Cours Marketing

Ch t 1 Chapter1
Marketing: ManagingProfitable Customer Relationships

Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
Copyright2008PearsonEducationCanada
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PrinciplesofMarketing,SeventhCanadian Edition
NASCARWhatistheirsecret?
NASCARisthe#1 televisedmotorsportin Canada Compellingblendoflive racingevents,media coverageandWebsites Showthecustomera goodtime To T develop d l customer relationshipNASCAR createsawholesome familyoriented environment.
Copyright2008PearsonEducationCanada 1 3
Fansarep passionateabout NASCAR Fansspendnearly$700a yearonNASCAR merchandise Secondhighestregular seasonsportonTV NASCARattractsover 250big bi namesponsors BigpartoftheNASCA experienceisthefeeling ofaccessibility
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WhatisMarketing?
Marketingisaboutmanagingprofitable customerrelationships
Attractingnewcustomers Retainingandgrowingcurrentcustomers
MarketingDefined:
Marketingisasocialandmanagerialprocessby whichindividualsandgroupsobtainwhattheyneed andwantthroughcreatingandexchangingvalue withothers
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LearningGoals
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Understandingthe Marketplace
CoreConcepts
Understandthemarketplace p andcustomerwantsand needs Designacustomerdriven marketingstrategy Constructamarketing programthatdeliverssuperior value Buildprofitablerelationships andcreatecustomerdelight Capturevaluefromcustomers tocreateprofitsandcustomer quality
Need
Stateoffeltdeprivation p
Wants
Theformofneedsasshaped bycultureandthe individual
Demands
Wantswhicharebackedby buying y gp power
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CoreConcepts
Understandthemarketplace p andcustomerwantsand needs(cont.) Designacustomerdriven marketingstrategy Constructamarketing programthatdeliverssuperior value Buildprofitablerelationships andcreatecustomerdelight Capturevaluefromcustomers tocreateprofitsandcustomer quality
Marketingoffer
Combinationof products,services, informationor experiencesthat satisfyaneedor want Offermayinclude services, i activities, ti iti people,places, informationor ideas
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CoreConcepts
Value
Customers Cu to e form fo expectationsregarding value Marketersmustdeliver valuetoconsumers
Satisfaction
Asatisfiedcustomerwill buyagainandtellothers abouttheirgood experience
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DiscussionQuestionsCustomer Satisfaction
Whenhaveyou, personally been personally, extremelysatisfiedor dissatisfiedwitha product?Why? Whyisitsodifficult forcompaniesto delivervalueto consumers?
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CoreConcepts
Exchange
Theactofobtaining ga desiredobjectfrom someonebyoffering somethinginreturn Oneexchangeisnotthe goal,relationshipswith severalexchangesarethe goal Relationships p arebuilt throughdeliveringvalue andsatisfaction
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CoreConcepts
Market
Setofactual a tualand a d potentialbuyersofa product Marketersseekbuyers thatareprofitable
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DesigningaCustomerDriven MarketingStrategy
Marketingmanagementistheartand scienceofchoosingtargetmarketsand buildingprofitablerelationshipswith them. Awinningmarketingstrategy
Whatcustomerswillweserve? How H canweservethese th customers t best? b t?
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DesigningaCustomerDriven MarketingStrategy
Whatcustomerswillweserve?
Ma Market ketsegmentation e e tatio a and dtarget ta etmarketing a keti Marketersselectcustomersthatcanbeserved profitably Knownascustomermanagementanddemand management
Howcanweservethesecustomersbest?
Bydefiningavaluepropositionthatwilldifferentiate andpositionthebrandinthemarketplace Issetofbenefitsorvaluesacompanypromisesto delivertoconsumersinordertosatisfytheirneeds
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Netflix DVDsbymail
Netflixbeganinearly2000 DVDsaredeliveredtoyourhomewithreturn mailenvelope Monthlychargewithunlimitedrentals limited amountoutatonetime
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DiscussionQuestions Netflix
1. HowmightNetflix defineitstarget g market? 2. Whatneedorwantdoes itfulfill? 3. Whatisitsmarketing offer? 4. Whatisitsvalue proposition?Isita strong t value l propositionforitstarget market?
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MarketingManagement Orientations
TheProductionConcept
Consumerswillfavourproductsthatare availableandhighlyaffordable
TheProductConcept
Consumerswillfavourproductsthatofferthe mostinq quality, y p performance,andinnovative features
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TheSellingConcept
Consumerswillnotbuyenoughofthefirms productsunlessitundertakesalargescale sellingeffort.
TheMarketingConcept
Achieving gorganizational g g goalsdepends p on knowingtheneedsandwantsoftarget marketsanddeliveringthedesired satisfactionsbetterthancompetitorsdo.
TheSocietalMarketingConcept
Themarketingstrategyshoulddelivervalue tocustomersandotherstakeholdersaffected bymarketingdecisionsinawaythat maintainsorimprovestheconsumersand thesocietys wellbeing.
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PreparingaMarketingPlan andProgram
Buildcustomerrelationshipsby transformingthemarketingstrategyinto action Includesthemarketingmixandthe4Psof marketing
Product Pi Price Place Promotion
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LearningGoals
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BuildingCustomer Relationships
CRM Customerrelationship management t... istheoverallprocessofbuildingand maintainingprofitablecustomer relationshipsbydeliveringsuperior customervalueandsatisfaction.Itdeals withallaspectsofacquiring,keepingand growingcustomers.
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RelationshipBuildingBlocks: ValueandSatisfaction
CustomerPerceivedValue
Thecustomersevaluationofthedifference betweenbenefitsandcosts. Customersoftendonotjudgevaluesand costsaccuratelyorobjectively.
CustomerSatisfaction
Productsperceivedperformancerelativeto customersexpectations.
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CustomerRelationship LevelsandTools
Basicrelationships
lowmargincustomers
Fullpartnerships
keycustomers
Frequencymarketingprograms
Rewardcustomerswhobuyfrequentlyorinlarge amounts
Clubmarketingprograms
Offermembersspecialdiscountsandcreatemember communities
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TheChangingNatureofCustomer Relationships
RelatingwithmoreCarefullySelected C t Customers RelatingfortheLongTerm RelatingDirectly
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PartnershipRelationship Management
Workingcloselywithpartnersinother companydepartments d t t and doutside t id th the companytojointlybringgreatervalueto customers PartnersInsidetheCompany PartnersOutsidetheFirm
Strategicpartners Supplychainmanagement
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CapturingValuefromCustomers
CreatingCustomerLoyaltyandRetention
Cu Customer to e deli delight htleads lead toe emotional otio al relationshipsandloyalty Customerlifetimevalueshowstrueworthof acustomer
GrowingShareofCustomer
Shareofcustomers customer spurchaseinaproduct category Achievedthroughofferinggreatervariety, crosssellandupsellstrategies
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BuildingCustomerEquity
Thecombinedcustomerlifetimevaluesofall currentandpotentialcustomers Measuresafirmsperformance,butina mannerthatlookstothefuture Choosingthebestcustomersiskey
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Thecompanycanclassifycustomers according di to t their th i potential t ti lprofitability fit bilit andmanageitsrelationshipsaccordingly.
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TheNewMarketingLandscape
Challenges
TheDigital Di italAge A e RapidGlobalization EthicsandSocial responsibility NotforprofitMarketing
Advancesin computers computers, telecommunications information, transportation

Customerresearchand tracking Productdevelopment de elopment Distribution Newadvertisingtools 24/7marketingthroughthe Internet
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Challenges
Geographicaland culturaldistances haveshrunk

Greatermarket coverage Moreoptionsfor purchasingand manufacturing f t i Increasedcompetition fromforeign competitors
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Challenges
Marketersneedto takegreat responsibilityforthe impactoftheiractions

Caringcapitalismisaway todifferentiateyour company
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Challenges
Manynonprofit organizationsare realizingthe importanceof strategicmarketing

Performingarts Governmentagencies C ll Colleges Hospitals Churches
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WhatisMarketing?
Theprocessofbuildingprofitable customer t relationships l ti hi b bycreating ti value l forcustomersandcapturingvaluein return
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Ch t 2 Chapter
Companyand M k ti Strategy: Marketing St t PartneringtoBuild Customer Relationships
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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CaseStudyDisneyWhatareits challenges?
Beganasanimatedfilms75 yearsago Themeparks:fourmajor NorthAmericanresorts WaltDisneyworld:worlds#1 touristdestination Keysuccessfactors:
Sparklingcleanliness Friendlinessofemployees Mission:makepeoplehappy; dreamcometrue Outstandingcustomerservice
Nowadiversified,mediaand entertainment t t i tconglomerate l t Disneyhasgrownvia diversification.Isittoolarge? Originallyknownforfilms, animation,themeparks.Will consumers/investorsaccept newbusinesses? Satisfyingthecustomeris everyones job. b Is I this h culture l changing? Whatcanitdoduringtravel andeconomicdownturns?
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LearningGoals
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CompanywideStrategicPlanning: DefiningMarketingsRole
StrategicPlanningDefined
Theprocessofdevelopingandmaintaininga strategicfitbetweentheorganizationsgoals andcapabilitiesanditschangingmarketing opportunities
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Defininga MarketOrientedMission
Missionstatement
Astatementofanorganizationspurpose; whatitwantstoaccomplishinthelarger environment;needstobespecific,realistic, andmotivating;todaysstatementsare marketoriented
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Defininga MarketOrientedMission
Amissionstatement asks asks..
Whatisourbusiness? Whoisthecustomer? Whatdoconsumers value? Whatshouldour businessbe?
Amissionstatement shouldbe:
Aninvisiblehand Neithertoonarrow nortoobroad Fittingofmarket environment Basedondistinctive competencies Motivating
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DiscussionQuestions MissionStatements
Underwhat circumstanceswould yousuggesta companychangeits mission? Whatchallenges mightitencounteras itimplementsa changeinits mission?
Copyright2008PearsonEducationCanada 2 8 PrinciplesofMarketing,SeventhCanadian Edition
SettingCompany ObjectivesandGoals
Themissionisturnedintodetailed b i business and dmarketing k ti objectives bj ti Marketingstrategiesandprogramsmust developtosupportmarketingobjectives
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DesigningTheBusinessPortfolio
Abusinessportfolioisthecollectionof businessesandproductsthatmakeup thecompany Businessportfolioplanninginvolves twosteps:
1. Analyzing y gitscurrentbusinessportfolio p 2. Shapingthefutureportfoliobydeveloping strategiesforgrowthanddownsizing
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AnalyzingtheCurrentBusinessPortfolio
Portfolioanalysisisastrategicplanningtoolto identify/evaluatebusinessesthatmakeupthefirm andmakeresourceallocationdecisions
Strategicbusinessunit(SBU):
Unitwithseparatemissionandobjectives Plannedindependentlyfromothercompany businesses Usedasthebuildingblockofportfolioanalysis
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TheBusinessPortfolio BCGMatrix
Build
Increasemarket share Workswellfor questionmarks
Harvest
Increasesshortterm cashflow Goodforweakcash cows,question marksanddogs
Hold
Preservemarket share Goodforcash cow
Divest
Sellorliquidate Goodfordogsand questionmarks
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DevelopingStrategiesforgrowthand D Downsizing i i
Marketingmustidentify,evaluate,andselect marketopportunitiesandlaydownstrategies forcapturingthem ProductMarketExpansionGrid
Aportfolioplanningtoolforidentifyingcompany growthopportunities
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PlanningMarketing:Partneringto BuildCustomerRelationships
Provideaguidingphilosophy Identifyattractiveopportunities Designeffectivestrategies BuildCustomerandPartnerRelationship management
F Formstrongvalue l chains h i Formsuperiorvaluedeliverynetworks
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PlanningMarketing:Partneringto BuildCustomerRelationships
PartneringwithOtherCompany D Departments t t
Coordinationofthevaluecreatingactivities performedbyeachdepartmentwithinthe company
Partnering gwithOthersintheMarketing g System

Theobjectiveistoimprovetheperformance ofthecustomervaluedeliverynetwork.
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MarketingStrategyandthe MarketingMix
MarketingStrategy
Themarketing a keti logic lo i bywhich hi hthebu business i e unithopestoachieveitsmarketingobjectives
MarketingMix
Thecompanydesignsamixmadeupof factorsunderitscontrol
Thecompanyengagesinmarketing analysis,planning,implementation,and control

CustomerCentered MarketingStrategy
1. MarketSegmentation 2 Targetmarketing 2. 3. MarketPositioning Dividingamarketinto groupswithdistinct needswhomightrequire (respondto)different marketingmixes Marketsegmentisa groupofconsumerswho respond e po i insimilar i i a ways ay tomarketingefforts Basesforsegmentation
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1. MarketSegmentation 2 Targetmarketing 2. 3. MarketPositioning Evaluatingthe attractivenessofeach marketsegment Selectionofsegments withgreatestlongterm profitability Decidingwhich segment(s)toenter Acompanycanchoose oneorseveralsegments totarget
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1. MarketSegmentation 2. Targetmarketing 3. MarketPositioning Theplacetheproduct occupies p inthe consumersmind Productsarepositioned relativetocompeting products Marketerslookforclear, distinctiveanddesirable placesinpositioning Differentiationby offeringanddelivering greatervalue
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DevelopingtheMarketingMix
Themarketingmixincludescontrollableand tacticalmarketingtoolsknowsasthe4P 4Ps s The4Psinclude
Product Place Promotion Price
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Managingthe MarketingEffort
1. 2 2. 3. 4. Analysis Pl Planning i Implementation Control Findingopportunities A idi th threats t Avoiding Understanding strengths Analyzing weaknesses
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1. 2 2. 3. 4. Analysis Planning Implementation Control Marketingplans include:
Executivesummary Analysisofcurrent situation Objectives Targetsand positioning Marketingmix Budget Controls
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1. 2 2. 3. 4. Analysis Planning Implementation Control Processthatturns strategiesandplans intomarketingactions thataccomplish strategicmarketing objectives Goodimplementation isachallenge Marketingdepartment organization
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1. 2 2. 3. 4. Analysis Planning Implementation Control InvolvesEvaluating theresultsof marketingstrategies andplansandtaking correctiveaction Checksfordifferences betweengoalsand performance Operatingcontrol, strategiccontrol, marketingaudit
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MeasuringandManaging ReturnonMarketing
Returnonmarketing(marketingROI)
Thenet etreturn etu from f o amarketing a keti investment i e t e tdivided di ided bythecostsoftheinvestments
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Ch t 3 Chapter
TheMarketing Environment
LearningGoals
1. Describetheenvironmentalforcesthataffect p y ability ytoserveitscustomers thecompanys 2. Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions 3. Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and 4. Explain culturalenvironments 5. Discusshowcompaniescanreacttothe marketingenvironment
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PrinciplesofMarketing,Seventh Canadian Edition
CaseStudy McDonalds
Challenges g
Shiftingconsumer lifestyles Lowratingsoffoodand servicequality Atmospherenotupscale Imageofbeingunclassy, unculturedanduncoolto youngertargetmarkets
Marketing gInitiatives
Focusoncorecompetency ofconsistentproductsand reliableservice Upscalealternative includingMcCafeand BistroGourmet Healthierfoodoptions p witheliminationof supersizeand introductionofGoActive! AdultHappyMeal
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LearningGoals
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TheMarketingEnvironment
MarketingEnvironment:
Theactors a to and a dforces fo e outside out idemarketing a keti thataffect affe t marketingmanagementsabilitytobuildand maintainsuccessfulrelationshipswithtarget customers
Microenvironment
Includestheactorsclosetothecompany
Macroenvironment
Involveslargersocietalforces
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Microenvironment TheCompany
Marketingmustconsiderotherpartsof th organization, the i ti i including l di fi finance,R&D R&D, purchasing,operationsandaccounting Marketingdecisions mustrelatetobroader companygoalsand strategies
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Microenvironment Suppliers
Marketersmustwatchsupplyavailability and dpricing i i Effectivepartnership relationship managementwith suppliersisessential
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Microenvironment MarketingIntermediaries
Helptopromote,sellanddistributegoodsto finalbuyers Includeresellers,physicaldistributionfirms, marketingservicesagenciesandfinancial intermediaries Companiesmustwork withtheirintermediaries aspartnersrather h than h simplyaschannels throughwhichtheysell theirproducts.
Copyright2008PearsonEducationCanada 3 8 PrinciplesofMarketing,Seventh Canadian Edition
Microenvironment Customers
Thefivetypesofcustomermarkets
Consumer Business Reseller Government International
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Microenvironment Competitors
Conductingcompetitoranalysisiscritical f successof for fth thefi firm Amarketermustmonitor itscompetitorsofferings tocreatestrategic advantage
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Microenvironment Publics
Anygroupthathasanactualorpotential interestinorimpactonanorganization Sevenpublicsinclude:
Financial Media Government Citizenaction Local General Internal
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DemographicEnvironment
DemographicEnvironment:
Thestudyofhumanpopulationsintermsof size,density,location,age,gender,race, occupationandotherstatistics Worldpopulationwillexceed8.1billionby 2030
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Canada:populationisexpectedtoexceed33 millionby2011 ChangingagestructurewithinCanada TheCanadianpopulationisgettingolder.The medianageis37.6years(2001Census) Thethreelargestagegroupsare:thebaby b boomers, Generation G i X X,and dG Generation i Y Y.
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DiscussionQuestion
Howmightchanges inconsumerspending patternsaffectMaster Card? Changesintheage andfamilystructure? Increasingdiversity?
?
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KeyGenerations
BabyBoomers GenerationX GenerationY
Bornbetween1946and 1964 BabyboominCanada startedandfinishedlater thanU.S. Represent30%ofthe population,makeup40% oftheworkforceandearn morethan50%ofall personalincome income. Manyminisegments existwithintheboomer group Enteringpeakearning yearsastheymature
KeyGenerations
Bornbetween1965and 1976 Firstgenerationof latchkeychildren Maintainacautious economicoutlook Respondtosocially responsiblecompanies Skeptical,impatient,and highlymobile, Primarymarketby2010
KeyGenerations
Bornbetween1977and 1994 Childrenofthebaby boomersrepresent20%of thepopulation Rangeinagefrom preteenstomidtwenties. Newproducts,services, and dmedia di cater t to t GenY G Y Attractiveand challengingtargetfor marketers
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TheChangingCanadianHousehold
Thenuclearfamilyhasledtothecrowded crowdednest nest withboomerangkids,andextendedfamilies Delayedmarriages Commonlawarrangements Fewerchildren Highdivorcerate Singleparentfamilies Alternativearrangements Workingwomen:48%ofworkforce Moredualincomefamilies
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GeographicShiftsinPopulation
Growthinpopulationisnotuniform Continuedmovementfromruraltourban areas Interprovincialmoves Growthofsuburbanareas Peoplewhotelecommutehasincreased creatingaboomingSOHOmarket
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BetterEducatedPeople
Increase I ea ein i post o tsecondary e o da yeducation edu atio
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Increasingdiversity
Ca Canada adais i more o eofacultural ultu almosaic, o ai than tha themelting elti potoftheU.S. Ethnicmarketsarenoteasilytargetedandserved Diversityincludesmorethanjustethnicity: gay/lesbianpopulation Respectingdiversitymaybethekeytoeconomic survivalformanycompanies
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EconomicEnvironment
Factorsthataffectconsumerbuying powerand dspending di patterns tt Typesofeconomywillinfluenceresources toworkwith
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EconomicEnvironment
ChangesinIncome Marketersshouldpayattentiontoincome distributionaswellasaverageincome.
Upperclass,middleclass,workingclass,and underclass
Thedistributionofincomehascreateda twotieredmarket:theaffluentandthe lessaffluent

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EconomicEnvironment
ChangingConsumerSpendingPatterns Engels E l l laws:amount tspent tonvarious i categorieschangesasincomerises
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NaturalEnvironment
Involvesthenaturalresourcesthatareneededas inputsbymarketersorthatareaffectedby marketingactivities Trends
Shortagesofrawmaterials Increasedpollution Increasedgovernmentintervention Canadianfederallaw:EnvironmentalProtectionAct (1989) Greenmovement Focusonenvironmentalsustainabilitystrategies
TechnologicalEnvironment
Themostdramaticforceshapingourdestiny Rapidlychangingforcewhichcreatesmanynew marketingopportunitiesbutalsoturnsmany existingproductsextinct Researchanddevelopmentisakeyelement
CanadianspendingonR&Dislow,ranked15thinthe world ManygovernmentprogramstoencouragemoreR&D spending
Governmentagenciestoregulatenewproduct safety
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PoliticalEnvironment
Consistsoflaws,governmentagencies,and pressuregroupsthatinfluenceorlimitvarious organizationsandindividualsinagivensociety
Legislationaffectingbusinessesworldwidehas increased Lawsprotectcompanies,consumersandtheinterests ofsociety Increasedemphasisonsociallyresponsibleactions
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CulturalEnvironment
Madeupofinstitutionsandotherforces thataffectasociety societys sbasicvalues values, perceptions,preferencesandbehaviors. PersistenceofCulturalValues SecondaryCulturalValuesaremoreopen tochange
Peoplesviewsofthemselves,others, organizations,society,nature,andthe unniverse
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CulturalEnvironmentIncludes peoplesviewsof
Themselves
Ide Identify tifywith ithbrands ba d forselfexpression
Society
Patriotism Pat ioti on o therise i e
Nature
lifestylesofhealth andsustainability (LOHAS)consumer segment
Others
Recentshiftfrom metowesociety
Organizations
Trendofdeclinein trustandloyaltyto companies
Universe
Includesreligionand spirituality
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Respondingtothe MarketingEnvironment
Therearethreekindsofcompanies:those who h make k things thi happen, h those th who h watch t h thingshappen,andthosewhowonder whatshappened.
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LearningGoals
Describetheenvironmentalforcesthataffectthe p y ability ytoserveitscustomers companys Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and Explain culturalenvironments Discusshowcompaniescanreacttothe marketingenvironment
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Chapter p 4
Marketingand Society: SocialResponsibility andMarketing Ethics
LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
Ben&Jerrys TheBodyShop
Early1980srevolutionariessuchasBen& Jerrys Jerry sorTheBodyShopweresocialactivists first,businesspeoplesecond Secondwavearebusinesspeoplewhoare passionateaboutacause Companiescanimprovetheirbottomlineswhile doinggoodbysellingqualityproducts,treating employees, l vendors, d and dfranchisees f hi with i h integrityandupgradingtheirenvironmental practices
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MountainEquipmentCoop(MEC)
MountainEquipmentCooperative(MEC) foundedin1971 Itsearlymissionwastoprovidequalityoutdoor equipmentataffordableprices Memberownedcooperative Focusonenvironmentalresponsibility Statementofvaluesandethicalbehaviour Developmentoflifetimerelationshipswithits members 2millionmembers,salesof$197min2005 Operatesretailstoresin9Canadiancities
LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing. 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
SocialandEthical CriticismsofMarketing
MarketingsImpactonIndividual Consumers
HighPrices
Highcostsofdistribution Highadvertisingandpromotioncosts Excessivemarkups
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DeceptivePractices
Pricing Promotion Packaging
HighPressureSelling
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Consumergroups,including GenerationGreenareclaiming thatSplendascampaignmade fromsugarsoittasteslikesugar ismisleading Theclaimisthatitleads customerstobelievethatSplenda isanatural i a u a sugar uga a alternative e a i e ratherthananartificialsweetener ThegroupisappealingtotheFTC tohavethemstopthiscampaign
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Shoddyorunsafeproducts Plannedobsolescence Poorservicetodisadvantagedconsumers
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MarketingsImpactonSocietyasaWhole
Falsewantsandtoomuchmaterialism Toofewsocialgoods Culturalpollution Toomuchpoliticalpower
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MarketingsImpactonOtherBusinesses
Acquisitionsofcompetitors Marketingpracticeswhichcreatebarriersto entry Unfaircompetitivemarketingpractices
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LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing. 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
Citizen&PublicActions toRegulateMarketing
Consumerism
Traditionalsellersrights Fundamentalconsumerrights Additionalrightsproposedbyconsumer advocates
Eachproposedrighthasledtomore specificproposalsbyconsumerists
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Environmentalism
A Anorganized o a i edmovement o e e tofconcerned o e ed citizens,businessesandgovernmentagencies toprotectandimprovepeoplesliving environment EnvironmentalSustainability
Pollutionp prevention Productstewardship Newenvironmentaltechnologies Sustainabilityvision
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PublicActionstoRegulateMarketing
Majo Majorlegal le alissues i ue affect affe tevery e e yarea a eaofmarketing a keti management,including: Sellingandadvertisingdecisions Channeldecisions Productdecisions Packaging g gdecisions Pricedecisions Competitivereactiondecisions
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LearningGoals
BusinessActionsTowardSocially ResponsibleMarketing
EnlightenedMarketing
ConsumerOrientedMarketing:
Companiesviewandorganizetheirmarketing activitiesfromtheconsumerspointofview.
InnovativeMarketing:
Companiesseekrealproductandmarketing improvements improvements.
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CustomerValueMarketing:
Companiesputmostoftheirresourcesintovalue buildingmarketinginvestments.
SenseofMissionMarketing:
Companiesdefinetheirmissioninbroadsocial termsratherthaninnarrowproductterms terms.
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SocietalMarketing:
Companiesmakemarketingdecisions byconsideringconsumerswants,the companysrequirements,consumers longruninterests,andsocietys longruninterests.
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SocietalClassificationofProducts
Deficientproducts Pleasingproducts Salutaryproducts Desirableproducts
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LearningGoals
MarketingEthics
Corporate Co o atemarketing a keti ethics ethi policies oli ie
Distributorrelations,advertisingstandards,customer service,pricing,productdevelopmentandgeneralethical standards
Guidingprincipleinpolicydetermination
Freemarketandlegalsystem Individualcompaniesandmanagers
Internationalethicalpoliciesareaspecialchallenge
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Chapter 5 Chapter5
Managing Managing Marketing I f Information ti
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadianEdition
Learning Goals LearningGoals

1 E 1. Explaintheimportanceofinformationtothe l i h i fi f i h companyanditsunderstandingofthe marketplace 2. Definethemarketinginformationsystem 3 Outlinethestepsinthemarketresearch 3. O tli th t i th k t h process 4 Explainhowcompaniesanalyzeanddistribute 4. E l i h i l d di t ib t marketinginformation 5 Discussthespecialissuessomemarketing 5. Di th i li k ti researchersface,includingpublicpolicyand ethical issues ethicalissues
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Case Study Dove CaseStudy

Bornin1957asabeautysoap.Itissoldinmore than80countrieswithmorethan$5billionin salesrevenues. Doveisapowerfulbrandname.Consumers p trustitandseeitashonestbutalsoasboring. U e e eeded to epos t o t e b a d to ake Unileverneededtorepositionthebrandtomake Doveabeautybrand. Needsolidresearchandinsightbeforethe Need solid research and insight before the repositioningtaskcouldbeundertaken.
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K Keyquestion:howwomensselfesteemisaffectedby ti h lf t i ff t d b bodyimage Globalsurveyandethnographicresearchtounderstand Global survey and ethnographic research to understand themeaningofbeautyandwhatwomenconsider beautiful.
1%considerthemselvesbeautiful 63%stronglyagreewomenareexpectedtobemoreattractive thanpreviousgeneration p g 9yearoldgirlsaredissatisfiedwiththeirbodyimage Allwomenwanttobebeautifulintheirownuniqueway 36%describethemselvesasnatural,fewas 36% describe themselves as natural few as sexy sexy ,stunning stunning , orgorgeous. Womenexplainbeautyinamuchbroadersense
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Timetochangethedefinitionofbeauty p g UnileverlaunchedtheCampaignforReal Beauty
Womenlookatthemselvesandopenadialogueon p g whattheyconsiderasbeauty Campaignfeaturingeverydaywomen(Fab?Or Fat?.,Bald?OrBeautiful?). BeyondComparePhotoTour
TheresultingMarketingcampaignwonUnilever Canadamultipleawards.

Marketing Information System MarketingInformationSystem

MarketingInformationSystem(MIS)
Consistsofpeople,equipment,and p p , q p , procedurestogather,sort,analyze,evaluate, anddistributeneeded,timely,andaccurate , y, informationtomarketingdecisionmakers.
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Marketing Information System MarketingInformationSystem

Interactswithinformationuserstoassess information Developsneededinformationfrominternaland externalsources Helpsusersanalyzeinformationformarketing dec s o s decisions Distributesthemarketinginformationandhelps managers use it for decision making managersuseitfordecisionmaking
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AssessingMarketing InformationNeeds
TheMISservescompanymanagersas p wellasexternalpartners TheMISmustbalanceneedsagainst feasibility:
Notallinformationcanbeobtained Obtaining,processing,sorting,and deliveringinformationiscostly g y
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Developing Marketing Information DevelopingMarketingInformation

Informationcollectedfromdifferentsourceswithinthe f ll df d ff h h company,andstoredwithintheorganizations information system informationsystem
Accountingsystem Operations/production p /p Salesreportingsystem Pastresearchstudies
Internaldataischeap,quick,andeasy Maynotbeinausableformforthedecisiontobemade Maybeincompleteorinappropriatetoaparticular situation
511

Marketingintelligence k ll isthesystematiccollectionand h ll d analysisofpubliclyavailableinformationabout competitors and trends in the marketing environment competitorsandtrendsinthemarketingenvironment. Proactiveapproachtokeepingtrackofwhatisgoingon within the organizations withintheorganization smarketingenvironment marketing environment Manysourcesofcompetitiveinformationexist:
Employees,customers,tradeshows,websites,marketing p oyees, custo e s, t ade s ows, webs tes, a ket g communications,suppliers,resellers,professionalinformation services,anddumpsterdiving
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Marketingresearch isthesystematicdesign, collection,analysis,andreportingofdata relevanttoaspecificmarketingsituationfacing anorganization.
Amultistep,purposedrivenprocess Measureeffectivenessofmarketingactions,sales potential,trytounderstandconsumerbehaviour Canbedonebycompanypersonnelorcontractedout t tooutsidecompanies t id i
513

Step1:Definingtheproblemand researchobjectives
Helpstoknowwhatyouarelooking for! Themanagerandtheresearchermust worktogether. k h Theseobjectivesguidetheentire j g process. Exploratory,descriptive,andcausal Exploratory descriptive and causal researcheachfulfilldifferent objectives objectives.
Step2:DevelopingtheResearch Plan
Translatingtheresearchobjectivesinto T l i h h bj i i specificinformationneeds Researchplanisawrittendocument yp p , whichoutlinesthetypeofproblem, objectives,dataneeded,andthe usefulnessoftheresults.Includes:
Secondarydata:Informationcollectedfor anotherpurposewhichalreadyexists p p y Primarydata:Informationcollectedforthe specificpurposeathand p p p
Gathering Secondary Data GatheringSecondaryData

Secondarydatasources: S d d
Governmentinformation I t Internaldata,commercial,andacademicsources ld t i l d d i Publications Online databases Onlinedatabases
Advantages:
Obtainedquickly Obt i d i kl Lessexpensivethanprimarydata
Disadvantages:
Informationmaynotexistormaynotbeusable
517
Primary Data PrimaryData

Primaryresearchdecisions:
Researchapproaches Contactmethods Samplingplan Researchinstruments
518

ResearchApproaches h h ContactMethods SamplingPlan ResearchInstrument Observationresearch b h usingpeopleormachines
Discovers Discoversbehaviorbutnot behavior but not motivations
Surveyresearch y
Effectivefordescriptive information
Experimentalresearch
investigatescauseand effect relationships effectrelationships
519

ResearchApproaches ContactMethods SamplingPlan Research Instrument ResearchInstrument KeyContactMethods include:
Mailsurveys Telephonesurveys Personalinterviewing: Individualorfocus group Onlineresearch
520

ResearchApproaches h h ContactMethods SamplingPlan ResearchInstrument Sample:subgroupof l b f populationfromwhom information will be informationwillbe collected Sampling Plan Decisions: SamplingPlanDecisions:
Samplingunit Samplesize Samplingprocedure: Probabilitysamples N Nonprobabilitysamples b bili l
521

ResearchApproaches h h ContactMethods SamplingPlan ResearchInstrument Questionnaires
Includeopenendedand closedended closed endedquestions questions Phrasingandquestion orderarekey
Mechanicalinstruments
Nielsenspeoplemeters Checkoutscanners Ch k Eyecameras
522
Discussion Question DiscussionQuestion

Adigitalcameramanufacturer wantstodeterminewhatis mostimportanttoolder(50+) i ld (50 ) camerabuyers Suggestaresearchapproach, contact methods sampling contactmethods,sampling plan,researchinstruments
523
Step3:ImplementingtheResearch Plan
Dataiscollectedbythecompanyoran outsidefirm Thedataisthenprocessedandchecked for accuracy and completeness and coded foraccuracyandcompletenessandcoded foranalysis Finallythedataisanalyzedbyavarietyof statistical methods statisticalmethods
524
Step4:InterpretingandReporting theFindings
Theresearchinterpretsthefinding,draws p g conclusionsandreportstomanagement Managersandresearchersmustwork together to interpret results for useful togethertointerpretresultsforuseful decisionmaking
525

Analyzing Marketing Information AnalyzingMarketingInformation

Statisticalanalysisandanalyticalmodelsareoftenused l l d l l d l f d tohelpmarketersmakebetterdecisions. CompaniesareturningtoCustomerrelationship C i t i t C t l ti hi management(CRM)tomanagedetailedinformation about individual customers and touchpoints aboutindividualcustomersand touchpoints to to maximizecustomerloyalty CRMconsistsofsophisticatedsoftwareandanalytical p y toolstoprovidea360degreeviewofthecustomer relationship.
527
Analyzing Marketing Information AnalyzingMarketingInformation

CRManalystsdevelopdatawarehouses p g andusesophisticateddatamining techniquestounderstandcustomerdata CRMdatasystemsoffermanybenefits CRM data systems offer many benefits andcanhelpafirmgainacompetitive advantagewhenusedaspartofatotal d h d f l gy CRMstrategy
528
DistributingandUsing MarketingInformation
Routinereportingmakesinformation R i i k i f i availableinatimelymanner. Userfriendlydatabasesallowforspecial q queries. Intranetsandextranetshelpdistribute information to company employees and informationtocompanyemployeesand valuenetworkmembers.
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Other Considerations OtherConsiderations

Marketingresearchinsmallbusinessesandnot forprofitorganizations Internationalmarketingresearch Public policy and ethics Publicpolicyandethics
Consumerprivacyissues Misuseofresearchfindings Misuse of research findings
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Chapter 6 Chapter6
ConsumerMarkets andConsumer uye e av ou BuyerBehaviour

1. Definetheconsumermarketandconstructa f h k d simplemodelofconsumerbuyerbehaviour 2. Namethefourmajorfactorsthatinfluence h f f h fl buyerbehaviour 3 Listandunderstandthetypesofbuying 3. L d d d h fb decisionbehaviourandstagesinthebuying decision process decisionprocess 4. Describetheadoptionanddiffusionprocess for new products fornewproducts
62
CaseStudy HarleyDavidson
MeasuringSuccess
1/5ofallNorth A Americanmotorbike i t bik sales,1/2ofall heavyweight segment heavyweightsegment Demandabovesupply 19yearsofrecord 19 years of record sales/income
BuildingSuccess
Understandingthe customersemotionsand customers emotions and motivation Determining the factors Determiningthefactors ofloyalty Translatingthis g informationtoeffective advertising
63
CaseStudy HarleyDavidson
N Nolongerjustforstereotypicalbikegangs l j tf t t i l bik Harleyscoreclientele:older,affluent,andbetter educated; rubbies educated; rubbies Usedfocusgroupsandsurveystoidentifycorevalues andattitudesofcustomers Identifiedsevencustomertypes Buyingabike,lifestyle,andanattitude Independence,freedom,andpower
64

1. Definetheconsumermarketandconstructa f h k d simplemodelofconsumerbuyerbehaviour 2. Namethefourmajorfactorsthatinfluence h f f h fl buyerbehaviour 3 Listandunderstandthetypesofbuying 3. L d d d h fb decisionbehaviourandstagesinthebuying decision process decisionprocess 4. Describetheadoptionanddiffusionprocess for new products fornewproducts
65
Definitions
Consumerbuyerbehaviourreferstothe buyingbehaviouroffinalconsumers y g individualsandhouseholdswhobuy goods and services for personal goodsandservicesforpersonal consumption Allofthesefinalconsumerscombineto All f h fi l bi p makeuptheconsumermarket
66

1. Definetheconsumermarketandconstructa simplemodelofconsumerbuyerbehaviour 2. Namethefourmajorfactorsthatinfluence buyerbehaviour y 3. Listandunderstandthetypesofbuying dec s o be a ou a d stages t e buy g decisionbehaviourandstagesinthebuying decisionprocess 4 Describetheadoptionanddiffusionprocess 4. Describe the adoption and diffusion process fornewproducts
67
FactorsAffecting ConsumerBehaviour
Cultural Social Personal Psychological Culture C l
Influenceapersons wants and behaviour wantsandbehaviour
Subculture
Smaller Smallergroupswith groups with sharedvaluesystems
SocialClass Social Class

Societysdivisions whosharevalues, interestsand behaviours
68
Cultural Social Personal Psychological Groups
Membership Reference Aspirational Opinionleaders Buzzmarketing
Family
Manyinfluencers y
Rolesandstatus
69
Cultural Social Personal Psychological A Ageandlifecycle d lif l stage Occupation O ti Economicsituation Lifestyle
AIO Activities, i t interestsandopinions t d i i VALS Lifestylesegmentation Lifestyle segmentation
Personalityandself concept
Brand Personality Dimensions BrandPersonalityDimensions

Th Thespecificmixofhumantraitsthatmaybe ifi i fh i h b attributedtoaparticularbrand Matchbrandpersonalitytotheconsumers M t hb d lit t th personality Brandpersonalitytraits B d lit t it
Sincerity E it Excitement t Competence Sophistication Ruggedness
611
Cultural Social Personal Psychological Motivation
Aneedthatdrivesthepersonto seeksatisfactionoftheneed
Perception p
Theprocessbywhichpeople select,organize,andinterpret information
Learning
Changesinanindividuals behaviourarisingfromexperience
Beliefs
A Adescriptivethoughtabout d i ti th ht b t something
Attitudes
Apersonsconsistentlyfavourable p y orunfavourableevaluations, feelings,andtendenciestowards something
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PsychologicalFactors Motivation
Amotiveisaneedthatissufficientlypressingto directthepersontoseeksatisfaction MotivationresearchisbasedonFreud.Looks forhiddenandsubconsciousmotivation Masloworderedneedsbasedonhowpressing t ey a e to t e co su e theyaretotheconsumer
613
Discussion Question DiscussionQuestion
Whatconsumer p productsmightfulfill g multiplelevelsofthe HierarchyofNeeds? y
614
PsychologicalFactors Perception
Perceptionistheprocessbywhichpeopleselect, organize,andinterpretinformation. PerceptionIncludes:
Selectiveattention
Consumersscreenoutinformation
Selectivedistortion
Peopleinterprettosupportbeliefs
Selectiveretention
Peopleretainpointstosupportattitudes
615
DiscussionQuestion Perception
1. Howmanyads wereyouexposed totoday? 2. Whichonesdoyou y remember?Why?
616
PsychologicalFactors Learning
L Learningdescribeschangesinanindividuals i d ib h i i di id l behaviourarisingfromexperience Learningoccursthrough Learning occurs through
Drives
Astronginternalstimulusthatcallsforaction g
Stimuli
Objectsthatmovedrivetomotive
Cues
Minorstimulithataffectresponse
Reinforcement
Feedbackonaction
617
PsychologicalFactorsBeliefs andAttitudes
Belief B li f
adescriptivethoughtaboutabrandorservice maybebasedonrealknowledge,opinion,or faith
Attitude
describes describesaperson a persons sevaluations,feelingsand evaluations, feelings and tendenciestowardanobjectoridea They are difficult to change Theyaredifficulttochange
618

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TypesofBuyingDecision Behaviour
Degreeofinvolvement:
Howmuchtheconsumercaresaboutthepurchase decision Higherlevelsforproductsthatareexpensive,risky, purchasedinfrequently,andhighlyselfexpressive h di f tl d hi hl lf i
Degreeofperceiveddifferencesbetweenbrands Thetypeofdecisionwillinfluencethe promotionalstrategymostlikelytobeeffective
620
The Buyer Decision Process TheBuyerDecisionProcess

NeedRecognition
Triggeredbyinternal(personsnormalneeds) gg y (p ) orexternalstimuli(advertisements,friends) Must reach an intensity high enough to Mustreachanintensityhighenoughto becomeadrive Needsarebasic,wantsarelearnedbehaviour Needs are basic wants are learned behaviour tosatisfythem
621

InformationSearch
Influencedbylevelofinvolvement(interest) y ( ) inthedecision Memory (internal) search Memory(internal)search Externalsearch:personal,commercial,public, experiential sources of information experientialsourcesofinformation Wordofmouthsourcesaremostinfluential ( dibili ) (credibility)
622

EvaluationofAlternatives
Evaluationproceduredependsonthe p p consumerandthebuyingsituation Attributes and importance weights are chosen Attributesandimportanceweightsarechosen ascriteria Alternativescomparedagainstthecriteria Alternatives compared against the criteria Marketerscaninfluencethisstage;personal selling lli
623

PurchaseDecision
Twofactorsintercedebetweenpurchase p intentionsandtheactualdecision:
Attitudesofothers Attitudes of others Unexpectedsituationalfactors
624

PostpurchaseBehaviour P h B h i
Whattheconsumerthinksanddoesafter purchasingandusingtheproductorservice Satisfaction:relationshipbetweenconsumer expectationandperceivedperformance
Delightedconsumersengageinpositivewordof mouth. th Unhappycustomerstellonaverage11other people.
Cognitivedissonance
625

626
BuyerDecisionProcess forNewProducts
NewProducts
Good,serviceorideathatisperceivedbycustomers asnew.
TheAdoptionProcess
Mentalprocessthroughwhichanindividualpasses fromfirsthearingaboutaninnovationtofinal adoption. d i
FiveStagesintheAdoptionProcess
Awareness,interest,evaluation,trial,andadoption.
627
IndividualDifferencesinInnovativeness
Consumerscanbeclassifiedintofiveadopter p categories,eachofwhichbehavesdifferently towardnewproducts. p
628
InfluenceofProductCharacteristicson p RateofAdoption
RelativeAdvantage Compatibility Complexity Divisibility y Communicability
629
ConsumerBehaviourAcrossInternational Borders
Values,attitudesandbehavioursdiffergreatlyin othercountries. Physicaldifferencesexistwhichrequirechangesin themarketingmix. Customsvaryfromcountrytocountry. C t f t t t Marketersmustdecidethedegreetowhichtheywill adapt their marketing efforts adapttheirmarketingefforts.
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632
Chapter 7 Chapter7
BusinessMarkets Business Markets andBusiness B BuyerBehaviour B h i
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadianEdition

1 D 1. Definethebusinessmarketandhowit fi h b i k dh i differsfromconsumermarkets 2. Identifythemajorfactorsthatinfluence businessbuyerbehaviour y 3. Listanddefinethestepsinthebusiness buying decision process buyingdecisionprocess 4. Comparetheinstitutionaland governmentmarketsandexplainhow t k t d l i h theymaketheirbuyingdecisions
CaseStudy UPS
CustomerNeeds
Consumersneedfast, y p g friendly,lowcostpackage delivery Businessneedsaremore complex complex Shippingpartof complexlogistics processincluding l d purchasing,inventory, orderstatus,invoices, payments,returns
Copyright2008PearsonEducationCanada 73
Services
Employs407,200people, 88,000 vehicles, and 600 88,000vehicles,and600 aircraftworldwide Helpscustomernavigatethe complexitiesofinternational l iti fi t ti l shipping Offersawiderangeof g financialservices Providesconsultingservicesto improve logistics operations improvelogisticsoperations

Definition
BusinessBuyerbehaviour: B i B b h i
Thebuyingbehaviouroforganizationsthat buygoodsandservicesforuseinthe productionofotherproductsandservicesthat aresold,rented,orsuppliedtoothers. ld t d li d t th Alsoincludedareretailingandwholesaling fi firmsthatacquiregoodsforthepurposeof th t i d f th f resellingorrentingthemorothersataprofit.
75
Characteristics of Business Markets CharacteristicsofBusinessMarkets

MarketingStructureand k d Demand Natureofthe N t f th BuyingUnit TypesofDecisionsandthe Types of Decisions and the DecisionProcess Businessmarkets k
havefewerbutlarger customers
Businesscustomers
aremoregeographically g g p y concentrated
Demandisdifferent
Demandisderived Demandispriceinelastic that can fluctuatequickly thatcanf luctuate quickly
76

MarketingStructure andDemand Natureofthe BuyingUnit y g TypesofDecisionsand theDecisionProcess the ecision rocess Businesspurchases involvemorebuyers inthedecision process Businessbuying involvesmore professional p purchasingeffort g
77

M MarketingStructure k ti St t andDemand Natureofthe N t f th BuyingUnit TypesofDecisionsand T fD i i d theDecisionProcess C Comparedto d consumerpurchases
M Morecomplexbuying l b i decisions Thebuyingprocessis The buying process is moreformalized Buyersandsellers y workmoreclosely togetherandbuild long term longterm relationships
78
Business Buyer Behaviour BusinessBuyerBehaviour

MajorTypesofBuyingSituations
Straightrebuy
Reorderingwithoutmodification
Modifiedrebuy
Requiresmodificationtopriorpurchase
Newtask
Firsttimepurchase Fi t ti h
SystemsSelling
Buyingapackagedsolutiontoaproblemfromasingleseller. Buying a packaged solution to a problem from a single seller Oftenakeymarketingstrategyforbusinessesseekingtowin andholdaccounts.
79
BusinesstoBusinessCompany DuPontChemicals
E Establishedin1802withgunpowderasitsfirstproduct t bli h d i 1802 ith d it fi t d t In1910movedawayfromexplosiveswiththefirstnon leather material which was snatched up for upholstery leathermaterial,whichwassnatchedupforupholstery andautomobileparts Today,thefirmdeliverssciencebasedsolutionsthat y makerealdifferencesinpeopleslivesaroundtheworld inareassuchasfoodandnutrition,healthcare,apparel, safety and security construction electronics and safetyandsecurity,construction,electronicsand transportation Revenueof$27billion
710
BusinesstoBusinessCompany DuPontChemicals
ExamplesofB2Bmarketsandproducts: l f k d d
HeathCare Medicalfabricstoprovidecomfortandsafetyto surgeons Automobile airbagfibersandengineeringplasticsforsafety Dental filamentsfortoothbrushes Glass technologytoreduceglareandnoise,saveenergy, protectagainstbreakage Footware Footware flexibilityforrubber,strengthofplastic flexibility for rubber strength of plastic Farming pesticides Guitarmanufacturers DuPontproductgivethelookofvintage p g g lacquer
711
ParticipantsintheBusiness BuyingProcess
BuyingCenter B i C
Thedecisionmakingunitofabuying organization Includesallindividualsandunitsthat participateindecisionmaking
Users Influencers Buyers Deciders D id Gatekeepers
712
DiscussionQuestion BuyerBehaviour
You Youhavejustbeenreassigned have just been reassigned fromCocaColasconsumer divisiontoitsInstitutional Division.Yourfirst assignmentistoconvinceyour formercollegetoswitchfrom PepsitoCocaColaintheir dining halls Consider the dininghalls.Considerthe following Howwilldemanddifferfrom the consumer market? theconsumermarket? Howdoesthebuyingprocess differ?Describethemembers y y g oftheybuyingcenter. Isthisanewtask,modified rebuyorstraightrebuy?
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1 D 1. Definethebusinessmarketandhowit fi h b i k dh i differsfromconsumermarkets 2. Identifythemajorfactorsthatinfluence businessbuyerbehaviour y 3. Listanddefinethestepsinthebusiness buyingdecision buying decisionprocess process 4. Comparetheinstitutionaland governmentmarketsandexplainhow t k t d l i h theymaketheirbuyingdecisions
MajorInfluenceson BusinessBuyers
Environmental Organizational Interpersonal Individual Economictrends Shortages of raw Shortagesofraw materials,risingcosts, andpolitical p developments g Technological changes Actionsof competitors Cultureandcustoms
715 PrinciplesofMarketing,SeventhCanadianEdition
Environmental Organizational Interpersonal Individual Objectives Policies Procedures Organizational structure Systems
716
Environmental Organizational Interpersonal Individual Influenceofmembers in the buying center inthebuyingcenter
Authority Status Empathy Persuasiveness
717
Environmental Organizational Interpersonal Individual Personal characteristics of characteristicsof membersinthe buying center buyingcenter

718
Ageandincome Education Jobposition Personality Riskattitudes Buying styles Buyingstyles

DiscussionQuestion BusinessBuyerBehaviour
Y YourjobsellingCocaColato j b lli C C l youroldcollegehasproven moredifficultthanyou imagined.Thereseemtobe manyinfluencesonyour buyersbehaviourthatyoudid y y notexpect.
Whatenvironmentalfactor might exist? mightexist? Organizationalfactors? Interpersonalfactors? Individualfactors?
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StagesintheBusiness BuyingProcess
Problemrecognitioncanresultfrominternalorexternal bl l f l l stimuli Generalneeddescription:describingthegeneral G l dd i ti d ibi th l characteristicsandquantityofaneededitemorservice
Part Partofthemoreformalizedprocessofbusinessbuying;may of the more formalized process of business buying; may needtechnicalexpertisetowritethis Thisstagecanbeinfluencedbysalespeoplepromotingthe uniqueaspectsoftheirproducts;helpingtowritethe i f h i d h l i i h specification
721
Productspecification:decidingonand specifyingthebesttechnicalproduct characteristicsforaneededitem
Theresponsibilityisonsupplierstomeetthe specificationsdemandedandprovidethebestvalue Valueanalysisisanapproachtocostreductionin whichcomponentsarestudiedforredesign, hi h t t di d f d i standardization,orlesscostlymethodsofproduction
722
Suppliersearch:thebuyersearchesforthebestvendors l h h b h f h b d fortheproductorservicesneeded
Sources: Sources:existingsuppliers,contactsfromnewsuppliers, existing suppliers contacts from new suppliers supplierdirectories,orthroughInternetbuyingsites Trendtowardssupplierdevelopment
Proposalsolicitation:invitingqualifiedsuppliersto submitproposalsfortheproductsspecified;alsoknown asRFQ,RFP,ortenderdocuments d d
723
Supplierselection:reviewingtheproposalssubmitted l l h l b d andchoosingthesupplierwhichbestmeetsthe specifications asked for specificationsaskedfor
Politicalconsiderationsmayenterintothisprocess,suchas reciprocalbuyingagreements,localpurchasingrequirements,or pasthistory Factorsotherthanpricemaybegivenconsideration:availability, servicing capabilities installation training location or servicingcapabilities,installation,training,location,or reputation
724
Orderroutinespecification:writingthefinalorderfor d f h f l d f thegoodstobepurchased;canbeaveryspecific,written document (purchase order or contract) to ensure document(purchaseorderorcontract)toensure accountability
Blanketcontractscanbeusedforfuturerepeatpurchasing p p g
Performancereview:postpurchaseratingofthesupplier todecideifsatisfactoryvaluehasbeenreceivedandif therelationshipshouldbecontinued
725
BusinessBuying ontheInternet
Eprocurementisgrowingrapidly. Online auctions and online trading Onlineauctionsandonlinetrading exchanges(emarketplaces)accountfor much of the online purchasing activity muchoftheonlinepurchasingactivity. Eprocurementoffersmanybenefits:
Accesstonewsuppliers Lower purchasing costs Lowerpurchasingcosts Quickerorderprocessinganddelivery
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Institutionaland GovernmentMarkets
InstitutionalMarkets I i i lM k
Consistofchurches,schools,prisons, hospitals,nursinghomesandother institutionsthatprovidegoodsandservicesto peopleintheircare. l i th i Oftencharacterizedbylowbudgetsand captivepatrons. ti t Marketersmaydevelopseparatedivisions andmarketingmixestoserviceinstitutional d k ti i t i i tit ti l markets.
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Institutionaland GovernmentMarkets
GovernmentMarkets
TheGovernmentofCanadabuys$14billioningoods andservicesfromthousandsofsuppliers PublicWorksandGovernmentServicesCanadaisthe governmentslargestpurchasingorganization t l t h i i ti averaging60,000contractsannually. Requiresupplierstosubmitbidsandoftengivejobto Require suppliers to submit bids and often give job to lowestbidder Favordomesticsuppliers Favor domestic suppliers Muchredtapecanexist
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Chapter8
Segmentation, Targeting,and Positioning: BuildingtheRight Relationships withtheRight Customers
LearningGoals
1. Definethethreestepsoftargetmarketing: marketsegmentation,targetmarketing,and marketpositioning 2. Listanddiscussthemajorbasesfor segmentingconsumerandbusinessmarkets 3. Explainhowcompaniesidentifyattractive marketsegmentsandchooseatarget marketing k i strategy 4. Discusshowcompaniespositiontheir productsformaximumcompetitiveadvantage inthemarketplace
CaseStudy ArtGalleryofOntario AGO

Targetingcriticalsegmentsis criticalfortheAGOto survive. The30to40yearoldurban professionalsmaybeoneof thefewsegmentswith enoughmoneytosupport culturalinstitutions. However,thisMe Generationisunphilantropic relativetotheirwealth. Theywantcars,houses,big jewellery. Potentialdonorsinthiscohort haveadesireforinteraction, involvement,andmeaningful commentonartaswellonthe AGOstactics. Createadistinctpositionto attracttheseyoungerdonors. Newprogram:New Foundersinitiative Inreturnfortheirsupport, donorswouldbeinvitedto smalldinnerpartiesand exclusivetoursofexhibitions. Theprogramhasbeena resoundingsuccess.
8 3 PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
Segmentation,Targeting,and Positioning
Marketsegmentation:dividingmarketinto distinctgroupswithdistinctneeds, needs characteristics,orbehaviours,whomightrequire separateproductsormarketingmixes Targetmarketing:choosingwhichgroup(s)to appealto Marketpositioning:creatingaclear clear,distinctive distinctive, anddesirablepositioninthetargetconsumers mind,relativetocompetition
8 5
LearningGoals
SegmentingConsumerMarkets
Geographicalsegmentation Demographicsegmentation
Mostpopularbasesforsegmentingconsumer markets
Psychographicsegmentation
Lifestyle,socialclass,andpersonalitybased segmentation
Behaviouralsegmentation g
Occasions,benefitssought,userstatus,usagerate, loyaltystatus.
Usingmultiplesegmentationbases
8 7
GeographicSegmentation Variables
Worldregion orcountry U.S.region State City Neighborhood Cit or City metrosize Density Climate
8 8
Demographic SegmentationVariables
Age G d Gender Familysize Familylifecycle Income Occupation Ed Education ti Religion Race Generation y Nationality
8 9
BehaviouralSegmentation Variables
Occasions Benefits B fit Userstatus Userrates L Loyalty lt status t t Readinessstage Attitudetowardthe product
810
DiscussionQuestion
Basedonthecar examplesonthe followingslide,how docarmanufacturers usethefollowing segmentswhen marketingproducts?
Geographic Demographic Psychographic behavioural
811
SegmentingBusinessMarkets
Geographicsegmentation Demographicsegmentation
Industry,companysize,location
Operatingcharacteristics
Technology,usagestatus,customercapabilities
Purchasingapproaches Situationalfactors
Urgency, U e y specific e ifi application, a li atio size i eoforder o de
Personalcharacteristics
Buyersellersimilarity,attitudestowardrisk,loyalty
812
Segmenting InternationalMarkets
Geographicsegmentation
Locationorregion
Economicfactors
Populationincomeorlevelofeconomicdevelopment
Politicalandlegalfactors
Type/stabilityofgovernment,monetaryregulations, amountofbureaucracy,etc.
Culturalfactors
Language,religion,values,attitudes,customs, behaviouralpatterns
813
Segmenting InternationalMarkets
Intermarketsegmentation
Formingsegmentsofconsumerswhohave similarneeds,eventhoughtheylivein differentcountries
814
SegmentingMarketsEffectively
Measurable
Size, Size purchasingpower, power andprofileofsegment
Accessible
Canbereachedandserved
Substantial
Largeandprofitableenoughtoserve
Differentiable
Responddifferently
Actionable
Effectiveprogramscanbedeveloped
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LearningGoals
TargetMarketing
TargetMarket
Consistsofasetofbuyerswhosharecommon needsorcharacteristicsthatthecompany decidestoserve
817
TargetMarketing
EvaluatingMarketSegments
Segmentsizeandgrowth Segmentstructuralattractiveness
Levelofcompetition Substituteproducts Powerofbuyers Powerfulsuppliers
Companyobjectivesandresources
818
TargetMarketingStrategies
Undifferentiated(mass)marketing:
Marketcoveragestrategythatignoresmarketsegmentdifferencesand targetsthewholemarketwithoneoffer
Differentiated(segmented)marketing:
Marketcoveragestrategythattargetsseveralmarketsegmentsand designsseparateoffersforeach
Concentrated(niche)marketing:
Marketcoveragestrategyinwhichacompanypursuesalargeshareof oneorafewsubmarkets
Micromarketing:
Thepracticeoftailoringproductsandmarketingprogramstothe needs/wantsofspecificindividualsandlocalcustomergroups Includes:localmarketingandindividualmarketing
819
Choosinga TargetMarketingStrategy
Considerationsinclude:
Companyresources Thedegreeofproductvariability Productslifecyclestage Marketvariability Competitorsmarketingstrategies Competitors
820
10
TargetMarketing
SociallyResponsibleTargeting
Somesegments,especiallychildren,areat specialrisk Spilloverfromadulttochildrenmarkets ManypotentialabusesontheInternet, includingfraudInternetshoppers Productsofquestionablebenefit Controversyoccurswhenthemethodsused arequestionable
LearningGoals
11
Positioning
Thewaytheproductisdefinedbyconsumers
onimportant i t tattributes tt ib t the th place l the th product d t occupiesinconsumersmindsrelativeto competingproductsrelativetocompeting products Involvesimplantingthebrandsuniquebenefits anddifferentiationinthecustomermind Perceptualpositioningmapsshowperceptions ofbrandsonimportantbuyingdimensions
823
ChoosingaPositioningStrategy
IdentifyingPossible Competitive Advantages Choosingtheright competitiveadvantage SelectinganOverall PositioningStrategy Differentiationcanbe basedon:
Products Services Channels People Image
824
12
IdentifyingPossible CompetitiveAdvantages Choosingtheright competitiveadvantages SelectinganOverall PositioningStrategy Howmanydifferencesto promote?
Uniquesellingproposition Severalbenefits
Whichdifferencesto promote?Criteria include:

Important Distinctive Superior Communicable Preemptive Affordable Profitable
825
IdentifyingPossible Competitive Advantages Choosingtheright competitiveadvantages SelectinganOverall PositioningStrategy Valuepropositions representthefull positioningofthe brand Possiblevalue propositions:

826
Moreformore M for More f the th same Moreforless Thesameforless Lessformuchless

13
WestJetsValueProposition: LessforMuchLess
Foundedin1996toprovidelowfareairtravelacross westernCanada SpecializesinservingtheVFRmarket(peoplevisiting friendsandrelatives). Maincompetitor:thefamilycar Peoplewouldchoosetoflyratherthandriveifoffered lowfares Onetypeofplane,offersbasicinflightservice(no g classservice,nobaggage gg g meals,nomovies),single transfer f serviceswith hother h airlines, l etc. However:lessserviceforlessmoneyisdefinedas feweramenitiesforalowerfare,notlesscustomer service. Generates$1billioninrevenues
Developinga PositioningStatement
Apositioningstatementsummarizesthe companyorbrand b dpositioning iti i EXAMPLE:To(targetsegmentandneed) our(brand)is(concept)that(pointof difference)
828
14
CommunicatingandDeliveringthe ChosenPosition
Companiesmusttakestrongstepsto d li and deliver dcommunicate i t th thed desired i d positiontotargetconsumers Themarketingmixeffortsmustsupport thepositioningstrategy Positionsmustbemonitoredandadapted overtimetomatchchangesinconsumer needsandcompetitorsstrategies
LearningGoals
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Ch t 9 Chapter
Product,Services, andBranding Strategies
LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
9 2
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CaseStudy lululemonathletica
Foundedin1998,inKitsilano, Vancouver,inresponsetothe growingnumberoffemales takingupsports,speciallyyoga. Startedasadesignstudio surroundedbyaretailstore providingyogainspired clothingtofemalesinCanada andaroundtheglobe. Tolululemoncustomers,the gearisntjust g j clothing. g Itisa wayoflife.Anexperience.A statement Thus,lululemondoesmuch morethanjustsellathletic apparel.Itcreatesan unparalleledexperience. Originally g ydesign g forathletes,the lululemonclothingcanbeusedby almostanyoneforanyactivity Althoughwomenwerethe originaltarget,lululemon currentlyhasalineofmens clothing. Thebrandisdefinedthroughthe storeexperience,superiorquality garnments,andetincingretail stores. Thelululemongearisnotcheap. And,yet,peopleflocktoitsstores. Customersarepasionateaboutthe brand,andtheysharethispassion withothers.
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LearningGoals
3. 4.
5.
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WhatIsaProduct?
Aproductisanythingthatcanbeofferedtoa marketforattention, attention acquisition, acquisition use use,or consumptionthatmightsatisfyaneedorwant. Aserviceisaformofproductthatconsistsof activities,benefitsorsatisfactionsofferedforsale thatareessentiallyintangibleanddonotresult intheownershipofanything anything.
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WhatIsaProduct?
Products,Services,andExperiences
Marketofferingsmayconsistofacombination ofgoodsandservices Experiencesareusedtodifferentiateofferings Corebenefit,actualandaugmentedproduct
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WhatIsaProduct?
Threelevelsofproduct
Augmentedproduct Actualproduct Corebenefit
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DiscussionQuestion
ConsiderStarbucks
Whatgoodsand servicesdotheyoffer? Howdothey differentiatethrough experience? Whatistheircore, core actualandaugmented productoffering?
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WhatIsaProduct?
TypesofConsumer Products
Convenience Shopping Specialty Unsought
Frequentpurchases boughtwithminimal buyingeffortandlittle comparisonshopping Lowprice Widespreaddistribution Masspromotionby producer

Snackfoods,toiletries,food products
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WhatIsaProduct?
Lessfrequentpurchases Moreshoppingeffortfor comparisons Higherthanconvenience goodpricing Selectivedistributionin feweroutlets Advertising Ad and dpersonal l selling
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WhatIsaProduct?
Strongbrandpreference andloyalty,requires specialpurchaseeffort, littlebrandcomparisons, andlowpricesensitivity Highprice Exclusivedistribution Carefullytargeted promotions
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WhatIsaProduct?
Littleproductawareness andknowledge(orif aware,sometimes negativeinterest) Pricingvaries Distributionvaries Aggressiveadvertising andpersonalsellingby producersandresellers
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ProductandServiceClassifications
ConsumerProducts BusinessProducts
Materialsandparts Capitalitems Suppliesandservices
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ProductandServiceClassifications
Organizations,persons,places,andideas
O Organizational a i atio almarketing a keti makes ake use u eofcorporate o o ate imageadvertising Personmarketingappliestopoliticalcandidates, entertainmentsportsfigures,andprofessionals Placemarketingrelatestotourism Socialmarketingpromotesideas
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LearningGoals
3. 4.
5.
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IndividualProductand ServiceDecisions
ProductandServiceAttributes
Quality
Linedtocustomervalueandsatisfaction
Thewholecompanyneedstobeinvolved(TQM)
Features
Competitivetoolfordifferentiatingproduct Shouldbevaluedbythecustomerasdeterminedthrough marketresearch
Style St l and dDesign D i

Gooddesigncontributestoproductsusefulnessaswellas looks
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Branding
Brand: a aname, a e,term, e ,sign, ig ,symbol, y o ,o ordesign e ig that a identifiestheproduct Brandingcanaddvaluetoaproduct Brandinghelpsbuyers
Identifyproducts Determinequality
Brandinghelpssellers
Conveyproductquality Providelegalprotection Segmentmarkets
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Packaging
Oftenincludesprimary,secondaryand shippingpackages Functionsofpackaging
Containandprotect Promotetheproduct Differentiatetheproduct
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Labellingservestoidentifytheproduct Describes D ib th theproduct d t Promotestheproduct Mustbecarefulnotto:
Misleadcustomers g Failtodescribeingredients Failtoincludesafetywarnings
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Productsupportservices
Surveycustomersregularlytoassesscurrent customerservice Companiesuseamixofphone,email,fax, Internetandinteractivevoiceanddata technologies
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ProductLineDecisions
Productline
Agroupofproductsthatarecloselyrelatedbecause theymay
functioninasimilarmanner aresoldtothesamecustomergroups Marketthroughthesametypesofoutlets fallwithingivenpriceranges
Productlinelength g
Linestretching:addingproductsthatarehigheror lowerpricedthantheexistingline Linefilling:addingmoreitemswithinthepresent pricerange
ProductMixDecisions
ProductMix
Alsoknownasproductassortment Consistsofalltheproductlinesanditemsthat aparticularselleroffersforsale
Width:#ofproductlines Length:#ofproductsinlines Depth:#ofversionsofeachproductcarried Consistency:howcloselyrelatedtheproductlines are
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LearningGoals
3. 4.
5.
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BrandingStrategy
Brandequityisthepositivedifferentialeffect thatknowingthebrandnamehasoncustomer responsetotheproductorservice Onemeasureofequityistheextenttowhich customersarewillingtopaymoreforthebrand Brandvaluationistheprocessofestimatingthe totalfinancialvalueofabrand
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BrandingStrategy
Brandswithstrongequityhavemany competitive titi advantages: d t
Highconsumerawareness Strongbrandloyalty Helpswhenintroducingnewproducts Lesssusceptibletopricecompetition
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BuildingStrongStrategy
Threelevelsof BrandPositioning positioning: Brand dNameSelection Sl i Productattributes BrandSponsorship Leasteffective BrandDevelopment Benefits
Beliefsandvalues
Tapsintoemotions
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BrandPositioning BrandNameSelection BrandSponsorship BrandDevelopment
GoodBrandNames:
Suggestsomethingabout theproductoritsbenefits Areeasytosay,recognize andremember Aredistinctive Areextendable Translatewellintoother languages Canberegisteredand legallyprotected
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Manufacturerbrands Private(store)brands
Costlytoestablishand promote Higherprofitmargins
Licensedbrands
Nameandcharacter licensing ghasgrown g
Cobranding
Advantages/ disadvantages
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Lineextensions
Minorchangestoexisting products
Brandextensions
Successfulbrandnames helpintroducenew products
Multibrands
Multipleproductentriesin aproductcategory
Newbrands
Newproductcategory
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ManagingBrands
Brandsareknownthroughadvertising,personal experience wordofmouth experience, mouth,theInternet Everyoneinthecompanyrepresentsthebrand Companiesneedtoperiodicallyrunabrand audit
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LearningGoals
3. 4.
5.
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ServicesMarketing
Services
Accountfor68%ofCanadasGDP,almost 75%ofemployment,andnearly90%ofnew jobcreation. Serviceindustriesincludebusiness organizations,government,andprivatenot f profit for fitorganizations i ti
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CharacteristicsofServices
Intangibility Inseparability Variability Perishability
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MarketingStrategiesfor ServiceFirms
TheServiceProfitChain
InternalMarketing ExternalMarketing InteractiveMarketing
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MarketingStrategiesfor ServiceFirms
ManagingServiceDifferentiation ManagingServiceQuality ManagingServiceProductivity
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LearningGoals
3. 4.
5.
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AdditionalProductConsiderations
ProductDecisionsand SocialResponsibility
Governmentregulation Foodandproductsafety Pricingandadvertising Labelling,weights,and measures Hazardousproducts Productliability
InternationalProductand ServicesMarketing
Standardizationversus localadaptation Electricalstandards, packaging Culturaldifferencesin meaning Barrierstotrade
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LearningGoals
3. 4.
5.
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Ch t 10 Chapter
NewProduct Developmentand LifeCycle Strategies
LearningGoals
1. Explainhowcompaniesfindand d develop l newproduct d tid ideas 2. Listanddefinethestepsinthenew productdevelopmentprocess 3. Describethestagesoftheproductlife cycle 4. Describehowmarketingstrategies changeduringtheproductslifecycle
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CaseStudy Nokia
Focus ocuso onI Innovation o a io
Namesitscultureof continuousinnovation renewal Organizesinto autonomousunits,which helpsfosterinnovation LargeR&Dbudgetof$3 billionwith40%of employeesinvolvedin R&D
Co Corporate po a eResults esu s

Annualsalesof$36billion across130countries Globalmarketshareof 38%,greaterthanthatofits nearestthreerivals combined
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LearningGoals
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NewProduct DevelopmentStrategy
NewProductDevelopment
Thedevelopmentoforiginalproducts, productimprovements,product modifications,andnewbrandsthroughthe firmsownR&Defforts.
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NewProduct DevelopmentStrategy
Newproductscanbeobtainedvia acquisition i iti ord development. l t Newproductssufferfromhighfailure rates. Severalreasonsaccountforfailure.
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DiscussionQuestion
Thinkofproducts youhaveseen recentlyinstores. Canyouthinkofany thatseemdoomedto fail? Why?
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LearningGoals
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StagesoftheNewProduct DevelopmentProcess
Stage1:IdeaGeneration
Thesystematicsearchfornewproductideas Internalsources:brainstorming,employees fromalldepartments,R&D Externalsources:customers,competitors, distributors,suppliers,andothers
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Stage2:IdeaScreening
Thepurposeistoidentifygoodideasand droppooronestoavoidspendinganymore moneyondevelopingthem Criteriaused:
Usefulnesstoconsumers Goodfitwithcompanyobjectivesandstrategies Havetheresources Addvalue
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Stage3:ConceptDevelopmentand T ti Testing
Conceptdevelopmentcreatesadetailed versionoftheideastatedinmeaningful consumerterms. Concepttestingaskstargetconsumersto evaluateproductconcepts.
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Stage4:MarketingStrategyDevelopment
t statementdescribes 1st d ib the h targetmarket, k product d positioning,andsales,share,andprofitgoalsfor thefirstfewyears. 2nd statementoutlinestheproductsprice, distribution,andmarketingbudgetforthefirst year. 3rd statementdescribesthelongrunsalesand profitgoals,andthemarketingmixstrategy.
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Stage5:BusinessAnalysis
Re Review ie ofthesales, ale costs, o t a and dprofit ofit projectionsforanewproducttodetermineif theywillsatisfycompanyobjectives
Stage6:ProductDevelopment
Developingtheproductconceptintoa physicalproducttoensurethatitcanbedone
Requireslargeinvestment Buildingaprototype Testingforsafety,durability,andacceptability
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Stage7:TestMarketing,testingtheproductand marketing gp program g inmorerealisticmarketsettings: g Todeterminethetargetmarketprofile Assessconsumeracceptability,trial,repeatpurchase rate Evaluatetradereceptionanddistributionpenetration Designeffectivemediaplans
Standardtestmarkets Controlledtestmarkets Simulatedtestmarkets
Stage8:Commercialization
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Stage8:Commercialization,introducinga newproduct d ti into t th themarket k t
Largeinvestmentrequired Needtodecideonintroductiontimingand scaleofevent Marketrolloutorfullscaleintroduction
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OnlineTestMarketing IsItintheNearFuture?
LeviandNikehavepartnered withThereformarketresearch data. Levishasfoundthatjeansand jeanjacketbuyersweremore likelytobevirtualclubgoers. Theycanalsotrackhowlong peoplewearacertainjeanor j k ti jacket inth their i virtual i t lworld. ld DiscussionQuestion:Doyou believetheInternetcansupply valuabletestmarketingdata?
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Organizingfor NewProductDevelopment
Sequentialproductdevelopment:working ononepiece i of fth thenewproduct d tat tati time Simultaneous(teambased)product development:developingmultiplepieces oftheproductatthesametime;todays method e o due ueto odistributed i i u e computing o pu i g
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LearningGoals
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StagesofthePLC
Introduction Growth Maturity Decline
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ProductLifeCycleStrategies
Theproductlifecycleconceptcanbe applied li dt toa:
Productclass(softdrinks) Productform(dietcolas) Brand(DietDr.Pepper)
Using gthePLCtoforecastbrandp performanceorto developmarketingstrategiesisproblematic
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LearningGoals
IntroductionStage
Salesstartatzeroandbeginto climbslowly;profitscontinueto declineduetocostsoflaunching theproduct Themainpromotionalgoalisto makeabignoisetoattract attentionandtoeducatebuyers aboutthenewproductconcept Marketpioneerstakethemost riskbutmayreapthebiggest rewards,eg.Chryslerminivan Fewproductvariants,no competitiontospeakof Pricingstrategy:skimmingor penetration Distribution:notalloutlets coveredassomemaynotwant therisk
GrowthStage
Salesofthenewproductbeginto climbq quickly yasawarenesswithin thetargetmarket(s)builds Profitsmaybecomepositiveas developmentandlaunchcostsare recoveredandthecompany achieveseconomiesofscale Competitionnoticesandrushes theirversionsintoproduction Productqualitycanbeimproved, extrafeaturesandversions developedtosustaingrowthand differentiatefromcompetition Distributionincreasesasthe productbecomesmoreknown Pressureonpricingas competitionincreases
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MarketingStrategies: IntroductionStage
Product Offerabasicproduct Price Usecostplusbasistoset Distribution Buildselective distribution Advertising Buildawarenessamong early l adopters d t and dd dealers/resellers l / ll SalesPromotion Heavyexpenditures tocreatetrial
MarketingStrategies: GrowthStage
Product Offerproductextensions, service, i warranty t Price Penetrationpricing Distribution Buildintensivedistribution Advertising Buildawarenessandinterest inthemassmarket SalesPromotion Reduceexpendituresto takeadvantageofconsumerdemand
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MaturityStage
Sales a e o ofthe enew e product po u continuetoclimbandthen peakasthemajorityofthe targetmarket(s)havetriedthe product Profitscontinuetogrowand staypositivethroughout Competitionismostintense atthisstage;manyversions andbrands Strategiestoprolongthis stage:
Modifythemarket Modifytheproduct Modifythemarketingmix
Decline
Salesofthenewproductdrop quicklyasthetargetmarket(s) moveontootherthings Profitsdeclineascompetitive pressuresforcelowerprices andincreasedpromotional spendingtomaintainshare Competitionhasdeclinedas weakerbrandshaveleftthe market Decisionsabouttheproduct
Maintainspendinglevelsto fightitoutforwhatisleft Harvestbycuttingspending andridingitout Droptheproductandmove ontothenextthing
Discussion
Howcanmarketers helpproductsbounce backfromthedecline stage?
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LearningGoals
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Ch t 11 Chapter
Pricing
LearningGoals
Identifyanddefinetheinternalfactorsaffectinga firmsp pricing gdecisions Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactofconsumer perceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices Discusshowcompaniesadjusttheirpricestotake intoaccountdifferenttypesofcustomersand situations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
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CaseStudy priceline.com
Launchedin1998asanew service i to t empowerconsumers tonametheirownprices. Theideacaughtonand Pricelinehasbecomethe leadingnameyourownprice Internetservice Dealsprimarilyintime sensitivetravelrelated products d Theconcepthasrealappealto consumers IfyougetitislikeIwon! Buysunsoldrooms,seatsor vacation ti packages k at theavily h il discountedrates Unevensuccessingrowing beyondtravelservices Sellingproductsandservices thatarenttimesensitiveis difficult. Pricelinehashundredsor thousandsofhappyrepeat customers.Howevernotall customersarethrilledwith theironlineexperience.
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LearningGoals
Identifyanddefinetheinternalfactorsaffectinga firmsp pricing gdecisions Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactofconsumer perceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices Discusshowcompaniesadjusttheirpricestotake intoaccountdifferenttypesofcustomersand situations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
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WhatIsPrice?
Theamountofmoneychargedfora product d torservice, i orth thesumof fth the valuesthatconsumersexchangeforthe benefitsofhavingorusingtheproductor service.
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PriceHasManyNames
Rent F Fare Fee, F Rate Commission Assessment Tuition Toll Premium R t i Retainer Bribe Salary Wage Interest Tax
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TodaysNewPricingEnvironment
DynamicPricing,chargingdifferentprices dependingonindividualcustomersand situations DynamicpricingontheWeballowsSELLERSto:
Monitorcustomerbehaviorandtailoroffers. Changepricesontheflytoadjustforchangesin demandorcosts. Aidconsumerswithpricecomparisons. Negotiatepricesinonlineauctionsandexchanges.
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Pricing:AnImportantbut DifficultDecision
PriceandtheMarketingMix
Onlyelementtoproducerevenues Mostflexibleelement Canbechangedquickly
CommonPricingMistakes
Reducingpricestooquicklytogetsales Pricingbasedoncosts,notcustomervalue
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FactorstoConsiderWhen SettingPrice
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizational considerations
Marketpositioning influencespricing strategy Otherpricing objectives:

Survival Currentprofit maximization Marketshare leadership Productquality leadership
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizationalconsiderations
Pricingmustbecarefully coordinatedwiththe othermarketingmix elements Targetcostingisoften usedtosupportproduct positioningstrategies based a e o onp price i e Nonpricepositioning canalsobeused
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DiscussionQuestion
Youarethemarketer ofanewhighend coffeemaker.What shouldyouconsider whenplanningyour:
1. 2. 3 3. 4. Price Product Place Promotion
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InternalFactors
Costssetthefloor,or lowestamountthat should h ldbe b charged h d Ideally,pricescharged coverallcostsandleave somethingleftoverfor profit Typesofcosts:
Variable Fixed Totalcosts
Howcostsvaryat differentproduction levelswillinfluenceprice setting

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InternalFactors
Marketskimmingpricing
Usedwhentheproductis newtechnology,andnot easilycopied
Marketpenetration pricing
Usedwhenthereare advantagestobegainedby l large volumes l early l in i the th lifecycle
Productlinepricing
Settingthepricesteps betweenproductsinaline
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizational considerations
Whosetstheprice?
Smallcompanies: CEOortop management Largecompanies: Divisionalorproduct linemanagers
Pricenegotiation g is commoninindustrial settingswherepricing departmentsmaybe created

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LearningGoals
Identifyanddefinetheinternalfactorsaffecting pricing gdecisions afirmsp Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactof consumerperceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices p adjust j theirp pricesto Discusshowcompanies takeintoaccountdifferenttypesofcustomers andsituations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
ExternalFactors
Natureofmarketanddemand Competitorscosts,prices, andoffers Otherenvironmentalelements
Typesofmarkets
Purecompetition Monopolisticcompetition Oligopolisticcompetition Puremonopoly
Consumerperceptionsof priceandvalue Pricedemand relationship

Demandcurve Priceelasticityofdemand
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ExternalFactors
Natureofmarketanddemand Competitorscosts,prices,and offers Otherenvironmentalelements
Considercompetitorscosts, prices,andpossiblereactions whendeveloping de elopingapricing strategy Pricingstrategyinfluencesthe natureofcompetition

Lowpricelowmargin strategiesinhibitcompetition Highpricehighmargin strategiesattractcompetition
B Benchmarking h ki costs t against i t thecompetitionis recommended
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ExternalFactors
Natureofmarketanddemand Competitorscosts,prices, andoffers Otherenvironmentalelements
Economicconditions
Affectproductioncosts Affectbuyerperceptionsof priceandvalue
Resellerreactionsto pricesmustbeconsidered Governmentmayrestrict orlimitpricingoptions Socialconsiderationsmay betakenintoaccount
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LearningGoals
GeneralPricingApproaches
CostBasedPricing:CostPlusPricing
Addingastandardmarkuptocost Ignoresdemandandcompetition Popularpricingtechniquebecause:
Itsimplifiesthepricingprocess Pricecompetitionmaybeminimized Itisperceivedasmorefairtobothbuyersand sellers
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CostBasedPricingExample
Variablecosts:$20
Expectedsales:100,000units Fixedcosts:$500,000 DesiredSalesMarkup:20%
VariableCost+FixedCosts/UnitSales=UnitCost $20+$500,000/100,000=$25perunit UnitCost/(1 DesiredReturnonSales)=MarkupPrice $25/(1 .20)=$31.25
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CostBasedPricing:BreakEvenAnalysis and dT Target tP Profit fitP Pricing i i
Breakevenchartsshowtotalcostandtotal revenuesatdifferentlevelsofunitvolume. Theintersectionofthetotalrevenueandtotal costcurvesisthebreakevenpoint. Companieswishingtomakeaprofitmust exceedthebreakevenunitvolume.
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BreakEvenAnalysisandTargetProfitPricing
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ValueBasedPricing:
U Uses e buye buyers perceptions e e tio ofvalue aluerather athe than tha sellerscoststosetprice. Measuringperceivedvaluecanbedifficult. Consumerattitudestowardpriceandquality haveshiftedduringthelastdecade. Valuepricingattheretaillevel
Everydaylowpricing(EDLP)vs.highlowpricing
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LearningGoals
PriceAdjustmentStrategies
Discount/allowance S Segmented td Psychological Promotional Geographical International Typesofdiscounts
Ca Cash hdiscount di ou t Quantitydiscount Functional(trade) discount Seasonaldiscount
Allowances
Tradeinallowances Promotional allowances
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Discount/allowance Segmented Psychological Promotional Geographical International Typesofsegmented pricingstrategies:
Customersegment Productformpricing Locationpricing Timepricing
Alsocalledrevenueor yieldmanagement yie a age e Certainconditionsmust existforsegmented pricingtobeeffective
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ConditionsNecessaryforSegmented P i i Eff Pricing Effectiveness ti
Marketmustbesegmentable Segmentsmustshowdifferentdemand Pricingmustbelegal Costsofsegmentationcannotexceedrevenues earned Segmentedpricingmustreflectreal differencesincustomersperceivedvalue
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Discount/allowance Segmented Psychological Promotional Geographical International Thepriceisusedtosay somethingaboutthe product.
Pricequalityrelationship Referenceprices Differencesassmallasfive centscanbeimportant Numericdigitsmayhave symbolic b l and dvisual l qualitiesthat psychologicallyinfluence thebuyer
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Discount/allowance Segmented Psychological Promotional Geographical International Temporarilypricing productsbelowthelist priceorevenbelowcost
Lossleaders Specialeventpricing Cashrebates Lowinterestfinancing, longerwarranties,free maintenance
Promotionalpricingcan haveadverseeffects
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PriceAdjustment Strategies
PromotionalPricingProblems
Easilycopiedbycompetitors Createsdealproneconsumers Mayerodebrandsvalue Notalegitimatesubstituteforeffective g planning p g strategic Frequentuseleadstoindustrypricewars whichbenefitfewfirms
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Discount/allowance S Segmented td Psychological Promotional Geographical International Typesofgeographic pricingstrategies:
FOBoriginpricing Uniformdelivered pricing Zonepricing Basing gp pointp pricing g Freightabsorption pricing
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Discount/allowance Segmented Psychological Promotional Geographical International Priceschargedina specificcountry dependonmany factors
Economicconditions Competitivesituation Laws/regulations Distributionsystem Consumerperceptions Corporatemarketing objectives Costconsiderations
LearningGoals
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PriceChanges
Initiatepricecuts whena firm: Hasexcesscapacity Facesfallingmarket shareduetoprice competition Desirestobeamarket shareleader Initiatepriceincreases whenafirm canincreaseprofit facescostinflation facesgreaterdemand thancanbesupplied
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PriceChanges
AlternativestoIncreasingPrice
Exploremorecosteffectiveproductionor distribution Reduceproductsize Removefeatures product Unbundlethep
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PriceChanges
Buyerreactionstopricechangesmustbe considered. id d Competitorsaremorelikelytoreactto pricechangesundercertainconditions.
Numberoffirmsissmall Productisuniform Buyersarewellinformed
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RespondingtoCompetitors PriceChanges
Respondingtocompetitorspricechanges
Evaluatethecompetitorsreasonfortheprice change Evaluatemarketplaceresponsetotheprice change Considersownproductsstrategy
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PublicPolicyandPricing
Pricefixing
Co Competitors etito cannot a otwork o kwith ithea each hothe otherto setprices
Pricediscrimination
Customersmustbeofferedproportionally equaldiscountswhenused
Deceptivepricing
Cannotmisleadcustomersastovalue received.
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EthicalIssuesinPricing
Compliancewiththelawistheminimum standard t d dwhen h judging j d i whether h th pricing i i practicesareethical Canconsumersunderstandpricesand comparethem? Consumersareunawaretheycan negotiatesomeprices Abilitytonegotiateprices
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LearningGoals
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Ch t 12 Chapter
Distribution Channels andSupplyChain Management
LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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CaseStudy Caterpillar
Dominatesworlds marketsforheavy constructionandmining equipment. Independentdealersare keytosuccess Dealernetworkislinked viacomputers
Caterpillar p stresses dealerprofitability, extraordinarydealer support,personal relationships,dealer performanceandfull, h honest, and dfrequent f communications
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LearningGoals
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SupplyChainsandtheValue DeliveryNetwork
Asupplychainconsistsofupstreamand downstreampartners Marketershavetraditionallyfocusedonthe downstreamside
Supplychain makeandsellview Demandchain senseandrespondview
ValueDeliveryNetwork
Thenetworkmadeupofthecompany,suppliers, distributors,andultimatelycustomerswhopartner witheachothertoimprovetheperformanceofthe entiresystem.
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Nature&Importanceof DistributionChannels
Marketingchannel
Setofinterdependentorganizationsinvolved intheprocessofmakingaproductorservice availableforuseorconsumptionbythe consumerorbusinessuser.
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Nature&Importanceof MarketingChannels
Channelchoicesaffectotherdecisionsin th marketing the k ti mix i
Pricing,marketingcommunications
Astrongdistributionsystemcanbea competitiveadvantage Channeldecisionsinvolvelongterm commitmentstootherfirms
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HowChannelMembersAddValue
Fe Fewer e contacts. o ta t Matchproductassortmentdemandwithsupply. Bridge,time,place,andpossessiongapsthatseparate productsfromusers.
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HowChannelMembersAddValue
Channelmembersaddvaluebybridging th major the j ti time,place, l and dpossession i gaps. Keyfunctions:
Information Promotion Contact Matching Negotiation
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PhysicalDistribution Financing Risktaking Environmental sustainability
NumberofChannelLevels
Thenumberofintermediarylevelsindicates thelengthofamarketingchannel.
DirectChannels IndirectChannels
Producerslosemorecontrolandfacegreater channel h lcomplexity l i asadditional ddi i lchannel h l levelsareadded.
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ChannelMembersareConnected ViaaVarietyofFlows
PhysicalFlow PaymentFlow InformationFlow PromotionFlow FlowofOwnership
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LearningGoals
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ChannelBehaviourand Organization
ChannelConflict
Occurswhenchannelmembersdisagreeon roles,activities,orrewards. TypesofConflict:
Horizontalconflict:occursamongfirmsatthe samechannellevel Vertical V ti lconflict: fli t occursamongfirms fi at tdifferent diff t channellevels
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ConventionalDistributionChannels
Consist o i of o one o eor o more o eindependent i epe e channel a e members Eachseekingtomaximizeitsownprofits Oftenresultinpoorperformance
VerticalMarketingSystems
Producers,wholesalers,andretailersactasaunified system One O channel h lmember b owns,h hascontracts t t with, ith orh has somuchpowerthattheyallcooperate Benefitsshouldincludegreatercontrol,lessconflict, andeconomiesofscaleduetothesizeofthesystem
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VerticalMarketSystem (VMS)
CorporateVMS ContractualVMS AdministeredVMS
Integratessuccessive stagesofproductionand distributionundersingle ownership channel ownershipisestablished throughcommon ownership Coordination oo i a io a andconflict o i throughregular organizationalchannels
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VerticalMarketSystem (VMS)
Individualfirmswhojoin throughcontracts Franchiseorganizations

Manufacturersponsored retailerfranchisesystem Manufacturersponsored wholesalerfranchise system Servicefirmsponsored retailerfranchisesystem
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VerticalMarket System(VMS)
Leadershipthrough thesizeandpowerof dominantchannel members Leadershipcouldbe manufactureror retailer
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HorizontalMarketingSystems
Co Companies a ie atthesame a ele level elwork o ktogether to ethe with ith channelmembers
MultichannelDistributionSystems
Alsocalledhybridmarketingchannels Occurswhenafirmusestwoormoremarketing channels
ChangingChannelOrganization
Disintermediation
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LearningGoals
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ChannelDesignDecisions
Step1:AnalyzingConsumerNeeds
Costandfeasibilityofmeetingneedsmustbe considered
Step2:SettingChannelObjectives
Setchannelobjectivesintermsoftargetedlevelof customerservice Manyfactorsinfluencechannelobjectives
Natureofthecompany(size/financialposition)andits products Marketingintermediaries Competition Marketingenvironment
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Step3:IdentifyingMajorAlternatives
Typesofintermediaries
Companysalesforce,manufacturersagency, industrialdistributors
Numberofmarketingintermediaries
Intensive,selective,andexclusivedistribution
Responsibilities bl of fchannel h lmembers b
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Step4:EvaluatingMajorAlternatives
Economiccriteria Controlissues Adaptivecriteria
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DesigningInternationalDistribution Ch Channels l
Globalmarketersusuallyadapttheirchannel strategiestostructuresthatexistwithin foreigncountries Keychallenges:
Maybecomplexorhardtopenetrate Maybescattered,inefficient,ortotallylacking
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LearningGoals
1224
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ChannelManagementDecisions
Selectingchannel members Managingand motivatingchannel members Evaluatingchannel members Whichcharacteristics areimportant?
Yearsinbusiness Linescarried Growthandprofit record Cooperativeness p and reputation Typeofcustomer Location
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Selectingchannel members Managingand motivatingchannel members Evaluatingchannel members Partnerrelationship management(PRM) forlongterm partnerships Softwareavailableto coordinatemembers
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13
Selectingchannel members Managingand motivatingchannel members Evaluatingchannel members Checkchannel performanceof:
Sales Inventory Customerdelivery Promotionand g training Customerservice
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PublicPolicyand DistributionDecisions
Exclusivedealing. Sellerscannotdemandexclusivity fortheirproductfromresellersifitcanbeproven thatitwilllessencompetitionorcreateamonopoly Exclusiveterritories. Sellersmaygrantexclusive territories,butmayhavetroubledemandingthat resellersdealonlywithinthatexclusiveterritory y gagreements. g demanding gthatresellersbuy y Tying and/orstockallproductswithinaproductline,asa conditionofdoingbusiness.Notillegalbutasource ofmuchchannelconflict
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PublicPolicyand DistributionDecisions
Dealersrights. Producersarefreetoselect dealers butarelimitedintheirabilityto dealers, terminatedealers;theymustshowcause,and cannotdropdealerswhorefusetoparticipatein doubtfullegalarrangements Sourcesofsupply. Ethicalconcernsoversupply sourcesfromcountrieswithhumanrights violationsorusetheproceedstofundarmed conflict
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LearningGoals
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MarketingLogisticsandSupply ChainManagement
Marketinglogistics(physicaldistribution).
Tasksinvolvedinplanning,implementing, andcontrollingthephysicalflowofmaterials, finalgoodsandrelatedinformation
Supplychainmanagement.
Managing g gupstream p anddownstreamvalue addedflowsofmaterials,finalgoods,and relatedinformationamongsuppliers,the company,resellers,andfinalconsumers
MarketingLogistics
Outbounddistribution Inbounddistribution Reversedistribution Involvestheentiresupplychainmanagement y system
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WhyGreaterEmphasisisBeingPlacedon L i ti Logistics:
Offersfirmsacompetitiveadvantage Canyieldcostsavings Greaterproductvarietyrequiresimproved g logistics Improvementsindistributionefficiencyare possibleduetoinformationtechnology
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GoalsoftheLogisticsSystem
Nosystemcanbothmaximizecustomer serviceandminimizecosts. Thegoalofmarketinglogisticsshouldbeto provideatargetedlevelofcustomerserviceat theleastcost. Firmsmustfirstweighthebenefitsofhigher serviceagainstthecosts.
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MajorLogisticsFunctions
Warehousing InventoryManagement Transportation LogisticsInformationManagement
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TransportationCarrierOptions
Truck Rail Water Pipeline Air Internet
Intermodaltransportation isbecomingmorecommon
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IntegratedLogisticsManagement
Crossfunctionalteamworkinsidethe companyiscritical Logisticspartnershipsarealsobuiltthrough sharedprojects Outsourcingoflogisticsfirmstothirdparty firmsisbecomingmorecommon
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LearningGoals
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Ch t 13 Chapter
Retailingand Wholesaling
LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Describethemajortypesofretailers. 3. Understandthemarketingdecisions facingretailersandwholesalers. 4 Identifythemajortypesofwholesalers. 4. wholesalers
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TheForzaniGroup
FoundedbyJohn Forzani formerCFL Forzani, player Corporatesegment:252 stores(SportChek, SportsExperts,Coast MountainSports) Franchisesegment:192 stores( (Athmosphere, p , RnR) 2005salesof$1.2billion, has16.1%marketshare ofCanadiansporting goodsmarket
Explosivegrowthinthe 1980s 1980 s ChallengedbyU.S.big boxstores,whooffer largerstores,deeper selection Storedesignsareflexible, abletolocateinshopping malls Useservicelevelsand communityinvolvement asadifferentiator Focusonkeepingcosts low
LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Knowthemajortypesofretailers. 3. Understandthemarketingdecisions facingretailersandwholesalers. 4 Knowthemajortypesofwholesalers 4. wholesalers.
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Retailing
Retailing
Allactivitiesinvolvedinsellinggoodsor servicesdirectlytofinalconsumersfortheir personal,nonbusinessuse.
Retailer
Businesswhosesalescomep primarily yfrom retailing.
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LearningGoals
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TypesofRetailers
Amountofservice Productlines Relativeprices Organizationalapproach Selfserviceretailers
Customersarewilling gto selfservetosavemoney Conveniencestoresand fastmovingshopping goods
Limitedserviceretailers
Mostdepartmentstores
Fullserviceretailers
Salespeopleassist customersineveryaspect ofshoppingexperience Highenddepartment storesandspecialtystores
DiscussionQuestion RetailerLevelofService
Selfservicecheckout scannersaregrowing inuse. Whatadvantagesfor retailer?Consumer? Whatarethe disadvantages?
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TypesofRetailers
Amountofservice Productlines Relativeprices Organizationalapproach Specialtystores
Narrowproductlineswith d deep assortments t t
Departmentstores
Widevarietyofproduct lines
Supermarkets Conveniencestores
Limitedline
Superstores S t
Food,nonfood,and services
Categorykillers
Giantspecialtystores
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TypesofRetailers
Amountofservice P d tlines Product li Relativeprices Organizational approach Discountstores
Lo Lowmargins a i are a eoffset off et byhighvolume
Offpriceretailers
Independentoffprice retailers
TJMaxx,Marshalls
Factoryoutlets
LeviStrauss,Reebok
Warehouseclubs
SamsClub,Costco
TypesofRetailers
Amountofservice P d tlines Product li Relativeprices Organizational approach Corporatechain stores stores. Voluntarychains Retailercooperatives Franchise organizations Merchandising conglomerates
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LearningGoals
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RetailerMarketingDecisions
TargetmarketandPositioningdecision
Defi Define ewell elltarget ta etmarket a keta and dstrong to positioning
Productvariables
Assortment Servicesmix Store St atmosphere t h
Pricedecision:
Markupsandvolumeareinverselyrelated
RetailerMarketingDecisions
Promotion
Retailers Retaile use u eany a yor o allfive fi etool toolstoreach ea hconsumers o u e
Placedecision
Locationiscriticaltoattractthetargetmarket Centralbusinessdistricts Shoppingcentres
Regional Neighbourhood
Powercentres
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Retailing
TheFutureofRetailing
Ne Newretail etailfo formsa and dshortening ho te i retail etaillife cycles
Wheelofretailingconcept
Growthofnonstoreretailing
Mailorder,television,phone,onlineshopping
Retailconvergence
Themergingofconsumers,products,prices,and retailers
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Retailing
TheFutureofRetailing
Riseofmegaretailers Growingimportanceofretailtechnology Globalexpansionofmajorretailers RetailstoresasCommunitiesor g Hangouts
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LearningGoals
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Wholesaling
Wholesaling
Allactivitiesinvolvedinsellinggoodsand servicestothosebuyingforresaleorbusiness use.
Wholesaler
Afirmengaged g g primarily p yinwholesaling g activity.
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Wholesaling
Wholesalersaddvaluebyperformingthe followingfunctions:
Sellingandpromoting Buyingandassortmentbuilding Bulkbreaking Warehousing Transportation Fi Financing i Riskbearing Marketinformation Managementservicesandadvice
TypesofWholesalers
MerchantWholesalers BrokersandAgents Manufacturersand retailersbranchesand offices Fullservicewholesalers
Wholesalemerchants Industrialdistributors
Limitedservice wholesalers
Cashandcarry wholesalers Truckwholesalers(j (jobbers) ) Dropshippers Rackjobbers Producerscooperatives Mailorderwholesalers
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TypesofWholesalers
MerchantWholesalers BrokersandAgents Manufacturersand retailersbranchesand offices Brokersandagentsdo nottaketitleofthegoods. Brokers
Bringbuyersandsellers togetherandassistin negotiation
Agents
Manufacturersagents g Sellingagents Purchasingagents Commissionmerchants
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TypesofWholesalers
MerchantWholesalers BrokersandAgents Manufacturersand retailersbranchesand offices Salesbranchesandoffices
Branchescarryinventory: lumber,autoequipment, parts Officesdonotcarry inventory:drygoods
Purchasingofficers
Performrolessimilarto b k and brokers dagents; t however,theseindividuals areemployeesofthe organization
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TrendsinWholesaling
Fierceresistancetopriceincreases Successful S f lwholesalers h l l must tadd ddvalue l by b increasingefficiencyandeffectiveness Thedistinctionbetweenlargeretailersand wholesalerscontinuestoblur Moreserviceswillbeprovidedtoretailers Manywholesalersaregoingglobal
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LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Knowthemajortypesofretailers. 3. Knowthemajortypesofwholesalers. 4. Understandthemarketingdecisions facingretailersandwholesalers wholesalers.
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Ch t 14 Chapter
Integrated Marketing Communications Strategy
LearningGoals
1. Nameanddefinethefivetoolsofthe marketingcommunicationsmix 2. Discusstheprocessandadvantagesof integratedmarketingcommunications 3. Outlinethestepsindevelopingeffective marketingcommunications 4 Explain 4. E l i the h methods h d for f setting i the h marketing k i communicationsbudgetandfactorsthataffect thedesignofthepromotionmix
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CaseStudy BMWMINI
Marketingtheanythingbut ordinarycarpresentedbig challenges. TheMINIisatinybutpotentcar thathasaretro60slook. Canadianstendtobeseriousabout theircars. Themarketingteamconcludedthat InCanadathecarperformancewas themainattributetostress. BMWchooseTaxiasitsadvertising agency. T icreated Taxi t danintegrated i t t dstrategy t t withunifiedbrandpersonality: TheMINIisanindividualistic, highperformance,premium vehiclethatsfuntodrive. Thecampaignbeganwitha60 secondmovietheatrespotcalled Anthem. Traditionalprintandoutdoor advertisingfollowednext:parks parksas fasterthanaFerrari,Onrampsare foreplay,andTheworldisyourgo karttrack. Adswereplacedeverywhere EdgyandhumorousTVspotswere alsoused. Othercomponents: Velocityparties, onlinecontests,drivingevents,and investmentsinshowroom improvements. Hipdealershipswereselectedand trainedinanewsoftsellapproach. Productplacementintheremakeof TheItalianJob,onlinemarketing,and publicity. Finallywordofmouth. Thecampaignwasahugesuccessand annualsalesgoalswereexceeded.
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LearningGoals
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TheMarketing CommunicationsMix
MarketingCommunicationsMix
Thespecificmixofadvertising,personal selling,salespromotion,andpublicrelationsa companyusestopursueitsadvertisingand marketingobjectives.
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TheMarketing CommunicationsMix
Advertising:
Anypaidformofnon personal lpresentation t ti and d promotionofideas,goods, orservicesbyanidentified sponsor
Personalselling:
Personalpresentationby th fi the firms sales l f forcef forth the purposeofmakingsales andbuildingcustomer relationships
Salespromotion:
Shorttermincentivesto encouragepurchaseorsale ofaproductorservice
Directmarketing:
Directcommunications withtargetedindividuals toobtainanimmediate p andlasting g response customerrelationships
Publicrelations:
Buildinggoodrelations andcorporateimagewith thecompanyspublics usingpublicity,and handlingunfavourable events
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LearningGoals
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IntegratedMarketing Communications
TheMarketingCommunicationsEnvironmentis Changing:
Massmarketshavefragmented,causingmarketersto shiftawayfrommassmarketingtotargetmarketing. Improvementsininformationtechnologyare facilitatingsegmentation Mediafragmentationhasoccurredwithcompanies doinglessbroadcastingandmorenarrowcasting
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TheNeedforIntegratedMarketing Communications
Conflictingmessagesfromdifferentsourcesor promotionalapproachescanconfusecompanyor brandimages Theproblemisparticularlyprevalentwhen functionalspecialistshandleindividualformsof marketing k ti communications i ti independently i d d tl
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TheNeedforIntegratedMarketing C Communications i ti
TheInternetmustbeintegratedintothe broaderIMCmix Bestbetistowedtraditionalbrandingefforts withtheinteractivityandservicecapabilities ofonlinecommunications
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IntegratedMarketingCommunications
Theconceptunderwhichacompanycarefully integratesandcoordinatesitsmany communicationschannelstodeliveraclear, consistent,andcompellingmessageaboutthe organizationanditsproducts.
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DiscussionQuestion
Howdoes TacoBell practice IMC?
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LearningGoals
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TheCommunication Process
Communicationseffortsshouldbeviewedfrom theperspectiveofmanagingcustomer relationshipsovertime. Thecommunicationprocessbeginswithan auditofallpotentialcontactsacustomermight havewiththebrand. Effectivecommunicationrequiresknowledgeof h communication how i i works. k
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StepsinDeveloping EffectiveCommunication
Step1:IdentifyingtheTargetAudience
Affe Affects t decisions de i io related elatedtowhat, hat how, ho when, he and a d wheremessagewillbesaid, aswellaswhowillsayit
Step2:DeterminingCommunication Objectives
Sixbuyer y readinessstages g
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Step3:DesigningaMessage
AIDAframework f a e o kguides uide message e a edesign de i Messagecontentcontainsappealsorthemesdesigned toproducedesiredresults
Rationalappeals:relatetotheaudiencesselfinterest Emotionalappeals:stirupnegativeorpositivefeelingsusing humour,fear,pride,joy,orevendisgust Moralappeals:relatedtheaudiences audience ssenseofrightversus wrong
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Step3:DesigningaMessage
Me Message a eStructure: St u tu e Keydecisions de i io are a erequired e ui edwith ith respecttothreemessagestructureissues:
Whetherornottodrawaconclusion Onesidedvs.twosidedargument Orderofargumentpresentation
MessageFormat:Design,layout,copy,color,shape, movement words, movement, words sounds, sounds voice, voice bodylanguage, language dress,etc.
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Step5:SelectingtheMessageSource
Hi Highly hlycredible ediblesources ou e are a emore o epersuasive e ua i e Apoorspokespersoncantarnishabrand
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DiscussionQuestion Effectivespokespeople?
Whatmakesan effective spokesperson? Whenshouldthey NOTbeused?
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Step6:CollectingFeedback
Recognition,recall,andbehaviouralmeasures areassessed Maysuggestchangesinproduct/promotion
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AdvertisingRecall
Putawayyournotes Recallalltheadsandmarketingmessages youhaveseensofarinthislecture
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LearningGoals
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SettingtheTotal PromotionBudget
AffordabilityMethod
Budgetissetatalevelthatacompanycan afford
PercentageofSalesMethod
Pastorforecastedsalesmaybeused
CompetitiveParityMethod
Budgetmatchescompetitorsoutlays
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SettingtheTotal PromotionBudget
ObjectiveandTaskMethod
Specificobjectivesaredefined Tasksrequiredtoachieveobjectivesare determined Costsofperformingtasksareestimated,then summedtocreatethepromotionalbudget
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SettingtheOverall CommunicationMix
Determinedbythenatureofeach promotion ti t tool land dth theselected l t d promotionmixstrategy
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Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Reacheslarge,geographically dispersed p audiences,oftenwith highfrequency Lowcostperexposure,though overallcostsarehigh Consumersperceiveadvertised goodsasmorelegitimate Dramatizescompany/brand Buildsbrandimage;may stimulateshorttermsales Impersonal;oneway communication
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Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Mosteffectivetoolforbuilding buyerspreferences,convictions, buyers andactions Personalinteractionallowsfor feedbackandadjustments Relationshiporiented Buyersaremoreattentive Sales S l f forcerepresentsalong l termcommitment Mostexpensiveofthe promotionaltools
Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Makesuseofavarietyof formats:premiums,coupons, contests,etc. Attractsattention,offersstrong purchaseincentives,dramatizes offers,boostssaggingsales Stimulatesquickresponse Shortlived Noteffectiveatbuildinglong termbrandpreferences
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Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Highlycredible Manyforms:newsstories, stories news features,eventsand sponsorships,etc. Reachesmanyprospectsmissed viaotherformsofpromotion Dramatizescompanyorbenefits Often Of the h mostunderused d d elementinthepromotionalmix
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Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Manyforms:Telephone marketing,directmail,online marketing,etc. Fourdistinctivecharacteristics: Nonpublic Immediate Customized Interactive Wellsuitedtohighlytargeted marketingefforts
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IntegratingthePromotionMix
Analyzetrends(internalandexternal) A ditcommunications Audit i ti spending di Identifyallpointsofcontact Teamupincommunicationsplanning Makeallcommunicationelementscompatible performancemeasures Createp AppointanIMCmanager
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SociallyResponsible Communication
AdvertisingandSalesPromotion
Avoidfalseanddeceptiveadvertising Nobaitandswitchadvertising Tradepromotionscannotfavorcertain customersoverothers gtop promotesocially y Useadvertising responsibleprogramsandactions
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SociallyResponsible Communication
PersonalSelling
Sale Salespeople eo lemust u tfollow follo therules ule offair fai competition Threedaycoolingoffruleprotectsultimate consumersfromhighpressuretactics Businesstobusinessselling
Bribery,industrialespionage,andmakingfalseand di disparaging i statements t t t about b tacompetitor tit areforbidden f bidd
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LearningGoals
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Ch t 15 Chapter
Advertising,Sales Promotion,and PublicRelations
LearningGoals
1. Definetherolesofadvertising,sales promotion andpublicrelationsinthe promotion, promotionmix 2. Describethemajordecisionsinvolvedin developinganadvertisingprogram 3. Explainhowsalespromotioncampaignsare developedandimplemented 4. Explainhowcompaniesusepublicrelationsto communicatewiththeirpublics
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TheUnitedWayofGreaterToronto
In2003thousandsofcharities appearedtobefightingforthe samesmall5%ofdonorsin Canada. TheUnitedWayneededa campaignthatwouldbreak throughtheclutterandhiredthe advertisingagencyArnold Worldwide Focusgroupsconfirmedthat donorsgivetoorganizationsthat havepersonalmeaningtothem. them Theyalsodiscoveredthisdonors feltanunderlyingguiltfornot givingdirectlytothepoor. Also,TheUnitedWayisseenas ahelpinghandtothosein need.
Strategy:GivingtotheUnited Wayisthesimplewaytotake careofthosemostvulnerable inthecity. Thecampaignusedthe imageryofthehandasan iconofprotection. Thecampaignrunfortwo yearshelpingtogenerate$10 millionindonatededitorial andpromotionalmedia. Results Re ult for fo United U itedWay: Way Donationsincreasedinboth 2003and2004 Advertisingawareness increasedby10%inoneyear. Brandimagewaspositively affected
LearningGoals
1. Knowthemajordecisions involvedindevelopinganadvertising program. 2. Learnhowsalespromotioncampaignsare developedandimplemented. 3. Learnhowcompaniesusepublicrelationsto communicatewiththeirpublics. 4. Understandtherolesofadvertising,sales promotion,andpublicrelationsinthe promotionmix.
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Advertising
Advertising
Anypaidformofnonpersonalpresentation andpromotionofideas,goods,orservicesby anidentifiedsponsor.
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Advertising
Signageinancienttimesoffersevidenceof early l advertising. d ti i Modernadspendingtops$11billionin Canadaannually,$498billionworldwide. Businessfirms,notforprofit,social agencies andprofessionalsalladvertise agencies, advertise.
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KeyAdvertisingDecisions
Settingobjectives Settingthebudget Developingtheadvertising strategy Evaluatingadvertising campaigns Advertisingobjectives canbeclassifiedby primarypurpose:
Inform
Introducingnewproducts
Persuade
Becomesmoreimportant ascompetitionincreases Comparativeadvertising
Remind
Mostimportantfor matureproducts
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Settingobjectives Settingthebudget Developingtheadvertising strategy Evaluatingadvertising campaigns Methodsofbudget settingwerelistedin chapter14 Severalfactorsshouldbe consideredwhensetting theadbudget:
StageinthePLC Marketshare Levelofcompetition Adclutter Degreeofbrand differentiation
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Settingobjectives Settingthebudget Developingtheadvertising strategy Evaluatingadvertising campaigns Creativechallenges
Advertisingclutter TiVoandPVRs
Creatingadmessages
Messagestrategy
CreativeconceptorBig Idea Advertisingappeal
Messageexecution
Manyexecutionstyles Tone,format,illustration, headline,copy
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Advertising
CreativeExecutionStyles
SliceofLife Lifestyle Fantasy MoodorImage Musical TestimonialEvidence orEndorsement PersonalitySymbol TechnicalExpertise ScientificEvidence
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Settingobjectives Settingthebudget Developingtheadvertising strategy(cont.) Evaluatingadvertising campaigns Selectadvertisingmedia
Decideonlevelofreach, frequencyandimpact Chooseamongthemajor mediatypesby considering:
Consumermediahabits, natureoftheproduct, typesofmessages,and costs
Selectspecificmedia vehicles Decideonmediatiming
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Advertising
MajorMediaTypes
Newspapers Television DirectMail Radio Magazines Outdoor Internet
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Settingobjectives Setting S tti th theb budget d t Developingthe advertisingstrategy (cont.) Evaluatingadvertising campaigns i Measuring communications effect
Copytesting
Measuringsaleseffect
Comparepastsales withpastadvertising expenditures Experiments
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OtherAdvertisingConsiderations
OrganizingforAdvertising
Smallvs.largecompanies Natureofadvertisingagencies
Advantagesofadvertisingagencies Consolidationandgrowthofagencies Creativeboutiques
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OtherAdvertisingConsiderations
InternationalAdvertisingDecisions
Standardizing Sta da di i worldwide o ld ideadvertising ad e ti i
Advantagesincludeloweradvertisingcosts, greaterglobaladvertisingcoordination,andconsistentglobal image Drawbacksincludeignoringdifferencesinculture, demographics,andeconomicconditions
Mostmarketersthinkg globally ybutactlocally y
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LearningGoals
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SalesPromotion
SalesPromotion
Salespromotionsareshorttermincentivesto encouragethepurchaseorsaleofaproductor service.
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SalesPromotion
SalesPromotions
Ca Canbetargeted ta etedatfinal fi albuye buyers,retailers etaile and a d wholesalers,businesscustomers,and membersofthesalesforce. Theuseofsalespromotionshasbeengrowing rapidly. Today, y,salespromotion p accountsfor76%of allmarketingexpenditures.
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SalesPromotion
Factorscontributingtogrowthofsales promotion: ti
Greaterfocusonincreasingsalesintheshort term Greatercompetition gefficiency y Declineinadvertising Consumersaremoredealoriented
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SalesPromotionObjectives
Objectives ConsumerPromotions:
Increaseshorttermsalesorlongtermmarketshare Generateproducttrial
Objectives TradePromotions:
Obtainingdistributionandshelfspace Encouragingretailerstoadvertisethebrand
Objectives j SalesForcePromotions:
Signingupnewaccounts
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MajorSalesPromotionTools
ConsumerPromotionTools
Samples Coupons CashRefunds (Rebates) Pricepacks(centsoff deals) ) AdvertisingSpecialties Premiums PatronageRewards PointofPurchase Communications Contests,Games,and Sweepstakes p
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TradePromotionTools
Di Discounts ou t (also (al ocalled alledprice i eoff, off offlist, li t a and d offinvoice) Allowances
Advertisingallowances Displayallowances
Freegoods Pushmoney Specialtyadvertisingitems
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BusinessPromotionTools
Includesmanyofthesametoolsusedin consumerandtradepromotions Twoadditionaltools:
Conventionsandtradeshows Salescontests
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SalesPromotion
KeyDecisionsWhenDevelopingtheSales P Promotion ti Program: P
Sizeoftheincentive Conditionsforparticipation Promotionanddistributionoftheactualsales promotionprogram p p g Lengthofthepromotionalprogram Evaluation
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LearningGoals
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PublicRelations
PublicRelations:
Buildinggoodrelationswiththecompanys variouspublicsbyobtainingfavorable publicity,buildingupagoodcorporate image,andhandlingorheadingoff unfavorablerumors,stories,andevents.
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PublicRelationsFunctions
PressRelations Product P d tP Publicity bli it PublicAffairs Lobbying Investor I t Relations R l ti Development
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PublicRelations
RoleandImpactofPublicRelations
Strongimpactonpublicawarenessatlower costthanadvertising Greatercredibilitythanadvertising Publicityisoftenunderused publicrelationscanbeap powerful Goodp brandbuildingtool
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MajorPublicRelationsTools
News S Speeches h BuzzMarketing CorporateIdentity Materials Mobile Marketing SpecialEvents W itt Materials M t i l Written Audiovisual Materials PublicService Activities Internet
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LearningGoals
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Ch t 16 Chapter
PersonalSelling and dDirect Di Marketing
LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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CaseStudy CDWCanadaInc.
CDWCanadaserves businessesandpublicsector customers CDWsdirectmarketing modelcombineshightouch personalsellingwithmodern hightechwebpresenceto buildlastingcustomer relationships. Highlydevotedtocustomer withCircle CircleofService Service philosophy Nearly2000account managersareresponsiblefor buildingandmaintaining customerrelationships Accountmanagersworkclosely withcustomers. Salespeoplearehighly knowledgeable Trainingisextensive Ninetechnologyteamswith morethan150specialists supportsalespeoplescustomer problemsolvingefforts. Accountmanagersareenergetic dpassionately i l customer and focused CDWaccountmanagers succeedbyhelpingcustomers, assessingtheirneeds,and solvingtheirproblems
LearningGoals
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PersonalSelling
TheNatureofPersonalSelling
Salespersoncoversawiderangeofpositions fromordertakertoordergetterresponsible forrelationshipbuilding
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PersonalSelling
Salespeoplehavemanynames
Agents A Salesconsultants SalesRepresentatives Account Executives SalesEngineers DistrictManagers Marketingrepresentatives AccountDevelopment Representatives
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PersonalSelling
TheRoleoftheSalesForce
T Two oway aypersonal e o alcommunication o u i atio Moreeffectivethanadvertisingincomplex sellingsituations Thesalesforceplaysamajorroleinmost companies Thesalesforceworkstorepresentsthe companytocustomers Theyalsorepresentthecustomerstothe company
LearningGoals
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MajorStepsin SalesForceManagement
Pharmaceuticalcompanies haveextensivesalesforces whichvisit/sellto physicians. Whatwouldbethe challengesineachstepof salesforcemanagement forthesalesforceofa pharmaceuticallike Viagra?
?
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ManagingtheSalesForce
DesigningSalesForceStrategyand St t Structure
SalesForceStructure
Territorialsalesforcestructure Productsalesforcestructure Customersalesforcestructure Complexsalesforcestructure
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SalesForceStrategyandStructure
SalesForceSize
Manycompaniesusetheworkload approachtosetsalesforcesize
OtherIssues
Outsideandinsidesalesforces Team T selling lli
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RecruitingandSelectingSalespeople
Carefulrecruitingcan:
Increaseoverallsalesforceperformance Reduceturnover Reducerecruitingandtrainingcosts
TraitsofSuccessfulSalespeople
Intrinsicmotivation Disciplinedworkstyle Theabilitytocloseasale Abilitytobuildrelationshipswithcustomers
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TrainingSalespeople
Trainingperiodcanbeanywherefromafew weekstoayearormore Trainingisexpensive,butyieldsstrong returns ManycompaniesareaddingWebbasedsales trainingprograms
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TrainingSalespeople
Trainingprogramshavemanygoals
Identifywiththecompanyanditsproducts Knowaboutcustomersandcompetitors Thebasicsofthesellingprocess
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CompensatingSalespeople
Compensationelements:salary, salary bonuses, bonuses commissions,expenses,andfringebenefits Basiccompensationplans:
Straightsalary Straightcommission Salaryplusbonus Salarypluscommission
Compensationplansshoulddirectthesalesforce towardactivitiesthatareconsistentwithoverall marketingobjectives.
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CompensatingSalespeople
Compensationelements:salary, salary bonuses, bonuses commissions,expenses,andfringebenefits Basiccompensationplans:
Straightsalary Straightcommission Salaryplusbonus Salarypluscommission
Compensationplansshoulddirectthesalesforce towardactivitiesthatareconsistentwithoverall marketingobjectives.
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SupervisingSalespeople
Supervision p isusedtodirectandmotivatesalespeople p p Companieswillvaryinhowcloselytheysupervisetheir salespeople;willvarydependingontheskilllevelandmaturity ofthesalesforce,andtypeofselling
Toolsused:
Annualcallplansandtimeanddutyanalysiscanhelpprovide direction Salesforceautomationsystemsassistincreatingmoreefficient sales l f forceoperations TheInternetisthefastestgrowingsalestechnologytool
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SupervisingSalespeople
Effectivesupervisorsalsomotivatethesales force
Organizationalclimate Salesquotas Salesmeetings Positive P iti incentives i ti
Salesmeetings,salescontests,honors,etc.
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EvaluatingSalespeople
Severaltoolscanbeused
Salesreports Callreports Expensereports
1619
LearningGoals
1620
10
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ThePersonalSellingProcess
Thegoalofthepersonalsellingprocessis t find to fi dnewcustomers t and dsell llthem th something Mostsalespeoplespendtheirtime maintainingexistingaccountsand building ui i glong o gterm e customer u o e relationships e a io ip Notallstepsrequiredineverysale
1621
ProspectingandQualifying
Ide Identifying tifyi customers u to e thatmay ayhave ha eaneed eedfor fo the productorservicebeingsold Onlyasmallnumberofprospectsbecomecustomers Prospectingrequireseffort,time,andcommitment
1622
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Preapproach:
Lea Learnas a much u habouttheprospective o e ti ecustomer u to e as a possible,priortoapproachingthemtoaskfora meeting Useallresourcestolearnbeforemeeting Settingcallobjectivesisimportanttobeing productiveandnotwastingthecustomerstime
1623
Approach:
Meeti Meetingand a dgreeting eeti thecustomer u to e for fo thefi first ttime ti e Involvessalespersonsappearance,openinglines,and thefollowupremarks Listeningtothecustomeriscrucial
1624
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Presentationanddemonstration:
What a happens appe during u i gthe esales a e call a Purposeistouncoverneedsandthenattemptto satisfythem Questioningandlisteningskillsareimportant Technologycanhelporgetintheway Customersvalueempathy,honesty,punctuality, reliability,thoroughness,andfollowthrough
1625
Handlingobjections:
The esalesperson a e pe o seeks ee ou out, ,clarifies, a i ie ,a ando overcomes e o e customerobjectionstobuyingtheproductorservice Customersobjectfordifferentreasons:noneed,lack ofinformation,productlimitation,orasanegotiating tactic Handlingobjectionsisimportant,butpreventing themismoreeffective;needtolookatqualifying skillsanduseoffeatures,advantages,andbenefits
1626
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Closingthesale:
Asking A ki thecustomer u to e tobuy(o (order) de )theproduct odu t Theonlystepthatproducesrevenue;mostimportant Fearofrejectionmakesthisstepthemostdifficult Keepitsimple,honest,anddirect;differenttypesof closingtechniquesmakeassumptionsthatcanbe dangerousifusedimproperly
1627
Followup:
Whattakes take place la eafter afte thesale ale Toensurecustomersatisfaction Tokeepthedooropenforrepeatbusiness Askforreferrals
1628
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PersonalSellingandCustomer RelationshipManagement
Theprincipalsjustdescribedaretransaction oriented Companieswanttoencouragerepeat purchasingbecauseitismoreefficientthan tryingtoreplacelostcustomers Ittakesdifferentskillstobuildrelationships withcustomers yprofitable p relationships p arebuilton Mutually creatingvalue,offeringpackagedsolutionsto problems,andimprovingproductsand processes
1629
LearningGoals
1630
15
14/11/2011
DirectMarketing
DirectMarketingconsistsofdirectoneto oneconnections ti with ithcarefully f ll targeted t t d individualconsumerstobothobtainan immediateresponseandcultivatelasting customerrelationships.
1631
DirectMarketing
ThenewDirectMarketingModel
DirectMarketingisboth,adirectmarketing channelandanelementofthemarketing communicationsmix Technologyhasmadeofdirectmarketinga newandcompletemodelfordoingbusiness. Firmsemployingthisdirectmarketingmodel (suchasDellComputer)useitastheonly approach
1632
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HowDellChangedanIndustry
Dellcomputersrevolutionizedanindustry Previously,companiesbuiltcomputersforinventory,soldthrough retail ld distribution b network k Biggestchallenge:fastpaceoftechnologicalchangeincomputer componentscreatedobsoleteinventory Dellsbigidea:onlybuildcomputerstoorder,selldirectto customers,usejustintimeinventorymanagementtoeliminate obsolescence Sellingdirectlowerscostsandprices Thechallenge:providingthelevelsofcustomersalesassistanceand servicethatwerepreviouslygivenbyretailers Result:DellmarketshareofPCmarketisnow31%;dominatesthe industry
1633
FormsofDirectMarketing
Telephonemarketing:outboundandinbound,suffers fromconsumerburnout,technologytoblockcalls Directmailmarketing:flexible,personalized,butsuffers fromjunkmailimage Cataloguemarketing:thebigwinnersintheriseofthe Internet;hugecostefficienciesbymovingcatalogue offeringonline Directresponsetelevisionmarketing: marketing infomercialswork, work despiteapoorreputation Kioskmarketing:goingwherethecustomersare
1634
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BenefitsofDirectMarketing
Forbuyers:
Convenient Easytouse Private Accesstoawealthofinformation Immediate Interactive
1635
BenefitsofDirectMarketing
ForSellers
Powerfultoolforbuildingrelationships Allowsfortargetingofsmallgroupsorindividuals withcustomizedoffersinapersonalizedfashion Canbetimedtoreachprospectsattherighttime Offersaccesstobuyersthatcouldntbereachedvia otherchannels Lowcost, cost effectivealternativeforreachingspecific markets
1636
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CustomerDatabasesand DirectMarketing
Customerdatabase:organizedcollectionof comprehensive p dataaboutindividualcustomersor prospects,includinggeographic,demographic, psychographic,andbehavioraldata
Databasesincludecomprehensivedataincludinggeographic, demographic,psychographicandbehavioral Databasescanbeusedtoidentifyprospects,tailorproducts,and maintaincustomerrelationships Databasemarketingrequiressubstantialinvestmentin h d hardware, software, ft personnel l Buildcustomerloyaltybytailoringnewofferstotheirspecific interests
1637
LearningGoals
1638
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DirectMarketing
IntegratedDirectMarketing
Di Direct e tmarketing a keti campaigns a ai thatuse u ecoordinated, oo di ated multiplepromotionalvehiclesandmultiplestagesto improveresponseratesandprofits Avoidsconfusingthecustomer Generatesleverageofmoniesspent Suitstodaysmediaobsessedconsumer
Figure16.5
DirectMarketing
PublicPolicyandEthicalIssues
Irritation,Unfairness,Deception,andFraud InvasionofPrivacy PersonalInformationProtectionandElectronic DocumentsAct (2004):
Consumerconsent Limitations Accuracy Righttoaccess
1640
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LearningGoals
1641
1642
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1643
1644
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Ch t 17 Chapter
Marketinginthe DigitalAge
LearningGoals
1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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CanadianTire
Foundedin1922bytwo brothers,A.J.BilesandJ.W. Biles l Startedoffrepairingvehicles, movedinautomotiveparts Introducedcataloguein1928 Nationalinstitution;462stores, 259gasstationsacrossCanada. Totalretailsales:$9billion Canadiantire.caoffersmore th 15 than 15,500 500products d t 1930s:offeredfirsttire guarantee 1958:CanadianTiremoney Waiteduntil2002tolaunch onlinestore
2003:Crosspromotionwith g Canadadaily yrental Budget company Morethan1000itemsare availableonlyonline Recently,Canadiantire.cawas completelyredesignedto makeshoppingfaster,better, andeasier. eFlyerisfullyintegratedinto thewebstore Bymeldingitsonlineand traditionalretailworlds CanadianTirehascreateda powerfulnewmodelof retailing
LearningGoals
3. 4. 5.
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MajorForcesShaping theDigitalAge
DigitalizationandConnectivity
Text,data,sound,andimagescanbe convertedintobitstreams Todayscomputers,appliances,automobiles, andcommunicationdevicesalloperateusing bitsofdigitalinformation Connectingthesedevicescreateshuge potentialforconvenienceandnewservices Intranet,Extranet,Internet
TheInternetExplosion
Wo World ldwide ideweb eband a dbrowsers b o e created eatedin i early ea ly1990s 1990 Dot.comcrashof2000didnotsloweddownusage growth Endof20thcentury:400millionwebsurfers Estimated2007:1.5billionwebsurfersworldwide penetrationinCanadahasreached78% Internetp TheInternethasbecometheprimarysourceof information Empowerscustomerswhenmakingdecisions
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NewTypesofIntermediaries
Internet I e e o only ycompanies o pa ie such u a asAOL, AO ,A Amazon.com, a o o , Dell,eBay Traditionalcompaniesfeareddisintermediationby newetailers Newchannelrelationshipsdeveloping Manyclickonlycompaniesfailedtodevelopa profitablebusiness Lateentryclickandmortarcompaniesemergeas strongercompetitorsthanclickonly Notallgoodsandservicessuitableforvirtual purchasing
177
Customization:
Oldeconomy e o o ywas a builton o standardization ta da di atio ofgoods ood andservices Neweconomyrunsoninformation;easierto differentiate,customize,personalize,and communicate Todayscustomerwantstheproducttheirway Firmsletthecustomersdesigntheproductoffering Companiesbecomefacilitators Consumersbecomepro(active)sumers
178
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LearningGoals
3. 4. 5.
179
MarketingStrategy intheDigitalAge
Ebusiness:
Useselectronicmeansandplatformsto conductbusiness
Ecommerce:
Buyingandsellingprocessessupportedby electronicmeans
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Emarketing:
Includeseffortsthatinform,communicate, promote,andsellproductsandservicesover theInternet
EcommerceandtheInternetbenefitboth y andsellers buyers
1711
BenefitstoBuyers
Convenience Buyingiseasyandprivate Greaterproductaccess/selection Accesstocomparativeinformation Onlinebuyingisinteractiveandimmediate
1712
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BenefitstoSellers
Powerfultoolforcustomerrelationship building Reducecosts Increasespeedandefficiency greatflexibility y Offersg Globalaccess,globalreach
1713
LearningGoals
3. 4. 5.
1714
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ECommerceDomains
B2C B2B C2C C2B Onlinesellingofgoodsandservicesto consumers lservices,clothing, l h computer Travel hardware/software,electronics,books,music, andvideoOnlineconsumers Onlineconsumers
Nowmoremainstreamanddiverse
Hascreatednewecommercetargeting opportunities Onlinebehaviordiffersbyage
O Online li consumersdiff differf fromt traditional diti loff ff lineconsumers

Theyinitiateandcontroltheexchangeprocess Valueinformationhighly
1715
ECommerceDomains
B2C B2B C2C C2B Usingtradingnetworks,auctionsites,spot exchanges,onlinecatalogues,andbartersites toreachorganizationalcustomers B2BvolumeismuchlargerthanB2C;$28.3 billion Usedtoprovidebetterservice,increased efficiencies,andmorecompetitivepricing Opentradingexchanges
Emarketspacebringingsellersandbuyers together g
Privatetradingexchanges
Linkssellerswiththeirowntradingpartners
1716
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ECommerceDomains
B2C B2B C2C C2B Onlineexchangesofgoodsand informationbetweenconsumers Theseexchangesaretheelectronic fleamarket eBayisthemostpopularauctionsite Otheruses:
Forums Newsgroups
Blogs
Allowsinterchangesofinformationfor specialinterestgroups Highlycredibleforadvertisers
1717
ECommerceDomains
B2C B2B C2C C2B Allowconsumerstosearchoutsellers, learnaboutoffers,initiatepurchase, di t t purchase h terms t ordictate
Ex:Priceline.com
Consumersbecomemoreactiveinthe process;empowered Consumershavedirectchannelto companiesforsuggestionsand complaints Some S sites it facilitate f ilit t the th feedback f db k processbetweencustomersand companies
Ex:Planetfeed.com
1718
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ConductingECommerce
PurePlay/ClickOnlyCompanies
Etailers, tailers searchenginesandportals, portals ISPs ISPs,transaction sites,somecontentsites,enablersites Duringthedot.comgoldrushofthelate1990s stockspricesreacheddizzyingheights
Dot.comsfailedformanyreasons
Lackofplanningandresearch Didnotdevelopmarketingstrategiesandspent lavishlyofflineonmassmarketing Overemphasisonacquisitionvs.retention Lowmargins
1719
ConductingECommerce
ClickandMortarCompanies
Co Combine bi etraditional t aditio aland a donline o li eoperations o e atio Channelconflictwasinitiallyaconcern Ecommerceoftencreatednewcustomers,ratherthan cannibalizingexistingones Manyfirmsnowenjoygreatersuccessthantheir clickonlycompetition
Trustedbrandnames,greaterfinancialresources,larger customerbase,industryknowledge,andstrongsupplier relationshipswerekeyadvantages
1720
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LearningGoals
3. 4. 5.
1721
SettingupanEmarketingPresence
Creatingwebsites Placingonlineadsand promotions Creatingor participatinginWeb communities Using gEmail Corporatewebsites
Buildgoodwilland relationships;generate excitement
Marketingwebsites
Engageconsumers andattemptto purchase influencep
Websitedesign
7Csofeffective websitedesign
1722
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SevenCsofWebsiteDesign
Context Content Community Customization Communication Connection Commerce
1723
Creatingwebsites Placing Pl i online li ads d and d promotions Creatingor participatinginWeb communities Using U i Email il Onlineformsofads andpromotions
Bannerads/tickers Skyscrapers Interstitials Contentsponsorships Microsites Viralmarketing
Futureofonlineads
1724
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DiscussionQuestion
Whatistheconsumer responsetoInternet advertising? Whenisitwelcomed bytheconsumer? Whatelsecan advertisersdoto reachtheirtargets?
1725
Creatingwebsites Placingonlineadsand promotions Creatingorparticipatingin Webcommunities UsingEmail Sitesformembersto congregate g g onlineand exchangeviewson commoninterests Attractionisthestrong senseofcommunity generated Webcommunitiesallow memberswithspecial intereststoexchange views
Socialcommunities Workrelatedcommunities
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Creatingwebsites Placing Pl i online li ads d and d promotions Creatingor participatinginWeb communities Using U i Email E iland d Webcasting Emailmarketing
Keytoolfor fo B2Band a d B2Cmarketing Clutterisaproblem Enrichedformsof emailattemptto breakthroughclutter Spamisaproblem Permissionbased marketing
1727
LearningGoals
3. 4. 5.
1728
14
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PromiseandChallenges ofECommerce
TheContinuingPromiseofECommerce
O Online li emarketing a keti will illbe become o easuccessful u e ful businessmodelforsomecompanies ForotherstheInternetshouldbeusedasone approachortoolinthefullyintegrated marketingmix Theq questionishow, , notwhether, , to deployInternettechnology
1729
PromiseandChallenges ofECommerce
TheWebsDarkerSide
Internet I te etProfitability P ofitability
FewB2Ccompaniesareprofitable Limitedexposure,skeweddemographics NavigatingtheWebisoftenproblematic
LegalandEthicalIssues
Onlineprivacyandsecurityconcerns Internet I t tf fraud, d th thedi digital it ldi divide, id accessb byvulnerable l bl or unauthorizedgroups
1730
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LearningGoals
3. 4. 5.
1731
1732
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Ch t 18 Chapter
TheGlobal Marketplace
LearningGoals
1. Discusshowtheinternationaltradesystem,economic, politicallegal, p g andculturalenvironmentsaffecta companysinternationalmarketingdecisions. 2. Describethreekeyapproachestoenteringinternational markets. 3. Explainhowcompaniesadapttheirmarketingmixes forinternationalmarkets. 4. Identifythethreemajorformsofinternational marketing k ti organizations. i ti
18 2
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CaseStudy McCainFoodsLimited
Foundin1956in Florenceville,N.B. Globalleaderamongfood processors Producesabout1/3ofthe frenchfriedpotatoes producedinternationally Worldslargestfrenchfry supplier pp toMcDonalds preferredbyJollibeeand BurgerKing Employs20,000people, generated$5.71billionin revenuesin2005selling productsinmorethan110 countries
WinnerofCanadasexport awardstwotimes Shipshundredsofmillionsof kgs.offrozenproductayear customizedforlocaltastesand requirements UseimportsfromCanadato builditsChinesebusiness Establishincountry y operationsaftercareful researchandexperimentation Workedcloselywiththe Chinesegovernmentwhen enteringintoChina SimilartacticsinIndia.
LearningGoals
18 4
14/11/2011
GlobalMarketing inthe21st Century

Theworldisshrinking Internationaltradeisbooming Culturaldiversityisarealityofourmajor cities:Montreal,Toronto,Vancouver. Thescopeofeverymanageristheworld Global Gl b lcompetitionisintensifying f
18 5
GlobalMarketing inthe21st Century

Manycompanieshavemadetheworld th i market their k t
18 6
14/11/2011
Definitions
Globalization
Thegrowingintegrationofeconomiesand societiesaroundtheworld
GlobalFirm
Afirmthat,byoperatinginmorethanone country, y g gainsR&D,production, p marketing, g andfinancialadvantagesinitscostsand reputationthatarenotavailabletopurely domesticcompetitors.
MajorDecisionsin InternationalMarketing
Acompanyfacessixmajordecisionsin i t international ti lmarketing k ti
18 8
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LookingattheGlobal MarketingEnvironment
TheInternationalTradeSystem
Ta Tariffs, iff quotas, uota embargos, e ba o exchange e ha econtrols, o t ol nontarifftradebarriers WorldTradeOrganizationandGATT Regionaleconomiccommunitiesorfreetrade zones
EU EuropeanUnion NAFTA NorthAmericanFreeTradeAgreement MERCOSUR Otherfreetradeareas
18 9
EconomicEnvironment
Industrialstructure
Subsistenceeconomies Rawmaterialexportingeconomies Industrializingeconomies Industrialeconomies
Income I d distribution b
18 10
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PoliticalLegalEnvironment
Attitudestowardinternationalbuying Governmentbureaucracy Politicalstability Monetaryregulations
Exchange g rates, ,exchange g controls, ,etc.
Countertrade
Barter,compensation/buyback,counterpurchase
18 11
CulturalEnvironment
ImpactofCultureonMarketingStrategy
Culturaltraditions,preferences,businessnorms andbehaviorvaryfromcountrytocountry.
ImpactofMarketingStrategyonCultures
Exposuretoforeignproductsandmediacause changesinvalues, values muchtothechagrinofsome withinlocalmarkets GlobalizationorAmericanization
18 12
14/11/2011
DecidingWhetherto GoInternational
Notallcompaniesneedtoventureinto i t international ti lmarkets k t
Thedomesticmarketplaceiseasierandsafer
However,companiesneedtomonitor internationalbusinesses
18 13
DecidingWhetherto GoInternational
Severalfactorsmaydrawnafirmintothe internationalarena
Growthopportunitiesoutsideofdomesticmarkets Asacounterattackagainstcompetitionathome Reducedependenceonexistingmarkets Needalargercustomerbasetoachieveeconomiesof scale
Thecompanyneedstoevaluateitsabilitiesand theconsumerandbusinessenvironmentsin othercountries

14/11/2011
DecidingWhich MarketstoEnter
Beforegoingabroad:
Defi Define einternational i te atio almarketing a keti objectives obje ti e and a dpolices, oli e andforeignsalesvolumegoals Decidehowmanycountriestotarget Evaluatethecountriesattractivenessbasedonthe product,culturaldistance,incomeandpopulation, politicalclimate,andotherfactorssuchas:market size, i market k growth, h costof fdoing d i business, b i competitiveadvantage,etc. Rankeachofthepossibleinternationalmarkets
18 15
Possibleglobalmarketsshouldberanked onseveral lfactors. f t
18 16
14/11/2011
In1983Dominosopeneditsfirst internationalstoreinCanada, thenAustralia In1985AsiaandEngland In1988Colombia Dominoscontinuestogrowits internationallocationswithmore than2000storesoutsidetheU.S. HowdoyouthinkDominos choosesitscountries?
?
LearningGoals
18 18
14/11/2011
MarketEntryStrategies
Thecompanymustdeterminethebestmodeof y entry. Eachsubsequententrystrategyinvolvesmore commitmentandrisk,butalsomorecontroland potentialprofits.
18 19
DecidingHowto EntertheMarket
Exporting
Directvs.indirect
JointVenturing
Licensing,contractmanufacturing, managementcontracting,jointownership
DirectInvestment
Assemblyfacilities,manufacturingfacilities
18 20
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14/11/2011
LearningGoals
18 21
DecidingontheGlobal MarketingProgram
Thedecisionontheglobalmarketing programis i aconstant t tsearch hfor f abalance b l betweenstandardizationandadaptation. Marketerssuggestthatcompaniesshould thinkgloballybutactlocallyand advocate a o a eaglocal g o a strategy. a egy
18 22
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StandardizedMarketingMix
Samebasicproduct,advertising,distribution, andotherelementsofthemarketingmixare usedinallinternationalmarkets.
AdaptedMarketingMix
Themarketing gmixelementsareadjusted j for eachinternationaltargetmarket.
18 23
GlobalPromotionStrategies
Standardizedglobalcommunication
Advertisingthemesarestandardizedfrom countrytocountrywithslightmodifications
Communicationadaptation
Advertisingmessagesarefullyadaptedtolocal markets
18 24
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GlobalPricingStrategies
Companiesfacemanyproblems
Priceescalation Pricingtoforeignsubsidiaries Recenteconomicandtechnologicalforces TheInternet
18 25
GlobalDistributionChannels
Wholechannelview
Sellersheadquartersorganization Channelsbetweennations Channelswithinnations Numbersandtypesofintermediaries Size Si and dcharacter h t of fretail t ilunits it abroad b d
18 26
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LearningGoals
18 27
DecidingontheGlobal MarketingOrganization
ManagingInternationalMarketing A ti iti Activities
Step1:Organizeexportdepartment Step2:Createaninternationaldivision Step3:Becomeaglobalorganization
18 28
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InternationalMarketing Organizations
Internationaldivisionorganizations
Geographicalorganization Worldproductgroups Internationalsubsidiaries
18 29
LearningGoals
18 30
15
14/11/2011
18 31
18 32
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Ch t 1 Chapter1

Marketing: ManagingProfitable Customer Relationships

Advancesin computers computers, telecommunications information, transportation

Geographicaland culturaldistances haveshrunk

Marketersneedto takegreat responsibilityforthe impactoftheiractions

Manynonprofit organizationsare realizingthe importanceof strategicmarketing

Partnering gwithOthersintheMarketing g System

Thecompanyengagesinmarketing analysis,planning,implementation,and control

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

Thedistributionofincomehascreateda twotieredmarket:theaffluentandthe lessaffluent

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

PrinciplesofMarketing,Seventh Canadian Edition

Learning Goals LearningGoals

Learning Goals LearningGoals

Case Study Dove CaseStudy

Case Study Dove CaseStudy

Case Study Dove CaseStudy

Learning Goals LearningGoals

Marketing Information System MarketingInformationSystem

Marketing Information System MarketingInformationSystem

Developing Marketing Information DevelopingMarketingInformation

Internaldataischeap,quick,andeasy Maynotbeinausableformforthedecisiontobemade Maybeincompleteorinappropriatetoaparticular situation

Developing Marketing Information DevelopingMarketingInformation

Developing Marketing Information DevelopingMarketingInformation

Learning Goals LearningGoals

Gathering Secondary Data GatheringSecondaryData

Primary Data PrimaryData

Primary Data PrimaryData

Primary Data PrimaryData

Primary Data PrimaryData

Primary Data PrimaryData

Discussion Question DiscussionQuestion

Learning Goals LearningGoals

Analyzing Marketing Information AnalyzingMarketingInformation

Analyzing Marketing Information AnalyzingMarketingInformation

Learning Goals LearningGoals

Other Considerations OtherConsiderations

Learning Goals LearningGoals

Learning Goals LearningGoals

Learning Goals LearningGoals