Marketing Management Relationship marketing: aims to build mutually

satisfying long-term relationships with key constituents

Marketing is an organizational function and a set of
processes for creating, communicating, and delivering
value to customers and for managing customer
relationships in ways that benefit the organization and
its stakeholders.
Marketing management is the art and science of
choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value.
What is marketed?
Goods, Services, Events, Experiences, Persons, Places,
Properties, Organizations, Information and Ideas.
Key Customer Markets
 Consumer Markets
 Business Markets
 Global Markets
 Nonprofits/Government Markets
in order to earn and retain their business.
4 Key Constituents for Relationship Marketing
 Customers
 Employees
 Marketing Partners
 Financial Community
Integrated marketing: occurs when the marketer
devises marketing activities and assembles marketing
programs to create, communicate, and deliver value for
consumers such that “the whole is greater than the sum
of its parts.”
Internal marketing is the task of hiring, training, and
motivating able employees who want to serve
customers well.
Performance marketing: requires understanding the

Types of Needs

 Stated
 Real
 Unstated
 Delight
 Secret

Marketing Channels

 Communication
 Distribution
 Service

Marketing Environment
financial and nonfinancial returns to business and
 Demographic society from marketing activities and programs.
 Economic
New 4P’s:
 Socio-cultural
 Natural  People reflect, in part, internal marketing and
 Technological the fact that employees are critical to marketing
 Political-legal success.
 Processes reflect all the creativity, discipline,
Company Orientations and structure brought to marketing
 Production management.
 Product  Programs reflect all the firm’s consumer-
 Selling directed activities. It encompasses the old four
 Marketing Ps as well as a range of other marketing
activities that might not fit as neatly into the old
Holistic Marketing: is based on the development, view of marketing.
design, and implementation of marketing programs,  Performance as in holistic marketing, to capture
processes, and activities that recognize their breadth the range of possible outcome measures that
and interdependencies. As integrating the value have financial and nonfinancial implications
exploration, value creation, and value delivery activities (profitability as well as brand and customer
with the purpose of building long-term, mutually equity), and implications beyond the company
satisfying relationships and co-prosperity among key itself (social responsibility, legal, ethical, and
stakeholders. community related).
Phases of Value Creation and Delivery  The strategic marketing plan: lays out the
target markets and the firm’s value proposition,
 Choosing the Value (STP)
based on an analysis of the best market
 Providing the Value
opportunities.
 Communicating the Value
 The tactical marketing plan: specifies the
Value chain: is a tool for identifying ways to create marketing tactics, including product features,
more customer value. promotion, merchandising, pricing, sales
channels, and service.
9 Strategically Relevant Activities
Mission Statement provides a shared sense of purpose,
1. Inbound logistics direction, and opportunity.
2. Operations
3. Outbound logistics Primary Characteristics of SBU’s
4. Marketing
 It is a single business or collection of related
5. Service businesses
6. Procurement  It has its own set of competitors
7. Technology Development  It has a leader responsible for strategic planning
8. HRM Supporting and profitability
9. Firm infrastructure

Core Business Processes Strategic Planning Gap

• The market-sensing process which refers to all the
activities in gathering and acting upon information
about the market.
• The new-offering realization process which is all the
activities in researching, developing, and launching new
high-quality offerings quickly and within budget.
• The customer acquisition process which entails all the
activities in defining target markets and prospecting for
new customers.
• The customer relationship management process
which entails all the activities in building deeper
understanding, relationships, and offerings to individual
customers.
• The fulfillment management process which includes
all the activities in receiving and approving orders,
shipping the goods on time, and collecting payment.
Strategic Planning, Implementation and Control
Processes
 Intensive Growth
 Integrative Growth
 Diversification Growth
Corporate culture is the shared experiences, stories,
beliefs, and norms that characterize an organization.
SWOT Analysis: a way of monitoring the external and
internal marketing environment.
Market Opportunity Analysis (MOA): evaluate
opportunities
Marketing Alliances
1. Product or service alliances—One company
licenses another to produce its product, or two
companies jointly market their complementary
products or a new product.
2. Promotional alliances—One company agrees to
carry a promotion for another company’s
product or service.
3. Logistics alliances—One company offers
logistical services for another company’s
product.
4. Pricing collaborations—One or more
companies join in a special pricing
collaboration.

Marketing information system (MIS) consists of people,

equipment, and procedures to gather, sort, analyze,
evaluate, and distribute needed, timely, and accurate
information to marketing decision makers.

Marketing intelligence system is a set of procedures

Marketing plan is the central instrument for directing
and coordinating the marketing effort. It operates at a
strategic and tactical level.
and sources that managers use to obtain everyday
information about developments in the marketing
environment.
Fad : unpredictable, short-lived, and without social,
economic, and political significance.
Trend: direction or sequence of events with momentum Marketing Research Firms
and durability, more predictable and durable than a fad;
 Syndicated
reveal the shape of the future and can provide strategic
 Custom
direction.
 Specialty-line
Megatrend: is large social, economic, political, and
technological change [that] is slow to form, and once in Marketing Research Process
place, influences us for some time—between seven and  Define the problem
ten years, or longer.  Develop research plan
 Collect information
Green Marketing Myopia: Consumers being concerned
 Analyze information
about the environment, yet they have not made major
 Present findings
changes in how they shop and live in order to protect
 Make decision
the environment.

Demand Measurement Types of Research

 Market Demand is the total volume that would  Exploratory—its goal is to shed light on the real
be bought by a defined customer group in a nature of the problem and to suggest possible
defined geographical area in a defined time solutions or new ideas.
period in a defined marketing environment  Descriptive—it seeks to quantify
under a defined marketing program.
 Causal—its purpose is to test a cause-and-
 Market Forecast shows expected market effect relationship.
demand, not maximum market demand.
 Market Potential is the limit approached by Focus group: is a gathering of 6 to 10 people carefully
market demand as industry marketing selected by researchers based on certain demographic,
expenditures approach infinity for a given psychographic, or other considerations and brought
marketing environment. together to discuss various topics of interest at length.
 Company Demand is the company’s estimated
Marketing Decision Support System (MDSS): is a
share of market demand at alternative levels of
coordinated collection of data, systems, tools, and
company marketing effort in a given time
techniques with supporting hardware and software by
period. It depends on how the company’s
which an organization gathers and interprets relevant
products, services, prices, and communications
information from business and environment and turns it
are perceived relative to the competitors’.
into a basis for marketing action.
 Company Sales Forecast is the expected level of
company sales based on a chosen marketing Approaches to Measuring Marketing Productivity
plan and an assumed marketing environment.
 Marketing metrics are the set of measures that
o Sales Quota is the sales goal set for a
helps marketers quantify, compare, and
product line, company division, or sales
interpret marketing performance.
representative. It is primarily a
 Marketing-mix models analyze data from a
managerial device for defining and
variety of sources, such as retailer scanner data,
stimulating sales effort, often set
company shipment data, pricing, media, and
slightly higher than estimated sales to
promotion spending data, to understand more
stretch the sales force’s effort.
precisely the effects of specific marketing
o Sales Budget is a conservative estimate
activities.
of the expected volume of sales,
primarily for making current Customer Perceived Value (CPV): is the difference
purchasing, production, and cash flow between the prospective customer’s evaluation of all
decisions. the benefits and all the costs of an offering and the
 Company Sales Potential is the sales limit perceived alternatives.
approached by company demand as company
Loyalty: is a deeply held commitment to re-buy or re-
marketing effort increases relative to that of
patronize a preferred product or service in the future
competitors.
despite situational influences and marketing efforts
Total market potential is the maximum sales available having the potential to cause switching behavior.
to all firms in an industry during a given period, under a
Quality: is the totality of features and characteristics of
given level of industry marketing effort and
a product or service that bear on its ability to satisfy
environmental conditions.
stated or implied needs.
Marketing research is the systematic design, collection,
analysis, and reporting of data and findings relevant to a
specific marketing situation facing the company.
CRM: is the process of carefully managing detailed Buying Situation
information about individual customers and all
 Straight Rebuy
customer touch points to maximize customer loyalty.
 Modified Rebuy
Database marketing: is the process of building,  New Task
maintaining, and using customer databases and other
databases (products, suppliers, resellers) to contact, Systems Buying: Business buyers prefer to buy a total
transact, and build customer relationships. problem solution from one seller.

Consumer Behavior: is the study of how individuals, Systems Selling: A key industrial marketing strategy in
groups, and organizations select, buy, use, and dispose bidding to build large-scale industrial projects such as
of goods, services, ideas, or experiences to satisfy their dams, steel factories, irrigation systems, sanitation
needs and wants. systems, pipelines, utilities, and even new towns.

Factors Influences Consumer Behavior Buying Process: Buy Phases

 Problem recognition
 Cultural
 General need description
 Social
 Product specification
 Personal  Supplier search
Culture: is the fundamental determinant of a person’s  Proposal solicitation
wants and behaviors acquired through socialization  Supplier selection
 Order-routine specification
processes with family and other key institutions
 Performance review
Social Factors: such as reference groups, family, and
social roles and statuses affect our buying behavior. Market Segment: consists of a group of customers who
share a similar set of needs and wants.
Personal factors that affect consumer decisions include
age, life cycle stage, occupation, wealth, personality, Loyalty Status
values, lifestyle, and self-concept. 1. Hard-core loyals—Consumers who buy only
one brand all the time
2. Split loyals—Consumers who are loyal to two or
three brands
3. Shifting loyals—Consumers who shift loyalty
from one brand to another
4. Switchers—Consumers who show no loyalty to
any brand

Effective Segmentation Criteria

 Measurable
 Substantial
 Accessible
Perception: is the process by which we select, organize,
 Differentiable
and interpret information inputs to create a meaningful
 Actionable
picture of the world.
Porter’s 5 Forces Model
Consumer Buying Process
1. Threat of intense segment rivalry—A segment
1. Problem Recognition
is unattractive if it already contains numerous,
2. Information Search
strong, or aggressive competitors.
3. Evaluation of Alternatives
2. Threat of new entrants—The most attractive
4. Purchase Decision
segment is one in which entry barriers are high
5. Postpurchase Behavior
and exit barriers are low.
Availability Heuristic—Consumers base their 3. Threat of substitute products—A segment is
predictions on the quickness and ease with which a unattractive when there are actual or potential
particular example of an outcome comes to mind. substitutes for the product.
4. Threat of buyers’ growing bargaining power—
Organizational Buying: is the decision-making process A segment is unattractive if buyers possess
by which formal organizations establish the need for strong or growing bargaining power.
purchased products and services and identify, evaluate, 5. Threat of suppliers’ growing bargaining power
and choose among alternative brands and suppliers. —A segment is unattractive if the company’s
 suppliers are able to raise prices or reduce
quantity supplied.
Strategic brand management combines the design and
implementation of marketing activities and programs to
build, measure, and manage brands to maximize their
value.
Brand: is a name, term, sign, symbol or design, or a
combination of them, intended to identify the goods or
services of one seller or group of sellers and to
differentiate them from those of competitors.
Role of Brands
Brand Line: consists of all products—original as well as
line and category extensions—sold under a particular
brand.
Brand Mix: (or brand assortment) is the set of all brand
lines that a particular seller makes.
Brand Extension: when a firm uses an established brand
to introduce new product.
Line Extension: the parent brand covers a new product
within a product category it currently serves, such as
with new flavors, forms, colors, ingredients, and
package sizes.

 Identify the maker Category Extension: marketers use the parent brand to
 Simplify product handling enter a different product category.
 Organize accounting
Sub-brand: When marketers combine a new brand with
 Offer legal protection
an existing brand.
 Signify quality
 Create barriers to entry Parent Brand: Is the existing brand that gives birth to a
 Serve as a competitive advantage brand extension or sub-brand.
 Secure price premium
Family Brand or Master Brand: If the parent brand is
Branding: endowing products and services with the already associated with multiple products through
power of the brand. brand extensions.

Brand Equity: is the added value endowed on products Branded Variants: which are specific brand lines
and services. It may be reflected in the way consumers supplied to specific retailers or distribution channels.
think, feel, and act with respect to the brand, as well as
Licensed Product: is one whose brand name has been
in the prices, market share, and profitability the brand
licensed to other manufacturers that actually make the
commands.
product.
Brand Promise: is the marketer’s vision of what the
Competitive Frame or Reference: which other brands a
brand must be and do for consumers.
brand competes with and therefore which brands
Brand Elements: are devices, which can be should be the focus of competitive analysis.
trademarked, that identify and differentiate the brand.
Points-of-difference (PODs): are attributes or benefits
 Brand names that consumers strongly associate with a brand,
 Slogans positively evaluate, and believe they could not find to
 Characters the same extent with a competitive brand.
 Symbols Points-of-parity: associations that are not necessarily
 Logos unique to the brand but may be shared with other
 URLs brands.
Brand Element Choice Criteria Brand mantra: is an articulation of the heart and soul of
 Memorable the brand and is closely related to other branding
 Meaningful Brand building concepts like “brand essence” and “core brand
 Likeable promise.”
 Transferable Brand Positioning Bull’s Eye: provides content and
 Adaptable Defensive context to improve everyone’s understanding of the
 Protectable positioning of a brand in the organization
Brand Value Chain: a structured approach to assessing 1. Share of market—The competitor’s share of the
the sources and outcomes of brand equity and the way target market.
marketing activities create brand value 2. Share of mind—The percentage of customers who
named the competitor in responding to the statement,
Brand Audit: is a consumer-focused series of “Name the first company that comes to mind in this
procedures to assess the health of the brand, uncover industry.”
its sources of brand equity, and suggest ways to 3. Share of heart—The percentage of customers who
improve and leverage its equity. named the competitor in responding to the statement,
“Name the company from which you would prefer to
buy the product.”
Product Life Cycle (PLC)
1. Products have a limited life.
2. Product sales pass through distinct stages,
each posing different challenges, opportunities,
and problems to the seller.
3. Profits rise and fall at different stages of the
product life cycle.
4. Products require different marketing, financial,
manufacturing, purchasing, and human
resource strategies in each life-cycle stage.
Sales and Profit Life Cycles
1. Introduction
2. Growth
3. Maturity
4. Decline
Changing Brand Course
 Market Modification
 Product Modification
 Marketing Program Modification
Product: is anything that can be offered to a market to
satisfy a want or need, including physical goods,
services, experiences, events, persons, places,
properties, organizations, information, and ideas.
Components of the Market Offering
Product
 Durability
 Tangibility
 Use
Nondurable goods are tangible goods normally
consumed in one or a few uses, such as beer and
shampoo.
Durable goods are tangible goods that normally survive
many uses: refrigerators, machine tools, and clothing.
Durable products normally require more personal
selling and service, command a higher margin, and
require more seller guarantees.
Services are intangible, inseparable, variable, and
perishable products that normally require more quality
control, supplier credibility, and adaptability.
Consumer Goods Classification
 Convenience (Staples, Impulse and Emergency)
 Shopping (Homogeneous and Heterogeneous)
 Specialty
 Unsought
Industrial Goods Classification
 Materials and parts –Raw Materials (Farm
products and natural products) and
Manufactured Materials and Parts (Component
materials and component parts)
 Capital items (Installations and Equipment)
 Supplies/business services
Product Differentiation
 Product form
 Features
 Customization
 Performance
 Conformance
 Durability
 Reliability
 Repairability
 Style
Service Differentiation
 Ordering ease
 Delivery
 Installation
 Customer training
 Customer consulting
 Maintenance and repair
 Returns
Design: is the totality of features that affect how a
product looks, feels, and functions to a consumer.
Design offers functional and aesthetic benefits and
appeals to both our rational and emotional sides.
Product Hierarchy
1. Need family is the core need that underlies the
existence of a product family.
2. Product family refers to all the product classes
that can satisfy a core need with reasonable
effectiveness.
3. Product class is the group of products within
the product family recognized as having a
certain functional coherence, also known as a
product category.
4. Product line is a group of products within a
product class that are closely related because
they perform a similar function, are sold to the
same customer groups, are marketed through
the same outlets or channels, or fall within
given price ranges.
 5. Product type is a group of items within a
product line that share one of several possible
forms of the product.
6. Item (also called stock-keeping unit or product
variant) is a distinct unit within a brand or
product line distinguishable by size, price,
appearance, or some other attribute.
Product system: is a group of diverse but related items
that function in a compatible manner.
 Competition
 Ethical Problems
 Involuntary Switching
Price: is not just a number on a tag. It comes in many
forms and performs many functions. Rent, tuition, fares,
fees, rates, tolls, retainers, wages, and commissions are
all the price you pay for some good or service.
Steps in Setting Price

Product mix (also called a product assortment): is the  Select the price objective
set of all products and items a particular seller offers for  Determine demand
sale.  Estimate costs
 Analyze competitor price mix
Line stretching: occurs when a company lengthens its  Select pricing method
product line beyond its current range, whether down-  Select final price
market, up-market, or both ways.
Fixed costs, also known as overhead, are costs that do
Product-Mix Pricing not vary with production level or sales revenue.
 Product-line pricing Variable costs vary directly with the level of production.
 Optional-feature pricing
 Captive-product pricing Total costs consist of the sum of the fixed and variable
 Two-part pricing costs for any given level of production.
 By-product pricing Average cost is the cost per unit at that level of
 Product-bundling pricing production; it equals total costs divided by production.
Ingredient branding: is a special case of co-branding. It Pricing Method
creates brand equity for materials, components, or
parts that are necessarily contained within other  Markup pricing
branded products.  Target-return pricing
 Perceived-value pricing
Packaging: sometimes called the 5th P, is all the  Value pricing
activities of designing and producing the container for a  Going-rate pricing
product.  Auction-type pricing
Functions of Labels Geographical pricing: the company decides how to
 Identifies the product or brand price its products to different customers in different
 Grade the product locations and countries.
 Describe the product Discount: is a price reduction to buyers who pay bills
 Promote the product through attractive promptly.
graphics.
Promotional Pricing Tactics
Service: is any act of performance that one party can
offer another that is essentially intangible and does not  Loss-leader pricing
result in the ownership of anything; its production may  Special-event pricing
or may not be tied to a physical product.  Cash rebates
 Low-interest financing
Categories of Service Mix  Longer payment terms
 Pure tangible good  Warranties and service contracts
 Good with accompanying services  Psychological discounting
 Hybrid Differentiated Pricing
 Service with accompany goods
 Pure service  Customer-segment pricing
 Product-form pricing
Factors Leading to Customer Switching Behavior  Image pricing
 Pricing  Channel pricing
 Inconvenience  Location pricing
 Core Service Failure  Time pricing
 Service Encounter Failures  Yield pricing
 Response to Service Failure
Marketing channel system: is the particular set of Nonstore Retailing
interdependent organizations involved in the process of
 Direct selling
making a product or service available for use or
 Direct marketing
consumption.
 Automatic vending
Push strategy uses the manufacturer’s sales force, trade  Buying service
promotion money, and other means to induce
intermediaries to carry, promote, and sell the product Major Types of Corporate Retail Organizations
to end users.  Corporate chain store
Pull strategy uses advertising, promotion, and other  Voluntary chain
forms of communication to persuade consumers to  Retailer cooperative
demand the product from intermediaries.  Consumer cooperative
 Franchise organization
Hybrid channels or multichannel marketing: occurs  Merchandising conglomerate
when a single firm uses two or more marketing
channels to reach customer segments Retailer Services Mix

Identifying Channel Alternatives  Prepurchase services include accepting

telephone and mail orders, advertising, window
 Types of Intermediaries and interior display, fitting rooms, shopping
 Number of Intermediaries hours, fashion shows, and trade-ins.
Exclusive Distribution: means severely limiting the  Postpurchase services include shipping and
number of intermediaries. delivery, gift wrapping, adjustments and
returns, alterations and tailoring, installations,
Selective distribution relies on only some of the and engraving.
intermediaries willing to carry a particular product.  Ancillary services include general information;
Intensive distribution places the goods or services in as check cashing, parking, restaurants, repairs,
many outlets as possible. interior decorating, credit, rest rooms, and
baby-attendant service.
 Terms and Responsibilities
Private label brand (also called a reseller, store, house,
Channel power: is the ability to alter channel members’ or distributor brand): is a brand that retailers and
behavior so they take actions they would not have wholesalers develop.
taken otherwise.
Major Wholesaler Types
Integrated marketing channel system: is one in which
the strategies and tactics of selling through one channel  Merchant
reflect the strategies and tactics of selling through one  Full-service
or more other channels.  Limited-service
 Brokers and agents
Retailing: Any organization selling to final consumers  Manufacturers
whether it is a manufacturer, wholesaler, or retailer.  Specialized
Retailer Types Supply chain management: starts before physical
 Specialty store distribution and means strategically procuring the right
inputs (raw materials, components, and capital
 Department store
equipment); converting them efficiently into finished
 Supermarket
products; and dispatching them to the final destinations
 Convenience store
 Discount store Market logistics includes planning the infrastructure to
 Off-price retailer meet demand, then implementing and controlling the
 Superstore physical flows of materials and final goods from points
 Catalog showroom of origin to points of use, to meet customer
requirements at a profit.
Retail Service
Integrated logistics system (ILS) includes materials
 Self service
management, material flow systems, and physical
 Self selection
distribution, aided by information technology.
 Limited service
 Full service
Modes of Marketing Communications
 Advertising
 Sales promotion
 Events and experiences
 Public relations and publicity
 Direct marketing
 Interactive marketing
 Word-of-mouth marketing
 Personal selling
Elements in the Communication Process
4. Deciding on Media (TV, Print Ads, Radio,
Magazines, Telephone, Internet etc)
 Reach
 Frequency
 Impact
 Exposure
5. Making Measurement Plans
Sales Promotion: consists of a collection of incentive
tools, mostly short term, designed to stimulate quicker
or greater purchase of particular products or services by
consumers or the trade.

Consumer-Directed Sales Promotion Tactics

 Samples
 Coupons
 Cash refund offers
 Price offs
 Premiums
 Prizes
 Patronage rewards
 Free trials
 Tie-in promotions

Public is any group that has an actual or potential

interest in or impact on a company’s ability to achieve
its objectives.
Personal communications channels let two or more
persons communicate face-to-face or person-to- Public relations (PR): includes a variety of programs to
audience through a phone, surface mail, or e-mail. promote or protect a company’s image or individual
products.
Nonpersonal channels are communications directed to
more than one person and include advertising, sales Public Relations Functions
promotions, events and experiences, and public
 Press relations
relations.
 Product publicity
Five M’s of Advertising  Corporate communications
 Lobbying
 Counseling

Tools in Marketing PR

 Publications
 Events
 Sponsorships
 News
 Speeches
 Public Service Activities
 Identity Media

Direct marketing: is the use of consumer-direct

Developing an Advertising Program
channels to reach and deliver goods and services to
1. Setting Objectives customers without using market middlemen.
 Informative
DM Channels
 Persuasive
 Reminder  Direct mail
 Reinforcement  Catalogs
2. Deciding on the Budget  Telemarketing
3. Developing the Campaign  Other direct response
 Message generation and evaluation
 Creative development and execution
 Social responsibility review Online Ads
  Search Ads: use to determine an ad’s relevance 1. Prospecting/qualifying
to a particular search. 2. Preapproach
 Display ads or banner ads: are small, 3. Approach
rectangular boxes containing text and perhaps a 4. Presentation
picture that companies pay to place on relevant 5. Overcoming objections
Web sites. 6. Closing
7. Follow up
Platforms of Social Media
Categories of New Products
 Online Communities and Forums
 Blogs  New to the world
 Social Networks  Additions
 Improvements
Buzz marketing generates excitement, creates publicity,
 Repositioning
and conveys new relevant brand-related information
 Cost Reductions
through unexpected or even outrageous means.
Venture Team: is a cross-functional group charged with
Viral marketing is another form of word of mouth, or
developing a specific product or business.
“word of mouse,” that encourages consumers to pass
along company-developed products and services or New-Product Development Decision Process
audio, video, or written information to others online.
1. Idea Generation
Types of Sales Representatives 2. Idea Screening
3. Concept Development and Testing
1. Deliverer—A salesperson whose major task is the
4. Marketing Strategy Development
delivery of a product (water, fuel, oil).
5. Business Analysis
2. Order taker—An inside order taker (standing behind
the counter) or outside order taker (calling on the 6. Product Development
supermarket manager). 7. Market Testing
3. Missionary—A salesperson not permitted to take an 8. Commercialization
order but expected rather to build goodwill or educate
Demand-First Innovation and Growth (DIG) framework
the actual or potential user.
is designed to provide companies with an unbiased view
4. Technician—A salesperson with a high level of
technical knowledge (the engineering salesperson who and an outside-in perspective of demand opportunities.
is primarily a consultant to client companies).  Demand landscape is based on the consumer
5. Demand creator—A salesperson who relies on needs and wants gleaned from observational,
creative methods for selling tangible products or
anthropological, and ethnographic methods.
intangibles.
 Opportunity space uses a conceptual lens and
6. Solution vendor—A salesperson whose expertise is
solving a customer’s problem, often with a system of structured innovative thinking tools to achieve
the company’s products and services. market perspective.
 Strategic blueprint sketches out where the new
product will fit in the lives of consumers.
Sales Tasks
Adoption: is an individual’s decision to become a
 Prospecting regular user of a product.
 Targeting
 Communicating Stages in the Adoption Process
 Selling 1. Awareness
 Servicing 2. Interest
 Information gathering 3. Evaluation
 Allocating 4. Trial
Managing the Sales Force 5. Adoption

 Recruiting Global Firm: is one that operates in more than one

country and captures R&D, production, logistical,
 Selecting
marketing, and financial advantages in its costs and
 Training
reputation that are not available to purely domestic
 Supervising
competitors.
 Motivating
 Evaluating

Steps in Effective Selling Four Stages of Internationalization

 Stage 1: No regular export activities
Stage 2: Export via independent agents
Stage 3: Establish sales subsidiaries
Stage 4: Establish production facilities abroad
Momentum in Market Entry
 Waterfall Approach
 Sprinkler Approach
 Born Global
Regional Free Trade Zones
 European Union
 NAFTA
 MERCOSUL
 APEC
 ASEAN
Five Modes of Entry into Foreign Markets
 Indirect exporting- they work through
independent intermediaries
 Direct exporting
o Domestic-based export department
o Overseas sales branch or subsidiary
o Traveling export sales representatives
o Foreign-based distributors or agents
 Licensing- licensor issues a license to a
foreign company to use a manufacturing
process, trademark, patent, trade secret, or
other item of value for a fee or royalty.
 Joint ventures -foreign investors have often
joined local investors in a joint venture
company in which they share ownership
and control
 Direct investment
Levels of Product Adaptation
 Production of regional product versions
 Production of country versions
 Production of city versions
 Production of retailer versions
Gray Market: consists of branded products diverted
from normal or authorized distributions channels in the
country of product origin or cross international borders;
dealers in lower priced countries sell products in higher
priced countries.
Whole-Channel Concept for International Marketing
 Seller
 International headquarters
 Channels between nations
 Channels within nations
 Final buyers
Trends in Marketing Practices
 Reengineering refers to appointing teams to
manage customer-value-building processes and
break down walls between departments.
 Outsourcing refers to the buying more goods
and services from outside domestic or foreign
vendors.
 Benchmarking is the studying of “best practice
companies” to improve performance.
 Supplier partnering refers to partnering with
fewer but better value-adding suppliers.
 Customer partnering refers to the trend of
working more closely with customers to add
value to their operations.
 Merging is the acquiring or merging with firms
in the same or complementary industries to
gain economies of scale and scope.
 Globalizing refers to the increasing efforts to
“think global” and “act local”.
 Flattening is the reduction in the number of
organizational levels to get closer to the
customer.
 Focusing is determining the most profitable
businesses and customers and focusing on
them.
 Justifying means becoming more accountable
by measuring, analyzing, and documenting the
effects of marketing actions.
 Accelerating means designing the organization
and setting up processes to respond more
quickly to changes in the environment.
 Empowering is encouraging and empowering
personnel to produce more ideas and take
more initiative.
 Broadening is factoring the interests of
customers, employees, shareholders, and other
stakeholders into the activities of the
enterprise.
 Monitoring is tracking what is said online and
elsewhere and studying customers,
competitors, and others to improve business
practices.
Internal Marketing
 R&D
 Purchasing
 Manufacturing
 Marketing
 Sales
 Logistics
 Accounting
 Finance
 Public Relations
 Other Customer-Contact Personnel
Cause-related marketing: is marketing that links the
firm’s contributions to a designated cause to customers
engaging directly or indirectly in revenue-producing
transactions with the firm.
Marketing implementation: is the process that turns
marketing plans into action assignments and ensures
they accomplish the plan’s stated objectives.
Annual-plan control: ensures the company achieves the
sales, profits, and other goals established in its annual
plan.
Marketing Audit: is a comprehensive, systematic,
independent, periodic examination of a company’s or
business unit’s marketing environment, objectives,
strategies, and activities with a view to determining
problem areas and opportunities, and recommending a
plan of action to improve the company’s marketing
performance.
Sales Management in the 21st Century
 Long-term relationships with customers
Key Themes
 Innovation – thinking outside the box
Innovation in Sales
Transactional Selling – transactions
involving separate organizations, each
entering into an independent transaction.
Relationship Selling – narrows the vendor
pool, improves efficiencies, works directly
with customers to solve problems.
 Technology – broad spectrum of tools available
to salespersons
 Leadership – capability to make things happen
 Globalization - Significant growth opportunities
lie outside domestic markets
 Ethics - Trust is necessary to maintain customer
loyalty
Sales Management Process
 The formulation of a sales program
 The implementation of the sales program
 The evaluation and control of the sales
program
Components of the External Environment
 Economic – GDP, disposable income,
competition, distribution channels
 Legal and Political- antitrust laws, consumer
protection law
 Natural- resource availability, environmental
impact
 Technological- new product technologies,
changing information, communication
technology
 Social and Cultural- changing population,
demographic, cultural diversity, ethical values
Components of the Internal Environment
 Goals and objectives
 Human resource
 Research and development and technological
capabilities
 Service capabilities
 Financial resources
 Production and supply-chain capabilities
The Process of Buying Selling
Selling Process:
1. Prospecting for customers
2. Opening the relationship
3. Qualifying the prospect
4. Presenting the sales message
5. Closing the sale
6. Servicing the account
Buying Process Participants
 Initiators – perceive problems/opportunities
requiring new product or service
 Users –use or work with product or service
 Influencers –provide information for evaluating
products or suppliers
 Gatekeepers – control flow of information
 Buyers – contact selling organization and place
order
 Deciders – final authority to purchase
 Controllers – determine budget
Customer Relationship Management (CRM)
 Comprehensive business model for increasing
revenues and profits by focusing on customers
 Overarching business philosophy and process
tool to facilitate a customer-driven enterprise
Objectives of CRM:
 Customer Retention
 Customer Acquisition
 Customer Profitability
Advantages of CRM:
 Reduces advertising costs
 Increases awareness of customer needs
 Tracks effectiveness of promotional campaigns
 Competition for customers based on service,
not prices
 Prevents over-spending on low-value clients,
under-spending on high-value ones
 Speeds time to develop and market a product
 Improves use of customer channel
Integrated Marketing Communication (IMC)
 Integrates personal selling, advertising and
other communications options
Advantages of selling in IMC
 Face-to-face contact
 More persuasive
 More demonstrative
 Customization opportunities
Disadvantages of selling in IMC
 Limited ability to duplicate
 More costly
Organize Around Customers
Historical
 Product-centered
 Expertise in features and functions
Today
 Customer-centered
 Expertise in business issues
 Sales resources deployed to provide best
service to best customers
Importance of Sales Organization Decisions
 Organizing activities, sales force management
are major parts of strategic sales planning
 Strong corporate vision, effective strategic
market planning are closely linked with how an
organization is structured, interacts with its
customers
Sales Organization Structure
 Horizontal – divides selling activities among
sales force
 Vertical – assigns authority for specific sales
management activities
Six C’s in finding the right representative
1. Compatible lines
2. Compatible territories
3. Compatible customers
4. Credibility of the rep
5. Capabilities
6. Credits
Geographic Organization
 Individual salespeople assigned to separate
geographic territories
 Responsible for performing all activities
necessary to sell all products
Product Organization
 Separate sales force for each product (or
category) in the line
Customer Type/Market Organization
 Natural extension of marketing concept and
strategy of market segmentation
Selling Function Organization
 Salespeople specialize in performing different
selling functions – e.g. prospecting and
developing new accounts versus maintaining
and servicing existing customers
Telemarketing
 Seeking repeat purchases from existing
accounts that cannot be covered efficiently in
person
Co-Marketing Alliances
- Develop marketing and sales programs to
sell integrated systems directly to the ultimate
customer
Logistical Alliances and Computerized Ordering
The Strategic Role of Information in Sales
Management
Market Opportunity Analysis
 Market potential – estimate of possible sales for
an entire industry in a market during a stated
period under ideal conditions
 Sales potential – portion of market potential the
firm can expect to reasonably achieve
 Sales forecast – estimate of dollar or unit sales
for a specified future period
 Sales quotas – sales goals assigned to a
marketing unit to manage sales efforts
Sales Forecasting Process:
1. Assess economic environment
2. Estimate market
3. Develop sales forecast
4. Compare forecast with objectives
5. Establish sales quota
Sales forecasting Method:
 Subjective method
 Objective method
Sales Forecasting Objectives:
 Market test – places product in select areas
 Time series analysis – relies on historical data to
develop predictions
 Statistical demand analysis – attempts to
determine the relationship between sales and
factors that influence sales
Sales Quota
 Tool for planning and controlling field selling
activities and results
Process for Setting Quotas
 Identify types of quotas to be used
 Select level of each type of quota
Quota Purposes
 Provide incentives for sales representatives
 Provide measures to evaluate salespeople’s
performance
Good Quota Characteristics
 Attainable
 Easy to understand
 Complete
 Timely
Quota Types
 Sales volume - emphasize sales or some aspect
of sales
 Activity - focus on certain sales activities
 Financial - examine financial criteria such as
gross margin or contribution to overhead
Sales Force Deployment Considerations
 Allocation of total selling effort to accounts
Determining Sales Force Size
 Breakdown method
  Workload method
 Incremental method
Sales Analysis
 Gathering, classifying, comparing, studying
company sales data
Changing Role of Sellers:
Role Perceptions:
 Role accuracy - degree to which a salesperson’s
perceptions of role partners’ demands are
accurate
 Role conflict - salesperson believes role
demands of two or more role partners are
incompatible
 Role ambiguity – salesperson believes he/she
does not have information necessary to
perform job adequately
Aptitude- Enduring personal characteristics that
determine individual’s overall ability to perform a sales
job
Personality- Enduring personal traits that reflect an
individual’s consistent reactions to situations
encountered in the environment
Skill- Learned proficiency at performing necessary tasks
Motivation- Effort willingly expended on activities
associated with the job
Rewards
 Extrinsic –controlled by people other than the
salesperson
 Intrinsic – salespeople primarily attain
for/within themselves
Role Development Stages
 Role partners communicate expectations
 Salespeople develop perceptions
 Salespeople convert perceptions into behaviors
Role Accuracy
 Correct understanding of job performance
expectations
Sales Person Motivators
Bases for Motivation
 Expectancies – perceived linkages between
more effort and improved performance
 Instrumentalities – perceived relationship
between improved performance and increased
rewards
 Valence for rewards – perceived intrinsic value
of the rewards
Career Stages and Motivation
 Exploration – lack of assurance
 Establishment – selection of selling as an
occupation and desire for career success
 Maintenance – seeking to retain present
position, high status, and achievement
 Disengagement – preparation for retirement
and possible loss of self-identity
Sales and Compensation and Incentives
 Salary – a fixed sum of money paid at regular
intervals
 Incentive Payments
 Commission – a payment based on short-term
results, usually a dollar or unit sales volume
 Bonus – a payment made at management’s
discretion for achieving or surpassing some set
level of performance
 Quota - often the minimum requirement for a
salesperson to earn a bonus
 Sales contests – encourage extra effort aimed at
specific short-term objectives
 Benefits - medical and disability insurance, life
insurance, retirement plan
 Non-financial incentives - opportunities for
promotion or various types of recognition for
performance
Cost Analysis
Cost Analysis Development
Sales managers need accurate knowledge of
profitability of
 Customers
 Geographic areas
 Products
 Markets
Three approaches
 Full costing
 Contribution analysis
 Activity-based costing (ABC)
Full Cost vs. Contribution Margin
 Full-cost (net profit) - many of the indirect costs
can be assigned on the basis of a demonstrable
cost relationship
 Contribution margin - direct product costs
identified associated with revenue to yield a
true Gross Profit
Steps in conducting a marketing profitability analysis:
1. Specify purpose and determine functional cost
centers
2. Spread natural account costs to functional
centers
3. Allocate functional costs to appropriate
segments using some reasonable basis
4. Sum allocated costs to determine contribution
of the segment
Evaluating Salesperson Performance
Sales Force Performance Management Systems
Performance Management Systems
 Inform sales force of how to sell
 Provide managers w/ management framework
 Enable measurement and continuous
improvement of sales force performance
  BPR and TQM movements didn’t significantly
impact the sales force
 CRM and SFA have sparked the current interest
Key elements
 Proper milestones
 Workflow
 Business logic
 Controls
Performance versus Effectiveness
 Behavior – what people do; tasks on which they
expend effort
 Performance – behavior evaluated in terms of
contribution to organizational goals
 Effectiveness –summary index of organizational
outcomes for which individual is at least partly
responsible
Performance Evaluation Measures
 Objective measures – reflect statistics sales
manager can gather from the firm’s internal
data
o Output
o Input
o Ratios of output or input
 Subjective measures – rely on personal
evaluations by sales manager and others
 Ratio Measures
o Expense ratios
o Account development and servicing
ratios
o Call activity and productivity ratios
Advertising - A powerful means of creating strong,
favorable, and unique brand associations and eliciting
positive judgments and feelings
Introduction to IMC
IMC is a strategic business process used to plan,
develop, execute and evaluate coordinated,
measurable, persuasive brand communication programs
with consumers, customers, prospects employees and
other relevant external and internal audiences.
Importance of IMC
• Strategic integration of communications
functions
– Avoids duplication
– Synergy among promotional tools
– More efficient and effective marketing
• Rapidly changing environment
– Consumers
– Technology
– Media
Integrated Marketing Approach
• Traditional mass media
– Television, radio, magazines,
newspapers, billboards
– Now drive consumers to Web sites
• Online strategies
– Provide detailed information
– Be experiential, entertaining,
interactive
– MySpace, YouTube, Facebook, wireless
mobile media devices, e-mail
Marketing – is the processes for creating,
communicating, and delivering value to customers
Marketing Mix
The four P’s
 Product
 Price
 Place
 Promotion
Promotional Mix:
Advertising – any paid form of non personal
communication about an organization, product, service,
or idea by an identified sponso
Direct marketing – communication directly with target
customers to generate a response and/or transaction
Interactive/Internet marketing – communication
through interactive media such as the Internet, CD-
ROMS and kiosks.
Sales promotion – marketing activities that provide
extra value or incentives to sales force, distributors, or
consumers to stimulate immediate sales
Publicity/Public Relations – Publicity is a form of non-
personal communication not directly paid for or run
under identified sponsorship. Public relations is a
management function which executes programs of
action to earn public understanding and acceptance an
enhance the image of the company.
Personal Selling – person-to-person communication
between a seller and buyer
IMC Planning Process
 Planning
 Executing
 Evaluating
 Controlling
Basic Elements of Marketing Plan
1. Detailed situation analysis
2. Specific marketing objectives
3. Marketing strategy and program
4. Program for implementing the strategy
5. Monitoring and evaluating performance
Target Marketing Process:
Identify markets with unfulfilled needs – this isolates
consumers with similar lifestyles, needs, and wants
Determine market segmentation – dividing a market
into distinct groups that have common needs and will
respond similarly to a marketing action
Select a market to target – determining how many
segments to enter, and which segments offer the most
potential.
Position through marketing strategies – the art and
science of fitting the product or service to one or more
segments of the broad market in such a way as to set it
meaningful apart from competition.
Bases for Segmentation
  Geographic  There are no rule
 Demographic
 Socioeconomic The Unique Selling Proposition
 Psychographic Benefit - Buy this product/service and you get this
 Behavioral benefit or reward
Unique - something rivals can't or don't offer
Market Positioning - Fitting the product or service to Potent - Promise must be strong enough or attractive
one or more segments of the broad market in such a enough to move people
way as to set it apart from the competition
Distribution Intermediaries Creativity Strategy: Implementation and Evaluation
 Brokers
 Distributors Advertising Appeals
 Wholesalers  The approach used to attract the attention of
 Retailers consumers
Execution Style
Participants in the IMC Process  The way an appeal is turned into an advertising
 Advertiser (Client) message
 Advertising agency Rational Appeal
 Media organizations  Focus on dominant traits of the product
 Marketing communications specialist
organizations
 Collateral services Levels of Relationship with Brands
Decision Making Process  Emotions
1. Problem recognition  Personality
2. Information search  Product benefits
3. Alternative evaluation
4. Purchase decision Basic Components of Print Advertising
5. Postpurchase evaluation Headline – words in the leading position of the
ad, usually are read first
Maslow’s Hierarchy of Needs Subheads – secondary to the main headline,
 Self0actualization needs larger than the body copy
 Esteem needs Body copy – main text portion of the ad, getting
 Social needs the target audience to read is difficult
 Safety and security needs Visual elements – illustrations, drawings, and
 Physiological needs photos, used to attract attention and communicate
ideas or images
External Influence on Consumer Behavior Layout – physical arrangement of the various
 Culture components of the ad
 Subculture
 Social class Production Stages for TV Commercials
 Reference group  Preproduction
 Situational determinants  Production
 Postproduction
Communication Process
Elements of the Communication Process Media Planning and Strategy
 Sender
Developing the Media Plan
 Receiver
1. Analyze the market
 Message
2. Establish media objectives
 Channel
3. Develop media strategy
 Decoding
4. Implement media strategy
 Response
5. Evaluate performance
 Feedback
 Noise
Determining Relative Cost of Print Media
Creativity Strategy: Planning and Development
Cost per thousand (CPM)
CPM = (cost of ad space/circulation) x 1,000
Advertising Creativity
Creative Strategy- Determining what the advertising
Cost per rating point (CPRP)
message will say or communicate
CPRP = (cost of commercial time/program rating)
Creative Tactics- Determining how the message
strategy will be executed
Advertising Medium
 Television
The only rule in Advertising
  Radio  Identification of policies and procedures
 Magazine  Development and execution of the program
 Newspaper
 Outdoor Personal Selling
 Direct mail  involves a person-to-person communications
 Internet process. The emphasis placed on personal
selling varies from firm to firm, and depends on
Support Media the product or service being marketed, the size
 To reach those people in the target audience of the organization, and the type of industry.
that primary media (TV, print, etc.) may not
have effectively reached and to reinforce, or
support, their messages
Also referred to as:
 Alternative media Stages of Personal Selling Evolution
 Nonmeasured media Provider stage – selling activity limited to order-
 Nontraditional media taking
Persuader stage – attempting to persuade
customer to buy
Prospector stage – seeking out buyers
perceived to have a need
Direct Marketing Problem-solver stage – buyers identify
 The total of activities by which the seller directs problems to be met by goods and services
efforts to a target audience using one or more Procreator stage – seller determines buyer
media for the purpose of soliciting a response needs and fulfills them
by phone, mail, or personal visit from a prospect
or customer Relationship Marketing
 The organization’s effort to develop a long-
Direct Marketing Combines with: term, cost-effective link with individual
 Internet customers for mutual benefit.
 Advertising
 Support media Advertising is regulated through:
 Sales promotion  Self regulation - Voluntary self regulation by the
 Public relations advertising industry, business, and media to
 Personal selling maintain consumer trust and confidence and
limit government interference
Sales Promotion  Federal regulation]
 State regulation- In addition to recognizing
 “A direct inducement that offers an extra value
decisions by the federal courts regarding false
or incentive for the product to the sales force,
or deceptive practices, many states have special
distributors, or the ultimate consumer with the
controls and regulations governing the
primary objective of creating an immediate
advertising of specific industries or practices.
sale.”
Ethics
Consumer Oriented SP
 Samples  Moral principles and values that govern the
 Coupons actions and decisions of an individual or group
 Premiums
 Contests
 Rebates BRAND MANAGEMENT
 Bonus packs Brand
 Price-off deals  a brand is a “name, term, sign, symbol, or
 Frequency program design, or a combination of them, intended to
 Event marketing identify the goods and services of one seller or
group of sellers and to differentiate them from
Public Relation those of competition
 defined as a management function which Product
evaluates public attitudes, identifies the policies  A product is anything we can offer to a market
and procedures for an organization with public for attention, acquisition, use, or consumption
interest, and executes a program of action to that might satisfy a need or want.
earn public understanding and acceptance.  A product may be a physical good, a service, a
retail outlet, a person, an organization, a place,
Public Relations Management Process or even an idea.
 Determination and evaluation of public Five Levels of Meaning for a Product:
attitudes
 The core benefit level is the fundamental need or
want that consumers satisfy by consuming the
product or service.
The generic product level is a basic version of the
product containing only those attributes or
characteristics absolutely necessary for its
functioning but with no distinguishing features. This
is basically a stripped-down, no-frills version of the
product that adequately performs the product
function.
The expected product level is a set of attributes or
characteristics that buyers normally expect and
agree to when they purchase a product.
The augmented product level includes additional
product attributes, benefits, or related services that
distinguish the product from competitors.
The potential product level includes all the
augmentations and transformations that a product
might ultimately undergo in the future.
Importance of Brands to Consumers
 Identification of the source of the product
 Assignment of responsibility to product
maker
 Risk reducer
 Search cost reducer
 Promise, bond, or pact with product maker
 Symbolic device
 Signal of quality
Importance of Brand to Firms
 To firms, brands represent enormously valuable
pieces of legal property, capable of influencing
consumer behavior, being bought and sold, and
providing the security of sustained future
revenues.
Importance of Brand Management
 The bottom line is that any brand—no matter
how strong at one point in time—is vulnerable,
and susceptible to poor brand management.
Strategic Brand Management
 It involves the design and implementation of
marketing programs and activities to build,
measure, and manage brand equity.
The Strategic Brand Management Process is
defined as involving four main steps:
1. Identifying and establishing brand positioning
and values
2. Planning and implementing brand marketing
programs
3. Measuring and interpreting brand
performance
4. Growing and sustaining brand equity
Customer-based Brand Equity
 “The differential effect that brand knowledge
has on consumer response to the marketing of
that brand.”
Sources of Brand Equity
 Brand awareness
 Brand recognition
 Brand recall
 Brand image
 Strong, favorable, and unique brand
associations
The Four Steps of Brand Building
1. Ensure identification of the brand with
customers and an association of the brand in
customers’ minds
2. Establish the totality of brand meaning in the
minds of consumers
3. Elicit the proper customer responses to the
brand identification and brand meaning
4. Convert brand response to create an intense,
active loyalty relationship between customers
and the brand
Salience Dimensions
 Depth of brand awareness
 Ease of recognition and recall
 Strength and clarity of category
membership
 Breadth of brand awareness
 Purchase consideration
 Consumption consideration
Creating Customer Value
 Customer-brand relationships are the
foundation of brand resonance and building a
strong brand.
 The customer-based brand equity model
certainly puts that notion front and center.
Customer Relationship Management (CRM)
 Uses a company’s data systems and
applications to track consumer activity
and manage customer interactions with
the company
Brand Positioning
 the act of designing the company’s offer
and image so that it occupies a distinct
and valued place in the target
customer’s minds.”
Target Market
 A market is the set of all actual and potential
buyers who have sufficient interest in, income
for, and access to a product.
 Market segmentation divides the market into
distinct groups of homogeneous consumers
who have similar needs and consumer behavior,
and who thus require similar marketing mixes.
 Market segmentation requires making tradeoffs
between costs and benefits.
Criteria for Segmentation
 Identifiability: Can we easily identify the
segment?
 Size: Is there adequate sales potential in the
segment?
 Accessibility: Are specialized distribution outlets
and communication media available to reach
the segment?
 Responsiveness: How favorably will the segment
respond to a tailored marketing program?
Points-of-Parity and Points-of-Difference
 Points-of-difference (PODs) are attributes or
benefits that consumers strongly associate with
a brand, positively evaluate, and believe that
they could not find to the same extent with a
competitive brand.
 Points-of-parity associations (POPs), on the
other hand, are not necessarily unique to the
brand but may in fact be shared with other
brands.
Core Brand Values
 Set of abstract concepts or phrases that
characterize the five to ten most
important dimensions of the mental
map of a brand
Brand Mantras
 Short three- to five-word phrases that
capture the irrefutable essence or spirit
of the brand positioning and brand
values
Brand Audit
 A comprehensive examination of a
brand involving activities to assess the
health of the brand, uncover its sources
of equity, and suggest ways to improve
and leverage that equity
Brand Audit Steps
 Brand inventory (supply side)
 Brand exploratory (demand side)
Brand Inventory
- A current comprehensive profile of how all the
products and services sold by a company are
branded and marketed:
 Brand elements
 Supporting marketing programs
 Profile of competitive brands
 POPs and PODs
 Brand mantra
Criteria for Choosing Brand Elements
 Memorability
 Meaningfulness
 Likability
 Transferability
 Adaptability
 Protectability
Packaging
 From the perspective of both the firm and
consumers, packaging must achieve a number
of objectives:
 Identify the brand
 Convey descriptive and persuasive
information
 Facilitate product transportation and
protection
 Assist at-home storage
 Aid product consumption
DESIGNING MARKETING PROGRAMS TO BUILD BRAND
EQUITY
Personalizing Marketing Concepts
 Experiential marketing - Views customers as
rational and emotional elements
 One-to-one marketing - Firm adds value by
generating rewarding experiences with
consumers.
 Permission marketing - “Encourages consumers
to participate in a long-term interactive
marketing campaign in which they are
rewarded in some way for paying attention to
increasingly relevant messages.”
Supporting Marketing Programs
Product Strategy
 Perceived quality and value
Pricing Strategy
 Setting prices to build brand equity
Channel Strategy
 The manner by which a product is sold or
distributed can have a profound impact on the
resulting equity and ultimate sales success of a
brand.
Push and Pull Strategies
 By devoting marketing efforts to the end
consumer, a manufacturer is said to employ a
pull strategy.
 Alternatively, marketers can devote their selling
efforts to the channel members themselves,
providing direct incentives for them to stock
and sell products to the end consumer. This
approach is called a push strategy.
Marketing communications are the means by which
firms attempt to inform, persuade, and remind
consumers—directly or indirectly—about the brands
they sell.
Co-Branding
  Occurs when two or more existing brands are
combined into a joint product or are marketed
together in some fashion
Ingredient Branding
 A special case of co-branding that involves
creating brand equity for materials,
components, or parts that are necessarily
contained within other branded products
Licensing
 Involves contractual arrangements whereby
firms can use the names, logos, characters, and
so forth of other brands for some fixed fee
Brand Equity Measurement System
 A set of research procedures that is designed
to provide timely, accurate, and actionable
information for marketers so that they can
make the best possible tactical decisions in the
short run and strategic decisions in the long run
Brand Equity Measurement System:
 Conducting brand audits
 Developing tracking procedures
 Designing a brand equity management system
Brand Equity Charter
 Provides general guidelines to marketing
managers within the company as well as key
marketing partners outside the company
Brand Equity Report
 Provides descriptive information as to what is
happening with the brand as well as diagnostic
information on why it is happening
Brand Equity Responsibilities
 Ensure that, as much as possible, marketing of
the brand is done in a way that reflects the
spirit of the charter and the substance of the
report
MEASURING OUTCOMES OF BRAND EQUITY
Comparative Methods
 Brand-based comparative approaches
 Consumer response is examined based on
changes in brand identification.
 Marketing-based comparative approaches
 The brand is held fixed and consumer response
is examined based on changes in marketing
programs.
 Conjoint analysis
 A survey-based multivariate technique that
enables marketers to profile the consumer
decision process with respect to products and
brands
Holistic Methods
 Attempt to place an overall value on the brand
in either abstract utility terms or concrete
financial terms
Holistic methods:
 Residual approaches - Examine the value of the
brand by subtracting consumers’ preferences
based on physical product attributes alone from
their overall brand preferences
 Valuation approaches - Attempt to place a
financial value on brand equity for accounting
purposes
Branding strategy
 it is the means by which the firm can help
consumers understand its products and services
and organize them in their minds.
Designing a Brand Portfolio
Basic principles:
 Maximize market coverage so that no
potential customers are being ignored
 Minimize brand overlap so that brands
aren’t competing among themselves to
gain the same customer’s approval
Brand Hierarchy
 A means of summarizing the branding strategy
by displaying the number and nature of
common and distinctive brand elements across
the firm’s products, revealing the explicit
ordering of brand elements
Corporate Brand Equity
 Occurs when relevant constituents hold strong,
favorable, and unique associations about the
corporate brand in memory
Family Brands
 Brands applied across a range of product
categories
 An efficient means to link common associations
to multiple but distinct products
Individual Brands
 Restricted to essentially one product category
 There may be multiple product types offered on
the basis of different models, package sizes,
flavors, etc.
Modifiers
 Signals refinements or differences in the brand
related to factors such as quality levels,
attributes, functions, etc.
 Plays an important organizing role in
communicating how different products within a
category that share the same brand name are
Using Cause Marketing to Build Brand Equity
 The process of formulating and implementing
marketing activities that are characterized by an
offer from the firm to contribute a specified
amount to a designated cause when customers
engage in revenue-providing exchanges that
satisfy organizational and individual objectives
Green Marketing
 A special case of cause marketing that is
particularly concerned with the environment
  Explosion of environmentally friendly products  Go “back to basics” and tap into existing
and marketing programs sources of brand equity
- Product strategy
Crisis Marketing Guidelines - Pricing strategy
 The two keys to effectively managing a crisis are - Channel strategy
that the firm’s response should be swift and
- Communication strategy
that it should be sincere.
 Create new sources of brand equity
BRAND EXTENSIONS
Leverage the Brand
 Firms are seeking to build “power” or “mega”
brands that establish a broad market footprint,
Entering New Markets
appealing to multiple customer segments with
multiple products all underneath the brand - One strategic option for revitalizing a fading
umbrella. brand is simply to more or less abandon the
consumer group that supported the brand in
Brand Extensions
the past to target a completely new market
 When a firm uses an established brand name to
introduce a new product segment.
Brand extension classification:
 Line extension
 Using a sub-brand to target a new market
segment within the same product category
 Category extension
 Using the parent brand in a different product
category

Creating Extension Equity

1. Salience of parent brand associations in the
minds of consumers in the extension context
2. Favorability of any inferred associations in the
extension context
3. Uniqueness of any inferred associations in the
extension context

MANAGING BRAND EQUITY

Reinforcing Brands
 we reinforce brand equity by marketing actions
that consistently convey the meaning of the
brand to consumers in terms of brand
awareness and brand image.

Revitalizing Brands
 Expand the depth and/or breadth of awareness
by improving consumer recall and recognition
of the brand during purchase or consumption
settings

Improving the Brand Image

 Repositioning the brand
- Establish more compelling points of difference
- In some cases, a key point of difference may
turn out to be nostalgia and heritage rather
than any product-related difference.
- Other times we need to reposition a brand to
establish a point of parity on some key image
dimension.
 Changing brand elements
- Convey new information or signal that the
brand has taken on new meaning
SERVICES MARKETING

Services: are economic activities offered by one party to
another; most commonly employ time-based
performances to bring about desired results
Services are often intangible, difficult to visualize and
understand, and customers may be involved in co-
production.
4 Categories of Services
 People-processing
 Possession-processing
 Mental Stimulus-processing
 Information-processing
Satisfaction: attitude-like judgment following a service
purchase or series of service interactions
Four Strategies for Services
 Fully focused: Limited range of services to
narrow and specific market
 Market Focused: Narrow market segment with
wide range of services
 Service Focused: Narrow range of services to
fairly broad market
 Unfocused: Broad markets with wide range of
services

Service attributes – determinant attributes are often the

7P’s of Services Marketing ones most important to customers
1. Product Effective Positioning Strategy
2. Place and Time
3. Price  Market Analysis
4. Promotion and Education  Internal Analysis
5. Process  Competitive Analysis
6. Physical Environment
7. People
Positioning maps are useful for plotting competitive
strategy:
3 Management Functions
 Identify potential competitive responses
 Operations Management  Help executives to visualize strategy
 Marketing Management
 HRM
Creating services involve:

3 Stage Model of Service Consumption  Designing the core product, supplementary

services, and their delivery processes

Flower of service includes core product and two types

of supplementary services: facilitating and enhancing

 Facilitating services include information, order

taking, billing, and payment
 Enhancing services include consultation,
hospitality, safekeeping, and exceptions

Spectrum of branding alternatives exists for services:

 Branded house
 Subbrands
 Endorsed brands
 House of brands

3 Interrelated Elements of Distribution

 Information and promotion flow: To get
customer interested in buying the
Risks of Purchasing and Using Services service
 Negotiation flow: To sell the right to use
 Functional a service
 Financial  Product flow: To develop a network of
 Temporal local sites
 Physical
 Psychological
 Social Service processes (people processing services,
 Sensory possession processing services, and information-based
services) affect international market entry via the
drivers:

 Market drivers
 Competition drivers
 Technology drivers
 Cost drivers
 Government drivers

Pricing Objectives

 Generating revenues and profit,

 Building demand,
 Developing user base

Three main foundations to pricing a service

 Cost-based pricing
 Competition-based pricing
 Value-based pricing
Four Levels of Service Performance

Service blueprinting can be used to design a service and

create a satisfying experience for customers.

Service Recovery Paradox: Customers who experience a

service failure that is satisfactorily resolved may be
more likely to make future purchases than customers
without problems (If second service failure occurs, the
paradox disappears).

Jaycustomer: A customer who behaves in a thoughtless

or abusive fashion, causing problems for the firm, its
employees, and other customers

Seven Types of Jaycustomer

1. The Cheat
2. The Thief
3. The Rulebreaker
4. The Belligerent
5. Family Feuders
6. The Vandal
7. The Deadbeat

Efficiency: involves comparison to a standard, usually

time-based

Productivity: involves financial valuation of outputs to

inputs

Effectiveness: degree to which firm meets goals

Service quality has five key dimensions: Tangibles,

Reliability, Responsiveness, Competence, and Courtesy

GAPS model can be used to diagnose and address

service quality problems:

o Gap 1: The Knowledge Gap

o Gap 2: The Policy Gap
o Gap 3: The Delivery Gap
o Gap 4: The Communications Gap
o Gap 5: The Perceptions Gap
o Gap 6: The Service Quality Gap
Channel Aim Challenges

Advertising: Build awareness, Needs to be unique Channel Aim Challenges

Done via media inform, persuade, as less than half of
channels and remind all ads generate a Sales Promotion: Generate Motivating customers
positive ROI Communication attention and to use a service sooner,
attached to an speed up in greater volume, or
Public Builds reputation Form relationships incentive that is introduction and more frequently
relations: and credibility to with its employees, specific to a period acceptance of especially during
Efforts to secure an image customers, and the of time, price, or new services periods when demand
stimulate conducive to community customer group would be weak
positive conduct business
interest Personal Selling: Educate Relationship marketing
through third Common in b2b customers and strategies based on
parties and infrequently promote account management
purchased services preferences for programs incur high
Direct Send personalized Advance in on- particular brand staffing costs;
Marketing such messages to highly demand or product telemarketing is a
as mail, e-mail targeted micro- technologies (e.g., lower cost alternative
& text segments; use spam filters, cookie
messages permission busters, pop-up Trade Shows Stimulate Opportunity to learn
marketing where blockers) empower extensive media about latest offerings
customers “raise consumers to coverage with from wide array of
their hands” and decide how and many suppliers
agree to learn more when they prefer prospective
about a company to be reached, and buyers
and its products by whom