Marketing. Marketing. Marketing. Marketing. Marketing. Marketing. What is marketing? The marketing concept. The marketing concept

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1 What is marketing? Component #3 The marketing concept provide the with what they want and need a business philosophy that requires: complete orientation coordinated company commitment profit (not sales) as the objective The marketing concept company marketing environment marketing research Component #3 Component #3 The marketing mix place a firm s action on controllable variables to satisfy group(s) price promotion eg high-end wood for small urban living spaces a select line of items with high design values and functionality priced at a premium, sold in specialty retail outlets in the downtown core advertised through architectural and lifestyle magazines, walk by traffic, and word-of-mouth Component #3 Component #3 1

2 The A is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work. He is the purpose of it. He is not an outsider on our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so. - Mahatma Gandhi, 1890 Component #3 Component #3 The (value chain) Value Added Producer Specifier Trees Sawmills Lumber s Panel Producers Distribution Builder Retailer End User By s Pulp & Paper Component #3 Component #3 physical good or service that satisfies a s wants and needs levels: items, lines, mixes, bundles types of (forest) s: commodity, differentiated, specialty total concept life cycle medicinal s newsprint coated s MSR m types of (forest) s Component #3 Component #3 2

3 medicinal s newsprint coated s MSR m commodity s medicinal s newsprint coated s MSR m differentiated s Component #3 Component #3 medicinal s newsprint coated s MSR m value-added s medicinal s newsprint coated s MSR m innovative s Component #3 Component #3 medicinal s newsprint coated s MSR m non-timber forest s medicinal s newsprint coated s MSR m subsistence s Component #3 Component #3 3

4 medicinal s newsprint coated s MSR m ecosystem services natural evolution complexity, importance of marketing activities commodity s types of s differentiated s specialty s Component #3 Component #3 service reliability quality style credit dimension reputation warranty total concept Component #3 Component #3 life cycle VALUE in $ Why is it critical to recognize where your (s) lies on the life cycle? 0 Introduction Growth Maturity Decline TIME Component #3 Component #3 4

5 Introduction: Growth: Maturity: Decline: source: adapted from Sinclair (1992) Component #3 Component #3 The length of a s life cycle depends on what? How can a s life cycle be extended? Component #3 Component #3 place sometimes known as distribution, logistics, supply chain management all of the activities that get the right to the right at the right time eg transportation methods delivery times and locations inventories retail provision of services Component #3 Component #3 5

6 supply chain (management) definitions: A supply chain is a physical network of entities through which materials, (directly, or via inventory), information, and cash flow. The supply chain starts with a raw material supplier and ends with the that consumes the s produced by the chain. supply chain (management): Supply chain management implies planning, development, coordination, organisation, steering, and control of intra and interorganisational processes from a holistic perspective and accounting for exchanges of materials, information, cash, development activities and marketing activities in supply chains. source: Mattsson (2000, 1999) source: Vahid (2011) Component #3 Component #3 channels of distribution: system made up of independent institutions involved in moving s from points of ion to points of consumption channel strategies: sell direct to s? which intermediaries should be used? agents versus merchants degree of channel ownership / integration? intensity / exclusivity of distribution? level of cooperation along supply chain? domestic or international markets? delivery times and locations? and treatments? inventories? mode of transport? rail, truck, waterways, intermodal Component #3 Component #3 terms of delivery (INCOTERMS): manufacturing wood industry trends manufacturing Departure Main Carriage Paid wholesalers distributors EXW (Ex Works) CFR (Cost & Freight) Main Carriage Unpaid CIF (Cost, Insurance & Freight) CPT (Carriage Paid To) CIP (Carriage & Insurance Paid To) industrial end-users yards industrial end-users prodealers DIY retailers FCS (Free Carrier) FAS (Free Alongside Ship) FOB (Free On Board) Arrival building and remodeling contractors ion builders building and remodeling contractors DAF (Delivered at Frontier) DES (Delivered Ex Ship) DEQ (Delivered Ex Quay) consumers and home owners consumers and home owners DDU (Delivered Duty Unpaid) DDP (Delivery Duty Paid) two-step supply chain one-step supply chain source: Juslin and Hansen (2011) source: Poyry (2009) Component #3 Component #3 6

7 Price place amount charged for a good or service fixed costs variable costs taxes price profit margin Component #3 Component #3 Price pricing models: cost-based pricing market share-based pricing (introductory pricing) sales volume-based pricing status quo pricing value-based pricing discounts: trade, package, cash, promotional, quantity, seasonal, coupons, rebates price place promotion Component #3 Component #3 Forest Firms Try a Different Pitch by M. McCullough The Vancouver Sun (date unknown) source: McGraw-Hill Magazines (1989) Component #3 Component #3 7

8 promotional planning communication that a company uses to inform existing and potential s about who they are and what they are selling generic model: Research Inputs Feedback Evaluate & Adjust push Strategic Decisions Constraints & Influences Measure Effectiveness through supply chain pull Tactical Execution Market Impact Component #3 Component #3 theoretical model for promotion low high cost per contact effectiveness of communication Component #3 Component #3 sending messages to s / potential s through media (TV, magazines, flyers, radio, direct mail, internet, social media) to reinforce positive attitudes to communicate incentives to change attitudes information about a firm / disseminated to the public at no (or little) cost news releases, media reporting, etc. Component #3 Component #3 8

9 dominates forest s industry trade shows, showrooms, free samples, coupons, discounts, point of purchase displays, etc. Direct presentation of information related to a firm s /service order-taking relationship-building missionary sales technical sales Component #3 Component #3 Find an advertisement in a wood s / forestry journal and answer the following questions: What is the advertisement communicating about the company,, service, etc.? How is the advertisement getting the message across? Who is the target audience? Is it an effective advertisement? Why or why not? if promotion is communication that a company uses to inform existing and potential s about who they are and what they are selling, then markets are the set of all existing and potential buyers of a particular service Component #3 Component #3 Why do most forest s firms now employ some form of target marketing / segmentation? market market mass marketing: a single marketing aimed at as broad a range of s as possible target marketing: segmenting the market and targeting s/services to one or more well-defined groups Component #3 Component #3 9

10 market market segments should be: homogenous accessible economical place market target markets / segments examples of market segments: industrial vs. consumer geographic / class demographic psychographic price promotion marketing strategy Component #3 Component #3 strategy Devise (brainstorm) a marketing strategy for a hypothetical forest. Component #3 10