Marketing
promotes them and then distributes
a process of planning and executing the:
 Conception,
 Pricing,
 Promotion,
 Distribution of ideas, goods, and services to
create exchanges that satisfy individual and
organizational objectives.
Marketing Activities
 get attention
 motivate & encourage people
 facilitate them to act (buy)
 get them to buy again
Define your product/service
Promotion / promoting
Distribute your product/service
Maintain a relationship
Building and nurturing a relationship
Create, expand and maintain
Understand consumer behavior
how people buy, what they buy, when they
buy and why they buy
 Customer focus (orientation):
 Customer wants1 are researched,
 The information is disseminated throughout
the firm and products are developed
 Customer satisfaction is monitored and
adjustments made if necessary.
3 Assumptions of Transactional Marketing
 There is a large number of potential
customers
 Customers and their needs are fairly
homogenous
 It is rather easy to replace lost customers with
new on
3 Levels of Marketing
Corporate
1. 'What business should we be in and
what opportunities should we
pursue?' This is marketing before we
even have a business, idea or product.
Business
2. 'How are we going to compete
against the competition? 'Focused on
the competition; deals with long term
sustainable advantages and business
models
Functional
3. 'How do we create and keep
customers?'; '4ps' of the marketing mix.
This level of marketing defines and
1 but there are usually legal restrictions, such as a prohibition of
determines what its potential customers desire
develops products, prices them,
them in a way that helps a company
create and sustain demand for their
products.
4Ps of Marketing
 Product: The Product management and
Product marketing aspects of marketing deal
with the specifications of the actual good or
service, and how it relates to the end-user's
needs and wants.
 Pricing: This refers to the process of setting a
price for a product, including discounts.
 Promotion: This includes advertising, sales
promotion, publicity, and personal selling, and
refers to the various methods of promoting the
product, brand, or company.
 Placement or distribution refers to how the
product gets to the customer; for example,
point of sale placement or retailing. This fourth
P has also sometimes been called Place,
referring to the channel by which a product or
service is sold (e.g. online vs. retail), which
geographic region or industry, to which
segment (young adults, families, business
people), etc.
Advertising
Advertising is paid communication through a non-
personal medium in which the sponsor is
identified and the message is controlled.
Variations include:
 publicity & public relations
 product placement2 (plug on sitcom)
 sponsorship & underwriting spots 3 (e.g. PBS)
 sales promotion
Viral Marketing
viral advertising refer to marketing techniques
that use pre-existing social networks to produce
increases in brand awareness.
Advantages:
 Ease of executing the marketing campaign,
 Relative low-cost (compared to direct mail)
 Good targeting,
 High and rapid response rate
Mass Market vs. Niche Market
2
a real commercial product is used in fictional or non-fictional
media, and the presence of the product is a result of an
economic exchange. When featuring a product is not part of
an economic exchange, it is called a product plug.
3
spots usually mention the name of the sponsor, and can
resemble traditional advertising in commercial broadcasting,
making product claims, announcing prices, or providing an
incentive to buy a product or service.
Mass marketing is used to sell a product to a large variety of
customers in large amounts. Mass marketing is the opposite
of niche marketing, where a product is made especially for
one person or a group of person
Marketing Innovations & Theory:
exploit people's herd mentality to increase sales
Mass Customization (PERSONALIZATION)
 Adaptive customization - firms produce a
standardized product, but this product is
customizable in the hands of the end-user
(the customers alter the product themselves)
 Collaborative customization - talk to
individual customers to determine the precise
offering that best serves the customer's
needs (personalized marketing and personal
marketing orientation). This information is
used to specify and manufacture a product
that suits that specific customer
 Cosmetic customization - produce a
standardized physical product, but market it
to different customers in unique ways.
 Product/Service Differentiation
differentiating it from competitors' products as
well as one's own product offerings
Sources:
 Differences in quality or design among output
(product)
 Ignorance of buyers regarding the essential
characteristics and qualities of goods they are
purchasing
 Pervasive sales promotion activities of sellers
and, in particular, advertising
 Differentiation in the locations of sellers of the
same good;
Product/Service Positioning
How are you, your product/service perceived in the market
compared to the competition?
A good position is:
1. What makes you unique
2. This is considered a benefit by your target
market
 Re-positioning involves changing the identity
of a product, relative to the identity of competing
products
 De-positioning involves attempting to
change the identity of competing products,
relative to the identity of your own product,
Environment
1. What is our marketing environment?
2. What is our competitive advantage?
Positioning Strategies:
 Product Attributes: What are the specific
product attributes?
 Benefits: What are the benefits to the
customers?
 Usage Occasions: When / how can the
product be used?
 Users: Identify a class of users.
 Against a Competitor: Positioned directly
against a competitor.
 Away from a Competitor: Positioned away
from competitor.
 Product Classes: Compared to different
classes of products.
Positioning Differences
 Important: The difference delivers a highly
valued benefit to the target buyers
 Distinctive: Competitors do not offer the
difference, or the company can offer it in a
more distinctive way
 Superior: The difference is superior to other
ways that the customer might obtain the
same benefit
 Communicable: The difference can be
explained and communicated to the target
buyers
 Preemptive: Competitors cannot easily copy
the difference
 Affordable: Buyers can afford to pay the
difference
 Profitable: Company can introduce the
difference profitably
Segmentation Variables:
Main Segments (subsets)
 Geographic
 Demographic (age, gender, income,
occupation, religion)
 Psychographic (personality, value, attitude)
 Behavioral (benefit sought, brand loyalty)
 Who are the Innovators and Early
adopters?
 Venturesomeness: the willingness and
desire to be daring in trying something new
and different
 Social integration: frequent and extensive
contact with others in one’s area
 Cosmopolitan: point of view extending
beyond the immediate neighborhood or
community
 Social mobility: upward movement on the
social scale
 Privilegedness: attitude and possession of
money (less risky to try something new)
 Upselling
a marketing technique where the customer is
offered a higher-priced version of a product or an
additional product to the original sale.
Target Market:
Each class has different risk tolerances.
• Innovators4 First 5% - 10% that adopt the
product
• Early Adopters Next 10% - 15%
• Early Majority Next 30%
• Late Majority Next 30%
• Laggards Remaining 20%
Product Adaptability
 Relative advantage of the product: How
superior is the innovation to the product or
other problem-solving methods it was
designed to compete against?
 Compatibility: Does it fit with current
product usage and customer activity?
 Complexity: Will difficulty or confusion arise
in understanding the innovation’s basic idea?
 Divisibility: How easily can trial portions of
the product be purchased?
 Communicability: How likely is the product
to appear in public places where it is easily
seen and studied by potential users?
Distribution Channels Functions
What is the purpose of a distribution channel?
• Information: gathering and distributing
marketing research
• Promotion: developing and
communicating offers
• Contact: communicating with prospective
buyers
4 increase short-run sales
• Matching: fitting the offer to the buyer's
needs
• Negotiation: reaching agreement on
price and terms
• Physical distribution: transporting and
storing the goods
• Financing: getting and using funds to
cover the costs of channel work
• Risk taking: assuming the risks the
channel work.
Distribution
• Retail
• Online
• In Person
• In House
Pricing Strategies
 Product Line: Setting price steps between
product line items
 Optional Product: Pricing optional or
accessory products
 Captive Product: Pricing products that must
be used with the main product
 By-Product: Pricing low value by product to
get rid of them
 Product Bundle: Pricing bundles of products
sold together
New Product Pricing Strategies
Market-Skimming: Initially set high prices to "skim"
revenue layer by layer from the market. Works when:
 Quality and image support the higher price
 Enough buyers want the product at that price
 Cost of producing a small volume cannot be high
 Competitors should not be able to enter the market
easily
Market Penetration: Set a low initial price in order to
penetrate the market quickly and deeply to win a large
market share. Works when:
 Market is highly price sensitive
 Production and distribution costs fall as sales
volume increases
 Low price must help keep out the competition
Price Adjustment
 Discount & Allowance: reduced prices to reward
customer responses such as paying early or
promoting the product
 Discriminatory: adjusting prices to allow for
differences in customers, products, and locations
 Psychological: adjusting prices for psychological
effects. Ex: $299 vs. $300
 Value: adjusting prices to offer the right
combination of quality and service at a fair price
 Promotional: temporarily reducing prices to
 Geographical: adjusting prices to account for
geographic location of customer.
 International: adjusting prices in international
markets

Promotion

Promotion is the specific mix of advertising, personal

selling, sales promotion, and public relations a
company uses to pursue its advertising and marketing
objectives

 Shows
 Direct Mail
 Web Page
 Posters
 Event Listings
 Reviews
 Radio
 Word of Mouth
 Press Releases

 Evangelism Marketing or Word of Mouth

advanced form of word of mouth marketing
(WOMM) in which companies develop customers
who believe so strongly in a particular product or
service that they freely try to convince others to
buy and use it.

 Consumers have become increasingly media-

savvy, hard-sell advertising messages do not
function well

 Branded content - branded content

programs are able to blend the advertising
message in a seamless and transparent fashion,
while still getting the information across to the
consume