Chapter 12 : Setting product characteristics

A.

PRODUCT CHARACTERISTICS AND CLASSIFICATIONS

1. Product levels

Eg. In a hotel, Core Benefit : rest and sleep Basic product : bed, bathroom , towels Expected product : clean bed, fresh towels, working lamp Augmented product : (exceed customer expectation) bible, wi-fi, fragrance Potential product : potential future offerings of the product

2. Product Classification
Durability : Nondurable goods, Durable goods, Services Consumer Goods Classification : Convenience (eg. Fmcg), Shopping (eg. Furniture, clothing), Specialty (eg. Cars), Unsought (eg. Life insurance) Industrial Goods Classification : Materials and parts, Capital items, Supplies/ business services

B.

DIFFERENTIATION
1. Product Differentiation
Product form Features Performance Conformance Durability Reliability Reparability

2. Design Differentiation 3. Service Differentiation

Ordering ease Delivery Installation Customer training Customer consulting Maintenance

C.

PRODUCT AND BRAND RELATIONSHIP

1. Product Hierarchy

2. Product System and Mixes

Depth Length Width Consistency

3. Product Line Analysis

Sales and Profits Market profile

4. Product Line Length

Line Stretching : Down-Market Stretch : lower priced line Up-Market Stretch : high end market Two-Way Stretch : both Line Modernization, Featuring and Pruning

5. Product-Mix Pricing
Product-line pricing Optional-feature pricing Captive-product pricing Two-part pricing By-product pricing Product-bundling pricing

6. Co-branding and Ingredient Branding

D. PACKAGING,LABELING,WARRANTIES and GUARANTEES

Packaging : Self-service, Consumer affluence, Company/brand image, Innovation opportunity

Chapter 13 : Designing and Managing Services A. NATURE OF SERVICES

1. Service Sectors 2. Categories of Service Mix
Pure tangible good Good w/ accompanying services Hybrid Service w/ accompanying goods Pure service

3. Service Distinctions

4. Distinctive Characteristics of Services

Intangibility Inseparability Variability Perishability

B. MARKETING STRATEGIES FOR SERVICE FIRMS

1. Customer Relationship Management
Profit tiers Customer Empowerment Co-production

2. Holistic Marketing for Services

C. MANAGING SERVICE QUALITY

1. Customer expectations

2. Determinants of Service Quality

Reliability Responsiveness Assurance Empathy Tangibles

3. Best Practices
Strategic Concept Top-Management Commitment High Standards Self-Service Technologies Monitoring Systems Satisfying Customer Complaints Satisfying Employees

D. MANAGING SERVICE BRANDS

1. Differentiating Services 2. Developing Brand Strategies for Services
Choosing Brand Elements Establishing Image Dimensions Devising Branding Strategy

E. MANAGING PRODUCT SUPPORT SERVICES

1. Identifying and Satisfying Customer needs
Customer Worries: Failure frequency, Downtime,Out-of-pocket costs

2. Post sale service strategy

Chapter 14 : Developing pricing strategies and programs A. UNDERSTANDING PRICING

1. Changing pricing environment 2. How companies price 3. Consumer psychology and pricing
Reference Prices Fair price Typical price Last price paid Upper-bound price Lower-bound price Competitor prices Expected future price Usual discounted price Price-quality inferences Price endings Price cues

B. SETTING THE PRICE

1. Selecting the Pricing Objective :

Survival Maximum current profit Maximum market share Maximum market skimming Product-quality leadership

2. Determining Demand
Price Sensitivity Estimating Demand Curves Price Elasticity of Demand

3. Estimating Costs 4. Analyzing competitors Price Cost Offers 5. Selecting a Pricing Method
Markup pricing Target-return pricing Perceived-value pricing Value pricing Going-rate pricing Auction-type pricing

6. Selecting the Final Price

Impact of other marketing activities Company pricing policies Gain-and-risk sharing pricing Impact of price on other parties

C. ADAPTING THE PRICE

1. Geographical Pricing
Countertrade Barter Compensation deal Buyback arrangement Offset

2. Discounts/Allowances

Cash discount Quantity discount Functional discount Seasonal discount Allowance

3. Promotional Pricing
Loss-leader pricing Special-event pricing Cash rebates Low-interest financing Longer payment terms Warranties and service contracts Psychological discounting

4. Differentiated Pricing
Customer-segment pricing Product-form pricing Image pricing Channel pricing Location pricing Time pricing Yield pricing

D. INITIATING AND RESPONDING TO PRICE CHANGES

1. Initiate Price cut Low quality, fragile market share, shallow pockets, price war 2. Initiate Price Increase Delayed quotation, escalator clause, unbundling, reduction of discounts

3. Responding to competitors price changes

Marketing Channels
Sets of interdependent organizations involved in the process of making a product or service available for use or consumption.

Marketing Strategy: PUSH & PULL 4Ps replaced by:

Solutions Information Value Access

Designing a Marketing Channel System:

Analyze customer needs Establish Channel Objectives Identify Major channel alternatives Evaluate major channel alternatives

Retailing
It includes all the activities involved in selling goods or services directly to final consumers for personal, non business use. Major Retailer Type Discount store Off-price retailer Superstore Catalog showroom Specialty store Department store Supermarket Convenience store

Chapter 17

Integrated Marketing Communications - a concept of marketing communications planning that recognizes the added value of a comprehensive plan, that evaluates the strategic roles of a variety of communication disciplines - for example, general advertising, direct response, sales promotion, and public relations- and combines these disciplines to provide clarity, consistency, and maximum communications impact.

Marketing communications mix 1. Advertising print and broadcast ads, packaging outer, brochures and booklets, posters and leaflets, billboards, display signs 2. Sales promotion contests, games, sweepstakes, lotteries, premiums, gifts, sampling, fairs and trade shows, coupons, rebates 3. Events and experiences sports, entertainment, festivals, causes, street activities 4. Public relations and publicity press kits, speeches, seminars, annual reports, community relations, lobbying 5. Direct marketing and Interactive marketing catalogs, mailings, telemarketing, websites, electronic shopping, tv shopping, blogs 6. Word of mouth marketing person to person, chat rooms, blogs 7. Personal selling sales presentations, sales meetings, samples, fairs and trade shows

Macro model of communications process

Steps in developing effective communication process

Determining communications objectives 1. 2. 3. 4. Category need Brand awareness Brand attitude Brand purchase intention

Design the communications 1. Determine message strategy whether to show rational, sensory, social or ego satisfaction benefits 2. Determine creative strategy informational or transformational 3. Message source credibility comes from likability, expertise and trustworthiness

Global adaptations of communications programme depends on 1. 2. 3. 4. Product Market segment Style Local or global emphasis

Selecting communication channels 1. 2. a) b) c) d) Personal communication channels advocate channels, expert channels and social channels. Non-personal communication channels Media Sales promotion Events and experiences Public relations

Establishing total marketing communications budget 1. 2. 3. 4. Affordable method Percentage of sales method Competitive parity method Objective and task method a. Establish market share goal b. Determine the percentage of the market that should be reach by advertising c. Determine the percentage of aware prospects that should be persuaded to try the brand. d. Determine the number of advertising impressions per 1% trial rate e. Determine the number of gross rating points that would have to be purchased. f. Determine the necessary advertising budget on the basis of the average cost of buying a gross rating point.

Characteristics of marketing communications mix 1. Advertising pervasive, amplified expressiveness and impersonality 2. Sales promotion communication, incentive and invitation 3. Public relations and publicity high credibility, ability of catch buyers off guard and dramatization 4. Events and experiences relevant, involving and implicit 5. Direct and interactive marketing customised, up to date and interactive

6. Word of mouth marketing credible, personal and timely 7. Personal selling personal interaction, cultivation and response Factors in setting marketing communication mix 1. Type of product market b2c or b2b 2. Buyer readiness stage 3. Product life cycle

Five M of advertising

Advertising objectives at different stages in Hierarchy of Effects Informative advertising Persuasive advertising Reminder advertising Reinforcement advertising Deciding on the Advertising Budget - Factors to consider when setting the advertising budget: Stage in the product life cycle Market share and consumer base Competition and clutter Advertising frequency

Product substitutability

Choosing the Advertising Message 1. Message generation 2. Message execution - Rational positioning and Emotional positioning 3. Message evaluation and selection - rate messages on: Desirability Exclusiveness Believability Types of advertising 1. 2. 3. 4. Television ads Print ads Radio ads Film ads

Measuring the effectiveness of advertisements Total Number of Exposures (E) E=RxF where R = reach, F = frequency Known as Gross Rating Points (GRP) Weighted Number of Exposures (WE) WE = R x F x I where R = reach, F = frequency, I = average impact

Chosing among major media types depends on 1. Target audience media habits 2. Product charecteristics

3. Message charecteristics 4. Cost

Alternative advertising options 1. Place advertising billboards, public spaces 2. Product placements movies, television serials 3. Point of purchase advertisements Selecting specific media vehicle depends on 1. 2. 3. 4. Circulation Audience Effective audience Effective ad exposed audience

Deciding on media timing and allocation Macro scheduling and micro scheduling Micro scheduling depends on buyer turnover, purchase frequency and forgetting rate. Advertising timing patterns 1. 2. 3. 4. Continuity Concentration Flighting Pulsing

Sales promotion Sales promotion objectives: 1. Obtaining trial and repurchase 2. Increasing consumption of an established brand 3. Defending current customers 4. Targeting a specific market segment Customer oriented sales promotion samples, coupons, premiums, contest/sweepstakes, refunds/rebates, bonus packs, price offs, loyalty programmes, event marketing Trade oriented sales promotions contests and dealer incentives, trade allowances, point of purchase displays, trade shows, cooperative advertising Events and experiences

Objectives 1. To identify with a particular target market or lifestyle 2. To increase awareness of company product or name 3. To enhance corporate image 4. To create experiences and evoke feeling 5. To express commitment to the community or on social issues

Major sponsorship decisions 1. Choosing events 2. Designing sponsorship programs 3. Measuring sponsorship activitiesa) Direct tracking of sponsorship related promotions b) Quantitative research c) Qualitative research

Public relations Functions of public relations 1. Press relations 2. Product publicity 3. Corporate communications 4. Lobbying 5. Counselling

Marketing public relation functions 1. Launching new products. 2. Repositioning a mature product

3. Building interest in a product category 4. Influencing specific target groups 5. Defending products that have encountered public problems 6. Building the corporate image in a way that reflects favourably on its products Major tools of marketing PR 1. Publications 2. Events 3. Sponsorships 4. News 5. Speeches 6. Public service activities

Chapter 21 TAPPING INTO GLOBAL MARKETS GLOBAL FIRM: A firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors. Example: OTIS uses door systems from France, small geared parts from Spain, electronics and Germany, motor drives from Japan and system integration happens in United States.

Deciding whether to go abroad Deciding which markets to enter Deciding how to enter the market Deciding on the marketing program Deciding on the marketing organization

There are generally 4 Stages of INTERNALIZATION. These are as given below:

There are FIVE modes of ENTRY into the Foreign Markets. These are:

There are FOUR methods of DIRECT EXPORTING. These are as given below: Domestic-based export department Overseas sales branch or subsidiary Traveling export sales representatives

 Foreign-based distributors or agents

Now, a firm must understand that the Global Marketing has its Advantages and Disadvantages too. o ADVANTAGES: Economies of scale Lower marketing costs Power and scope Consistency in brand image Ability to leverage Uniformity of marketing practices o DISADVANTAGES: Differences in consumer needs, wants, usage patterns Differences in consumer response to marketing mix Differences in brand development process Differences in environment

While going Global, a firm has to understand, respect and make use of the Cultural Dimensions in that part of the world.

Firms generally follow either of the International Product and Communication Strategies:

MODE OF COMMUNICATION: Communications can be divided into two based on the mode of communication: Communications Adaptation Dual Adaptation PRICING: Pricing plays a very important role while successfully entering a new global market. There are various choices that a firm can have based on how they want to decide the price of their product or service. Set a uniform price everywhere Set a market-based price in each country Set a cost-based price in each country

WHOLE-CHANNEL CONCEPT OF INTERNATIONAL MARKETING

CHAPTER 22 TRENDS in Marketing Practices Reengineering Outsourcing Benchmarking Supplier partnering Customer partnering

Merging Globalizing Flattening Focusing Accelerating Empowering

ORGANIZING the Marketing Department Functionally Geographically By product By brand By market Matrix By corporate/division

FUNCTIONAL ORGANIZATION:

Tasks Performed by Brand Managers Develop long-range and competitive strategy for each product Prepare annual marketing plan and sales forecast Work with advertising and merchandising agencies to develop campaigns Increase support of the product among channel members Gather continuous intelligence on product performance, customer attitudes Initiate product improvements

The Product Managers Interactions:

VERTICAL PRODUCT TEAM PM = Product Manager APM = Associate PM PA = Product Assistant

TRIANGULAR PRODUCT TEAM PM = Product Manager R = Market Researcher C = Communication Specialist

HORIZONTAL PRODUCT TEAM PM = Product Manager R = Market Researcher C = Communication Specialist S = Sales Manager D = Distribution Specialist F = Finance Specialist E = Engineer

PRODUCT/MARKETING-MANAGEMENT MATRIX SYSTEM:

ROLE OF MARKETING AT THE CORPORATE LEVEL: To promote a culture of customer orientation To be an advocate for the customer To assess market attractiveness To develop firms overall value proposition, the vision, and articulation of how it proposes to deliver superior value to customers

TOP-RATED COMPANIES FOR SOCIAL RESPONSIBILITY Johnson & Johnson Coca-Cola Wal-Mart Anheuser-Busch Hewlett-Packard Walt Disney Microsoft IBM

 McDonalds 3M UPS FedEx Target Home Depot

CAUSE-RELATED MARKETING

Marketing that links the firms contributions to a designated cause to customers engaging directly or indirectly in revenue-producing transactions with the firm. CORPORATE SOCIAL MARKETING

Marketing efforts that have at least one non-economic objective related to the social welfare and uses the resources of the company and/or its partners.

BRANDING A CAUSE MARKETING PROGRAM Self-branded: Create Own Cause Program Co-branded: Link to Existing Cause Program Jointly branded: Link to Existing Cause Program

SOCIAL MARKETING CAMPAIGNS

Necessary Skills for Implementing Marketing Programs: Diagnostic skills Identification of company level Implementation skills Evaluation skills

SOCIAL MARKETING PLANNING PROCESS:

THE CONTROL PROCESS:

TYPES OF MARKETING CONTROL:

MARKETING AUDIT

Comprehensive, systematic, independent periodic examination of a companys or business units marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities, and recommending a plan of action to improve the companys marketing performance.

CHARACTERISTICS OF MARKETING AUDITS: Comprehensive Systematic Independent Periodic