Description
NOTES ON PRINCIPLE OF MARKETING
Principles of Marketing
Principles of Marketing
Kotler & Armstrong: Principles of Marketing, 9th edition
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Principles of Marketing
Table of Contents
1 Marketing in a Changing World.........................................................................................................................5
1.1 Marketing Model – Core concepts............................................................................................................................5 1.2 Marketing management.............................................................................................................................................6 1.3 Marketing concepts...................................................................................................................................................8 1.4 Challenges in the new connected millennium...........................................................................................................9
2 Strategic Planning and the Marketing Process................................................................................................10
2.1 trategic planning process......................................................................................................................................1! 2.2 Marketing process...................................................................................................................................................12
3 The Marketing Environment.............................................................................................................................15
3.1 "#er#iew.................................................................................................................................................................15 3.2 Microen#ironment...................................................................................................................................................15 3.3 Macroen#ironment..................................................................................................................................................1$ 3.4 %esponding to marketing en#ironment...................................................................................................................19
4 Marketing esearch and !n"ormation S#stems................................................................................................20
4.1 &eneral....................................................................................................................................................................2! 4.2 Marketing in'ormation s(stem )M* +......................................................................................................................2! 4.3 Marketing research process.....................................................................................................................................21 4.4 "ther marketing research considerations................................................................................................................24
5 Cons$mer Markets and Cons$mer %$#er %ehavior.......................................................................................25
5.1 Model o' consumer ,eha#ior .................................................................................................................................25 5.2 Characteristics a''ecting consumer ,eha#ior.......................................................................................................... 25 5.3 -(pes o' ,u(ing decision ,eha#ior.........................................................................................................................29 5.4 -he ,u(er decision process.....................................................................................................................................3! 5.5 -he ,u(er decision process 'or new products.........................................................................................................3! 5.6 Consumer ,eha#ior across international ,orders....................................................................................................31
& %$siness Markets and %$siness %$#er %ehavior.............................................................................................32
6.1 "#er#iew.................................................................................................................................................................32 6.2 .usiness ,u(er ,eha#ior.........................................................................................................................................33 6.3 *nstitutional and go#ernment markets.....................................................................................................................35 $.1 "#er#iew.................................................................................................................................................................36 $.2 Market egmentation..............................................................................................................................................3$ $.3 Market targeting......................................................................................................................................................39 $.4 /ositioning 'or competiti#e ad#antage....................................................................................................................4!
' Market Segmentation( Targeting( and Positioning "or Com)etitive *dvantage...........................................3&
+ Prod$ct and Services Strateg#...........................................................................................................................43
8.1 0hat is a product1..................................................................................................................................................43 8.2 /roduct classi'ications.............................................................................................................................................44 8.3 *ndi#idual product decisions...................................................................................................................................46 8.4 /roduct line decisions.............................................................................................................................................49 8.5 /roduct mi2 decisions.............................................................................................................................................5! 8.6 er#ices marketing..................................................................................................................................................51 8.$ *nternational product and ser#ices marketing.........................................................................................................52
, -e./Prod$ct 0evelo)ment and Prod$ct 1i"e/C#cle Strategies......................................................................53
9.1 3ew product de#elopment strateg(.........................................................................................................................53 9.2 /roduct li'e4c(cle strategies....................................................................................................................................56
10 Pricing Prod$cts2 Pricing Considerations and *))roaches..........................................................................5,
1!.1 *ntroduction...........................................................................................................................................................59 1!.2 5actors to consider when setting prices........................................................ ........................................................ 59 1!.3 &eneral pricing approaches...................................................................................................................................62
11 Pricing Prod$cts2 Pricing Strategies...............................................................................................................&4
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11.1 3ew4product pricing strategies.............................................................................................................................64 11.2 /roduct mi2 pricing strategies...............................................................................................................................64 11.3 /rice ad6ustment strategies....................................................................................................................................65 11.4 /rice changes........................................................................................................................................................68 11.5 /u,lic polic( and pricing......................................................................................................................................69
12 0istri3$tion Channels and 1ogistics Management........................................................................................'1
12.1 -he nature o' distri,ution channels.......................................................................................................................$1 12.2 Channel ,eha#ior and organi7ation.......................................................................................................................$2 12.3 Channel design decisions......................................................................................................................................$4 12.4 Channel management decisions............................................................................................................................$6 12.5 /u,lic polic( and distri,ution decisions...............................................................................................................$6 12.6 /h(sical distri,ution and logistics management...................................................................................................$$
13 etailing and .holesaling.................................................................................................................................+0
13.1 %etailing................................................................................................................................................................8! 13.2 %etailer marketing decisions.................................................................................................................................83 13.3 -he 'uture o' retailing...........................................................................................................................................84 13.4 0holesaling..........................................................................................................................................................85 13.5 0holesaler marketing decisions............................................................................................ ...............................86 13.6 -rends in wholesaling...........................................................................................................................................8$
14 !ntegrated marketing comm$nications strateg#.............................................................................................++
14.1 -he marketing communications mi2.....................................................................................................................88 14.2 *ntegrated marketing communications..................................................................................................................88 14.3 8 #iew o' the communication process..................................................................................................................89 14.4 teps in de#eloping e''ecti#e communication.......................................................................................................9! 14.5 etting the total promotion ,udget and mi2..........................................................................................................93 14.6 ociall( responsi,le marketing communication....................................................................................................95 15.1 8d#ertising............................................................................................................................................................96 15.2 ales promotion..................................................................................................................................................1!! 15.3 /u,lic relations....................................................................................................................................................1!1
15 *dvertising( sales )romotions( and )$3lic relations......................................................................................,&
1& Personal selling and sales management.........................................................................................................103
16.1 %ole o' personal selling.......................................................................................................................................1!3 16.2 Managing the sales 'orce.....................................................................................................................................1!3 16.3 /rinciples o' personal selling..............................................................................................................................1!5
1' 0irect and online marketing2 the ne. marketing model.............................................................................10+
1$.1 0hat is direct marketing1...................................................................................................................................1!8 1$.2 .ene'its and growth o' direct marketing.............................................................................................................1!8 1$.3 Customer data,ases and direct marketing...........................................................................................................1!9 1$.4 5orms o' direct marketing...................................................................................................................................1!9 1$.5 "nline marketing and electronic commerce........................................................................................................11! 1$.6 *ntegrated direct marketing.................................................................................................................................112 1$.$ /u,lic polic( and ethical issues in direct marketing........................................................................................... 112
1+ Com)etitive strategies.....................................................................................................................................113
18.1 Customer relationship marketing........................................................................................................................113 18.2 Competiti#e marketing strategies........................................................................................................................115 18.3 .alancing customer and competitor orientations................................................................................................118 19.1 &lo,al marketing in the twent(4'irst centur(............................................................................ ..........................119 19.2 9ooking at the glo,al marketing en#ironment.................................................................................................... 119 19.3 :eciding whether to go international..................................................................................................................121 19.4 :eciding which markets to enter.........................................................................................................................121 19.5 :eciding how to enter the market.......................................................................................................................121 19.6 :eciding on the glo,al marketing program.........................................................................................................122
1, The glo3al market)lace..................................................................................................................................11,
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19.$ :eciding on the glo,al marketing organi7ation..................................................................................................123
20 Marketing and societ#2 social res)onsi3ilities and marketing ethics ..........................................................124
2!.1 ocial criticisms o' marketing.............................................................................................................................124 2!.2 Citi7en and pu,lic actions to regulate marketing................................................................................................124 2!.3 .usiness actions toward sociall( responsi,le marketing....................................................................................126
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Principles of Marketing
1 Marketing in a Changing World
1 1 Marketing Model ! Core concepts
Marketing
Five core concepts – Needs, wants, demands – – – – Products and services Value, satisfaction, ualit! "#c$anges, transactions, relations$ips Markets
Definition of marketing – A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others – %imple definition – – &eliver customer satisfaction at a profit '!( )1* attracting new customers +! promising superior value, and )2* keep current customers +! delivering satisfaction Scope of marketing – 'ook $as a +road scoping( ,-&, communcation, distri+ution, pricing, service – .lso +u!ers carr! on marketing activities / e0g0 +! searc$ing for goods Main elements of a modern marketing system / value added in steps – %uppliers – – – 1ompan! )marketer* 2 competitors Marketing intermediaries "nd user market
Needs, wants, demands
Needs – %tates of felt deprivation, part of $uman makeup – P$!sical and social needs Wants – 3$e form needs take )e0g0 food 45 $am+urger* – %$aped +! culture and personalit! Demands – 6$en wants are +acked +! +u!ing power
Products and services
– – – –
roducts .n!t$ing t$at can +e offered to satisf! a need or a want P$!sical products, services, e#periences, persons, places, organi7ations, information, ideas "#ample( 8smoking is +ad9 idea can +e a product, a person can +e a product in an election .ka( satisfier, resource, marketing offer
Services – :ust one kind of a product
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Value, satisfaction, ualit! !"ustomer# $alue
– – – – &ifference +etween 8value gained +! owning and using a product9 and 8cost of o+taining t$e product9 Value gained not necessaril! monetar! %imilarl! cost of o+taining not necessaril! monetar! 1ustomers act on perceived value 1Q>B.N9 – +deas – %ocial ideas / pu+lic $ealt$ campaigns – %ocial marketing / creation and implementation of programs seeking to increase t$e accepta+ilit! of a social idea, cause, or practice wit$in target groups
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5 # ,ndi)id&al prod&ct decisions
Model Product attri+utes
roduct attributes 0< .randing 0< ackacing 0< :abeling 0< Support services – – 1losing signals from +u!ers / p$!sical actions, comments, uestions )8w$at are !our prices and credit termsL9* %everal closing tec$ni ues – – – – – – .sk for order ,eview points of agreement Qelp write up t$e order .sk w$ic$ model t$e customer wants Note t$at customer will lose out if not ordered now ?ffer incentives to +u! now / lower price, larger uantit! for same price
EollowDup
4 Eollow up after a sale to ensure customer satisfaction and repeat +usiness – %c$edule immediatel! after sale – – ,eveal pro+lems, assure +u!er of salespersonIs interest ,educe +u!er concerns t$at mig$t $ave arisen after t$e sale
,elations$ip marketing
4 3$e process of creating1 maintaining1 and enhancing strong, value5laden relations$ips wit$ customers and ot$er stake$olders – Erom transaction orientation to relations$ip marketing – – "mp$asi7e long term interests instead of closing a sale 1ustomers want 8w$ole solution9 packages, uick responsesA often pro+lem if separate sales forces for eac$ product
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14 :irect and online marketing: the ne% marketing model
14 1 What is direct marketing6
&efinition New direct marketing model
4 &irect communications wit$ carefull! targeted individual consumers to o+tain an immediate response and cultivate lasting customer relations$ips "arl! marketers – 1atalog companies, direct mailers, telemarketers New marketers – .dvances in data+ase tec$nologies – – – – New marketing media / especiall! Hnternet and ot$er electronic c$annels Ksuall! a supplementar! c$annel Qowever, some new companies rel! e#clusivel! on direct marketing )&ell* 4 1omplete model for doing +usiness 'he marketing model of t$e new millenniumL – %ome envision a future w$ere all +u!ing and selling occurs directl! +etween producer and consumer
14 " 2enefits and gro%th of direct marketing
'enefits to +u!ers
– – – – – – 1onvenient "as! Private Breater product access and selection 6ealt$ of comparative information Hnteractive and immediate 3ool for customer relations$ip +uilding, +etter targeting and customi7ation 1an +e timed to reac$ prospects at @ust t$e rig$t moment Qig$er readers$ip and response Hnternet / online +enefits – – – – – – ,educing costs and increasing speed and efficienc! .void e#penses of rent, insurance, utilities )related to owning a store* Hmprove efficienc! of c$annel and logistics functions )order processing, inventor! $andling, deliver!, trade promotion* 1osts less t$an communicating on paper t$roug$ t$e mail Breater fle#i+ilit! / ongoing ad@ustments to offers and programs )e0g0 8online catalog9* Blo+al medium
'enefits to sellers
– – – –
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Principles of Marketing
Browt$ of direct marketing K% direct marketing sales growt$ ca0 MO annuall!
– – 1aused +! advances in tec$nolog! and new marketing realities Market demassification / everDincreasing num+er of nic$es wit$ different preferences – Qig$er costs of driving, traffic congestion, parking, lack of time, s$ortage of retail sales $elp, c$eckout lines, 000 &irect marketing $as also grown in '2' commerce
14 # C&stomer databases and direct marketing
1ustomer data+ase &ata+ase marketing
4 .n organi7ed collection of compre$ensive data a+out individual customers or prospects, including geograp$ic, demograp$ic, ps!c$ograp$ic, and +e$avioral data Process of +uilding, maintaining, using customer and ot$er data+ases for t$e purpose of contacting and transacting wit$ customers – Ere uentl! used in '2' and service retailing )$otel, +ank, airline* "ustomer mailing list – %impl! a set of names, addresses, telep$one num+ers "ustomer database – 1ontains muc$ more information – "0g0 past purc$ases, personal information, famil! information, etc0 Hdentif!ing prospects &eciding w$ic$ customer s$ould receive a particular offer &eepening customer lo!alt! )information, gifts, etc* ,eactivating customer purc$ases )knowledge of past purc$ases, gift certificates, promotions, etc*
Ksing data+ases
1* 2* 3* 4*
14 $ =orms of direct marketing
EaceDtoDface selling
?riginal and oldest form / sales call )previous c$apter* – Professional sales force – – ManufacturersI representatives &irect selling force / e0g0 3upperware
3elemarketing
4 Ksing t$e telep$one to sell directl! to customers – ?ut+ound 4 call to customer – Hn+ound 4 e0g0 tollDfree num+ers
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&irectDmail marketing
4 &irect marketing t$roug$ single mailings t$at include letters, ads, samples, foldouts, and ot$er 8salespeople wit$ wings9 sent to prospects on mailing lists – Qig$ target market selectivit! – – – – 1an +e personali7ed "as! measurement of results 1an send 1&s, V1,s, etc0 Possi+le media – – – – P$!sical mail Ea# mail "Dmail Voice mail
1atalog marketing
4 &irect marketing t$roug$ print, video, or electronic catalogs t$at are mailed to select customers, made availa+le in stores, or presented online – 8ld definition +! 1atalog .ge – – 8a printed, +ound piece of at least eig$t pages, selling multiple products, and offering a direct ordering mec$anism9 ?nline catalogs – Passive, need to +e marketed>
&irectDresponse television 4 &irect marketing via telecision, including directDresponse television advertising or marketing
informercials and $ome s$opping c$annels – &irectDresponse advertising – – – –
%$ort spots wit$ ordering information Hnfomercials / 3G minute advertisement programs, single product 3elevision programs or entire c$annels dedicated to selling goods and services
Qome s$opping c$annels
Potential in t$e future for integrated television and Hnternet marketing
Siosk marketing
Siosk – Hnformation and ordering mac$ines – – – – "0g0 car information, 1& listening Placed in stores, airports, etc &iffers from vending mac$ine +ecause a kiosk does not dispense actual products .lso used +! '2', e0g0 kiosks at trade s$ows
?nline marketing
)Ne#t su+section*
14 1 *nline marketing and electronic commerce
?nline marketing
4 Marketing conducted t$roug$ interactive online computer s!stems, w$ic$ link consumers wit$ sellers electronicall! 'asic t!pes 1* 1ommercial online services 2* Hnternet "0g0 .merica ?nline, 1ompu%erve, Prodig! Now overtaken +! pu+lic Hnternet Hnternet / from &o& pro@ect to 666 +rowsing
1ommercial online services Hnternet
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Principles of Marketing
,apid growt$
"lectronic commerce )eDcommerce* – 4 3$e general term for a +u!ing and selling process t$at is supported +! electronic means – Marketspaces instead of market places – 'usiness +u!ers dominate )>*, more than ABC is business buyingD Hnternet population demograp$ics differs from general population – Rounger – – – .ffluent, +etter educated More male 'ut +ecoming more like t$e general population as time goes on
3$e online consumer
.lso differences in – .pproac$es to +u!ing – – – – Place greater value on information ,eact negativel! to messages aimed onl! at selling ,esponses to marketing 1onsumers control more of t$e interaction t$an in traditional direct marketing
Word of web
1onducting online marketing
&lectronic presence on5line – 1orporate we+Dsite – – 4 6e+ site t$at seeks to +uild customer goodwill and to supplement ot$er sales c$annels rat$er t$an to sell t$e compan!Is products directl! Marketing we+ site – – – – – – 4 6e+ site designed to engage consumers in an interaction t$at will move t$em closer to a purc$ase or ot$er marketing outcome 1atalog, s$opping tips, promotional features000 Marketing we+ sites are often promoted in print and +roadcast ads "0g0 dental floss / $ow to get people to visit !our siteL 45 1reate corporate we+ site wit$ answers to customer uestions and +uild goodwillA use it onl! to supplement ot$er c$annels
Cow interest products
Placing advertisements online – ?nline ads – 4 .ds t$at appear w$ile su+scri+ers are surfing online services or 6e+ sites, including +anners, popDup windows, 8tickers9 and 8road+locks9 – ,oad+lock 4 full screen ads t$at users must 8pass t$roug$9 to get to ot$er screens t$e! want to view 1ontent sponsors$ips – &,g, 8ldsmobile sponsors A8
s "elebrity "ircle
–
Participating in forums, newsgroups, and we+ communities – Eorums / discussion groups located in commercial online services – – – Newsgroups / Hnternet version of forums 'ulletin +oard s!stems )''%s* / speciali7ed online services t$at center on a specific topic or group, e0g0 $ealt$, computer games, vacations, 000 Web communities * cyberspace e9uivalent to Starbucks coffeehouse
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Ksing email and and we+casting – 6e+casting 4 3$e automatic downloading of customi7ed information of interest to recipientsI P1s, affording an attractive c$annel for delivering Hnternet advertising or ot$er information content
Promise and c$allenges
1$allenges – Cimited consumer e#posure and +u!ing – – – – – ?nline markets still limited, 6e+ users often do 8window s$opping9 %kewed demograp$ics and ps!c$ograp$ics 1$aos and clutter %ecurit! issues "t$ical concerns
14 3 ,ntegrated direct marketing
&efinition
4 &irectDmarketing campaigns t$at use multiple ve$icles and multiple stages to improve response rates and profits MultipleDmedia, multipleDsate campaigns 1* 2* 3* 4* ;* Paid ad wit$ a response c$annel &irect mail )to people w$o responded* ?ut+ound telemarketing EaceDtoDface sales call 1ontinuing communication
"#ample
14 4 P&blic polic- and ethical iss&es in direct marketing
?verview Hrritation, unfairness, deception, fraud
– – – Coud commercials, late nig$t p$one calls, 000 3aking advantage of impulsive +u!ers Qeat merc$ants / mailers and cop! intended to mislead +u!ers – ?fficial looking documents, simulated newspaper clippins, fake $onors and awards, etc0
Hnvasion of privac!
Microtargeting Pentium HHH serial num+er Microsoft 8,egistration 6i7ard9 leaking information 45 rivacy revolt &irect Marketing .ssociation )&M.* mem+er logo – Cogo users follow guidelines
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15 Competiti)e strategies
15 1 C&stomer relationship marketing
,elations$ip marketing
4 3$e process of creating, maintaining, and en$ancing strong, valueDladen relations$ips wit$ customers and ot$er stake$olders – Erom transactions to deep relations$ips Hn t$e past, 8leak! +ucket9 approac$ worked accepta+l! well – Ceak! +ucket 4 alt$oug$ new customers attracted, old customers leaving relations$ips 6$! isnIt t$is approac$ useful an!moreL – 1$anging demograp$ics, more sop$isticated competitors, overcapacit! – 45 Eewer customers to go around, must keep e#isting customers 4 3$e amount +! w$ic$ revenues from a given customer over time will e#ceed t$e compan!Is costs of attracting, selling, and servicing t$at customer "ustomer value – "ustomer delivered value 0 'otal customer value * 'otal customer cost – – – – – – – – – – – 1ustomers )ideall!* +u! products wit$ +est customer delivered value Product value %ervices value Personnel value Hmage value Monetar! cost 3ime cost "nerg! cost Ps!c$ic cost 1ustomer value components
,elevance
1ustomer lifetime value .ttracting, retaining, and growing customers
1ustomer cost components
"ustomer satisfaction – 4 3$e e#tent to w$ic$ a productIs perceived performance matc$es a +u!erIs e#pectations – ,elative to expectations1 w$ic$ in turn are +ased on – – – – – – – – – – – Past +u!ing e#periences ?pinions of friends and associates Marketer and competitor information and promises 4 internationalA an international compan! does not necessaril! $ave t$e advantages t$at a glo+al firm )+! definition* $as 1* 2* 3* 4* ;* 6* Cooking at t$e glo+al marketing environment &eciding w$et$er to go international &eciding w$ic$ markets to enter &eciding $ow to enter t$e market &eciding on t$e glo+al marketing program &eciding on t$e glo+al marketing organi7ation
Ma@or decisions
19 " ;ooking at the global marketing en)ironment
3$e international trade s!stem
3ariff – 4 . ta# levied +! a government against certain imported products0 3ariffs are designed to raise revenue or to protect domestic firms0 Tuota – 4 . limit on t$e amount of goods t$at an importing countr! will accept in certain product categories "m+argo – 4 .
NOTES ON PRINCIPLE OF MARKETING
Principles of Marketing
Principles of Marketing
Kotler & Armstrong: Principles of Marketing, 9th edition
1 / 126
Principles of Marketing
Table of Contents
1 Marketing in a Changing World.........................................................................................................................5
1.1 Marketing Model – Core concepts............................................................................................................................5 1.2 Marketing management.............................................................................................................................................6 1.3 Marketing concepts...................................................................................................................................................8 1.4 Challenges in the new connected millennium...........................................................................................................9
2 Strategic Planning and the Marketing Process................................................................................................10
2.1 trategic planning process......................................................................................................................................1! 2.2 Marketing process...................................................................................................................................................12
3 The Marketing Environment.............................................................................................................................15
3.1 "#er#iew.................................................................................................................................................................15 3.2 Microen#ironment...................................................................................................................................................15 3.3 Macroen#ironment..................................................................................................................................................1$ 3.4 %esponding to marketing en#ironment...................................................................................................................19
4 Marketing esearch and !n"ormation S#stems................................................................................................20
4.1 &eneral....................................................................................................................................................................2! 4.2 Marketing in'ormation s(stem )M* +......................................................................................................................2! 4.3 Marketing research process.....................................................................................................................................21 4.4 "ther marketing research considerations................................................................................................................24
5 Cons$mer Markets and Cons$mer %$#er %ehavior.......................................................................................25
5.1 Model o' consumer ,eha#ior .................................................................................................................................25 5.2 Characteristics a''ecting consumer ,eha#ior.......................................................................................................... 25 5.3 -(pes o' ,u(ing decision ,eha#ior.........................................................................................................................29 5.4 -he ,u(er decision process.....................................................................................................................................3! 5.5 -he ,u(er decision process 'or new products.........................................................................................................3! 5.6 Consumer ,eha#ior across international ,orders....................................................................................................31
& %$siness Markets and %$siness %$#er %ehavior.............................................................................................32
6.1 "#er#iew.................................................................................................................................................................32 6.2 .usiness ,u(er ,eha#ior.........................................................................................................................................33 6.3 *nstitutional and go#ernment markets.....................................................................................................................35 $.1 "#er#iew.................................................................................................................................................................36 $.2 Market egmentation..............................................................................................................................................3$ $.3 Market targeting......................................................................................................................................................39 $.4 /ositioning 'or competiti#e ad#antage....................................................................................................................4!
' Market Segmentation( Targeting( and Positioning "or Com)etitive *dvantage...........................................3&
+ Prod$ct and Services Strateg#...........................................................................................................................43
8.1 0hat is a product1..................................................................................................................................................43 8.2 /roduct classi'ications.............................................................................................................................................44 8.3 *ndi#idual product decisions...................................................................................................................................46 8.4 /roduct line decisions.............................................................................................................................................49 8.5 /roduct mi2 decisions.............................................................................................................................................5! 8.6 er#ices marketing..................................................................................................................................................51 8.$ *nternational product and ser#ices marketing.........................................................................................................52
, -e./Prod$ct 0evelo)ment and Prod$ct 1i"e/C#cle Strategies......................................................................53
9.1 3ew product de#elopment strateg(.........................................................................................................................53 9.2 /roduct li'e4c(cle strategies....................................................................................................................................56
10 Pricing Prod$cts2 Pricing Considerations and *))roaches..........................................................................5,
1!.1 *ntroduction...........................................................................................................................................................59 1!.2 5actors to consider when setting prices........................................................ ........................................................ 59 1!.3 &eneral pricing approaches...................................................................................................................................62
11 Pricing Prod$cts2 Pricing Strategies...............................................................................................................&4
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11.1 3ew4product pricing strategies.............................................................................................................................64 11.2 /roduct mi2 pricing strategies...............................................................................................................................64 11.3 /rice ad6ustment strategies....................................................................................................................................65 11.4 /rice changes........................................................................................................................................................68 11.5 /u,lic polic( and pricing......................................................................................................................................69
12 0istri3$tion Channels and 1ogistics Management........................................................................................'1
12.1 -he nature o' distri,ution channels.......................................................................................................................$1 12.2 Channel ,eha#ior and organi7ation.......................................................................................................................$2 12.3 Channel design decisions......................................................................................................................................$4 12.4 Channel management decisions............................................................................................................................$6 12.5 /u,lic polic( and distri,ution decisions...............................................................................................................$6 12.6 /h(sical distri,ution and logistics management...................................................................................................$$
13 etailing and .holesaling.................................................................................................................................+0
13.1 %etailing................................................................................................................................................................8! 13.2 %etailer marketing decisions.................................................................................................................................83 13.3 -he 'uture o' retailing...........................................................................................................................................84 13.4 0holesaling..........................................................................................................................................................85 13.5 0holesaler marketing decisions............................................................................................ ...............................86 13.6 -rends in wholesaling...........................................................................................................................................8$
14 !ntegrated marketing comm$nications strateg#.............................................................................................++
14.1 -he marketing communications mi2.....................................................................................................................88 14.2 *ntegrated marketing communications..................................................................................................................88 14.3 8 #iew o' the communication process..................................................................................................................89 14.4 teps in de#eloping e''ecti#e communication.......................................................................................................9! 14.5 etting the total promotion ,udget and mi2..........................................................................................................93 14.6 ociall( responsi,le marketing communication....................................................................................................95 15.1 8d#ertising............................................................................................................................................................96 15.2 ales promotion..................................................................................................................................................1!! 15.3 /u,lic relations....................................................................................................................................................1!1
15 *dvertising( sales )romotions( and )$3lic relations......................................................................................,&
1& Personal selling and sales management.........................................................................................................103
16.1 %ole o' personal selling.......................................................................................................................................1!3 16.2 Managing the sales 'orce.....................................................................................................................................1!3 16.3 /rinciples o' personal selling..............................................................................................................................1!5
1' 0irect and online marketing2 the ne. marketing model.............................................................................10+
1$.1 0hat is direct marketing1...................................................................................................................................1!8 1$.2 .ene'its and growth o' direct marketing.............................................................................................................1!8 1$.3 Customer data,ases and direct marketing...........................................................................................................1!9 1$.4 5orms o' direct marketing...................................................................................................................................1!9 1$.5 "nline marketing and electronic commerce........................................................................................................11! 1$.6 *ntegrated direct marketing.................................................................................................................................112 1$.$ /u,lic polic( and ethical issues in direct marketing........................................................................................... 112
1+ Com)etitive strategies.....................................................................................................................................113
18.1 Customer relationship marketing........................................................................................................................113 18.2 Competiti#e marketing strategies........................................................................................................................115 18.3 .alancing customer and competitor orientations................................................................................................118 19.1 &lo,al marketing in the twent(4'irst centur(............................................................................ ..........................119 19.2 9ooking at the glo,al marketing en#ironment.................................................................................................... 119 19.3 :eciding whether to go international..................................................................................................................121 19.4 :eciding which markets to enter.........................................................................................................................121 19.5 :eciding how to enter the market.......................................................................................................................121 19.6 :eciding on the glo,al marketing program.........................................................................................................122
1, The glo3al market)lace..................................................................................................................................11,
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Principles of Marketing
19.$ :eciding on the glo,al marketing organi7ation..................................................................................................123
20 Marketing and societ#2 social res)onsi3ilities and marketing ethics ..........................................................124
2!.1 ocial criticisms o' marketing.............................................................................................................................124 2!.2 Citi7en and pu,lic actions to regulate marketing................................................................................................124 2!.3 .usiness actions toward sociall( responsi,le marketing....................................................................................126
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Principles of Marketing
1 Marketing in a Changing World
1 1 Marketing Model ! Core concepts
Marketing
Five core concepts – Needs, wants, demands – – – – Products and services Value, satisfaction, ualit! "#c$anges, transactions, relations$ips Markets
Definition of marketing – A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others – %imple definition – – &eliver customer satisfaction at a profit '!( )1* attracting new customers +! promising superior value, and )2* keep current customers +! delivering satisfaction Scope of marketing – 'ook $as a +road scoping( ,-&, communcation, distri+ution, pricing, service – .lso +u!ers carr! on marketing activities / e0g0 +! searc$ing for goods Main elements of a modern marketing system / value added in steps – %uppliers – – – 1ompan! )marketer* 2 competitors Marketing intermediaries "nd user market
Needs, wants, demands
Needs – %tates of felt deprivation, part of $uman makeup – P$!sical and social needs Wants – 3$e form needs take )e0g0 food 45 $am+urger* – %$aped +! culture and personalit! Demands – 6$en wants are +acked +! +u!ing power
Products and services
– – – –
roducts .n!t$ing t$at can +e offered to satisf! a need or a want P$!sical products, services, e#periences, persons, places, organi7ations, information, ideas "#ample( 8smoking is +ad9 idea can +e a product, a person can +e a product in an election .ka( satisfier, resource, marketing offer
Services – :ust one kind of a product
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Principles of Marketing
Value, satisfaction, ualit! !"ustomer# $alue
– – – – &ifference +etween 8value gained +! owning and using a product9 and 8cost of o+taining t$e product9 Value gained not necessaril! monetar! %imilarl! cost of o+taining not necessaril! monetar! 1ustomers act on perceived value 1Q>B.N9 – +deas – %ocial ideas / pu+lic $ealt$ campaigns – %ocial marketing / creation and implementation of programs seeking to increase t$e accepta+ilit! of a social idea, cause, or practice wit$in target groups
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Principles of Marketing
5 # ,ndi)id&al prod&ct decisions
Model Product attri+utes
roduct attributes 0< .randing 0< ackacing 0< :abeling 0< Support services – – 1losing signals from +u!ers / p$!sical actions, comments, uestions )8w$at are !our prices and credit termsL9* %everal closing tec$ni ues – – – – – – .sk for order ,eview points of agreement Qelp write up t$e order .sk w$ic$ model t$e customer wants Note t$at customer will lose out if not ordered now ?ffer incentives to +u! now / lower price, larger uantit! for same price
EollowDup
4 Eollow up after a sale to ensure customer satisfaction and repeat +usiness – %c$edule immediatel! after sale – – ,eveal pro+lems, assure +u!er of salespersonIs interest ,educe +u!er concerns t$at mig$t $ave arisen after t$e sale
,elations$ip marketing
4 3$e process of creating1 maintaining1 and enhancing strong, value5laden relations$ips wit$ customers and ot$er stake$olders – Erom transaction orientation to relations$ip marketing – – "mp$asi7e long term interests instead of closing a sale 1ustomers want 8w$ole solution9 packages, uick responsesA often pro+lem if separate sales forces for eac$ product
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Principles of Marketing
14 :irect and online marketing: the ne% marketing model
14 1 What is direct marketing6
&efinition New direct marketing model
4 &irect communications wit$ carefull! targeted individual consumers to o+tain an immediate response and cultivate lasting customer relations$ips "arl! marketers – 1atalog companies, direct mailers, telemarketers New marketers – .dvances in data+ase tec$nologies – – – – New marketing media / especiall! Hnternet and ot$er electronic c$annels Ksuall! a supplementar! c$annel Qowever, some new companies rel! e#clusivel! on direct marketing )&ell* 4 1omplete model for doing +usiness 'he marketing model of t$e new millenniumL – %ome envision a future w$ere all +u!ing and selling occurs directl! +etween producer and consumer
14 " 2enefits and gro%th of direct marketing
'enefits to +u!ers
– – – – – – 1onvenient "as! Private Breater product access and selection 6ealt$ of comparative information Hnteractive and immediate 3ool for customer relations$ip +uilding, +etter targeting and customi7ation 1an +e timed to reac$ prospects at @ust t$e rig$t moment Qig$er readers$ip and response Hnternet / online +enefits – – – – – – ,educing costs and increasing speed and efficienc! .void e#penses of rent, insurance, utilities )related to owning a store* Hmprove efficienc! of c$annel and logistics functions )order processing, inventor! $andling, deliver!, trade promotion* 1osts less t$an communicating on paper t$roug$ t$e mail Breater fle#i+ilit! / ongoing ad@ustments to offers and programs )e0g0 8online catalog9* Blo+al medium
'enefits to sellers
– – – –
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Browt$ of direct marketing K% direct marketing sales growt$ ca0 MO annuall!
– – 1aused +! advances in tec$nolog! and new marketing realities Market demassification / everDincreasing num+er of nic$es wit$ different preferences – Qig$er costs of driving, traffic congestion, parking, lack of time, s$ortage of retail sales $elp, c$eckout lines, 000 &irect marketing $as also grown in '2' commerce
14 # C&stomer databases and direct marketing
1ustomer data+ase &ata+ase marketing
4 .n organi7ed collection of compre$ensive data a+out individual customers or prospects, including geograp$ic, demograp$ic, ps!c$ograp$ic, and +e$avioral data Process of +uilding, maintaining, using customer and ot$er data+ases for t$e purpose of contacting and transacting wit$ customers – Ere uentl! used in '2' and service retailing )$otel, +ank, airline* "ustomer mailing list – %impl! a set of names, addresses, telep$one num+ers "ustomer database – 1ontains muc$ more information – "0g0 past purc$ases, personal information, famil! information, etc0 Hdentif!ing prospects &eciding w$ic$ customer s$ould receive a particular offer &eepening customer lo!alt! )information, gifts, etc* ,eactivating customer purc$ases )knowledge of past purc$ases, gift certificates, promotions, etc*
Ksing data+ases
1* 2* 3* 4*
14 $ =orms of direct marketing
EaceDtoDface selling
?riginal and oldest form / sales call )previous c$apter* – Professional sales force – – ManufacturersI representatives &irect selling force / e0g0 3upperware
3elemarketing
4 Ksing t$e telep$one to sell directl! to customers – ?ut+ound 4 call to customer – Hn+ound 4 e0g0 tollDfree num+ers
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&irectDmail marketing
4 &irect marketing t$roug$ single mailings t$at include letters, ads, samples, foldouts, and ot$er 8salespeople wit$ wings9 sent to prospects on mailing lists – Qig$ target market selectivit! – – – – 1an +e personali7ed "as! measurement of results 1an send 1&s, V1,s, etc0 Possi+le media – – – – P$!sical mail Ea# mail "Dmail Voice mail
1atalog marketing
4 &irect marketing t$roug$ print, video, or electronic catalogs t$at are mailed to select customers, made availa+le in stores, or presented online – 8ld definition +! 1atalog .ge – – 8a printed, +ound piece of at least eig$t pages, selling multiple products, and offering a direct ordering mec$anism9 ?nline catalogs – Passive, need to +e marketed>
&irectDresponse television 4 &irect marketing via telecision, including directDresponse television advertising or marketing
informercials and $ome s$opping c$annels – &irectDresponse advertising – – – –
%$ort spots wit$ ordering information Hnfomercials / 3G minute advertisement programs, single product 3elevision programs or entire c$annels dedicated to selling goods and services
Qome s$opping c$annels
Potential in t$e future for integrated television and Hnternet marketing
Siosk marketing
Siosk – Hnformation and ordering mac$ines – – – – "0g0 car information, 1& listening Placed in stores, airports, etc &iffers from vending mac$ine +ecause a kiosk does not dispense actual products .lso used +! '2', e0g0 kiosks at trade s$ows
?nline marketing
)Ne#t su+section*
14 1 *nline marketing and electronic commerce
?nline marketing
4 Marketing conducted t$roug$ interactive online computer s!stems, w$ic$ link consumers wit$ sellers electronicall! 'asic t!pes 1* 1ommercial online services 2* Hnternet "0g0 .merica ?nline, 1ompu%erve, Prodig! Now overtaken +! pu+lic Hnternet Hnternet / from &o& pro@ect to 666 +rowsing
1ommercial online services Hnternet
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,apid growt$
"lectronic commerce )eDcommerce* – 4 3$e general term for a +u!ing and selling process t$at is supported +! electronic means – Marketspaces instead of market places – 'usiness +u!ers dominate )>*, more than ABC is business buyingD Hnternet population demograp$ics differs from general population – Rounger – – – .ffluent, +etter educated More male 'ut +ecoming more like t$e general population as time goes on
3$e online consumer
.lso differences in – .pproac$es to +u!ing – – – – Place greater value on information ,eact negativel! to messages aimed onl! at selling ,esponses to marketing 1onsumers control more of t$e interaction t$an in traditional direct marketing
Word of web
1onducting online marketing
&lectronic presence on5line – 1orporate we+Dsite – – 4 6e+ site t$at seeks to +uild customer goodwill and to supplement ot$er sales c$annels rat$er t$an to sell t$e compan!Is products directl! Marketing we+ site – – – – – – 4 6e+ site designed to engage consumers in an interaction t$at will move t$em closer to a purc$ase or ot$er marketing outcome 1atalog, s$opping tips, promotional features000 Marketing we+ sites are often promoted in print and +roadcast ads "0g0 dental floss / $ow to get people to visit !our siteL 45 1reate corporate we+ site wit$ answers to customer uestions and +uild goodwillA use it onl! to supplement ot$er c$annels
Cow interest products
Placing advertisements online – ?nline ads – 4 .ds t$at appear w$ile su+scri+ers are surfing online services or 6e+ sites, including +anners, popDup windows, 8tickers9 and 8road+locks9 – ,oad+lock 4 full screen ads t$at users must 8pass t$roug$9 to get to ot$er screens t$e! want to view 1ontent sponsors$ips – &,g, 8ldsmobile sponsors A8
s "elebrity "ircle–
Participating in forums, newsgroups, and we+ communities – Eorums / discussion groups located in commercial online services – – – Newsgroups / Hnternet version of forums 'ulletin +oard s!stems )''%s* / speciali7ed online services t$at center on a specific topic or group, e0g0 $ealt$, computer games, vacations, 000 Web communities * cyberspace e9uivalent to Starbucks coffeehouse
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Ksing email and and we+casting – 6e+casting 4 3$e automatic downloading of customi7ed information of interest to recipientsI P1s, affording an attractive c$annel for delivering Hnternet advertising or ot$er information content
Promise and c$allenges
1$allenges – Cimited consumer e#posure and +u!ing – – – – – ?nline markets still limited, 6e+ users often do 8window s$opping9 %kewed demograp$ics and ps!c$ograp$ics 1$aos and clutter %ecurit! issues "t$ical concerns
14 3 ,ntegrated direct marketing
&efinition
4 &irectDmarketing campaigns t$at use multiple ve$icles and multiple stages to improve response rates and profits MultipleDmedia, multipleDsate campaigns 1* 2* 3* 4* ;* Paid ad wit$ a response c$annel &irect mail )to people w$o responded* ?ut+ound telemarketing EaceDtoDface sales call 1ontinuing communication
"#ample
14 4 P&blic polic- and ethical iss&es in direct marketing
?verview Hrritation, unfairness, deception, fraud
– – – Coud commercials, late nig$t p$one calls, 000 3aking advantage of impulsive +u!ers Qeat merc$ants / mailers and cop! intended to mislead +u!ers – ?fficial looking documents, simulated newspaper clippins, fake $onors and awards, etc0
Hnvasion of privac!
Microtargeting Pentium HHH serial num+er Microsoft 8,egistration 6i7ard9 leaking information 45 rivacy revolt &irect Marketing .ssociation )&M.* mem+er logo – Cogo users follow guidelines
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15 Competiti)e strategies
15 1 C&stomer relationship marketing
,elations$ip marketing
4 3$e process of creating, maintaining, and en$ancing strong, valueDladen relations$ips wit$ customers and ot$er stake$olders – Erom transactions to deep relations$ips Hn t$e past, 8leak! +ucket9 approac$ worked accepta+l! well – Ceak! +ucket 4 alt$oug$ new customers attracted, old customers leaving relations$ips 6$! isnIt t$is approac$ useful an!moreL – 1$anging demograp$ics, more sop$isticated competitors, overcapacit! – 45 Eewer customers to go around, must keep e#isting customers 4 3$e amount +! w$ic$ revenues from a given customer over time will e#ceed t$e compan!Is costs of attracting, selling, and servicing t$at customer "ustomer value – "ustomer delivered value 0 'otal customer value * 'otal customer cost – – – – – – – – – – – 1ustomers )ideall!* +u! products wit$ +est customer delivered value Product value %ervices value Personnel value Hmage value Monetar! cost 3ime cost "nerg! cost Ps!c$ic cost 1ustomer value components
,elevance
1ustomer lifetime value .ttracting, retaining, and growing customers
1ustomer cost components
"ustomer satisfaction – 4 3$e e#tent to w$ic$ a productIs perceived performance matc$es a +u!erIs e#pectations – ,elative to expectations1 w$ic$ in turn are +ased on – – – – – – – – – – – Past +u!ing e#periences ?pinions of friends and associates Marketer and competitor information and promises 4 internationalA an international compan! does not necessaril! $ave t$e advantages t$at a glo+al firm )+! definition* $as 1* 2* 3* 4* ;* 6* Cooking at t$e glo+al marketing environment &eciding w$et$er to go international &eciding w$ic$ markets to enter &eciding $ow to enter t$e market &eciding on t$e glo+al marketing program &eciding on t$e glo+al marketing organi7ation
Ma@or decisions
19 " ;ooking at the global marketing en)ironment
3$e international trade s!stem
3ariff – 4 . ta# levied +! a government against certain imported products0 3ariffs are designed to raise revenue or to protect domestic firms0 Tuota – 4 . limit on t$e amount of goods t$at an importing countr! will accept in certain product categories "m+argo – 4 .