New Perspectives on Marketing

• Digitalization and connectivity (through Internet,

intranet, and mobile devices)
• Disintermediation and reintermediation (via new
middlemen of various sorts)
• Customization (through tailored products and
ingredients provided to customers to make
products themselves)
• Industry convergence (through the blurring of
industry boundaries)
Amazon.com sells goods via the
Internet
Dell sells PC directly to consumers
http://www.adidas.com/campaigns/miadidas_teaser/content/index.asp?strcountry_adidascom=com
 Integrating Marketing Programs
and Activities
• Marketers should evaluate all possible
means, all contact points, to create
knowledge and identify the contacts

• Creative and original thinking is necessary

to create fresh new marketing programs
Mobile Marketing

Bus stops - CBD - slices of toast and jam jars

MTR subway

Life size copiers in Underpass

Double A
 Personalizing Marketing
• Means to create deeper, richer, and more
favorable brand associations.
• Driven by rapid expansion of the Internet
and continued fragmentation of mass
media
• 3 concepts:
– Experiential marketing
– One-to-one marketing
– Permission marketing
 Experiential Marketing
• Connect the product with unique and
interesting experiences, that entailed after
you purchase the product
Demonstrate how a brand can enrich a
customer’s life
• Enriched with 5 senses, ensure the
customer is enjoying the consumption
process before the purchase , during and
after sales service
 One-to-One Marketing
• Consumers help to add value by providing
information.
• Firm adds value by generating rewarding
experiences for consumers.
– Creates switching costs for consumers
– Reduces transaction costs for consumers
– Maximizes utility for consumers
• Treat different consumers differently
– Different needs, different current and future values to
firm
 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.”
– Anticipated
– Personal
– Relevant
 Integrating the Brand
into Supporting Marketing Programs
• Supporting marketing mix should be
designed to enhance awareness and
establish desired brand image.
– Product strategy
– Pricing strategy
– Channel strategy
 Product Strategy
• Perceived quality and value
• Core product, Actual Product,
Augmented Product
Brand intangibles:
– functional benefits +
– process (experience) benefits +
– relationship benefits
What Is a Product?
Levels of Product and Services
 Product and Service Decisions
Individual Product and Service Decisions

Product support services augment actual products

 Product Strategy
• Relationship marketing
– Mass customization (personalization), higher
switching costs
– Aftermarketing, e.g. easy-to-use
instructions, user manuals in multimedia
formats, sale of complementary products,
etc.
– Loyalty programs
– Experiential Marketing
 Pricing Strategy
• Price is strongly related to the product
quality, obvious, flexible, easier to manage
• Consumer price perceptions
– Consumers often rank brands according to
price tiers in a category.
• Setting prices to build brand equity
• - Premium pricing
– Value pricing
– Everyday low pricing
 New-Product Pricing Strategies
Market-skimming pricing is a strategy with
high initial prices to “skim” revenue layers
from the market
• Product quality and image must support the price
• Buyers must want the product at the price
• Costs of producing the product in small volume
should not cancel the advantage of higher prices
• Competitors should not be able to enter the
market easily
• HK 9000 for Iphone 15
 New-Product Pricing Strategies

Market-penetration pricing sets a low initial

price in order to penetrate the market quickly
and deeply to attract a large number of
buyers quickly to gain market share
• Price sensitive market
• Low prices must keep competition out of the
market
• Budget Airlines
• MOP 368 to Bangkok (for the first 5
customers)
 Product Mix Pricing Strategies
Pricing Strategies

Product line pricing takes into account

the cost differences between products in
the line, customer evaluation of their
features, and competitors’ prices

Optional-product pricing takes into

account optional or accessory products
along with the main product
Product Mix Pricing Strategies
Pricing Strategies

Captive-product pricing
involves products that
must be used along
with the main product
Two-part pricing involves
breaking the price into:
– Fixed fee
– Variable usage fee
 Price Mix Pricing Strategies
Pricing Strategies

By-product pricing refers to products with

little or no value produced as a result of
the main product. Producers will seek
little or no profit other than the cost to
cover storage and delivery.
 Price Mix Pricing Strategies
Pricing Strategies

Product bundle pricing combines several

products at a reduced price
Price-Adjustment Strategies
Price Changes
Initiating Pricing Changes
 Price Changes
Buyer Reactions to Pricing Changes
 Price Changes
Responding to Price Changes

Questions
– Why did the competitor change the price?
– Is the price cut permanent or temporary?
– What is the effect on market share and
profits?
– Will competitors respond?
Price Changes
Responding to Price Changes
 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.
• Channel strategy includes the design and
management of intermediaries such as
wholesalers, distributors, brokers, and
retailers.
 Channel Design
• Direct channels
– Selling through personal contacts from the company
to prospective customers by mail, phone, electronic
means, in-person visits, and so forth
• Indirect channels
– Selling through third-party intermediaries such as
agents or broker representatives, wholesalers or
distributors, and retailers or dealers
– Push and pull strategies
• Web strategies
 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.
 Why are Retailers Using
Multiple Channels to Interact
with Customers?
Consumers buy what they want,
When they want,
customer Wherever they want

store kiosk catalog Call center Web/E-mail mobile

Benefits Provided by Different
Channels
 Web Strategies
• Advantage of having both a physical “brick
and mortar” channel and a virtual, online
retail channel
 Today’s empowered consumers live in a multi-channel world –
research products online, buy offline, and demand service everywhere

Web & Email

Consumers buy • 24x7
• Visual
what they want,
when they want,
Call Center
wherever they want
• Convenient
• Immediate
Brick & Mortar
• Touch/Feel
• Experience driven

Kiosks
• Visual
• Convenient
Customer
Handheld Devices
• Immediate
• 24x7
Being both innovative and creative is important
in building up the brand salience dimensions.
Research on a brand which in your opinion is
the most innovative brand. Please elaborate its
innovation in different dimensions, and please
give concrete examples in your presentation for
next class.