Principles of MKT Handout

PRINCIPLES OF
MARKETING
DISCUSSION
Marketing is selling
and advertising?
COURSE OUTLINE
1
• Overview of Marketing
2
• The marketing environment
3
• Methods of market research
4
• Consumer market and buying behavior of consumers
5
• Market and buying behavior of organizations
6
• Market segmentation, target and position market
7
• Product Policies
8
• Pricing policies
9
• Distribution policies
10
• Policies to promote and support business
COURSE RESOURCES
• Text book:
Principles of Marketing (Philip Kotler)
• Analysis of case studies in lectures
• Lecture slides
• Individual/Group presentations
GRADING
• Class attention: 10%

• Midterm exam: 30%
• Final Exam: 60%
• Bonus marks: individual/group activities
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CHAPTER 1: Overview of Marketing

CONTENT
Definitions of marketing and

international marketing
Major terms in marketing
Marketing management philosophies

DEFINITIONS OF MARKETING
Marketing
American Philip Kotler

Marketing
Association
- AMA
American
American marketing
marketing association
association
1985 2013
1960
1960: “The performance of business activities

that direct the flow of goods and services from
producers to consumers.”
1985: “Marketing is the process of planning and

executing the conception, pricing, promotion,
and distribution of ideas, goods and services to
create exchanges that satisfy individual and
organizational objectives.”
2013
Marketing is the activity, set

of institutions, and processes Offerings is some combination
for creating, communicating, of products, services,
delivering, and exchanging information, or experiences
offerings that have value for offered to a market to satisfy
a need or want.
customers, clients, partners,
and society at large.
PHILIP KOTLER’S DEFINITION
http://www.youtube.com/watch?v=RKL6KFlJdaM&list=PLA62747E5A6151D34a
PHILIP KOTLER’S DEFINITIONS OF MARKETING
(In narrow business

(Broadly defined)
context)
• A social and • Marketing is the
managerial process by process by which
which individuals and companies create value
groups obtain what for customers and build
they need and want strong customer
through creating and relationships in order to
exchanging products capture value from
and values with others. customers in return.
(Kotler et al, 2018)
PHILIP KOTLER’S DEFINITIONS OF MARKETING
Marketing 4.0 is a marketing approach that combines

online and offline interaction between companies and
customers (Kotler, 2016)
In the digital economy, digital interaction alone is not sufficient. In fact, in
an increasingly online world, offline touch represents a strong
differentiation. Marketing 4.0 also blends style with substance. While it is
imperative for brands to be more flexible and adaptive due to rapid
technological trends, their authentic characters are more important than
ever. In an increasingly transparent world, authenticity is the most
valuable asset.
FUNCTIONS OF MARKETING
MODERN MARKETING SYSTEM
Marketing System of CocaCola Vietnam
Agency
Supplier
BTL
Agency
ATL
Customer Sales Trade Brand
Analysis Media
Agency
Market
Research
CAREER PATHS IN MARKETING
Chief
Brand Assistat brand
Marketing Pr manager
manager manager
officer
Creative Account
Coppy writter Art director
director manager
Account Marketing
MR Analyst Ad manager
executive executive
…….
MARKETING DEVELOPMENT
MARKETING DEVELOPMENT
Marketing
4.0
Marketing 3.0 • Digital/society
• value
Marketing 2.0
• Customer’s need
Marketing
1.0
• product
DISCUSSION
Have the 4P's of Marketing Become

Outdated?
CORE MARKETING CONCEPTS
NEEDS
TRANSACTIONS WANTS
MARKETING
EXCHANGE DEMANDS
PRODUCTS MARKETS
NEEDS
A state of felt deprivation

NEEDS
NEEDS
Needs
Latent needs: are

needs they don’t
Current needs
even know they
have
WANTS
The form that a human need takes as shaped by
culture and individual personality.
Eg: a hugry person in US may want ….
a huger in China may want…..
a huger in VN….
As a society evolves, the wants of its members
expand. As people are exposed to more objects that
arouse their interest and desire, producers try to
provide more want-satisfying products and
services.
DISCUSSION
“A LOT OF TIMES, PEOPLE

DON’T KNOW WHAT
THEY WANT UNTIL YOU
SHOW IT TO THEM”
STEVE JOBS
DEMANDS
Human wants that are backed by buying power.

People have NARROW, BASIC NEEDS,
but almost UNLIMITED WANTS.
However
also have LIMITED RESOURCES.
Thus they want to choose products that provide the most
satisfaction for their money.
CUSTOMER-PERCEIVED VALUE
The customer’s evaluation of the difference between all

the benefits and all the costs of a marketing offer
relative to those of competing offers.
SATISFACTION
The extent to which a product’s perceived performance

matches a buyer’s expectations.
Performance
Expectation
SATISFACTION
Satisfied customers buy again and tell Dissatisfied customers often
others about their good experiences. switch to competitors and
disparage the products to others.
PRODUCTS
Anything that can be offered to a market for

attention, acquisition, use or consumption that
might satisfy a want or need.
PRODUCTS
Objects Places ideas
people Services Organizations
Information …
ACTIVITIES
MARKET
Marketers see the sellers as constituting an industry and

the buyers as constituting a market.
Market is the set of all actual and potential buyers
of a product or service
These buyers share a particular need or want that
can be satisfied through exchange relationships.
MARKET
communication
Products/services
Industry (a Market (a
collection of collection of
sellers) money buyers
information
EXCHANGE
Is the act of obtaining a desired object from

someone by offering something in return
EXCHANGE
Conditions making exchange possible

- At least 2 parties participate
- Each must have sth of value to offer the other
- Each must want to deal with the other
- Each must be free to accept or reject the other’s offer
- Each must be able to communicate and deliver
TRANSACTION
A trade between two parties that involves at least two

things of value, agreed-upon conditions, a time of
agreement and a place of agreement
Transaction is marketing’s unit of measurement

OTHER CONCEPTS
Content Convention rate Engagement rate Inbound/outbound Influencer/KOL
Above the line

KPI (key performance
ATL/Below the line Organic traffic Reach Viral
indicator)
BTL
USP (unique selling ATL/BTL Brand/branding/Brand

B2B/B2C Big Data
point) identity
Cross channel MKT/

Buyer persona multichannel/ Insight Customer journey Trend
Omnichannel
ROI Target Tactics Strategy Campaign
WOM (Words of
mouth)/Buzz Trade Marketing Green Marketing Digital Marketing ….
Marketing
EVOLUTION OF MARKETING
PHILOSOPHIES
1. Production
Concept
2. Product
Concept
5. Societal Marketing Key
Concept Marketing
Concepts
3. Selling
4. Marketing Concept
Concept
THE PRODUCTION CONCEPT
The philosophy that consumers will favor products

that are available and highly afforable
and
that management should therefore focus on
improving production and distribution efficiency.
consumers
available Highly
affordable
product
Improving
Improving
distribution
production
efficiency
organization
1908 – 1927
It is useful in 2 types of situation:

1. The demand for a product > the supply
2. The demand for a product < the supply
But the product’s cost is too high
And improved productivity is needed to bring it down.
THE PRODUCT CONCEPT
The idea that consumers will favour products that offer

the most quality, performance and features and that
the organisation should therefore devote its energy to
making continuous product improvements.
THE PRODUCT CONCEPT
consumers
Most Performance
quality +
product features
Product
improvement
organization
1864 - 1968
THE SELLING CONCEPT
The idea that consumers will not buy enough of
the organization’s products unless the
organization undertakes a large-scale selling
and promotion effort.
Most firm practise the selling concept when they
have overcapacity. Their aim is to sell what
they make rather than make what the market
wants.
THE SELLING CONCEPT
The idea that consumers will not buy enough of the organization’s
products unless the organization undertakes a large-scale selling
and promotion effort.
Most firms practice the selling concept when they have
overcapacity. Their aim is to sell what they make rather than
make what the market wants.
It focuses on creating sales transaction in the short term rather than
on building long term and profitable relationships with
customers.
The selling concept is also practised in the non-profit area
THE MARKETING CONCEPT
The marketing concept holds that achieving

organizational goals depends on determining the
needs and wants of target markets and delivering
the desired satisfactions more effectively and
efficiently than competitors do.
THE MARKETING CONCEPT
customer
value
Company’s
profit
Selling concept Marketing concept
Starting point factory Market
Focus Existing products Customer needs
Means Selling and promoting Integrated marketing
Profits through sales Profits through

Ends
volume customer satisfaction
Outside-in
Perspective Inside-out perspective
perspective
SOCIETAL MARKETING CONCEPT
The idea that the organisation should

determine the needs, wants, and interests of
target markets and deliver the desired
satisfactions more effectively and efficiently
than competitors in a way that maintains or
improves the consumer’s and society well-
being.
SOCIETAL MARKETING CONCEPT
consumers
Societal
MKT
concept
organization society
DISCUSSION
Distinguish Societal marketing >< Social

Marketing?
+
MARKETING PLAN
GROUP HOMEWORK
-Go online to learn about careers in marketing.
- Interview someone who works in one of the marketing
jobs and ask him or her the following questions:
What does your job entail?
How did you get to this point in your career? Is this what
you thought you’d be doing when you grew up? What
influenced you to get into this field?
What education is necessary for this job?
What advice can you give to college students?
Add one additional question that you create.
Write a brief report of the responses to your questions
and explain why you would or would not be interested in
working in this field.
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CHAPTER 2:
THE MARKETING ENVIRONMENT
CONTENT
2.1. Definition
2.2. Levels of marketing environment

2.1 DEFINITION
The marketing environments are the

actors and forces outside marketing
that affect marketing management’s
ability to develop and maintain
successful transactions with its target
customers.
2.2. LEVELS OF MARKETING ENVIRONMENT
Marketing
The microenvironment
The macroenviroment
2.2.1. THE COMPANY’S MICROENVIRONMENT
The forces close to the company that affect its ability to serve its
customers, include:
- The company
- Suppliers
- Marketing intermediaries
- Customer markets
- Competitors
- Publics
2.2.1. THE COMPANY’S MICROENVIRONMENT
THE COMPANY
- Financial capacity
- Technology, R&D
- Personnel
- Company’s culture
In 2017, Sabeco spent VND 1.221 billion for
marketing.
SUPPLIERS
They provide the resources needed by the

company to produce its good and services.
Suppliers are very important as supply
shortages, delays, labour strikes can seriously
affect marketing. Rising supply cost may
force price increases that can harm the
company’s sales volume.
MARKETING INTERMEDIARIES
Are firms that help the company to

promote, sell and distribute its good to
final buyers.
MARKETING INTERMEDIARIES
• the individuals and organisations that buy goods and services to resell at a profit.
Rese
llers
Phy
sical • warehouse, transportation and other firms that help a company to stock and move
distr goods from thei points of origin to their destination
ibuti
on
firm
Mars
keti • Marketing research firms, advertising agencies, media firms, marketing consulting
ng firms and other service providers that help a company to target and promote its
serv products to the right market
ices
agen
Fina
cies
ncia • Banks, credit companies, insurance companies and other businesses that help
l finance transactions or insure agianst the risks associated with the buying and
inte selling of goods.
rme
diar
CUSTOMERS
Consumer
markets
International Business
markets market
marketing
Government Reseller
markets markets
Institutional
markets
DISCUSSION
Buyer Customer
Consumer Client
COMPETITORS
A company in the same industry or a similar

industry which offers a similar product or
services.
To be successful, a company must provide greater

customer value and satisfaction than its competitors
NYDC CLOSURE IN VIETNAM
PUBLICS
A public is any group that has an actual or

potential interest in or impact on an
organization’s ability to achieve its
objectives.
PUBLICS
Citizen
action
Government publics Local
publics publics
Media General
publics publics
Financial Internal
publics marketing publics
2.2.2. THE COMPANY’S MACROENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
Demography is the study of human

population in terms of size, density,
location, age, sex, race, occupation, and
other statistics
DEMOGRAPHIC ENVIRONMENT
Growing
Ethnic Age
Diversity Structures
Education Key
Demographic
Trends
Changing
Family
Geographic Structure
Shifts
ECONOMIC ENVIRONMENT
The economic environment consists of factors that

affect consumer-buying power and spending
patterns.
Population
Income
Family size
Education
Life expectancy
Infrastructure
Unemployment
Cost of labour
THE NATURAL ENVIRONMENT
Increased costs Increased

of energy pollution
Government
Shortages of intervention in
raw materials natural resource
Issues in management
Natural
environment
THE TECHNOLOGICAL ENVIRONMENT
Fast Pace of High R&D
Change Budgets
Issues in the
Technological
Environment
Focus on Minor Increased

Improvements Regulation
DISCUSSION
How technologies transform Marketing?

THE POLITICAL ENVIRONMENT
Laws, government agencies and pressure groups

that influence and limit various organisations
and individuals in a given society.
THE POLITICAL ENVIRONMENT
Laws: Marketers need an awareness of:

- Differences between the written law and common
practice/interpretation
- Differing laws related to each element of the marketing Mix
- Product: laws to protect consumers
- Price: price control mechanism, dumpling, tariffs
- Distribution: regulations covering distribution channels
- Promotion: prohibition of advertising: use of
words/expressions
THE CULTURAL ENVIRONMENT
The cultural environment is made up of institutions

and other forces that affect society’s basic values,
perceptions, preferences, and behaviours.
People grow up in a particular society that shapes their
basic beliefs and values.
They absorb a world view that defines their
relationships to themselves and others.
CULTURAL ELEMENTS
Time-assumptions Language-
about time vary precision versus Religion-beliefs
across cultures ambiguity
Consumption Business/social
Importance of
patterns-material customs–bribery,
the context-verbal
possessions / etiquette, status,
/ non-verbal cues
dress, mealtimes jokes, music.
Relationship with
authority Nationalism
(Hofstede, 1980)
TOOLS FOR ENVIRONMENT ANALYSIS
- PEST/PESTEL
- SWOT -> TOWS
- 5 FORCES
- ….
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1
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PESTEL
1
0
SWOT
Strengths Weaknesses
(Điểm mạnh) (điểm yếu)
Opportunities Threats
(cơ hội) (Thách thức)
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Chapter 3: MARKETING RESEARCH
THE MARKETING INFORMATION SYSTEM
Big Data: The huge and complex data sets generated

by today’s sophisticated information generation,
collection, storage, and analysis technologies.
Customer insight: Fresh marketing information-based

understandings of customers and the marketplace
that become the basis for creating customer value,
engagement, and relationships.
MARKETING RESEARCH DEFINITION
The systematic design, collection,

analysis, and report of data
relevant to a specific marketing
situation facing an organisation.
Some large companies have their own research department, some

hire outside research specialists, some purchase data collected by
outside firms…
Marketing research is the function that:

- links the consumer, customer, and public to the marketer
through information--information used to identify and define
marketing opportunities and problems;
- generate, refine, and evaluate marketing actions; monitor
marketing performance; and improve understanding of
marketing as a process.
- Marketing research specifies the information required to
address these issues, designs the method for collecting
information, manages and implements the data collection
process, analyzes the results, and communicates the findings
and their implications. (AMA, 2004)
It can
- Gives MKT insights into customer motivations,
purchase behavior, and satisfaction
- Help them to assess market potential and market
share or measure the effectiveness of pricing,
product, distribution, and promotion activities
- Provide relevant, up-to-date information on market
- Indicate trends
- Take the guess work out of decision-making
It can not
- Provide a miracle cure
- Make your decisions for you
RESEARCH PARADIGMS
Quantitative Qualitative
Descriptive or causal methods of research Exploratory methods of research
Larger sample sizes Smaller sample sizes
The researcher plays a separate The researcher plays an inseparable role to the
role from that of the subject subject
Data is analysed via maths and statistics Data is analysed subjectively

MARKETING RESEARCH PROCESS
Step 2: Step 3:
Step 1: Implementing Step 4:
Defining the Developing the research
problem and the research plan- Interpreting
research plan for collecting and and reporting
objectives collecting analyzing the the findings
information data
STEP 1: DEFINING THE PROBLEM AND RESEARCH
OBJECTIVES
Marketing decision problem
Marketing research problem
Research objectives
STEP 1: DEFINING THE PROBLEM AND RESEARCH OBJECTIVES
RESEARCH OBJECTIVES
• Marketing research to gather preliminary

Exploratory information that will help decline problems and
suggest hypothesis
research • Eg. Observational research
• To better describe marketing problems, situations, or

Descriptive markets, such as the market potential for a product
or the demographics and attitudes of customers
research • Eg. Survey research
Causal • Causal research: marketing research to test

hypotheses about cause and effect relationships.
research • Eg. Experimental research
STEP 2: DEVELOPING THE RESEARCH PLAN FOR COLLECTING INFORMATION
SECO
PRIMA
NDAR
RY
Y
DATA
DATA
SECONDARY DATA
Information that already exists somewhere,

having been collected for another purpose.
Eg. Company’s internal database, commercial data services,

government sources. Eg. The Nielsen company; Cnn,
Factiva, Lexisnexis, internet…
STEP 2: DEVELOPING THE RESEARCH PLAN FOR COLLECTING
INFORMATION
SECONDARY DATA
Advantages Disadvantages
Cost Current
Speed Relevant
Accuracy
Impartial
STEP 2: DEVELOPING THE RESEARCH PLAN FOR
COLLECTING INFORMATION
PRIMARY DATA
Observation
Research
Survey
approaches
Experiment
PRIMARY DATA
Observation Involves gathering primary data

by observing relevant people, actions, and
situations.
Researchers often observe consumer behavior to glean customer
insights that they can’t simply obtain by asking questions.
In research labs, using high tech cameras and other equipment, or
in in natural environment.
http://www.youtube.com/watch?v=QX_oy9614HQ
OBSERVATION
Obtain information that

people are unwilling or
unable to provide
Feelings, attitudes,
motives, private behavior
can’t be observed; short-
term; difficult to interpret
SURVEY RESEARCH
Gathering primary data by asking people

questions about their knowledge, attitudes,
preferences, and buying behavior.
SURVEY/QUESTIONNAIRE TYPES
Person administered Self administered

 Telephone  Direct mail outs
 Home  On-line
 Shopping Mall  Shopping Mall
A D VA N T A G E S
Lower cost
More respondent control
A D VA N T A G E S Less interviewer bias
High response rates Ability to gather data on many respondents in
a small time frame
Rapport established between researcher and
interviewee Ability to ask socially sensitive questions
D I S A D VA N T A G E S D I S A D VA N T A G E S
Time consuming Very time consuming
Expensive to administer Lower response rates than person administered
May lead to biased responses surveys
EXPERIMENTAL RESEARCH
Gathering primary data by selecting matched groups of

subjects, giving them different treatments, controlling
related factors, and checking for differences in group
responses.
Experimental research tries to explain cause-and-effect
relationships
Eg. McDonald’s, before adding new sandwich to its menu,
might use experiments to test the effects on sales of 2
different prices it might change.
PRIMARY DATA COLLECTION
CONTACT METHODS
Mail Telephone Personal Online
Flexibility Poor Good Excellent Good
Quantity of data Good Fair Excellent Good

collected
Control of Excellent Fair Poor Fair

interviewer effects
Control of sample Fair Excellent Good Excellent
Speed of data Poor Excellent Good Excellent

collection
Response rate Poor Poor Good Good
Cost Good Fair Poor Excellent

CONTACT METHODS
Talking w people on
the streets, in their
Individual interviewing
homes, offices,
shopping mall
Personal interviewing
Personal interviewing that

involves inviting 6-10
people to gather for a few
Focus group
hours with a trained
interviewing
interviewer to talk about a
product, service, org, on
important issues.
CONTACT METHODS
Online marketing research:

Collecting primary data online through internet
surveys, online focus groups, web-based
experiments, or tracking consumers’ online
behavior.
Advantages: cost, speed, more interactive, engaging,
easier to complete, less intrusive than traditional
contact methods.
SAMPLING PLAN
Sample: a segment of the population selected for marketing

research to represent the population as a whole.
Who is to be studied? (sampling unit)
How many people should be included? (sample size)
How should they be chosen? (sampling procedure)
Types of sample: p.140
STEP 3: IMPLEMENTING THE RESEARCH PLAN-
COLLECTING AND ANALYZING THE DATA
This involves collecting, processing, analyzing the

information.
Data collection can be carried out by the company’s
marketing research staff or by outside firms.
The data collection phase of the marketing research process
is generally the most expensive and the most subject to
error.
Researchers should watch closely to make sure that the plan
is implemented correctly.
STEP 4: INTERPRETING AND REPORTING THE FINDINGS
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Chapter 4: CONSUMPTION
MARKET AND BUYING
BEHAVIOR OF CONSUMERS
CONSUMER BEHAVIOUR
Looks at:
How people, groups and organisation select, buy, use
and dispose of goods, services, ideas or experiences to
satisfy their needs and wants….
CHARACTERISTICS INFLUENCING
CONSUMER BEHAVIOUR
Consumer purchases are strongly influenced by two

groups of factors:
• Internal characteristics that determine our behaviour:

 psychological
 personal
• External influences that represent the environment in

which the individual behaviour takes place:
 cultural
 social
PSYCHOLOGICAL FACTORS
 A buyer's decisions are influenced by psychological factors

such as:
 Motivation
 Perception
 Learning
 Personality
 Self concept
 Belief
 Attitude
PSYCHOLOGICAL FACTORS – MOTIVATION
Motive is a need that is sufficiently pressing to direct

the person to seek satisfaction of the need
Motivation describes behavior that is energized
Behavior is energized by needs
Needs occur when a gap exists between the desired
state of affairs and the current state of affairs
The bigger the gap, the greater the need, the more
motivation.
PSYCHOLOGICAL FACTORS – PERCEPTION
Perception ‘The process by which people select,

organise and interpret information to form a
meaningful picture of the world’.
How a person acts is influenced by his or her
perception of the situation. Two people with similar
motivation and in the same situation might act quite
differently because they perceive the situation
differently.
PSYCHOLOGICAL FACTORS: LEARNING
Learning: Changes in an individual’s behaviour arising

from experience.
When people act, they learn. Learning describes
changes in an individual's behaviour arising from
experience.
The significance of learning theory to marketers is that
they can build demand for a product by associating it
with strong drives, using motivating cues and
providing positive reinforcement.
PSYCHOLOGICAL FACTORS – PERSONALITY
Personality: A person’s distinguishing psychological

characteristics that lead to relatively consistent
and lasting responses to his or her own
environment.
Closely tied to motivation and is usually described in
terms of traits such as self-confidence, dominance,
sociability, autonomy, defensiveness, adaptability and
aggressiveness.
DISCUSSION
Brand Personality = Customer personality?

PSYCHOLOGICAL FACTORS: SELF CONCEPT
The beliefs a person holds about their own attributes

and how he/she evaluates these qualities.
A person’s perception of himself or herself
Examples - Self image
Self Esteem
OTHER TYPES OF SELVES
Each individual has many different selves:

Ideal Self
Actual self
Social self
Extended self
PSYCHOLOGICAL FACTORS: BELIEF
A descriptive thought that a person holds about

something.
Marketers are interested in the beliefs that people
formulate about specific product and services
because these belief make up product and brand
images that affect buying behaviour.
If some beliefs are wrong and prevent purchase, the
marketer will want to launch a campaign to correct
them.
PSYCHOLOGICAL FACTORS: ATTITUDES
A person’s consistently favourable or unfavourable

evaluations, feelings and tendencies towards an
object or idea.
Attitudes are difficult to change. Thus a company
should actually try to fit its products into existing
attitudes rather than try to change attitudes. Of
course, there are exceptions in which the greater cost
of trying to change attitudes may pay off.
PERSONAL FACTORS
A buyer's decisions are also influenced by personal

characteristics such as:
 Age and Lifecycle stage

 Occupation
 Education
 Economic Situation
 Lifestyle
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CULTURAL FACTORS
Cultural factors exert the broadest and deepest

influence on consumer behaviour. Marketers need to
understand the role played by the:
 Culture
 Subculture
 Social class
CULTURAL FACTORS
Culture ‘The set of basic values, perceptions, wants and

behaviours learned by a member of society from
family and other important institutions’.
Subcultures—‘smaller groups of people with shared
value systems based on common life experiences and
situations’.
Social classes are ‘relatively permanent and ordered
divisions in a society whose members share similar
values, interests and behaviours’.
SOCIAL FACTORS
Household type
Roles and Status
Membership Groups
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DISCUSSION
- WOM, eWOM
- KOL, Opinion leader
TYPES OF BUYING DECISIONS
High Low
Involvement Involvement
Significant Complex Variety-

differences
between
Buying Seeking
brands Behaviour Behaviour
Few Dissonance- Habitual

differences
between Reducing Buying Buying
brands Behaviour Behaviour
THE BUYER DECISION PROCESS
Need recognition
Information search
Evaluation of alternative
Purchase decision
Postpurchase behavior
THE BUYER DECISION PROCESS (OTHER
MODELS)
THE BUYER DECISION PROCESS (OTHER
MODELS)
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ADOPTION OF INNOVATIONS
Percentage of Adopters
Early Majority Late Majority

Innovators
Early
Adopters Laggards
34% 34%
13.5% 16%
2.5%
Early Time of Adoption Late

STAGES IN ADOPTION PROCESS
Awareness Interest Evaluation Trial Adoption

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Chapter 5: BUYING BEHAVIOR OF
ORGANIZATION
BUSINESS TO BUSINESS MARKETING
Business Markets
Where products and services are used in operations of
businesses and organisations for their internal needs
and not directed at end consumers.
Business marketing, defined as

Those activities that facilitate exchanges involving
products and customers in markets where goods and
services are used for purposes other than personal
consumption.
What’s in a name……..
Busi ne ss to B usi ne ss M a rk et ing

Industr
ial M ar
keting
Business Marketin
g
g a n i s a t i o n s
eti n g t o O r
Mark
BUSINESS AND CONSUMER MARKETING
Common to both:
The marketing concept – market driven:
Customer comes first
Know customers and competitors
Integrated approach
BUSINESS MARKET VS CONSUMER MARKET
WHERE THEY DIFFER
• Fewer buyers
Market structure and • Larger buyers
demand • Geographic concentration of users
• More buyers effort

Nature of the buying • More professional purchasing effort
unit
• More complex buying decisions
Types of decision and • More formalised
• Buyer and seller are often much more dependent on each other
the decision process
• Direct purchasing
Other characteristics • Reciprocity
• Leasing
BUSINESS CUSTOMER CATEGORIES
Commercial enterprises
Governmental organisations
Institutions
COMMERCIAL ENTERPRISES
Manufacturers / Processors
 Factories
 Original equipment manufacturers (OEMs)
Other Marketing Providers
 Dealers / distributors / resellers
Service Providers
 Most businesses
 Transport
 etc
GOVERNMENT
Governmental units – national and local- that

purchase or rent goods and services for
carrying out the main functions of government.
Purchase products and services for defence,
education, public welfare, and other public
needs.
INSTITUTIONS
Schools; hospitals; nursing homes, prisons and

other institutions that provide goods and
services to people in their care.
Similar to government needs and buying
behaviour
Consider FTU:
 Buildings > Furnishing and fittings.
 Consumables.
 Operation support eg Vehicles; PCs; AV.
BUSINESS / ORGANIZATIONAL MARKETS
WHAT THEY BUY
Major equipment
Accessories
Fabricated & component parts
Process materials
Raw materials
Maintenance, repairs, operating
supplies
Business services
CLASSIFYING GOODS FOR B2B
Entering goods
 Raw material / manufactured parts that become part of
finished product
Foundation goods
 Goods used to produce end product such as plant &
machinery; facilities; office equipment.
Facilitating goods
 Goods and services that support operations, includes
office supplies, maintenance /repairs; services.
BUSINESS BUYER BEHAVIOR
Major Types of Buying Situations
Straight rebuy is a routine purchase decision such as reorder without any
modification
Eg. Electricity, water, gas, office supplies, gum, cigarettes, bulk chemicals
Modified rebuy is a purchase decision that requires some research where
the buyer wants to modify the product specification, price, terms, or
suppliers
Eg. New cars, consulting services, electrical components, personal
computers
New task is a purchase decision that requires thorough research such as a
new product
Eg. Custom-built offices, complets buildings, bridges, installations
(machinery, computer systems), weapon system…
PARTICIPANTS IN THE BUSINESS BUYING
PROCESS
Buying center is all of the individuals and units that
participate in the business decision-making process.
Members:
Deciders - make the buying decision
Influencers - provide info, eg Quality control; R&D
Secondary Roles
Users - those who use the product
Gatekeepers - control the flow of info to other members
Buyers - authorised to select vendor, do transaction.
BUYING CENTRE
COMPOSITION AND NUMBER
Depends on buying task:

Straight rebuy
Modified rebuy
New task
Depends on roles:
Area of responsibility
Source of relevant information
THE MAIN INFLUENCES ON BUSINESS BUYERS
Environmental Organizational Interpersonal Individual

• economic • objectives • Authority • Age
• Technological • Policies • Status • Education
• Political • Procedures • Empathy • Job position
• Competitive • Org structure • persuasiveness • Personality
development • systems • Risk attitudes
The Buying Process

E-Procurement – buying on the internet
Online purchasing
Company buying sites

E-Procurement
Advantages
 Access to new suppliers
 Lowers costs
 Speeds order processing and delivery
 Shares information
 Sales
 Service and support
Disadvantages
 Can erode relationships as buyers search for new
suppliers
 Security
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SEGMENTATION, TARGET AND
POSITIONING
1. MARKET SEGMENTATION
Market
Segment
Segmentation
Dividing a market into

A segment is a group of
smaller segments with
customers who share one or
distinct needs, characteristics,
more similar characteristics,
or behavior that might
and therefore have similar
require separate marketing
product/service needs.
strategies or mixes.
WHY SEGMENT MARKETS?
Provides Increase
Focus profit
Greater efficiency,
Identify and Compare
less waste, improved
best marketing
marketing
opportunities.
performance.
Reduces vulnerability
Concentrate company
by “matching”
resources on most
resources to segment
profitable segments.
needs
Segmenting consumers markets
Geographic Demographic
Psychographic Behavioral
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SEGMENTING INDUSTRY MARKETS
Less scope to segment than in consumer

markets, because:
fewer segmentation variables
markets concentration & dominance
Segmentation variables harder to discern

SEGMENTING INDUSTRY MARKETS
Geographical Demographical Benefits sought User status
Customer
Purchasing
Usage rate Loyalty status operating
approaches
characteristics
Situational Personal
factors characteristics
REQUIREMENTS FOR EFFECTIVE
MARKET SEGMENTATION
To be useful, market segments must be:
Measurable Accessible Substantial
Differentiable Actionable
2. SELECTING TARGET MARKET SEGMENTS
Market A target
Targeting market
The process of Consists of a set of
evaluating each market buyers sharing common
segment’s attractiveness needs or characteristics
and selecting one or that the company
more segments to enter decides to serve.
SELECTING TARGET MARKET SEGMENTS
Undifferentiated marketing
• ignore segmental differences;
Differentiated marketing
• develop specialized marketing activities for different segments;
Concentrated (niche) marketing

• develop one set of marketing plans for a few segments.
Micromarketing
MARKET COVERAGE STRATEGIES
Company
Company
Marketing
Marketing Market
Market
Mix
Mix
A. Undifferentiated Marketing
Company
CompanyMix
Mix11 Segment
Segment11
Company
CompanyMix
Mix22 Segment
Segment22
Company
CompanyMix
Mix33 Segment
Segment33
B. Differentiated Marketing
Company Segment
Segment11
Company
Marketing Segment
Marketing Segment22
Mix
Mix
Segment
Segment33
C. Concentrated Marketing
INSIGHTS
An unrecognized fundamental human truth

A new way of viewing the world that causes us to
reexamine existing conventions and challenge the
status quo
A penetrating observation about human behaviour
that results in seeing consumers from a fresh
perspective
A discovery about the underlying motivation that
drive people’s action
INSIGHT
Reaction Reality
Resonate Relevant
INSIGHTS
INSIGHTS
INSIGHTS
3. MARKET POSITIONING
Product position is the way the product is defined by

consumers on important attributes—the place the
product occupies in consumers’ minds relative to
competing products
CHOOSING A DIFFERENTIATION AND POSITIONING
STRATEGY
Identify possible value differences and competitive

advantages:
An advantage over competitors gained by offering greater
customer value, either by having lower prices or providing
more benefits that justify higher prices.
A company can differentiate along the lines of product,
services, channels, people, or image.
STRATEGY
Choosing the right competitive advantages:

…….is a posture that allows a firm to gain an
edge over its rivals in attracting customers and
defending
against competitive forces.
BMW - Technological superiority

Rolex - Brand Image
Amazon.com - Distribution, product range
Body Shop - Environmentally friendly
IDENTIFYING A POSITIONAL DIRECTION BY
PERCEPTUAL MAPPING
IDENTIFYING A REPOSITIONING DIRECTION
STRATEGY
Selecting an overall positioning strategy:

DEVELOPING A POSITIONING STATEMENT
To (target segment and need) our

(brand) is (concept) that (point of
difference).
To busy, mobile professionals who need to always be
in the loop, the BlackBerry is a wireless
connectivity solution that gives you an easier,
more reliable way to stay connected to data,
people, and resources while on the go.
REPOSITIONING
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Chapter 7: PRODUCT POLICIES
WHAT IS A PRODUCT?
Anything that can be offered to a market

for attention, acquisition, use, or
consumption that might satisfy a want or
need.
• Tangible objects
• Services
• Events
• Persons
• Places
• Organizations
• Ideas
PRODUCTS
Organizations marketing: create, maintain, or change the attitudes

and behavior of target consumers toward an organization.
Person marketing: create, maintain, or change the attitudes and
behavior of target consumers toward a person.
Presidents, entertainers, professionals….
Place marketing: create, maintain, or change the attitudes and
behavior of target consumers toward particular places.
nations, cities, regions..
Social marketing: the use of commercial marketing concepts and
tools in programs designed to influence individuals’ behavior to
improve their well being and that of society.
Wilderness protection, clean air, human rights, racial
equality…
LEVELS OF PRODUCT AND SERVICES
PRODUCT AND SERVICE CLASSIFICATIONS
Products
Consumer Industrial products

products A product bought by
A product individuals and
bought by final organizations for further
consumers for processing or for use in
personal conducting a business
consumption
.
ry
lle
e ga
em
th
w w.
w m
co
CONSUMER PRODUCTS
Convenient Shopping Specialty Unsought

product product product product
• A consumer • A consumer • A consumer • A consumer
product that product that product with product that
customers the customer, unique the consumer
usually buy in the process characteristics either does not
frequently, of selecting or or brand know about or
immediately, purchasing, identification knows about
and with usually for which a but does not
minimal compares on significant normally
comparison such attributes group of consider
and buying as suitability, buyers is buying.
effort quality, price, willing to
and style make a special
purchase
effort.
INDUSTRIAL PRODUCTS
Entering goods (materials and parts)
 Raw material / manufactured parts that become part of finished
product
 Farm products: wheat, cotton, fruits, vegetables; natural products:
fish, lumber, crude petroleum; component materials: iron, yarn,
cement, wires, tires, casting...
Foundation goods (Capital items)
 Goods used to produce end product such as plant & machinery;
facilities; office equipment.
 Factories, offices, generators, drill presses, large computer systems,
elevators, computers, fax machines, desk...
Facilitating goods (supplies and services)
 Goods and services that support operations, includes office supplies,
maintenance /repairs; services.
 Paper, pencils, paint, brooms, window cleaning, computer repair,
consulting services, advertising services....
PRODUCT AND SERVICE DECISIONS
Product attribute
Branding
Packaging
Labeling
Product support service

PRODUCT AND SERVICE ATTRIBUTES
Quality
Features
Style &
design
Product attributes
BRAND
A brand is a name, term, sign, symbol, or design, or

a combination of these, that identifies the
products or services of one seller or group of
sellers and differentiates them from competitors.
BRAND
A promise of future expectations

A brand must consistently measure up to your
promise-everyday at every touch point
Earns an emotional connection with consumers
Consumers have a unique emotional connection with
your brand
Is company’s behaviours
Behaviours are aligned to company core values – It’s
not what the company says, it’s what the company
does.
PRODUCT VS BRAND
A Product is what the firm makes

A Brand is what the customer buys
A Product can be copied
A Product can be quickly outdated
A Brand is Unique
A Brand is what makes the firm’s product
unique
A Brand can go on and on, forever….
BRAND ARCHITECTURE
It is the structure of the brand in an organizational

entity that defines how various brands and sub-
brands in a company’s portfolio are related to each
other or are different from one another.
Brand architecture provides a hierarchy that depicts the
roles and relationships within the products and
services that make a company’s portfolio and makes
sure that the external stakeholders understand the
value of what the brands offer.
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BRAND ARCHITECTURE
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2
2
2
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BRAND ARCHITECTURE
2
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BRAND ARCHITECTURE
2
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BRAND HEALTH CHECK/DIAGNOSIS
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PACKAGING
The activities of designing and producing the container

or wrapper for a product.
LABELING
Labels range from simple tags attached to products

to complex graphics that are part of the
packaging.
Functions:
identifies the product or brand (eg. Name)
describe several things about the product
promote the brand, support its positioning, and connect
with customers.
PRODUCT SUPPORT SERVICES
PRODUCT LINE
A group of products that are closely related because

they function in a similar manner, are sold to the
same customer groups, are marketed through the
same types of outlets, or fall within given price
ranges.
PRODUCT MIX
The set of all product lines and items that a particular

seller offers for sale.
Product mix width refers to the number of different
product lines the company carries.
Product mix length refers to the total number of items a
company carries within its product lines
Product mix depth refers to the number of versions
offered for each product in the line.
the consistency of the product mix refers to how closely
related the various product lines are in end use,
production requirements, distribution channels, or
some other way.
SERVICES MARKETING
THE NATURE AND CHARACTERISTICS OF A SERVICE
STAGES OF THE PRODUCT LIFE CYCLE
9 - 237
USES OF PLC
A predictive or forecasting tool

A planning tool- it provides useful descriptions of
competitive marketing strategies at different stages of
the PLC
A control tool
It is NOT formula for magical predictions
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Chapter 8: PRICING POLICIES
WHAT IS A PRICE?
Price is the amount of money charged for a

product or service.
It is the sum of all the values that consumers
give up in order to gain the benefits of having
or using a product or service.
Price produces revenue;

all other elements in the marketing mix
represent costs
1. CONSIDERATIONS AFFECTING PRICE DECISION
Considerations Major pricing strategy
Customer value Customer value based pricing
Cost Cost plus pricing
Competition Breakeven pricing
Demand Competition based pricing
Price elasticity of demand

CUSTOMER VALUE BASED PRICING
Price set in accordance with

customer perceptions about the
value of the product/service
rather than the seller’s cost
COST BASED PRICING
Cost – plus pricing (markup pricing): add a

standard markup to the cost of the product.
COST BASED PRICING
MARKUP PRICING
Markup as a % Markup
=
of Selling Price Selling Price
= 15
60
= 25%
COST BASED PRICING
MARKUP PRICING
Markup as a % Markup
=
of Cost Cost
= 15
45
= 33%
COST BASED PRICING
BREAK-EVEN PRICING
The breakeven point is the point at which costs of

producing the product equal revenue from selling
the product.
Setting price to break even on the costs of making
and marketing a product or setting price to make
a target return
MAJOR PRICING STRATEGIES
Break-Even Analysis and Target Profit Pricing

BREAKEVEN POINT
Fixed Costs
Breakeven Point = _______________________________
Per Unit Contribution to Fixed Costs
Fixed Costs
___________________
=
Price - Variable Costs
= $300,000 : ($20 - $10)
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PRICE – DEMAND RELATIONSHIP
Price elasticity of demand illustrates
the response of demand to a change in price
Inelastic demand occurs when demand hardly changes

when there is a small change in price
Elastic demand occurs when demand changes greatly for

a small change in price
2. ADDITIONAL PRICING STRATEGIES
New product Product Mix

pricing Pricing
Price
adjustments
2.1. NEW PRODUCT PRICING STRATEGIES
Market
skimming
pricing
Market
penetration
pricing
SKIMMING VS. PENETRATION PRICING
The product’s quality & image

must support its higher price,
& enough buyers must want
the product at that price
Skimming:
Setting a high price for a new
product to skim maximum revenues The cost of producing a smaller
volume cannot be so high that
layer by layer from the segments they cancel (annul) the
willing to pay the high price; advantage of charging more
the company makes fewer but
more profitable sales
Competitors should not be
able to enter the market
easily & undercut the
high price
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SKIMMING VS PENETRATION PRICING
The market must be highly

price sensitive so that a low
price produces more
market growth
Penetration:
Setting a low price for a new Production & distribution costs
product in order to attract a large must fall as sales volume
number of buyers and a increases
large market share
The low price must help

keep out the competition, and
the penetration pricer must
maintain its low-price position
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2.2. PRODUCT MIX PRICING
PRICE ADJUSTMENT STRATEGIES
Discount and allowance pricing
Segmented pricing
Psychological pricing
Promotional pricing
Geographic pricing
Dynamic pricing
International pricing
Reduces prices to reward customer responses such as
paying early or promoting the product
cash discount for paying promptly;
quantity discount for large volume;
functional (trade) discount for selling, storing, distribution, and
record keeping.
trade-in allowance
promotional allowance to reward dealers for participating in
advertising or sales support programs.
Customer segment pricing -
different customers pay different prices for the same
product or service. [although no differences in costs ]
Product form segment pricing –

different versions of the product are priced
differently but not according to differences
in cost.
Location pricing –
the product sold in different geographic areas is priced
differently even though the cost is the same.
Examples???
when prices are temporarily priced below list
price or cost to increase demand
Loss leaders
Special event pricing
Cash rebates
Low-interest financing
Longer warrantees
Free maintenance
RISKS OF PROMOTIONAL PRICING
Used too frequently, and copies by competitors can

create “deal-prone” customers who will wait for
promotions and avoid buying at regular price
Creates price wars

PSYCHOLOGICAL PRICING
Form of value pricing (consumer based)

Used to play on consumer perceptions, e.g. $1,990
High value goods priced according to what
consumers THINK should be the price
May be slightly below certain perceived price points,
e.g. <$2,000 computer
DYNAMIC PRICING
Adjusting prices continually to meet the

characteristics and needs of individual customers
and situations
DISCUSSION
Dynamic pricing is a trend in Marketing 4.0?

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POLICIES
CONTENTS
What is distribution
Distribution channels
Intermediaries in
distribution channels
Distribution strategies
WHAT IS DISTRIBUTION
Includes company activities that make the

product available to target customers.
Involves:
Channel management
Transportation
Warehousing
Inventory management
Wholesale
Retail
Supply chain: Managing upstream and downstream
value-added flows of materials, final goods, and
related information among suppliers, the
company, resellers, and final consumers.
Upstream partners are firms that supply the
raw material, components, parts, information,
finances, and expertise to create a product or
service
Downstream partners include
the marketing channels or distribution channels that
look toward the customer, form a vital
connection between the firm and its customers.
DISTRIBUTION CHANNELS
Marketing channels (or distribution channels): a set of
interdependent organizations that help make a
product or service available for use or consumption
by the consumer or business user.
Manufactures, agents, wholesalers, retailers, customers
partner with each other to improve the performance
of the entire system
FUNCTION AND IMPORTANCE OF CHANNEL INTERMEDIARIES
Intermediaries offer producers greater efficiency in

making goods available to target markets.
Through their contacts, experience, specialization,
and scale of operations, intermediaries usually
offer the firm more than it can achieve on its
own.
FUNCTION AND IMPORTANCE OF CHANNEL
INTERMEDIARIES
Smooth flow of goods and services
Large quantity of limited variety ->

Limited quantity of a wide variety
FUNCTION AND IMPORTANCE OF CHANNEL
INTERMEDIARIES
Information: The collection and dissemination of marketing research information about
potential and current customers, competitors, and other actors and forces in the
marketing environment.
Promotion: The development and dissemination of persuasive communications designed
to attract customers to the offer.
Negotiation: The attempt to reach final agreement on price and other terms so that
transfer of ownership or possession can be effected.
Ordering: Marketing-channel members' communication of intentions to buy to the
manufacturer.
Financing: The acquisition and allocation of funds required to finance inventories at
different levels of the marketing channel.
Risk taking: The assumption of risks connected with carrying out the channel work.
Physical possession: The successive storage and movement of physical products from raw
materials to the final customers.
Payment: Buyers' payment of their bills to the sellers through banks and other financial
institutions.
Title: The actual transfer of ownership from one organization or person to another.
NUMBER OF CHANNEL LEVELS
Direct marketing channel: a marketing channel that

has no intermediary level
Many businesses, especially small ones and those just
starting up, sell directly to customers.
Advantage: a certain degree of control over prices
and selling activities
Disadvantages: lack retailing expertise.
Indirect marketing channel

Channel containing one or more intermediaries levels
(wholesalers, retailers)
• Advantages:
Middlemen are sales professionals
Useful when location of home base is too far from consumers
Greater sales volume potential
Frees producer to focus on production
• Disadvantages:
More expensive than direct distribution
Less control over product
INTERMEDIARIES IN DISTRIBUTION
CHANNELS
WHOLESALER
Wholesaling: all the activities involved in selling

goods and services to those buying for resale or
business use.
Wholesaler: a firm engaged primarily in wholesaling
activities.
Wholesalers buy mostly from producers and sell
mostly to resellers, industrial consumers, and
other wholesalers.
WHOLESALER
FUNCTIONS OF WHOLESALER
Selling and Promotion Financing

Buying and assortment Risk bearing
building Market information
Bulk breaking Management services
Warehousing
Transportation
WHOLESALERS
TYPES OF WHOLESALERS
Merchant • An independent owned wholesale business that

wholesalers takes title to the merchandise t handle
• a wholesaler who represents buyers or sellers on

Agents a relatively permanent basis, performs only a few
functions, and does not take title to goods
• A wholesaler who does not take title of goods and

Brokers whose function is to bring buyers and sellers
together and assist in negotiation
Manufacturer's sales • Wholesaling by sellers or buyers themselves

branches and offices rather than through independent wholesalers.
RETAILERS
Retailing includes all the
activities in selling products
or services directly to final
consumers for their personal,
non-business use
Retailers are businesses whose

sales come primarily from
retailing
RETAILERS
Specialty stores
• Narrow product line with deep assortment: sporting-goods store, bookstores, florists,
furniture stores
Department stores
• Wide variety of product lines: clothing + home furnishing + household goods
Convenience stores
• A relatively small store located near residential areas, Limited line of high-turnover
convenient goods
Supermarkets
• A relative large operation designed to serve the consumer’s total needs for grocery and
household products
Discount store
• Carries standard merchandise sold at lower prices with lower margins and higher
volumes
Distribution channels of FMCG
Off
On Premise
Premise
General Trade: vendor, kios,
Modern Trade: Horeca
local market, roadside
vendors CVS, supermarket, (hotel+restaurant+catering,
hypermarket, shopping mall canteen, hospital…)
food stalls…
DISCUSSION
1. Is Modern Trade the future growth driver for

FMCG?
2. Identify trends in retailing?
DISTRIBUTION STRATEGIES
Intensive
Channel Selective
Distribution
Strategies
Exclusive
Intensive distribution: a strategy in which the

company uses as many outlets as possible
Exclusive distribution: the producer gives only a

limited number of dealers the exclusive right to
distribute its products in their territories.
Selective distribution: the use of more than one but

fewer than all the intermediaries who are willing
to carry the company’s products.
Manufactures are constantly tempted to move from

…. ………………..or …………………………..
distribution to more ……………………………
distribution to increase the coverage and the sales.
CHAPTER 10: POLICIES TO
PROMOTE AND SUPPORT BUSINESS
1. THE PROMOTION MIX
The promotion mix is the specific blend of

advertising, public relations, sales promotion,
personal selling, and direct-marketing tools that
the company uses to persuasively communicate
customer value and build customer relationships
THE PROMOTION MIX
Advertising
Advertising is any paid form of non-personal
presentation and promotion of ideas, goods, or
services by an identified sponsor
Broadcast
Print
Internet
Outdoor
THE PROMOTION MIX
Advertising
Major advertising decisions
THE PROMOTION MIX
ADVERTISING
Reach
 The number of people exposed to a retailer’s promotion
efforts in a specific period.
Frequency
 The average number of times each person who is reached is
exposed to a retailer’s promotion efforts in a specific period.
Message Content
 The characteristics of the promotional form influence the
message
 What is the best media to convey retailer’s message and
achieve desired outcome?
 How does it complement / interact with message in other
media?
THE PROMOTION MIX
Public relation
Public relations involves building good relations
with the company’s various publics by
obtaining favorable publicity, building up a
good corporate image, and handling or
heading off unfavorable rumors, stories, and
events
Public relations is a very believable form of

promotion that includes news stories,
features, sponsorships, and events
THE PROMOTION MIX
PUBLIC RELATIONS
FUNCTION OF PR DEPARTMENT
Press relations or press agency

Product publicity
Public affairs
Lobbying
Investor relations
Development
THE PROMOTION MIX
PUBLIC RELATIONS
OBJECTIVES & ROLE OF PR
Increase awareness of the retailer and its strategy mix
Maintain or improve company image
Show the retailer as a contributor to the public’s quality of
life
Demonstrate innovativeness
Present a favourable message in a highly believable
manner
Minimize total promotion costs
THE PROMOTION MIX
Public Relations
Major public relations tools
News
Speeches
Special events
Publicity: annual reports, brochures, articles, company
newsletters, magazines, DVDs, online video
Corporate identify materials: logos, brochures, signs,
bz cards, uniforms
Public service activities
DISCUSSION
THE PROMOTION MIX
Personal selling
Personal selling is the personal presentation by the

firm’s sales force for the purpose of making sales
and building customer relationships
Sales presentations
Trade shows
Incentive programs
Personal selling is the most effective method at certain
stages of the buying process, particularly in building
buyers’ preferences, convictions, actions, and
developing customer relationships
THE PROMOTION MIX
Sales Promotion
Sales promotion is the short-term incentive to

encourage the purchase or sale of a product
or service
THE PROMOTION MIX
SALES PROMOTION TOOLS
Point-of-Purchase
Contests
Coupons
Frequent-Shopper Programs
Prizes
Samples
Referral Gifts
Specialty Items
Special Events
THE PROMOTION MIX
PURPOSE / ROLE OF SALES PROMOTION
To increase short-run sales volume

To maintain customer loyalty
To emphasize novelty
To complement other promotion tools
THE PROMOTION MIX
Direct marketing
Direct marketing involves making direct connections
with carefully targeted individual consumers to
both obtain an immediate response and cultivate
lasting customer relationships—through the use of
direct mail, telephone, direct-response television, e-
mail, and the Internet to communicate directly with
specific consumers
Catalog
Telemarketing
Kiosks
THE PROMOTION MIX
DIRECT MARKETING BENEFITS
• Tool to build customer relationships

• Low-cost, efficient, fast alternative to reach
markets
• Flexible
• Access to buyers not reachable through other
channels
THE PROMOTION MIX
FORMS OF DIRECT MARKETING
Face-to-face selling
Direct-mail marketing
Catalog marketing
Telephone marketing
Direct-response television marketing
Kiosk marketing
Digital direct marketing
Online marketing
2. INTEGRATED MARKETING
COMMUNICATIONS
Integrated marketing communications (IMC) is the

integration by the company of its communication
channels to deliver a clear, consistent, and compelling
message about the organization and its brands
Integrated marketing communications are composed of
advertising, sales promotions, trade shows, personal
selling, direct selling, and public relations…
HAAGEN – DAZS LOVES HONEY BEES
Marketing
2. INTEGRATED MARKETING COMMUNICATIONS
COMMUNICATION PROCESS
STEPS IN DEVELOPING EFFECTIVE MARKETING
COMMUNICATION
1. Identify the target audience
2. Determine the communication objectives
3. Design communications
4. Select channels
5. Establish budget
6. Decide on marketing communication mix
7. Measure results
8. Manage IMC
COMMUNICATION
1. Identifying the Target audience

What will How it will The audience may be
be said be said potential buyers or current
users,deciders, influencers,
individual, groups, particular
When it Where it publics, or general publics,
will be said will be said those who make the buying
decision or those who
influence it.
Who will
say it
COMMUNICATION
2. Determining the Communication Objectives
COMMUNICATION
2. Determining the Communication Objectives
Marketers seek a purchase response that results
from a consumer decision-making process that
includes the stages of buyer readiness
COMMUNICATION
AIDA Model
Get Attention
Hold Interest
Arouse Desire
Obtain Action
AIDA
Marketing
Promotion and the Hierarchy of Effects
Behavioral Objective Promotional Mix
Hierarchy of Effects
of Promotion Relevant to Each Step
Awareness
Informative Advertising, Public
Provide
Relations, Point-of-Purchase,
Information
Window Displays
Knowledge
Liking
Change Competitive Advertising,
Attitudes Personal Selling, Sales
and Feelings Promotions
Preference
Conviction
Reminder
Stimulate
Advertising, Personal Selling,
Desires
Frequent-Shopper Programs
Purchase
COMMUNICATION
3. Designing a communications
MESSAGE STRATEGY: searches for appeals,
themes, or ideas that will tie in to the brand
positioning and help establish points-of-parity or
points-of-difference.
COMMUNICATION
Message Structure
The communicator must put the messages together in a logical way.
Three message-structure issues need to be considered.
1. Whether to draw a conclusion or leave it to the audience.
2. Whether to present a one-sided or two-sided argument.
3. Whether to present the strongest arguments first or last.
Message Format
The communicator needs a strong format for the message, which is
based on different communication tools. For example, the
communicator must consider words, sounds and voices when
the message is to be carried over the radio.
COMMUNICATION
3. Designing a communications
Creative strategy
Information (rational) appeal - relates to the
audience’s self-interest
Transformational Emotional appeal - attempt to stir
positive or negative emotions to motivate
purchase
COMMUNICATION
Message source
The message’s impact is affected by
audience view of the communicator
Celebrities Role Model / Aspire / Like
 Athletes
 Entertainers
Professionals Credibility
 Health care providers
COMMUNICATION
4. SELECT CHANNELS
Personal
selling
Personal
Personal channels
channels
Word of
mouth
Print
media
Non-personal
Non-personal
channels
channels
Broadcast
media
7
32
4-
COMMUNICATION
Personal communication involves two or more

people communicating directly with each other.
It is effective because it allows personal addressing
and feedback
Face to face
Phone
Mail
E-mail
Internet chat
COMMUNICATION
Personal Communication
Opinion leaders – person[s] within a reference group

who exerts social influence on others, because of
their special skills, knowledge, personality, or
other characteristics,
Buzz marketing - cultivating opinion leaders and

getting them to spread information about a
product or service to others in their communities
COMMUNICATION
Non-personal communication is media that carry

messages that affect the buyer directly without
personal contact or feedback, including
major media,
atmospheres, and
events
COMMUNICATION
Non-Personal Communication Channels
Major media - print, broadcast, display, and online media
Atmospheres are designed environments that create or
reinforce the buyer’s leanings toward buying a product
Events - that communicate messages to target audiences
 Press conferences
 Grand openings
 Exhibits
 Public tours
COMMUNICATION
5. Establish budget
Four common methods used to set the total budget for
communication:
 Affordable method
 Percentage-of-sales method
 Competitive-parity method
 Objective-and-task method
COMMUNICATION
6. Decide on marketing communication mix
Advertising
PR
Sales promotion
Personal selling
Direct marketing
COMMUNICATION
7. Measuring Communication Results
Reach and frequency (the percentage of target market
exposed to a communication and the number of
exposures),
Get feedback from target audience
See / aware of / ad / TVC
Recall and recognition scores,
Review / make changes.
How many people bought the product, liked it, and
talked to others about it.
3. PROMOTION MIX STRATEGIES

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PRINCIPLES OF

• Class attention: 10%

CHAPTER 1: Overview of Marketing

Definitions of marketing and

Major terms in marketing

Marketing management philosophies

American Philip Kotler

1960: “The performance of business activities

1985: “Marketing is the process of planning and

Marketing is the activity, set

(In narrow business

Marketing 4.0 is a marketing approach that combines

Customer Sales Trade Brand

Have the 4P's of Marketing Become

A state of felt deprivation

Latent needs: are

“A LOT OF TIMES, PEOPLE

Human wants that are backed by buying power.

The customer’s evaluation of the difference between all

The extent to which a product’s perceived performance

Anything that can be offered to a market for

Objects Places ideas

people Services Organizations

Marketers see the sellers as constituting an industry and

Is the act of obtaining a desired object from

Conditions making exchange possible

A trade between two parties that involves at least two

Transaction is marketing’s unit of measurement

Content Convention rate Engagement rate Inbound/outbound Influencer/KOL

Above the line

USP (unique selling ATL/BTL Brand/branding/Brand

Cross channel MKT/

ROI Target Tactics Strategy Campaign

The philosophy that consumers will favor products

It is useful in 2 types of situation:

The idea that consumers will favour products that offer

The marketing concept holds that achieving

Starting point factory Market

Focus Existing products Customer needs

Means Selling and promoting Integrated marketing

Profits through sales Profits through

The idea that the organisation should

Distinguish Societal marketing >< Social

2.2. Levels of marketing environment

The marketing environments are the

They provide the resources needed by the

Are firms that help the company to

A company in the same industry or a similar

To be successful, a company must provide greater

A public is any group that has an actual or

Demography is the study of human

The economic environment consists of factors that

Increased costs Increased

Focus on Minor Increased

How technologies transform Marketing?

Laws, government agencies and pressure groups

Laws: Marketers need an awareness of:

The cultural environment is made up of institutions

Big Data: The huge and complex data sets generated

Customer insight: Fresh marketing information-based

The systematic design, collection,

Some large companies have their own research department, some

Marketing research is the function that: