CHAPTER 21

3. MARKETING

3.1 What Is Meant By 'Marketing'?
- according to the Institude of Marketing, marketing is the management process that identifies, anticipates and supplies customer needs efficiently and profitably

3.2 The Marketing Mix
Product - anything offered for attention, acquisition, use or consumption
Place - outlets, geographic areas, and distribution channels
Promotion - advertising, publicity, sales promotion
Price - price levels, discounts, allowances, payment terms, credit policy

3.3 Product Issues
~Product definition
- core/generic product - benefit or problem solving service
- actual product - tangible product or intangible service that serves as the medium for receiving core products
- augmented/extended product - measures taken to help the customer put the actual product to use

~ Product positioning
- comparison with our competitors

3.4 Pricing Issues
Cost - the price must be high enough to make a profit
Customers - what are they willing to pay
Competition - comparison of prices with competitors
Corporate objectives

Pricing tactics:
- cost plus pricing - the cost per unit is calculated and then a mark-up added
- penetration pricing - a low price is set to gain market share
- perceived quality pricing - a high price is set to reflect an image of high quality
- price discrimination - different prices are set for the same product in different markets
- going rate pricing - prices are set to match competitors
- price skimming - high prices for new products are dropped to increase demand
- loss leaders - a product sold at a loss to attract customers
- captive product pricing - used when customers must buy 2 products. first is cheap, second is expensive