Marketing Study Guide

Chapter 8 - Developing and Managing Products and Services

Two ways to obtain new products

1. Acquisition - refers to the buying of a whole company, a patent, or a license to produce someone
else’s product.
2. New product development - refers to original products, product improvements, product
modifications, and new brands developed from the firm’s own research and development.

● Services - Intangible activities, benefits, or satisfaction that do not result in the ownership of
anything
● Products - Anything offered to a market for attention, acquisition, use, or consumption that
might satisfy a want or need
*Products are differentiated based on experience(s) in acquiring and using them & are evaluated
at three levels (Core, Actual, & Augmented)
- Consumer products are purchased by consumers for their personal (i.e., nonbusiness) use.
Marketers usually classify these products and services further based on how consumers go
about buying them. Consumer products include convenience products, shopping products,
specialty products, and unsought products. These products differ in the ways consumers buy
them and, therefore, in how they are marketed (see Table 8.1).
- Industrial products are those purchased for further processing or for use in conducting a
business. The distinction between a consumer product and an industrial product is based on
the purpose for which the product is bought. If a consumer buys a lawn mower for use
around the home, the lawn mower is a consumer product. If the same consumer buys the
same lawn mower for use in a landscaping business, the lawn mower is an industrial
product.

Chapter 12 - Retailing & Wholesaling

Retailing - includes all the activities involved in selling products or services directly to final
consumers for their personal, nonbusiness use. Many institutions such as manufacturers,
wholesalers, and retailers do retailing. Most retailing is done by retailers - businesses whole sales come
primarily from retailing.

Types of Retailers: Amount of Service

Self-serve Retailers Limited- Service Retailers Full-service Retailers
•Convenience Stores •Home Depot •Higher-end market
•Canadian Tire •Canadian Tire •Luxury goods
•Discount Stores
•Gas Stations
Types of Retailers: Product Line
● Speciality Stores - narrow product line, deep assortment, lululemon
● Supermarkets - wide assortment
● Department Stores - wide variety
● General Merchandise - walmart
● Superstore - larger than department stores, large assortment
● Category Killer - large specialty stores, big box
● Service Retailer - tennis clubs, dry cleaner
Types of Retailers: Organizational Approach:
Retailer Marketing Strategies:
- Targeting and Positioning - (differentiation)
- Product Assortment and Services Decisions - Product assortment, Services mix, Store
atmosphere
Price Decisions Promotion Decisions Place Decisions
-Mark-up vs. Volume? -Retailers use all five Location is critical
-Everyday low pricing (EDLP) promotional tools Shopping centre
(Walmart/Costco) -Interact with customers Power centre
-High-low pricing using social media Lifestyle centre

Retail Trends and Developments:

● Experiential - Concept stores with customer friendly ambience aimed to engage rather than
dazzle
● In-Store Technology - In-store digital elements ranging from kiosks for viewing, searching
content, to scannable product information and self-checkout.
● Gift Cards - $1B industry in Canada, builds brand awareness and capitalizes on time-starved
Canadians. Also profitable due to excessive non-redemption.
● Shopper Marketing - Using point-of-sale promotions and advertising to extend brand
equity to “the last mile” and encourage favorable in-store purchase decisions.
● Social Media & Mobile - Smartphones and other handheld electronic devices are becoming
like “butlers” to shoppers.
Retailing Trends and Developments:
● International Retailing
● Instore, Mobile, and wearable technology
● Increasing use of gift cards - billion dollar industry, many go unused
● Shopper Market - pre-shopping, shopping, post-shopping
● Online Retail - showrooming
● New Retail Forms and Retail Convergence - pop up stores
● Green Retailing
Wholesaling: Many of the largest and most important wholesalers are largely unknown to
consumers. But they are very well known and much valued by the business customers they serve.
Wholesaler Functions:
● Selling and promoting 
● Buying and assortment building 
● Bulk breaking
● Warehousing
● Transportation
● Financing
● Risk bearing
● Market Information
● Management Services
3 Types of Wholesalers
● Merchant wholesalers
 ● Full-service wholesalers
● Limited-service wholesalers
Major Types of Wholesalers:
● Merchant wholesalers
● Full-Service Wholesalers
● Cash-and-carry wholesalers
● Truck wholesalers
● Producers’ cooperatives
● Mail-order or Web wholesalers
● Manufacturers’ agents
● Selling agents
● Purchasing agents
● Commission merchants
● Manufacturers’ and Retailers’ Branches and Offices
● Sales Branches and Offices
● Purchasing Offices
Trends in Wholesaling:
Wholesalers are challenged by:
● Need to achieve greater cost efficiencies
● Demand for lower prices
● Changing needs of suppliers

Chapter 13 - Communicating Customer Value: Advertising and

Public Relations
Integrated Marketing Communications - Integration of communication channels to deliver a
clear, consistent, and compelling message about the company and its products. Communication
with/to customers is changing:
● Consumers see “single” messages from companies
● Communication technology is richer, faster
● Marketing strategies must be integrated

The Promotion Mix - Tools used to persuasively communicate customer value and build customer
relationships
● Advertising
● Sales Promotion
● Public Relations
● Personal Selling
● Direct Marketing

Advertising:
PROS
-Reaches masses at low cost per exposure
-Repeats message many times
-Creates consumer trust (view of advertised products as more legitimate)
CONS
-Promotes impersonally, one-way
-Costs are high for some media types

Personal Selling
PROS
-Communicates personally two-ways
-Builds preferences, convictions, and actions
-Allows relationship building
CONS
-Requires long-term commitment to sales force
-Most expensive promotion tool

Sales Promotion
PROS
-Includes a wide assortment of tools
-Attracts consumer attention
-Offers strong incentives to purchase
-Dramatizes product offers
-Invites quick consumer response
CONS
-Effects are short-lived

Public Relations
PROS
-Legitimizes credibility, very believable
-Reaches people who resist advertising
-Dramatizes a company or product
-Saves money when used proactively
CONS
-Tends to be used as an afterthought

Direct Marketing
PROS
-Communicates more directly with targeted customers
-Reaches customers with tailored message
-Creates interactivity
-Builds one-to-one relationships
CONS
-Often perceived as junk-mail/spam
Advertising Objective: A specific communication task to be accomplished with a specific target
audience during a specific period of time
Advertising budget methods:
● Affordable method - The method is based on the company’s capacity to spend.
It is based on the notion that a company should spend on advertising as per its
capacity. Company with a sound financial position spends more on advertising
and vice versa.
● Percentage-of-sales method - the amount for advertising is decided on the
basis of sales
● Competitive-parity method - This method considers the competitors’
advertising activities and costs for setting advertising budget. The advertising
budget is fixed on the basis of advertising strategy adopted by the competitors.
● Objective-and-task method - The costs of various advertising activities to be
performed to achieve marketing objectives make up the advertising budget.
Developing Advertising Strategy Steps:
1. Creating Advertising Messages
● Must break through the clutter
● Branded entertainment
● Merging ads with entertainment
2. Selecting Advertising Media
● Set reach, frequency, and impact goals
● Choose among major media types
● Select specific media vehicles
● Decide on media timing

Message Strategy:
● Identify benefits to be used as appeals
● Develop a compelling creative concept
● Choose an advertising appeal that is: Meaningful, Believable, and Distinctive.

Selecting Advertising Media

Media Selection:
● Deciding on reach, frequency, impact
➔ Reach: Percentage of people exposed to an ad campaign in a given time
period
➔ Frequency: Number of times a person is exposed to an advertisement
➔ Media Impact: Qualitative value of a message exposure through a given
medium
● Choosing media types
 ● Selecting media vehicles - (like digital, radio, newspaper etc)
Considerations when choosing vehicles:
➔ Cost
➔ Audience quality / engagement
➔ Editorial quality
● Deciding on media timing
Media Timing Schedules:
➔ Follow seasonal pattern
➔ Oppose seasonal pattern
➔ Same coverage all year
Choose the pattern of the ads:
➔ Continuity
➔ Pulsing

Evaluating advertising involves measuring:

● Communication effects of an ad or campaign
● Sales and profit effects of the ad campaign

Return on Advertising Investment: The net return on advertising investment divided

by the costs of the advertising investment

Organizing for Advertising

Advertising agency - A marketing services firm that assists companies in planning,
preparing, implementing, and evaluating all or portions of their advertising programs.
● Small companies - Advertising done by someone in the sales department.
● Large companies - have advertising departments
*Most large companies use outside advertising agencies because they offer several
advantages.

Public Relations: building strong relations with the company’s various stakeholders by:
● Obtaining favourable publicity
● Communicating a trustworthy corporate image
● Managing unexpected occurrences, both positive
and negative
*Public relations is used to promote products, people, places, ideas, activities,
organizations, and even nations.
*Public relations can have a strong impact on public awareness at a much lower cost
than advertising can.

Function Description
Press Creating and placing newsworthy
Relations information in the
news media to attract attention
Product Publicizing specific products
Publicity
Public Building and maintaining national or local
Affairs community relations
Lobbying Building and maintaining relations with
legislators and government officials to
influence legislation and regulation
Investor Maintaining relationships with
Relations shareholders and others in the financial
community
 Developmen Working with donors or members of
t not-for-profit organizations to gain
financial or volunteer support
Major Public Relations Tools:
● News
● Speeches
● Special events
● Written materials
● Audiovisual materials
● Corporate identity materials
● Public service activities
● Buzz marketing
● Company website

Chapter 14 -