers.
Having set the promotion budget and mix, the next task is to integrate into a promotion mix. There are legal and ethical issues to consider when thinking about marketing communications.