Chapter 10

Innovation & Marketing
Lesson Outline:
1. Product
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical Evidence
Innovation Management All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2015 1– 3
Product
Everything, both favorable and

unfavorable, that a person
receives in an exchange

Product
Product is the Product

“heart” of
Marketing Mix
Price Promotion
Place (Distribution)
Functions of Packaging
Holding and protecting
Promoting
Storage, use and convenience
Environmental friendliness

What Is Price?
Price is that which is given

up in an exchange to
acquire a good or service.

Pricing Strategies
Penetration Pricing
Price Skimming
Psychological Pricing
Product Line Pricing

© Oxford Fajar Sdn. Bhd. (008974-T), 2015
2–8 1– 8
Place (Distribution)
Concerned with making the

products available when and
where the customers want
them.

Distribution channels

Promotion
Communication by marketers that

informs, persuades, and reminds
potential buyers of a product in
order to influence an opinion or
elicit a response.

Promotional Strategy
Promotional Strategy
A plan for the optimal use of the
elements of promotion:
 Advertising
 Public Relations
 Sales Promotion
 Personal Selling
Competitive
Advantage

Advertising
Impersonal, one-way
mass communication about
a product or organization
that is paid for by a
marketer.

Advertising Media

Personal Selling
Personal Selling
Planned presentation to one or more
prospective buyers for the purpose of
making a sale.

Personal Selling
Traditional Relationship
Selling Selling

Personal Selling
 personal selling tends to:

– Use fewer resources, pricing is often negotiated.
– Products tend to be fairly complex (e.g. financial
services or new cars).
– There is some contact between buyer and seller after
the sale so that an ongoing relationship is built.
– Client/prospects need specific information.
– The purchase tends to involve large sums of money

Sales Promotion
Marketing activities--other than personal

selling, advertising, and public relations--
that stimulate consumer buying and
dealer effectiveness.

Sales Promotion
samples, coupons, cash refund

offers, price packs, premiums,
prizes, patronage rewards, Consumers
free trials, product warranties,
and point-of-purchase displays
and demonstrations
price-off, advertising and

display allowances, Trade
free goods, push money,
and specialty-advertising items
conventions, trade shows,

contests, sweepstakes, Business
and games
Example of Sales Promotion Tools
 Free samples
– Stimulate trial of product.
– Increase sales volume at the early stage of the
product life cycle.
 Contest
– Consumers compete based on their analytical or
creative skills.

 Premiums
– Offered free or at minimum cost as a
bonus.
– Used to attract competitors customers,
different sizes of established products
– Examples:
• Batman Forever with McDonalds,
Kelloggs, Sears
• Burger King with the Lion King movie

Trade shows
Coupons
 Usually reduce the purchase price or
offered as cash.

Public Relations
The marketing function that

evaluates public attitudes, identifies areas
within the organization that the public
may be interested in, and executes a
program of action to earn public
understanding and acceptance.

Functions of Public Relations
Evaluates public Identifies areas Executes programs

attitudes of public interest to “win” public
Publicity
Public information about a company, good, or service
appearing in the mass media as a news item.
Physical Evidence
Supports a service bought or

performed, and helps the customers
to shape perceptions of a service,
through the creation of the
‘environment’ and ‘atmosphere’

Physical Evidence
Element of Physical Concept
Evidence
Facility Exterior attributes are visible on the outside of the facility such
as factors are exterior design, signage, parking,
landscape, surrounding environment.
For an example, the owner of a shop in a mall does not
have the power to change the parking lot design but if
the customer struggles to find parking outside the shop
this still fall under the overall service cycle.

Physical Evidence
Element of Physical Concept
Evidence
Facility Interior Attributes are visible on the inside the facility such as
interior design, equipment, signage, layout,
temperature.
For an example, after struggling to find parking, a store
was placed with soft lighting, gently music and air
conditioning that give relaxation to customer.


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Innovation & Marketing

Innovation Management All Rights Reserved

Everything, both favorable and

Innovation Management All Rights Reserved

Product is the Product

Holding and protecting

Storage, use and convenience

Innovation Management All Rights Reserved

Price is that which is given

Innovation Management All Rights Reserved

Product Line Pricing

Innovation Management All Rights Reserved

Concerned with making the

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

Communication by marketers that

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

 personal selling tends to:

Innovation Management All Rights Reserved

Marketing activities--other than personal

Innovation Management All Rights Reserved

samples, coupons, cash refund

price-off, advertising and

conventions, trade shows,

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

The marketing function that

Innovation Management All Rights Reserved

Evaluates public Identifies areas Executes programs

Supports a service bought or

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

Innovation Management All Rights Reserved

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