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Objectives

7 Course Organization
7 Tasks of Marketing
7 Major Concepts & Tools of Marketing
7 Marketplace Orientations
7 Marketings Responses to New
Challenges
Defining Marketing
Marketing is a societal process by
which individuals and groups obtain
what they need and want through
creating, offering, and freely
exchanging products and services of
value with others.
- Philip Kotler (p. 7)
Simple Marketing System
Industry
(a collection
of sellers)
Market
(a collection
of Buyers)
Goods/services
Money
Communication
Information

Production Concept

Product Concept
Selling Concept
Marketing Concept
Consumers prefer products that are
widely available and inexpensive

Consumers favor products that
offer the most quality, performance,
or innovative features
Consumers will buy products only if
the company aggressively
promotes/sells these products
Focuses on needs/ wants of target
markets & delivering value
better than competitors
Company Orientations
Towards the Marketplace
Objectives
7 Define value & satisfaction - understand
how to deliver them
7 The nature of high-performance
businesses
7 How to attract & retain customers
7 Improving customer profitability
7 Total quality management
Resources Organization
and
aligning...
High Performance Business
Processes
By improving
critical business...
Stake-
holders
Set strategies to
satisfy key...
Satisfied Customers:
7 Are loyal longer
7 Buy more (new products & upgrades)
7 Spread favorable word-of-mouth
7 Are more brand loyal (less price
sensitive)
7 Offer feedback
7 Reduce transaction costs

Inactive or
ex-customers
Customer Development
Partners Advocates Clients
Repeat
customers
First-time
customers
Suspects
Prospects
Disqualified
prospects
Customer/Product
Profitability Analysis
P
1

Highly
profitable
product
P
2

Profitable
product
P
3

Losing
product
P
4

Mixed-bag
product
P
r
o
d
u
c
t
s
+
+
+
High
profit
customer
+
-
Mixed-bag
customer
+
-
-
Losing
customer
C
1
C
2
C
3
Customers
Objectives
7 Corporate and division strategic planing
7 Business unit planning
7 The marketing process
7 Product level planning
7 The marketing plan
Market-Oriented Strategic
Planning
Objectives
Skills
Resources
Opportunities
Market-Oriented Strategic
Planning
Objectives
Skills
Resources
Opportunities
Profit
and
Growth
Corporate Headquarters
Planning
7 Define the corporate mission
7 Establish strategic business units
(SBUs)
7 Assign resources to SBUs
7 Plan new business, downsize older
businesses
The Marketing Plan
Executive Summary & Table of Contents
Current Marketing Situation
Opportunity & Issue Analysis
Objectives
Marketing Strategy
Action Programs
Projected Profit-and-loss
Controls
Objectives
7 Components of a marketing information
system
7 Criteria of good marketing research
7 Decision support systems for marketing
management
7 Demand measurement and forecast
A marketing information system (MIS) consists of
people, equipment, and procedures to gather, sort,
analyze, evaluate, and distribute needed, timely, and
accurate information to marketing decision makers.
A marketing intelligence system is a set of
procedures and sources used by managers to obtain
everyday information about developments in the
marketing environment.
Research Approaches
Behavioral
Focus-group
Survey
Experimental
Observational
Secondary-Data Sources
7 Internal Sources
7 Government Publications
7 Periodicals and Books
7 Commercial Data
7 On-Line
7Associations
7Business Information
Good Marketing Research:
Is scientific
Is creative
Uses multiple methods
Realizes the interdependence of
models & data
Acknowledges the cost & value of
information
Maintains healthy skepticism
Is ethical

Demand
Market
Demand
Company
Demand
Estimating Current Demand
7 Total Market Potential
7 Area Market Potential
7 Industry Sales
7 Market Share
Estimating Future Demand
7 Survey of Buyers Intentions
7 Composite of Sales Force Opinion
7 Expert Opinion
7 Past Sales Analysis
7 Market Test Method
Objectives
7 Tracking & Identifying Opportunities in
the Macroenvironment
7 Demographic, Economic, Natural,
Technological, Political, & Cultural
Developments
Macroenvironmental Forces
7 World trade enablers
7 Asian economic power
7 Rise of trade blocs
7 International monetary crises
7 Use of barter & countertrade
7 Move towards market economies
7 Global lifestyles
Macroenvironmental Forces
7 Opening of new markets
7 Emerging transnational firms
7 Cross-border strategic alliances
7 Regional ethnic & religious conflict
7 Global branding
Demographic Environment
Worldwide Population Growth
Population Age Mix
Ethnic Markets
Household Patterns
Educational Groups
Geographical Shifts in Population
Shift from Mass Market to Micromarkets
Economic Environment
Income Distribution
Subsistence economies
Raw-material-exporting economies
Industrializing economies
Industrial economies
Savings, Debt, &
Credit Availability
Natural
Environment
Higher Pollution
Levels
Increased Costs
of Energy
Shortage of
Raw Materials
Changing Role
of Government
Accelerating Pace
of Change
Unlimited Opportunities
for Innovation
Increased
Regulation
Issues in the Technological
Environment
Varying
R & D Budgets
Political-
Legal
Environment
Increased
Legislation
Special-
Interest
Groups
Social/Cultural Environment
Of
Organizations
Of
Nature
Of
Oneself
Of
Society
Of
the Universe
Of
Others
Views
That Express
Values
Social/Cultural Environment
Objectives
7 Influences on Buying Behavior
7 Buyer Decision Making
Simple Response Model
Stimulus Organism Response
Culture
Cultural Factors
Subculture
Social Class
Buyer
Social Factors
Reference
Groups
Roles &
Statuses
Family
Influences on Consumer
Behavior
Personal Influences
Age and Family Life
Cycle Stage
Lifestyle
Occupation &
Economic Circumstances
Personality &
Self-Concept
Psychological Factors
Perception Learning
Beliefs &
Attitudes
Motivation
Four Types of Buying
Behavior
Complex
Buying
Behavior
Dissonance-
Reducing Buying
Behavior
Variety-
Seeking
Behavior
Habitual
Buying
Behavior
Significant
differences
between
brands
Few
differences
between
brands
High
Involvement
Low
Involvement
Total
Set
Decision Making Sets
Aware-
ness
Set
Consid-
eration
Set
Choice
Set
Decision
Objectives
7 How Business & Consumer Markets Differ
7 Organizational Buying Situations
7 Participants in the Business Buying
Process
7 Major Influences on Organizational Buyers
7 Business Buyer Decision Making
7 Institutional & Government Buying
Organizational Factors
Purchasing-
Department
Upgrading
Cross-
Functional
Roles
Centralized
Purchasing
Decentralized
Purchasing
of Small
Ticket Items
Internet
Purchasing
Long-Term
Contracts
Purchasing-
Performance
Evaluation &
Pro. Buyers
Lean
Production
Problem Recognition
General Need Description
Product Specification
Supplier Search
Proposal Solicitation
Supplier Selection
Order Routine Specification
Performance Review
Post
Purchase
Purchase
Info
Search/
Eval
Need
Recognition
Institutional Markets
Captive Patrons Low Budgets
Government Markets
Domestic Suppliers
Open Bids Cost Minimization
Public Review
Paperwork
Objectives
7 Identifying Competitors
7 Evaluating Competitors
7 Competitive Intelligence Systems
7 Competitive Strategies
7 Customer vs. Competitor Orientation
Industry Competition
7 Number of Sellers - Degree of
Differentiation
7 Entry, Mobility, Exit barriers
7 Cost Structure
7 Degree of Vertical Integration
7 Degree of Globalization
Analyzing Competitors
Competitor
Actions
Objectives
Strengths &
Weaknesses
Reaction
Patterns
Strategies
Competitors Expansion Plans
Markets
P
r
o
d
u
c
t
s

Individual
Users
Commercial
& Industrial
Educational
Personal
Computers
Hardware
Accessories
Software
Dell
Hypothetical Market Structure
& Strategies
40%
Market
leader
30%
Market
challenger
20%
Market
follower
Expand Market
Defend Market Share
Expand Market Share
Attack leader
Status quo
Imitate
10%
Market
nicher
Special-
ize
Defense Strategies
Attacker
(3) Preemptive
defense

(4) Counter-
offensive
defense
Defender
(1)
Position
defense
(5)
Mobile
defense
(2) Flank defense
(6) Contraction
defense
Attack Strategies
Attacker

Defender
(3) Encirclement attack
(4) Bypass attack
(2) Flank attack
(5) Guerilla attack
(1) Frontal attack
Specific Attack Strategies
7 Price-discount
7 Cheaper goods
7 Prestige goods
7 Product proliferation
7 Product innovation
7 Improved services
7 Distribution innovation
7 Manufacturing cost reduction
7 Intensive advertising promotion
Nichemanship
7 End-user specialist
7 Vertical-level specialist
7 Customer-size specialist
7 Specific-customer specialist
7 Geographic specialist
7 Product or product-line specialist
7 Product-feature specialist
7 Job-shop specialist
7 Quality-price specialist
7 Service specialist
7 Channel specialist

Balance
Competition
Customer
+ Fighter orientation
+ Alert
+ Exploit weaknesses
- Reactive
+ ID opportunities
+ Long-run profit
+ Emerging needs & groups
Objectives
7 Identifying Market Segments
7 Choosing Target Markets
Market-Segmentation
Procedure
Survey
7Motivations
7Attitudes
7Behavior
Analysis
7Factors
7Clusters
Profiling

Bases for Segmenting
Consumer Markets
Occasions, Benefits,
Uses, or Attitudes
Behavioral
Geographic
Region, City or Metro
Size, Density, Climate

Demographic
Age, Gender, Family size
and Life cycle, Race,
Occupation, or Income ...
Lifestyle or Personality
Psychographic
Bases for Segmenting
Business Markets
7 Demographic
7 Operating Variables
7 Purchasing Approaches
7 Situational Factors
7 Personal Characteristics
Measurable
Accessible
Substantial
Differential
Segments must be large or
profitable enough to serve.
Segments can be
effectively reached and
served.
Actionable
Size, purchasing power,
profiles of segments can
be measured.
Segments must respond
differently to different
marketing mix elements &
actions.
Must be able to attract and
serve the segments.
Effective Segmentation
Additional Segmentation
Criteria
7 Ethical Choice of Market Targets
7 Segment Interrelationships &
Supersegments
7 Segment-by-Segment Invasion Plans
7 Intersegment Cooperation
Objectives
7 Identify Differentiating Attributes
7 Choosing & Communicating Effective
Positioning
7 Marketing Strategies Along the Product
Life Cycle
7 Marketing Strategy & Market Evolution
Product Differentiation
Form
Fea-
tures
Perfor-
mance
Quality
Conform-
ance
Quality
Dura-
bility
Relia-
bility
Repair-
ability
Style Design
Delivery
Services Differentiation
Ordering
Ease
Maintenance
& Repair
Customer
Training
Installation
Customer
Consulting
M
i
s
c
e
l
l
a
n
e
o
u
s

S
e
r
v
i
c
e
s

Differentiation
7 Personnel
7 Channel
Media Atmosphere
Symbols
Events
Image Differentiation
Differences Worth
Establishing
Affordable Superior
Profitable
Preemptive
Distinctive
Important
P 298
Sales & Profit Life Cycles
Introduction Growth Maturity Decline
Time
S
a
l
e
s

&

p
r
o
f
i
t
s

(
$
)

Four Introductory
Marketing Strategies
Rapid-
skimming
strategy
Rapid-
penetration
strategy
Slow-
penetration
strategy
Slow-
skimming
strategy
Price
Low
High
Promotion
High Low
Maturity Stage
7 Market Modification
7 Product Modification
7 Marketing-Mix Modification

Decline Stage
7 Decrease investment
7 Resolve uncertainties - stable
investment
7 Selective niches
7 Harvesting
7 Divesting
Market Evolution
7 Emergence
7 Growth
7 Maturity
7 Decline
Objectives
7 Challenges in New Product Development (NPD)
7 Organizational Structure & NPD
7 Stages & Management of NPD
7 Diffusion & Adoption of New Products

Why New Products Fail
7 Over Championing
7 Overestimated Demand
7 Poor Design
7 Poor Marketing Execution
7 High Development Costs
7 Strong Competitive Reaction
Challenges in NPD
7 Idea Shortage
7 Fragmented Markets
7 Social & Governmental Constraints
7 Cost
7 Capital Shortage
7 Need for Speed
7 Shorter Product Life Cycles
Probability of Success
Probability
of technical
completion
Overall
probability
of success
=
Probability of
commercialization
given technical
completion
X
Probability of
economic
success given
commercialization
X
Concept Development & Testing
1. Develop Product Ideas into
Alternative Product Concepts
2. Concept Testing - Test the Product
Concepts with Groups of Target Customers
3. Choose the Best One
Consumer-Goods Market Testing
Sales-
Wave
Research

Test offering trail to
a sample of
consumers in
successive
periods.
Simulated
Test Market

Test in a simulated
shopping environment
to a sample of
consumers.


Standard
Test Market

Full marketing campaign
in a small number of
representative cities.



Controlled
Test Market

A few stores that have
agreed to carry new
products for a fee.
Commercialization
When
Where
Whom
Product
Price
Place
Promotion
Characteristics of the Innovation Rate of
Adoption
7 Relative advantage
7 Compatibility
7 Complexity
7 Divisibility
7 Communicability
Objectives
7 Factors to Consider Before Going Global
7 Selecting Foreign Markets
7 Foreign Market Entry
7 Product Adaption for Global Marketing
7 Management & Organization of Global Activities
Major Decisions in International Marketing
Deciding whether
to go abroad
Deciding which
markets to enter
Deciding how to
enter the market
Deciding on the
marketing program
Deciding on the
marketing organization
Challenges in Going Global
7 Shifting borders
7 Unstable governments
7 Foreign-exchange
7 Corruption
7 Technological pirating
Criteria for Entry
7 Market Attractiveness
7 Risk
7 Competitive Advantage
Five Models of Entry
Into Foreign Markets
Direct
invest-
ment
Joint
ventures
Licensing
Direct
exporting
Indirect
Exporting
Amount of commitment, risk, control, and profit potential
Internationalization Process
No Export
Export via Agents
Sales Subsidiaries
Production Abroad
Five International Product
and Promotion Strategies
Dual
adaptation
Promotion
Product
Product
adaptation
Adapt
product
Straight
extension
Do not change
product
Do not change
promotion
Communi-
cation
adaptation
Adapt
promotion
Develop new
product
Product
invention
Pricing Challenges
>Price Escalation
>Dumping charges
>Gray markets
>Transfer prices
Whole-channel Concept for International
Marketing
Seller
Sellers international
marketing headquarters
Channels between
nations
Channels within
foreign nations
Final buyers
Objectives
7 Product Characteristics
7 Building & Managing the Product Mix & Product Lines
7 Brand Decisions
7 Packaging & Labeling


Specialty Products
Unsought Products
Shopping Products
Buy less frequently
> Gather product information
> Fewer purchase locations
> Compare for:
Suitability & Quality
Price & Style
Convenience Products


Special purchase efforts
> Unique characteristics
> Brand identification
> Few purchase locations
New innovations
> Products consumers dont
want to think about.
>Require much advertising &
personal selling
Buy frequently & immediately
> Low priced
> Many purchase locations
> Includes:
Staple goods
Impulse goods
Emergency goods
Consumer-Goods Classification
Product Mix
Width - number of
different product lines
Length - total number
of items
within the lines
Depth - number of
versions of each
product
Product Mix -
all the product
lines offered
Product-Line Length
7 Line Stretching
7 Downmarket
7 Upmarket
7 Two-way
7 Line Filling
7 Line Modernization
7 Line Featuring & Line Pruning
What is a Brand?
Attributes Benefits Values
Culture
User
Personality
Brand Equity
No Brand Loyalty
(customer will change)
Satisfied Customer
(no reason to change)
Satisfied & Switching Cost
Values the Brand
(brand as friend)
Devoted
to Brand
Brand Strategies
Brand
Extension
New
B
r
a
n
d

N
a
m
e

Product Category
Line
Extension
Existing
Existing
Multibrands
New
New
Brands
Good Brand Names:
Suggest
Product
Benefits
Distinctive
Lack Poor
Foreign
Language
Meanings
Suggest
Product
Qualities
Easy to:
Pronounce
Recognize
Remember
Why Package Crucial as a
Marketing Tool
7 Self-service
7 Consumer affluence
7 Company & brand image
7 Opportunity for innovation
Labels
Identify
Describe

Promote
Objectives
7 Service Definitions & Classifications
7 How Services Differ Goods
7 Improving Service Differentiation, Quality, & Productivity
7 Improving Customer Support Services
Categories of Service Mix
Pure
Service
Tangible
Good
w/
Services
Major
Service
w/ Goods
Hybrid
Pure
Tangible
Good
Services
Inseparability

Services cannot
be separated
from their
providers
Perishability

Services cannot
be stored for
later sale or use
Intangibility

Services cannot
be seen, tasted,
felt, heard, or
smelled before
purchase
Variability

Quality of
services depends
on who provides
them and when,
where, and how
Services
Inseparability

Increase
productivity of
providers
Perishability

Match supply
and demand
Intangibility

Use cues to
make it tangible
Variability

Standardize
service
production
& delivery
Service Differentiation
Offer
Delivery
Image
Determinants of Service Quality
7 Reliability
7 Responsiveness
7 Assurance
7 Empathy
7 Tangibles
Service
Excellence
7 Strategic Concept
7 Top-Management Commitment
7 High Standards
7 Monitoring Systems
7 Satisfying Customer Complaints
7 Satisfying Both Employees & Customers
7 Managing Productivity
Complaint Resolution
7 Hiring Criteria & Training for Employees
7 Develop Guidelines for Fairness
7 Remove Complaint Barriers
7 Analyze Types & Sources of Complaints
Objectives
7 Setting the Price
7 Adapting the Price
7 Initiating & Responding to Price Changes
Types of Costs

Total Costs
Sum of the Fixed and Variable Costs for a Given
Level of Production


Fixed Costs
(Overhead)
Costs that dont
vary with sales or
production levels.

Executive Salaries
Rent

Variable Costs

Costs that do vary
directly with the
level of production.

Raw materials

Pricing Methods
7 Markup Pricing
7 Target Return Pricing
7 Perceived Value Pricing
7 Value Pricing
7 Going-Rate Pricing
7 Sealed-Bid Pricing
Some important pricing definitions
7 Utility: The attribute that makes
it capable of want satisfaction
7 Value: The worth in terms of
other products
7 Price: The monetary medium of
exchange.
Value Example: Caterpillar
Tractor is $100,000 vs. Market
$90,000
$90,000 if equal
7,000 extra durable
6,000 reliability
5,000 service
2,000 warranty
$110,000 in benefits -
$10,000 discount!
Psychological Pricing
7 Most Attractive?
7 Better Value?
7 Psychological reason to price
this way?
A
32 oz.
$2.19
B
26 oz.
$1.99
Assume Equal Quality
Discriminatory Pricing
Time
Product-form
Customer Segment
Location
Objectives
7 Work Performed by Marketing Channels
7 Channel-Design Decisions
7 Channel-Management Decisions
7 Channel Dynamics
How a Distributor Reduces the
Number of Channel Transactions
= Customer
= Manufacturer
A. Number of contacts
without a distributor
M x C = 3 X 3 = 9
1
3
2
4
5
6
7
8
9
How a Distributor Reduces the
Number of Channel Transactions
= Distributor = Customer
= Manufacturer
B. Number of contacts
with a distributor
M x C = 3 + 3 = 6
Store
1
2
3
4
5
6
Distribution Channel Functions
Ordering
Payments
Communication
Transfer
Negotiation
Financing
Risk Taking
Physical
Distribution
Information
Customers Desired Service Levels
7 Lot size
7 Waiting time
7 Spatial convenience
7 Product variety
7 Service backup
Channel Management Decisions
Selecting
F
E
E
D
B
A
C
K

Motivating
Training
Evaluating
Types of Vertical Marketing Systems
Corporate
Common Ownership at Different
Levels of the Channel
Contractual
Contractual Agreement Among
Channel Members
Administered
Leadership is Assumed by One or
a Few Dominant Members
Conventional Distribution Channel vs.
Vertical Marketing Systems
Vertical
marketing
channel
Manufacturer
Retailer
Conventional
marketing
channel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
W
h
o
l
e
s
a
l
e
r

Causes of Channel
Conflict
7 Incompatibility
7 Difference in Perception
7 Dependence
Legal & Ethical Issues in
Channel Relations
7 Exclusive Dealing
7 Exclusive Territories
7 Tying Agreements
7 Dealers Rights
Objectives
7 Retailing
7 Wholesaling
7 Market Logistics
Four Levels of Retail Service
7 Self-service
7 Self-selection
7 Limited-service
7 Full-service
Classification Of Retailer Types
Specialty Stores
Department Stores
Supermarkets
Convenience Stores
Off-Price Retailer
Superstores
Catalog Showroom
Wide Variety of Product Lines i.e. Clothing, Home Furnishings,
& Household Items
Wide Variety of Food, Laundry, & Household Products
Limited Line of High-Turnover Convenience Goods
Inexpensive, Overruns, Irregulars, and Leftover Goods
Large Assortment of Routinely Purchased Food & Nonfood
Products, Plus Services
Broad Selection, Fast Turnover, Discount Prices
Narrow Product Line, Deep Assortment
Store Type Length and Breadth of Product
Assortment
Discount Stores Broad Product Line, Low Margin, High Volume
Types of NonStore Retailing
Direct Selling
Direct Marketing
Buying Services
NonStore Retailing
Accounts for More Than
12% of All Consumer
Purchases, and is
trending up.
Automatic Vending
Low Price
Low Status
Low Margin
Mid Price
Mid Status
Mid Margin
High Price
High Status
High Margin
Wheel of Retailing
Why are Wholesalers Used?
Wholesaler
Functions
Management
Services & Advice
Selling and
Promoting
Market
Information
Buying and
Assortment Building
Risk Bearing
Bulk Breaking
Transporting
Financing Warehousing
Goals of the Logistics System
Provide a Targeted Level of Customer Service at the Least Cost.
Maximize Profits, Not Sales.
Higher Distribution Costs/ Higher
Customer Service Levels
Lower Distribution Costs/ Lower Customer
Service Levels
Inventory
When to order
How much to order
Just-in-time
Costs
Minimize Costs of
Attaining Logistics
Objectives
Warehousing
Storage
Distribution
Order Processing
Submitted
Processed
Shipped
Logistics
Functions
Transportation
Water, Truck,
Rail,
Pipeline & Air
Logistics Systems
Rail
Nations largest carrier, cost-effective
for shipping bulk products, piggyback
Truck
Flexible in routing & time schedules, efficient
for short-hauls of high value goods
Water
Low cost for shipping bulky, low-value
goods, slowest form
Pipeline
Ship petroleum, natural gas, and chemicals
from sources to markets
Air
High cost, ideal when speed is needed or to
ship high-value, low-bulk items
Transportation Modes
1. Speed.
2. Dependability.
3. Capability.
4. Availability.
Checklist for Choosing
Transportation Modes
Rating Transportation Modes





Rail 3 4 2 2 3
Water 4 5 1 4 1
Truck 2 2 3 1 4
Pipeline 5 1 5 5 2
Air 1 3 4 3 5

Source: See Carl M. Guelzo; Introduction to Logistics Management Englewood Cliffs, NJ:
Prentice Hall, 1986), p. 46.
(Door-to-
door
delivery
time)
(Meeting
Schedules
on Time)
(Ability to
Handle
Various
Products)
(No. of
Geographic
Points
Served)
(Per
Ton-
Mile)
Speed Dependability Capability Availability Cost
Advertising
Personal Selling


Any Paid Form of Nonpersonal
Presentation by an Identified
Sponsor.
Sales Promotion


Short-term Incentives to
Encourage Trial or Purchase.
Public Relations
Direct Marketing


Direct Communications With
Individuals to Obtain an
Immediate Response.


Protect and/or Promote
Companys Image/products.


Personal Presentations.
The Marketing Communications Mix
Message Problems
Selective Attention
Selective Distortion
Selective Retention
Effective Communications
Step 1. Identifying the Target Audience
Purchase
Conviction
Preference
Liking
Knowledge
Awareness
Step 2. Determining the Communication Objectives
Buyer Readiness Stages
Step 3. Designing the Message


Message Source
Expertise,
Trustworthiness,
Congruity




Message Format
Layout,
Words, & Sounds,
Body Language




Message Structure
Draw Conclusions
Argument Type
Argument Order




Message Content
Rational Appeals
Emotional Appeals
Moral Appeals



Step 4. Select Communications Channel



Nonpersonal Communication
Channels




Personal Communication
Channels



Step 5. Establish the Budget

Competitive
Parity
Objective
& Task
Affordable
% Of
Sales

Step 6. Decide on Communications Mix

Advertising
Public, Pervasive, Expressive, Impersonal
Sales Promotion
Communication, Incentive, Invitation
Public Relations & Publicity
Credibility, Surprise, Dramatization
Personal Selling
Personal Confrontation, Cultivation, Response
Direct Marketing
Nonpublic, Customized, Up-to-Date, Interactive

Step 7. Measure Results


Step 8. Manage the IMC Process

Factors in Developing Promotion Mix
Strategies
Product Life-
Cycle Stage
Type of
Product/
Market
Push vs.
Pull Strategy
Buyer/
Readiness
Stage
Push Versus Pull Strategy
Producer
Producer
Interme-
diaries
Marketing
activities
End users
Marketing
activities

Demand
Interme-
diaries
Demand
Push Strategy
Pull Strategy
End users
Marketing activities
Demand
Objectives
7 Developing & Managing an Advertising Program
7 Deciding on Media & Measuring Effectiveness
7 Sales Promotion
7 Public Relations

Informative Advertising
Build Primary Demand

Persuasive Advertising
Build Selective Demand
Comparison Advertising
Compares One Brand to Another
Reminder Advertising
Keeps Consumers Thinking
About a Product.
Advertising Objectives
7 Specific Communication Task
7 Accomplished with a Specific Target Audience
7 During a Specific Period of Time
Advertising Budget Factors
Stage in the
Product Life Cycle
Market Share &
Consumer Base
Competition &
Clutter
Advertising
Frequency
Product
Substitutability
Profiles of Major Media Types
Newspapers
Advantages: Flexibility, timeliness; good local market coverage;
broad acceptance, high believability

Limitations: Short life; poor reproduction quality; small
pass-along audience
Television
Advantages: Combines sight, sound, motion; high attention;
high reach; appealing to senses

Limitations: High absolute costs; high clutter; fleeting exposure;
less audience selectivity
Direct Mail
Advantages: Audience selectivity; flexibility, no ad compe-
tition within same medium; allows personalization

Limitations: Relative high cost; junk mail image
Radio
Advantages: Mass use; high geographic and demographic
selectivity; low cost

Limitations: Audio only; fleeting exposure; lower attention;
nonstandardized rates; fragmented audiences
Magazines
Advantages: High geographic and demographic selectivity;
credibility and prestige; high-quality reproduction;
long life; good pass-along readership

Limitations: Long ad purchase lead time; waste circulation;
no guarantee of position
Outdoor
Advantages: Flexibility; high repeat exposure; low cost;
low message competition

Limitations: Little audience selectivity; creative limitations
Profiles of Major Media Types
Advertising Strategy
Message Execution
Typical
Message
Execution
Styles
Testimonial
Evidence
Slice of Life
Scientific
Evidence
Lifestyle
Technical
Expertise
Fantasy
Musical
Personality
Symbol
Mood or
Image
Turning the Big Idea Into an Actual Ad to Capture
the Target Markets Attention and Interest.
Advertising Evaluation
Advertising Program Evaluation
Communication Effects

Is the Ad Communicating Well?
Sales Effects

Is the Ad Increasing Sales?


Why the increase in Sales Promotion?
7 Growing retailer power
7 Declining brand loyalty
7 Increased promotional sensitivity
7 Brand proliferation
7 Fragmentation of consumer market
7 Short-term focus
7 Increased managerial accountability
7 Competition
7 Clutter
Long-Term Promotional Allocation
0
10
20
30
40
50
60
1986 88 90 92 94 1996
Year
%
t

o
f

t
o
t
a
l

-

3

y
r
.
M
A

Trade Promo
Media Adv
Cons. Promo
Cox Direct 19th Annual Survey of Promotional Practices
Channels of Sales Promotions
MANUFACTURER
RETAILER
Trade
Promotions
CONSUMER
Consumer
Promotions
Push
Push
Pull
Retail
Promotions
Consumer Promotion
Consumer-Promotion
Objectives
Consumer-Promotion Tools
Point-of-Purchase
Displays
Premiums
Price Packs
Cash Refunds
Coupons
Samples
Patronage
Rewards
Games
Sweepstakes
Contests
Advertising
Specialties
Patronage
Rewards
Entice Consumers to
Try a New Product
Lure Customers Away
From Competitors Products
Get Consumers to Load Up
on a Mature Product
Hold & Reward Loyal
Customers
Consumer Relationship
Building
Deal Proneness,
Liechtenstein, Burton, &
Netemeyer, Journal of
Retailing, Summer 1997
7 Examination of deal proneness
among consumers in a
supermarket setting
7 Surveys & Grocery Receipts
used
7 Eight types of deals:
7 Cent-off, One-free, Gift,
Display, Rebate, Contest,
Sale, & Coupon
Deal Proneness,
Liechtenstein,
Burton, & Netemeyer
Cluster analysis yielded two
interpretable results:
+ 49% are deal prone, 51% not
+ 24% High Deal prone, 50%
intermediate, 26% deal insensitive
7 Deal-proneness a generalized
construct - (crosses type of
promotion)
7 Younger & Less educated more
likely to be deal prone
Trade-Promotion Objectives
Trade-Promotion Tools
Specialty
Advertising
Items
Contests
Free Goods
Buy-Back
Guarantees
Allowances
Price-Offs
Patronage
Rewards
Push Money
Discounts
Premiums
Displays
Persuade Retailers or
Wholesalers to Carry a Brand
Give a Brand Shelf Space
Promote a Brand in
Advertising
Push a Brand to Consumers
Trade Promotions
Business-Promotion
Objectives
Business-Promotion
Tools
Generate Business Leads
Stimulate Purchases
Reward Customers
Motivate Salespeople
Conventions
Trade Shows
Sales Contests
Business-to-Business Promotion
Major Public Relations Tools
Special
Events
Written
Materials
Corporate
Identity
Materials
Speeches
News
Audiovisual
Materials
Public
Service
Activities
Web Site