MODULE 1 - MARKETING_____________________ 2. Design a customer-driven marketing strategy.

Marketing Management
MARKETING - Art and science of choosing target markets
and building profitable relationships with
- Managing profitable customer relationships them
- Process of creating value for customers and
build strong relationship in order to capture
value from them
 Selecting customers to serve:
o Market Segmentation – refers to
dividing market into segments
MARKETING PROCESS
o Target Marketing – refers to which
1. Understand the market place and customer segment to go after
needs and wants. o Demarketing – marketing to reduce
demand temporarily / permanently
 Needs – states of deprivation (physical,
social, individual)  Choosing a value proposition:
 Wants – needs shaped by culture and o Value Proposition – set of benefits
personality or values a company promises to
 Demands – wants backed by buying power deliver
o 5 Marketing Concepts:
1. Production Concept
Market Offerings (consumers will favour
products that are available &
- Combination offered to a market to satisfy
affordable)
customer needs and wants
2. Product Concept
(consumers will favour high
quality products, performance,
Marketing Myopia and features)
- Occurs when sellers focus more on their 3. Selling Concept
specific products than on the benefits and (consumers will not buy unless
experiences they can offer products undergo large-scale
- Focus on wants and lose sight of needs selling and promotion effort)
- Example: KODAK, Nokia 4. Marketing Concept
(achieving organization goals
depend on knowing and
satisfying customer wants and
 Customer Value > Customer Satisfaction
needs)
5. Social Marketing Concept
(company should make good
Exchanges marketing decisions by
- Obtaining an object by offering something considering customer wants
in return [satisfaction], company
requirements [profit], and
society’s interest [welfare].
3. Construct an integrated marketing program that
delivers superior value.
5. Capture value from customers to create profits
Marketing Mix and customer equality.
- Set of tools used to implement its  Creating Customer Loyalty and Retention
marketing strategy  Growing Share of Customer
- Classified into 4 Ps of Marketing:  Building Customer Equity
o Product
o Price
o Place Four Customer Relationship Groups:
o Promotion
profitability

Butterflies True Friends

Integrated Marketing Program High - good fit, but not - good fit and
loyal loyal
- Comprehensive plan that communicates
and delivers intended value to customers Barnacles
Strangers
Low - loyal, but limited
- little fit
fit
4. Build profitable relationships and create loyalty Short-term Long-term
customer delight.
Customer Relationship Management
- Overall process of building and maintaining THE CHANGING MARKETING LANDSCAPE
profitable customer relationships
Economic Environment
- Consists of external factors in a business’
Relationship Building Blocks: market and broader economy
 Customer-Perceived Value
- Difference between customer value
and total customer cost  Digital Age
 Customer Satisfaction - time period starting in 1970s
- Extent to which product matches - the introduction of computer with
customers’ expectations subsequent technology
- providing the ability to transfer
information freely and quickly
 Globalization
Customer Relationship Levels:
- Trend where countries are
 Basic Relationships (low-margin) becoming more able to trade a
 Full Partnerships (high-margin) wider variety of goods and services
 Not-For-Profit Marketing
- Used by non-profit organizations
Customer Relationship Tools: - Promote message and ask for
volunteers to help with their
 Frequency Marketing Programs mission
 Club Marketing Programs - Sentimental message
MODULE 2 – MARKETING STRATEGY____________
STRATEGIC PLANNING
- Process of developing and maintaining a
strategic fit between goals, capabilities, and
changing marketing opportunities
STRATEGIC PLANNING STEPS
3. Designing the business portfolio.
(Corporate level)
 Portfolio Analysis – major activity where
management evaluates products and
businesses that make up the company
4. Planning marketing and other functional
strategies.
(Business Unit, Product, and Market level)

1. Defining a company mission.  Strategic Business Unit (SBU) – a unit of

(Corporate level) company that has a separate mission and
objectives
 Mission
- purpose, what it wants to accomplish  BCG Matrix – is a technique developed by
in the larger environment Bruce Henderson of Boston Consulting
- should: Group, about business or products being
 serve as a guide classified as low or high performance
 “market-oriented” rather than depending on growth rate and market share
“product-oriented”
 Fit with market environment
 Market Share – percentage of total market
 Be motivating
that is being serviced by your company,
measure either in terms of revenue or
volume
2. Setting company objectives and goals.
(Corporate level)
BCG Growth-Share Matrix:
The company needs to turn its mission
statement into detailed objectives for each level of growth
management. rate
Stars Question Marks
 Business Objectives – build profitable growth introduction
customer relationships, invest in research, - leaders in business - potential star or
improve profits High - require heavy cash cow, but can
investment also become a dog
 Marketing Objectives – increase market - attempts should - need high
share, create local partnerships, increase be made investment
promotions Cash Cows Dogs
maturity
decline
- foundation / stars
- cash traps
Low of yesterday
 Goals - generate more
- don’t have
- Establish where you intend to go and potential
cash than required
- high cost, low
how to get there - extract profits by
quality
- Improve overall effectiveness investing little cash
 Objectives market
High Low
share
- specific steps to reach your goals
DEVELOP GROWTH STRATEGIES  Value Chain – series of departments that
carry out value-creating activities
 Value Delivery Network – made up of the
Product/Market Expansion Grid – tool for company, suppliers, distributors, and
identifying company growth opportunities customer who partner with each other to
improve performance of entire system

Growth Strategy Matrix:

Marketing Strategy
Existing
New Product - Marketing logic by which companies hope
Product
to create customer value and profitable
Existing Market Product customer relationship
Market Penetration Development
 Market Segmentation – dividing market
into distinct groups of buyers
New Market o Market Segment – group of
Diversification
Market Development consumers who respond to similar
way of marketing efforts
 Market Targeting – process of evaluating
 Market Penetration – increasing sales to
each market segment and selecting one or
current market segments without
more to enter
changing the product
 Market Positioning – arranging product to
 Market Development – identifies and
occupy clear and desirable place relative to
develops new market for current products
competing products
 Product Development – offers new or
modified products to existing market
 Diversification – starting up business
outside company’s current product and Marketing Mix
market - Set of controllable tactical marketing tools
that firm blends to produce the response it
wants from the target market
Downsizing – reduction of business portfolio by
eliminating products or business units that are not The 4 Ps: (vs. 4Cs)
profitable or that no longer fit the company’s  Product – goods and services offered
overall strategy (Customer solution)
 Price – amount of money customers
have to pay to obtain product
Partner Relationship Management (Customer cost)
 Place – company activities that make
- Process of working closely with partners in
product available to the target market
other departments to form effective value
(Convenience)
chain
 Promotion – communicate the merits of
- Partnering effectively with other
the product and persuade customers
companies in the market system to form a
(Communication)
competitively superior value-delivery
network
 o PRODUCT STRATEGIES – product design,
variations, features, packaging, branding,
support services
o PRICING STRATEGY – determine how much
is charged for a product, to final consumers
and to wholesalers and retailers
o PLACE (DISTRIBUTION) STRATEGIES –
outline how, when, and where will the
product be available (place competent)
o PROMOTIONAL STRATEGY – how marketers
communicate a product’s value to
customers
 Product Management – useful for
companies with different products or
brands.
 Market or Customer Management
Organization – useful for companies with
one product line sold to many markets.
IMPACT OF ENVIRONMENTAL FACTORS
Micro environmental Factors:

Marketing Analysis  Suppliers – holds power only when they are

the largest supplier of their goods
- Complete analysis of the company’s  Resellers – if products are taken to market
situation by 3rd party market intermediaries
 Customers – their reasons for buying the
SWOT Analysis: product will play a large role
 Competition – those who sell the same
Positive Negative products and services
 General Public – duty to satisfy the public
Internal Strengths Weaknesses must be considered

Macro environmental Factors:

External Opportunities Threats
 PEST Analysis
- a scan of the external macro-
environmental in which the firm
Marketing Plan operates
- Factors:
- Contents: o Political
1. Executive summary o Economical
2. Current marketing situation o Social
3. Analysis of threats and opportunities
o Technological
4. Objectives and issues
5. Marketing strategy
6. Action programs
7. Budgets
8. Controls

 Implementation – process that turns plans

into actions to accomplish objectives
MODULE 3 – CUSTOMER BUYER BEHAVIOR_______
 Consumer Market – all individuals and
household that buy for personal
consumption
 Consumer Buyer Behavior – buying
behavior of final consumers
Consumer Black Box
 Buyer Characteristics – influence how the
buyer perceives and reacts to stimuli
 Buyer’s Decision Process – affects buyer’s
behavior
Customer Responses
- Include purchasing and loyalty
- Buying attitudes and preferences
BUYER CHARACTERISTICS
 CULTURAL FACTORS
o Culture – set of basic values
(learned from family, school,
religion)
o Subcultures – small groups with
common life experiences and
interests
o Social classes – relatively
permanent and ordered divisions
(index of occupation, income, or
education)
 SOCIAL FACTORS
o Groups – two or more people
interact to accomplish goals
 Membership groups – have
direct influence
 Aspiration groups – groups
you aspire to join / want to
be a part of
 Reference groups – serve
as points of comparison or
reference
 Opinion Leaders – a
person in a reference
group who exerts
social influence
because of special
skills, knowledge, etc.
o Family – key reference group
o Roles and Status – groups and
organizations that can define role
and social status
 PERSONAL FACTORS
o Age and Life Cycle – groups such as
singles, young marrieds, single
parents, etc.
o Occupation – and income affects
products desired and purchased
o Economic Situation
 Lifestyle – person’s pattern
of living expressed in AIO
(activities, interest, opinion)
o Personality and Self-Concept
 Personality – unique
psychological
characteristics that
distinguish someone
 PSYCHOLOGICAL FACTORS
o Motivation
 Motive – a need that is
sufficiently pressing to
direct someone to seek
satisfaction
o Perception – process by which
people interpret information to
form a meaningful picture
o Learning – changes in behavior
arising from experience
o Beliefs and Attitudes
 Belief – descriptive thought
that a person holds about
something
 Attitude – one’s consistent
evaluation, feeling, and
tendency toward something
BUYER’S DECISION PROCESS
 1. Need Recognition – recognizes a problem o Occupation (professional, trade,
or need unskilled)
2. Search – aroused to search for more o Education
information o Ethnic Background
- Information Sources: o Religion
 Personal  Geographic – where
 Commercial o Country
 Public o Region
 Experiential o City
3. Evaluation/Choice o Urban/Rural
4. Purchase – decision about which to o Climate
purchase
 Psychographic – why
5. Post-Purchase Behavior – takes further
o Lifestyle
action after purchase based on satisfaction
o Values
or dissatisfaction
o Social Class
o Personality
o AIO
New Product Buying:
 Behavioral – how
1. Awareness o Occasion
2. Interest o User status (ex, potential, first-time,
3. Evaluation regular users)
4. Trial o Usage rate (light, medium, heavy
5. Adoption – mental process through which users)
an individual passes from first hearing to o Loyalty
final adoption o Knowledge
o Shopping style
o Involvement
Segmentation Process:
1. Segmentation
Multiple Segmentation
2. Targeting
3. Differentiation - Used to identify smaller, better defined
4. Positioning target groups

MARKET SEGMENTATION Intermarket Segmentation

 Demographic – who
o Age group (pre-teens, teens, young
adults, older adults)
o Generation (baby boomers, gen x)
o Gender
o Marital Status
o Family life cycle (young married no
kids, married young kids)
o Family size (couple only, small
family, large family)
- Forming segments who what similar needs
and behavior even though located in
different countries
 Effective Segmentation (requirement):
o Measurable – examples include
size, purchasing power, and profiles
o Accessible – market can be
effectively reached and served
 o Substantial – market is large and
profitable enough to serve
 Product Position – way the product is
o Differentiable – markets are
defined by customers, relative to competing
conceptually distinguishable
products
o Actionable – effective programs can
o Perceptions
be designed
o Impressions
o Feelings
MARKET TARGETING
Target Market – set of buyers sharing common  Competitive Advantage – advantage over
needs or characteristics the company serves competitors , through lower prices or more
benefits

Strategies:
 Undifferentiated (mass) – ignore segments
differences, go after the whole market with
single marketing mix
 Differentiated – target several market
segments and several offers for each
 Concentrated (niche) – go after a large
share of one / few segments, single
marketing mix
 Micromarketing – tailoring for specific
individuals and local customer segments
o Local Marketing – tailoring to needs
of local customers
o Individual Marketing – tailoring to
needs of individuals (one-to-one
marketing, mass customization,
markets-of-one marketing)
 Mass Customization –
process where firm
interacts one-to-one with
masses of customers
 Types of Differentiation:
o Product Differentiation (features, style,
design, attributes)
o Service Differentiation (delivery,
installation, customer training services)
o Channels
o People/Personnel (hiring, employee
train)
o Image (symbols, events)
 Positioning Statement – summarizes
company or brand positioning
o Form: “to (target segments and
needs), our (brand) is (concept) that
(point of difference)”
o Example: To young, active soft-
drink consumers who love
adventure, Mountain Dew is the
soft drink that gives you more
energy than any other brand.

DIFFERENTIATION AND POSITIONING

Differentiation
BUSINESS BUYER BEHAVIOR
- Differentiating the market offering to create
superior customer value - Refers to the buying behavior of
organizations that buy goods and services
Positioning for use in production of other products and
- Arranging for a market offering to occupy a services that are sold to others
place in the mind of target consumer
 Business Buying Process – business buyers
determine which products and services
their organizations need among alternative
suppliers/brands

 Business Demand – derived from demand

for consumer goods

o Inelastic Demand – total demand is

not affected by price changes
o Fluctuating Demand – demand for
business goods change quickly
more than consumer goods

 Types of Buying Situations:

o Straight Rebuy – buyer reorders
without modifications, on a routine
basis
o Modified Rebuy – wants to modify
specifications, prices, terms, or
suppliers
o New Task – buys for the first time

 Participants in the Business Buying Process:

o Buying Center – decision-making
unit of buying organization
 Users – use the product/service
 Influencers – define specific…,
provide information
 Buyers – formal authority to
select supplier and arrange
terms of purchase
 Deciders – formal or informal
power to select or approve
final suppliers
 Gatekeepers – control the flow
of information to others
MODULE 4 – PRODUCTS, SERVICES, AND o Unsought – products that consumer
BRANDS__ does not know about or not
normally buys
(e.g. life insurance, blood
 Product – anything that can be offered in donations)
the market to satisfy a need or want  Industrial Products – for further processing
or for use in business
 Services – offered for sale that is intangible Classifications:
or does not result in the ownership of o Capital Items – aid in the buyer’s
anything production or operations
o Materials and Parts – raw materials
sold directly to industrial users
Forms of Product: o Supplies and Services – operating
supplies, repair and maintenance
 Goods – tangible items, and business services
 Services – intangible

Types of Marketing:
 Experiences – represent what buying will do
for the customer
Levels of Product and Services:
1. Core Benefits – what the buy is really
buying
2. Actual Product – what delivers the core
benefit to the customer
3. Augmented Product – additional services or
benefits of the actual product
 Organization Marketing – activities to
create, maintain, or change attitudes and
behavior of target consumers toward and
organization
 Person Marketing – particular people
 Place Marketing – toward particular places
 Social Marketing – commercial marketing
concepts to influence behavior to improve
the well-being

Types of Product: PRODUCT AND SERVICE DECISIONS

 Consumer Products – for own consumption

Classifications: 1. Product Attributes – deliver the benefits
o Convenience – usually bought o Product Quality – characteristics
frequently, immediately, and with that bear on the ability to satisfy
minimum buying effort customer needs
(e.g. toiletries)  Product Quality Level – level
o Shopping – compared carefully on of quality that supports the
suitability, quality, price, and style products positioning
(e.g. furniture, cars, appliances)  Product Conformance
o Specialty – have unique Quality – freedom from
characteristics / brand identification defects and consistency in
(e.g. medical, designer clothes) level of performance
o Product Features – competitive tool
for differentiating from
 competitors, assessed based on
value to customer versus cost to
company
o Product Style and Design
 Style – appearance
 Design – usefulness as to
looks
2. Branding
o Brand – name, term, sign, design, or
a combination of these that identify
the product and differentiate it
3. Packaging – designing and producing the
container or wrapper of product
4. Labelling
o Labels – identify the product or
brand, descries attributes, and
provide promotion
5. Product Support Services – augment
Types of Decisions:
 Product Line – group of products closely
related by function
 Product Mix – all products and items that a
seller offers
o Width – number of product lines
o Length – number of items in the product
line
o Depth – number of versions of each product
o Consistency – how closely various product
lines are
SERVICES MARKETING
Types of Service Industries:
 Government
 Private Not-for-Profit Organizations
 Business Services
Nature and Characteristics of a Service:
 Intangibility
 Inseparability – cannot be separated from
providers
 Variability – quality depends on how, when,
where, and who provides
 Perishability – cannot be stored
Marketing Strategies for Service Firms: (Additional)
 Service-Profit Chain – links profits with
employee and customer satisfaction
o Internal service quality
o Satisfied and productive service
employees
o Greater service value satisfied and
loyal customers
o Healthy service profits and growth
 Internal Marketing – motivating customer
contact and supporting service employees
to work as a team
 Interactive Marketing – training service
employees in art of interacting with
customers
o Service Differentiation – creates
competitive advantage
 Offer – distinctive features
 Delivery – reliable people,
environment, or process
 Image – symbols, branding
o Service Quality – delivering
consistently higher quality than
competitors
o Service Productivity – cost side of
marketing strategies
  Employee recruiting, hiring, o Sales and profit goals
and training 5. Business Analysis
 Service quantity and quality – review of sales, costs, and profit
strategies projections to find out whether they satisfy
the company objectives
6. Product Development
– creating physical versions to show
whether the idea can be turned into
workable product
NEW-PRODUCT DEVELOPMENT STRATEGIES 7. Test Marketing
– product and marketing program are
tested in realistic market settings before full
introduction
Two Ways to Obtain New Products:
Types of Test Markets:
1. Acquisition – buying of whole company, o Standard
patent, or license o Controlled
2. New Product Development – through own o Simulated
product development efforts 8. Commercialization

New-Product Development Process:

1. Idea Generation PRODUCT LIFE-CYCLE STRATEGIES
– search for new ideas
o Internal Sources  Style – basic distinctive mode of expression
o External Sources  Fashion – currently accepted popular style
 Fad – temporary periods of unusually high
 Crowdsourcing
sales from customer enthusiasm and
2. Idea Screening
product popularity
– to spot good ideas and drop poor ones as
soon as possible
o Is it real?
o Can we win?
o Is it worth doing?
3. Concept Development and Testing
o Product Idea – idea for possible
product
o Product Concept – detailed version
of idea
o Product Image – way consumers
perceive the product
 Concept Testing – testing new
product concepts
4. Marketing Strategy Development
– designing initial marketing strategy based
on new concept
o Description of target market
o Value proposition
MODULE 5 –
PRICING_________________________
Price – amount of money/value customers give up
MAJOR PRICING STRATEGIES
Considerations in Setting Price:
1. Customer Perceptions of Value
 Price ceiling – no demand above
this
2. Product Cost
 Price floor – no profits below this
3. Other Internal and External Considerations
I. Value-Based Pricing
- Uses buyers’ perception of value
- Price is considered before the
marketing program is set
- Customer driven
 Good-value pricing – offers the right
combination of quality at a fair price
 Everyday low pricing (EDLP) – constant low
price with few or no temporary discounts
 High-low pricing – charging higher prices
everyday but has frequent promos
 Value-added pricing – attaches features and
services to differentiate offers, support
higher price, and build pricing power
II. Cost-Based Pricing
- Based on costs plus rate of return
- Product driven
- Fixed (OH), Variable, and Total costs
 Cost-plus pricing – adds a standard mark up
to the cost
 Breakeven pricing – no profit
III. Other Internal and External Considerations
Affecting Price Decisions
 Target costing – starts with ideal selling
price based on consumer value, then
targets costs
 Market and Demand
o Price elasticity of demand – response
of demand to change in price
o Inelastic demand – demand hardly
changes
o Elastic demand – demand changes
greatly for a small change in price
 Competition
o Pure competition – many sellers
o Monopolistic competition – similar but
differentiated products (e.g. clothes)
o Oligopolistic competition – few large
sellers (e.g. telecom)
o Pure monopoly – non-price
competition (e.g. electricity)
 Economic conditions
 Reseller’s response to price
 Government
 Social concerns
PRICING STRATEGIES
New-Product Pricing Strategies:
 Market-Skimming pricing – sets high price
at first to attract buyers with more
resources then gradually reduces for the
rest of the market
 Market-Penetration pricing – offers low
price in initial offering to attract more
customers
Product Mix Pricing Strategies:
 Product Line pricing – takes into account
the cost differences between products
  Optional-Product pricing – takes into - Prices are adjusted to meet needs
account accessory along with main product of individuals and situations
 Captive-Product pricing – involves products - Ex: airline seats
that must be used along with main product  International pricing
 By-Product pricing – products with little or - Prices based on country factors
no (profit) value produced as a result of
main product
 Product Bundle pricing – combines PRICE CHANGES
products and reduce the price
Price cuts occur due to:
 Excess capacity
Price Adjustment Strategies:  Increased market share
 Discount and Allowance pricing Price increase from:
- Reduces price to reward customer
responses  Cost inflation
 Segmented pricing  Increased demand
- Sells product at two or more prices  Lack of supply
not based on cost
- Ex: student and senior discounts
 Psychological pricing PUBLIC POLICY AND PRICING
- Considers psychology of prices and
Pricing Within Channel Levels:
not just economics
- Using amounts lower than whole  Price fixing – sellers must set price without
numbers talking to competitors
o Reference prices – buyers carry in  Predatory pricing – selling below cost to
their minds and refer to punish competitor out of business and gain
 Promotional pricing long-term profits
- Prices are temporarily reduced to
increase demand Pricing Across Channel Levels:
- Ex: loss leader, special event,  Retail price maintenance – manufacturer
clearance requires dealer to charge specific retail
 Geographic pricing price
- Used for customers in different  Deceptive pricing – states price or savings
location that mislead consumers
o FOB-origin pricing - buyer has to
bear shipping cost)
o Uniformed-delivered pricing –
same price plus freight is charged to
all
o Zone pricing – same price per zone
o Basing-point pricing – charges
freight from base to customer
o Freight-absorption pricing – seller
absorbs freight to attract customers
 Dynamic pricing
MODULE 6 – MARKETING CHANNELS____________

 Supply Chain
- “make and sell” view
- Includes raw materials, productive
inputs, and factory capacity

 Demand Chain  Information – about actors and forces in the

- “sense and respond” view
- Suggests that planning starts with
the need of target customer
 Value Delivery Network
- Firm’s suppliers, distributors, and
customers
- Partners with each other to
improve the performance of the
system
MARKETING CHANNELS
marketing department
 Promotion – persuasive communication
about an offer
 Contact – finding and communicating
buyers
 Matching – shaping and fitting to buyer’s
needs
 Negotiation – reaching an agreement on
price and other terms
 Physical distribution – transporting and
storing goods
 Financing – acquiring and using funds to
cover costs
 Risk taking – assuming the risks

Channel Levels:
 Intermediaries
- offer producers greater efficiency in  Customer Marketing Channels
making goods available to  Business Marketing Channels
customers
- from an economic view, they
transform assortment of products
into assortments wanted by
customers

Channel members add value by bridging

time, place, and possession gaps that
separate foods and services from those who
would use them.

CHANNEL BEHAVIOR AND ORGANIZATION

 Marketing Channel – set of independent

organizations that help making a product or
service available for use or consumption

 Channel Conflict – disagreement among
marketing channel members
o Horizontal conflict
o Vertical conflict
CHANNEL DISTRIBUTION SYSTEMS
 Conventional Distribution Systems –
channel seeking to maximize own
profits
 Vertical Marketing Systems (VMSs) –
distribution channel structure with
unified system
o Corporate Marketing System –
combines successive stages of
production under single leadership
 Total ownership
o Contractual Marketing System –
independent firms at different
levels joined together through
contracts
 Legal relationship
o Administered Marketing System –
coordinates successive stages
through size and power of one
parties
 Strong leadership
o Franchise Organization – a channel
member (franchisor) links several
stages
 Horizontal Marketing System – two
or more companies at one level join
together
CHANGING CHANNEL ORGANIZATION
 Disintermediation – cutting out of channel
intermediaries or displacement of
traditional
CHANNEL DESIGN DECISIONS
1. Analysing customer needs.
2. Setting channel objectives.
3. Identifying major channel alternatives.
o Intensive Distribution
o Exclusive Distribution
o Selective Distribution
4. Evaluation.
Distribution Decisions:
 Exclusive Distribution – seller allows only
certain outlets to carry its product
 Exclusive Dealing – seller requires sellers not
handle competitors’ products
 Exclusive Territorial Agreements – limit
territory
 Tying Agreements – dealer must take most of
the line
Marketing Logistics – physical flow of goods,
services, and information from points of origin to
points of consumption
 Inbound logistics – supplier to company
 Outbound logistics – company to customers
 Reverse logistic – from customers
Supply Chain Management – process of managing
upstream and downstream flows

Major Logistic Functions

 Warehousing
 Inventory Management
 Transportation
 Logistics Information Management
MODULE 7 – COMMUNICATING CUSTOMER VALUE - Integration of communication channels to
deliver clear message about the
organization and its brands
PROMOTION MIX
- specific blend of tools used to persuasively The Communication Process:
communicate customer value

 Advertising – paid form of non-personal

promotion by a sponsor
o Broadcast
o Print
o Internet
o Outdoor
 Sales Promotion – short-term incentive
to encourage sale Developing Effective Marketing Communication:
o Discounts
1. Identify the target audience.
o Coupons
o Displays 2. Determine the communication objectives.
o Demonstration  Buyer-Readiness Stages - stages
 Public Relations – building good consumers normally pass through
relations by obtaining favourable on their way to purchase
publicity, building a good image, o Awareness
handling rumors o Knowledge
o Press release o Liking
o Sponsorship o Preference
o Special events o Conviction
o Web pages o Actual Purchase
 Personal Selling – personal presentation  AIDA:
by sales force o Attention
o Sales presentation o Interest
o Trade shows o Desire
o Incentive programs o Action
 Direct Marketing – making direct
connections with targeted individuals 3. Design a message.
o Catalogue  Message content – appeal that will
o Telemarketing produce the desired response
o Kiosks o Rational Appeal – relates to
audience’s self-interest
o Emotional Appeal –
attempt to stir up emotions
o Moral Appeal – directed to
INTEGRATED MARKETING
sense of what is right and
proper
 4. Choose the media.  Percentage of Sales – setting at a certain
 Personal Communication– channels percentage of current or forecasted sales
which people communicate directly
o Word-of-mouth influence –  Competitive Parity – setting to match
between target buyers and competitors’ outlays
associates
o Opinion Leaders – people  Objective Task
within a reference group
who exert social influence
o Buzz Marketing –
cultivating opinion leaders SHAPING THE MIX
and getting them to spread
information
 Nonpersonal Communication –
Promotion Mix Strategies:
media that carry messages without
personal contact or feedback  Push strategy
o Major Media – digital or  Pull strategy
traditional
o Atmosphere – designed
environments that
reinforce buyer’s leanings
toward buying a product
o Events – staged
occurrences
 Press conferences
 Grand openings
 Exhibits
 Public tours

5. Select the message source.

The message’s impact is affected by
how the audience view the communicator.
 Celebrities
 Professionals

6. Collect feedback.
Involves the communicator
understanding the effect on target audience
by measuring behavior.

SETTING THE TOTAL PROMOTION BUDGET

 Affordable Method – setting at level the
management thinks the company can afford