Innovation Marketing 17182022

INNOVATION
MARKETING
DR. RUS SUMARIYANTI HAJI SURIN
01113181719
roseyantie@yahoo.com
1
THE MARKETING
■ CLIP PEPSI N MJ INFLUENCE.flv

STRATEGIC
PLANNING AND THE
MARKETING PROCESS
CHAPTER 1
3
Strategic Planning is the process of
DEVELOPMENT AND MAINTAINING A
STRATEGIC FIT between the
ORGANIZATION’S GOALS AND
CAPABILITIES AND ITS CHANGING
MARKETING OPPORTUNITIES.
STRATEGIC PLANNING
4
INTRODUCTION
■ Marketing combines economics, psychology,

anthropology, sociology, statistics and demographic.
■ Identifies and provides tools to satisfy need and wants.
■ It is around us every day.
■ Improves quality of life.
■ Resolves conflicts between consumer and societal
needs/wants.
5
1. Customer focus: needs and wants
2. Research emphasis
3. Exchange process
4. Relationship basis
5. Competitive environment
6. Satisfaction emphasis
7. Efficiency
8. Process to satisfy needs/wants
6
DEFINITION OF MARKETING
1. Process
2. Planning and executing
3. Conception, pricing, promotion and distribution
4. Goods and services
5. Create exchanges
6. Individuals and organizational
goals
7
The Complexity of Marketing
■Multiple decision-making process

■Interrelated factors
■Interaction between buyer and seller
■Global factor-important for survival
8
HISTORY OF MARKETING THOUGHT
1. Production Concept-industrial revolution (late

18th century)
2. Product Concept-innovation (1920s)
3. Selling Concept-promotion (1940s)
4. Marketing Concept-customer
satisfaction (1960s)
5. Social Responsibility-consumerism and
improve quality of life (1970s)
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Marketing Theory
1. Goods Vs. services-tangible/intangible
2. Product categories-durable/nondurable
3. Consumer Vs. industrial markets
4. Profit Vs. nonprofit
5. Intermediaries Vs. end users
6. Domestic Vs. international
7. Small firms Vs. large firms
1
The Marketing Mix
1. Product
2. Place
3. Price
4. Promotion
1
MARKETING MIX
7PS
sElf-review – 10 MINUTES
Selling versus Marketing
1. Inward-looking Vs. outward-looking

2. Short-term Vs. long-term
3. Sales volume Vs. customer satisfaction
4. Mass production Vs. innovation (needs)
5. Profit focus Vs. Brand loyalty
1
Marketing and Strategic Planning
1. Understanding customers
2. Understanding Competitors
3. Planning concepts (medium and long
term)
4. Marketing intelligence (need discovery)
5. Strengths and weaknesses
6. Strategy assessment-long term goals
7. Organization response to environmental
challenge
7/5/2021 10
Marketing and Strategic
1. Top management concerns

2. Follow the environmental changes- Microsoft
Corporation
3. Global approach-Sears Vs Wall-Mart
4. The organizational strategic plan:
• Organizational mission
• Organizational objectives
• Organizational Strategies
• Organizational portfolio plans
Organizational Mission
1. Organization’s history
2. The organization’s distinctive
competencies
3. The organization’s environment
Organizational Strategies
Strategies based upon product/market
Market penetration
Market development
Product development
Diversification
Strategies based upon competitive
advantage
Porter’s competitive advantage-low cost
advantage-Wal-Mart
Differentiation-Microsoft, Rolex,
L.L.Bean
Organizational Objectives
■Market standing Innovations
■Productivity
■Physical and financial resources
■Profitability
■Manager responsibility
■Worker's performance
■Social responsibility
ORGANIZATIONAL STRATEGIES
1. Organizational strategies based upon value

• Product leadership-innovative approach
• Operational excellence-Dell computer
• Customer intimacy-relationship marketing
2. Organizational Portfolio Plan
• Boston Consulting Group model
• GE model
Product/Market Strategy
1. Market penetration-to use more, changing
product offering and positioning:exp. tuna fish in
water.
2. Product development and Innovation –
redevelop new product or adding new features
3. Market development-taking the product to a new
market: internationalization
4. Diversification:(a) related, and (b)unrelated
industries.
Product Portfolios
Criticism of BCG matrix:
(1) cash flow is applicable to limited number of markets,
(2)brand leader should not be milked because new brand
may not be a leader.
Economies of scale-the more are sold, the more are made,

and the lower the unit cost.
Product mix-product width and depth

Product mix decision: 1.line stretching, 2.line rationalization
MARKETING MANAGEMENT
PROCESS
1. Process of planning,
2. execution,
3. pricing,
4. promotion,
5. distribution of goods and
6. services.
7. Situation analysis
ORGANIZATIONAL OBJECTIVES AND
MISSION
– Cooperative environment-suppliers,
resellers
– Competitive environment
– Economic environment
– Social environment-cultures and
traditions
– Political and Legal environment
MARKETING MANAGEMENT
PROCESS 2
■ Marketing Planning
1. Setting the objectives
2. Selecting the target
3. Market developing the marketing mix
■ Implementation and Control
ORGANIZATIONAL OBJECTIVES AND MISSION
1. Cooperative environment-suppliers, resellers

2. Competitive environment
3. Economic environment
4. Social environment-cultures and traditions
5. Political and Legal environment
STEPS IN STRATEGIC PLANNING
Business Unit,
■ Fig 1.1 Product and Market
Corporate Level
Level
Planning,
Setting Company Designing the
Defining the Marketing and
Objectives & Business
company Mission Other Functional
Goals Portfolio
Strategies
26
DEFINING THE COMPANY’S BUSINESS
& MISSION
■ A Mission Statement is a statement of the Organization’s Purpose
MARKET ORIENTED
CHARACTERISTIC OF GOOD
REALISTIC
MISSION STATEMENT
SPECIFIED
FIT MARKET ENVIRONMENT
DISTINCTIVE COMPETENCIES
MOTIVATING
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COMPARISON
MISSION STATEMENT VISION STATEMENT

About A Mission statement talks about HOW you A Vision statement outlines
will get to where you want to be. Defines WHERE you want to be.
the purpose and primary objectives related Communicates both the
to your customer needs and team values. purpose and values of your
business.
Answer It answers the question, “What do we do? It answers the question,

What makes us different?” “Where do we aim to be?”
Time mission statement talks about the present A vision statement talks about
leading to its future. your future
AIR ASIA VISION
& MISSION
■ The Vision
– AIRASIA VISION IS TO BE THE
LARGEST LOW COST AIRLINE IN ASIA
and serving the 3 billion people who are
currently underserved with poor
connectivity and high fares.
■ The Mission
– To be the best company to work for whereby
employees are treated as part of a big
family
– Create a globally recognized ASEAN brand
– To attain the lowest cost so that everyone
can fly with AirAsia
– Maintain the highest quality product,
embracing technology to reduce cost and
enhance service levels
MALAYSIA ■ Vision ‘An airline uniquely renowned for its
personal touch, warmth and efficiency’
AIRLINES ■ Mission ‘To provide air travel and transport

service that rank among the best in terms of
safety, comfort and punctuality’
MCDONALD’S VISION AND MISSION
■ McDonald’s vision is to be THE WORLD’S BEST
QUICK SERVICE RESTAURANT
EXPERIENCE. Being the best means providing
outstanding quality, service, cleanliness, and value,
so that they make every customer in every restaurant
smile.
■ MCDONALD’S MISSION IS TO BE
– Their customer’s favourite place and way to eat.
– Their worldwide operations are aligned around
a global strategy called the plan to win, which
centre on an exceptional customer experience "
people, products, place, price and promotion.
– They are committed to continuously improving
their operations and enhancing their customer’s
experience.
The business portfolio IS THE
BUSINESS PORTFOLIO
COLLECTION OF BUSINESSES AND
PRODUCTS THAT MAKE UP THE
DESIGNING THE
COMPANY
THE COMPANY MUST:

Analyse its
CURRENT Develop growth
Decide which
BUSINESS strategies for adding
SBU’s should
PORTFOLIO OR new products or
receive more, less businesses to the
STRATEGIC
or no investment portfolio
BUSINESS UNITS
(SBU’s)
32
Analysing Current SBU’s Boston
. Consulting Group Approach (BCG)
RELATIVE MARKET SHARE
High Low
RELATIVE MARKET
QUESTION
STAR
?
GROWTH
High growth & share MARKS

High
PROFIT POTENTIAL High growth, Low share

MAY NEED HEAVY Build into stars or phase out
INVESTMENT TO GROW Require cash to hold market share
CASH COW
Low growth, High share DOGS
Low
ESTABLISHED SUCCESSFUL Low growth & share

SBU’S Low profit potential
PRODUCE CASH
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GE/McKinsey
Matrix -THE
MATRIX SHOWS
MARKET
ATTRACTIVENES
S AND BUSINESS
STRENGTH.
The GE / McKinsey
matrix is a model used
to assess the strength
of a strategic
business unit (SBU) of
a corporation.
PROBLEMS WITH MATRIX
APPROACHES
CAN BE DIFFICULT, TIME CONSUMING & COSTLY TO
IMPLEMENT
DIFFICULT TO DEFINE SBU’S & MEASURE MARKET

SHARE/GROWTH
FOCUS ON CURRENT BUSINESS, BUT NOT FUTURE PLANNING
CAN LEAD TO UNWISE EXPANSION OR DIVERSIFICATION 35

DEVELOPING GROWTH STRATEGIES IN
AGE OF CONNECTEDNESS
EXISTING PRODUCTS NEW PRODUCTS
PRODUCT / MARKET
EXPANSION GRID
EXISTING
MARKET 1.MARKET 3. PRODUCT
PENETRATION DEVELOPMENT
NEW MARKETS
2. MARKET 4.
DEVELOPMENT DIVERSIFICATION
36
MARKET MARKET
PENETRATION: making
DEVELOPMENT:
more sales to current
customers without develop new markets
changing its products for its current products
How? Add new stores in

current market areas, How? Identify new
improve advertising, demographic or
prices, service or store geographic markets
design
PRODUCT / MARKET EXPANSION GRID

37
PRODUCT / MARKET EXPANSION GRID
PRODUCT
DIVERSIFICATION
DEVELOPMENT
: New products for new
: offering modified or new
market
products to current markets
How? New
styles, flavors,
How? Start up or
colors or
buy new business
modified
products 38
. PLANNING CROSS-FUNCTIONAL
STRATEGIES
MARKETING’S ROLE IN STRATEGIC PLANNING
Guiding Input to Strategic Designs Strategies

Philosophy Planners
CUSTOMER SATISFACTION
“MARKET
POSITIONING”
arranging for a product
CONNECTIN to occupy a clear
G WITH distinctive and
CUSTOMERS desirable place relative
to competing products
in the minds of target
consumers”
40
ZAITUN
?
MARKETING STRATEGIES FOR
COMPETITIVE ADVANTAGE
Market Leader Market Challenger
STRATEGY A COMPANY ADOPT

DEPENDS ON ITS INDUSTRY
POSITION
Market Niche Market Follower

Market leader: A market leader is typically
THE FOUR THE COMPANY HOLDING THE
LARGEST MARKET SHARE in a
BROAD particular industry or segment of
BRAND an industry.
POSITIONIN
G FOR
COMPETATI
Market leaders are often recognizable by the global
VE presence of their brand as well as their
ADVANTAG ongoing marketing efforts.
E Apple, Google, Amazon, Facebook,

Boeing and Caterpillar.
■ Market challenger: a market challenger
wants to AGGRESSIVELY STEAL
MARKET SHARE FROM THE MARKET
THE FOUR LEADER, and invests time and money into
BROAD finding differentiators and creating
marketing programs that enable the brand to
BRAND exploit opportunities whenever they arise.
POSITIONIN ■ And if opportunities don’t arise, the market
G FOR challenger will seek ways to create
innovative opportunities.
COMPETATI – The classic example is the ongoing coke
VE vs. Pepsi rivalry.
ADVANTAGE – CB Buying Decision and Brand Loyalty
Coke vs. Pepsi_ who wins _ -
Shortcut.lnk
■ Market follower: A market follower is a
company that follows what the leader in its
sector does. A market follower does not like
THE FOUR taking risks. Instead, it waits and observes
BROAD what its competitors do, especially
the market leader. It then only ADOPTS
BRAND THE LEADER'S SUCCESSFUL
POSITIONIN STRATEGIES.
– Facebook. MySpace, Friendster,
G FOR whatever.
COMPETATI – Google. Yahoo, Altavista, whatever.
VE – Apple. Copied Xerox, Altair, everything.
ADVANTAGE – Slack. Very innovative, especially in
integrations. But we had so many point
solutions before, and since.
■ Market nicher: the market
THE FOUR niche defines the company and
product features AIMED AT
BROAD SATISFYING
BRAND SPECIFIC MARKET NEEDS, as
POSITIONIN well as the price range, production
G FOR quality and the demographics that it
is intended to target. It is also a
COMPETATI small market segment.
VE – ORGANIC FOOD
ADVANTAGE – RETROSTYLE,
THE 4 P’S & 4 C’S OF MARKETING MIX
■ Marketing Mix – Main Ps : Robert F. Lauterborn 1990 (modification of 4P’s)
4P’s 4 C’s
Product Customer Solution
Price Customer Costs
Place Convenience
Promotion Communication
50
ADDITIONAL PS (4p’s to 7p’s)
Marketing mix or better known as 4P’s refers to the main strategy elements that need to
be designed and managed by marketers to come up with a value exchange process that
will maximise consumer satisfaction. Clearly, PRODUCTS, PRICE, PLACE AND
PROMOTION are the four elements that build the marketing mix.
However, for service marketing, marketing mix for the business organisations is known as 7P’s. this is because,
besides designing product, price, place and promotion, the service marketers also need to support services
marketing process by creating:
PHYSICAL EVIDENCE as a
Human management (PERSON) Service delivery process
trade mark, direction, interior
who are the staff and consumers (PROCESS)
design, etc.
51
MANAGING THE MARKETING
EFFORT
Marketing Analysis of Company Situation
Marketing Control
Planning
Marketing
Measure Results
Develop strategic Implementation
Plan
Evaluate results
Carry out the plan
Develop marketing Take Corrective
Plan Action
52
Executive Summary
Current Marketing Situation
CONTENTS Threats and Opportunities Analysis

OF A Objectives and Issues
MARKETI Marketing Strategy – 4 or 7Ps
NG PLAN Action program
Budgets –Financial spreadsheet
Control
53
MARKETING DEPARTMENT
ORGANIZATION
Functional
Combination Geographic
Plan
WAYS TO
CARRY OUT
MARKETING
ACTIVITIES
Market Product
Management Management
54
MARKETING CONTROL PROCESS
MEASURE EVALUATE TAKE

SET CORRECTIVE
PERFORMAN PERFORMAN
GOALS ACTION
CE CE
55
Review of Concept
Connections
■ Explain companywide strategic planning and its four
steps.
■ Discuss how to design business portfolios and growth
strategies
■ Explain functional planning strategies and assess
marketing’s role in strategic planning
■ Describe the marketing process and the forces that
influence it
■ List the marketing management functions, including
the elements of a marketing plan.
56
THE MARKETING
ENVIRONMENT
CHAPTER 2
57
Marketing Environment – consists of the factors and forces
ENVIRONMENT outside marketing that effect marketing management’s ability
MARKETING
to DEVELOP AND MAINTAIN SUCCESSFUL
RELATIONSHIPS WITH ITS TARGET CUSTOMERS.
Includes:
Microenvironment – forces close to the Macroenvironment- larger societal forces

company that affect its ability to serve its that affect the microenvironment - General
customers - Specific Environment Environment
58
THE
MARKETING
ENVIRONME
NT
THE COMPANY’S
MICROENVIRONMENT
COMPANY’S INTERNAL
ENVIRONMENT- functional areas
inside a company that have an
impact on the marketing SUPPLIERS- provide the MARKETING
department’s plans – Specific resources needed to produce goods INTERMEDIARIES- help the
Environment and services and are an important company to promote , sell, and
link in the “value delivery distribute its goods to final buyers.
system”. i.e. resellers.
60
Actors in the Microenvironment
MICRO
ENVIRONMENT
AL FACTORS
COMPANY INTERNAL
ENVIRONMENT
Purc
D h asin
R& g
M
an
ce
u
fac
an
Fin
tu
rin
g
management
Accounting
Marketing
Top
63
TYPES OF CUSTOMER MARKETS
Reseller Go
e ss Markets ve
s in ets M rnm
ark e
Bu ark et nt
M
Int Mar
Ma umer
ern ke
ts
r ke
ati t
s
Con
on
al
Company
64
TYPES OF PUBLICS
Citizen
Action
r nment Local
Go ve Publics Publi
Publics cs
Ge
e d ia Pu nera
M lic s bli l
b c
Pu
Int blics
bli al
Pu anci
Pu
e rn
cs
Fin
al
Company
65
FINANCIAL PUBLICS
1. Influence the company’s

ability to obtain funds. For
example, banks, investment
houses and stockholders are
the major financial publics.
MEDIA PUBLICS
■ Organizations need to manage the
media so that the
1. promote the positive things
2. reduce the impact of a negative
event on their reputation.
3. Public relations (PR) consultants or
“gurus” to help them manage a
particular event or incident.
– TV, RADIO AND NEWSPAPER and
SOCIAL MEDIA
REGULATION AGENCY
ADVERTISING STANDARDS
AUTHORITY (ASA). The constituent
members of ASA are:
• Malaysian Advertisers Association
• Association of Accredited Advertising Agents, Malaysia
• Malaysian Newspaper Publishers Association
• Media Specialists Association
The Code was launched by our first Prime Minister, the late Tunku Abdul Rahman Putra Al-Haj. The Code contains principles describing the
essence of good advertising.
1. All advertisements should be legal, decent, honest and truthful.
2. Advertisements must project the Malaysian culture and identity, reflect the multi-racial character of the population and advocate the
philosophy of RUKUN NEGARA.
3. Advertisements must not identify or typecast each particular racial group or sex with vocations, traditional values and backgrounds.
4. Advertisements must comply in every respect with the Law, common or statute.
5. All advertisements should be prepared with a sense of responsibility to consumers and to society.
6. All advertisements should conform to the principles of fair competition as generally accepted in business.
7. No advertisements shall bring advertising into disrepute or reduce confidence in advertising as a service to the industry and to the public.
8. Advertisements must be clearly distinguishable as such.
MALAYSIAN CODE OF ADVERTISING PRACTICE.

Formed by the consumer or environmental groups. For example:
a. People for ethical treatment of animals (PETA) or Greenpeace.
b. The Human Rights Commission of Malaysia (Malay:
Suruhanjaya Hak Asasi Malaysia) better known locally as
SUHAKAM
c. FOMCA Federation of Malaysian Consumers Associations
(FOMCA)
CITIZEN ACTION GROUPS PUBLICS

GENERAL PUBLICS
A company should be
concerned towards
general publics’ attitude
towards its products and
services.
INTERNAL PUBLICS
Employees who help in creating proper image for the company through word of mouth.
COMPETITORS
Any person or entity which is a
rival against another. In business,
a company in the same industry
or a similar industry which offers
a similar product or service.
COMPETITO
R
Competitor may arise
from:
SMALL FIRMS WITH LOW OVERHEADS
PRODUCING DUPLICATES.
THE
MARKETING
ENVIRONME
NT
Major Macroenvironmental Forces
MAJOR FORCES IN THE COMPANY MACRO
ENVIRONMENT – GENERAL ENVIRONMENT
Tech
Natural nolo
ic forces forc gical P
m es ol i
no for tica
o
Ec orces ce l
f s
es i c
rc ph
Cu orce
fo gra
lt u s
f
o
ra
m
l
De
Company
82
KEY DEMOGRAPHIC TRENDS
CHANGING AGE STRUCTURE
Population is aging ; many divisions
CHANGING MALAYSIAN FAMILY

Later marriage, fewer children, working women and nontraditional households
GEOGRAPHIC SHIFTS
Moving to the Sunbelt, suburbs, “micropolitan areas”
BETTER-EDUCATED & MORE WHITE-COLLAR

Increased college attendance
And white-collar workers
INCREASING DIVERSITY
Homogeneous? Malay, Chinese ,Indian , Foreign market?
83
FROM SMALL GROUPS TO IDENTIFY A
COMPANY THAT HAS DONE A GOOD JOB OF
REACTING TO:
Baby boomers or
DISCUSSION Generation X, or
CONNECTION
S Gen Y
What did the company do well
Compare this company to one that has done a poor job.

What did they do poorly?
84
ECONOMIC ENVIRONMENT
Economic Development
KEY ECONOMIC
Changes In Income: Value Marketing CONCERNS FOR
MARKETERS
Changing Consumer Spending Patterns

TECHNOLOGICAL – forces that
create new technologies, creating new
product and market opportunities
The POLITICAL – laws, agencies and
Company’s pressure groups that influence and limit
Macro organizations and individuals in a
given society
Environment
CULTURAL – institutions and other
forces that affect a society’s basic
values, perceptions, preferences, and
behaviors
86
Faster pace of technological change;
products are outdated at a rapid pace
Almost unlimited opportunities being

developed daily in health care, space
industry, robotics, and bio-genetic field.
Technological
Environment Challenge is not only technical, but also
commercial – make practical, affordable
versions of products
Increase regulation concerning products

safety, individual privacy and other areas
that affect technological changes
87
CULTURAL ENVIRONMENT
People’s
People’s s
view of
themselves
People’s People’s
View of the View of
Cultural
Universe Value of a Others
society People’s view
People’s of
view of Organizations
Nature
Peoples View
of Society
88
■ Environmental Management Perspective
■ Taking a proactive approach to managing the
microenvironment and the macro-environment by
taking aggressive (rather than passive) actions to affect
the publics and forces in the marketing environment.
– How? Hire lobbyists, run “advertorials”, press law
suits, file complaints, and form agreements.
RESPONDING TO THE MARKETING ENVIRONMENT

89
REVIEW OF CONCEPT CONNECTIONS
Describe Explain Identify Explain Discuss

Describe the Explain how Identify the major Explain the key Discuss how
environment forces changes in the trends in the firm’s changes in the companies can
that affect the demographic and natural and political and react to the
company’s ability economic technological cultural marketing
to serve its environments affect environments environments environment
customers marketing decisions
90
SELF-REVIEW (15 MINUTES)
IDENTIFY THE
GENERATIONS AT
WORKPLACE
DEVELOPING A
MARKETING
PLAN
Use a good Marketing Plan to guide the strategic
and tactical direction of your business
Executive Summary
 A Marketing Plan is at the core of directing and
coordinating all marketing
efforts within a firm.
 It usually operates at two levels, strategic and
tactical: strategic to identify the overall market play
and tactical to execute on the marketing plan.
 A Marketing Plan does not need to be long or
expensive to put together. If it is carefully
researched, thoughtfully considered, and evaluated,
it will help your firm achieve its goals.
Developing a Marketing Plan
A Good Marketing Plan
 A good Marketing Plan details what you want to accomplish and helps
you
meet your objectives.
 A Marketing Plan should:
– Explain (from an internal perspective) the impact and results of past marketing
decisions.
– Explain the external market in which the business is competing.
– Set goals and provide direction for future marketing efforts.
– Set clear, realistic, and measurable targets.
– Include deadlines for meeting those targets.
– Provide a budget for all marketing activities.
– Specify accountability and measures for all activities.

Overall Planning Process
 You should create and implement
your Marketing Plan.
Feedback and Control Process
 Some major steps involved in this
process are:
MONITOR
– Planning
• Define your corporate mission
• Establish business units
• Assign resources to business units SIGNOFF MEASURE
• Assess growth opportunities
– Implementing
– Gaining Feedback and Control
• Measuring results
• Diagnosing results CORRECT INPUT
• Taking corrective action

The Marketing Challenge
Ask yourself these five critical questions:
1. What is unique about your business idea? What is the general need that your
product or service aims to meet?
2. Who is your target buyer? Who buys your product or service now, and who do
you really want to sell to?
3. Who are your competitors? How can your small business effectively compete
in your chosen market?
4. What positioning message do you want to communicate to your target
buyers? How can you position your business or product to let people know
about your product?
5. What is your sales strategy? How will you get your product or service in the
hands of your customers?
The 10 Elements of a Good Marketing Plan
A good Marketing Plan includes these 10
elements:
1. Describe Your Business
2. Conduct a Situation Analysis
3. Define Your Customer
4. Strategize Your Market Entry
5. Forecast your Sales or Demand Measurement
6. Define Your Marketing Budget
7. Integrate Your Marketing Communication
8. Identify Sales Channels
9. Track Marketing Activities
10. Evaluate Your Progress
Self-Review – 20 MINUTE
■ COMPARING AND RECOMMENDATION FOR

BETTER BUSINESS PLAN BY FREFERING TO
THE GUIDELINE IN SLIDE 8 UNTIL 19
1. Describe Your Business
 Small business owners often describe themselves by their product
or services; however, business must be viewed as a customer-
satisfying process, not goods-producing.
 Describe your business in detail and clearly identify goals and
objectives.
 Answer the following questions:
– What is your product or service?
– How will your product benefit the customer?
– What is different about the product your business is offering?
– Is it a new business, a takeover, or an expansion?
– Why will your business be profitable?
– What are the growth opportunities?
– What is your geographic marketing area?

2. Conduct a Situation Analysis
 A situation analysis details the context for your
marketing efforts by considering internal and Strengths Weaknesses
external factors that could influence your
marketing strategy.
 This section of the plan could include a SWOT
Opportunities Threats
analysis to summarize your Strengths,
Weaknesses, Opportunities and Threats.
– Strengths: assets or a resources that can be
used to improve your business’
competitive position.
– Weaknesses: resources or capabilities that may
cause your business to have a
less competitive position.
– Opportunities: situations or conditions arising from a business’ strengths, or set
of positive externalities.
– Threats: problems
Developing a that focus
Marketing Plan on your weaknesses and which can create a
potentially negative situation.
3. Define Your Customers
Defining your market does not need to be a difficult process. You do not need a
huge market base, but you need to be realistic and your market needs to be
well-defined.
– Who are your competitors, and who do they target?
– Who is your perfect customer and client base?
– What is your current customer base (in terms of age, sex, income, and geographic
location)?
– What habits do your customers and potential customers share? Where do they
shop, what do they read, watch, listen to?
– What prospective customers are you currently not reaching? How can you reach
them?
– What qualities do your customers value most about your product or service? Do
they value selection, convenience, service, reliability, availability, or affordability?
– What qualities about your product or service do you need to improve? How can
they be adjusted to serve your customers better?
4. Strategize Your Market Entry
Once you have identified what is unique
about your business and who
your target buyers are, focus on your
competition:
– Identify your direct competitors and learn
what they do.
– Sharpen your decisions about the best
business category and market segment in
which to compete.

5. Forecast Sales or Demand
Measurement
 Sales forecasting provides the basis for comparison over a
period of time.
 Market demand is the total volume that could be bought by
a defined customer group in, a defined geographical area, in
a defined time period, and under a defined marketing
program.
 You should:
– Correctly identify and estimate current demand by considering total
market
potential, market share, and expected sales.
– Estimate future demand by considering past sales patterns, consumer
trends, and overall market projections.

6. Define Your Marketing
Budget
 Marketing budgets, especially in small
and mid-sized businesses, are often
arbitrarily set as either x% of planned
revenue or y% over the prior year's
marketing budget.
 Use targeted budgeting to more
intelligently set your budget based on
company objectives.
6. Define Your Marketing
Budget
Answer the following questions:
– What previous marketing methods have been most effective?
– What are your costs compared to sales?
– What is your cost per customer?
– What marketing methods will you use to attract new customers?
– What percentage of profits can you allocate to your marketing
campaign?
– What marketing tools (i.e. - newspapers, magazines, Internet, direct
mail, telemarketing, event sponsorships) can you implement within
your budget?
– What methods are you using to test your marketing ideas?
– What methods are you using to measure results of your marketing
campaign?
7. Integrate Your Marketing
Communication
 Integrate marketing communication to consolidate marketing tools, approaches, and
resources within a company to maximize impact and gain edge over the competition.
 Build on a "Marketing Mix“ and include the A COLLABORATIVE
■ following: APPROACH
– 4P’s: Product, Price, Promotion, and Place

– Marketing & Advertising
• Internet
• Events
• Direct
• Database
– Public Relations

8. Identify Sales Channels
 Part of the challenge of marketing is figuring out which distribution method
to use for your business.
 Include all relevant distribution channels:
– Retail: Stores selling to final consumer buyers (one store, or a chain of stores).
– Wholesale: An intermediary distribution channel that usually sells to retail stores.
– Direct mail: Generally catalog merchants that sell directly to consumers.
– Telemarketing: Merchants selling directly to consumer buyers at retail via phones.
– Cyber-Marketing: Merchants selling directly to consumer buyers at retail prices, or
business-to-business products and services at wholesale prices via computer
networks.
– Sales force: Salaried employees of a company or independent commissioned
representatives who usually sell products for more than one company.

9. Track Marketing Activities
 Tracking helps monitor the effectiveness of each marketing
activity and is
especially helpful with your overall program evaluation.
 Include procedures for tracking each type of marketing activity
you are using.

9. Track Marketing Activities 2
 Some examples are:

– Display advertising: With traditional consumer publications, tracking can be done through the
use of different phone numbers, special offers (specific to that advertisement or publication), or
reference to a specific department.
– Internet marketing: Usually, this is easily tracked by monitoring web traffic.
– Trade shows: A trade show’s effectiveness can be tracked by collecting the right
■ information at the show and following up on it.
– Database: Before your Marketing Plan is kicked off, make sure you have the database
structure in place to record this information.
 The tabulated results and customer information is very valuable information.
10. Evaluate Your Progress
 Identify how you will measure your success and
in what ways your objectives have been met.
Then, use these metrics to determine the
success of your marketing efforts.
 Answer the following questions:
– Did we reach our goals?
– Was the marketing campaign successful?
– Were we able to determine Return on Investment
(ROI)?
– Did our efforts result in conversion? In other words, were
we able to convert an inquirer to a visitor, a visitor to a
customer?
– Can we utilize our database to survey, capture
additional information,
Developing a Marketing Plan or establish a more
comprehensive customer relationship program?
Key Takeaways from This Module
 Every business has marketing challenges and
opportunities.
 A Marketing Plan:
– Allows you to analyze your current situation, describe
your business, and define your customer base.
– Helps you to strategize your market entry, identify your
sales channels, and
integrate your marketing communications for
maximum efficiency.
– Gives you a means of evaluating your progress.

CONSUMER MARKETS
AND THE CONSUMER
BUYING BEHAVIOR
CHAPTER 3
112
CONSUMER BUYING BEHAVIOR
Consumer Buying All these consumers make The central question for “HOW DO
Behavior refers to the up the consumer market. marketers is;
buying behavior of final CONSUMERS
consumers – individuals RESPOND TO
& households who buy VARIOUS
goods and services for
personal consumption. MARKETING
EFFORTS THE
COMPANY
MIGHT USE?”
113
.
FACTORS INFLUENCING CONSUMER
BEHAVIOR
Cultural Personal
1. Culture Social 1. Age and
2. Sub 1.Reference life-cycle Psychologica
culture 2. Groups 2.Occupation l
3. Social 3. Family 3. Economic 1.
class 4. Roles and Motivation Buyer
situation
Status 4. Lifestyle 2. Perception
5. 3. Learning
Personality Beliefs and
and concept attitudes
114
FACTORS AFFECTING CONSUMER
BEHAVIOR : CULTURE
Culture is the most basic Cause of a Person’s wants and behavior
Subculture
Group of people with shared value systems based on
common life experiences
Malaysian Consumers
Foreign Consumers
Mature Consumers
115
FACTORS AFFECTING CONSUMER BEHAVIOR: SOCIAL
Groups
Membership
Reference
Family (Most important)

• Husband, wife, kids. Social Factors
• Influencer, buyer, user
Roles and Status

116
SRI VALUES AND LIFESTYLES (VALS)
High Resources Actualizers High Innovation
Fulfilleds Achievers Experiences
Makers
Believers Strivers
Low Resources Struggles Low Innovation

117
FACTORS AFFECTING CONSUMER BEHAVIOR:
PSYCHOLOGICAL
Motivation
Psychological
Beliefs & Factors Perception
Attitudes affecting
buyers choices
Learning
118
TYPES OF BUYING DECISION
BEHAVIOR
High Involvement Low Involvement
Significant
differences Complex buying Behavior Variety Seeking Behavior
between brands
Few differences Dissonance – reducing

between brands Habitual Buying Behavior
Buying Behavior
BUYER DECISION PROCESS
Purchase
Decision
Evaluation of Post purchase

Alternatives Behavior
76-85 slides
Information
Search
Need Recognition
120
FORM SMALL GROUP TO DISCUSS A SPECIFIC
MAJOR PURCHASE THAT ONE OF YOU HAS
MADE RECENTLY
WHAT TYPE OF BUYING DECISION WAS IT?
DISCUSS THE BUYER DECISION PROCESS AND
WHAT MAJOR FACTORS INFLUENCED YOUR
DECISION
DISCUSSION CONNECTIONS
121
Buyer Decision process
Step 1 Need Recognition
Actual state
State where the
Buyer Needs arising from:
Buyer’s Needs
Recognizes a Internal stimuli –
are fulfilled and
problem or a Hunger
the buyer is
need
satisfied
External Stimuli –
Friends
122
THE BUYER DECISION PROCESS
STEP 2 INFORMATION SEARCH
* Family, friends, neighbors

Personal Sourceses * Most effective form of information
• Advertising, Salespeople
Commercial Sources * Receives most information from these sources
• Mass Media
Public Sources * Consumer rating groups
*Handling the product

Experiential Sources * Examining the product
* Using the product
123
STEP 4 EVALUATION OF ALTERNATIVES
Consumer may use careful calculations & logical thinking
Consumer may buy on impulse and rely on intuition
Consumer may make buying decisions on their own
Consumers may make buying decision only after consulting others
Marketers must study Buyers to find out How they evaluate

brand alternatives 124
STEP 5 PURCHASE DECISION
Purchase Intention
Desire to buy the most preferred brand
Unexpected
Attitudes
Situational
Of others
factors
Purchase Decision
125
STEP6 POST-PURCHASE BEHAVIOR
Satisfied Customer
Cognitive Dissonance
Consumer’s expectations of products
performance
Products perceived Performance
Dissatisfied customer
Stages in the adoption process
Awareness
Interest
Evaluation
Trial
Adoption
INFLUENCE OF PRODUCT
CHARACTERISTICS ON RATE OF ADOPTION
Communicability : Can results
be easily observed or described
Divisibility to others
Relative Advantage : Is the

innovation superior to
existing products
Complexity
Compatibility
REVIEW OF CONCEPT CONNECTION
01 02 03 04
Define the consumer Name the four major List and understand Describe the
market and construct factors that influence the stages in the adoption and
a simple model of consumer buyer buyer decision diffusion process for
consumer buyer behavior process new products
behavior
129
BUSINESS MARKETS
AND BUSINESS BUYER
BEHAVIOR (B2B)
CHAPTER 4
130
A business market comprises all the
organizations that buy goods and
services for use in the production of
other products and services that are
WHAT IS sold, rented, or supplied to others
BUSINESS
MARKET? The business market is huge and
involves many more dollars and goods
than do consumer markets
131
CHARACTERISTICS OF BUSINESS
MARKETS (B2B)
■ Marketing structure
Contain fewer, but larger buyers
and demand
Customers are more geographically concentrated
Buyer demand is derived from final consumer
demand
Demand is often more inelastic
Demand often fluctuates more and more quickly
132
CHARACTERISTICS OF BUSINESS
MARKETS
■ Types of decisions and the Decision Process
Business Buyers
usually face
more complex
buying
Business buying
decisions
process is more In business
formalized buying buyers
and sellers work
more closely
together
BUILD LONG TERM

PARTNERSHIP 133
MODEL OF BUSINESS BUYER BEHAVIOR
Buyer resources
The Environment The Buying
Organization Product or service
Marketing Stimuli choice
Product
The buying center
Price Supplier Choice
Place
Buying decision
Promotion Order quantities
process
Other Stimuli Delivery terms and
(Interpersonal and
Economic times
individual influences)
Technological
Political Service terms
(Organizational
Cultural
influences)
Competitive Payment
134
Although business markets are similar in
many ways to consumer markets, there are
also significant differences
DISCUSSION What similarities and differences might

office depot (www.officedepot.com)
CONNECTION encounter in selling to the business market
versus the consumer market for the
S following products
(a) a personal computer (b) a desk chair
135
MAJOR TYPES OF BUYING
New Task Buying
Modified Rebuy
Involve Decision
Making
Straight Rebuy
136
MAJOR INFLUENCES ON BUSINESS
BUYER BEHAVIOR
Environmental
Economic development Organizational Individual
Interpersonal
Supply conditions Objectives Age
Authority
Technological change Policies Education
Status Buyer
Political and regulatory Procedures Job position
Empathy
developments Organizational Personality
Persuasiveness
Competitive Structure Risk attitudes
developments System
Culture and customs
THE BUSINESS BUYING
PROCESS
Stage 1 Problem Recognition
Stage 2 General Need Description

Stage 3 Product Specification
Stage 4 Supplier Search
Stage 5 Proposal Solicitation
Stage 6 Supplier Selection

Stage 7 Order routine Specification
Stage 8 Performance review
138
Business Buyer may purchase electronically by
Electronic data interchange links (EDT)
The Internet
BUSINESS
BUYING Connecting to customers to:
ON THE Share marketing information
INTERNET Sell products and services
Provide customer support, and
Maintain ongoing relationship
139
BENEFITS AND PROBLEMS CREATED BY
BUYING ON THE INTERNET
Benefits
■ Share transaction cost
■ Reduce time between order
Problems
and delivery Cut purchasing jobs
■ Create more efficient Erode supplier-buyer loyalty
Create potential security disaster
purchasing systems Forge
more intimate relationships
■ Level the playing field
140
INSTITUTIONAL AND GOVERNMENT
MARKETS Institutional markets
Low Budgets Captive Patrons
Government Market
Red tape is Non economic

Public Review
Common Criteria
Some Buying
Negotiated Contract
Online
141
Define the business and explain how business
Define markets differ from consumer markets
REVIEW OF Identify Identify the major factors that influence business

buyer behavior
CONCEPT
CONNECTION
List and
S define
List and define the steps in the business buying
decision process
Compare the institutional and government buyers

Compare make their buying decisions.
142
MARKET SEGMENTATION ,
TARGETING AND POSITIONING
FOR COMPETITIVE
ADVANTAGE
CHAPTER 5
143
STEPS IN MARKET SEGMENTATION,
TARGETING, AND POSITIONING
Market Segmentation
1. Identify bases for segmenting the market
2. Develop segment profiles
Market targeting
3. Develop measure of segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for target segments
6. Develop its marketing mix for each segment
144
STEP 1. MARKET SEGMENTATION
LEVELS OF MARKET SEGMENTATION
■ Through market segmentation, companies divide large, heterogeneous markets into
smaller segments that can be reached more efficiently and effectively with products and
services that match their unique needs
Mass marketing
Some products to all customers
(no segmentation, ie coca-cola)
Segment Marketing
Different products to one or more segments
(soe segmentation, ie Marriot)
145
MARKET SEGMENTATION LEVELS OF
MARKET SEGMENTATION
Niche Marketing
Different products to subgroups within segments
(more segmentation, ie standard or luxury SUV’s)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Local Marketing Individual Marketing

Tailoring brands / Tailoring products and
promotion to local programs to the needs
customer group exp of individual
SEARS customers. Exp Dell
MARKET SEGMENTATION-
GEOGRAPHIC SEGMENTATION
World Region or
country
City or Metro size
Density or climate
STEP 1 MARKET SEGMENTATION –
PSYCHOGRAPHIC SEGMENTATION
■ Divide Buyers into different groups based on
SOCIAL
CLASS
LIFESTYLE
PERSONALITY
148
STEP 1 MARKET SEGMENTATION -
BEHAVIOR
Dividing the SEGMENTATION
market into
groups based Occasions Benefits
on variables
such as
User Status Usage Rate Loyalty Status
Attitude
Readiness
Towards
Stage
Product
149
SEGMENTING BUSINESS MARKETS
Demographics
BUSINESS
MARKETERS USE
Operating Variables MANY OF THE SAME
CONSUMER
VARIABLES
Purchasing Approaches
Situational Factors
Personal
Characteristics 150
MARKET SEGMENTATION – REQUIREMENT
FOR EFFECTIVE SEGMENTATION
Measurable Size, purchasing power, profiles of segments
can be measured
Accessible Segments can be effectively reached and

served
Substantial Segments are large or profitable enough to

serve
Segments must respond differently marketing

Differential
mix elements & programs
Effective programs can be designed to attract

Actionable and serve the segments
Can you identify specific companies,
other than the examples already
discussed, that practice each level of
segmentation?
DISCUSSION Using the segmentation bases you’ve
CONNECTION just read about, segment the Malaysia
Motorvehicle market
S
Describe each of the major segments
and sub segments
152
MARKET TARGETING –
EVALUATING MARKET SEGMENTS
SEGMENT SEGMENT COMPANY

SEGMENT SIZE AND SEGMENT COMPANY
GROWTH STRUCTURAL OBJECTIVES AND
• Analyze current sales, ATTRACTIVENESS RESOURCES
growth rates an expected • Consider effects of: • Company skills & resources
profitability for various competitors, availability of needed to succeed in that
segments. substitute products and, the segment (s)
power of buyers & suppliers • Look for competitive
advantages
153
STEP 2 MARKET TARGETING –
MARKET COVERAGE STRATEGIES
A. Undifferentiated Marketing
Company
Market
Marketing Mix
DIY, RM2 ECO,

B . Differentiated Marketing
Company Marketing Mix 1 Segment 1
ANLENE MILK
155
C. Concentrated Marketing
Company Segment 1
Marketing Segment 2
Mix Segment 3
156
Smart targeting helps companies and consumers alike
Target marketing sometimes generates controversy

and concern
SOCIALLY
RESPONSIBLE Disadvantage and vulnerable can be targeted
TARGET
MARKETING Cigarette, drinks, and fast food marketers have
received criticism in the past
Internet has come under attack because of the loose

boundaries and lack of control in marketing practices
157
DISCUSSION CONNECTION
At the last discussion Now, pick two

connection, you companies that serve
segmented the this market and
Malaysia describe their
motorvehicle market segmentation
158
PRODUCTS POSITION – the way the product
is defined by consumers on important attributes –
the place the product occupies in consumers
minds relative to competing products
Step 3
Choosing a
Positioning
Strategy
MARKETERS MUST:
Plan positions to give their

Design marketing mixes to create
products the greatest advantage in
these planned positions
selected target markets
159
STEP 3 CHOOSING A POSITIONING
STRATEGY
Step 1 Identifying Possible
Competitive Strategies
Step 2 Selecting the right

competitive advantage
Step 3 Communicating
and Delivering the chosen
position
160
IDENTIFYING POSSIBLE
COMPETITIVE ADVANTAGES
Competitive advantage is an
ADVANTAGE OVER
Key to winning and keeping
COMPETITORS GAINED by
customers is to understand their
offering consumers greater
needs and buying processes
value, either through lower
better than competitors do and
prices or by providing more
deliver more value
benefits that justify competitive
advantage
161
IDENTIFYING POSSIBLE
COMPETITIVE ADVANTAGES
SERVICES DIFFERENTIATION
PRODUCT DIFFERENTIATION
Exp Delivery, Installation, Repair
Exp features, performance, style &
Services, Customer training
design or attributes
Services
PERSONAL
IMAGE DIFFERENTIATION DIFFERENTIATION
Exp symbols, Atmospheres, events Exp Hiring, Training better people
than competitors
CHOOSING THE RIGHT
COMPETITIVE ADVANTAGE
Important
Profitable Distinctive
Criteria for
determining which
differences to
Affordable promote
Superior
Unique selling proposition
Preemptive Communicable
Tactical
163
COMMUNICATING AND
DELIVERING THE CHOSEN
POSITION
■ Once position is chosen, company must
take strong steps to deliver and
communicate the desired position to target
consumers
■ All the company marketing mix must
support the positioning strategy
■ Positioning strategy must be monitored and
adapted over time to match changes in
consumer needs and competitor’s strategies
164
REVIEW OF CONCEPT CONNECTION
List and
Define Explain Discuss
discuss
Define the three List and discuss Explain how Discuss how
steps of target the major levels of companies companies can
marketing, market market identify attractive position their
segmentation, segmentation and market segments products for
market targeting bases for and choose a maximum
and market segmenting market-coverage competitive
positioning consumer and strategy advantage in the
business markets marketplace
165
PRODUCTS &
SERVICE
STRATEGY CHAPTER
6
166
■ A product is anything that can be offered to
a market for attention, acquisition, use, or
consumption and that might satisfy a want
or need Includes:
What is a
– Physical objects
– Services
Product?
– Events
– Persons
– Places
– Organization
– Ideas
– Combinations of the above
167
A service is a form of product that consist of activities, benefits, or
satisfactions offered for sale that are essentially intangible and do not result in
the ownership of anything.
Examples include:
Banking
WHAT IS A Hotels
SERVICE?
Tax Preparation
Home repair services
Insurance
168
PRODUCT CLASSIFICATIONS
CONSUMER PRODUCTS
Convenience Products Shopping Products
 Buy frequently & Immediately  Buy less frequently
 Low Priced  Higher price
 Mass Advertising  Fewer purchase locations
 Many Purchase Locations  Comparison shop
Exp candy, newspaper Exp clothing, cars, appliances
Specialty Products Unsought Products

 Special purchase efforts
 New innovations
 High price
 Products consumers don’t want
 Unique characteristics
to think about these products
 Brand identification
 Require much advertising &
 Few purchase locations
personal selling exp life
Exp Lamborghini, Rolex
insurance, blood donation
169
PRODUCT CLASSIFICATION
INDUSTRIAL PRODUCTS
Materials and
Parts
Capital Items
Supplies &
Services
INDIVIDUAL PRODUCT DECISIONS
PRODUCT ATTRIBUTES
BRANDING
LABELING
PACKAGING
PRODUCT SUPPORT SERVICES

171
PRODUCT ATTRIBUTES
■ Developing a product or service involves defining the benefits that it will offer such as:
Product Ability of a product to perform its

Quality function; includes level & consistency
Product Help to differentiate the product from

Features those of the competition
Product Style & Process of designing a product’s style &

Design function
172
BRANDING
Consistency Quality &
Value
Identification
Attributes
Advantages of
Brand Names
Brand Equity
High Brand Strong Brand
Loyalty Association
Name Perceived
Awareness Quality
173
MAJOR BRANDING
BRAND NAME SELECTION
Selection
Protection
DECISIONS
BRAND SPONSOR
Manufacturer’s brand
Private brand
Licensed brand
Co-Branding
BRAND STRATEGY
Line extension
Brand extension
Multi-brands
New brands
174
BRAND STRATEGY
Existing brand names
LINE extended to new forms,
sizes, and flavors, of an
BRAND
EXTENSION existing product EXTENSION
category.
Existing brand names

extended to new or MULTI- New brand names
introduced in the same
modified product
categories
BRANDS product category
NEW New brand names in

BRANDS new product categories
175
DISCUSSION CONTEXT
List as many specific
examples as you can
BRAND LICENSING CO-BRANDING
find of each of the
following:
Can you find a single

LINE EXTENSION, BRAND
brand that has done all
AND EXTENSIONS
of these?
Pick and describe a

familiar brand that has
been widely extended.
What are the benefits
and dangers for this
specific brand?
176
PACKAGING
ACTIVITY OF PACKAGING PACKING ESTABLISH A DEVELOP TIE

DESIGNING USED TO JUST NOW HAS PACKAGING SPECIFIC TOGETHER
AND CONTAIN PROMOTIONA CONCEPT ELEMENTS OF ELEMENTS
PRODUCING AND L VALUE AND THE TO SUPPORT
THE PROTECT THE MARKETERS PACKAGE THE
CONTAINER PRODUCT SHOULD: POSITIONING
OR WRAPPER AND
FOR A MARKETING
PRODUCT STRATEGY.
177
LABELING : PRINTED INFORMATION
APPEARING ON OR WITH THE PACKAGE.
PERFORMS SEVERAL FUNCTIONS;
IDENTIFIES DESCRIBES PROMOTES THE

PRODUCT OR SEVERAL THINGS PRODUCT
BRAND ABOUT THE THROUGH
PRODUCT ATTRACTIVE
GRAPHICS
178
Companies should design its support services to
profitably meet the needs of target customers and
gain competitive advantage. How?
Step 1 Survey customers to assess the value of

current services and to obtain ideas for new
PRODUCT – services
SUPPORT Step 2 assess costs of providing desired services
SERVICES
Step 3 develop a package of services to delight
customers and yield profits to the company
179
PRODUCT MIX DECISION
CONSISTENCY Width –number of

different product
lines
Product Mix –
all the product
Length – total
number of items lines & items
in product lines offered
Depth – number
of versions of
each product
180
Using P&G’s website (www.pg.com), its
annual report, or other sources, develop a
list of all the company’s product lines and
individual products. What surprises you
about this list of products?
Discussion Is P&G’s product mix consistent?

Connections
What overall strategy or logic appears to

have guided the development of this product
mix?
181
NATURE AND CHARACTERISTIC OF A SERVICE
Can’t be seen, tasted, felt,

Intangibility heard or smelled before
purchased
Can’t be separated from

Inseparability service providers
Quality depends on who

provides them and when,
Variability where and how
Can’t be stored for later

Perishability sale or use
182
THE SERVICE PROFIT CHAIN
Healthy Internal
Service service
Profits and quality
growth
Satisfied and
Satisfied and Productive
loyal service
customer employees
Greater
Service
value
183
INTERNATIONAL PRODUCT AND
SERVICES MARKETING
Decide which products & services to introduce
Decide how much to standardize or adapt
Packaging presents New Challenges
Service marketers face special challenges
Trend towards global service companies will continue

Define product and the major classifications of
products and services
Describe the roles of product and service branding,
REVIEW OF packaging, labeling, and product support services
CONCEPT Explain the decisions companies make when
CONNECTION developing product lines and mixes
S Identify the four characteristics that affect the

marketing of a service
Discuss the additional marketing considerations for

services
185
NEW-PRODUCT
DEVELOPMENT AND PRODUCT
LIFE-CYCLE STRATEGIES
CHAPTER 7
186
NEW PRODUCT DEVELOPMENT
STRATEGIES
Strategies for obtaining New Product Ideas
Original
Acquired Products
Companies
Product
Improvements
Acquired
Patents
Product
Modifications
Acquired
Licenses
New Brands
187
■ One study estimated that as many as 80% of new consumer packaged
products failed. Only about 40% of new consumer products are around 5
years after introduction. Why?
– Overestimation of market size
– Product design problems
– Product incorrectly positioned, priced or advertised
– Product may have been pushed despite poor marketing research
findings
– Costs of product development, or
– Competitive actions
CAUSES OF NEW PRODUCT FAILURES

188
MAJOR STAGES IN NEW PRODUCT
DEVELOPMENT
Marketing Strategy
Business Analysis
Concept development
and testing Product development
Idea screening Test marketing
Idea generation Commercialization
189
NEW PRODUCT DEVELOPMENT PROCESS
STEP 1 IDEA GENERATION
■ Idea Generation is the systematic search for new product
ideas obtained internally from employees and also from:
Customers Competitors Distributors Suppliers
190
NEW PRODUCT DEVELOPMENT PROCESS-STEP 2: IDEA SCREENING.
Process to spot good ideas and drop poor ones as soon as possible. Many companies have systems for rating and
screening ideas which estimate:
Development time
Market size Product size
& costs
Then, the idea is

Manufacturing
Rate of return evaluated against a set of
costs
general company criteria
191
NEW PRODUCT DEVELOPMENT PROCESS-
STEP 3: CONCEPT DEVELOPMENT
Product Image is the
1.Develop New Product Ideas into alternative way consumers
detailed product concepts perceive an actual or
potential product
2. Concept Testing – Test the New Product

Concepts with Groups of target Customers
3.Choose the one that has the strongest appeal to target

customers
Step 5 Business Analysis
Step 6 Product Development
Business Analysis :
Review of product sales, costs and profits projections to see if
they meet company objectives
If No Eliminate Product
Concept
If Yes, Move to Product
Development
193
PROCESS STEP 7 : TEST MARKETING
MORE REALISTIC MARKET

Budget
TEST MARKETING IS THE
ARE INTRODUCED INTO

MARKETING PROGRAM
Levels Product
STAGE WHERE THE
PRODUCT AND
SETTINGS Packaging ELEMENTS

THAT MAY BE Positioning
TEST
MARKETED
Branding BY A Advertising
COMPANY
Pricing Distribution
PROCESS STEP 7 : TEST MARKETING
Controlled Test
Standard Test
Market
Simulated test market A few stores
marketing
Full marketing that have
campaign in a small Test is a simulated agreed to carry
number of shopping new products
representative cities environment to a for a fee
sample of consumers
195
NEW PRODUCT DEVELOPMENT PROCESS
STEP 8: COMMERCIALIZATION
■ Commercialization is the introduction of the new
product into the marketplace
When is the
Where to
Right Tine to
Launch a new
introduce
Product?
Product?
196
SPEEDING UP NEW PRODUCT DEVELOPMENT
Sequential Simultaneous (Team-based)
Step 1
Step 1
Step 2
Step 2
Step 3 Step 3
Step 4 Step 4
197
PRODUCT LIFE-CYCLE
Sales/
Profits
Sales
Profits
time
Product Introduction Growth Maturity Decline
Development
Losses/
Investment
198
APPLICATIONS OF THE
PRODUCT LIFE CYCLE
■ The PLC concept can be describe a:
– Product class which has the longest life cycle (exp gas
powered car)
– Product form which tend to have the standard PLC
shape (exp minivans)
– Brand which can change quickly because of changing
competitive attaches and responses (exp Ford taurus)
– Style which is a basic and distinctive mode of
expression,
– Fashion which is a popular style in a given field,
– Fad which is a fashion that enters quickly is adopted
quickly and declines fast
199
PROBLEM USING THE PLC
■ The PLC Concept can help in developing good marketing strategies for different stages of the
Product Life Cycle, However some problems can arise:
Trouble identifying which stage of the PLC the product

is in
Difficult to forecast the sales level, the length of each stage,

and shape of the PLC
Strategy is both a cause and a result of the Product’s Life Cycle
200
STAGES OF THE PLC
PLC Stages Intro Growth Maturity Decline
Sales
OBJECTIVES & STRATEGIES
Costs
Profits
CHARACTERISTICS,
SUMMARY OF THE
Marketing
Objectives
Products
Price
Distribution
Advertising
REVIEW OF CONCEPT
CONNECTIONS
01 02 03 04
Explain how List and define the Describe the Describe how
companies find steps in the new- stages of the marketing
and develop new development product life-cycle strategies change
product ideas process during the product
life cycle
202
PRICING PRODUCTS:
PRICING CONSIDERATION,
APPROACHES &
STRATEGIES
CHAPTER 8
203
PRICE
■ Determining a price for your product can be complex.

Typically, you’ll want to consider three variables:
• Cost: how much your product costs to produce.
• Price: how much you charge customers for your
product.
• Value: How much value your customers get from the
product.
COSTING
TYPES OF COST
TANGIBLE COST INTANGIBLE COST
RUNNING COST
• the money that you spend regularly to operate a machine or to
manage a business or service.
OPERATING COST
Operating costs are the ongoing expenses incurred from the normal
day-to-day of running a business. Operating costs include both costs of
goods sold (COGS) and other operating expenses—often called selling,
general, and administrative (SG&A) expenses.
A SUNK COST
Sometimes called a
retrospective cost, refers to an
investment already incurred
that can't be recovered.
Examples of sunk costs in business
include MARKETING, RESEARCH,
NEW SOFTWARE INSTALLATION
OR EQUIPMENT, SALARIES AND
BENEFITS, OR FACILITIES
EXPENSES.
PRICE
■ Price is the sum of all the values that
consumers exchange for the benefits of
having or using the product or service
■ Price has been the major factor
affecting buyer choice, non-price
factors have become increasingly
important in buyer-choice behavior
■ Price is the only element in the
marketing mix that produces revenues,
all others represent costs.
213
FACTORS AFFECTING PRICE DECISIONS
INTERNAL EXTERNAL
FACTORS FACTORS
Marketing Objectives Nature of the market
Marketing Mix Pricing and demand
Strategy Decisions Competition
Costs Other environmental
Organizational factors (economy,
Considerations resellers, government)
214
INTERNAL FACTORS AFFECTING PRICING
DECISIONS: MARKETING OBJECTIVES
SURVIVAL
Low prices to cover variable costs and some fixed costs to stay in business
CURRENT PROFIT MAXIMIZATION

Choose the price that produces the maximum current profit, etc
MARKETING
OBJECTIVES MARKET SHARE LEADERSHIP
Low as possible prices to become the market share leader
PRODUCT QUALITY LEADERSHIP

High prices to cover higher performance quality and R&D
215
INTERNAL FACTORS AFFECTING PRICING
DECISIONS: MARKETING MIX
■ Customer seek products that give them the best value in terms of benefits received for
the price paid
PRODUCT DESIGN
NON PRICE POSITION PRICE DISTRIBUTION
Special order
Free gift
Coupon
PROMOTION
216
TYPES OF COST FACTORS THAT
AFFECT PRICE DECISION
FIXED COSTS (OVERHEAD)
VARIABLE COSTS
Cost that don’t vary with sales or
Costs that do vary directly with the
production levels. Remain the same.
level of production
Executive salaries, rental, payments,
Raw material, labor, commissions
insurances
TOTAL COSTS
Sum of the fixed and variable costs for a given level of production
TYPES OF COST FACTORS THAT AFFECT
PRICING DECISIONS
The experience curve
As a firm gains experience in ( learning curve) indicates that
production, it learns how to do average cost drops with
it better. accumulated production
experience.
Strategy: company should

price products low; sales
Risk are present with this
increase; costs continue to
strategy.
decrease; and then lower prices
further
218
EXTERNAL FACTORS AFFECTING
PRICING DECISIONS
.
MARKET AND DEMAND
COMPETITORS’ COSTS, PRICES

AND OFFERS
OTHER EXTERNAL FACTORS
1. Economic Conditions
2. Reseller needs
3. Government Actions
4. Social Concerns 219
MARKET AND DEMAND FACTORS
AFFECTING PRICING DECISION
PURE MONOPOLY is a market
PURE COMPETITION structure where one company is the
: Many buyers and sellers single source for a product and
who have little effect on there are no close substitutes for the
product available
the price
OLIGOPOLISTIC
MONOPOLISTIC COMPETITION :
COMPETITION : Many Few sellers who are sensitive to
buyers and sellers who trade each other’s pricing/marketing
over a range of prices strategies
220
MAJOR CONSIDERATIONS IN
SETTING PRICE
PRODUCT CONSUMER
COSTS PERCEPTION OF
COMPETITOR VALUES
PRICES AND
OTHER
INTERNAL AND
PRICE FLOOR EXTERNAL PRICE CEILING
NO PROFITS FACTORS NO DEMAND
BELOW ABOVE
THIS PRICE THIS PRICE
COST BASED PRICING
Certainty about
Costs Simplest
Pricing
Cost Plus Method
Pricing is simplified Pricing is an
approach that
adds a
standard Ignores Current
Price Competition is Minimized
markup to the Demand &
cost of the Competition
Much fairer to buyers & sellers
product
222
Pick two competing brands from a
familiar product category (watches,
perfume, etc) one low priced and the
other high priced.
DISCUSSION Which, if either, offers the greatest

CONNECTION value?
S
Does “value” mean the same thing as
“low price”? How do these concepts
differ?
223
COMPETITION BASED PRICING
SETTING PRICE
GOING RATE
Company sets price based on what competitors are charging
SEATED-BID
Company sets prices based on what they think competitors will charge
224
Identify and define the internal
factors affecting a firm’s pricing
decisions
Review Of
Identify and define the external
Concept factors affecting pricing
Connections
Contrast the three general

approaches to setting prices
225
PRICING
STRATEGIES
PRICING STRATEGIES
■ Involve adjusting prices to maximize the profitability for a
group of products rather than on just one item.
■ One product may have a small profit margin while another may be
high, balancing the effect of the lower priced one.
1. PRODUCT MIX STRATEGIES
■ Optional Product– setting prices for accessories or

options sold with the main product.
2. PRICE LINING
■ Offers merchandise in a given
category at certain prices
– Shirts at $25, $35, $50
– Upper tier is better quality premium
brand
– Middle tier is for average priced
brands
– Lower tier for price-conscious
customers.
PRICE LINING
LOWER TIER MIDDLE TIER UPPER TIER

PRODUCT LINE PRICING EXAMPLE
Product line pricing is when management must
decide on the price steps to set between the various
products in a line. In other words, it is when a
company must decide the price differences between
the upgrades of a product or service.
Apple is going to have 6 different versions of the iPad and all will have different
prices.
1. Price between $499 to $829.
2. 3 versions will have 3G, (which some customers may believe this will add value to
the iPad.)
3. The other three do not have 3G.
Product line pricing
4. It Includes the costs to make the versions,
5. The different features included in each version,
6. And how Apple is making several different versions of a similar product.
3.PREMIUM PRICING
■ Use a high price where there is
uniqueness about the product or
service. This approach is used
where a substantial competitive
advantage exists.
■ Such high prices are charge for
luxuries such as Cunard Cruises,
Savoy Hotel rooms, and Concorde
flights.
4. PRICE SKIMMING
Charge a high price because you have a substantial competitive advantage are kept at
a minimum
■ Examples of Price Skimming
An example of price skimming is DVD players.
■ Initially in 1990s when DVD players were launched the price of a DVD player was
$500 and $400.
■ By 2001 the prices were skimmed to less than a $100.
■ By 2004 DVD players were available for as low as $50 or $60.
5. BUNDLE PRICING
 Product
Bundle Pricing
- Here sellers
combine
several
products in the
same package.
BUNDLE PRICING
■ Several complementary products sold at a
single price.
– Travel services
– Computers and software
6. CAPTIVE PRODUCT
■ Sets the price for one product low but compensates
for that low price by pricing the supplies needed to
operate that product high.
7. PENETRATION PRICING
■ The price charged for products and services

is set artificially low in order to gain market
share
– Penetration pricing is a marketing technique in
which a company offers a new product at a price
significantly lower than its competitors.
PENETRATION PRICING
PENETRATION PRICING
– Once it has gained a large market share and

customer base, the company begins to increase the
price of the product.
– Companies sometimes use this technique when
offering a new product, such as a new technology,
to encourage customers to try the product.
8.ECONOMY PRICING
1. This is a no frills low price. The cost of marketing and
manufacture. Selling price that includes direct, indirect,
and hidden costs like downtime and opportunity cost.
2. The cost of marketing and manufacture are kept at a
minimum. Supermarkets often have economy brands for
soups, spaghetti, etc.
9. PSYCHOLOGICAL PRICING
The marketer wants the consumer to respond on an
emotional, rather than rational basis:
1. Odd-Even Pricing
2. Prestige Pricing
3. Multiple-Unit Pricing
4. Everyday Low Prices
PSYCHOLOGICAL PRICING
1. Odd-Even Pricing
– Odd numbers convey a bargain image
-- $.79, $9.99, $699
– Even numbers convey a quality image

-- $10, $50, $100
RM 50.99 RM99.00
2. Prestige Pricing – sets a higher than
average price to suggest status
3. Multiple-Unit Pricing – 3 for $.99
■ Suggests a bargain and helps increase sales
volume.
■ Better than selling the same items at $.33
each.
4. Everyday Low Prices (EDLP) –
set on a consistent basis
10. PRODUCT LINE PRICING
Product line is a collection of products

in a company that are closely related in
some way to one another
Product line pricing is where there is a
range of product or services the pricing
reflect the benefits of parts of the range.
PEPSI
■ Pepsi uses the product line pricing strategy. It offers
different quality products with different price. When
the competitor reduces its price, Pepsi will change its
price as well. Otherwise it will lose customers in such
a competitive industry.
11. PROMOTIONAL PRICING
Used with sales promotion

1. Loss Leader Pricing
2. Special-Event
3. Rebates and Coupons
as BOGOF (Buy One Get One
Free)
1. Loss Leader Pricing
1. Offering very popular items for sale at

below-cost prices NOT to increase
sales, but to attract customers’
attention in hopes that they will buy
other products as well.
2. Special-Event
– Back-to-school specials
– Dollar days
– Anniversary sales
3. Rebates and Coupons
12. GEOGRAPHICAL PRICING
■ Geographical pricing is evident where there are
variations in price in different parts of the world.
13. DISCOUNTS AND
ALLOWANCES
■ Cash Discounts – offered to buyers to
encourage them to pay their bills quickly.
– 2/10, net 30
■ Quantity Discounts – offered for placing
large orders
■ Trade Discounts – the way manufacturers
quote prices to wholesalers and retailers.
DISCOUNTS AND ALLOWANCES
■ Seasonal Discount – offered
outside the customary buying
season
DISCOUNTS AND ALLOWANCES
■Allowances – go directly to the

buyer. Customers are offered a
price reduction if they sell back
an old model of the product they
are purchasing.
DISTRIBUTION
CHANNELS CHAPTER 9
AND LOGISTICS
MANAGEMENT
257
ISSUES CONCERNING
DISTRIBUTION CHANNELS
What role
What is the does physical
nature of distribution
distribution play in
What
How do attracting and
Channels? problems do
satisfying
channel firms companies
interact and customers?
face in
organize to do designing and
the work of managing
the channel? their channels?
258
WHY ARE MARKETING USED INTERMEDIARIES
The use of intermediaries results from their greater efficiency in making goods available to
target markets. Offer the firm more than it can achieve on its own through the intermediaries:
Contracts Experience Specialization
Purpose match supply

from procedures to
Scale of operation
demand from
consumers
259
HOW A MARKETING INTERMEDIARY
REDUCES THE NUMBER OF CHANNEL
Manufacturer
TRANSACTIONS
customer
Store
Number of contacts without Number of contacts with distributor

distributor M x C =3x3 =9 M+C = 3+3 = 6
260
Number Of Channel Levels
Channel Level – Each layer of marketing intermediaries that perform some
work in bringing the product and its ownership closer to the final buyer
Channel 1
M C
Channel 2
M R C
Channel 3
M W R C
Channel 4
M W J R C
261
CHANNEL BEHAVIOR & CONFLICT
All members
Each member is cooperate to attain
The channel will be
assigned task it can overall channel goals
most effective when
do best and satisfy the target
market
Horizontal conflict Vertical conflict

When this doesn’t occurs among firms occurs between
happen, conflict at the same level of different levels of the
occurs the channel exp same channel exp
retailer to retailer wholesaler to retailer
For the channel to

perform well, each
channel member’s
role must be
specified and conflict
must be managed
262
CONVENTIONAL MARKETING CHANNEL
VS A VERTICAL MARKETING SYSTEM
CONVENTIONAL
VERTICAL
MARKETING SYSTEM
MARKETING SYSTEM
Manufacturer Manufacturer
Wholesaler
Wholesaler
Retailer
Retailer
Consumer Manufacturer
TYPES OF VERTICAL MARKETING
SYSTEM
CORPORATE
Common ownership at different levels of the channel exp SEARS
Degree of
direct CONTRACTUAL
control Contractual agreements among channel members
ADMINISTERED
Leadership is assumed by one or a few dominant members exp
KRAFT
264
Describe the kinds of horizontal and vertical channel
conflict that might occur in one of the following
Personal computer industry
Automobile industry
Discussion
Connections Music industry
Clothing industry
How would you remedy the problems you have just

describe?
265
ADVERTISING,
SALES
PROMOTION & CHAPTER 10
PUBLIC
RELATION
266
Advertising is centuries old
US advertisers spend in excess of $212 billion each year;

worldwide spending exceeds $414 billion.
Advertising is used by;
Advertising Business firms,
Non profit organizations
Professionals, and
Social agencies
267
■ Advertising is any paid form of non
personal presentation and promotion
of ideas, goods, or services by an
identified sponsor
What is advertising?
268
FIG 15.1 MAJOR ADVERTISING DECISIONS
Message Decisions
Message strategy
Message Execution
BUDGET
DECISION CAMPAIGN EVALUATION
*Affordable *Communication impact
OBJECTIVE
approach *Sales impact
SETTING
*Percent of
* Communication
sales
objective
*Competitive
*Sales Objective
parity MEDIA DECISIONS
*Objective & *Reach, frequency, Impact
task *Major media types
*Specific media types
269
Setting the Promotion
Budget
■ After determining its advertising objectives, the ,
marketer must set the advertising budget for each
product and market
PERCENTAGE OF SALES
AFFORDABLE
Based on a certain percentage of
Based on what the company can afford
current or forecasted sales
OBJECTIVE AND TASK COMPETITIVE PARITY

Based on determining estimating costs Based on the competitor’s
objectives & tasks, then ex Promotion budget
270
Factors to be considered when setting the advertising
budget:
Stage in product life cycle
Setting the
Advertising Market share,
Budget
Competition and clutter,
Product differentiation
271
DEVELOPING
ADVERTISING STRATEGY
■ Advertising strategy consists of two major elements
and companies are realizing the benefits of planning
these two elements jointly
Creating the Selecting the

advertising advertising media
Messages
272
DEVELOPING ADVERTISING STRATEGY:
CREATING AD MESSAGE
Plan a Message Strategy
General Message to be Communicated to customer
Develop a Message
Focus on Customer Creative Concept
benefits “Big Idea”
Visualization or
Phrase combination
Advertising Appeals
of both
Meaningful
Believable
Distinctive
273
ADVERTISING STRATEGY”
SELECTING ADVERTISING MEDIA
Step 1 Decide on reach, frequency, and impact
Step 2 choosing among major media types media habits of target consumers
Nature of the product. Types of message, cost
Step 3 Selecting specific media vehicles Specific media within a given type exp
magazines. Must balance media cost against media factors .Audience quality and
attention, editorial quality
Step 4 Deciding on media timing Scheduling of advertising over the course of a

year Patterns of acts continuity or pulsing.
EVALUATING ADVERTISING
Advertising Program Evaluation
Communication Effect Sales Effect

Is the Ad Does the ad increase
Communicating Well? Sales?
Discussion Connections
Advertising objectives can be Using your local newspaper, Apply (Fig 15.1 Major
classified by primary purpose: find examples of ads pursuing Advertising decision) to explain
to inform, persuade, or remind each of the above your answers.
276
What is sales promotion
Sales Promotion is mass

communication technique
that offers short term
Offers reasons to buy now
incentives to encourage
purchase or sales of a
product or service.
277
THANK
YOU

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Innovation Marketing 17182022

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INNOVATION

■ CLIP PEPSI N MJ INFLUENCE.flv

■ Marketing combines economics, psychology,

■Multiple decision-making process

1. Production Concept-industrial revolution (late

1. Inward-looking Vs. outward-looking

1. Top management concerns

1. Organizational strategies based upon value

Economies of scale-the more are sold, the more are made,

Product mix-product width and depth

1. Cooperative environment-suppliers, resellers

FIT MARKET ENVIRONMENT

MISSION STATEMENT VISION STATEMENT

Answer It answers the question, “What do we do? It answers the question,

AIRLINES ■ Mission ‘To provide air travel and transport

THE COMPANY MUST:

High growth & share MARKS

PROFIT POTENTIAL High growth, Low share

ESTABLISHED SUCCESSFUL Low growth & share

DIFFICULT TO DEFINE SBU’S & MEASURE MARKET

FOCUS ON CURRENT BUSINESS, BUT NOT FUTURE PLANNING

CAN LEAD TO UNWISE EXPANSION OR DIVERSIFICATION 35

How? Add new stores in

PRODUCT / MARKET EXPANSION GRID

Guiding Input to Strategic Designs Strategies

Market Leader Market Challenger

STRATEGY A COMPANY ADOPT

Market Niche Market Follower

E Apple, Google, Amazon, Facebook,

Product Customer Solution

Price Customer Costs

CONTENTS Threats and Opportunities Analysis

MEASURE EVALUATE TAKE

Microenvironment – forces close to the Macroenvironment- larger societal forces

1. Influence the company’s

8. Advertisements must be clearly distinguishable as such.

MALAYSIAN CODE OF ADVERTISING PRACTICE.

CITIZEN ACTION GROUPS PUBLICS

CHANGING MALAYSIAN FAMILY

BETTER-EDUCATED & MORE WHITE-COLLAR

What did the company do well

Compare this company to one that has done a poor job.

Changing Consumer Spending Patterns

Almost unlimited opportunities being

Increase regulation concerning products

RESPONDING TO THE MARKETING ENVIRONMENT

Describe Explain Identify Explain Discuss

Developing a Marketing Plan

Developing a Marketing Plan

■ COMPARING AND RECOMMENDATION FOR

Developing a Marketing Plan

Developing a Marketing Plan

Developing a Marketing Plan

– 4P’s: Product, Price, Promotion, and Place

Developing a Marketing Plan

Developing a Marketing Plan

Developing a Marketing Plan

 Some examples are:

Developing a Marketing Plan

Family (Most important)

Roles and Status

High Resources Actualizers High Innovation

Fulfilleds Achievers Experiences

Low Resources Struggles Low Innovation