CHAPTER 1 – DEFINING MARKETING FOR THE NEW REALITIES

 Marketing - Marketing means meeting needs profitably.

 Marketing Management - The art and science of choosing target markets getting,
keeping and growing customers through creating, delivering, and communicating
superior customer value.
 Market - Physical place where buyers and sellers gather to buy and sell goods.
 Goods, services, events, experiences, persons, places, properties, organizations,
information and ideas are the entities which are being marketed.
 Key Customer Markets.
1. Consumers Markets
2. Business Markets
3. Global Markets
4. Nonprofit and Government Markets

 Core Marketing Concepts

1. Needs, Wants, and Demands
 Needs are the basic human requirements such as food, water etc.
 Wants are needs when directed to specific objects, they satisfy the
need.
 Demands are wants for a specific product backed by an ability to pay.
2. Target Markets, Positioning, and Segmentation
Identification of distinct segments of buyers by identifying demographic,
psychographic, and behavioral differences between them. For each of these
target markets, the firm develops a market offering that it positions in target
buyers mind as delivering key benefits.
3. Offerings and Brands
The intangible value proposition (the key benefit), is made physical by an
offering, combination of products, services, etc. A brand is an offering from a
known source.
4. Marketing Channels
To reach a target market, the marketer uses three kinds of marketing channels.
communication channels, distribution channels, and service channels.
5. Paid, Owned, and Earned Media
 Paid media includes TV, magazine and display ads, paid search, and
sponsorships.
 Owned media includes company or brand brochure, website, Facebook
page.
 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 marketing methods.
6. Impressions and Engagement
Impressions occurs when consumers view a communication, they are a useful
metric for tracking the scope or breadth of a communication‟s reach that can
also be compared across all communication types.
Engagement is the extent of a customer‟s attention and active involvement
with a communication.
7. Value and Satisfaction
Value is the sum of tangible and intangible benefits and costs.

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 Satisfaction reflects a person‟s judgment of a products perceived performance
in relationship to expectations.
8. Supply Chain
The supply chain is a channel, stretching from raw materials to components to
finished products carried to final buyers
9. Competition
Includes all the actual and potential rival offerings and substitutes a buyer
might consider.
10. Marketing Environment
It consists of the task environment and the broad environment.
 Task Environment - It includes the actors engaged in producing,
distributing and promoting the offer.
 Broad Environment - It consists of six components: demographic
environment, economic environment, social-cultural environment,
natural environment, technological environment and political-legal
environment.

 The New Marketing Realities

1. Technology
2. Globalization
3. Social Responsibility

 4 A’s of Marketing:

1. Acceptability-It is the extent to which a firm‟s total product offering exceeds

customer expectations.
2. Affordability-It is the extent to which customers in the target market are able and
willing to pay the product‟s price.
3. Accessibility-It is the extent to which customers are able to readily acquire the
product.
4. Awareness-It is the extent to which customers are informed regarding the
product‟s characteristics, persuaded to try it, and reminded to purchase.

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 Holistic Marketing Concept- It is based on development, design, and implementation of
marketing programs, processes and activities that recognize their breadth and
interdependencies.
 Relationship Marketing-A key goal of marketing is to develop deep, enduring
relationships with people and organizations that directly or indirectly affect the success of
the firm‟s marketing activities. Relationship marketing aims to build mutually satisfying
long term relationships with key constituents in order to earn and retain their business.
 Integrated Marketing-It occurs when the marketer devises marketing activities and
assembles marketing programs to create, communicate and deliver value for the
consumers.
 Internal Marketing-It is the task of hiring, training and motivating able employees who
want to serve customers well.
 Performance Marketing- It meansoptimizing financial and nonfinancial returns to
business and society from marketing activities and programs.

CHAPTER 2: DEVELOPING MARKETING STRATEGIES AND PLANS

Value Chain: A tool for identifying ways to create more customer value because every firm
is a synthesis of primary and support activities performed to design, produce, market, deliver
and support its product.

Value Delivery Process:

Choose the value Provide the value Communicate the value
 Segment the market Identify specific product Promote the product
 Select the appropriate  Features  Advertising
target  Prices  Sales force
 Develop the  Distribution  Internet
offering‟s value  Other communication
positioning tools

Corporate and Division Strategic Planning:

 Defining the corporate mission
 Establishing strategic business units
 Assigning resources to each strategic business unit
 Assessing growth opportunities.

Assessing Growth Opportunities:

Includes planning new businesses, downsizing and terminating older businesses.

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Strategic Planning Gap:
Gap between future desired sales and projected sales.
To fill the gap-
1.Intensive growth- growth within
current businesses.
2.Integrative growth- build or acquire
businesses related to current
businesses.
3.Diversification growth- add
attractive unrelated businesses.

Corporate Culture: shared experiences, stories, beliefs, and norms characterizing an

organization.
SWOT Analysis:
EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT
Opportunity Analysis Strengths Analysis
Area of buyer need and interest that a Internal capabilities complimenting
company has a high probability of profitably opportunity exploration.
satisfying.

Threat Analysis Weaknesses Analysis

Challenge posed by unfavorable trend or Internal shortcomings of company that
development, leading to lower sales or impede its development.
profits.

Business Unit Strategic Planning:

 Define business mission
 Goal formulation
 Strategic formulation
 Program formulation and implementation
 Feedback and control
Porter’s Generic Strategies:
 Overall cost leadership- lowest costs to win market share.
 Differentiation- achieving superior performance in customer valued area.
 Focus- Focus on one or more narrow market segments, pursue either cost leadership
or differentiation.
Marketing Plan: A written document summarizing what marketer learned about
marketplace.
Contents of a Marketing Plan:
 Executive summary and table of contents
 Situation analysis: background data on sales, cost, market, competitors, environment
 Marketing strategy: defines mission, objectives, and market offerings.
 Marketing tactics: marketing activities undertaken to execute marketing strategy.

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  Financial projections: sales forecast, expense forecast and a break-even analysis.
 Implementation controls: controls for monitoring and implementation of plan.

CHAPTER 3: CREATING LONG-TERM LOYALTY RELATIONSHIPS

Building customer value, satisfaction and loyalty-

Customer Perceived Value- The difference between the prospective customer‟s evaluation
of all the benefits and costs of an offering and the perceived alternatives.
 Total Customer Benefit- The perceived monetary value of the bundle of
economic,functional and psychological benefits customer expect from a given market
offering because of the product,service, people and image.
 Total Customer Cost- The perceived bundle of costs customers expect to incur in
evaluating, obtaining,using and disposing of the given market offering,including
monetary,time,energy and psychological cost.
CPV = Customer benefit – Customer Cost
 Customer Value Analysis- It reveals the company‟s strengths and weaknesses
relative to those of various competitors. Steps in this-
 Identifying the major attributes and benefits that customers value
 Assess the quantitative importance of the different attributes and benefits
 Assess the company‟s and competitor‟s performance on the different customer
values.
 Examine how customers in a specific segment rate the company‟s performance
against a specific major competitor.
 Choice Processes and Implications-Buyers give more weight to personal benefit
than company‟s benefit which include buying at the lowest price, less operating
expense and enjoy long-term benefit with salesperson.
 Delivering High Customer Value- Loyalty, a deeply held commitment to rebuy or
patronize a preferred product or service in future despite situational influence and
marketing efforts having the potential to cause switching behavior.
 Value Proposition- consists of a whole clutter of benefits the company promises to
deliver.
Total Customer Satisfaction- The company must try to deliver a high level of customer
satisfaction subject to also delivering acceptable levels to other stakeholders, given its total
resources.

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Monitoring Satisfaction – It is a key factor to customer retention.
 Measurement Techniques- Companies measure customer‟s satisfaction and
competitor‟s performance. Periodic Survey is used to measure customer‟s repurchase
intention, likelihood or willingness to recommend the company and brand to others
and specific attribute or benefit perception likely to be related to customer
satisfaction.
 Influence of Customer Satisfaction- It is both goal and market tool. Internet spreads
good and bad word of mouth very quick so customer satisfaction is important.
Product or Service Quality- Quality is the totality of features and characteristics of a
product or service that bear on its ability to satisfy stated or implied needs.
 Impact of Quality- Higher level of quality gives higher customer satisfaction.
 Marketers help companies identify and deliver high quality goods and services by
identifying their needs, delivering the proper product at the proper time and also
staying in touch with customers.
Maximizing Customer Lifetime Value- 80-20 rule states that 80% or more of the profits
come from 20% of the customers.
Customer Profitability- A profitable customer is a person, household or company that yields
a revenue stream exceeding by an acceptable amount the company‟s cost for attracting,
selling, and serving the customer.
 Customer Profit Analysis (CPA) - It is best conducted with Activity-based costing
which identifies real cost of serving each customer.
Measuring Customer Lifetime Value- It is the net present value of the stream of future
profits expected over the customer‟s lifetime purchase.
Attracting and Retaining Customers- Different acquisition method yield customers with
varying CLVs. Ex- E-mails to new customers
 Reducing Defection- It is not enough to attain new customers, company must keep
them and increase their business. To reduce defection-
 Define and measure its retention rate.
 Distinguish the causes of customer attrition and identify those that can be managed
better and
 Compare the lost CLV to the costs of reducing the defection rate.

 Retention Dynamics – The Marketing Funnel(figure above) identifies the

percentage of the potential target market at each stage in the decision process.

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  Managing the Customer Base- A key driver of shareholder value is the aggregate
value of thecustomer base which can be improved by-
 Reducing the rate of customer defection
 Increasing the longevity of the customer relationship
 Enhancing the growth potential of each customer through „share of wallet‟, cross
selling and up-selling
 Making low profit customer more profitable or terminating them
 Focusing disproportionate effort on high profit customers.
Building Loyalty- Three marketing activities that improve loyalty and retention-
 Interact closely with customers- Connecting customer, client and others.
 Develop Loyalty programs-Frequency Programs to reward customer who buy
frequently and substantial amount. Club membership Program attracts and keep those
customers responsible for the largest portion of business.
 Create institutional ties
Brand Communities- A brand community is a specialized community of consumers and
employees whose identification and activities focus around the brand.
 Types of Brand Communities- some from brand users and others are company
sponsored and facilitated.
 Maximizing the Benefit of Brand Communities- Results in more loyal, committed
customer base with constant source of inspiration and feedback. Recommendation for
effective online brand community-
 Enhance the timeliness of information
 Enhance the relevance of information exchanged
 Extend the conversation
 Increase the frequency of information exchanged.
Win-Back– however hard companies try, some customers become inactive or drop-out. The
strategies to reactivate them are win-back strategies.
Customer Relationship Management- Process of carefully managing detailed information
about individual customers and all customer „touch-points‟ to maximize loyalty. Touch point
is any occasion when a customer encounters the brand and product from actual experience to
personal or mass communications to casual observation.
 Personalizing Marketing- Making sure that the brand and its marketing are as
personally relevant as possible to as many customers as possible.
 Customer Empowerment- Helping consumers become evangelists for brands by
providing them resources and opportunities to demonstrate their passion.
 Customer Reviews and Recommendation- Making recommendation from consumer
an important factor for decision making.
 Customer Complaint- Even a perfectly designed program will have complain, best
thing to be done is to make it easy for them to complain and resolve the complain.
Some factors to recover customer goodwill are contacting them soon, accepting
responsibilities, using friendly people and resolving quickly.

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 CHAPTER 4 – COLLECTING INFORMATION AND FORECASTING
DEMAND

MARKETING INFORMATION SYSTEM (MIS)

An MIS consists of people, equipment and procedures to gather, sort, analyze, evaluate and
distribute needed, timely and accurate information to marketing decision makers.
1. Internal Records
 The Order-to-Payment Cycle- Customers send orders, the sales department
prepare invoices, billing documents are generated and are sent to various
departments.
 Sales Information Systems- Marketing managers need timely and accurate
reports on current sales. Also, the data should be carefully interpreted to avoid
misinterpretation.
 Databases, data warehousing and data mining-The explosion of data brought
by the maturation of internet gives companies opportunities to engage their
customers.

2. Marketing Intelligence System- A marketing intelligence system is a set of

procedures and sources that managers use to obtain everyday information about
developments in the marketing environment.
 Train and motivate the sales force to spot and report new developments
 Motivate distributors, retailers and other intermediaries to pass along important
intelligence
 Hire external experts to collect intelligence
 Network internally and externally
 Set up a customer advisory panel
 Take advantage of government related data sources
 Purchase information from outside research firms and vendors
 Collecting marketing intelligence on the internet- In order to know about the
competitors‟ strengths and weaknesses, the companies often use independent
customer goods and service review forums, distributor or sales agent feedback
sites, combo sites offering customer reviews and expert opinions, customer
complaint sites and public blogs.
Communicating and acting on marketing intelligence – The competitive intelligence works
best when it is closely coordinated with the decision making process.
3. Analyzing the macro-environment
a) Needs and Trends
 Fad –A fad is an unpredictable, short-lived and without social, political and
economic significance. Example – crocs clogs
 Trend – A trend is more predictable and durable than fad. Trends reveal the shape
of the future and can provide strategic decision.
 Megatrend – It is a large social, economic, political change that is slow to form
and once in place, influences us for some time.
b) Identifying the major forces –
 The demographic environment
1. Worldwide population growth

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 2. Population age mix
3. Ethnic and other markets
4. Educational groups
5. Household patterns
 The Economic Environment
1. Consumer psychology
2. Income distribution
3. Income, savings, debt and credit
 The Socio-Cultural Environment
1. Views of ourselves
2. Views of others
3. Views of organizations
4. Views of society
5. Views of nature
6. Views of the universe
Core cultural values- Core beliefs and values passed from parents to children and reinforced
by social institutions like schools, churches.
Sub cultures- Groups with shared values, beliefs, preferences and behaviors emerging from
their special life experiences or circumstances.
 The Natural Environment- Corporate environmentalism recognizes the need to
integrate environmental issues into firm‟s strategic plans.
 The Technological Environment
1. Accelerating the pace of change
2. Unlimited opportunities for innovation
3. Varying R&D budgets
4. Increased regulation of technological change
 The Political-Legal Environment
1. Increased business legislation
2. Growth of special interest groups
Forecasting and Demand Management
The measures of market demand :
1. The potential market is a set of consumers with a sufficient level of interest in a
market offer.
2. The available market is a set of consumers who have interest, income and access to
a particular offer.
3. The target market is a part of qualified available market the company decides to
pursue.
4. The penetrated market is the set of consumers who are buying the company‟s
product.
A vocabulary for demand measurement
 Market demand
 Market forecast
 Market potential
 Company demand
 Company sales forecast
 Company sales potential
 Estimating current demand

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  Total market potential
 Area market potential
1. Market- buildup method
2. Multiple –factor index method
 Industry sales and market shares
Estimating future demand
 Survey of buyers‟ intention
 Composite of sales force opinions
 Expert opinion
 Past-sales analysis
 Market –test method

CHAPTER 5: CONDUCTING MARKETING RESEARCH

Scope of Marketing Research
Marketing Research - Links the consumer, customer and public to the marketer through
information; information that the research is linked to, is about the issues regarding
generating, refining and linking the marketer through information. The marketer has to
monitor marketing performance and improve understanding of marketing as a process.
Marketing Insights – Provides diagnostic information about how and why we observe
certain effects in the market place and what they mean to the marketers.
Market research is not limited to large companies but also have an expansion scope for small
companies, job roles as following-
 Engaging students or professors to design and carry out projects
 Using the internet
 Checking out rivals
 Tapping into marketing partner expertise
Tapping into employee creativity and wisdom
Marketing Research Categories-
1. Syndicated-service research firms
2. Custom marketing research firms
3. Specialty-line marketing research firms
Marketing Research Process
Step 1- Define the problem, the decision alternatives, and the research objectives
Step 2- Develop the research plan
Step 3- Collect the information
Step 4- Analyze the information
Step 5- Present the findings
Step 6- Make the decision
During developing the research plan, the data resources (primary or secondary) and the
research approaches should be kept in consideration.

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  Research can be Observational;conversation with customers or self-consuming the
product.
 Ethnographic Research; concepts and tools from anthropology and other social
science disciplines to provide deep cultural understanding of how people live and
work.
 Survey Research
 Behavioral Research
Research Instruments: Questionnaires, Qualitative, Technological devices
Sampling Plan-After research approach, marketer must design a sampling plan consisting
the answers to the following decisions:
 Sampling unit- Whom should we survey?
 Sample size- How many people should we survey?
 Sampling procedure- How should we choose the respondents?
Contact Methods-
 Mail contacts
 Telephone contacts
 Personal contacts
 Online contacts
Characteristics of Good Marketing Research
1. Scientific method
2. Research creativity
3. Multiple methods
4. Interdependence of models and data
5. Value and cost of information
6. Healthy scepticism
7. Ethical marketing
Measuring Marketing Productivity
Marketing Metrics : A set of measures that helps marketers quantify, compare, and interpret
their performance.
Marketing Mix Modeling: These analyze data from a variety of sources, such as retailer
scanner data, company shipment data, pricing, media and promotion spending data, to
understand more precisely the effects of specific marketing activities.
Marketing Dashboard : A concise set of interconnected performance drivers to be viewed in
common throughout the organization.

CHAPTER 6: ANALYSING CONSUMER MARKETS

Consumer behavior is the study of how individuals, groups, and organizations select, buy, use
and dispose of goods, services.
A consumer‟s buying behavior is influenced by Culture, Social and Personal factors.

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CULTURAL FACTORS
 Each culture consists of smaller subcultures that include nationalities, religions, racial
groups, and geographic regions that are determinant of a person‟s wants and behavior.
 Social stratification ranks and categorize people in a hierarchy called the social classes
which are lower lowers, upper lowers, working class, middle class, upper middles, lower
uppers and upper uppers.

SOCIAL FACTORS
These include reference groups, family and social roles and statuses.

REFERENCE GROUPS: Groups that have a direct or indirect influence on their attitudes or
behavior.
 Groups having a direct influence are membership groups, some of which are primary
groups with whom a person interacts continuously and informally, such as family,
friends, neighbors and co-workers.
 Secondary groups include religious, professionals and trade union groups with which
formal interaction takes place.
 Aspirational groups are those that a person hopes to join.
 Dissociative groups are those whose values or behavior an individual rejects.
 Cliques are smalls groups whose members interact frequently.

FACTORS THAT WORKS TO IGNITE PUBLIC INTEREST IN AN IDEA BY

MALCOLM GLADWELL:

The Law of the Few – three types of people work to spread the idea like an epidemic.
 Mavens: people knowledgeable about big and small things.
 Connectors: people who know and connect with a great number of people.
 Salesman: who possess natural persuasive power.

Stealth Marketing or Shill Marketing: Marketing where people are paid by companies to
anonymously promote their product or service in public areas.
Family is the most influential reference group which includes:
 Family of orientation – consists of parents and siblings.
 Family of procreation – includes the spouse and children.
E.g.Many of the Disney‟s successful products for kids involve tie-ins with their popular TV
or movie franchises.

PERSONAL FACTOR

 Age and Stages in the Life Cycle.

 Psychological life and Occupation and Economic Circumstances. E.g. The baby market
targeting expectant and new parents is highly lucrative for marketers.
 Traits of Brand personality identified by Jenifer Aaker are
1. Sincerity (down to earth, honest, wholesome and cheerful)
2. Excitement ( daring, spirited, imaginative and up to date)
3. Competence ( reliable, intelligent, successful)
4. Sophistication ( upper-class and charming)
5. Ruggedness ( outdoorsy and tough)

LIFESTYLE & VALUES: Consumer decisions are also influenced by core values and the
belief systems.

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KEY PSYCHOLOGICAL PROCESSES
4 key psychological processes are motivation, perception, learning and memory.

THEORIES OF HUMAN MOTIVATION

FRUED’S THEORY:
 Frued assumed that psychological forces influencing people‟s behavior are largely
unconscious and people don‟t understand their motivation completely.
 Someone who examines specific brands will react not only to their stated capabilities but
also to other less conscious cues like shape, size, weight, etc.
 Laddering technique: a technique that let‟s us trace a person‟s motivation.

MASLOW’S THEORY:

 Human needs are arranged in a hierarchy, from physiological needs to safety needs,
social needs, esteem needs, and self actualization needs.
 People will satisfy their most important needs first and then move to the next.

HERZBERG’S THEORY: 2 Factor theory – includes dissatisfies and satisfiers.

Perception: process by which we select, organize, and interpret information inputs to create
a meaningful picture of the world.
 SELECTIVE ATTENTION : it means that marketers must work hard to attract
consumers notice and the challenge is to explain which stimuli people will notice.
 SELECTIVE DISTORTION: it is the tendency to interpret information in a way that fits
our preconceptions.
 SELECTIVE RETENTION: due to selective retention we are likely to remember the
good points about a product we like and forget good points about the competing products.
 SUBLIMINAL PERCEPTION: it requires customer‟s active engagement and thoughts. It
describes situations in which weak stimuli are perceived without awareness.

 LEARNING: changes in our behavior arising through interplay of drives, stimuli, cues,
responses and reinforcement.
Cues are minor stimuli that determine when, where and how a person responds.

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 MEMORY:
Includes short term memory(STM) - a temporary and limited repository of information, and
Long term memory (LTM) – a more permanent repository.
ASSOCIATIVE NETWORK MEMORY MODEL views LTM as a set of nodes and links.

THE BUYING DECISION PROCESS: FIVE STAGE

MODEL
INFORMATION SEARCH: consumers search for limited
information.
Two levels of engagement in the search – heightened
attention and information search.
Search dynamics - by gathering information the consumer
learns about competing brands and their features.
Total set → Awareness Set → Consideration Set → Choice
 SetEXPECTANCY
→ Decision VALUE MODEL:
This model of attitude formation posits that consumers evaluate products and services by
combining their brand beliefs – the positives and negatives .

 PURCHASE DECISION:
Consumers buy the most preferred brand. The sub decisions involved in such decision are as
following: -
a. Brand b. Dealer c. Quantity d. Timing e. Payment
Consumers often takes “mental shortcuts” called Heuristics or rule of thumb for decision
making.
 Conjunctive Heuristics
 Lexicographic Heuristics
 Elimination by aspect Heuristics

1. Decision Heuristics
 Availability
 Representatives
 Anchoring and Adjustment

2. Framing : the manner in which choices are presented to and seen by a decision
makers.

CHAPTER 7: ANALYZING BUSINESS MARKETS

1. Organization Buying
It is a decision-making process by which formal organization establish the need for purchased
products and services to identify, evaluate, and choose among alternative brands and
suppliers.

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1) Business marketers contrast sharply with consumer markets in some ways, however.
They have:
 Fewer but larger buyers
 Close supplier-customer relationship
 Professional purchasing
 Multiple buying influences
 Multiple sales call
 Derived demand
 Inelastic demand i.e. not much affected by the price changes
 Fluctuating demand
 Geographically concentrated buyers i.e. it helps to reduce selling costs
 Direct purchasing
2) Buying situations -: The business buyer faces many decisions in making a purchase.
There are basically three types of buying situations, namely:
 Straight rebuy i.e. in a straight rebuy, the purchasing department reorders items like
office supplies and bulk chemicals on a routine basis and chooses from suppliers on an
approved list.
 Modified rebuy i.e. The buyer in the modified rebuy wants to change product
specifications, prices, delivery requirements, or other terms.
 New task i.e. purchaser buys a product or service for the first time.
3) The buying center -: Webster and Wind call the decision making unit of a buying
organization the buying center. The buying center includes all the members of the
organization who play any of seven roles in the purchase decision process
 Initiators
 Users
 Influencers i.e. people who influence the buying decisions
 Deciders i.e. people who decide on product requirements or on suppliers
 Approvers i.e. people who authorize the proposed actions
 Buyers
 Gatekeepers i.e. people who have power to prevent sellers from reaching members of
the buying center.
4) Stages in the buying process
Patrick J. Robinson and his associates identified eight stages and called them buy-phases,
they are:
 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order-routine specification
 Performance review.
5) E-Procurement -: Websites are organized around 2 types of e-hubs, vertical hubs centered
on industries (plastics, steels, chemicals, paper) and functional hubs (logistics, media buying,
advertising, energy management). In addition to these websites, companies can use e-
procurement in other ways as well
 Set up direct extranet links to major suppliers
 Form buying alliances
 Set up company buying sites

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6) Some companies handle price oriented buyers by setting a lower price but establishing
restrictive conditions, a) Limited quantity, b) No refunds, c) No adjustments and d) no
services.
7) Several forces influence the development of a relationship between business partners. Four
relevant ones are availability of alternatives, importance of supply, complexity of supply, and
supply market dynamism. Based on these we can classify buyer-supplier relationships into
eight categories: -
 Basic buying and selling
 Bare bones
 Contractual transaction
 Customer supply
 Cooperative systems
 Collaborative
 Mutually adaptive
 Customer is king
8) Institutional Market consists of schools, hospitals, nursing homes, prisons, and other
institutions that must provide goods and services to people in their care.
9) Specific Investments are those expenditure tailored to a particular company and value
chain partner (Investments in company-specific training, equipment, and operating
procedures or systems).
10) Opportunism is some form of cheating or undersupply relative to an implicit or explicit
contract.

CHAPTER 8: TAPPING INTO GLOBAL MARKETS

 INTRODUCTION
A global firm operates in more than one country and captures R&D, production,
logistical, marketing and financial advantages not available to purely domestic
competitors.High opportunities and risks in global markets. Examples of successful
global marketers: Hyundai (quality of cars), Tata Motors (affordability of Nano).


 Factors attracting companies to global markets:

1. Better profit opportunities 

2. Larger customer base 

3. Broader market 

4. Global competition at home markets 

5. Services to customers across international borders 


 Risks involved in going global: 


1. Failure in designing competent product 

2. Difference in business culture 

3. Foreign regulations and high costs 

4. Lack of international experience 

5. Change in political and business law and foreign currency

 Internationalization process: 

1. No regular export 

2. Export via sole agents 


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 3. sales subsidiaries 

4. Production facilities abroad 

 Which market to enter:
1. Indirect exporting: Less investment and risk 

2. Direct Export: Domestic Division, overseas subsidiary, sales rep. and foreign
agents.
3. Licensing: Engage in international market. Example: Hyatt and Marriot. 

4. Joint Ventures: Example McDonalds. 

5. Direct Investment: Buying interest company. 


Acquisition: Example SABMiller.

1. Marketing Program:
Standardized marketing program (low cost) and adapted
marketing program (example, Oreo) Global similarities and differences w.r.t, age,
preferences, brand perception, internet usage. Marketing adaptation: Examples, taste
of Coca-Cola, McDonald‟s menu layout and staples. 

2. Global product strategies

3. Product Standardization (Facebook, Twitter) 

4. Product adaption: Straight extension (no changes), dual adaptation (change in
product and 
communication), product invention (backward and forward), (new
product). 

5. Brand element adaptation: Change in brand name, logo, slogans and
advertisements. 

6. Global communication strategies: Communication through creative and attractive
messages, slogans, 
advertisement, etc. 

7. Global pricing strategies: price escalations, transfer prices, grey markets, counterfeit
products. 

8. Global distribution strategies: intermediaries, transportations, financing, risk
management. 

9. Country of origin effects:
Building country images through movies, emergence of
global players etc. 
Consumer perception of country of origin: domestic products,
reputation of country for a particular product/service. 


CHAPTER 9: IDENTIFYING MARKET SEGMENTS AND TARGETS

Market Segment – Consists of a group of customers who share a similar set of needs and
wants. It is segmented into-
 Geographical – divides market into geographical units like nation, states, cities etc. A
geo-clustering approach called PRIZM takes 39 factors in 5 categories- education and
affluence, family life cycle, urbanization, race and ethnicity, mobility.
 Demographic – divides into age, family size, gender, income etc. It includes variables
like-
 Age and life-cycle stages- wants and abilities change with age. Ex -Colgate for
different age groups.
 Life stages-Major concern a person is going through. Ex- marriage or divorce.
 Gender- Men and women have different attitudes and behave differently
depending on genetic makeup and socialization.

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  Income- The income group helps in targeting the segment to people for a product.
 Generation- Each generation or cohort is influenced by the time it grows up. Four
main generation cohorts-
 Millennials (or Gen Y) – people born between 1977 and 1994. These are also
known as the echo boomers, „digital native‟. Widely used experiential tactics-
Student ambassadors, Street teams and cool events.
 Gen-X–people born between 1964 and 1978. They were raised in more
challenging times when working parents left them in day cares.
 Baby Boomers – people born between 1946 and 1964. One amongst five had the
mantra „fifty is the new thirty‟.
 Silent Generation- people born between 1925 and 1945. They redefine what old
age means as most of them feel younger than their age.
 Race and Culture- Multicultural marketing recognizes that different ethnic and
cultural segment have sufficiently different needs and wants to require targeted
marketing activities.
1. Hispanic Americans- People born between 2000 to 2010. These have strong
family values and are brand loyal with a keen interest in product quality.
2. Asian American- Six counties of Far east, south-east or Indian sub-continent
represent such population- China, Philippines, India, Vietnam, Korean and
Japan.
3. African American- These are the most fashion-conscious of all racial and
ethnic groups but are motivated by selection and quality.
4. Lesbian ,Gay, Bisexual and transgender (LGBT)- They hold approximately 5
to 10% of the population with $700 billion purchasing power.
 Psychological – Psychographics is the science of using psychology and demographic to
better understand the customers. Customers are divided into groups like personality traits,
lifestyle or values. Most popular available classification system is Insight‟s (SBI) VALS,
used for consumer motivation and consumer resource.
 Behavioral – Buyers are divided into groups on the basis of knowledge, attitude towards,
use of, or response to a product.
1. Need and benefits- It identifies distinct market segments with clear marketing
implications. Ex- Six Benefit segment of US wine market- Enthusiast, Image
seeker, Savvy Shoppers, Traditionalist, Satisfied sipper and overwhelmed.
2. Decision Role- people play 5 roles in buying decision- Initiator, Influencer,
Decider, Buyer and User.
3. Use and usage related variable- Many marketers believe variables related to user
or usage- occasion, User Status, Usage Rate, Buyer-readiness stage and loyalty
status (loyalty status- Hard-core loyals,Split loyals, Shifting loyals and switchers)
4. Attitude- 5 consumer attitudes- enthusiastic, positive, indifferent, negative and
hostile.
5. Multiple bases- Combining different behavioral bases can provide more
comprehensive and cohesive view of a market and its segment.
How to segment market- It is done through a sequential process. First it is macro-segmented
(which end use to serve) and then micro-segmented (on the basis of price, service and
quality). A flexible market offering consists of two parts- naked solution (elements that all
segments value) and discretionary options (some segments value).
Market Targeting- once the market segment opportunities are identified, it must be decided
how many and which ones to target.
Effective Segmentation Criteria- To be useful Market segmentation must rate favorably 5
criteria- Measurable, Sustainable, Accessible, Differentiable, Actionable.

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Michael Porter’s five forces- Determines the long-run attractiveness of a market- Threat of
intense segment rivalry, Threats of new entrants, Threats of substitute products, Threats of
buyers‟ bargaining power, Threat of suppliers‟ bargaining power.
Evaluating and selecting a Market Segment- It has been divided into 4 levels.
 Full Market Coverage- Firm serves all the customers with all the products they might
need.It is divided as - undifferentiated or mass marketing( ignores segment difference and
goes after the whole market with one offer) and differentiated marketing (different
product to different segment)
 Multiple Segment Specialization- A firm selects a subset of all the possible segments,
each objectively attractive and appropriate. A Super-segment is a set of segment sharing
some exploitable similarity. It can be achieved through- Product Specialization and
Market Specialization,
 Single-Segment Concentration- The firm markets to only one particular segment. Niche
customers here are those who seek mix of benefits within a segment.
 Individual Marketing- The ultimate level leads to „segment of one‟ or „one to one
marketing‟. Mass customization is the ability to meet each customer‟s requirement.
The four-step framework for one to one marketing by Don Peppers and Martha Roger-
Identify your perspective customer, Differentiate customers in term of their needs and
their value to your company, Interact with individual customer to improve knowledge
about their individual needs and to build stronger relationship and customize products and
customize products and services and messages to each customer.
 Legal and ethical issues with market targets- Marketers must avoid customer backlash
and some customers resist being labeled. Even marketing targets may generate public
controversy when marketers take unfair advantage.

CHAPTER 10: CRAFTING THE BRAND POSITIONING

Positioning: Brand Positioning can be defined as an activity of creating a brand offer in such
a manner that it occupies a distinctive place and value in the target customer‟s mind. Eg.
Direct TV, the worlds leading provider of digital television entertainment service. Direct TV
carries the slogan “Don‟t just watch TV, Direct TV” reflecting a unique brand positioning.
 To develop a Brand Positioning all market strategies are built on Segmentation, Targeting
and Positioning (STP).
Deciding on a position requires:
1. Choosing a frame of reference.
2. Identifying the optimal points of parity and points of difference.
3. Creating a brand mantra.

1. Competitive frame of reference: defines which other brands a brand competes with and
which should thus be the focus of competitive analysis.
Competitor can be identified through a competitive frame of reference Category
Membership (a set of products with which a brand competes) Eg. - PepsiCo knows Coca-
Cola‟s Dasani is a major bottled water competitor for its Aquafina brand.

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2. Points of difference (PODs) and points of parity (POPs).
PODs are attributes or benefits that customers strongly associate with a brand, positively
evaluate, and believe they could not find to the same extent with a competitive brand. Eg.
Apple (design, ease-of-use and irreverent attitude), Nike (performance, innovative
technology and winning).
 The brand to be truly functional to consumer should be- desirable to consumer,
deliverable by the company and differentiating from competitors.
POPs are benefit associations that are not necessarily unique to the brand, but may in fact be
shared with other brands.
The benefit association is of three types-
 Category points of parity- represent necessary but not sufficient conditions for brand
choice.
 Correlational points of parity- are potentially negative associations that arise from the
existence of positive associations for the brand.
 Competitive points of parity- are associations designed to overcome perceived
weaknesses of the brand in light of competitors‟ point of difference.
Eg. Hyundai Motor Company has pioneered the car market by successfully establishing a
POD on low prize and POP on Quality and Design.
Often, the key to positioning is not so much achieving a POD as achieving a POP.

 Straddle positioning: here POD for one category becomes POP for other and visa
versa.Eg. BMW positioned the brand as the only automobile that offered both luxury and
performance at the same time.

To choose a specific PODs or POPs marketer should use a competitive advantage which
include Means of Differentiation, Perpetual Map(consumers perception and preference) and
Emotional Branding.
 Perceptual Maps- are visual representations of consumer perceptions and preferences.
They provide quantitative pictures of market situations and the way consumers view
different products, services, and brands along various dimensions.
 Emotional Branding- brand positioning should have both rational and emotional
components. It should contain POD and POP that appeal to both head and heart.
Example- Brands such as Kellogg‟s and Johnson & Johnson are seen as authentic,
genuine and evoke trust, affection and strong loyalty.

3. Designing a Brand Mantra :Brand mantra is a three to five word articulation of the
heart and soul of the brand and is closely related to other branding concepts like “brand
essence” and “core brand promise”.Example- Disney adopted an internal brand mantra of
“fun family entertainment”.
Designing a brand mantra Involves 3 criteria which are- communicate, simplify and inspire.
 Establishing a Brand Positioning- A good positioning should follow the “90-10” rule
and be highly applicable to 90% of the products in the brand.
 Communicating category membership relies on three main ways which are-
announcing category benefits, comparing to exemplars and relying on the product
descriptor.
 Communicating POPs and PODs and Monitoring competition are also essential
factors for brand positioning.

Alternative Approaches to Positioning

 Brand narrative and story telling
 Cultural branding

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Branding guidelines for small businesses-
 Find a compelling product or service performance advantage.
 Focus on building one or two strong brands based on key associations
 Encourage product or service trial in any possible way.
 Develop cohesive digital strategy to make the brand “bigger and better”.
 Create buzz and a loyal brand community.
 Leverage as many secondary associations as possible.
 Creatively conduct low-cost marketing research.

CHAPTER -11 CREATING BRAND EQUITY

What is a Brand ?
A brand is a name, term, sign, symbol, design, or some combination of these elements,
intended to identify the goods and services of one seller or group of sellers and to
differentiate them from those of competitors.
Branding : It is the process of endowing products and services with the power of a brand.
Brand Equity : It is the added value endowed to products and services with consumers.
Brand Promise : It is the marketer‟s vision of what the brand must be and do for customers.
Brand Resonance Pyramid

 Brand Value Chain

The brand value chain is a structured approach to assessing the sources and outcomes of
brand equity and the way marketing activities create brand value.

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 What Is a Brand Worth ?
It is the net present value of the future earnings that can be attributed to the brand alone. Its
process follows five steps : Market Segmentation, Financial Analysis, Role of branding,
Brand strength, Brand value calculation.
 What is Customer Equity ?
Customer Equity is a concept that is complementary to brand equity and reflects the sum of
lifetime values of all customers for a brand.
 Brand Dilution : It occurs when consumers no longer associate a brand with a specific or
highly similar set of products and start thinking less of a brand.
 Brand Audits : It measures “where the brand has been,” and tracking studies measure
“where the brand is now” and weather marketing programs are having the intented
effects.
 Brand Portfolios :It is the set of all brands and brand lines a particular firm offers for
sale in a particular category or market segment.
 Integrated Marketing:It is about mixing and matching marketing activities to maximize
their individual and collective effects.

CHAPTER 12: ADDRESSING COMPETITION AND DRIVING

GROWTH
Hypothetical Market Structure :
1) Market Leader (40 %)
2) Market Challenger (30 %)
3) Market Follower (20%)
4) Market Nichers (10 %)
 Market Leader : A market leader has the largest market share in the relevant product
market. To remain dominant, it looks to expand total demand and protect and perhaps
increase its current share.
 Market Challenger : It attacks the market leader and other competitors in an aggressive
bid for more market share.

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 Market Follower : It is a runner-up firm willing to maintain its market share and not rock
the boat. It can be a cloner, imitator, or adapter.
 Market Nicher : It serves small market segments ignored by larger firms. The key is
specialization, which can command a premium price in the process.
Market Leader: Defense Strategies
 Position Defense : Fortify strengths, USP, Occupying most desirable place in
consumers mind.
 Preemptive Defense : Offense is the best defense - All-round Offence, before any
defense preannouncements to engage/divert.
 Counteroffensive Defense :Counterattack, invade attacker - Attack their flank, pincer
attacks - Crush the competitor economically/politically.
 Mobile Defense : Market broadening & diversification - Future center of offense &
defense.
 Contraction Defense : Planned contraction & strategic withdrawal - Give up weaker
markets & focus on strong ones.
 Frontal Attack : Match 4P‟s & watch market trends - Assure better quality at
cheaper price/more value.
 Flank Attack : Market leader‟s weak spots targeted - Identify & fill the gaps.
 Encirclement Attack : Launching grand offensive - Blitz attack on competitors - By
an endowed challenger .
 Bypass Attack : Indirect assault - Bypassing enemy to attack easier markets, -
Diversifying to unrelated products/territories - Bringing new technology.
 Guerrilla Attack/ Warfare :
 Harassing & demoralizing by small, intermittent attacks - conventional or
unconventional – undertaken by a strong opponent .
Product Life Cycles: Competitive Strategies
 Products have a limited life.
 Product sales pass through distinct stages, each posing different challenges,
opportunities and problems to the seller.
 Profits rise and fall at different stages of the product life cycle.
 Products require different marketing, financial, manufacturing, purchasing and human
resource strategiesin each life-cycle stage.

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 CHAPTER 13: SETTING PRODUCT STRATEGY

A product: Anything that can be offered to market to satisfy a want or need, including
physical goods, services, experiences, events etc.
 Product Levels: The customer-value hierarchy. In its market offering, a marketer needs
to address five product levels. Each level adds more customer value and together the five
constitute a customer value hierarchy. They are as follows:
I. Core benefit: It is the service or benefit that the customer is availing
II. Basic product: The additional benefits that come with core benefits
III. Expected product: The quality of the basic product which the customer expects
IV. Augmented product: The product that exceeds the customer‟s expectations
V. Potential product: The products that encompasses all the possible product stages
 Product Classifications:
a. Durability and Tangibility: The products are classified as durable, non-durable and
services
b. Consumer Goods Classification: They are categorized as shopping goods, specialty
goods and unsought goods.
 Product Differentiation: Products can be differentiated by the following:
a. Form
b. Features
c. Performance Quality
d. Conformance Quality
e. Durability
f. Reliability
g. Reparability
h. Style
i. Customization
 Services Differentiation: Services can be differentiated by the following;
a. Ordering Ease
b. Delivery
c. Installation
d. Customer Training
e. Customer Consulting
f. Maintenance and Repair
g. Returns
 Design: offers a potent way to differentiate a position a company‟s products and services.
Design is the totality of the features that affect the way the product looks, feels and
functions. Design can shift consumer perceptions to make a brand experience more
rewarding.
 Luxury Products: upgraded versions of simple products in terms of quality, reliability,
durability and uniqueness. They are sold at a significantly higher price. Marketing Luxury
brands:
a. Controlling and Maintaining Image
b. Making an aspirational image
c. Brand architecture management
d. Attractive logos, symbols, packaging.

The Product Hierarchy:

a. Need family(security)

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 b. Product family (savings and income)gv
c. Product class (financial institutions)
d. Product line (life insurance)
e. Product type (term life insurance)
f. Item (prudential renewable life insurance) Product System: A group of diverse but
related items that function in a compatible manner Product Mix: It is a set of all
products and items a seller offers to sale .

 Packaging: All activities of designing and producing the container for a product
 Labelling: It is the process of designing and adding a tag or elaborately designed graphic
that is a part of the package
 Warranty: Formal statements of expected product performance by the manufacturer
 Guarantee: They are statements that reduce the buyer‟s perceived risk. A formal
assurance that certain conditions will be fulfilled, especially that a product will be
repaired or replaced if not of a specified quality.

CHAPTER-14: DESIGNING AND MANAGING SERVICES

 Services: Act or performance one party offers to another.
 Service mix categories:
1. Pure tangible goods: no services accompanying goods, Eg-soap
2. Tangible good with services: Eg-cell phone
3. Hybrid: equal parts of goods and services, Eg-restaurant meal where food is
prepared and served
4. Major service with minor goods and services: Eg-air travel with few tangibles
(snacks and drinks)
5. Pure service: Eg- psychotherapy

 Characteristics of services:

1. Intangibility: services cannot be seen, tasted, heard or smelled before purchase.

2. Inseparability: services cannot be separated from their providers.
3. Variability: depends on who provides them, when, where and how.
4. Perishability: services cannot be stored for later use.
 Determinants of service quality, in order of importance:
1. Reliability: Ability to perform the promised service dependably and accurately
2. Responsiveness: Willingness to help customers and to provide prompt service.
3. Assurance: The knowledge and courtesy of confidence.
4. Empathy: The provision of caring, individualized attention to customers.
5. Tangibles: The appearance of physical facilities, equipment, personnel, and
communication materials.
 Types of marketing in service industries:
1. External marketing: Describes normal work of preparing, pricing, distributing,
and promoting services to customers.
2. Internal marketing: Describes training and motivating employees to serve
customers well.
3. Interactive marketing: Describes the employees‟ skill in serving customers.

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  Best practices of top service companies :
1. Strategic concept: Top service companies have a clear sense of theirtarget
customers their needs and a distinctive strategy .
2. Top management commitment: Those companies have a thorough commitment
to service quality.
3. High standards: They set high service-quality standards.
4. Monitoring systems: They audit service performance, both their own and
competitors', on a regular basis.
5. Satisfying customer complaints: They encourage disappointed customers to
complain and empower employees to remedy the situation.
6. Profit tiers: Customers in high-profit tiers get special discounts and offers.

 Differentiating Services :

1. Primary service package: What the customer expects. Eg- comfortable room in a
hotel.
2. Secondary service package: addition of features to the package. Eg- free
breakfast buffet in a hotel.

Managing Product-Support Services:

 Identifying and Satisfying Customer Needs: Customers have three specific worries:
-About reliability and failure frequency
-About downtime.
-About out-of-pocket
 Post-sale service strategy:
Consider customers‟ complaints, requests and suggestions.

CHAPTER 15: INTRODUCING NEW MARKET OFFERINGS

 Make or Buy – A company can add new products through acquisition or

development. Challenges in New Product Development

1. The Innovation Imperative New-Product Success New-Product Failure

2. Fragmented Markets
Social, economic, and governmental constraints Cost of
development
Capital Shortages
Shorter required development time
Poor launch
timing
Shorter product life cycle
Lack of organizational support
3. Organizing New-Product Development

26
 4. Cross-functional teams – Develops a specific product or business.
5. Crowdsourcing – Unpaid outsiders can offer needed expertise or a different
perspective on a task or project that might otherwise be overlooked.
Stage-gate
systems – Divides the innovation process into stages, with a gate or checkpoint
at the end of each.
 Process Ideas

1. Generating ideas 

2. Interacting with Employees 

3. Interacting with Outsiders 

4. Studying Competitors 

5. Adopting Creativity Techniques 

6. Using Idea Screening 


The stages in the new-product development process is shown in the figure below

Managing the Development Process: Concept to Strategy

 Concept Development – Involves a category concept that defines the product‟s

competition. 

 Testing – Presenting the product concept to target consumers, physically or
symbolically, and getting their reactions. 

 Conjoint Analysis – A method for deriving the utility values that consumers attach to
varying levels of a product‟s attributes. 
Managing the Development Process:
Development to commercialization 

1. Product development 

2. Physical prototypes 

3. Customer tests 

4. Market testing 

5. Consumer-goods market testing 

6. Business-goods market testing 
Commercialization 

7. When (timing) – First entry, Parallel entry and Late Entry 

8. Where - geographic strategy 

9. To whom – Target market prospects
10. How – Introductory market strategy
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  Consumer Adoption Process: Adoption is an individual‟s decision to become a
regular use of a product and is followed by the consumer- 
loyalty
process.
Innovation is any good, service, or idea that someone perceives, as new, no
matter how long its history.

 Stages in the Adoption Process 


1. Awareness – The consumer become aware of the innovation but lacks
information about it. 

2. Interest – The consumer is stimulated to seek information about the
innovation. 

3. Evaluation – The consumer considers whether to try the innovation. 

4. Trial – The consumer tries the innovation to improve his or her estimate of its
value. 

5. Adoption – The consumer decides to make full and regular use of the
innovation.

Factors Influencing the Adoption Process

 Readiness to try new products and personal influence

 Characteristics of the innovation
 Organizations readiness to adopt the innovations 


CHAPTER 16: DEVELOPING PRICING STRATEGIES AND

PROGRAMMES

 Price- one element of marketing mix that produces revenue.

 Reference prices: price that consumer considers justified to pay for a product/service
in comparison to competitor or in comparison to previously advertised price.
 Possible consumer reference price: fair price, typical price, last price paid, upper
bound price, lower bound price, historical competitor price, expected future price
and usual discontinued price.
 Price-Quality inferences: consumer use price as an indicator of quality, higher the
price higher the quality.
 Price endings- belief of sellers that prices should end in odd numbers. E.g. price
like $299 is perceived to be in 200 rather than 300 range.
 Setting the price:
Step1. Selecting the pricing objective: survival, maximum current profit, maximum market
share, maximum market skimming, product quality leadership, and other objectives.
Step2. Determining demand: price sensitivity, price elasticity of demand
Step3. Estimating cost- Types of cost: variable costs, fixed costs, total cost
 Accumulated production: average cost falls with accumulated production
experience
 Target costing: cost can change as a result of concentrated effort by designers,
engineers.
 Analyzing competitor’s price: prices can be set by observing the pricing of
competitor‟s products
 Selecting a pricing method: after following all the steps the company is all set to
decide the price.

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  Target-return pricing: the price which yield the company the target rate of return on
investment
 Perceived-value pricing: price of a product is determined by its perceived value in
the mind of customer.
 Value pricing: fairly low price for high quality products
 EDLP: everyday low pricing: charging a constant low price with little or no price
promotion or special sales.
 Going rate pricing: when firm bases its price largely on competitor‟s prices,
 Auction type pricing: in which buyers raise bids in order to take the product from
sellers
 Selecting the final price: while selecting the price the firm must consider the
additional factors, include the impact of other marketing activities, company
pricing policies etc.
 Differentiated pricing:
 Customer segment pricing: e.g. - monuments charging low to students
 Product form pricing
 Channel pricing: whether purchased from vending machines, restraint
 Image pricing: e.g. Same perfume sold in different bottles by creating different
images
 Location pricing: e.g. Theatre prices differently for different location of seats
 Time pricing: prices vary by day, hour or season.
 Delayed quotation pricing: company decides the price when the product is finished
or delivered.
 Escalator clauses: the company require the customers to pay today‟s as well as part of
any inflation increase that takes place before delivery.
 Unbundling: maintaining the price but removing or pricing separately one or more
elements of offer. E.g. installation charges.
 Price Discrimination occurs when the company sells a product or service at two or
more prices that do not reflect a proportional difference in costs.

CHAPTER 17: DESIGNING AND MANAGING INTEGRATED

MARKETING COMMUNICATIONS

 The role of marketing communications

Marketing communications are the means by which firms attempt to inform, persuade, and
remind consumers; directly or indirectly about the products and brands they sell.
 Communication process models
 Macro-model of the communication:
 Key factors- Sender, Receiver, Message, Media, Encoding, Decoding, Response,
Feedback.

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 Micro model of consumer responses - It concentrates on consumers‟ specific responses
to communications.
 Elements- Awareness, Knowledge,Liking,Preference,Conviction,Preference

 Developing Effective Communications

1. Identify the target audience
2. Set the communications objectives – Establish need for category, Build brand
awareness, Build brand attitude, Influence brand purchase intention
3. Design the communications – Message strategy, Creative strategy, Message
source
4. Select the communication channels – Personal and Non-personal
communication channels, Integration of communication channels.
5. Establish the total marketing communications budget
 Selecting the Marketing Communication Mix – Companies must allocate their
marketing communications budget over the eight major modes of communication;
advertising, sales, promotion, events & experiences, public relations & publicity, online
& social media marketing, mobile marketing, direct & database marketing, sales force.
 Characteristics of marketing communication mix
1. Advertising – Pervasiveness, Amplified expressiveness, Control

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 2. Sales Promotion – Ability to be attention getting, Incentive, Invitation
3. Events and Experiences – Relevant, Engaging, Implicit
4. Public Relations and Publicity – High credibility, Ability to reach hard-to-find buyers,
Dramatization
5. Online and Social Media Marketing – Rich, Interactive, Up to date
6. Mobile Marketing – Timely, Influential, Pervasive
7. Direct and Database Marketing – Personal, Proactive, Complementary
8. Personal Selling – Customized, Relationship-oriented, Response-oriented
 Factors in setting the marketing communication mix – Type of product market,
Buyer-readiness stage, Product life-cycle stage.
 Managing the Integrated Marketing Communications Process
 Integrated Marketing Communications – A planning process designed to assure that
all brand contacts received by a customer or prospect for a product, service, or
organization are relevant to that person and consistent over time.
 Coordinating Media :Media coordination can occur across and within media types, but
marketers should combine personal and non-personal communications channels through
multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase
message reach and impact.
 Implementing IMC :Integrated marketing communications can produce stronger
message consistency and help build brand equity and create greater sales impact; forcing
management to think about every way the customer comes in contact with the company.

CHAPTER 18 – MANAGING MASS COMMUNICATIONS:

ADVERTISING, SALES PROMOTIONS, EVENTS AND
EXPERIENCES, AND PUBLIC RELATIONS

DEVELOPING AND MANAGING AN ADVERTISEMENT PROGRAM

Advertising can be can be a cost-effective way to disseminate messages, whether to build
brand preference or to educate people. The five major decisions called the 5 M‟s are -
 Mission – what are our advertising objectives?
 Money –how much can we spend and how do we allocate our spending across media
types?
 Message – what should the ad campaign say?
 Media – what media should we use?
 Measurement – how should we evaluate the results?
Advertising objective- It is a specific communication task and achievement level to be
accomplished with a specific audience in a specific period of time. Setting the advertisement
objectives can be classified as under –
 Informative advertising –It aims to create brand awareness and knowledge of new
products or new features of existing products.
 Persuasive advertising – It aims to create preference of a particular product or service.
 Reminder advertising – It aims to stimulate repeat purchase of a product and services.
 Reinforcement advertising – It aims to convince current purchasers that they made the
right choice.

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Deciding on the advertising budget – The following factors are to be considered:-
 Stage in the product life cycle – New products and services need more advertising
budget to build awareness and to gain consumer trial.
 Market share and customer base – High market share brands usually require less
advertising expenditure than a low market share brand.
 Competition and clutter – In a market with a large number of competitors and high
advertisement spending, a brand must advertise more heavily to be heard.
 Advertising frequency – The number of repetitions needed to put the brands‟ message
across to consumers has an obvious impact on the advertising budget.
 Product substitutability – Brands in less-differentiated or commodity-like product
classes require heavy advertising to establish a unique image.
Advertising elasticity- The predominant response function for advertising is often concave
but can be S-shaped.
Developing the advertising campaign– The three steps are as follows:–
 Message generation and evaluation – Advertisers are always seeking the “big idea”
that connects with consumers rationally and emotionally, distinguishes the brand from
its competitors and is flexible enough to translate to different media, markets and time
periods. Fresh insights are important for creating unique appeals and positions.
 Creative development and execution – The ad‟s impact depends not only on what is
says but also on how it says.
 Television ads –It can demonstrate product attributes and persuasively explain
their consumer benefits. Also, it can dramatically portray user and usage imagery,
brand personality and other intangibles.
 Print ads – Magazines and newspapers can provide detailed product information
and effectively communicate user and usage imagery since readers consume them
at their own pace. At the same time, print media makes dynamic presentations or
demonstrations difficult.
 Radio ads – The main advantage is flexibility. The stations can be targeted, ads
are relatively inexpensive to produce and place and short closings for scheduling
them allow for quick response.
 Legal and social issues- The advertisers must be sure not to overstep social and legal
norms or offend the general public.
Deciding on media selection – The following factors are to be considered: –
 Reach (R) – The number of persons or households exposed to a particular media
schedule at least once during a specified time period.
 Frequency (F) – The number of times within the specified time period that an average
person or household is exposed to the message.
 Impact (I) – The qualitative value of an exposure through a given medium.
The relationship between reach, frequency and impact are as follows-
 Total number of exposures (E) isE=R*F. This is also called gross rating points.
 Weighted number of exposures (WE) is WE=R*F*I.
Choosing among major media types
 Place advertising options are billboards, public spaces, product placementand point of
purchase.
 Evaluating alternate media
 Selecting specific media vehicles

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  Selecting media timing and allocation- The advertiser must choose among continuity,
concentration, flighting and pulsing.
Evaluating advertising effectiveness
 Communication-effect research
 Sales-effect research
Sales promotion – It consists of a collection of incentive tools, mostly short term, designed
to stimulate quicker or greater purchase of particular products or services.
 Advertising versus promotion
 Major decisions-
1. Establishing objectives – for consumers, retailers and sales force
2. Selecting customer protection tools
3. Selecting trade promotion tools
4. Selecting business and sales force promotion tools
5. Developing the program
6. Implementing and evaluating the program – Evaluations are held through sales
data, consumer surveys and experiments.
Events and experiences
Events objectives
 To identify with a particular target market or lifestyle
 To increase salience of company or product name
 To create or reinforce perceptions of key brand image associations
 To enhance corporate image
 To create experiences and evoke feelings
 To express commitment to the community or on social issues
 To entertain key clients or reward key employees
 To permit merchandising or promotional opportunities
Major sponsorship decisions
 Choosing events
 Designing sponsorship programs
 Measuring sponsorship activities
Creating experiences- Experiential marketing not only communicates features and benefits
but also connects a product or service with unique and interesting experiences.
Public relations – It includes a variety of programs to promote or protect a company‟s image
or individual products. Their functions are – press relations, product publicity, corporate
communications, lobbying and counseling.
Marketing public relations – It plays an important role in these tasks – launching new
products, repositioning mature products, building interest in a product category, influencing
specific target groups, defending products that have encountered public problems, building
the corporate image in a way that reflects favorably on its products.
Major decisions in marketing PR
 Establishing objectives
 Choosing messages and vehicles
 Implementing the plan and evaluating results.

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 CHAPTER 19. MANAGING DIGITAL COMMUNICATION: ONLINE,
SOCIAL MEDIA AND MOBILE

Online marketing provides marketers with opportunities for much greater interaction and
individualization. A large part of owned media consists of online marketing communications.

Four of the main categories of online marketing communications are-

 Web sites
 Search ads
 Display ads
 E-mail
Advantages and disadvantages of online marketing communications
Advantages
 They can offer or send tailored information and messages
 Marketers can easily trace their effects by noting numbers of unique visitors
 Contextual placement-marketers can buy ads on sites to their own offering
Disadvantages
 Consumers can easily screen out the most messages
 Bogus clicks are created by software sites.
 Online messages can be hacked or vandalized
Online marketing communication options
1) Websites: Companies must design websites that express their purpose, history, products,
and vision that can encourage repeat visits.
Seven key design elements of an effective websites
 Context
 Content
 Community
 Customization
 Communication
 Connection
 Commerce
Visitors judge site‟s performance on ease of use and physical attractiveness.
Ease of use- The site should download quickly, should be easy to understand and should be
easy to navigate to other pages.
Physical attractiveness - Individual page should be clean, typeface and fontsize readable
with good use of color.
2) Search ads :An important component of online marketing is paid search or pay-per-click
ads.Marketers believe consumers, engaging in search are prime prospects.
 Broader search terms are useful.
 Search terms should be spotlighted on appropriate pages.
 Data can be collected to track the effects of paid search
3) Display ads
 These are small,rectangular boxes containing text and pictures that companies pay to
place on relevant websites. .

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  Interstitials are advertisements which often contain animations and videos, that pop up
between page changes within or across websites
4) E-mails
 It allows marketers to inform and communicate with customers at a fraction of the
cost of the direct-mail. It is a very productive selling tools.
 Emails must be timely, targeted, and relevant.
Social media: Social media are a means for consumers to share text, images, audio, and
video information with each other and with other companies and vice versa.
Social media platforms
There are three main platforms of social media:
1) Online Communities and forums:These are mainly created by consumers or group of
consumers.
2)Blogs: Blogs are regularly updated online journals or diaries and have become an important
outlet for word of mouth.
3) Social networks:Social networks have become an important force in both business to
consumers, business to business marketing.
Using social media
 Social media allows customer to become engaged with a brand at perhaps a deeper
and broader level than ever before.
 Marketers must recognize that when it comes to social media only some customers
engage with some brands and even then, only for some of the time.
Word of mouth(WOM):
Forms of word of mouth: can be online or offline
Viral marketing: It is a form of online word of mouth that encourages consumers to pass
along company developed products or services.
The following rungs on the customer loyalty ladder:
1) satisfaction
2) repeat purchase
3) word of mouth/buzz
4) evangelism
5) ownership
Mobile marketing
Characteristics of mobile device
 Uniquely tied to one user
 Always on and carried everywhere
 Allows immediate consumption
 Highly interactive
Effective mobile marketing programs:
Expert‟s advice;
 Mobile ad copyshould occupy only 50 % of the screen
 Ads should be limited to a pair of phrases.
 Logo should be placed in the corner of the mobile ad frame
 Ad should use at least one bright color but no more than two.

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 CHAPTER 20: MANAGING PERSONAL COMMUNICATIONS: DIRECT
AND DATABASE MARKETING AND PERSONAL SELLING

Direct Marketing- the use of consumer direct (CD) channels to reach and deliver goods and
services to customers without using marketing middlemen. E.g. - direct mail, catalogue
marketing, interactive TV, websites, etc.
Benefits of Direct Marketing
 No cost of reaching the market through a sales force. They can customize and personalize
their relationship with each customer, and interact with them to up sell or cross sell.
 Consumers can save a lot of time. It is less tiresome for them.
 It can reach the prospect consumer the moment the direct marketers want a solicitation.
 It lets marketers test alternative media and message to find most cost effective approach.
Direct Marketing Channels
Direct Mail - It means sending an offer, announcement, reminder or other item to an individual
consumer using highly selective mailing list.
 Benefit - It permits target market selection, is flexible, can be personalized, allows testing
and response measurement and the people reached are much better prospects.
 Objective - The main objective is enhanced response rates measured in customer orders. It
also aims to produce prospect leads, strengthen customer relationship, inform and educate
customers, remind them of offers and reinforce purchases.
 Target Markets and Prospects - Most direct marketers use RFM (recency, frequency,
monetary amount) formula to select customers. They also consider factors like age, sex,
income, education, previous orders, occasions and passion. A company‟s best prospects are
the customers who have bought its product in the past.
 Offer Elements - The offer strategy has five elements - product, offer, medium, distributive
method and creation strategy.
 Testing Elements - The offer strategy can be tested under real marketplace conditions.
Response rates typically understates a campaign‟s long term impact-the awareness, intention
to buy and word of mouth.
 Measuring Campaign Success: Lifetime Value - By adding up planned campaign costs, the
direct marketer can determine the needed break-even response rate. A campaign which fails
to break even in the short run may do so in the long run.
Catalogue Marketing - Here, companies send full-line merchandise catalogs, speciality
consumer catalogs and business catalogs, usually in print form but also as DVDs or online.
Telemarketing- It is the use of telephone and call centers to attract prospects, sell to existing
customers and provide service by taking orders and answering questions. Companies receive
calls from customers (inbound telemarketing) and initiate calls to prospects and consumers
(outbound telemarketing).
Other media for direct response marketing - Newspaper and magazine ads, radio ads,
infomercials- informative TV commercials, at home shopping channels.
Public and ethical Issues in Direct Marketing
 Irritation  Deception and fraud
 Unfairness  Invasion of Privacy
Database Marketing- It is the process of building, maintaining and using customer databases
and other databases to contact, transact and build customer relationships.

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Customer Database - A customer database is an organized collection of comprehensive
information about individual customers or prospects that is current, accessible and actionable for
lead generation, lead qualification, sale of a product or service or maintenance of customer
relationship.
Customer Mailing List - It is a set of names, addresses and telephone numbers of the
customers. A customer electronic mailing list is simply names and email addresses of the
customers. These are different from customer database.
Business Database - It contains information like business customers‟ past purchases; info of
buyer team members; status of current contracts; the suppliers estimated share of customer‟s
business; competitive suppliers; strengths and weaknesses in selling and customer buying
practices, patterns and policies.
Data Warehouse - The information relating to a customer is captured by a company‟s contact
center and organized into a data warehouse so that marketers can capture, query and analyse
them to draw inferences about an individual customer‟s needs and responses.
Data Mining - Through data mining, marketing statisticians extract useful information about
individuals, trends and segments. Companies use their databases in 5 ways:
 To identify prospects
 To decide which customers should
receive a particular offer
 To deepen customer loyalty
 To reactivate customer purchases
 To avoid serious customer mistakes

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Downside of Database Marketing
 Some situations are not just conducive to database marketing.
 Building and maintaining a customer database require a large investment.
 Employees may resist becoming customer oriented and using the available information.
 Not all customers want a relationship with the company.
 The assumptions behind CRM may not always hold true.
Designing the Sales Force- the term sales representatives covers 6 positions, ranging from the least
to the most creative types of selling - deliverer, order taker, missionary, technician, demand creator,
solution vendor.
 Sales force objective - Sales people complete one or more specific tasks in performing their
jobs: prospecting, targeting, communicating, selling, servicing, information gathering and
allocating.
 Sales force strategy - Companies must deploy sales forces strategically so they call on the
right customers at the right time in the right way.
 Sales force structure - Territorial structure and product or market structure. Some
companies need a more complex structure.
 Sales force size - Workload approach is used to establish the size.
 Sales force compensation - The company must quantify four components of sales force
compensation- fixed amount (salary), variable amount (bonus), expense allowance (travel)
and benefits (vacations).

Managing the sales force - It includes recruiting, selecting, training supervising, motivating and
evaluating sales representatives.
 Recruiting and selecting representatives - Sales representatives must be appropriately
selected. It is a waste to hire the wrong people. Sales force turnover leads to lost sales, the
expense of finding and training replacements and often pressure on existing salespeople to
pick up the slack.
 Training and supervising representatives - Investment in training is necessary as
customers expect salespeople to have deep product knowledge, add ideas to improve
operations and be efficient and reliable. Representativeswho are salaried and must cover
definite accounts are likely to receive substantial supervision.
 Sales representative Productivity - Some research suggests today‟s sales representatives
spend too much time selling to smaller, less profitable accounts instead of focusingon larger,
more profitable accounts. Norms for prospect calls, using sales time efficiently and sales
technology can help increase sales representative productivity.
 Motivating Sales Representatives
 Intrinsic Versus Extrinsic Rewards - These include pay, promotion, personal growth
and sense of accomplishment(intrinsic), liking, respect, security and recognition (extrinsic)
 Sales Quotas - In many companies, compensation is often tied to degree of set annual
sales quota fulfillment.
 Evaluating Sales Representatives
 Sources of Information - These include sales report, personal observation, salesperson
self-reports, customer letters and complaints, customer surveys and conversation with other
representatives.
 Formal Evaluation - The sources provide the raw materials for evaluation after which
evaluation can be done by comparing current performances with past performances.
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Principles of Personal Selling - Representatives are taught the SPIN method to build long-term
relationships, with questions such as: situation questions, problem questions, implication
questions and need pay-off questions.

The Six Steps in Effective Selling

 Prospecting and Qualifying - The first step is to identify and qualify prospects. BANT- the
necessary budget, the authorityto buy, need for the product/service and a timelinefor
delivery, is used by marketers in their pursuit of qualified leads.
 Preapproach - The salesperson needs to learn as much as possible about the prospect
company and its buyers. He must thoroughly understand the purchasing process in terms of
who, when, where, why and how in order to set call objectives.
 Presentation and demonstration - The salesperson uses the features, advantages, benefits
and value (FABV) approach to brief the buyer about the product.
 Overcoming objections - Customers pose psychological and logical resistance. To handle
these objections, the salesperson maintains a positive approach and turns it into a reason for
buying.
 Closing - Closing signs from the buyer includes physical actions, statements or comments
and questions.
 Follow-up and maintenance - This is necessary to ensure customer satisfaction and repeat
business. Immediately after closing, the salesperson should cement any necessary details
about delivery time, purchase terms, and other matters important to the customer.

Relationship Marketing-in many cases a company seeks not an immediate sale but rather a
long-term supplier–customer relationship. Today‟s customers prefer suppliers who can work
closely with customer teams to improve products and processes. When Relationship marketing is
properly implemented, the organization will focus as much on managing its customers as on
managing its products.

CHAPTER 21-DESIGNING AND MANAGING INTEGRATED

MARKETING CHANNELS
 Marketing Channels: Set of pathways a product or service follows after production,
culminating in purchase and consumption by the final end user.
 Merchants: Intermediaries such as wholesalers and retailers who buy take title to and resell
the merchandise.
 Agents: Intermediaries such as brokers and sales agents who search for customers and
negotiate on producer‟s behalf but do not take title to the goods.
 Facilitators: Intermediaries such as Transport companies, banks who do not take title to
goods nor negotiate purchases of goods.
 In Managing Intermediaries, the firm must decide how much effort to devote to push and to
pull marketing.
 Push Strategy: It uses the manufacturer‟s sales force trade promotion money to induce
intermediaries to carry, promote and sell the product to end users.

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 Pull Strategy: The manufacturer uses advertising, promotion and other forms of
communication to persuade consumers to demand the product from intermediaries, thus
inducing the intermediaries to avoid it.
 Multichannel Marketing: It reaches two or more marketing channels to reach customer
segments in one market area.
 Integrated marketing channel system: A channel system in which the strategies and tactics
of selling
 through one channel reflects the strategies and tactics of selling through one or more other
channels.
 Value Network: A system of partnership and alliances that a firm creates to source, augment
and deliver its offerings.
 Marketing Channels:

Channel-
Design

Decisions:
 Analyzing customer needs and wants.
 Establishing objectives and constraints.
 Identifying major channel alternative.
 Number of Intermediaries:
 Exclusive Distribution: It severely limits the number of intermediaries.

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  Selective Distribution: It relies on only some of the intermediaries willing to carry a
particular product
 Intensive Distribution: It places the goods or services in as many outlets as possible.
 Terms and Responsibilities of channel members:
 Price Policy calls for the producers to establish a price list and schedule of discounts
and allowances that intermediaries see as sufficient.
 Conditions of sale refers to the payment terms and producer guarantees.
 Distributor‟s territorial rights define the distributor‟s territories and the terms under
which the producer will enfranchise other distributors.
 Mutual services and responsibilities must be carefully spelled out, especially in
franchised and exclusive-agency channels.
 Major channel alternatives evaluated on economic, control and adaptive criteria.
 Channel Management Decisions:
 Selecting channel members.
 Training and motivating channel members.
 Evaluating channel members.
 Modifying channel design and arrangements.
 Channel Modification Decisions
 Global channel consideration.
 Vertical Marketing Systems:
 A conventional marketing channel consists of an independent producer,
wholesaler(s), and retailer(s).
 A vertical marketing system includes the producer, wholesaler(s), and retailer(s)
acting as unified way.
 A horizontal marketing system is a system in which two or more unrelated
companies put togetherresources and programs to exploit an emerging marketing
opportunity.
 Ecommerce uses a Website to transact or facilitate the sale of products and services
online.
 Pure click companies are those companies that have launched a Website without any
previous existence as a firm.
 Brick and click companies are the existing companies that have added an online site
for information or e-commerce.
 M-Commerce marketing practices:
 Advertising and Promotion
 Geofencing: The idea of geofencing is to target customers with a mobile promotion
when they are within a defined geographical space.
 A conflict is generated when one channel member‟s action prevent another channel
member from achieving its goal.
 Types of conflicts and competition:
 A horizontal channel conflict occurs between channel members at the same level.
 A vertical channel conflict occurs between different levels of the channels.
 A multichannel conflict exists when the manufacturer has established two or more
channels that sell to the same market.
 Strategies to manage channel conflicts:
 Strategic Justification.
 Dual Compensation.

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  Super ordinate Goals.
 Employee Exchange.
 Joint Memberships.
 Co-optation.
 Diplomacy.
 Legal Resources.

CHAPTER 22: MANAGING RETAILING, WHOLESALING AND

LOGISTICS
 Introduction – The Retail Market can be unforgiving , the more successful use of
strategic planning , state of the art technology , advanced information systems and
sophisticated marketing tools , the more successful the retail enterprise will be.
 Talking about Retailing – Retailing includes all the activity in selling goods or services
directly to the final consumers for personal, non business use. A retailer or Retail
business store is any business enterprise where sales value come primarily from
retailing.
RETAILING IS A FAST MOVING, CHALLENGING INDUSTRY.
TYPES OF RETAILERS
1) Store Retailers – The best known store retailer is the Departmental Store . Different
format of store retailers will have different competitive and price dynamics. It is
mainly of 4 level of services :
a) Self Service
b) Self Selection
c) Limited Service
d) Full Service
2) Non Store Retailing – Non Store Retailing is growing faster than store retailing ,
especially given e-commerce and m-commerce . They fall under 4 major categories:
a) Direct Marketing
b) Direct Selling
c) Automatic Vending
d) Buying Service
3) Corporate Retail & Franchising – Although many retail stores are independently
owned, an increasing number are part of corporate retailing organization.These
organizations achieve economies of scales, greater purchasing power, wider brand
recognition , and better trained employees than independent stores can usually gain
alone. The Major types of corporate retailing -
a) Corporate Chain stores
b) Voluntary Chains
c) Retailer and Consumer Cooperatives
d) Franchises
e) Merchandising Conglomerates
THE MODERN RETAIL MARKETING ENVIRONMENT

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The Retail Marketing environment is dramatically different today from what it was a decade or
so ago. Two areas that have seen enormous change :
1) COMPETITIVE RETAIL MARKET STRUCTURE
a) New Retail forms and combinations.
b) Growth of Giant Retailers
c) Growth of intertype Competition
d) Emergence of fast retailing
e) Decline of Middle Market Retailers.
2) ROLE OF TECHNOLOGY
Technology is profoundly affecting the way retailers conduct virtually every facet
of every business. Almost all now use technology to produce forecast , control
inventory costs, and order from suppliers , reducing the need to discount and run
sales to clear out languishing products .Technology is also directly affecting the
consumer shopping experience inside the store. Electronic shelf labeling allow
retailers to change price levels instantaneously at need.
MARKETING DECISIONS
1) Target Market
2) Channels
3) Product Assortment
4) Procurement
5) Price
6) Services
7) Store Atmosphere
8) Store Activities & Experiences
9) Communications
10) Location
PRIVATE LABEL BRANDS -A private label brand also called distributor/reseller brand is a
brand that retailers and wholesalers develop. Benetton, the body shop, and Marks & Spencer
carry mostly own brand merchandise.
WHOLESALING-It includes all the activities in selling goods or services to those who buy for
resale or business use. Wholesalers can perform one or more of the following functions-
1) Selling and promoting
2) Buying and assortment building
3) Bulk breaking
4) Warehousing
5) Transportation
6) Financing
7) Risk bearing
8) Market info
9) Management services and counseling
MARKET LOGISTICS-It includes planning the infra to meet demand, then implementing and
controlling the physical flows of materials and final goods from points of origin to points of use
to meet customer requirements at a profit. It has 4 steps –
1) Deciding on the company‟s value proposition to its customer.
2) Selecting the best channel
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 3) Developing operational excellence in sales forecasting, warehouse management,
material management
4) Implementing the solution.

CHAPTER 23 – MANAGING A HOLISTIC MARKETING ORGANIZATION FOR THE

LONG RUN

Internal Marketing: It is an ongoing process where the employees realize their job to create,
serve and satisfy their customers.
Organizing the marketing department: Functional organization, Geographical organization,
Product-or brand-management organization, Market-management organization, Matrix-
management organization.
The manager develops a long-range and competitive strategy, prepares an annual marketing plan,
increases support among sales force, works with advertising, digital and merchandising agencies,
gathers continuous intelligence and initiates product improvements.
Relationship with other departments: All departments need to “think customer” and work
together to satisfy customer needs and expectations.
Building a creative marketing organization: Transforming into a true market-driven company
requires (1) developing a company-wide passion for customers, (2) organizing around customer
segments instead of products, (3) understanding customers through qualitative and quantitative
research.
Socially responsible marketing:
 Corporate social responsibility – Legal behavior, Ethical behavior, Social responsibility
behavior, Sustainability
 Socially responsible business models
 Cause-related marketing – Cause-marketing benefits and costs, designing a cause
program
 Social marketing: By nonprofit or government organizations furthers a cause, such as
“say no to drugs” or “exercise more and eat better.”
Marketing implementation and control:
 Marketing Implementation: Process that turns marketing plans into action assignments
and ensures they accomplish the plan‟s stated objectives.
 Marketing Control – Annual-plan control, Profitability control, Efficiency control,
Strategic control.
Marketing Audit: It is an examination of company‟s marketing environment, objectives,
strategies, and activities with a view of determining problem areas and opportunities and
recommending a plan of action to improve the company‟s marketing performance.
Characteristics: Comprehensive, systematic, independent, periodic.

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Future of marketing:
The coming years will see :
 The demise of the marketing department and rise of holistic marketing
 The demise of free-spending marketing and the rise of ROI marketing
 The demise of marketing intuition and rise of marketing science
 The demise of manual marketing and the rise of both automated and creative marketing
 The demise of mass marketing and rise of precision marketing

Tools for marketing control:

 Annual plan control
1. Sales analysis: Sales analysis, Sales-variance analysis, Microsales analysis
2. Market share analysis: Overall market share, Served market share, Relative
market share
3. Marketing expense-to-sales analysis
4. Financial analysis
 Profitability control
1. Marketing profitability analysis: (a) Identifying functional expenses,
(b) Assigning functional expenses to marketing entities, (c) Preparing a profit and
loss statement for each marketing entity
2. Determining corrective action
3. Direct versus full costing: Types of costs – direct cost, traceable common costs,
nontraceable common costs.
Conclusions from market share analysis, however, are subject to qualifications:
 The assumption that outside forces affect all companies in the same way is often not true
 The assumption that a company‟s performance should be judged against the average
performance of all companies is not always valid
 If a new firm enters the industry, every existing firm‟s market share might fall
 Sometimes a market share decline is deliberately engineered to improve profits
 Market share can fluctuate for many minor reasons.
Analyze market share movements in terms of four components:
Overall market share = Customer penetration x Customer loyalty x Customer selectivity x Price
selectivity.

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