MARKETING MANAGEMENT

Unit 1 - Understanding marketing management

Chapter 1 - Defining marketing for the new realities

THE VALUE OF MARKETING

• Financial success often depends on marketing ability.
• Successful marketing builds demand for products and services, which, in turn, creates jobs.
• Marketing builds strong brands and a loyal customer base, intangible assets that contribute heavily to
the value of a firm.
• There is little margin for error in marketing.

THE SCOPE OF MARKETING

WHAT IS MARKETING?
• Marketing is about identifying and meeting
human and social needs. One of the shortest
good definitions of marketing is “meeting
needs profitably.” American Marketing
Association (AMA) formaldefinition:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings
that have value for customers, clients, partners, and society at large.

• Marketing management is the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating superior
customervalue.

WHAT IS MARKETED?
Marketers market 10 main types of entities:
1. Goods
Physical goods constitute the bulk of most countries’ production and marketing efforts.
2. Services
As economies advance, a growing proportion of their activities focuses on the production of
services.
Services include the work of airlines, hotels, car rental firms, and accountants, bankers,
lawyers, engineers, doctors, software programmers, and management consultants. Many
market offerings mix goods and services, such as a fast-food meal.
3. Events
Marketers promote time-based events, such as major trade shows, artistic performances, and
company anniversaries.
4. Experiences
By orchestrating several services and goods, a firm can create, stage, and market experiences.
5. Persons
Artists, musicians, CEOs, physicians, high-profile lawyers and financiers, and other
professionals often get help from marketers.
6. Places
Cities, states, regions, and whole nations compete to attract tourists, residents, factories, and
company headquarters.
Place marketers include economic development specialists, real estate agents, commercial
banks, local business associations, and advertising and public relations agencies.
7. Properties
Properties are intangible rights of ownership to either real property (real estate) or
financial property (stocks and bonds). They are bought and sold, and these exchanges
require marketing..
8. Organizations
 Museums, performing arts organizations, corporations, and nonprofits all use marketing to
boost their public images and compete for audiences and funds.
Some universities have created chief marketing officer (CMO) positions to better manage their
school identity and image.
9. Information
Information is essentially what books, schools, and universities produce, market, and distribute
at a price to parents, students, and communities.
10. Ideas
Every market offering includes a basic idea.

WHO MARKETS?
A marketer is someone who seeks a response (attention, a purchase, a vote, a donation) from another
party, called the prospect.
If two parties are seeking to sell something to each other, we call them both market.

Marketers are skilled at stimulating demand for their products, but that’s a limited view of what they do.
They also seek to influence the level, timing, and composition of demand to
meet the organization’s objectives. Eight demand states are possible:
1. Negativedemand Consumers dislike the product and may even pay to avoidit.
2. Nonexistentdemand Consumers may be unaware of or uninterested in theproduct.
3. Latentdemand Consumers may share a strong need that cannot be satisfied by an
existingproduct.
4. Decliningdemand Consumers begin to buy the product less frequently or not atall.
5. Irregulardemand Consumer purchases vary on a seasonal, monthly, weekly, daily, or
even hourlybasis.
6. Fulldemand Consumers are adequately buying all products put into themarketplace.
7. Overfulldemand More consumers would like to buy the product than can besatisfied.
8. Unwholesomedemand Consumers may be attracted to products that have undesirable
socialconsequences.
In each case, marketers must identify the essential cause(s) of the demand state and decide a
plan of action to shift demand to a more desired state.

Markets
Market → a collection of buyers and sellers who transact over a particular product or product class.

- Manufacturers go to resource markets (raw material markets, labor markets, money

markets), buy resources and turn them into goods and services, and sell finished products to
intermediaries, who sell them toconsumers.
- Consumers sell their labor and receive money with which they pay for goods andservices.
- The government collects tax revenues to buy goods from resource, manufacturer, and
intermediary markets and uses these goods and services to provide publicservices.
Each nation’s economy, and the global economy, consists of interacting sets of markets linked
through exchange processes. Marketers view sellers as the industry and use the term market to
describe customer groups.
They talk about need markets (the diet-seeking market), product markets (the shoe market),
demographic markets (the “millennium” youth market), geographic markets (the Chinese
market), or voter markets, labor markets, and donor markets.

- Sellers send goods and services and communications such as ads and direct mail to themarket;
- in return they receive money and information such as customer attitudes and salesdata.
- The inner loop shows an exchange of money for goods andservices;
- the outer loop shows an exchange ofinformation.

Key customer markets

Consider the following key customer markets:
● ConsumerMarkets
Companies selling mass consumer goods and services, establish a strong brand image by
developing a superior product or service, ensuring its availability, and backing it with
engaging communications and reliable performance.

● Business Markets
Companies selling business goods and services often face well-informed professional
buyers skilled at evaluating competitive offerings.
● Global Markets
Companies in the global marketplace navigate cultural, language, legal, and political
differences while deciding which countries to enter, how to enter each, how to adapt product
and service features to each country, how to set prices, and how to communicate in different
cultures.
● Nonprofit and Governmental Markets
Companies selling to non-profit organizations with limited purchasing power such as
churches, universities, charitable organizations, and government agencies need to price
carefully.

CORE MARKETING CONCEPTS

● NEEDS, WANTS, ANDDEMANDS
Needs: the basic human requirements such as for air, food, water, clothing, and shelter.
Wants: specific objects that might satisfy the need.
Demands: wants for specific products backed by an ability to pay.
Companies must measure not only how many people want their product, but also how many are willing
and able to buy it.
Marketers do not create needs: needs pre-exist marketers.
Some customers have needs of which they are not fully conscious or cannot articulate. We can
distinguish 5 types of needs:
1. Statedneeds (The customer wants an inexpensivecar.)
2. Realneeds (The customer wants a car whose operating cost, not initial price, islow.)
3. Unstatedneeds (The customer expects good service from thedealer.)
4. Delightneeds (The customer would like the dealer to include an onboard GPSsystem.)
5. Secretneeds (The customer wants friends to see him or her as a savvyconsumer.)
To gain an edge, companies must help customers learn what they want.
● TARGET MARKETS, POSITIONING, ANDSEGMENTATION
Marketers identify distinct segments of buyers by identifying demographic, psychographic, and
behavioral differences between them.
They then decide which segment(s) present the greatest opportunities.
For each of these target markets, the firm develops a market offering that it positions in target
buyers’ minds as delivering some key benefit(s).

● OFFERINGS ANDBRANDS
Companies address customer needs by putting forth a value proposition, → a set of
benefits that satisfy those needs. The intangible value proposition is made physical by an
offering, which can be a combination of products, services, information, and experiences.
A brand is an offering from a known source.

● MARKETING CHANNELS → To reach a target market, the marketer uses 3 kinds of

marketing channels: Communication channels deliver and receive messages from target buyers
and include newspapers, magazines, radio, television, mail, telephone, smart phone, billboards,
posters, fliers, CDs, audiotapes, and theInternet.
Distribution channels help display, sell, or deliver the physical product or service(s) to the buyer or
user.
These channels may be direct via the Internet, mail, or mobile phone or telephone or indirect
 with distributors, wholesalers, retailers, and agents as intermediaries.
To carry out transactions with potential buyers, the marketer also uses service channels that
include warehouses, transportation companies, banks, and insurance companies.
Marketers clearly face a design challenge in choosing the best mix of communication,
distribution, and service channels for their offerings.

PAID, OWNED, AND EARNEDMEDIA

The rise of digital media gives marketers a host of new ways to interact with consumers and customers.
- Paid media allow marketers to show their ad or brand for a fee, include TV, magazine
and display ads, paid search, and sponsorships.
- Owned media are communication channels marketers actually own, like a company or
brand brochure, Web site, blog, Facebook page, or Twitteraccount.
- Earned media are streams in which consumers, the press, or other outsiders voluntarily
communicate something about the brand via word of mouth, buzz, or viral
marketingmethods.
The emergence of earned media has allowed some companies to reduce paid media expenditures.

● IMPRESSIONS ANDENGAGEMENT
Marketers now think of three “screens” or means to reach consumers: TV, Internet, and mobile.
Surprisingly, the rise of digital options did not reduce the amount of TV viewing, in part because 3 of 5
consumers use two screens at once.
Impressions, which occur when consumers view a communication, are a useful metric for
tracking the scope or breadth of a communication’s reach that can also be compared across all
communication types.
The downside is that impressions don’t provide any insight into the results of viewing the
communication.
Engagement is the extent of a customer’s attention and active involvement with a communication.
It reflects a much more active response than a mere impression and is more likely to create value for the
firm.

● VALUE ANDSATISFACTION
The buyer chooses the offerings he/she perceives to deliver the most value, the sum of the tangible and
intangible benefits and costs.
Value is primarily a combination of quality, service, and price (qsp),
called the customer value triad. Value perceptions increase with quality
and service but decrease with price.
We can think of marketing as the identification, creation, communication, delivery, and monitoring of
customer value.
Satisfaction reflects a person’s judgment of a product’s perceived performance in relationship to
expectations.
If performance falls short of expectations, → the customer is disappointed.
If it matches expectations, → the customer is satisfied. If it exceeds them, → the customer is delighted.

● SUPPLYCHAIN
The supply chain is a channel stretching from raw materials to components to finished products
carried to final buyers. Each company in the chain captures only a certain percentage of the total
value generated by the supply chain’s value delivery system. When a company acquires
competitors or expands upstream or downstream, its aim is to capture a higher percentage of
supply chain value. Problems with a supply chain can be damaging or even fatal for a business.

● COMPETITION
Competition includes all the actual and potential rival offerings and substitutes a buyer might consider.

● MARKETINGENVIRONMENT
The marketing environment consists of the task environment and the broad environment.
- The task environment includes the actors engaged in producing, distributing, and promoting
theoffering.
These are the company, suppliers, distributors, dealers, and target customers.
In the supplier group are material suppliers and service suppliers, such as marketing
research agencies, advertising agencies, banking and insurance companies,
transportation companies, and telecommunications companies. Distributors and
dealers include agents, brokers, manufacturer representatives, and others who
facilitate finding and selling to customers.

- The broad environment consists of six components: demographic environment, economic

environment, social-cultural environment, natural environment, technological environment,
and political-legalenvironment.
Marketers must pay close attention to the trends and developments in these and modify their
marketing strategies as needed. New opportunities are continuously emerging that await the right
marketing knowledge and creativity.

THE NEW MARKETING REALITIES

The marketplace is dramatically different from even 10 years ago, with new marketing behaviors,
opportunities, and challenges emerging.

1. TECHNOLOGY
With the rapid rise of e-commerce, the mobile Internet, and Web penetration in emerging
markets, the Boston Consulting Group believes brand marketers must enhance their “digital
balance sheets.”
Massive amounts of information and data about almost everything are now available to
consumers and marketers. Even traditional marketing activities are profoundly affected
by technology.

1. GLOBALIZATION
The world has become a smaller place. New transportation, shipping, and communication
technologies have made it easier for us to know the rest of the world, to travel, to buy and sell
anywhere.
By 2025, annual consumption in emerging markets will total $30 trillion and contribute more than 70
percent of global GDP growt
A staggering 56 percent of global financial services consumption is forecast to come from
emerging markets by 2050, up from 18 percent in 2010. Demographic trends favor developing
markets such as India, Pakistan, and Egypt, with populations whose median age is below 25.
In terms of growth of the middle class, defined as earning more than $3,000 per year, the
Philippines, China, and Peru are the three fastest-growing countries.
Globalization has made countries increasingly multicultural.
Globalization changes innovation and product development as companies take ideas and lessons
from one country and apply them to another.

2. SOCIAL RESPONSIBILITY
Poverty, pollution, water shortages, climate change, wars, and wealth concentration demand our
attention.
The private sector is taking some responsibility for improving living conditions, and firms all
over the world have elevated the role of corporate social responsibility.
The organization’s task is to determine the needs, wants, and interests of target markets and satisfy
them more effectively and efficiently than competitors, while preserving or enhancing consumers’
and society’s long-term well-being.
As goods become more commoditized and consumers grow more socially conscious, some
companies incorporate social responsibility as a way to differentiate themselves from
competitors, build consumer preference, and achieve notable sales and profit gains.

A DRAMATICALLY CHANGED MARKETPLACE

These 3 forces (technology, globalization, and social responsibility) have strongly changed
the marketplace, bringing consumers and companies new capabilities.
The marketplace is also being transformed by changes in channel structure and heightened competition.

NEW CONSUMER CAPABILITIES

Social media is an explosive worldwide phenomenon. Empowerment is not just about technology,
though.
Consumers are willing to move to another brand if they think they are not being treated right or do
not like what they are seeing. Expanded information, communication, and mobility enable
customers to make better choices and share their preferences and opinions with others around the
world.
● Consumers can use the internet as a powerful information and purchasingaid
● Consumers can search, communicate, and purchase on themove
● Consumers can tap into social media to share opinions and expressloyalty
● Consumers can actively interact withcompanies
● Consumers can reject marketing they findinappropriate
●
NEW COMPANY CAPABILITIES
● Companies can use the internet as a powerful information and sales channel, including for
individually differentiated goods
● Companies can collect fuller and richer information about markets, customers, prospects, and
competitors
● Companies can reach customers quickly and efficiently via social media and mobile marketing,
sending targeted ads, coupons, and information
● Companies can improve purchasing, recruiting, training, and internal and external
communications
● Companies can improve cost efficiency
●
CHANGING CHANNELS
One of the reasons consumers have more choices is that channels of distribution have changed as a
result of retail transformation and disintermediation.
- Retail transformation → Store-based retailers face competition from catalog houses; direct-
mail firms; newspaper, magazine, and TV direct-to- customer ads; home shopping TV; ande-
 commerce.
In response, entrepreneurial retailers are building entertainment into their stores with
coffee bars, demonstrations, and performances, marketing an “experience” rather than a
product assortment.
- Disintermediation → Early dot-coms such as Amazon.com, E*TRADE, and others
successfully created disintermediation in the delivery of products and services by
intervening in the traditional flow ofgoods.
In response, traditional companies engaged in reintermediation and
became “brick-and-click” retailers, adding online services to their
offerings.
Some with plentiful resources and established brand names became stronger contenders than pure-
click firms.
HEIGHTENED COMPETITION
The rise of private labels and mega-brands and a trend toward deregulation and privatization have also
increased competition.
- Private labels → Brand manufacturers are further buffeted by powerful retailers that
market their own store brands, increasingly indistinguishable from any other type ofbrand.
- Mega-brands→Manystrongbrandshavebecomemega-
brandsandextendedintorelatedproductcategories,includingnew opportunities at the
intersection of two or moreindustries.
- Deregulation → Many countries have deregulated industries to create greater competition and
growthopportunities.
- Privatization → Many countries have converted public companies to private ownership and
management to increase theirefficiency.

MARKETING IN PRACTICE
Given the new marketing realities, organizations are challenging their marketers to find the best
balance of old and new and to provide demonstrable evidence of success.

MARKETING BALANCE
Companies must always move forward, innovating products and services, staying in touch
with customer needs, and seeking new advantages, rather than relying on past strengths.
Marketers must balance increased spending on search advertising, social media, e-mails, and text
messages with appropriate spending on traditional marketing communications.
The ideal is retaining winning practices from the past while adding fresh approaches that reflect the new
marketing realities.

MARKETING ACCOUNTABILITY
Marketers are increasingly asked to justify their investments in financial and profitability terms,
as well as in terms of building the brand and growing the customer base.
They are thus applying more metrics—brand equity, customer lifetime value, return on marketing
investment (ROMI)—to understand and measure their marketing and business performance and a
broader variety of financial measures to assess the direct and indirect value their marketing efforts
create.

MARKETING IN THE ORGANIZATION

Marketing is not done only by the marketing department; every employee has an impact on the
customer.
Marketers now must properly manage all possible touch points: store layouts, package designs,
product functions, employee training, and shipping and logistics.
To create a strong marketing organization, marketers must think like executives in other
departments, and executives in other departments must think more like marketers.

The Holistic Marketing Concept

The holistic marketing concept is based on the development, design, and implementation of
marketing programs, processes, and activities that recognize their breadth and interdependencies.
Holistic marketing acknowledges that everything matters in marketing—and that
a broad, integrated perspective is often necessary. Holistic marketing thus
recognizes and reconciles the scope and complexities of marketing activities.
Figure 1.4 provides a schematic overview of four broad components characterizing holistic
marketing: relationship marketing, integrated marketing, internal marketing, and performance
marketing.
UPDATING THE FOUR PS
Many years ago, McCarthy classified various marketing activities into marketing-mix tools of four
broad kinds, which he called the four Ps of marketing: product, price, place, and promotion.
 - People reflects, in part, internal marketing and the fact that employees are critical to
marketingsuccess.
Marketing will only be as good as the people inside the organization.
It also reflects the fact that marketers must view consumers as people to understand their lives
more broadly, and not just as shoppers who consume products and services.
- Processes reflects all the creativity, discipline, and structure brought to marketingmanagement
- Programs reflects all the firm’s consumer-directedactivities.
It encompasses the old four Ps as well as a range of other marketing activities that might not fit
as neatly into the old view of marketing.
These activities must be integrated such that their whole is greater than the sum of their
parts and they accomplish multiple objectives for the firm.
- We define performance as in holistic marketing, to capture the range of possible outcome
measures that have financial and nonfinancial implications (profitability as well as brand and
customer equity) and implications beyond the company itself (social responsibility, legal,
ethical, and theenvironment).
Finally, these new four Ps actually apply to all disciplines within the company, and by thinking this
way, managers more closely align themselves with the rest of the company.

MARKETING MANAGEMENT TASKS

With these concepts in place we can identify specific set of tasks that make up successful
marketing management and marketing leadership.

1. Analytical - Developing marketing strategies and plans, Capturing marketing insights

2. Strategic - Connecting with consumers; Building strong brands; Creating Value

3. Operational - delivering value , communicating value

 Chapter 2 - Developing marketing strategies and plans

MARKETING AND CUSTOMER VALUE

The task of any business is to deliver customer value at a profit.
THE BUSINESS UNIT STRATEGIC PLANNING
The business unit strategic-planning process consists of the steps shown in Figure 2.4.

THE BUSINESSMISSION
Each business unit needs to define its specific mission within the broader company mission.
Defining the corporatemission
-What is ourbusiness?
-Who is thecustomer?
-What is of value to the customer?
-What will our business be?
-What should our business be?
Good Mission statements
-Focus on a limited number of goals
-Stress the company’s major policies and values
-Define the major competitive spheres within which the company will operate
-Take a long-term view

-Are as short, memorable, and meaningful as possible

SWOT Analysis → The overall evaluation of a company’s strengths, weaknesses,

opportunities, and threats. It’s a way of monitoring the
external and internal marketingenvironment.

EXTERNALENVIRONMENTANALYSIS (Opportunity andThreat)

A business unit must monitor key macro-environment forces and significant micro-
environment factors that affect its ability to earn profits.
Marketing opportunity: an area of buyer need and interest that a company has a
high probability of profitably satisfying.
Marketers need to be good at spotting opportunities.
To evaluate opportunities, companies can use market opportunity analysis (MOA) to ask
questions like:
Can we articulate the benefits convincingly to a defined targetmarket(s)?
Can we locate the target market(s) and reach them with cost-effective media and
tradechannels?
Does our company possess or have access to the critical capabilities and resources we
need to deliver the customerbenefits?
Can we deliver the benefits better than any actual or potentialcompetitors?
Will the financial rate of return meet or exceed our required threshold forinvestment?

Environmental threat: challenge posed by an unfavorable trend or development that,

in the absence of defensive marketing action, would lead to lower sales or profit.

INTERNAL ENVIRONMENT ANALYSIS (Strengths and Weaknesses)

It’s one thing to find attractive opportunities and another to be able to
take advantage of them. Each business needs to evaluate its internal
strengths and weaknesses.
The business doesn’t have to correct all its weaknesses, nor should it gloat about all its
strengths.
The big question is whether it should limit itself to those opportunities for which it possesses
the required strengths or consider those that might require it to find or develop new
strengths.
 GOAL FORMULATION(MBO)
Goals are objectives that are specific with respect to magnitude and time.
Most business units pursue a mix of objectives, including profitability, sales growth,
market share improvement, risk containment, innovation, and reputation.
The business unit sets these objectives and then
manages by objectives (MBO). For an MBO system
to work, the unit’s objectives must meet 4 criteria:
11. Unit’s objectives must be arrangedhierarchically
12. Objectives should bequantitative
13. Goals should berealistic

14. Objectives must beconsistent

Each choice calls for a different marketing strategy.

STRATEGICFORMULATION
Every business must design a strategy for achieving its goals, consisting of a marketing strategy
and a compatible
technology strategy and sourcing strategy.

STRATEGIC ALLIANCES

Just doing business in another country may require the firm to license its product, form a joint venture with a
local firm, or buy from local suppliers to meet “domestic content” requirements.
Many firms have developed global strategic networks, and victory is going to those who build the better one.
Many strategic partnerships take the form of marketing alliances.
These fall into 4 major categories.
1. Productorservicealliances:Onecompanylicensesanothertoproduceitsproduct,ortwo companies
jointly market their complementary products or a newproduct.
2. Promotionalalliances:Onecompanyagreestocarryapromotionforanothercompany’sproductor service.
3. Logistics alliances: One company offers logistical services for another company’sproduct.
4. Pricing collaborations: One or more companies join in a special pricingcollaboration. Well-
managed alliances allow companies to obtain a greater sales impact at lower cost. Rather than
just form a partnership, a firm may choose to just acquire anotherfirm

Unit 2- Capturing MarketingInsights

Marketers play a central role in connecting products and services to customers.

Quickly fine-tuning positioning, messaging, and campaigns to align with the ever-
changing needs of customers, marketers must still balance business priorities like
improving brand reputation, increasing customer loyalty, generating demand,
driving revenue, and much more.
As marketers, we traditionally rely on data to guide our decisions. We run A/B
tests. We use robust analytics tools. We find out where customers are converting,
and where they’re not. We know exactly what our customers are doing.

But there’s one major problem: we don’t always understand why.

If you’re like most marketers, you’ve probably seen your campaign performance or
site analytics and wondered what’s going on inside your customers’ heads. What
were they thinking when they abandoned their order? Or when they bounced from
a landing page after just five seconds? Why did they unsubscribe from your email
list? Would they have converted if you had a different design? Or different copy?

You may suspect you know the answers to these questions, but unless you hear it
straight from the source, you’re really just guessing. Now more than ever, it’s
critical that marketers understand their customers’ attitudes, motivations, and
reactions so they can understand what content will resonate with customers and
what will drive them to convert.

Collecting Information

⚫ The major responsibility for identifying important marketplace changes

falls to the company’s marketers.

⚫ Marketers have two advantages to accomplish this task:

⚫ Disciplined methods for collecting information

 ⚫ Their time spent interacting with customers and observing competitors and
other outside groups.

⚫ Companies with superior information can choose their markets better and
develop better offerings and execute better marketing plans.

⚫ Every company must organize and distribute a continuous flow of

information to its marketing managers.

Marketing Information System

A marketing information system (MIS) is made of people, equipment, and

procedures to gather, sort, analyze, and distribute needed, timely information to
marketing decision makers.

Components

⚫ A marketing information system (MIS) depends on three components:

⚫ 1. Internal Records

⚫ 2. Marketing intelligence activities

⚫ 3. Marketing research

Internal Records-

i. Companies use reports of orders, sales, prices, costs, inventory

 levels, receivables and payable to look for opportunities and
potential problems.

ii. Order-to-Payment Cycle

iii. Sales Representatives and customers send orders to the

company

iv. The sales department prepares invoices, transmit copies to

various departments

v. Shipped items generate shipping and billing documents that go

to various departments

vi. Customers want companies to perform these steps quickly and

accurately.

vii. Sales Information Systems- Marketing managers need timely

and accurate reports on current sales.

viii. Databases- Companies organize information into customer,

product, and salesperson databases and place them in data
warehouses.

ix. Data mining- Analysts can mine the data to get information on
neglected customer segments, and customer trends.

Marketing Intelligence-
⚫ A marketing intelligence system is a set of procedures and sources that
managers use to obtain everyday information about developments in the
marketing environment.

⚫ The marketing intelligence system is happening data while the internal

records is results data.

⚫ Marketing managers get their intelligence by

⚫ Reading books, newspapers, talking to customers, suppliers, and

distributors; monitoring social media, and meeting with other company
managers.

How can companies improve the quality and quantity of their marketing
intelligence?

⚫ Train and motivate the sales force to spot and report new developments.

⚫ Motivate distributors, retailers, and other intermediaries to share

intelligence.

⚫ Hire specialists to gather marketing intelligence (mystery shoppers).

⚫ Purchase competitors’ products, published reports, and ads, consult with

suppliers and attend trade shows.

Needs and Trends

⚫ Successful companies recognize and respond profitably to unmet needs and
trends.

⚫ A fad is a product, service, or idea that is extremely popular for a very brief
period of time and then becomes unpopular just as quickly.

⚫ A trend is a pattern or direction in the way something is changing; a

movement toward a style or idea. Example: A trend towards healthier
eating.

⚫ Trends have a more lasting effect on the marketplace than fads.

⚫ A megatrend is a major movement in pattern or emerging trend in the

macro-environment. It is an emerging force that will have an impact on the
kinds of products consumers will prioritize when buying in the future.
Example: People living longer, Globalization, and alternative energy.

Major forces in the market

1. Demographic Environment

2. Economic Environment

3. Social-cultural Environment

4. Natural Environment

5. Technological Environment
6. Political-legal Environment

1. The Demographic Environment –

● Demography: the study of human populations-- size, density, location,

age, gender, race, occupation, and other statistics.

● Population growth- A growing population does not mean a growing

market unless there is enough purchasing power.

● Population age mix-

● Preschool children, school-age children, teens, young adult age 20-40,

middle age adults 40-65, and older adults 65 and over.

● Some countries have a young population and some countries have an old
population.

● Educational Groups

● Illiterates, high school dropouts, high school diplomas, college degrees,

and professional degrees.

2. The Economic Environment –

● The available purchasing power in an economy is dependents on:

● Current incomes
 ● Prices

● Savings

● Debt

● Credit Availability

3. The Sociocultural Environment –

● Core Beliefs and values- are passed from parents to children and
reinforced by social institutions-schools, religious institutions, businesses,
and governments.

● Secondary beliefs and values are more open to change.

● Marketers have some change of changing secondary values but little

chance of changing core values.

● Subcultures are a group with shared values, beliefs, preference, and

behaviors emerging from their special life experiences or
circumstances.

4. The Natural Environment -

⚫ Trends in the natural environment

1. Increased environmental regulations-more laws to protect the environment

 2. Shortage of raw material

3. Increased energy costs

⚫ Corporate environmentalism recognizes the need to integrate

environmental issues into the company’s strategic plans.

5. The Technological Environment -

⚫ Marketers should monitor the following technology trends:

⚫ Accelerating pace of change- more ideas than ever are in the works and the
time between idea and implementation is shrinking. (shorter product life
cycles)

⚫ Unlimited opportunities for innovation- (biotechnology,

telecommunications, robotics)

⚫ Varying R & D Budgets- Companies are focusing on the development as

opposed to the research side.

⚫ Increased regulation of technological change-Regulations to ban

potentially unsafe products.

6. The Political Legal environment -

⚫ Increase in Business Legislation to

 1. Protect companies from unfair competition.

2. Protect consumers for unfair business practices.

3. Protect society from unethical business behavior.

4. Charge businesses with the social costs of their products or production

processes.

⚫ The consumerist movement-organized citizens and government to

strengthen the rights and powers of buyers in relationship to sellers.

Forecasting and demand measurement

⚫ Companies must measure and forecast the size, growth , and profit potential
of each new opportunities.

⚫ Forecasting is the art of anticipating what buyers are likely to do under a

given set of conditions.

Estimate Future Demand

⚫ All forecasts are built on one of three information bases:

⚫ What people say

⚫ What people do
 ⚫ What people have done

Unit 3 –

1. Customers are value maximizers. They form an expectation of value and act on it. Buyers
will buy from the firm that they perceive to offer the highest customer-delivered value,
defined as the difference between total customer benefits and total customercost.
2. A buyer’s satisfaction is a function of the product’s perceived performance and the
buyer’s expectations. Recognizing that high satisfaction leads to high customer loyalty,
companies must ensure that they meet and exceed customerexpectations.
3. Losing profitable customers can dramatically affect a firm’s profits. The cost of attracting a
new customer is estimated to be five times the cost of keeping a current customer happy. The
key to retaining customers is relationshipmarketing.
4. Quality is the totality of features and characteristics of a product or service that bear on its
ability to satisfy stated or implied needs. Marketers play a key role in achieving high levels
of total quality so that firms remain solvent andprofitable.
5. Marketing managers must calculate customer lifetime values of their customer base to
understand their profit implications. They must also determine ways to increase the value of
the customerbase.
6. Companies are also becoming skilled in customer relationship management (CRM), which
focuses on developing programs to attract and retain the right customers and meeting the
individual needs of those valuedcustomers.
7. Customer relationship management often requires building a customer database and doing
data mining to detect trends, segments, and individual needs. A number of significant risks
also exist, so marketers must proceedthoughtfully.
N

The aim of marketing is to meet and satisfy target customers' needs and wants. The field of
consumer behavior studies how individuals, groups, and organizations select, buy, use, and
dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Understanding consumer behavior and "knowing customers" are never simple. Customers may
state their needs and wants but act otherwise. They may not be in touch with their deeper
motivations. They may respond to influences that change their mind at the last minute.
Nevertheless, marketers must study their target customers' wants, perceptions, preferences, and
shopping and buying behavior:

Consumer Behaviour -

The starting point for understanding buyer behavior is the stimulus-response model shown in Figure -1.
Marketing and Environmental Stimuli enter the buyer's consciousness. The Buyer's Characteristics and
Decision Process lead to certain purchase decisions. The marketer's task is to understand what happens in
the buyer's consciousness between the arrival of outside stimuli and the buyer's purchase decisions.

Cultural Factors

Cultural factors exert the broadest and deepest influence on consumer behavior. The roles played
by the buyer's culture, subculture, and social class are particularly important.

Culture. Culture is the most fundamental determinant of a person's wants and behavior. The
growing child acquires a set of values, perceptions, preferences, and behaviors through his or her
family and other key institutions. An American's interest in computers reflects his upbringing in
a technological society. He knows what computers are and he knows that the society values
computer expertise. In another culture, say a remote tribe in central Africa, a computer would
mean nothing. It would simply be a curious piece of hardware, and there would be no buyers.

Subculture. Each culture consists of smaller subcultures that provide more specific
identification and socialization for its members. Subcultures include nationalities, religions,
racial groups, and geographical regions. Many subcultures make up important market segments,
and marketers often design products and marketing programs tailored to their needs. Subculture
will influence ones food preferences, clothing choices, recreation, and career aspirations.

Social Class. Social Classes are relatively homogeneous and enduring divisions in a society,
which are hierarchically ordered and whose members share similar values, interests, and
behavior. Social classes do not reflect income alone but also other indicators such as occupation,
education, and area of residence. Social classes differ in their dress, speech patterns, recreational
preferences, and many other characteristics. The following table describes the five social classes
identified by social scientists.

Characteristics of Four Major Indian Social Classes

This class consists of people who are rich and posses considerable wealth, eg, People with large Businesses
1. Upper
and Wealthy Corporate Executives. These people live in large bungalows in posh localities and tend to buy
Class
expensive products and patronize branded exclusive shops. This class is very important for marketers.
2.Upper This class consists of well educated people holding top class positions in middle size firms, or Professionals
Middle who are successful. They have a strong drive for success and indulge in shopping for goods that speak of their
Class social status.
This class consists of white collar workers like middle level and junior executives, sales people,
3. Middle academicians, small business owners, etc. These people lead a conservative lifestyle and spend moderately.
Class They leave in apartments or reasonably smaller houses and seek to buy products, which give more value for
money.
 This class consists of blue collar workers like factory laborers, semi-skilled and unskilled laborers in the un
organized sector. These people are more family oriented and depend on their family for economic and
4. Lower
emotional support. Their families are generally male dominated. These people are less or poorly educated,
Class
live in smaller houses in less desirable neighborhoods. Due to their low income levels, these people tend to
live in the present and have no concept of savings.
Social Factors

In addition to cultural factors, a consumer's behavior is influenced by such social factors as

reference groups, family, and roles and statuses.

Reference Groups. A person's Reference Groups consist of all the groups that have a direct
(face-to-face) or indirect influence on the person's attitudes or behavior. People are significantly
influenced by their reference groups. Marketers try to identify their target customers' reference
groups. Reference groups appear to strongly influence both product and brand choice only in the
case of automobiles and color televisions; mainly brand choice in such items as furniture and
clothing; and mainly product choice in such items as beer and cigarettes.

Family. The family is the most important consumer-buying organization in society, and it has
been researched extensively. From parents a person acquires an orientation toward religion,
politics, and economics and a sense of personal ambition, self-worth, and love. In countries
where parents live with their grown children, their influence can be substantial. A more direct
influence on everyday buying behavior is one's family of procreation--namely, one's spouse and
children. Marketers are interested in the roles and relative influence of the husband, wife, and
children in the purchase of a large variety of products and services.

Roles and Statuses. A person participates in many groups throughout life--family, clubs,
organizations. The person's position in each group can be defined in terms of role and status. A
role consists of the activities that a person is expected to perform. Each role carries a status. A
Supreme Court justice has more status than a sales manager, and a sales manager has more status
than an office clerk. People choose products that communicate their role and status in society.
Marketers are aware of the status symbol potential of products and brands.

Personal Factors

A buyer's decisions are also influenced by personal characteristics. These include the buyer's age
and stage in the life cycle, occupation, economic circumstances, lifestyle, and personality and
self-concept.

Age and Stage in the Life Cycle. People buy different goods and services over their lifetime.
They eat baby food in the early years, most foods in the growing and mature years, and special
diets in the later years. People's taste in clothes, furniture, and recreation is also age related.

Occupation. A person's occupation also influences his or her consumption pattern. A blue-collar
worker will buy work clothes, work shoes, and lunch boxes. A company president will buy
expensive suits, air travel, country club membership, and a large sailboat.

Economic Circumstances. Product choice is greatly affected by one's economic circumstances.

People's economic circumstances consist of their spendable income (its level, stability, and time
pattern), savings and assets (including the percentage that is liquid), debts, borrowing power, and
attitude toward spending versus saving. Marketers of income-sensitive goods pay constant
attention to trends in personal income, savings, and interest rates. If economic indicators point to
a recession, marketers can take steps to redesign, reposition, and reprice their products so they
continue to offer value to target customers.

Lifestyle. People coming from the same subculture, social class, and occupation may lead quite
different lifestyles. A person's Lifestyle is the person's pattern of living in the world as expressed
in the person's activities, interests, and opinions. Marketers search for relationships between their
products and lifestyle groups. For example, a computer manufacturer might find that most
computer buyers are achievement-oriented. The marketer may then aim the brand more clearly at
the achiever lifestyle.

Personality and Self-Concept. Each person has a distinct personality that influences his or her
buying behavior. Personality is a person's distinguishing psychological characteristics that lead
to relatively consistent and enduring responses to his or her environment. Personality is usually
described in terms of such traits as self-confidence, dominance, autonomy, deference, sociability,
defensiveness, and adaptability.

Psychological Factors

A person's buying choices are influenced by four major psychological factors--motivation,

perception, learning, and beliefs and attitudes.

Motivation. A person has many needs at any given time. Some needs are biogenic; they arise
from physiological states of tension such as hunger, thirst, discomfort. Other needs are
psychogenic; they arise from psychological states of tension such as the need for recognition,
esteem, or belonging. Most psychogenic needs are not intense enough to motivate the person to
act on them immediately. A need becomes a motive when it is aroused to a sufficient level of
intensity. A motive is a need that is sufficiently pressing to drive the person to act. Satisfying the
need reduces the felt tension. Psychologists have developed theories of human motivation. Three
of the best known--the theories of Sigmund Freud, Abraham Maslow, and Frederick Herzberg--
carry quite different implications for consumer analysis and marketing strategy.

Freud's Theory of Motivation. Freud assumed that the real psychological forces shaping people's
behavior are largely unconscious. Thus a person cannot fully understand his or her own
motivations.

Maslow's Theory of Motivation. Abraham Maslow sought to explain why people are driven by
particular needs at particular times. Maslow's theory says that human needs are arranged in a
hierarchy, from the most pressing to the least pressing. In their order of importance, they are
physiological needs, safety needs, social needs, esteem needs, and self- actualization needs
(Figure 6-3). People will try to satisfy their most important needs first. When a person succeeds
in satisfying an important need, that need will cease being a current motivator, and the person
will try to satisfy the next-most-important need.

Herzberg's Theory of Motivation. Frederick Herzberg developed a two-factor theory of

motivation that distinguishes dissatisfiers (factors that cause dissatisfaction) and satisfiers (factor
that cause satisfaction). Herzberg's theory of motivation has two implications. First, sellers
should do their best to avoid dissatisfiers (for example, a poor training manual or a poor service
policy). While these things will not sell the computer, they might easily unsell the computer.
Second, the manufacturer should identify the major satisfiers or motivators of purchase in the
market and then supply them. These satisfiers will make the major difference as to which
computer brand the customer buys.

Perception. A motivated person is ready to act. How the motivated person actually acts is
influenced by his or her perception of the situation. Perception is the process by which an
individual selects, organizes, and interprets information inputs to create a meaningful picture of
the world. Perception depends not only on the physical stimuli but also on the stimuli's relation
to the surrounding field and on conditions within the individual.

Selective Attention. People are exposed to a tremendous amount of daily stimuli. For example,
the average person may be exposed to over 1,500 ads a day. Because a person cannot possibly
attend to all of these stimuli, most stimuli will be screened out--a process called selective
 attention. Selective attention means that marketers have to work hard to attract consumers'
notice. Their messages will be lost on most people who are not in the market for the product.
Even people who are in the market may not notice a message unless it stands out from the
surrounding sea of stimuli. Ads that are novel or larger in size, use bold colors, or provide
contrast to their surroundings is more likely to be noticed.

Learning. When people act, they learn. Learning involves changes in an individual's behavior
arising from experience. Most human behavior is learned. Learning theorists believe that
learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement.
A drive is a strong internal stimulus impelling action. Learning theory teaches marketers that
they can build up demand for a product by associating it with strong drives, using motivating
cues, and providing positive reinforcement.

Beliefs and Attitudes. Through doing and learning, people acquire beliefs and attitudes. These
in turn influence their buying behavior. A Belief is a descriptive thought that a person holds
about something. Manufacturers are very interested in the beliefs that people carry in their heads
about their products and services. These beliefs make up product and brand images, and people
act on their images. If some beliefs are wrong and inhibit purchase, the manufacturer will want to
launch a campaign to correct these beliefs.

Just as important as beliefs are Attitudes. An Attitude is a person's enduring favorable or

unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea.
People have attitudes toward almost everything: religion, politics, clothes, music, food, and so
on. Attitudes put them into a frame of mind of liking or disliking an object, moving toward or
away from it.

OCESS

To be successful, marketers have to go beyond the various influences on buyers and develop an
understanding of how consumers actually make their buying decisions. Specifically, marketers
must identify who makes the buying decision, the types of buying decisions, and the steps in the
buying process.

Buying Roles
It is easy to identify the buyer for many products. Men normally choose their shaving equipment,
and women choose food items. We can distinguish five roles people might play in a buying
decision:

● Initiator: A person who first suggests the idea of buying the product or service
● Influencer: A person whose view or advice influences the decision
● Decider: A person who decides on any component of a buying decision--whether to buy, what to
buy, how to buy, or where to buy
● Buyer: The person who makes the actual purchase
● User: A person who consumes or uses the product or service

Buying Behavior

Consumer decision making varies with the type of buying decision. The decisions to buy toothpaste, a
tennis racket, a personal computer, and a new car are all very different. Complex and expensive purchases
are likely to involve more buyer deliberation and more participants. Assael distinguished four types of
consumer buying behavior based on the degree of buyer involvement and the degree of differences among
brands.

Four Types of Buying Behaviors

HIGH INVOLVEMENT LOW INVOLVEMENT
Significant Differences Complex buying behavior Variety-seeking buying behavior
 Between Brands
Few Differences
Dissonance-reducing buying behavior Habitual buying behavior
Between Brands

Complex Buying Behavior. Consumers engage in complex buying behavior when they are highly
involved in a purchase and aware of significant differences among brands. This is usually the case when
the product is expensive, bought infrequently, risky, and highly self-expressive. The marketer of a high-
involvement product must understand high-involvement consumers' information-gathering and evaluation
behavior. The marketer needs to develop strategies that assist the buyer in learning about the product's
attributes and their relative importance, and that call attention to the high standing of the company's brand
on the more important attributes. The marketer needs to differentiate the brand's features, use print media
to describe the brand's benefits, and motivate store sales personnel and the buyer's acquaintances to
influence the final brand choice.

Dissonance-Reducing Buyer Behavior. Sometimes the consumer is highly involved in a purchase

but sees little difference in the brands. The high involvement is based on the fact that the purchase is
expensive, infrequent, and risky. In this case, the buyer will shop around to learn what is available but
will buy fairly quickly, perhaps responding primarily to a good price or to purchase convenience. For
example, carpet buying is a high-involvement decision because carpeting is expensive and self-
expressive, yet the buyer may consider most carpet brands in a given price range to be the same.

Habitual Buying Behavior. Many products are bought under conditions of low consumer involvement
and the absence of significant brand differences. Consider salt. Consumers have little involvement in this
product category. They go to the store and reach for the brand. If they keep reaching for the same brand, it
is out of habit, not strong brand loyalty. There is good evidence that consumers have low involvement
with most low-cost, frequently purchased products.

Marketers use four techniques to try to convert low-involvement product into one of higher involvement.
First, they can link the product to some involving issue, as when Crest toothpaste is linked to avoiding
cavities. Second, they can link the product to some involving personal situation--for instance, by
advertising a coffee brand early in the morning when the consumer wants to shake off sleepiness. Third,
they might design their advertising to trigger strong emotions related to personal values or ego defense.
Fourth, they might add an important product feature to a low-involvement product (for example,
fortifying a plain drink with vitamins). These strategies at best raise consumer involvement from a low to
a moderate level; they do not propel the consumer into highly involved buying behavior.

Variety-Seeking Buying Behavior. Some buying situations are characterized by low consumer
involvement but significant brand differences. Here consumers often do a lot of brand switching. Think
about cookies. The consumer has some beliefs about cookies, chooses a brand of cookies without much
evaluation, and evaluates the product during consumption. But next time, the consumer may reach for
another brand out of boredom or a wish for a different taste. Brand switching occurs for the sake of
variety rather than dissatisfaction.

The market leader and the minor brands in this product category have different marketing strategies. The
market leader will try to encourage habitual buying behavior by dominating the shelf space, avoiding out-
of-stock conditions, and sponsoring frequent reminder advertising. Challenger firms will encourage
variety seeking by offering lower prices, deals, coupons, free samples, and advertising that presents
reasons for trying something new.

THE STAGES OF THE BUYING DECISION PROCESS

Figure -3 shows a "5-stage model" of the typical buying process. The consumer passes through
five stages: problem recognition, information search, evaluation of alternatives, purchase
decision, and post purchase behavior. Clearly the buying process starts long before the actual
purchase and has consequences long afterward.
The model in Figure -3 implies that consumers pass sequentially through all five stages in buying
a product. But this is not the case, especially with low-involvement purchases. Consumers may
skip or reverse some stages. Thus a woman buying her regular brand of toothpaste goes directly
from the need for toothpaste to the purchase decision, skipping information search and
evaluation.

Problem Recognition. The buying process starts when the buyer recognizes a problem or need.
The buyer senses a difference between his or her actual state and a desired state. A person passes
a bakery and sees freshly baked bread that stimulates her hunger; she admires a neighbor's new
car; or she watches a television commercial advertising a Hawaiian vacation.

Marketers need to identify the circumstances that trigger a particular need. By gathering
information from a number of consumers, marketers can identify the most frequent stimuli that
spark an interest in a product category. The marketer can then develop marketing strategies that
trigger consumer interest.

Information Search. An aroused consumer will be inclined to search for more information. We
can distinguish between two levels of arousal. The milder search state is called heightened
attention. At the next level, the consumer may enter active information search. She actually looks
for reading material, phones friends, and engages in other activities to learn about the product.
How much search she undertakes depends on the strength of her drive, the amount of
information she initially has, the ease of obtaining additional information, the value she places on
additional information, and the satisfaction she gets from search.

Evaluation of Alternatives. There is no simple and single evaluation process used by all
consumers or by one consumer in all buying situations. There are several decision evaluation
processes, the most current models of which see the consumer evaluation process as cognitively
oriented. That is, they see the consumer as forming product judgments largely on a conscious
and rational basis.

Some basic concepts will help us understand consumer evaluation processes: First, the consumer
is trying to satisfy a need. Second, the consumer is looking for certain benefits from the product
solution. Third, the consumer sees each product as a bundle of attributes with varying abilities of
delivering the benefits sought to satisfy this need. The consumer develops a set of brand beliefs
about where each brand stands on each attribute. The set of beliefs about a brand make up the
brand image. The consumer's brand image will vary with his or her experiences as filtered by the
effects of selective perception, selective distortion, and selective retention.

Purchase Decision. In the evaluation stage, the consumer forms preferences among the brands
in the choice set. The consumer may also form an intention to buy the most preferred brand.
However, two factors can intervene between the purchase intention and the purchase decision
(Figure -4).

The first factor is the attitudes of others. A buyer's preference for a brand will increase if
someone he or she likes favors the same brand strongly. The converse is also true. The second
factor is unanticipated situational factors. These may erupt to change the purchase intention. The
consumer might lose her job, some other purchase might become more urgent, or a store
salesperson may turn her off. Thus preferences and even purchase intentions are not completely
reliable predictors of purchase behavior.

Postpurchase Behavior. After purchasing the product, the consumer will experience some level
of satisfaction or dissatisfaction. The marketer's job does not end when the product is bought but
continues into the postpurchase period. Marketers must monitor postpurchase satisfaction,
postpurchase actions, and postpurchase product use and disposal.
Postpurchase Satisfaction. After purchasing a product, a consumer may detect a flaw. Some
buyers will no longer want the flawed product, others will be indifferent to the flaw, and some
may even see the flaw as enhancing the product's value.37 For instance, an upside-down page in
the first edition of a famous author's book might make the book become a collectible item worth
many times its original purchase price. Consumers form their expectations on the basis of
messages received from sellers, friends, and other information sources. If the seller exaggerates
the benefits, consumers will experience disconfirmed expectations, which lead to dissatisfaction.
The larger the gap between expectations and performance, the greater the consumer's
dissatisfaction. Here the consumer's coping style comes into play. Some consumers magnify the
gap when the product is not perfect, and they are highly dissatisfied. Other consumers minimize
the gap and are less dissatisfied. The importance of postpurchase satisfaction suggests that sellers
must make product claims that truthfully represent the product's likely performance. Some sellers
might even understate performance levels so that consumers experience higher-than-expected
satisfaction with the product.

Postpurchase Actions. The consumer's satisfaction or dissatisfaction with the product will
influence subsequent behavior. If the consumer is satisfied, he or she will exhibit a higher
probability of purchasing the product again. Dissatisfied consumers respond differently. They
may abandon or return the product. They may take public action such as by complaining to the
company, going to a lawyer, or complaining to other groups, make a decision to stop buying the
product or warn friends.

Postpurchase Use and Disposal. Marketers should also monitor how the buyers use and dispose
of the product If consumers store the product in their closet, the product is probably not very
satisfying, and word-of-mouth will not be strong. If consumers find new uses for the product,
marketers should advertise these uses:

Chapter 7 – Analyzing Business Market

What is organizational buying?

Organizational buying refers to the decision- making process by which formal
organizations establish the need for purchased products and services, and identify, evaluate,
and choose among alternative brands and suppliers.

Top business marketing challenges

● Expand understanding of customerneeds

● Compete globally as China and India reshape markets
● Master analytical tools and improve quantitative skills
● Reinstate innovation as an engine ofgrowth
● Create new organizational models andlinkages

Characteristics of business markets

● Fewer, largerbuyers
● Close supplier- customerrelationships
 ● Professional purchasing
● Many buyinginfluences

● Multiple sales calls

● Derived demand
● Inelastic demand
● Fluctuating demand
● Geographically concentratedbuyers
● Direct purchasing

Buying Situations –
1. Straight rebuy is when the purchasing department reorders on a routine basis and chooses
from suppliers on an approved lists.
2. Modified rebuy is when the buyer wants to modify product specifications, prices, delivery
requirements, or other items.
3. New task is when the purchaser buys a product or service for the first time

Marketing Implications of different buying situations

1. The business buyer makes the fewest decisions in the straight rebuy situation and the most in
the new-task situation.
2. In the new-task situation, the buyer has to determine product specifications, price limits,
delivery terms and times, service terms, payment terms, order quantities, acceptable suppliers,
and the selected supplier. This situation is the marketer’s greatest opportunity and challenge.
3. Because of the complicated selling involved, many companies use a missionary sales force
consisting of their most effective salespeople for new-task situations.

Systems Buying and Selling

● Systems buying Buy total solution from 1 seller
● Systems selling Key industrial marketing strategy - large-scale industrial projects
Eg – Dams , utilities

Systems Contracting
ONE supplier for entire MRO
(maintenance, repair, operating) supplies
Supplier manages inventory
Benefits arising:
Customer - reduce cost & protect price
Seller - low operating costs - steady demand

Participants in the Business Buying Process

There are seven roles in the purchase decision process:
1. Initiators—requests the product
2. Users—will use the product
3. Influencers—influence the buying decision
4. Deciders—makes the decision of what to purchase
5. Approvers—authorize the proposal
6. Buyers—have the formal authority to purchase
7. Gatekeepers—have the power to prevent seller information from reaching members of the
buying center

Institutional & Government Markets

● Institutional market - provide for people in their care (schools, hospitals)
● Low budgets & captive clienteles
● Government -Major buyer goods & services
⮚ Suppliers – take lowest bid
⮚ Negotiated contract basis – complex projects

Institutional & Government Markets

▪ Government spending - public review
o Considerable paperwork
o Justify cost - major consideration
o Show bottom-line of offerings
▪ Suppliers - ways to cut through red tape

Institutional & Government Markets

 In Asia - some governments favor local companies - award contracts
 Government purchase – kickback, bribery
 Tie up with influential local business - effective way to penetrate government market

Chapter 8 – Tapping into Global Markets

Companies need to be able to cross boundaries within and outside their country. Although
opportunities to enter and compete in international markets are significant, the risks can also be
high. Companies selling in global industries, however, have no choice but to internationalize
their operations.
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
Deciding Whether to Go Abroad
l Driving Factor(What makes company want to go abroad)
1. Some international markets present better profit opportunities than the domestic market.
2. The company needs a larger customer base to achieve economies of scale.
3. The company wants to reduce its dependence on any one market.
4. The company decides to counterattack global competitors in their home markets.
5. Customers are going abroad and require international service.
Risk Evaluation (then the company will evaluate the risks that they are going to face.)
1. The company might not understand foreign preferences and could fail to offer a
competitively attractive product.
2. The company might not understand the foreign country’s business culture.
3. The company might underestimate foreign regulations and incur unexpected costs.
4. The company might lack managers with international experience.
5. The foreign country might change its commercial laws, devalue its currency, or undergo a

political revolution and expropriate foreign property.

Four stages Four steps. The internationalization process typically has four stages:
1. No regular export activities
2. Export via independent representatives (agents)
3. Establishment of one or more sales subsidiaries
4. Establishment of production facilities abroad

Deciding Which Markets to Enter

How Many Markets to Enter
Waterfall approach: gradually entering countries in sequence
Sprinkler approach, entering many countries simultaneously.
Born global approach. Born to the worldwide
o Developed versus Developing Markets
Focus on the BRIC: Brazil, Russia, India, and China (Emerging market) Many firms are using
lessons gleaned from marketing in developing markets to better compete in their developed
markets
o Evaluating Potential Markets
Its readiness for different products and services, and its attractiveness as a market, depend on its
demographic, economic, sociocultural, natural, technological, and political-legal environments.
In general, a company prefers to enter countries that have high market attractiveness and low
market risk, and in which it possesses a competitive advantage.
Deciding How to Enter the Market
Five Modes of Entry into Foreign Markets
a) Indirect exporting (less Investment, less risky)
b) Direct exporting
c) Licensing
● Management contracts
● Contract manufacturing,
● Franchising
d) Joint ventures
e) Direct Investment （High risk, high investment, high return）

Deciding on the Marketing Program

▪ Global Similarities and Differences
▪ Four cultural dimensions of Differentiate countries
▪ Marketing Adaptation
▪ Global Product Strategies

Four cultural dimensions of Differentiate countries

● Individualism versus collectivism
(High collectivism: Japan; low: United States)
● High versus low power distance
(High: Russia; low: Nordic countries).
● Masculine versus feminine
(Highly masculine: Japan; low: Nordic countries)
● Weak versus strong uncertainty avoidance
(High avoidance: Greece; low: Jamaica)

Marketing Adaptation
The best global brands are consistent in theme but reflect significant differences in consumer
behavior, brand development, competitive forces, and the legal or political environment.
Think Global, Act Local
World’s Local Bank.
Global Product Strategies
● PRODUCT STANDARDIZATION
Philips reserves higher-end, premium products for developed markets and emphasizes products
with basic
● PRODUCT ADAPTATION STRATEGIES
Straight extension：introduces the product in the foreign market without any change.
Product adaptation：alters the product to meet local conditions or preferences. Regional
version, country version, city version, retailer version.
Product invention creates something new.
2. BRAND ELEMENT ADAPTATION: Choice between phonetic and semantic
translations. E.g. Electrolux’s British ad line for its vacuum cleaners—“Nothing sucks like an
Electrolux”—would certainly not lure customers in the United States!
Global Communication Strategies
Changing marketing communications for each local market is a process called communication
adaptation. If it adapts both the product and the communications, the company engages in dual
adaptation.
o Three strategies:
1.Vary from culture.
The company can use one message everywhere, varying only the language, name, and perhaps
colors to avoid taboos in some countries.
2.Same theme, different execution.
Use the same message and creative theme globally but adapt the execution.
3.country-specific ads （Coca-Cola）In China. The red Coca-Cola is the symbol of sharing and
family reunion
o GLOBAL ADAPTATIONS
a) Legally and culturally acceptable.
b) Appropriateness.
c) Vary their messages’ appeal.

Global Pricing Strategies

Multinationals selling abroad must contend with price escalation and transfer prices (and
dumping charges). Two particularly thorny pricing problems are gray markets and counterfeits.
Global Distribution Strategies
Whole-Channel Concept for International Marketing （5 steps）
• Seller
• Seller's international marketing headquarters
• Channels between nations
• Channels within foreign nations
• Final buyers
Country-of-Origin Effects
o Building Country Images
Country-of-origin perceptions are the mental associations and beliefs triggered by a country.
Company and national image are complementary to each other
The good national image will increase the local company’s sales，and a strong company that
emerges as a global player can do wonders for a country’s image.
o Consumer Perceptions of Country of Origin
Japan for automobiles and consumer electronics; the United States for high-tech innovations, soft
drinks, toys, cigarettes, and jeans; France for wine, perfume, and luxury goods.

Deciding on the Marketing Organization

Generally, companies manage their international marketing activities in three ways: through
export departments, international division, or a global organization.

International divisions: operating units: geographical organizations, world product groups,

International subsidiaries
UNIT 4-
Creating value: setting product strategy, designing and managing services,
developing pricing strategies and programs
⮚ Setting Product Strategy
A product strategy draws from the ultimate vision of the product. It states where
the product will end up. By setting a product strategy, you can determine the
direction of your product efforts.

Similar to making effective use of a map, you first need a destination, and then you
can plan your route. Just as a business has a strategic vision of what it wants to be
when it grows up, the product has its own strategy and destination.

Elements of a product strategy

When defining your product strategy be sure to answer the following questions.

Note that each question below links to an article that further develops the topic, so
make sure to review the linked articles as you create your strategy.

Who are you selling to?

Define your target customer or market. Identify whom you are selling to, and what
that market looks like.

What are you selling?

Describe how potential customers will perceive your product compared to

competitive products. Understand what makes your product unique in the market.

What value do you provide your customers?

Determine what problems your product solves for customers. You cannot be
everything to everyone within a particular market, but you can help to solve
specific problems. Create a value proposition to position the value you provide and
the benefits that customers will receive with your solution.

How will you price your product?

State how you will price the product. Include its perceived value and a pricing
model.

How will you distribute your product?

Describe how you will sell your product, and how your target market will acquire
your product.

Creating your product strategy

To create your product strategy, start with identifying the market problems you
would like to solve. This includes interviewing your target market, understanding
the competitive landscape and identifying how you will differentiate yourself.

Your product strategy will change over time as you learn more about your market,
and as (if) you decide to enter different markets. Listening to your market and
developing your product strategy is a circular process; as you learn more, you will
evolve your product strategy and the problems you solve.

Example: Product strategy

Here is a brief example of a product strategy. Your product strategy will vary, and
will probably be longer, but should follow the theme of the five questions above.

● We build quality kitchen hardware for residential kitchen customers.

● Our customers are young North American families who want kitchen
hardware that can stand the wear and tear of young children. They are
interested in materials that are safe for children and eco-friendly.
● We sell our products through a retail channel.
 ● Our products are priced per unit, and are considered “high-end” hardware
solutions.

Power of the product strategy

The power of a product strategy comes from what you define as well as what
you exclude. By identifying a particular target market in your product strategy,
you are also excluding other markets. This helps your company to understand
which projects fall outside the product strategy and distract from strategic goals.

PRODUCT LINE

A group of products manufactured by a company that are closely related because

they perform functions in a compatible manner, sold to same customer group or
fall within a price range.

PRODUCT MIX The complete set of all products and items a particular company
offers for sale.

Depth : The number of variants offered of each product in a product line.

. Consistency : This describes how closely related the various products lines are.

Designing and Managing Services

Products can be classified as goods and services. Goods and services tend to
be compared on four major factors:
● Intangibility
● Inseparability
 ● Variability
● Perish ability

There are some major differences between goods and services. In assessing the
broad differences between goods and services marketers view the following:

● Nature of the Product:

1. Goods are tangible things
2. Services are intangible and represent an effort.
● Customer Involvement in Production:
1. Goods can be produced and stored
2. Services are time bound, experiential with lasting consequences
● Quality Control Problems:
1. Goods are produces before they are consumer and quality can be checked
2. Services produced as they are being consumed -- in real-time.
3. Service personnel and customer interact in the product therefore quality
is difficult to control. Training is therefore essential.
● Inventory Issues:
1. Goods, because they are tangible, can be produced, moved and stored
until needed.
2. Services produced in real-time. Because they are intangible, they cannot
be moved or stored. Service personnel may be hard to keep… therefore,
marketer must set-up facilities and hold labor in readiness to create
service (just like in a production facility). This produces waste if there is
no demand for the service. To overcome this firms use cross training so
that personnel can do something else if demand is low. For example, at a
grocery, the person stocking the shelves may able be able to work at the
checkout register.

● Distribution Channels:
1. Goods distributed through identified channels determined by the market
coverage the marketer desires. Hence in distributing goods, marketers
often make use of middlemen.
2. Service firms tend to depend on electronic rather than physical
distribution channels.
3. Service firms also combine service factory and point of consumption into
one to manage customer and personnel contact. Hence there is little on
no use of intermediaries (middlemen) in service industries. The major
task is managing customers’ consumption behavior.
While services can compete with goods (dry cleaning competes with the
sale of washing machines, concerts with the sale of CD’s), different
management skills needed to market services. For example, in marketing
a good the consumer never sees the production process while in
marketing a service the consumer is an important part of the production
and consumption process.
Services tend to be (a) more intangible than tangible – consumed not
possessed, (b) simultaneously produced and consumed, (c) be less
standardized and uniform than goods.
Since personnel is key in marketing services, the marketer must go a
good job of marketing to the internal customers (the employees). The
quality of the service is inseparable from the quality of the service
provider. Performance shapes the service and becomes part of the
service. Because production and consumption tends to be simultaneous,
there is much room for customization.
Goods are easier to evaluate than services. Because consumers cannot
assess the quality of an intangible, they look at and for tangible cues.
Therefore, in producing services, pay attention to those aspects of the
service that are tangible (equipment and surroundings for example). such
things as physical environment, appearance of service providers, and
goods that go with the services. This tends to make the service tangible
and helps the customers perceived judgement of the service.
 Since services cannot be inventories, marketers must synchronize supply
and demand. This can be done by reshaping supply (e.g. use part-time
employees, cross train employees, have employees on call) or reshaping
demand (e.g. use of differential pricing, pricing incentives).
DEVELOPING PRICING STRATEGIES

Understanding how to develop a pricing strategy is not only one of the important
parts of creating a successful business, it’s quite possibly
the most important. Pricing strategy has the clearest direct impact on revenue and
your bottom line, and it’s the ultimate reflection of the value your company offers
through its products and customer service.

You’ve put all your time, creativity and energy into developing a great product and
a beautiful website, but nothing communicates those efforts to your potential
customers quite as succinctly as your prices.

Every aspect of your business works to justify them, but from a numbers
perspective, pricing has a huge impact: a 1% improvement in pricing equates to an
average boost of 11% in profit. It’s that huge to revenue maximization and growth.

5 Steps to Create and Implement a Value-Based Pricing Strategy

All that being said, let’s help you out by looking at the first five steps to
developing and executing a value based pricing strategy that pushes your revenue
in the right direction.

1. UNDERSTAND YOUR BUYER PERSONAS

Buyer personas are fictional characters that represent your ideal customers. They
help you refine your marketing activities and lead to an understanding of your
customers’ willingness to buy at a given price. There’s plenty of literature out there
on defining your buyer personas, so we won’t go too deeply into that process. Yet,
in terms of pricing and packaging, understanding them helps you to customize and
develop your product for the valuations of those customers and price accordingly.
 You’re probably already versioning your product into tiers or levels, but
understanding these personas ensures you’re capitalizing on those customers
willing to pay more and appealing to those who are more price sensitive. The big
thing here is that it’s all about your customers. Understand them, align your
offerings to them, and you can’t lose.

2. SURVEY AND TALK WITH YOUR CUSTOMERS

Once we’ve identified our buyer personas and understand them how do we figure
out how much they’re willing to spend, or what exactly they want their plan to be
for your product? The key to creating optimized prices and measuring the value
you’re providing is to survey the customer base and collect hard data. You already
should be talking to your customers about everything else, there’s no reason
pricing should be an exception. You’ll find customers truly appreciate the
conversation, because it’s directly related to providing them the right amount of
value for how much they’re paying.

You can ask them point blank how much they’d be willing to pay, but you’ll find
it’s hard for customers (and the human brain, quite frankly) to cognitively come up
with a number. Instead, asking the customer value-based questions in ranges (“at
what point is this way too expensive or at what point is this so cheap you question
the quality?”) will generate data that can take most of the guesswork out of pricing
your product tiers, and with that data you’ll be able to price your products for
affluent clients who want all the bells and whistles as well as frugal ones who don’t
need every feature.

3. ANALYZE THE DATA AND PICK YOUR PRICES AND PACKAGES

Now that you’ve collected some quantitative and qualitative data, you can analyze
it and create value-based pricing that appeals to the target segments. Pricing is a
process, and while looking for one perfect price is like trying to find a needle in a
haystack, the data will generate an optimal price range that narrows it down
significantly. You’ll see patterns emerge (I promise), especially when segmenting
this data by persona.
 You’ll also need to compare the data to your costs and competitors before making
a final decision (although that data shouldn’t be the driving force behind your
analysis). Your final list of offerings and SKUs should then be a listing that is
discrete and collectively exhaustive. Essentially, you need to make sure there’s an
option for every one of your customer personas, in addition to ensuring that when a
customer visits your pricing page they know exactly what bucket they fall into
across your offerings.

From a pragmatic standpoint, make sure that you set a deadline for your team and
that one person will make the final decision. The process should and can involve
someone from every part of the business, but we’ve seen plenty of pricing
paralysis when there are too many cooks in the kitchen. After all, pricing will
always be an aspect of your business.

4. COMMUNICATE VALUE TO YOUR CUSTOMERS

Prices and value are only as good as how you communicate them. Fortunately,
collecting price sensitivity data not only determines a more accurate price for your
product, it also allows you to provide great customer service. You’re further
developing that customer relationship and assuring customers that you’re providing
the value you claim in your prices.

Once you have those prices though, you need to make sure you communicate the
value, pricing model and purchase process clearly. If you publish your prices,
make sure it’s clear what features are available for each tier at the given price so
that customers know exactly what they’re paying for when they put down their
credit card or invoice number (more on pricing pages). Make it as easy as possible
for customers to predict their costs and see the value they’re receiving.

5. CREATE THE RIGHT, PROFIT FOCUSED CULTURE

While it’s definitely imperative that you communicate the value of your product to
the consumer, it’s equally as important to accurately convey that value to everyone
on your team. The individuals on your team, from the sales team to developers,
have just as much power over your profitability as your customers. If the company
culture isn’t unified around the value and pricing of your products, then none of the
effort put into generating data, conducting a thorough analysis or choosing your
price points will maximize revenue or help your business grow.

To create a culture that reinforces your pricing strategy it’s important that your
company’s costs, pricing, and profit margins are clearly visible to the team. This
transparency guarantees their bought in, and you’ll realize that the collective will
do a better job at figuring out how to market and sell different versions of your
product to the right customer segments.

If you decide to run promotions or offer discounts, make sure the team knows the
limits so you don’t lose out on margins. Discounts need to be discreet, used
sparingly and executed consistently.

UNIT 4 DONE

UNIT 5

Communicating value :

Designing and managing integrated marketing communications, managing

mass communications: advertising, sales promotions, events, experiences and
public relations, managing digital communications: online, social media and
mobile, managing personal communications: direct ma rketing, database
marketing, personal selling marketing, database marketing, personal selling

Integrated Marketing Community

Integrated Marketing is an approach to creating a unified and seamless experience

for consumers to interact with the brand/enterprise; it attempts to meld all aspects
 of marketing communication such as advertising, sales promotion, public relations,
direct marketing, and social media, through their respective mix of tactics,
methods, channels, media, and activities, so that all work together as a unified
force. It is a process designed to ensure that all messaging and communications
strategies are consistent across all channels and are centered on the customer.

IMC is an approach to achieving the objectives of a marketing campaign, through a

well coordinated use of different promotional methods that are intended to
reinforce each other. It recognizes the value of a comprehensive plan that
evaluates the strategic roles of a variety of communication disciplines advertising,
public relations, personal selling, and sales promotion and combines them to
provide clarity, consistency, and maximum communication impact.

TYPES:
Horizontal Integration occurs across the marketing mix and across business
functions – for example, production, finance, distribution and communications
should work together and be conscious that their decisions and actions send
messages to customers.
● While different departments such as sales, direct mail and advertising can help
each other through Data Integration. This requires a marketing information
system which collects and shares relevant data across different departments.
● Vertical Integration means marketing and communications objectives must
support the higher level corporate objectives and corporate missions.
● Meanwhile Internal Integration requires internal marketing – keeping all staff
informed and motivated about any new developments from new advertisements, to
new corporate identities, new service standards, new strategic partners and so on.
● External Integration, on the other hand, requires external partners such as
advertising and PR agencies to work closely together to deliver a single seamless
solution – a cohesive message – an integrated message.

Advertising
 Advertising refers to any paid form of non-personal promotion of products or
services by an identified sponsor. The various media used are print (newspapers
and magazines), broadcast (radio and television), network (satellite, wireless and
telephone), electronic (web page, audio and videotape) and display (billboards,
signs and posters).

The primary advantage of advertising is that it reaches geographically dispersed

consumers. Consumers generally tend to believe that a heavily advertised brand
must offer some ‘good value’ but at the same time, advertising proves to be an
expensive form of promotion.

Sales Promotion

It is a variety of short-term incentives to encourage trial or purchase of a product or

service. It may include consumer promotions – focused towards the consumer –
such as a distribution of free samples, coupons, offers on purchase of higher
quantity, discounts and premiums or trade promotions – focused on retailers – such
as display and merchandising allowances, volume discounts, pay for performance
incentives and incentives to salespeople.

Personal Selling

Face-To-Face interaction with one or more buyers for the purpose of making
presentations, answering questions and taking orders. This proves to be the most
effective tool in the later stages of the buying process.

The advantage is that the message can be customized to the needs of the buyer and
is focused on building a long-term relationship with the buyer.

Public Relations

A variety of programs directed toward improving the relationship between the

organisation and the public. Advertising is a one-way communication
 whereas public relations is a two-way communication which can monitor feedback
and adjust its message for providing maximum benefit. A common tool used here
is publicity which capitalizes on the news value of the product or service so that
the information can be disseminated to the news media.

Direct Marketing

Direct Marketing involves the use of mail, telephone, fax, e-mail, or internet to
communicate directly with or solicit response or dialogue from specific customers
or prospects. Shoppers have started relying on credit cards and online purchasing
more than ever which makes it essential for marketers to approach the consumers
directly thus helping them in the purchase process.

Companies have a database of contact details of consumers through which they

send catalogues and other marketing material making it easier for the consumer to
purchase online. The relevance of direct marketing has increased in recent years.

Events And Experiences

These are company sponsored activities and programs designed to create brand-
related interactions with customers. Sponsorships improve the visibility of the
company. Companies provide customers with an experience of using the product
which ends up leading to a higher brand recall than competitors. These events
prove to be engaging with the audience.

Mobile Marketing

Mobile Marketing involves communicating with the consumer via a mobile device,
either to send a simple marketing message, to introduce them to a new
participation-based campaign or to allow them to visit a mobile website.

Cheaper than traditional means for both the consumer and the marketer, mobile
marketing really is a streamlined version of online marketing the use of which is
 increasing as time progresses. Examples are advertisements that we see on mobile
applications.

UNIT 5 DONE

UNIT 6

Managing retailing, wholesaling and logistics Conducting marketing responsibility

for long-term success:managing a holistic marketing organization for the long run

Companies designing marketing channel under the value network principle need to
understand the players, role and their importance.

Retailing

The act through which goods and services reach the end customer for individual or
business usage is known as retailing. The players involved in this act are known as
retailers. Retailers can be manufactures, distributors or wholesalers. They can
reach the end customer through the internet or physical stores. Retail organizations
are divided into three categories store retailers, non-store retailers and retail
organization. Store retailing, the best example is the department store like Macy or
Sears. Store retailers are further divided on the service level with self service, self
selection, limited service and full service stores. Store retailing comprises over
90% in way products reach the end customer.
 Over the years non-store retailing has garnered a market share. Non-store retailing
includes direct selling, direct marketing, automatic vending and buying service.
Avon is an example of direct selling. Internet retail giant Amzon.com is an
example of direct marketing. Soft drink vending machines are a form of automatic
vending.

Retail organizations are retailing stores under direct ownership of corporate.

Customer satisfaction and brand management becomes easier through retail
organizations. Corporate chain store like Old Navy and Franchises like
McDonald’s are good examples of retail organizations.

Every retailer needs to have a business or marketing strategy for success. Retailer
needs to analyze its target market and customers for an in-store promotion and
product assortment. Services form a big part of retailing business, so retailers have
to finalize level of service. Services include pre-purchase, post purchase and
supporting services.

With the advent of technology and unprecedented economic growth, retailing has
its own share of change in business ways.

Wholesaling

The act of purchasing goods for consumer and industry for further resale is referred
to as wholesaling. Here, manufactures and farmers are not considered as
wholesalers.

Wholesaler is an important part of the marketing channel. Wholesaler increase

reach of the company products and the risk of selling to the customers.

Wholesaler can store inventory of various assortment of product thus helping cost
for company and time for customers. Wholesaler can serve as ears and eyes for the
company in understanding competition and customer.

Marketing Logistics
The supply chain management is essential for companies to improve productivity
and reduce costs. The purpose of marketing logistic is to design and implement
infrastructure, which will deliver goods from the point of origin to point of sell in
an effective and least cost manner. This objective mix of high customer satisfaction
and lowest cost possible are asymmetrical. The major decision involved with
marketing logistic relate to order processing, warehousing, inventory and
transportation.

Companies look forward to shortening order to payment cycle. A long cycle will
lead to decrease in customer satisfaction and company’s profit. Companies have to
set benchmarks at each level from sales people receiving orders to receiving
payment from creditors.

Warehousing for finished goods is another important hub for companies. There has
to be a right balance between sales order and quantity of finished goods.
Warehousing at strategic locations increases timely delivery of goods and reducing
in inventory. Technology has helped in improving warehousing standards.

Piled up inventory is not a good sign for the company. Inventory management
involves making decision with time and quantity of raw materials for matching
customer requirements. Management principle like Just In Time (JIT) are used for
better inventory management. In JIT focus is to develop well time flow of raw
materials and finished goods.

Transportation and freight cost plays an important role in final pricing, delivery
and condition of raw materials as well as finished products. Here companies need
to make the decision, whether to use a private carrier (company ownership),
contractual (Outside agency) or common carrier (service shared at standard rates).

A business may choose to use a holistic marketing approach when they are under
the strong belief that all aspects of its marketing strategy are interrelated.
Development of marketing programs such as the marketing mix, the design
of marketing campaigns, and the implementation of marketing processes are not
isolated business functions under a holistic marketing concept. Instead, the
business makes marketing decisions and implements campaigns based on reaching
a common organizational objective.

HOLISTIC MARKETING
The process of holistic marketing takes into account the considerations of stakeholders,
customers, employees, suppliers, and the community as a whole when creating and
implementing marketing strategies. Holistic marketing has gained in popularity due to the
high saturation rate and increased competition in the marketplace. Businesses realize that
they can set themselves apart through a holistic marketing approach, while at the same
time creating synergy among departments in the organization.

Although strategies for implementation differ from one company to the next, every
holistic marketing approach includes four main components: relationship marketing,
integrated marketing, internal marketing, and societal marketing.

1. Relationship Marketing
The goal of relationship marketing is to build strong, long-lasting relationships with
various stakeholders and other important parties connected to the business. Customers,
employees, financing entities, suppliers, vendors, regulatory agencies, and competitive
firms are all necessary partners for a business to have and keep. Each has a significant
impact on the success or failure of the company. Relationship marketing focuses on
establishing relationships with a stakeholder, and it also requires the retention and growth
of each relationship over time.

2. Integrated Marketing
Within the integrated marketing component of a holistic strategy, businesses work
towards making marketing decisions that create value for stakeholders through a clear,
concise marketing message. All activities within integrated marketing, including
advertising, public relations, direct marketing, online communications, and social media
marketing, work in sync with one another to ensure the company's customers and
business partners have the same experience with and perception of the company.

3. Internal Marketing
Internal marketing is aimed at catering to the specific needs of the business's own
employees. Internal marketing ensures that employees are satisfied with the work they
perform each day as well as the philosophy and direction of the organization as a whole.
Greater satisfaction among employees leads to increased customer satisfaction over time,
making internal marketing a key aspect of the holistic approach.

4. Societal Marketing
The last component of holistic marketing is societal or socially-responsible marketing.
This component extends a company's reach beyond the customers consuming its product
or service to society in general.

Societal marketing is aimed at creating marketing initiatives that are based on ethically
sound business practices, such as environmentally-friendly production or meaningful
interaction with the surrounding community. Marketing campaigns that are intentionally
socially responsible provide another method for businesses to build long-lasting,
beneficial stakeholder and partner relationships.

UNIT6 DONE