Low prizing is not strategy at all.

Advertizing and sales is important

History of Marketing:

Is very new in the way we do it today

First marketing books: 1904? Of distribution. Different ways of retail. Advertizing.

WarW2: more money to expend. Spending more money, they went to the suburbs,
and they build more shops, then malls.

1960, 70: new things in marketing

1980: inflation.
For the first time they start to competing. To have profits. To earn money someone
must loose.

Strategic marketing plan. What are you offering. Who really want that. How many
people want that. How many can afford that. If you can answer that questions you will
be successful .

8-31-09

hotels and restaurants: difficult to run in trouble

marketing definition and how we use it:

strategic marketing planning, examples:

Williamsburg. Years ago..not organized, marketing people asks them questions. Who
come? and then they go to Rockefeller foundation. To make it profitable: Not only
historic site, but also tourist destination. They sells the passport for all the buildngs.
Fist time: 40 million range

University of Richmond:

Very good presentations asking for money.

In order to achieve that goal.

Holistic marketing!!!

Marketing is a function, not only a department

Mkt use the knowledge of psychology, sociology, economy, ect.

Fx: generating profit.

Example of silos. Not separate departamnets!! “I only do this, you that”

That’s literally imposible for markting!!!

We can’t do the job independentrly.

We have to make sure we are satisfying the consumer

Definition: (working definition). It’s very difficult to define marketing because it

involves many things:

“Human activity that recognizes needs and wants through an exchange process “

3 major elements:

1) Human activity. We think rational. How we decide to buy something (people can
buy the same thing because of different reasons)

2) What’s being exchange

3) How you generate this exchange process (how you make it happens)

08-02-09

Another aspect of the definition:

2)What’s is being exchange: product, service or ideas. But the real thing we exchange
the VALUE it give us!! We buy the value of the product.

Perceived vs. reality

We buy if we perceive value in the product

example of the A flu.

3) Creating exchange relationships:

you have to generate repeat purchases. In every exchange there is something fiscal,
social, and economic. I need to understand what is important to the customer. Some
things we can’t change, but we have to create more value in other things.

Physical: temperature, music, parking, ect

Social: Friendly employees, some will pay more for good customer service. How
customers fell buying there. To get back to the community (help the community)

Economic: the dollar price. What you have to give up in order to get what you want.
For example…to buy more cheap go to a bad place.
Assigment:

Choose some retail establishment: example: a shop. Create an evaluation grade. List all
the physical variables, the social variables, and the economic variables.

Create a liker scale, what ever we want. From really good, to really bad.

Like: Parking: very good

And decide which of them are more important for the success of the store.

Based on that we have to come up with some suggestion that we believe the store can
make more money. With the greatest economic impact. Chose just one. Must be
reasonable.

09-09-09

Marketing management:

Analysis, planning, implementation and control of programs, designed to bring about

desire exchanges with target markets, for the purpose of achieving organizational
goals

09-14-09

Where is the demand? Most businessmen will say: my customers. But there are many
other people who could be buying my products. I need to do something. I need a
broader market prospective.

State on mind: all this people are in our market

1)Negative state of mind: people who don’t like what I’m offering. We use
Convertional marketing. From negative to neutral or positive if we can. They should
be exchanging, but they don’t like you. (example of militaty).

2)Not interested: stimulation marketing. Most new products fall in this category.
People don’t know the product.

3)Latent demand: is inside, deep, but we are not thinking about. Example of
technology (ipod).

4)People not buying as much as they could: remarketing. Reinvent. Something is

working, but not as it could.

5) we have all the demand as we want, so we want to maintain what we have:

Maintenance Marketing. You don’t get larger, just maintain what we have.

6) we have too much demand, and that is a negative. We can’t support that.
Demarketing: We have to de-emphasis the marketing. University of Richmond is an
example. I have to decide whom I’m not going to supply. Sometimes you have to look
for another supplier for your customer.

7) people who are looking for destroy demand for your product (this is not
competitions): Counter marketing . Like fur industry.

Read “Marketing myopia” first published in Harvard Business Review

09-16-09

Marketing concept:

What that it means to focus on the customer?

Definition: Customer orientation in all aspects of the operations, developing customer

satisfaction, scientific prosed of profitable value and the integration of effort within
and outside the firm and achieving the total system approach.

Product orientation: just developing good products. What book said is wrong. There
are still companies production orientated.

Example of Kevlar

(plan obsolescence: to plan how long the product last)

Sell orientated: promotion, advertising a lot. Focus on I can do.

Let’s figure it out what the customer wants: that’s marketing concept. Not focus only
in product, or in promotion.
How to use it:

First part of definition: to be customer oriented, what can I do to make my business

more favorable to the customer. Specific things to do:

Come up with a generic need definition for your business. Make sure you understand
what is the basic need to satisfy. (example of the indoor tennis facilities in Richmond,
to reduce costs they reduce air conditioning). Don’t loose that! That’s prity important.

Focus target market (segment): not everything is for all people. Generate several focus
markets (Because not all the people buy the same product for the same reason).
Differentiated message for each target group.

Differential advantage strategy: every exchange produced must be perceived as

different and better for me. Why people are buying from me?
Consumer research: we can do it without expending any money, or low money.
(example of bicycle shop in Richmond, and flyers).

Profitable exchange: generally people talk about 2 ways to increase profit:

1) rice prices
2) win more customers

there are another ways (resizes of packaging)

IMPORTANT: The purpose of the marketing orientated is a long run profit

optimization.

Systematic approach internal and external: is not a marketing department issue. All
the company must work with this idea.

09-21-09

two things to be successful:

1) big mouth advertizing

2) ? business

Ethics:

1) Database marketing: Create numbers, creating date. It is a decision tool. Give

sense to numbers to take better decisions. Where to put your resources.
Some people sale that information.
What about Privacy! Credit cards, blockbuster, facebook, ect.
The good thing is they can offer better products for us.
2) Green marketing: “the greening of America”. Green marketing: do the right
thing to do, don’t matter if is more costly. We have to ask if we are adding value
to something. Not purely in a profitable point of view., but to protect the
environment. We have to think in facts
3) Health care. Difficult dilemma for marketing. Macro-micro dilemma. We have
to care about people, but still be profitable.

Advertising is not unethical, individuals are unethical. Not things.

Marketing environment. There are marketing variables we can control (internal),

and external (out of your control), like competition, changes in economy,
consumer changes, ect. We have to do an environmental threat analysis. Every
business can do this, in matter how small they are. Evaluate what is out there, that
I can’t change, and will have a huge impact for me. You have to control the impact.
We have to try to take advantage of that I can’t modify.
 09-23-09

Planning: long term plan. You can do little changes, but the strategic plan doesn’t
change. Always must be plans to grow. (Larger or maintenance marketing).
Growth mentality! If not you are going backwards.

Processing information: to become a creative in marketing

Grid to how to come up with a good idea: decision process:

From easy and cheap to harder and expensive:

1) Intensive:

Market penetration. If you want to grow you have to ask yourself is you can get
more with your current customers and the same product? You can make bigger
packages. That’s why there is a floweriest in the grocery. Clients are already there,
and you can make more profit with them! Most of these strategies are not new. If
this doesn’t work:

Market development: same products, new markets. For example, geographic

expansion. Sell in other states, other countries. Other advertising media. Promote
new uses. (example of the baking soda, for the fridge odors.)

Product development: create new product for the same market. Or make some
changes to the product. Example of cherry coke.

2) Integrated:

solutions in our market environment. Distribution chain. backward or forwards

integration. one of the most successful is synergistic integration. I’m going to do
better all together than separately.

4) Diversification:

Going to something totally different. The big risk is management.

“Big business blunders” book to read.

09-28-09

Segmentation: the most powerful tool we have in marketing. A group of people has
determined that you have that they want. We need a strategy for that group of
people. If you have something different you can be successful. In you are in
 business and you are doing it well, someone else might offer a better product
(competition).

Marketing segmentation definition: Process of taking the total heterogeneous

markets for a product and dividing in into several submarkets, or segments, each
which stet to be homogeneous in all significant aspects.

Segments are not the same, but must be homogeneous in the meaningful aspects.
Variables will make a difference to buy a type of product.

Segmentation methods:

1) Geographic segmentation: based in where people live. But people won’t buy a
products just because they live in some place
2) Demographic segmentation: the most widely use. Because they are easy to
manage. We have many different variables and are easy to get. Are not a
significant variable. Are very important for promotion and advertising, but not
important to assure the sales. They are not a reason.
3) Psychographics: styles of life. Who and how e are determines a lot what are we
going to do. This is very determining.

Those 3 are descriptive variables (who)

09-30-09

(Maintain traditions, but create new things. Companies have a personality. )

3 different behavioral variables:

1) Benefit segmentation: benefits they received. This is the most significant

variable. Example of Crest: Number 1 in 3 years! Because of the benefit of
prevent cavities. Example of AcquaFresh and the 3 colors for the 3 benefits.
2) Volume segmentation: How much people use it. Heavy users. Could not stay
alone. Is always used with demographics. Example of Bear Industry. Phillip
Morris buy Miller: The Champagne of bottle bears. 80/20 principle. The 80% of
your sales are from the 20% of the customers. They change into the men’s beer.
Transformation. And then they came up with Miller light for women.

Buyer Behavior:

BtoB: Every product sell it for resells or product another product.

Final use: final consumer

Behavioral trades:

1) Economical element: Price is not the unique variable important for consumer.
 2) Stimulus Response Model: Pavlov. Stimulus-Intervening variables-response (S-
O-R), not more just S-R. Example of Burger King: Are you hungry now? People
buy pizza.
The variables determine the response.

10-05-09

3) Cognitive model: Interpretation and organization of sensory data. We maintain

a balance in these cognitive maps. When we receive negative information, we
start going imbalance. When a piece of advertize don’t support what we
already think, we need to trust the source. If not we imbalance. Framer
reference. Incongruent information. Cognitive consistency, cognitive
dissonance: something negative after you made something (the book said that).
Tension, you don’t feel good. Don’t happen just after the purchase, can be in
the entire process. When you go to a shop with information, to buy something
and the seller tell you…this is better because…that is dissonance!
4) Psychoanalytic: Ego, and Super ego. Freud. Subconscious motivation. Most of
our decision making come from our subconscious. We make the decisions in
the conscious state, not in the unconscious, but some information won’t come
up from the subconscious.

Gestalt and ?: Holistic person. We think about the past, present and future: Perception.
That’s the reality.

Perception process (we control it): selective exposure, selective attention, selective
comprehension (assign a meaning to it), selective retention, selective action.

Come 8:45 . bring pen or two. Nothing more. Some essays. Don’t memorize.
Application orientated. Multiple choices.

No demographics

No laws environment

MID TERM EXAM: grade 78

10-14-09

Marketing mix: 4Ps. They have to fit. All have impact to the other.
PRODUCT

What does it mean: Whatever the customer tells me he is buying.

Product life cycle: is a allegory of human life cycle. The product must change, because
the entire environment in changing. We have to know where is the industry in this
cycle. Differences to the book. Is has just 4 stages, and different names. We wont use
the one of the book. Market development vs. Introduction (you have to build the
market, not just introduce). Increase sales not necessarily increase profit. See
differences between low and high learning products. If there is a low learning product
we need to have the capital to sustain yourself.

Learning requirements:

New product introduction:

Product abandonment:

Branding:

10-26-09

Group:

List of needs or categories we have to read for the project: with the group we have to
combine. Take all the strategic decisions. And who’s going to write that? U have to
write what the group decided. Get back together and gathering the staff together.

The only way to maintain profit per unit is to increase the price, because the costs to
maintain the same level of sales I need more money.

10-28-09

Innovation adoption model: page 385 of the book.

Diffusion of innovation. New first time buyers respond different in the product life
cycle. 5 categories: the Innovators will be the first to buy the product, often are
opinion leaders. The left category are “lagers”.

How to allocate a resource when you are not earning profit returns pr unit, but the
level of sales is high

Product abandonment: you need to come up with a number of expect profit, if you
don’t reach that level of profit, you will have to abandon the product. You have to look
to the external variables,
11-02-09

Every new product: some learning must take place

We don’t want to loose money, so we have to get out from the first stage as quick as
possible. The innovators will be buying first, easily.

Types of learning:

1) Use behavior learning: physical behavior, they have to experience (computers,

ipods, food: prunes.
2) Roll perception learning: Customers have to perceive themselves different
(fashion, cars, prepared food: mum is the responsible for the meals).
3) Cost-value relationship.

New product development process: the purpose of this is to reduce the risk of failure.

Branding:

Name, logo, color, everything that identifies what you do. You have to expend a lot of
money to have a logo, because you have to show it a lot in advertizing.

University of Richmond: it suppose to speak to you, must have a message, a story. Fit
the image of an English university, with all the schools separate.

Sense of security, identification, helps to develop a new product.

P&G they don’t use family branding. They want the whole marketing.

Most of the branded products are not manufactured by the brand.

Characteristics of a good brand:

Say something about the products use, quality, or function. Should be easy to
pronounce spell and remember.

If you are not going to have that, must be part of all your strategy.

Should be distinctive, different.

Versatility of the brand, how it can be work in different media. Family branding.

Classification of goods: see the book.

Pricing:

Non-dollar price competition:

Is not just about the dollar price. There are a lot of another costs and values, in the
price.

Objective of pricing: returnable investment (R on I)., stability, meet or prevent

competition: price position. Its illegal to low prices without other business reasons
but eliminate the competition. Maximizing profits. Drives all my decisions.

Prices Strategies: must take care of the objective. Objective is get into the market as
soon as possible: the strategy is Price penetration (you offer your product for a lower
price than expected): this is not a low price strategy. Then you have to rise your price
to the level of competitors.

Other strategy in the opposite: charge a really high price: price skimming (skim the
cream): the objective is to reach the top market of this product category. You have to
come out with a exclusive product. You have to maintain the image and the quality
very high. (be careful with the book).

Early cash recovery: you are charging a relative high price, and anyone is going to
reduce it. You will try to recover the development expenses. You use innovators,
early adopters, that will pay more to have is sooner.

Product line pricing: you might offer different products with different prices.

This is a promotional strategy, not price strategy: Loss leader: much lower price that
expected, with the purpose to getting into the store. This must be pat of the
promotional budget.

Methods of pricing:

How are you going to come up with the price?

Cost plus: add some percentage to the cost. This is not a good strategy, because you
don’t know what people are willing to pay, and also competition may have a lower
price.

Break ? analysis :

Set your Price in relationship to the market.

Method based on supply demand:

Add even pricing: $9,99, that’s a psychological issue, also colors

Channels of distribution:

If u need space in the shelves, you have to displace someone’s product. For that you
have to demonstrate the seller that you are going to product more turnovers. You
have to give more of something. For example cooperate advertizing. You have value
when you start having high turnover.

Costs: the cost to move of channel is very costly. The channel is a chain, and everyone
has a specific function. It’s a support system.

Outlet malls, stores: saving money for buying the same things. There are overstocks,
and they sell it to the outlet store.

Skipping the middleman cost you money:

Vertical vs. Horizontal (independent) channels: read from the book. Who has
economic power can manage the entire channel. Franchise is another example of
vertical channel.

Communications:

Pubic relations, advertizing. Is Unbelievable expensive, really important, not very

effective.

Sometimes enterprises outsource this. But they don’t know our customers as well as
we do. We have to understand what are the things we have to ask to success., in order
to communicate the message we want.

Look at the communication chard (decision process): to decide how to promote.

You have to ask: what is what I want to get out of it? What is my objective?

Advertizing purpose may be: give information, looking for support, make people go to
buy my product.

What are we going to put in it?

The sender: the one who has something to say. Most communication doesn’t have a
person, a face. In your mind there is always a sender. Credibility, expert or knowledge,
and trust wording (most important things about the sender). This help people to
understand it, believe it. Must be some reason to pay attention to the.

Encoding situation: (comes from the military term): putting your message in a
particular order. You have to stop when your message has been communicated.

You have to think for yourself, don’t let the advertizing company do whatever, is a
waste of my money.

Channel: vehicle of communication (radio, TV, ect)

The message is the graphic representation. Sometime the channel comes first
(because is the one you are able to pay).
Sometime we don’t have the money to use the appropriate channels.

What time of search process? Are they really looking for? Or not at all? How much
effort do you have to do to get your attention? Is the market passive or active
searcher?

The receiver: the ones to responds. They might respond negative. When you
communicate always something come back to you. Do I understand it properly, I am
misunderstanding it?

Example of ad about orange juice. The market was saturated, so the campaign didn’t
work. Before doing a campaign you have to find out if you have still potential market.

Noise: Anything that reduces the effectiveness of the communication. The sender and
the receivers must understand the message in the same way.

Ads must be really simple!!!!

11-18-09

Promotion model: is not really a model

Includes 4 things:

Advertising:

Public relations (publicity):

Personal Selling:

Sales Promotion:

To think what to use, we have to think about: Efficiency and Effectiveness (both in the
same time). Is this going to work? Do I afford to do it?

Advertising: create awareness of who you are. It is a variable expense. Is hard to

evaluate. 3 basic functions of an ad:

1) Attention
2) Information
3) Persuasion

Purpose: To inform and or persuade. But you can’t do it if you don’t get their attention.
But only get their attention is not what we need. (Example of Clio Awards).

Ways to get attention:

Blank space in the media.

Sex

Information: is the easiest one. We are all interest in being informed. The problem is
the misunderstood message.

Persuasion: most of our communication is persuasive. Is trying to get to believe. High

integrity is very persuasive.

Underdog advertising: “We try harder”, when you are second.

Reference group ad: If I want to be like that, I have to buy that.