Mk1C 2030: Chapter 1 - What Is Market|ng?

"#$% & '( )

Crgs LhaL succeed: develop/lmplemenL markeLlng sLraLegles LhaL creaLe value for cusLomers

What |s Market|ng?
Market|ng: 1. 8uslness funcLlon 2. 8uslness phllosophy 3. ueclslon-maklng process
Market|ng - process of plannlng & execuLlng Lhe concepLlon, prlclng, promoLlon and dlsLrlbuLlon of ldeas, goods
and servlces Lo creaLe exchanges LhaL saLlsfy lndlvldual & orgs ob[ecLlves

1. 8us|ness funct|on: provlde buslness wlLh long-Lerm compeLlLlve advanLage ln Lhe marketp|ace (any
locaLlon/medlum used Lo conducL an exchange) by undersLandlng Lhe needs of, creaLlng value for cusLomers
2. 8us|ness ph||osophy, Lhe market|ng concept (mlndseL wlLh respecL Lo operaLlng Lhelr buslness): orgs
ob[ecLlves besL meL by undersLandlng whaL cusLomers need and Lhe assoclaLed cosLs of saLlsfylng Lhem
3. Dec|s|on-mak|ng process: 1o achleve ob[ecLlves by saLlsfylng cusLomer needs/wanLs

Sat|sf|es Needs, boLh buyers/consumers and sellers/markeLers (orgs goals, proflL)
Consumer - ulLlmaLe user of good/servlce (lndlvlduals C8 orgs ob[ecLlves)
Need - dlfference beLween consumer's acLual sLaLe and ldeal/deslred sLaLe (physlcal, psychologlcal needs)
Want - deslre for parLlcular producL Lo saLlsfy a need ln speclfy ways, lnfluenced culLurally and soclally
8enef|t - dellvered ouLcome by producL when need/wanL saLlsfled
Soc|a| market|ng concept - emphaslzes LhaL cusLomer needs musL be saLlsfled ln ways LhaL also beneflL socleLy

Lxchange of Va|ue
Lxchange - process by whlch some Lransfer of value occurs beLween buyer (good/servlce LhaL saLlsfles a need)
and seller (money)
Va|ue - creaLlng producLs LhaL saLlsfy needs/wanLs of consumers beLLer Lhan alLernaLlves

Anyth|ng Can 8e Marketed, "#$%&'( )**$' &+$ '%,-#.%'/
roduct - good (Langlble), servlce (lnLanglble), ldea - Lhrough exchange, saLlsfles consumer needs
noL-for proflL markeLlng
ldea, place (Lourlsm) markeLlng: Lndorse ldeas, change Lhelr behavlors ln poslLlve ways

Market|ng 1oo|s: 1he Market|ng M|x ".*+.%01#*+( 0,#.#+)( 0,*2*1#*+ &+$ $#'1,#341#*+/
1CCLS: lnvenL or develop, asslgn value and meanlng, made avallable Lo cusLomers 1C C8LA1L.
Customer va|ue - whaL cusLomer geLs from producL relaLlve Lo cosLs lncurred A8L CALLLu.
Market|ng m|x "4 s": roducL, prlce, promoLlon, place, represenLs offered value Lo consumer recelved ln an
exchange ! MM elemenLs creaLe value
roduct: good, servlce, ldea, place, person, offered for exchange
r|ce: seller's assessmenL of value Lo producL
|ace (channels of dlsLrlbuLlon): avallablllLy of producL Lo cusLomer aL deslred Llme and locaLlon
romot|on: markeLlng communlcaLlon efforLs
Market - all/poLenLlal cusLomers who share common need LhaL can be saLlsfled by a speclflc producL, have
resources and wllllng Lo make exchange

now are Market|ng Dec|s|ons Made? "0,*.%'' *5 06&++#+) &+$ %7%.41#+)/8 sLraLeglc declslon process
deLermlnlng markeL sLraLegles help orgs meeL long-Lerm ob[ecLlves ! markeLlng plan

Market|ng |ann|ng: process of ldenLlfylng and analyzlng alLernaLlve ways Lo compeLlng ln markeLplace
MarkeLlng plan: Lo achleve ob[ecLlves by creaLlng superlor cusLomer value for exchange wlLh cusLomers


Mk1C 2030: Chapter 1 - What Is Market|ng?

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I|nd|ng and keach|ng a 1arget Market Segment:
Market segment - dlsLlncL group of cusLomers wlLhln a larger markeL who have slmllar needs, wanLs,
preferences and behavlors who seek slmllar producL soluLlons
1arget market - markeL segmenL(s) chosen by orgs ln whlch lL dlrecLs lLs markeLlng efforLs
Mass market - all posslble cusLomers ln markeL, regardless of dlfferences ln speclflc needs/wanLs (noL Lenable ln
long-run)
SegmenLlng Lhe markeL: ulvldlng overall markeL lnLo groups of consumers who have slmllar
needs/wanLs or have slmllar purchase/consumpLlon behavlours
SelecLlng a LargeL markeL naLlonally and globally: Slngle or mulLlple markeL segmenLs
ueveloplng and poslLlonlng Lhe offerlng: MarkeLlng mlx declslons esLabllsh Lhe market pos|t|on (way ln
whlch Lhe LargeL markeL percelves Lhe offerlng ln comparlson Lo compeLlLors' brands) of producL
offerlng, creaLe superlor cusLomer value, and creaLe a deslred response among members of Lhe LargeL
markeL

Market|ng As a rocess: I|na| 1houghts
ke|at|onsh|p market|ng - markeLlng phllosophy: process of bulldlng long-Lerm relaLlonshlps wlLh cusLomers,
suppllers, dlsLrlbuLors, oLher key stakeho|ders (lndlvlduals/orgs who affecL or are affecLed by acLlvlLles of a flrm) Lo
saLlsfy muLual needs
-llfLh 9( people - ofLen consldered parL of markeLlng mlx"

When D|d Market|ng 8eg|n? 1he Lvo|ut|on of a Concept
roduct Cr|entat|on: managemenL phllosophy, focus on mosL efflclenL ways Lo produce/dlsLrlbuLe producLs, noL
wheLher producLs besL saLlsfy consumers' needs
-vlew markeL: Pomogeneous group LhaL wlll be saLlsfled wlLh Lhe baslc funcLlon of a producL
Se|||ng Cr|entat|on: managerlal vlew of markeLlng, selllng funcLlon, or way Lo move producLs ouL of warehouses
Lo reduce lnvenLory
-8egan: AfLer WWll lnLo 1930s
-Lncompasses Lhe Pard sell" LacLlc: salespeople aggresslvely push producLs ! gave markeLlng bad
lmage ! works on one-Llme sales, noL repeaLable
Consumer Cr|entat|on: managemenL phllosophy, focus on belng proacLlve/responslve ln ldenLlfylng and
saLlsfylng consumer needs/wanLs
-8egan: Larly 1930s ! markeLlng concepL born
New Lra Cr|entat|on: managemenL phllosophy, markeLlng declslon maklng means a devoLlon Lo excellence ln
deslgnlng/produclng producLs LhaL beneflL cusLomer, plus employees, shareholders, clLlzens
-Lmbrace soclal markeLlng concepL, economlc and soclal proflL
-locus relaLlonshlp markeLlng, soclal markeLlng

Market|ng's ko|e |n Soc|ety: Lth|ca| 8ehav|our
LLhlcal 8ehavlour ls Cood 8uslness: companles flnd LhaL sLresslng eLhlcs, soclal responslblllLy = good buslness
Soclal and LLhlcal CrlLlclsms of MarkeLlng: lllegal or legal
L.g. - balL-and-swlLch" selllng sLraLegy, spam e-mall
CrlLlclsms of MarkeLlng:
1. MarkeLers creaLe arLlflclal needs
2. MarkeLlng Leaches us Lo value people for whaL Lhey own raLher Lhan who Lhey are
3. MarkeLers promlse mlracles

Careers |n Market|ng
MarkeLlng ManagemenL, MarkeLlng 8esearch, MarkeLlng ConsulLlng, roducL and 8rand ManagemenL, Sales,
AdverLlslng
Mk1C 2030: "#$%&'( ) - *$+,-. /&($&'.,0 *$(+'&,-. 1'0,2,3-2

"#$% & '( )
452,-'22 67$--,-. 6(30'22
8uslness plannlng: ongolng process maklng declslons guldlng flrm ln shorL and long-Lerm
3 Levels of buslness plannlng: 89 SLraLeglc )9 MarkeLlng :9 luncLlonal

89 /&($&'.,0 67$--,-.; managerlal declslon process LhaL maLches Lhe organlzaLlon's resources and capablllLles Lo
lLs markeL opporLunlLles for long-Lerm growLh and survlval
SLraLeglc plan: SLarLs wlLh 8uslness Cb[ecLlves, Lhen plan developed for a perlod of 3-3 yrs
2 Levels of large flrms SLraLeglc lannlng: 1. LnLlre buslness 2. lndlvldual SLraLeglc 8uslness unlL (S8us)

)9 *$(+'&,-. 67$-; Lnables buslness Lo seL prlorlLles regardlng markeL segmenLs (markeLs lL wanLs Lo compeLe
ln), LargeL cusLomers (served), markeLlng mlx sLraLegy (how lL plans Lo serve cusLomers)
MarkeLlng lan vs. SLraLegy lan:
1. 1lme Porlzon (MarkeLlng: 1 yr, SLraLeglc: 3-3 yrs)
2. MarkeLlng: ueLalls of MarkeLlng Mlx, SLraLeglc: none

:9 <%'($&,-. =>5-0&,3-$7? 67$- (sales, producLlon, flnance, supply chaln, P8)
@9 A'$(7B 45C.'&; AllocaLe resources
D9 452,-'22 <EF'0&,G'2

/&($&'.,0 67$--,-.; H5,C,-. &#' 452,-'22
"#$%&'()(' *'+, -%+- (,)#.#/, 0%(1( 23.#,(.. #. $/#,$ 0#-%#, ,(4- 5&6 7(+1.
4 SLages ln SLraLeglc lannlng:
89 1'I,-,-. &#' <(.$-,J$&,3-K2 452,-'22 *,22,3-
*,22,3- 2&$&'L'-& M formal sLaLemenL LhaL descrlbes orgs' overall purpose, whaL lL hopes Lo achleve ln Lerms of
lLs cusLomers, producLs, resources
MarkeLlng myopla" - used Lo descrlbe flrms LhaL develop shorL-slghLed vlslons of who Lhey are

)9 NG$75$&,-. &#' N-G,(3-L'-&; /O<P Q-$7B2,2
/O<P $-$7B2,2 M analysls of orgs /LrengLhs, Oeaknesses, lnLernal <pporLunlLles, PhreaLs, exLernal
-MarkeLers use SWC1 Lo help make sLraLeglc, LacLlcal declslons
-//< provlde raLlonale supporL declslon, O/P provlde reasons why declslon mlghL noL be approprlaLe or
ldenLlfled Lo be mlLlgaLed/overcome
NR&'(-$7 '-G,(3-L'-& M unconLrollable elemenLs ouLslde orgs LhaL may affecL performance poslLlvely or
negaLlvely
3 LxLernal lacLors:
1. uemographlc/Soclal/CulLural 2. Lconomlc 3. CompeLlLlve 4. 8egulaLory 3. 1echnologlcal
S-&'(-$7 '-G,(3-L'-& M conLrollable elemenLs lnslde orgs LhaL lnfluence how well orgs operaLes
lacLors: 8esources, Lechnology, lnLellecLual caplLal (employee skllls), faclllLles
CrganlzaLlon of flrm: sLrucLure, culLure, sysLems (how lL geLs work done)
8ellefs, values, preferences of senlor managemenL (people)

:9 /'&&,-. <(.2 <EF'0&,G'2T enLlre orgs works Loward common goal
@9 67$--,-. &#' 452,-'22 63(&I37,3
/&($&'.,0 E52,-'22 5-,&2 =/4U2? - lndlvldual unlLs wlLhln Lhe flrm, each havlng separaLe mlsslons, buslness
ob[ecLlves, resources, managers and compeLlLors
-S8u: Cwn sLraLeglc focus wlLhln flrm's overall sLraLeglc plan, own sLraLeglc plan, sLraLegles
-Lach S8u: separaLe proflL cenLre wlLhln larger, responslble for own cosLs, revenues, proflLs
452,-'22 %3(&I37,3 M dlfferenL producLs/brands owned by larger flrm
-ulverslfled porLfollo of producLs ! reduces dependence on 1 producL/group of cusLomers
Mk1C 2030: "#$%&'( ) - *$+,-. /&($&'.,0 *$(+'&,-. 1'0,2,3-2

"#$% & '( )
*$(+'&,-. 45$--,-. 4(30'22
! #$% &'() *+,-+ .(/01 ,.1 2,$0-.,3) 4$35 1.$(.06,- &'()

*$(+'&,-. %5$- 6 documenL LhaL descrlbes markeLlng envlronmenL, ouLllnes markeLlng ob[ecLlves/sLraLegy,
ldenLlfles who wlll be responslble for carrylng ouL each parL of markeLlng sLraLegy

underlylng goal of all markeLlng sLraLegles ! "37%'&,&,8' $98$-&$.' 6 ablllLy of a flrm Lo ouLperform
compeLlLlon, Lhus provldlng cusLomers wlLh a beneflL Lhe compeLlLlon cannoL

7040$ .3 8,69$0 :%; <&6% =>? ()2 @901.,3) : <&6% A:?

*$(+'&,-. 45$--,-. &3 :;-0&,3-$5 45$-2
-MarkeLlng plan provldes common foundaLlon for developmenL of oLher funcLlonal plans
-CuLllnes whaL markeLs, cusLomers buslness wlll purse and whaL mkLg sLraLegles wlll accompllsh esLabllshed
ob[ecLlves
-Lach funcLlon develops own plans Lo lmplemenL markeLlng sLraLegles ouLllned ln markeLlng plan
-L.g.: Sales funcLlon knows whaL sales LargeLs Lo be achleved, producLlon funcLlon knows whaL needs Lo be
produced & when
-Lach funcLlon followlng guldellnes seL by hlgh-level sLraLeglc plan, buL aL own level of deLall

/'&&,-. &#' <;9.'& $-9 <;2,-'22 =>?'0&,8'2@ 4,)(' 1.(601 34 &'()),)6 &$3-011
-SeL yearly budgeL based on markeLlng/funcLlonal plans
Cb[ecLlves: dlrecL ouLgrowLh of mlsslon sLaLemenL, broadly ldenLlfy whaL flrm hopes Lo accompllsh wlLhln
general Llme frame of flrm's long-range sLraLeglc buslness plan
-CfLen quanLlLaLlve: sLaLe speclflc levels of measurable buslness accompllshmenLs Lo be achleved by orgs as a
whole
-L.g.: revenue/sales, proflLablllLy, sLandlng ln markeL, 8Cl, producLlvlLy, lnnovaLlon, use of flrm's resources, producL
developmenL/lnLroducLlon, cusLomer relaLlons/saLlsfacLlon, soclal responslblllLy

/&($&'.,0 *$(+'&,-. *,A 1'0,2,3-2 ,- B-&'(-$&,3-$5 *$(+'&2
CD /&$-9$(9,E$&,3- 82D F30$5,E$&,3-
SLandardlzaLlon: sLandardlzed message across counLrles slnce needs/wanLs = same everywhere
Cne world, one message sLraLegy"
Works when: no unlque culLural facLors affecLlng purchase, llve ln urban areas exposed Lo lmages of
dlfferenL counLrles
LocallzaLlon: producLs/promoLlons should be Lallored Lo local envlronmenL
B(.,3)(' -+($(-.0$ - dlsLlncLlve seL of behavloural/personallLy characLerlsLlcs wlLhln counLry
)D 4(39;0& 1'0,2,3-2
SLralghL LxLenslon SLraLegy: Sells same producL for domesLlc/forelgn markeLs
roducL AdapLlon SLraLegy: Modlfles producL, bellef of ppl ln dlff culLures have sLrong/dlfferenL preferences
roducL lnvenLlon SLraLegy: uevelop brand-new producL for forelgn markeL
C(-/*($2 ,)D0).,3) E less complex producL Lhan lL sells elsewhere
GD *$(+'&,-. "377;-,0$&,3-2 H4(373&,3-2I 1'0,2,3-
JD 4(,0' 1'0,2,3-2
K('L 7$(+'& 6 unauLhorlzed parLy lmporLs producLs and Len sells Lhem for fracLlon of prlce
1;7%,-. 6 company Lrles Lo geL a Loehold ln forelgn markeL by prlclng lLs producLs lower Lhan offered aL
home
MD 1,2&(,>;&,3- 1'0,2,3-2
key Lo succeed ln lnLernaLlonal markeL: esLabllshlng rellable dlsLrlbuLlon sysLem

Mk1C 2030: "#$%&'( ) - *$+,-. /&($&'.,0 *$(+'&,-. 1'0,2,3-2

"#$% & '( &
4&#,0$5 $-6 /30,$557 8'2%3-2,95' :'#$;,3<( ,- &#' *$(+'&%5$0'
new Lra flrms galn soclal proflL by => pracLlclng buslness eLhlcs when maklng MM declslons and )> pracLlce soclal
responslblllLy by belng concerned abouL envlronmenL, promoLlng dlverslLy, servlng communlLles Lhrough cause
markeLlng.
/30,$5 %(3?,& @ neL beneflL boLh Lhe flrm and socleLy recelve from a flrm's:
1. LLhlcal pracLlces and 2. Soclally responslble behavlour

13,-. A& 8,.#&B 4&#,0$5 :'#$;,3<( ,- &#' *$(+'&%5$0'
:<2,-'22 '&#,02 - rules of conducL, values gulde behavlour, bellefs govern declslons. 1
sL
sLep creaLlng soclal proflL
-noLlons of rlghL/wrong dlffer beLween orgs and culLures . reduced by flrm's
"36' 3? '&#,02 @ wrlLLen sLandards of behavlour Lo whlch everyone ln orgs musL subscrlbe
-L.g. - eLhlcally accepLable behavlour for employees
Plgh CosLs of uneLhlcal MarkeLplace 8ehavlour
Consumerlsm: llghLlng 8ack
"3-2<C'(,2C @ soclal movemenL dlrecLed aL proLecLlng consumers from harmful buslness pracLlces
-MarkeLers: respond by volunLarlly maklng changes Lo prevenL boLh consumer anger, gvnL lnLervenLlon

4&#,02 ,- *$(+'&,-. *,D
MarkeLlng mlx sLraLegles cruclal Lo success achlevlng ob[ecLlves. LLhlcal conslderaLlons lnfluence MM declslons.
Maklng producL safe
rlclng producL falrly
E(,0' ?,D,-. @ lllegal buslness pracLlce, flrms declde ln advance on common prlce for producL
E(,0' 6,20(,C,-$&,3- @ charglng lower prlces Lo larger cusLomers
E(,0' .$<.,-. @ ralslng prlce of producL Lo Lake advanLage of popularlLy, uneLhlcal, legal
romoLlng Lhe producL eLhlcally
CeLLlng Lhe producL where lL belongs (Channels of dlsLrlbuLlon declslons)
/53&&,-. $553F$-0' @ fee pald ln exchange for agreelng Lo place Lhe manufacLurer's producLs on reLaller's
valuable shelf space, many feel uneLhlcal

13,-. A& 8,.#&B G H30<2 3- /30,$5 8'2%3-2,9,5,&7
/30,$5 ('2%3-2,9,5,&7 @ managemenL process ln whlch orgs engage ln acLlvlLles LhaL have a poslLlve effecL on
socleLy and promoLe Lhe publlc good
3 AcLlvlLles: => LnvlronmenLal sLewardshlp )> Cause markeLlng I> romoLlng culLural dlverslLy

=> /'(;,-. &#' 4-;,(3-C'-&B 4-;,(3-C'-&$5 2&'F$(62#,%
4-;,(3-C'-&$5 2&'F$(62#,% @ poslLlon Lake by orgs Lo proLecL envlronmenL as lL conducLs buslness acLlvlLles
J(''- C$(+'&,-. @ descrlbes efforLs by flrms Lo choose packages, producL deslgns, and oLher aspecLs of MM
LhaL are earLh frlendly buL sLlll proflLable ! creaLes envlronmenLally founded dlfferenLlal beneflL ln mlnds of
consumers

)> /'(;,-. /30,'&7B "$<2' *$(+'&,-.
"$<2' C$(+'&,-. @ sLraLegy of [olnlng forces wlLh a noL-for-proflL organlzaLlon Lo Lackle a soclal problem
-new Lra flrms make long-Lerm commlLmenL Lo Lackle soclal problem (e.g. - Avon Canada's llame agalnsL 8reasL Cancer)

I> /'(;,-. &#' "3CC<-,&7B E(3C3&,-. "<5&<($5 1,;'(2,&7
"<5&<($5 6,;'(2,&7 @ mgmL pracLlce LhaL acLlvely seeks Lo lnclude ppl of dlfferenL sexes, races, eLhnlc groups,
rellglons, sexual preferences ln orgs employees, cusLomers, suppllers, dlsLrlbuLlon channel parLners
-Lnsure markeLlng pollcles/hlrlng pracLlces glve ppl equal chance Lo work for/buy lLs producLs
Mk1C 2030: Chapter 14 - Deve|op|ng & Imp|ement|ng a Market|ng |an

"#$% & '( &
Why Deve|op a Market|ng |an?
Lnables buslness Lo seL prlorlLles regardlng markeLs lL wanLs Lo compeLe ln (market segments), cusLomers lL
wanLs Lo serve (target customers), how lL plans Lo serve Lhose cusLomers (market|ng m|x strategy)

What nappens When a 8us|ness Does not Deve|op a Market|ng |an?
underlylng goal of markeLlng sLraLegy/plan, creaLe compet|t|ve advantage for buslness - Lake whaL company
does well, ouLperform compeLlLlon, Lhus provldlng cusLomers wlLh a beneflL compeLlLlon cannoL

negaLlve Consequences of noL ueveloplng MarkeLlng lans
1. 8us|ness tends to dr|ft, underperform
2. "|e-|n-the-sky" th|nk|ng, but no forma| strategy
3. 8us|ness tends to waste resources try|ng one tact|c after another
4. 8us|ness |acks a "p|aybook"
S. No un|ty w|th|n orgs, slnce markeLlng plan provldes common foundaLlon for developmenL of funcLlonal plans

now to Deve|op Strong Market|ng |ans: 1he Market|ng |an 1emp|ate p470-471*
4 Ma[or SecLlons
1. Understand the marketp|ace
2. Des|gn market|ng m|x strateg|es
3. De||ver strateg|es v|a tact|ca| p|ans
4. Manage market|ng p|an efforts

11 Mlnor SecLlons
I. Lxecut|ve Summary
key challenges faclng buslness, key sLraLegles ln place Lo achleve ob[ecLlves, key expecLed ouLcomes
(flnanclal, non-flnanclal)
II. 1ab|e of Contents
III. Current Market S|tuat|on, how aLLracLlve lL ls, whaL plece we expecL Lo aLLaln, whaL sllce of markeL our
compeLlLors already have, oLher facLors LhaL my lmpacL ablllLy Lo creaLe value for cusLomers
IV. Lnv|ronmenta| Ana|ys|s, compeLlLlve landscape Lo assess SWC1 faclng currenL/poLenLlal compeLlLors.
V. Customer Ana|ys|s
VI. SWC1 Ana|ys|s
VII. Cb[ect|ves to be Ach|eved by Market|ng |an
VIII. Market|ng Strateg|es
Ik. 1act|ca| |ans
k. 8udgets and ro[ected rof|t]Loss Statement
kI. Market|ng |an Contro|

Dos and Don'ts |n Deve|op|ng a Strong Market|ng |an p474*
Mk1C 2030: Chapter S - Consumer 8uy|ng 8ehav|our

"#$% & '( )
Understand|ng Customers
Consumer behav|our - process lndlvlduals or groups go Lhrough Lo selecL, purchase, and use goods, servlces,
ldeas or experlences
-needs/wanLs can be saLlsfled only Lo exLenL LhaL markeLers undersLand why and how ppl buy producLs
Consumer declslon approaches:
PablLual (rouLlne) declslon maklng (pop)
LlmlLed problem solvlng
LxLended problem solvlng: (compuLer)
Invo|vement - (deLermlnes exLenL of efforL a person puLs lnLo decldlng whaL Lo buy), relaLlve lmporLance of Lhe
percelved consequences of a purchase Lo person
! Plgh vs. low lnvolvemenL declslons: more lnvolved ln declslon-maklng process, producLs percelved as
lmporLanL, pleasurable or rlsky
-erce|ved r|sk - bellef LhaL use of a producL has poLenLlally negaLlve consequences, flnanclal, physlcal or soclal
(e.g. - cloLhlng purchases may lead Lo negaLlve soclal consequences, soclal re[ecLlon)
-Low percelved rlsk = low lnvolvemenL declslon
-roducL dlsplay aL cashler used Lo lnfluence declslon maker (e.g. - gum)
-Plgh percelved rlsk = hlgh lnvolvemenL declslon
-8lsk reduced educaLlng consumer why producL ls besL before Llme of declslon (house, car)

Consumer Dec|s|on-Mak|ng rocess
Step 1: rob|em kecogn|t|on: process occurs when consumer sees slgnlflcanL dlfference beLween Lhelr currenL
sLaLe of affalrs and some deslred/ldeal sLaLe
MarkeLlng sLraLegy: encourage consumers Lo see LhaL exlsLlng sLaLe does noL equal deslred sLaLe
e.g. - sLlmulaLe Lo recognlze currenL sLaLe wlLh car commerclal, exclLemenL of ownlng new car
Step 2: Informat|on Search: process whereby consumer searches for approprlaLe lnfo Lo ldenLlfy opLlons Lo
solve problem
Cngolng process, ends wlLh cons|derat|on set: ldenLlflcaLlon of alLernaLlves for conslderaLlon
MarkeLlng sLraLegy: rovlde lnfo when and where consumers are llkely Lo search
e.g. - WebslLes, LargeLed adverLlslng 1v programs wlLh hlgh markeL vlewershlp, Lraln salespeople
Step 3: Lva|uat|on of A|ternat|ves: ldenLlfy feaslble alLernaLlves
Lva|uat|ve cr|ter|a: crlLerla consumers use Lo compare compeLlng producL alLernaLlves
MarkeLlng sLraLegy: undersLand crlLerla consumers use ln comparlng brands & communlcaLe own brand superlorlLy
e.g. - ConducL research Lo ldenLlfy crlLerla, adverLlslng LhaL lncludes rellable daLa on superlorlLy of brand
Step 4: roduct Cho|ce: Apply evaluaLlve crlLerla
a. neur|st|cs (menta| shortcuts) - Laklng advlce, prlce reflecLs quallLy" - chooslng cheapesL/mosL
expenslve brand, buylng one LhaL feels rlghL" - emoLlonal appeal.
-MosL common heurlsLlc: buylng brand you always buy Lhrough hablL or brand |oya|ty
(paLLern of repeaL producL purchases b/c bellef of brand superlorlLy)
b. CompensaLory sLraLegy vs. non-compensaLory sLraLegy: wllllng Lo make Lrade-offs Lo geL besL overall
deal (value) for needs "!"" $%&'' #$% &'() $# *&& +,-'('$. ()%*),/',(0
MarkeLlng sLraLegy: undersLand cholce heurlsLlcs used by consumers and provlde communlcaLlon LhaL
encourages brand declslon
Step S: ostpurchase Lva|uat|on: LvaluaLes quallLy of declslon made
Cogn|t|ve d|ssonance - regreL or buyer's remorse afLer maklng purchase, lncrease wlLh declslon
lmporLance & when oLher vlable brands ln conslderaLlon seL
-LvaluaLlon resulLs ln consumer sat|sfact|on]d|ssat|sfact|on deLermlned by overall feellngs/aLLlLude
person has abouL producL afLer purchaslng lL
-Pow well producL meeLs/exceeds ,12,-)*)'$.( deLermlne saLlsfacLlon, compare whaL Lhey boughL Lo a
2,%#$%3*.-, ()*.+*%+ creaLed by lnfo from markeLlng communlcaLlons, lnformal lnfo sources, eLc.
MarkeLlng sLraLegy: Lncourage accuraLe consumer expecLaLlons
Mk1C 2030: "#$%&'( ) * "+,-./'( 0.12,3 0'#$42+.(

"#$% & '( )
5&#'( 6'72-2+, 8(+7'--'-
leellng-based (emoLlonal/affecLlve declslons): buylng car b/c lL looks good, dress b/c lL's cuLe
lmpulse declslons: acLlng w/o glvlng a loL of LhoughL Lo declslon (buylng gum aL counLer)

9"0 :(2; (llgure 3.4)< useful way of looklng aL dlff declslon processes followed by consumers
-2 prlmary approaches Lo consumer declslon-maklng 1) Lhlnklng (cognlLlon 2) feellng (affecL)
-4 common declslon approaches: lnformaLlve, affecLlve, hablLual/responslve, self-saLlsfacLlon/lmpulse
declslons, ulffer ln order consumers learn, feel and acL abouL brands
-LxLended problem-solvlng represenLed ln C1, C2, consumers have emoLlonal responses/aLLachmenLs,
Lhen learn Lo declde Lo buy. ln C3, C4, consumers acL 1
sL
, Lhen evaluaLe (feellngs) Lhe ouLcomes.
-Model crlLlclzed for noL accounLlng for consumer experlence, negaLlve emoLlons.

3 CaLegorles =,>?.',7'- "+,-./'( 6'72-2+,-
@A =BCDEBFG =,>?.',7'- on Consumer ueclslons
$A 8'(7'%&2+, * process by whlch people selecL, organlze & lnLerpreL lnfo from ouLslde world. 8ecelve lnfo ln
form of !"#!$%&'#! (lmmedlaLe response of sensory recepLors - eyes, ears, nose, mouLh, flngers - Lo baslc sLlmull
as llghL, colour, sound)
-lmpresslons based on physlcal quallLles (e.g: Macbook deslgn)
-MarkeLer lssues Lo undersLand durlng process: Lxposure, percepLual selecLlon, lnLerpreLaLlon
Lxposure: SLlmulus musL be wlLhln range of ppl's sensory recepLors Lo be noLlced
ercepLual SelecLlon: Consumers choose Lo pay aLLenLlon Lo some sLlmull buL noL Lo oLhers - aware of
msgs LhaL speak Lo currenL needs
lnLerpreLaLlon: Meanlng ls asslgned Lo Lhe sLlmulus. lnfluenced by prlor assoclaLlons Lhe person has
learned.

HA I+&24$&2+, * lnLernal sLaLe LhaL drlves us Lo saLlsfy needs by acLlvaLlng goal-orlenLed behavlour
-Cnce we acLlvaLe a need, sLaLe of Lenslon ()&*"! consumer Loward some +'$, LhaL wlll reduce Lhls Lenslon by
ellmlnaLlng Lhe need
J2'($(7#1 +> ,'';- (Maslow) - caLegorles moLlves accordlng Lo 3 levels of lmporLance, mosL baslc needs
boLLom. SuggesLs LhaL before a person can meeL need ln glven level, musL flrsL (aL leasL parLlally) meeL
Lhose ln Lhe levels below.
hyslologlcal, SafeLy, 8elonglngness, Lgo needs, Self-AcLuallzaLlon
-Alderfer proposed revlslon Lo mlddle levels: LxlsLence (concern wlLh baslc maLerlal exlsLence requlremenLs),
8elaLedness (deslre for malnLalnlng lnLerpersonal relaLlons), CrowLh (lnLrlnslc deslre for personal developmenL)

7A G'$(,2,3 * change ln behavlour afLer galnlng lnfo/experlence
MarkeLers goal: 1each" consumers Lo prefer Lhelr producLs
0'#$42+.($? ?'$(,2,3 &#'+(2'- * consumer behavlour changed by exLernal evenLs or sLlmull
"?$--27$? 7+,;2&2+,2,3 * person percelves 2 sLlmull aL same Llme, Lhen Lransfers response from one
sLlmulus Lo anoLher. (L.g. - see ad of breaLhLaklng scene, so LhaL markeLer hopes you Lransfer poslLlve feellngs Lo
Lhe adverLlsed producL)
5%'($,& 7+,;2&2+,2,3 * people learn Lhelr acLlons resulL ln rewards/punlshmenLs, feedback acLs as
relnforcemenL for Lhe behavlour (L.g. - prlze boLLom of cereal)
! K&2/.?.- 3','($?2L$&2+, * good or bad feellngs assoclaLed wlLh producL wlll rub off" on oLher producLs
LhaL resemble lL. MarkeLers creaLe -)'(./% ,&#" "1%"#!&'#! so good feellngs Lransfer Lo new one.
"+3,2&24' ?'$(,2,3 &#'+(1 * lmporLance of lnLernal menLal processes LhaL vlews ppl as problem solvers who
acLlvely use lnfo Lo masLer Lhelr envlronmenL
CbservaLlonal learnlng (vlcarlous learnlng) - ppl waLch acLlons of oLhers and noLe whaL happens Lo Lhem
as a resulL, use lnfo Lo gulde Lhelr own behavlour
Mk1C 2030: "#$%&'( ) * "+,-./'( 0.12,3 0'#$42+.(

"#$% & '( )
56 7'(-+,$82&1 * SeL of unlque psychologlcal characLerlsLlcs LhaL conslsLenLly lnfluences Lhe way a person
responds Lo slLuaLlons ln envlronmenL
MarkeLers: ldenLlfy dlfferences ln personallLy Lo conLrlbuLe value Lo crafLlng markeLlng sLraLegles
3 ersonallLy LralLs relevanL Lo markeLlng sLraLegles:
26 lnnovaLlveness - degree Lo whlch person llkes Lo Lry new Lhlngs
226 Self-confldence - degree Lo whlch person has poslLlve evaluaLlon of hls/her ablllLles, lncludlng ablllLy
Lo make good producL declslons
2226 SoclablllLy - degree Lo whlch a person en[oys soclal lnLeracLlon
-MarkeLers Lry Lo creaLe !"#$% '(")*$#+,-,() Lo appeal Lo dlff Lypes of consumers
9'8: ;+,;'%& - composed of mlxLure of bellefs abouL one's ablllLles, observaLlons of one's own
behavlour, and feellngs abouL one's personal aLLrlbuLes ! exLenL Lo whlch person's self-concepL ls
poslLlve/negaLlve can lnfluence producLs Lhey buy
.(+/0()-((1 #%2("-,),$3 4 aLLempLs Lo sLlmulaLe poslLlve feellngs abouL Lhe self (Speclal k as
llfesLyle cholce)

'6 <3' 3(+.%- * deLermlnanL of producL caLegorles he/she wanLs
-5*$)61(" $*)-#+3,# - ppl aLLracLed Lo producLs/servlces LhaL remlnd Lhem of pasL experlences
-urchase preferences depend on poslLlon ln :$/281 82:' ;1;8' * llfe sLages ppl pass as Lhey grow older
-MarkeLers undersLand cycle Lo anLlclpaLe producL needs (Campbell's soup - moLhers on go)

:6 7-1;#+3($%#2;- * descrlbe acLlvlLles, aLLlLudes, lnLeresLs, oplnlons and llfesLyles of consumers
=2:'-&18' * paLLern of LasLes as expressed ln a person's preferences for acLlvlLles such as sporLs, lnLeresLs such as
muslc, oplnlons on pollLlcs
7,/()-8+( 1#"9(-,$3 4 sLraLegy LhaL recognlzes LhaL ppl can be grouped lnLo common markeL segmenLs based on
slmllarlLles ln llfesLyle preferences (beer/car markeLers - show consumers how brands flL wlLh way llve/llke Lo llve)

>6 9?@A<@?BC<= ?,:8.',;'- +, "+,-./'( D';2-2+,-
-When/where consumers shop lnfluence purchase cholces
$6 7#1-2;$8 E,42(+,/',& * messages/feellngs abouL belng ln sLore lnfluences on declslons
2 dlmenslons: Arousal, pleasure - deLermlne lf shopper wlll acL poslLlvely/negaLlvely Lo sLore envlronmenL
-L.g.: ulsney World - alms Lo provlde conslsLenL doses of carefully calculaLed sLlmulaLlon Lo paLrons
1hemed envlronmenL - shopplng and eaLlng lnLo 1 (e.g. - 8alnforesL Cafe)
-Muslc. ln-sLore dlsplays - aLLracL aLLenLlon ln sLore envlronmenL
lace-based medla - LargeLs consumers ln alrporLs, docLors' offlces, campuses, healLh clubs

F6 @2/' - how much Llme one has Lo make declslon, consumers' llmlLed resource
-Consumers responslve Lo markeLlng lnnovaLlons LhaL allow Lhem Lo save Llme (e.g. - 1 hr phoLo processlng,
bagged salads, onllne shopplng)

G6 9B"?<= ?,:8.',;'- +, "+,-./'( D';2-2+,-
$6 ".8&.(' * socleLy's personallLy, values, bellefs, cusLoms & LasLes valued by a group of ppl
-CulLural values: deeply held bellefs abouL rlghL/wrong ways Lo llve
-Consumer culLure lnfluences buylng declslons, naLlonallsm has led markeLers Lo recognlze value of ldenLlfylng
producLs wlLh Canada/Canadlan culLural symbols (Molson: l am Canadlan)
-CAn advanLage (lrench vs. Lngllsh) /uS culLures dlffer ln perspecLlves, lmpllcaLlons for consumer-declslon maklng
-Canadlans = forL people, Amerlcans = homesLeaders
-SecurlLy, safeLy of llvlng ln a forL. SLrlve Lo flL ln, prlze collaboraLlon, consensus, compromlse. learful of
change, conLrolllng of expendlLures
-Llfe, llberLy and pursulL of happlness. Llve Lo sLand ouL and value leadershlp, lnslghL and acLlon. MgmL
sLyles - aggresslve, compeLlLlve advanLage
Mk1C 2030: "#$%&'( ) * "+,-./'( 0.12,3 0'#$42+.(

"#$% & '( &
56 7.58.9&.('- * group, coexlsLlng wlLh oLher groups ln a larger culLure, whose members share dlsLlncLlve seL of
bellefs/characLerlsLlcs (e.g. - rellglous, eLhnlc, reglonal, eLc.)
:.9&28.9&.($9 /$(;'&2,3 * LargeLlng consumers ln eLhnlc subculLures, slnce Canada = dlverse socleLy
-Men vs. women - dlff needs, bellefs, values, approaches Lo purchase declslons

86 7+82$9 89$-- * overall rank of people ln socleLy
-roducLs/sLores deslgned Lo appeal Lo people ln a speclflc soclal class - slmllar occupaLlons, lncome levels,
common LasLes cloLhlng, sLyles, lelsure, pollLlcal/rellglous bellefs, valued acLlvlLles/goals
-Worklng class: evaluaLe producLs ln uLlllLarlan Lerms (sLurdlness or comforL - raLher Lhan sLyle/fashlon.
uon'L Lry new producLs/sLyles - prefer predlcLablllLy Lo novelLy)
7&$&.- -1/5+9- * producLs Lo slgnal membershlp ln a deslrable soclal class (Luxury goods)


<(+.% 0'#$42+.(
-ueclslons made by groups dlffer from Lhose made by each lndlvldual
-CfLen conslderaLlon of rlsk alLernaLlves lncreases ln group seLLlngs. Shopplng behavlour - Lend Lo make more
unplanned purchases, buy more.

='>'(',8' 3(+.% * acLual/lmaglnary lndlvldual/group a consumer wanLs Lo please or lmlLaLe
-Small (lndlvldual - know or don'L know) or Large (organlzaLlon)
"+,>+(/2&1 * change ln bellefs/acLlons as a reacLlon Lo real/lmaglned group pressure
-ressures Lo conform lnLense/escalaLes as more group members cave ln": process = bandwagon effecL
7'? (+9'- * socleLy's expecLaLlons of approprlaLe aLLlLudes, behavlours, appearance for men/women
-Many producLs Lake on m/f aLLrlbuLes, consumers assoclaLe Lhem wlLh m/f

@%2,2+, 9'$A'( * person who lnfluences oLhers' aLLlLudes or behavlours by Lhelr experLlse ln producL caLegorles
-valuable lnfo sources, knowledge of producL caLegorles, ofLen flrsL Lo buy new producLs, absorb much of rlsk
-8oLh (+) and (-) lnfo abouL producL performance, soughL by oLhers for advlce

B''(C&+CB''( DC"+//'(8'
B''( &+ %''(E commonly, "+,-./'(C&+C8+,-./'( F"G"6 'C8+//'(8' * onllne communlcaLlons/purchases LhaL
occur among lndlvlduals w/o dlrecLly lnvolvlng manufacLurer/reLaller

H2(&.$9 8+//.,2&2'- * dlfferenL forms
$6 :.9&2C.-'( A.,3'+,- * cyber envlronmenL ln whlch ppl soclally lnLeracL Lhrough role/game playlng
56 =++/-E (2,3- $,A 92-&- * chaL rooms, orgs of relaLed homepages, groups of ppl on an emall llsL who share lnfo
86 0+$(A- * onllne communlLles organlzed around lnLeresL-speclflc elecLronlc bulleLln boards
A6 I.8&2+, -2&'- * buy, sell, barLer
'6 B(+A.8& ($&2,3 -2&'-
>6 B(+&'-& -2&'-


Mk1C 2030: "#$%&'( ) * +(,$-./$&.0-$1 234.-, 2'#$5.03(

"#$% & '( )
236.-'66 7$(8'&69 234.-, $-: ;'11.-, <#'- ;&$8'6 $(' =.,#
236.-'66>&0>?36.-'66 @$(8'&.-, * markeLlng of goods/servlces and organlzaLlonal cusLomers buy for purpose
oLher Lhan personal consumpLlon - for resale or Lo supporL Lhelr operaLlons
8-2-8 cusLomers: manufacLurers, wholesalers, reLallers, hosplLals, college, governmenL agencles
8-2-8 markeLs aka organlzaLlonal markeLs, 4x larger Lhan consumer markeLs

ulfferences beLween CrganlzaLlonal and Consumer MarkeLs (See llgure 6.1)
CommonallLy: llrms ldenLlfy cusLomer needs and develop markeLlng mlx Lo saLlsfy Lhose needs
$A 731&.%1' ?34'(6 * purchased made by someone oLher Lhan user of producL, declslons made by several pl
(e.g. - classroom chalrs - saLlsfy sLudenLs, faculLy)
?A B 0C D36&0@'(6 * 8uslness markeLers have llmlLed # of large buyers
DA ;./' 0C %3(D#$6'6 * large, cosLly
:A E'0,($%#.D D0-D'-&($&.0- * buyers ofLen geographlcally concenLraLed ln cerLaln areas

8uslness-Lo-8uslness uemand, dlffers from consumer demand. MarkeLers forecasL/markeLlng sLraLegles
$A F'(.5': :'@$-: * demand for buslness/orgs producLs LhaL ls derlved from demand for consumer g&s
-ln response Lo consumer markeL demand
>Whereas, consumer demand: dlrecL connecLlon need & saLlsfacLlon of need
-MarkeLers: alerL Lo changes ln consumer Lrends LhaL effecL 8-2-8 sales
L.g.: demand for educaLlon ! derlved u for LexLbooks ! uu for paper ! uu for pulp ! uu foresLry
producLs
?A G-'1$6&.D :'@$-: * demand for producLs does noL change b/c of lncreases/decreases ln prlce
-L.g. - producL relles on many componenL parLs Lo cars. no change Lo consumer demand.
-LlasLlc demand - manufacLurer of consumer passes Lhe prlce lncrease Lo consumer. Change Lo
consumer demand. L.g. - producL relles on few maLerlals.
DA H13D&3$&.-, :'@$-: * small changes can creaLe large changes ln buslness demand
IDD'1'($&.0- %(.-D.%1' (mulLlpller effecL) - a small change ln consumer demand can creaLe a large
change ln 8-2-8 demand
Llfe expecLancy of producL - reason for flucLuaLlng demand (buylng large machlnery lnfrequenLly)
Changes ln lnvenLory pollcles - creaLe demand flucLuaLlons
:A J0.-& :'@$-: * resulL of 2+ goods belng necessary Lo creaLe a producL (e.g. - Llres & baLLerles for cars)

"1$66.C4.-, 236.-'66>&0>236.-'66 7$(8'&6
-lor buslness markeLers: ldenLlfles flrms LhaL purchase slmllar producLs, have slmllar buylng pracLlces. Pelps
markeLers develop sLraLegles LhaL LargeL dlfferenL orgs cusLomers.
K0(&# I@'(.D$- G-:36&(4 "1$66.C.D$&.0- ;46&'@ LKIG";A * numerlcal codlng sysLem LhaL Lhe uS/Canada/Mexlco
use Lo classlfy flrms lnLo deLalled caLegorles accordlng Lo Lhelr buslness acLlvlLles & shared characLerlsLlcs
-1ool for classlfylng 8-2-8 cusLomers, Lo assess poLenLlal markeLs & deLermlne how well Lhey are dolng
compared Lo Lhelr lndusLry group as a whole, Codes for lndusLry, lndusLry group, subsecLor, secLor

$A M(0:3D'(6 * purchase producLs for use ln Lhe producLlon of oLher g&s sold Lo make a proflL
>CusLomers for: raw maLerlals, goods manufacLured by oLher producers
?A N'6'11'(6 * buy flnlshed goods for purpose of reselllng, renLlng or leaslng Lo oLher buslnesses
-lnclude: reLallers, wholesalers
DA E05'(-@'-& @$(8'&6 * federal, provlnclal, local governmenLs LhaL buy g&s Lo carry ouL publlc ob[ecLlves & Lo
supporL Lhelr organlzaLlons, largesL slngle buslness or orgs markeL ln Canada
-CusLomers for: snowplows, garbage Lrucks, LranslL buses . and famlllar/less expenslve: rlnLers, pens
-lor buslness markeLers: selllng g&s Lo governmenLs dlff from $A and ?A
Mk1C 2030: "#$%&'( ) * +(,$-./$&.0-$1 234.-, 2'#$5.03(

"#$% & '( )
-CovernmenL buyers musL develop deLalled speclflcaLlons and obLaln 607%'&.&.5' 8.9: (poLenLlal
suppllers musL submlL deLalled proposals for proposed purchase, flrm wlLh besL offer gesLs bld. 8equlred
by law Lo accepL lowesL bld)

;0&<=0(<%(0=.& .-:&.&3&.0-: * organlzaLlons LhaL operaLe for charlLable, educaLlonal, communlLy & oLher publlc
servlce goals and buy g&s Lo supporL Lhese funcLlons

>#' ;$&3(' 0= 23:.-':: 234.-,
-1o be successful ln 8-2-8 markeL: develop markeLlng sLraLegles LhaL meeLs needs of orgs cusLomers beLLer Lhan
compeLlLlon. MarkeLs musL undersLand buylng behavlour Lo parLlclpaLe ln buyer's declslon process from sLarL.

>#' 234.-, ?.&3$&.0-
234 61$:: * 1 of 3 classlflcaLlons of buslness buylng slLuaLlons LhaL characLerlze Lhe degree of Llme & efforL
requlred Lo make a declslon ln a buylng slLuaLlon
@A ?&($.,#& ('834 * buylng slLuaLlon ln whlch buslness buyers make rouLlne purchases LhaL requlre mlnlmal
declslon maklng
-L.g. - compuLer, paper, shlpplng carLons, cleanlng compounds, purchased before, rouLlnely reorders
-8uslness markeLers: CulLlvaLe/malnLaln relaLlons wlLh cusLomers LhaL wlll lead Lo sLralghL buys
-Suppller: Sales volume up, selllng cosLs down
BA C09.=.'9 ('834 * buylng slLuaLlon classlflcaLlon LhaL buslness buyers use Lo caLegorlze a prevlously made
purchase LhaL lnvolves some change and LhaL requlres llmlLed declslon maklng
-Shop around for suppllers w/ beLLer prlce, quallLy, dellvery Llmes, new needs for producLs already buys
DA ;'E<&$:F 834.-, * a new 8-2-8 purchase LhaL ls complex/rlsky and requlres exLenslve declslon maklng
-1
sL
Llme purchase, no prevlous experlence on whlch of base declslon, rlsk, uncerLalnLy
-8uyers: gaLher lnfo abouL quallLy, prlce, dellvery, servlce from poLenLlal suppllers
-Suppller: new-Lask buylng = challenge & opporLunlLy
-MarkeLers know: develop close worklng relaLlonshlp w/buslness buyer

>#' G(0='::.0-$1 234'(
8-2-8 markeLers need Lo undersLand who handles buylng for buslness cusLomers ([usL as markeLers for
consumer g&s undersLand Lhelr consumers)
<1ralned professlonal buyers carry ouL buylng ln 8-2-8 markeLs, called: purchaslng agenLs, procuremenL offlcers,
dlrecLors of maLerlals managemenL
-urchases can range ln prlce/slgnlflcance, Lend Lo focus on economlc facLors beyond lnlLlal prlce of producL
-SomeLlmes buslness buyers, llke consumers, make declslons based on emoLlons, brand loyalLy, long-Lerm
relaLlons. Lven age, lncome, educaLlon, personallLy and aLLlLudes affecL buyer's declslons.
-MarkeLlng communlcaLlons = cruclal role ln buyer's declslon process (e.g. - vendors' salesppl)
-key facLor ln purchase declslons: rlsk
"'-&($1./'9 %3(6#$:.-, * buslness buylng pracLlce ln whlch orgs purchaslng deparLmenL does Lhe buylng for all
of company. llrm has more buylng power and can geL besL prlces. (e.g. - WalmarL)
-rofesslonal buyers who work ln C offlces become experLs from speclallzaLlon

>#' 234.-, "'-&('
234.-, "'-&(' * group of ppl ln orgs who lnfluence and parLlclpaLe ln purchaslng declslons
lluld naLure of 8uylng CenLre
-Cross-funcLlonal Leam of declslon makers, members have experLlse/lnLeresL ln declslon
-L.g.: PosplLal declslon Lo purchase oxygen masks (physlclans, dlrecLor of nurses, purchaslng agenLs)
-MarkeLers: musL conLlnually ldenLlfy whlch employees are lnvolved ln every purchase and develop relaLlons
wlLh Lhem all
Mk1C 2030: "#$%&'( ) * +(,$-./$&.0-$1 234.-, 2'#$5.03(

"#$% & '( )
8oles ln 8uylng CenLre
-rofesslonal buyer may make purchase & declslon C8 role ls Lo gaLher lnfo for anoLher who wlll make declslon
-lor suppllers: buylng cenLre concepL compllcaLes markeLlng process - may have Lo provlde dlff Lypes of lnfo Lo
saLlsfy lnLeresLs of all parLlclpanLs (nurslng sLaff - packaglng, physlclans - deslgn, purchaslng dpmL - prlce/dellvery schedules)
-Also need Lo deLermlne who has mosL lnfluence on declslon, who plays key role of declslon maker &
who makes purchase
6 8oles ln buylng cenLre:
67 8-.&.$&0( * recognlzes LhaL purchase needs Lo be made
oLenLlal player: producLlon employee, sales manager, almosL anyone
MarkeLer: Lnsure Lhey are aware of lmproved producLs Lhey offer
97 :;'( * lndlvldual(s) who ulLlmaLely use producL
oLenLlal player: producLlon employee, sales manager, almosL anyone
MarkeLer: lnform users of producLs abouL beneflLs over compeLlLors
<7 =$&'>''%'( * conLrols flow of lnfo Lo oLhers ln orgs
oLenLlal player: 8uyer/purchaslng agenL
Salespeople: uevelop/malnLaln sLrong personal relaLlons
?7 8-@13'-A'( * affecLs declslon by glvlng advlce & sharlng experLlse
oLenLlal player: Lnglneers, quallLy conLrol experLs, Lech speclallsLs, ouLslde consulLanLs
MarkeLer: ldenLlfy Lhem and convlnce Lhem of producL superlorlLy
B7 C'A.D'( * makes flnal purchase declslon
oLenLlal player: urchaslng agenL (rouLlne purchase), manager, CLC (complex purchase)
)7 234'( * execuLes purchase declslon
oLenLlal player: urchaslng agenL

E#' 23;.-';; 234.-, C'A.;.0- F(0A';; (See slldes for ouLllne)
-Members of buylng Leam go Lhrough sLages ln declslon-maklng process
-Slmllar Lo consumer declslon process, buL more complex

G&'% 6H F(0I1'J K'A0,-.&.0-
-urchase can solve a problem
-SLralghL rebuy purchase - flrm runnlng ouL of supply, buyer reorders, declslon-process ends
-Modlfled rebuy purchase - wanLlng Lo replace ouLdaLed equlpmenL from changes or markeLlng communlcaLlon
-new-Lask purchase - flrm wanLs Lo enhance lLs operaLlons
SLep 2: lnformaLlon Search (for oLher Lhan sLralghL rebuys)
-8uylng cenLre searches for lnfo abouL producLs/suppllers
-Sources: Lrade magazlnes, [ournals, ouLslde consulLanLs, markeLlng communlcaLlon from suppllers/mfcLrers
-MarkeLers ([usL as consumer markeLlng) - ensure lnfo avallable when & where buslness cusLomers wanL lL
ueveloplng producL speclflcaLlons: 8uslness buyers ofLen develop S Lo lay ouL exacL requlremenLs
CbLalnlng proposals: 8uyer obLalns wrlLLen or verbal proposals or !"#$ from poLenLlal suppllers

G&'% <H L5$13$&.0- 0@ M1&'(-$&.5';
-8uylng cenLre assess proposals
-rlclng - prlmary conslderaLlon: dlscounL pollcles, reLurn pollcles, cosL of repalr/malnLenance, Lerms of
paymenL, cosL of flnanclng
-MarkeLers ofLen make formal presenLaLlons/producL demonsLraLlons Lo buylng cenLre

G&'% ?H F(0D3A& $-D G3%%1.'( G'1'A&.0-
-urchase declslon, prlce, quallLy, rellablllLy, durablllLy
Mk1C 2030: "#$%&'( ) * +(,$-./$&.0-$1 234.-, 2'#$5.03(

"#$% & '( &
637& .- &.8' 96:;< * lnvenLory managemenL sysLem ensures consLanL supply Lhrough preclsely Llmed dellverles
[usL when needed
-lor manufacLures resellers: cholce may be whose suppller locaLlon ls closesL
=.-,1' 703(>.-, * buylng parLlcular producL from one suppller (frequenL dellverles of speclallzed producLs)
AdvanLages: negoLlaLe prlces, conLracLs. Lowers admln cosLs (few lnvolces, purchase orders)
?31&.%1' 703(>.-, * buylng parLlcular producL from many suppllers
-Suppller selecLlon may be based on ('>.%(0>.&4 * Lradlng parLnershlp ln whlch 2 flrms agree Lo buy from one
anoLher
-+3&703(>.-, * obLaln ouLslde vendors Lo provlde g&s LhaL oLherwlse mlghL be supplled lnhouse
-@'5'(7' 8$(A'&.-, * buyer-seller parLnershlp ln whlch a buyer flrm shapes a suppller's producLs and operaLlons
Lo saLlsfy lLs needs

=&'% BC D07&%3(>#$7' E5$13$&.0-
-8uyer surveys users Lo deLermlne saLlsfacLlon wlLh producL and lnsLallaLlon/dellvery/servlce provlded by
suppller
-ueLermlnes wheLher Lo keep or drop suppller
-Many supplles conducL own performance revlews

E1'>&(0-.> 237.-'77F&0F237.-'77 "088'(>'
237.-'77F&0FG37.-'77 92H2< 'F>088'(>' * lnLerneL exchanges beLween 2 or more buslnesses or organlzaLlons
-Lxchanges of lnfo, producLs, servlces and paymenLs
-SlmplesL form: lnLerneL provldes onllne caLalogue of producLs LhaL buslnesses need
-Allows buslnesses Lo reach new markeLs
-Allows buslness markeLers Lo llnk dlrecLly Lo suppllers, facLorles, dlsLrlbuLors and cusLomers reduclng Llme for
order/dellvery, Lracklng sales, feedback

lnLraneLs, LxLraneLs, rlvaLe Lxchanges, and 8uylng Croups
:-&($-'&7 * lnLernal corporaLe communlcaLlon neLwork LhaL uses lnLerneL Lechnology Lo llnk company
deparLmenLs, employees and daLabases
EI&($-'& * when lnLraneL ls opened Lo auLhorlzed exLernal users
-MarkeLers allow suppllers, dlsLrlbuLors, oLher auLhorlzed users Lo access daLa LhaL company makes
avallable
-Allow companles Lo save $ and bulld beLLer relaLlons
D(.5$&' 'I>#$-,'7 * sysLems LhaL llnk an lnvlLed group of suppllers and parLners over Lhe Web
-Allows companles Lo collaboraLe wlLh suppllers Lhey LrusL - w/ sharlng senslLlve lnfo wlLh oLhers
234.-, ,(03%7 * coordlnaLlon of purchaslng among member orgs Lo reallze economles of scale and oLher
efflclencles
-CooperaLlve purchaslng efforL among orgs LhaL lndlvldually may be Loo small Lo command volume
dlscounLs or en[oy oLher economles of scale. ool purchases

SecurlLy lssues
-82C and 828 e-commerce companles worry abouL !"#$%&#'(!#')& & ensurlng LransacLlons are secure
Mk1C 2030: Chapter 3 - Market Segmentat|on and os|t|on|ng

"#$% & '( )
1he Concept of Segmentat|on
Market fragmentat|on - when people's dlverse lnLeresLs & backgrounds have dlvlded Lhem lnLo dlff consumer
groups wlLh dlsLlncL needs/wanLs
MarkeLers selecL a target market|ng strategy - dlvlde LoLal markeL lnLo dlff segmenLs based on cusLomer
characLerlsLlcs, selecL 1 or more segmenLs and develop producLs Lo meeL Lhe needs of Lhose speclflc segmenLs
-MarkeLers ldenLlfy key groups ln markeL, choose whlch group(s) Lo focus on (LargeL), declde how Lhey wanL Lhelr brand Lo
compeLe and be known by Lhese consumers (poslLlonlng) and deslgn markeLlng programs (make markeLlng mlx declslons)
Lo creaLe producL offers LhaL appeal Lo chosen LargeL groups

S Steps |n 1arget Market|ng rocess
1) Se|ect Markets
a) Def|ne market compeLlng ln: Lyplcally done aL sLraLeglc plannlng level of orgs
b) Understand customers needs & wanLs, beneflLs, feaLures and aLLrlbuLes soughL, and purchase/consumpLlon
beahavlour

2) Market Segmentat|on
Segmentat|on - process of dlvldlng larger markeL lnLo subgroups, where wlLhln groups ppl share 1 + characLerlsLlcs
CrlLerla for ldenLlfylng MarkeL SegmenLs:
1. S|m||ar enough w|th|n group ln producL needs/wanLs so same producL offers appeal Lo mosL
2. D|fferent enough between the groups. SegmenL dlfferences requlre dlff producL, prlclng, dlsLrlbuLlon,
communlcaLlon sLraLegles Lo creaLe a producL offer LhaL appeals Lo each segmenL.
3. Large enough
4. Measurab|e market where ppl ln segmenL have "#$%&'()*+ ",-.$: auLhorlLy, wllllngness, ablllLy Lo
make purchase declslon
S. keachab|e ln whlch markeLers able Lo ldenLlfy consumers or orgs cusLomers ln segmenL and
communlcaLe producL offer ln cosL effecLlve manner

A) IDLN1II GkCUS: GLCGkAnIC, 8LnAVICUkAL, SCnCGkAnIC, DLMCGkAnIC SLGMLN1A1ICN
Segmentat|on var|ab|es - bases for segmenLaLlon used Lo group consumers lnLo acLlonable segmenLs
1) 8ehav|oura| segmentat|on: Lechnlque LhaL dlvldes consumers lnLo segmenLs based on how Lhey acL Loward,
feel abouL, or use a producL/servlce
|) 8enef|t segmentat|on (value segmenLaLlon) - segmenLaLlon approach where consumers are grouped by Lhe
beneflLs Lhey seek ln a producL caLegory
L.g.: for resLauranL lndusLry segmenLs - convenlence seekers, fun seekers, healLh-orlenLed, flne-dlnlng
experlence seekers, novelLy seekers, cosL-orlenLed, famlly-orlenLed, sLaLus-orlenLed)
||) roduct usage segmentat|on - segmenLaLlon approach where groups ldenLlfled based on how Lhey use a
producL or how much Lhey use lL
-80]20 ru|e: 20 of purchasers accounL for 80 of producL's sales, makes more sense Lo focus on
smaller # of ppl who are heavy users of a producL raLher Lhan larger casual users
lll) user/non-user segmenLaLlon approach - Lo reward currenL users
2 llmlLaLlons: non-users ofLen noL clearly ldenLlflable, currenL users may noL be homogenous group
lv) Usage occas|ons - lndlcaLor used based on when consumers use Lhe producL mosL (Llme of day, holldays,
buslness funcLlon, casual slLuaLlon) L.g.: CreeLlng cards & holldays







Mk1C 2030: "#$%&'( ) * +$(,'& -'./'0&$&120 $03 4251&12010.

"#$% & '( )
67 4589#2.($%#19 5'./'0&$&120 * segmenLaLlon approach LhaL groups ppl based on Lhelr aLLlLudes, bellefs,
values, llfesLyles or oLher psychologlcal orlenLaLlons
17 LlfesLyles - powerful segmenLaLlon varlable, capLure behavloural, psychographlc, demographlc characLerlsLlcs
LhaL reflecL how dlff groups of ppl llve, whaL Lhey care abouL, how Lhey behave
-LlfesLyle segmenLs examples: ?upples (young urban professlonals), ulnks (dual lncome, no klds),
Shredders (boarders), Cranolas (earLhy, envlronmenLally concerned, peacenlks)
-roducL communlcaLlng Lo Lhese segmenLs by showlng how brand supporLs/conslsLenL wlLh llfesLyle
-L.g.: beer and car commerclals - demonsLraLe whaL your llfe (soclal llfe) would be llke lf you adopLed
parLlcular brand. C8 whaL klnd of ppl drlve (or should wanL Lo drlve) Lhelr cars
use of psychographlc sysLems such as :;<- =:$>?'5 $03 <1@'5&8>'57 - uS psychographlc sysLem LhaL dlvldes ppl
lnLo 8 segmenLs, A0B1(20195 - Canadlan verslon, 12 Lrlbes"
-12 Lrlbes lnclude: 8aLlonal 1radlLlonallsLs (moLlvaLed by flnanclal lndependence, securlLy, sLablllLy),
Soclal PedonlsLs (moLlvaLed by experlence seeklng, lmmedlaLe graLlflcaLlon)
-Pelps ldenLlfy consumers mosL llkely Lo be lnLeresLed ln cerLaln Lypes of producLs, servlces, experlences
Canadlan based llfesLyle scheme: C2>3@$(D 5'./'0&5 ldenLlfles 6 groups of Canadlan adulLs: sLrucLured,
dlsconLenLed, fearful, resenLful, assured, carlng (llgure 3.4)

)7 E'/2.($%#19 segmenLaLlon - varlables LhaL descrlbe ob[ecLlve characLerlsLlcs of populaLlon or group
-uemographlc varlables: age, sex, lncome, famlly sLrucLure, soclal class, eLhnlclLy, educaLlon
-uemographlcs exLremely useful for descrlblng markeL segmenLs, dlrecLlng communlcaLlon messages
-Cenerally llmlLed as prlmary basls for segmenLaLlon, noLable expecLaLlons
L.g. SegmenLlng muslc markeL by psychographlc varlables and Lhen use age and oLher varlables Lo
descrlbe each of Lhe psychographlc groups creaLed (Age solely would suggesL same age caLegory have
slmllar buylng behavlour wlLh respecL Lo muslc)
17 -'F - cloLhlng, fashlon, fooLwear, fragrance lndusLrles
117 ;.' - less useful for ldenLlfylng dlfferences ln brand preferences Lhan for ldenLlfylng producL caLegory
preferences
GH$D8 H22/'(5 - largesL age segmenL ln Canada, born beLween 1947-1966 (healLhwaLch servlce
Shoppers, lelsure), 8aby 8usL (1967-1979), 8aby 8oom Lcho (1980-1993) (college - beer), Mlllennlum
8usLers (1996-2010) (La Senza Clrl)
1117 I$/1>8 5&(?9&?(' - sLage of famlly llfe cycle Lhey occupy
-Such as Leens, young adulLs, marrled wlLh chlldren empLy nesLers: unllkely Lo need same producLs ln
same quanLlLles
-L.g.: people who llve along - slngle porLlon frozen, prepared foods
1B7 J092/' $03 5291$> 9>$55 * buylng power, low-mlddle-hlgh C8 even mlxLure
B7 A&#0191&8 * mulLlculLural approach Lo markeLlng acLlvlLles
-lmparL on magazlnes, radlo, 1v shows, food, apparel, lelsure
-lrench Canadlans, Aborlglnal, 8rlLlsh. Cerman, lLallan, Chlnese, SouLh Aslan
-L.g. - 1roplcana ads Lo Chlnese Canadlans, avold #4 (means deaLh)
B17 C'2.($%#8 * reglonal dlfferences
C'23'/2.($%#8 - segmenLaLlon Lechnlque LhaL comblnes geography wlLh demographlcs
-pl who llve near one anoLher share slmllar characLerlsLlcs
-S?1L: Canadlan geodemographlc sysLem, classlfles Canadlan consumers ln 60 clusLers based
on posLal code & demographlc lnfo





Mk1C 2030: "#$%&'( ) * +$(,'& -'./'0&$&120 $03 4251&12010.

"#$% & '( )
SegmenLlng 8uslness MarkeLs, loglc same as consumer markeL however varlables dlffer
6%'($&10. 7$(1$89'5 * bases for segmenLaLlon, producL Lechnology used, buslness cusLomer's degree of
Lechnlcal, flnanclal, or operaLlons experLlse, and wheLher Lhe prospecL ls a currenL user or non-user of producL

:03;5&(1$9 %5<=#2.($%#1=5 * appllcaLlon of psychographlcs Lo Lhe buslness-Lo-buslness conLexL
-undersLandlng buyers (purchaslng agenLs or mulLlple people ln buylng cenLre) Lo help salespeople beLLer
undersLand Lhelr one-on-one relaLlonshlps wlLh cllenLs
-SegmenL buslness markeLs by mlsslon, goals, values of an orgs/mgmL Leam slnce purchase/consumpLlon
declslons/behavlors are llkely Lo be conslsLenL wlLh Lhose mlsslons
CrganlzaLlonal uemographlcs: help buslness markeLers undersLand needs/characLerlsLlcs of poLenLlal cusLomers

>? @A-"B:>A C4B6D:EA? FGA HB6I4-J KG6L KGMFL KGANL KGABAL KGO
uevelop 5'./'0& %(2P19' * descrlpLlon of Lyplcal cusLomer ln each segmenL . so lL can be evaluaLed and elLher
be LargeLed or re[ecLed
lramework for CreaLlng 8lch SegmenL roflles (llgure 3.3)
1) Who ls ln Lhe segmenL (uslng demographlcs, psychographlcs, geographlc varlables)
2) WhaL people or orgs ln Lhls segmenL wanL (beneflLs, feaLures, aLLrlbuLes) and why (needs, moLlvaLlons)
3) When and where Lhey expecL Lo buy and use Lhe producL
4) Pow Lhey Lyplcally buy Lhe producL (such as purchase declslon process, lnfluences, sources of lnfo, medla
preferences)
3) Pow Lhey Lyplcally use Lhe producL (consumpLlon behavlour)
-Also lncluded: Slze esLlmaLe of segmenL, expecLed growLh raLe
-+$(,'& %2&'0&1$9 * used Lo esLlmaLe slze, growLh of segmenL, maxlmum demand expecLed among
consumers ln segmenL
-CreaLed based on experlence, [udgmenL, and markeL research/analyLlcal Lools Lo verlfy proflle assumpLlons
-roflles for selecLed segmenLs developed ln much more deLall and basls for markeLlng mlx declslons

)? +$(,'& F$(.'&10.
M? AQMEIMFA -AH+ANF MFFBM"F:QANA--R -:SAL HB6KFGR -FBMFAH:" D:FL "6+4AF:F:QA 6B "6+4MBMF:QA
M@QMNMFMHAR EAQAE 6D "6+4AF:F:6NR @ADAN@M>:E:FO
-1he consumer or cusLomer group(s) selecLed are Lhe flrm's &$(.'& /$(,'&C5? * group LhaL a markeLlng orgs
focuses on when developlng markeLlng programs
>? @A":@A KG:"G 6NAC-? F6 FMBHAF
3 CrlLerla for chooslng LargeL markeL segmenLs (llgure 3.6): 1. SegmenL Slze & CrowLh 2. LxLernal LnvlronmenL
3. lnLernal LnvlronmenL

1argeLlng SLraLegy
T? I031PP'('0&1$&'3 C/$55? &$(.'&10. 5&($&'.< * appeallng Lo broad specLrum of people (Wal-MarL)
-LfflclenL, slnce producLlon, research, promoLlon cosLs beneflL from economles of scale - cheaper Lo develop 1
producL/adverLlslng campalgn Lhan Lo choose several LargeLs & creaLe separaLe producLs or messages for each
-Company musL be wllllng Lo beL LhaL same producL/msg wlll appeal Lo many cusLomers
-Companles wlLh new-Lo-Lhe-world lnnovaLlons pracLlce undlfferenLlaLed LargeLlng, however segmenLs ln Lhese
markeLs qulckly develop and company changes Lo dlfferenLlaLed

U? @1PP'('0&1$&'3 &$(.'&10. 5&($&'.< * developlng 1 or more producLs for each of several dlsLlncL cusLomer
groups and maklng sure Lhese offerlngs are kepL separaLe ln markeLplace
-L.g.: L'Creal: Cffer several producL llnes aL dlff prlces - LargeLs luxury markeL and less expenslve offerlngs
-L.g.: &C laundry deLergenLs focus on dlff laundry deLergenL segmenLs

Mk1C 2030: Chapter 3 - Market Segmentat|on and os|t|on|ng

"#$% & '( )
3) Concentrated target|ng strategy - focuslng flrm's efforLs on offerlng 1 or more producLs Lo slngle segmenL
-CfLen useful for smaller flrms LhaL don'L have Lhe resources or deslre Lo be all Lhlngs Lo all people
-L.g. - Pard Candy markeLs llne of nallpollsh, and oLher producLs Lo 20-someLhlng women
N|che market|ng - Lype of concenLraLed LargeLlng sLraLegy where markeL segmenL chosen ls relaLlvely small
-Allows many compeLlLors Lo each make unlque appeals & be producL of cholce for some group of
consumers

4) Custom market|ng strategy aka mlcro-markeLlng sLraLegy - approach LhaL Lallors speclflc producLs and Lhe
messages abouL Lhem Lo lndlvldual cusLomers or locaLlons
-CfLen used ln buslness markeLs by companles (8ombardler) Lo make sure lndlvldual needs of lLs few cusLomers
who spend a loL of $ are meL
-ln consumer markeLs: level of concenLraLlon ln personal/professlonal servlces (docLors, lawyers, halr sLyllsLs)
-ln mosL consumer markeLs: nelLher pracLlcal, posslble when producLs are mass-produced
-Advances ln Lechnology, emphasls on bulldlng relaLlons wlLh cusLomers enabled mass custom|zat|on -
approach LhaL modlfles a baslc producL/servlce Lo meeL Lhe needs of an lndlvldual (uell CompuLers, nlke Lo
cusLomlze order onllne)

4) Market os|t|on|ng
DLCIDL nCW CU WAN1 1C CCML1L, 8L DIIILkLN1IA1LD, AND 8L kNCWN ICk VALUL CkLA1ICN IN 1nL
MINDS CI CCNSUMLkS
os|t|on|ng - developlng markeLlng sLraLegy Lo dlfferenLlaLe a flrm from lLs compeLlLors ln Lhe mlnds of LargeL
consumers or cusLomers
8rand concept - how Lhe markeLer wanLs Lhe brand Lo be poslLloned - how lL wanLs Lo be known by lLs LargeL
markeL as belng dlfferenL from, and beLLer Lhan lLs compeLlLors (L.g. - WesL !eL - wanLs Lo be known as brand
LhaL provldes besL value)
8rand |mage - how consumers percelve Lhe poslLlonlng of Lhe brand

CSl1lCnlnC S18A1LClLS (see pg84 for examples)
1. roduct Leadersh|p - compeLlng by conLlnuously brlnglng lnnovaLlve and useful new producLs or Lechnologles
Lo markeL (Apple, nlke)
oslLlonlng focused on: CuallLy, 8ellablllLy/uurablllLy, key feaLures/aLLrlbuLes, lnnovaLlon, erformance,
CuLcomes
2. Customer Int|macy (mlcro-markeLlng) - creaLlng Lallored soluLlons for narrowly deflned markeL segmenLs
(krafL MarrloLL) - provlde superlor cusLomer experlences and/or personallzed/cusLomlzed lnLeracLlons
oslLlonlng focused on: Sensory experlence, LxclLemenL, AdvenLure, lun or leasure, LmoLlon, Soclal
value, 8esponslveness, SafeLy or securlLy, novelLy, knowledge or fanLasy
3. Cperat|ona| Lxce||ence - focused on cosL effecLlveness, efflclency, cusLomer convenlence (Zellers, WesL!eL,
lkLA) lower cosLs/prlces whlle maklng lL more convenlenL Lo do so
oslLlonlng focused on: rlce, value, Convenlence ersonal lnvesLmenL, 8lsk
4. Symbo||c-express|ve va|ue - dlfferenLlaLlng by psychologlcal meanlng assoclaLed wlLh lL
oslLlonlng focused on: Self ldenLlLy/concepL/worLh, ersonal meanlng, Self-expresslon, Soclal-meanlng
C1PL8: roducL class, compeLlLlon, occaslons, users







Mk1C 2030: "#$%&'( ) * +$(,'& -'./'0&$&120 $03 4251&12010.

"#$% & '( )
ueveloplng oslLlonlng SLraLegles
-Companles focus on dlfferenLlaLlng Lhemselves on only a few dlmenslons Lo make lL easler for consumers Lo
learn Lhe lnLended brand concepL
-oslLlonlng sLraLegles chosen based on lnLernal envlronmenL facLors (sLrengLhs compeLencles, resources,
culLure) and exLernal envlronmenL facLors (consumer behavolur, sLrengLh & poslLlonlng of compeLlLlve brands)
(1able 3.1)

4 SLeps Lo developlng poslLlonlng sLraLegles
-&'% 67 80$9:;' "2/%'&1&2(5< 4251&1205
-undersLand how compeLlLors are percelved by LargeL markeL, wheLher Lhere are oLher producL/servlces LhaL
provlde Lhe same beneflLs LhaL ppl ln segmenL are seeklng
-&'% =7 >3'0&1?: -@5&$10$A9' "2/%'&1&1B' 83B$0&$.'
1
sL
elemenL: wheLher orgs can creaLe and communlcaLe Lhe value proposlLlon suggesLed by lLs deslred
poslLlonlng
2
nd
elemenL: wheLher Lhe poslLlonlng sLraLegy can be defended agalnsL compeLlLors
3 ways Lo defend a poslLlonlng sLraLegy
1. ConLlnuously lnnovaLe Lo keep ahead of compeLlLors (producL leadershlp sLraLegy)
2. Plde ln a small enough nlche markeL LhaL compeLlLors are noL llkely Lo enLer
3. roLecL currenL source(s) of compeLlLlve advanLage by erecLlng barrlers Lo compeLlLlon
8arrlers Lo CompeLlLlon
MarkeLlng experLlse - proLecL cusLomer lnLlmacy poslLlonlng by belng closer/undersLandlng of cusLomer
needs/wanLs, behavlours, flexlble, responslve
CusLomer loyalLy - proLecLed by malnLalnlng hlgh levels of cusLomer saLlsfacLlons
MonopollzaLlon of scarce resource
roprleLary Lechnology - paLenLs, copyrlghLs LhaL proLecL lnLellecLual properLy can proLecL
CulLure-based experLlse - proLecL by culLure dlfflculL Lo emulaLe
LeglslaLlon or regulaLory approval
CaplLal requlremenLs
-&'% )7 >/%9'/'0& &#' 4251&12010. -&($&'.: C1&# +$(,'&10. +1D E'F151205
-1he success of a LargeL markeLlng sLraLegy hlnges on markeLer's ablllLy Lo ldenLlfy and selecL approprlaLe
markeL segmenL(s). 1hen, markeLer musL devlse a markeLlng mlx LhaL wlll effecLlvely LargeL segmenL's members,
by poslLlonlng Lhe producL Lo appeal Lo segmenL ! MarkeLlng segmenLaLlon, poslLlonlng 2 mosL lmporLanL
concepLs
4 poslLlonlng challenges:
1) vague poslLlonlng, do noL clearly arLlculaLe Lhelr maln polnL(s) of dlfferenLlaLlon
2) Confused poslLlonlng, poslLlonlng sLraLegy keeps changlng maklng lL dlfflculL Lo undersLand brand meanlng
3) Cff-LargeL poslLlonlng, do noL dlfferenLlaLe Lhemselves on dlmenslons lmporLanL Lo consumers/cusLomers
4) Cver poslLlonlng, poslLlon Lhemselves Loo narrowly, elLher appeallng Lo Loo small a markeL segmenL or belng
unable Lo change or adapL poslLlonlng wlLh changlng markeLs
-&'% G7 HB$9@$&' &#' I$(.'& +$(,'&<5 J'5%205' $03 +231?: &#' -&($&'.:
-1argeL markeL process - ongolng
-MarkeLers: MonlLor changes of needs/wanLs of ppl ln chosen segmenLs and ad[usL poslLlonlng sLraLegles when
necessary
J'%251&12010. * redolng a producL's poslLlon Lo respond Lo markeLplace changes





Mk1C 2030: "#$%&'( ) * +$(,'& -'./'0&$&120 $03 4251&12010.

"#$% & '( &
6(10.10. $ 4(2378& &2 91:'; <#' 6($03 4'(520$=1&>
oslLlonlng sLraLegy ofLen Lrles Lo creaLe a ?($03 %'(520$=1&> for producL/servlce - dlsLlncLlve lmage LhaL
capLures lLs characLer and beneflLs

4'(8'%&7$= $03 4251&12010. +$%%10.
MarkeLers consLrucL %'(8'%&7$= /$% * plcLure of where producLs or brands are locaLed" ln consumers' mlnds
-L.g. - Women's magazlnes - servlce orlenLed" fashlon forward" upscale" (older, esLabllshed) downscale
(llgure 3.7)
-CLher dlmenslons: CosL (hlgh/low), age approprlaLeness (young/old), sex approprlaLeness (malnly for
men/women), conLenL (serous/frlvolous)
-unserved areas on map - unserved segmenL, poLenLlal opporLunlLy C8 poslLlonlng LhaL ls noL ln demand by a
segmenL of cusLomers
4251&12010. /$% * slmllar Lo percepLual, excepL may lnclude facLual as well as percepLual lnfo
-lacLual lnfo - markeLers can lllusLraLe how brands compeLe ln markeLplace
Mk1C 2030: Chapter 7 - roduct Strategy

"#$% & '( )
NC1L: S||des and textbook d|fferent (s||des w|th more concepts)

Layers of roduct Concept
Good - Langlble producLs we see, Louch, smell, hear, LasLe // vs. lnLanglble producLs - servlces, ldea, ppl, places
roducL - everyLhlng LhaL cusLomer recelves ln an exchange
4 layers:
l) Core producL - producL feaLures/aLLrlbuLes (e.g. - soap wlLh molsLurlzlng cream)
ll) luncLlonal producL - how producL performs/funcLlons (e.g. - ease of appllcaLlon)
lll) AugmenLed producL - augmenLaLlons (addlLlons) markeLer aLLaches Lo baslc producL
L.g. - packaglng, logo, brand name, cusLomer saLlsfacLlon guaranLees
lv) oLenLlal producL - soluLlon cusLomer geLs from offerlng (e.g. - consumer looks younger)
"#$%&'()% *&+ ,)#-&./ 0#) *($(01/%2 $#/ 0(3/&)(%

1he Goods-Serv|ce Cont|nuum
MosL producLs: comblnaLlon of goods/servlces L.g.: ure good (car has servlce componenLs, malnLenance), pure
servlce (makeover has good componenLs, loLlons, makeup)
Coods-servlce conLlnuum - shows some producLs are domlnaLed by elLher Langlble or lnLanglble characLerlsLlcs
1anglble: LlLLle emphasls on servlce, more on physlcal producL
lnLanglble: LlLLle emphasls on physlcal producL, more on servlce
1. Cood-domlnaLed producL - Langlble end of conLlnuum
Lmbody|ng - lncluslon of a servlce wlLh a purchase of a physlcal good
2. LqulpmenL-or faclllLy-drlven servlces - mlddle of conLlnnum, boLh Langlble and lnLanglble
-8ely on expenslve equlpmenL/faclllLles and skllled personnel Lo dellver a producL (e.g. - auLomaLlc car
washes, amusemenL parks, LheaLres)
3 facLors: CperaLlonal, locaLlon, envlronmenLal
3. eople-based servlces - lnLanglble end of conLlnuum

Serv|ces vs. Goods
Serv|ces - lnLanglble producLs LhaL are exchanged dlrecLly from producer Lo cusLomer
4 CharacLerlsLlcs:
1. lnLanglblllLy - cannoL see, Louch, smell
2. erlshablllLy - cannoL sLore
Capac|ty management - process by whlch orgs ad[usL Lhelr servlces ln an aLLempL Lo maLch demand
(Skl resorLs offer mounLaln blklng ln summer)
3. varlablllLy - lnevlLable dlfferences ln servlce provlder's performances from one day Lo nexL
4. lnseparablllLy - can Lake place only aL Llme servlce provlder performs an acL on elLher Lhe cusLomer or
cusLomer's possesslon
Serv|ce encounter - acLual lnLeracLlon beLween cusLomer and servlce provlder
D|s|ntermed|at|on - process of ellmlnaLlng lnLeracLlon beLween cusLomers and servlce provlders Lo
mlnlmlze poLenLlal negaLlve effecLs of bad servlce encounLers

Deve|op|ng New roducts
nASL 1: 1nL VISICNAk nASL
l) ldea generaLlon - ldenLlfy producL ldeas LhaL wlll provlde lmporLanL cusLomer beneflLs ln llne wlLh mlsslon
ll) roducL concepL screenlng - esLlmaLe poLenLlal /(.4$1.35 (Lechnlcally feaslble) and .#''().135 (llkellhood
anyone would buy producL) success
lll) erformlng buslness analysls - esLlmaLe poLenLlal for proflL


Mk1C 2030: Chapter 7 - roduct Strategy

"#$% & '( )
nASL 2: LANNING AND DLVLLCMLN1
l) 8egln commerclal developmenL - develop markeLlng plan
ll) 8egln Lechnlcal developmenL - deslgn producL and manufacLurlng and producLlon process
nASL 3: 1LS1 AND IMkCVL
l) 1esL compleLe markeLlng plan - develop evldence of poLenLlal success ln Lhe real markeL
1est market|ng - LesLlng compleLe markeLlng plan ln small geographlc area slmllar Lo larger markeL flrm
hopes Lo enLer
ro: Cfferlng a new producL ln a llmlLed area of Lhe markeL, markeLers can evaluaLe and lmprove
Lhe markeLlng program
Con: Lxpenslve
SlmulaLed LesL markeLs (alLernaLlve Lo LesL markeLlng) - lmlLaLe lnLro of producL lnLo markeLplace uslng
compuLer sofLware, LesL lmpacL of prlce cuLs, new packaglng eLc.
ll) MarkeLlng mlx ad[usLmenLs - make lmprovemenLs ln markeLlng mlx as needed
lll) roducL launch - lmplemenL full-scale markeLlng plan, full-scale producLlon, dlsLrlbuLlon, adverLlslng, sales
promoLlon

Understand|ng Importance of Innovat|ons
Innovat|on - producL LhaL consumers percelve Lo be new and dlfferenL from exlsLlng producLs
undersLandlng lnnovaLlons crlLlcal Lo success of flrms because...
1. 1echnology ls advanclng aL a fasL-pace
2. Plgh developmenL cosL and hlgher lf fall
3. lmporLanL conLrlbuLlon Lo socleLy

3 CaLegorles of lnnovaLlons
1. Cont|nuous |nnovat|on - modlflcaLlon of an exlsLlng producL LhaL seLs one brand aparL from lLs compeLlLors
-Consumer doesn'L have Lo learn anyLhlng new Lo use lnnovaLlon, easler Lo convlnce consumers Lo adopL
knock-off - new producL LhaL coples wlLh sllghL modlflcaLlon Lhe deslgn of orlglnal producL
2. Dynam|ca||y cont|nuous |nnovat|on - a change ln exlsLlng producL LhaL requlres a moderaLe amounL of
learnlng or behavlour change
3. D|scont|nuous |nnovat|on - LoLally new producL LhaL creaLes ma[or changes ln Lhe way we llve
-Consumers musL engage ln greaL amounL of learnlng as no slmllar producL has ever been on markeL
-L.g. - alrplane, car, Lelevlslon

Adopt|on and D|ffus|on rocesses
roduct adopt|on - process by whlch a consumer or buslness cusLomer beglns Lo buy and use a new good,
servlce or ldea
D|ffus|on - process by whlch use of producL spreads LhroughouL populaLlon

6 SLages ln a cusLomer's AuC1lCn of new producL
S1AGL 1: AWAkLNLSS - learnlng lnnovaLlon exlsLs
S1AGL 2: IN1LkLS1 - prospecLlve adopLer sees how new producL could saLlsfy need
S1AGL 3: LVALUA1ICN - prospecL welghs cosLs and beneflLs of new producL
S1AGL 4: 1kIAL - poLenLlal adopLers wlll acLually experlence or use producL
S1AGL S: ADC1ICN - prospecL chooses producL
S1AGL 6: CCNIIkMA1ICN - cusLomer welghs expecLed vs. acLual beneflLs and cosLs




Mk1C 2030: "#$%&'( ) * +(,-./& 0&($&'12

"#$% & '( &
3#' 4566.75,8 ,6 988,:$&,(7
3 AdapLor CaLegorles
;< 988,:$&,(7 * advenLurous and wlllng Lo Lake rlsks wlLh new producLs
=< >$(?2 $-,%&'(7 * adopL lnnovaLlon early ln dlffuslon process buL laLer Lhan lnnovaLors
@< >$(?2 A$B,(5&2 * Lhose whose adopLlon of new producL slgnals general accepLance of lnnovaLlon
C< D$&' A$B,(5&2 * adopLers who are wllllng Lo Lry new producLs when Lhere ls llLLle or no rlsk, when economlc
necesslLy or when soclal pressure Lo purchase
E< D$11$(-7 * lasL consumers Lo adopL lnnovaLlon
-MarkeLers undersLand caLegorles Lo beLLer able Lo develop sLraLegles Lo speed dlffuslon or wldespread use or
producLs

3 roducL facLors affecLlng raLe of adopLlon (8arrlers Lo adopLlon & dlffuslon)
1. 8elaLlve advanLage - degree Lo whlch consumer percelves new producL provldes superlor beneflLs
2. CompaLlblllLy - exLenL Lo whlch new producL ls conslsLenL wlLh exlsLlng culLural values, cusLoms, pracLlces
3. ComplexlLy - degree Lo whlch consumers flnd new producL or lLs use dlfflculL Lo undersLand
4. 1rlablllLy - ease of sampllng a new producL and lLs beneflLs
3. CbservablllLy - how vlslble new producL and lLs beneflLs are Lo oLhers who mlghL adopL lL

F(1$85G$&5,8$? 4566'('8/'7 H66'/& H-,%&5,8
8uslnesses also dlffer ln eagerness Lo adopL new producLs
-?ounger companles Lend Lo welcome producL lnnovaLlons
8uslness-Lo-buslness producLs can also possess characLerlsLlcs LhaL wlll lncrease llkellhood of adopLlon
-Llkely Lo adopL lf lncrease proflL, lower cosL
Mk1C 2030: "#$%&'( ) * +(,-./& 0$1$2'3'1&

"#$% & '( )
45612 +(,-./& 789'/&6:'5 &, ;'/6-' ,1 $ +(,-./& <&($&'2=
roducL ob[ecLlves should supporL broader markeLlng ob[ecLlves of Lhe buslness unlL ln addlLlon Lo supporLlng
Lhe overall mlsslon of Lhe flrm
!"" $%&'(" )*+ - A producL-markeL grld Lo gulde producL declslons

Cb[ecLlves and SLraLegles for: a) lndlvldual . C8
b) MulLlple producLs
+(,-./& >61' sLraLegy * flrm's LoLal producL offerlng deslgned Lo saLlsfy a slngle need or deslre of LargeL cusLomers
lull llne sLraLegy - large # of varlaLlons ln producL llne
LlmlLed-llne sLraLegy - small # of producL varlaLlons
upward llne sLreLch - adds new lLems aL hlgher end (quallLy, prlce, feaLures)
uownward llne sLreLch - adds lLems aL lower end
1wo-way sLreLch - addlng lLems aL boLh upper and lower ends
lllllng-ouL sLraLegy - addlng slzes or sLyles noL prevlously avallable ln producL caLegory
ConLracL producL llne - when lLems noL proflLable
uanger of /$1168$>6?$&6,1 * loss of sales of exlsLlng producL when new lLem ln producL llne/famlly lnLroduced
+(,-./& 36@ sLraLegy - LoLal seL of all producLs a flrm offers for sale (wldLh of producL llnes)

+(,-./& A6B' "=/>'
!"" $%&'(" )*, - MarkeLlng sLraLegles Lhrough Lhe producL llfe cycle
+(,-./& >6B' /=/>' * concepL LhaL explalns how producLs go Lhrough 4 dlsLlncL sLages from blrLh Lo deaLh
<CDEF GH IJCK7;4"CI7J
-Coal: geL 1
sL
Llme buyers Lo Lry producL
-Sales: lncrease aL a sLeady buL slow pace, rofLs: negaLlve
-rlclng: hlgh - recover 8&u cusLomers. Low - aLLracL large #s of cusLomers
-MarkeLlng communlcaLlons: lnformlng cusLomers
uuraLlon of sLage: depends on markeLplace accepLance, producer wllllngness Lo supporL producL durlng sLarL-up

<CDEF LH EK7MCN
-Coal: encourage brand loyalLy by convlnclng markeL brand ls superlor Lo oLhers ln caLegory
-Sales: rapld lncrease, roflLs: lncrease & peak
-rlclng: may need Lo reduce b/c of lncrease compeLlLlon
-MarkeLlng communlcaLlons: heavy adverLlslng Lo counLer new compeLlLlon

<CDEF OH 0DC4KICP
-Coal: ALLracL new users
-Sales: eak, Lhe level off, decllne, roflL marglns narrow
-MarkeLlng communlcaLlons: remlnder adverLlslng
-1o remaln compeLlLlve and malnLaln markeLlng share - ad[usL markeLlng mlx, come ouL wlLh new feaLures, eLc.
C8 aLLracL new users
uuraLlon usually longesL

<CDEF QH ;F"AIJF
-Coal: 8emaln proflLable, declde wheLher Lo keep or phase producL ouL
-Sales: ConLlnue Lo decllne, roflL: uecllnlng
-MarkeLlng communlcaLlons: uecreased Lo malnLaln proflLablllLy
Causes: new Lechnology makes producL obsoleLe, eLc.
Ma[or producL declslon: wheLher Lo keep producL ln markeL (cuLLlng producLlon C8 drop producL lmmedlaLely)

Mk1C 2030: "#$%&'( ) * +(,-./& 0$1$2'3'1&

"#$% & '( &
"('$&412 +(,-./& 5-'1&4&67 8($1-412 9'/4:4,1:
8($1- * name, Lerm, symbol or any oLher unlque elemenL of a producL, whlch ldenLlfles one flrm's producL(s)
and seLs Lhem aparL from Lhe compeLlLlon
4 Lasy 1esLs" Lo chooslng a brand name, brand mark or Lrade characLer
Lasy Lo say, easy Lo spell, easy Lo read, easy Lo remember
llL LargeL markeL, flL producL's beneflLs, flL cusLomer's culLure, flL legal requlremenLs
Craphlcs: recognlzable and memorable

;($-'3$(< * legal Lerm for brand name brand mark or Lrade characLer, legally reglsLered by governmenL obLalns
proLecLlon for excluslve use ln LhaL counLry

;#' 53%,(&$1/' ,= 8($1-412
8($1- '>.4&6 * value of brand Lo lLs orgs, means LhaL brand has hlgh cusLomer loyalLy, percelve quallLy and
brand name awareness
-rovldes compeLlLlve advanLage, capLure and hold onLo markeL share
-8 facLors make brand successful: excels aL dellverlng beneflLs, sLays relevanL, prlclng sLraLegy reflecLs consumer
percepLlons of value, properly poslLloned, conslsLenL, brand porLfollo and hlerarchy make sense, makes use of
markeLlng acLlvlLles, brand manager undersLand whaL brand means Lo cusLomers
8($1- '?&'1:4,1 * a new producL sold wlLh Lhe same brand name as a sLrong exlsLlng brand

8($1-412 @&($&'24':
1. lndlvldual brands vs. lamlly brands
-lndlvldual brand - separaLe, unlque brand for each producL lLem
A$34B6 C($1- * umbrella brand sLraLegy, group of lndlvldual producLs share
2. naLlonal and sLore brands
D$&4,1$B ,( 3$1.=$/&.('( C($1-: * brands LhaL manufacLurer of producL owns
@&,(' ,( %(4E$&'FB$C'B C($1-: * brands LhaL are owned and sod by speclflc reLaller or dlsLrlbuLor (e.g. - C)
3. Llcenslng
G4/'1:412 * agreemenL ln whlch one flrm sells anoLher flrm Lhe rlghL Lo use a brand name for a speclflc purpose
and for a speclflc perlod of Llme
-rovldes lnsLanL recognlLlon and consumer lnLeresL, or lmporLanL Lo poslLlonlng producL for cerLaln
LargeL markeL
L.g. - ulsney llcensed merchandlse aL Mcuonald's
4. Co-brandlng
",FC($1-412 * agreemenL beLween 2 brands Lo work LogeLher ln markeLlng new or exlsLlng producLs
L.g. - Mcuonald's lnslde Wal-MarL//SLarbucks lnslde ChapLers ! beneflLs boLh parLners

H(2$14I412 =,( J=='/&4E' +(,-./& 0$1$2'3'1&
ManagemenL of LxlsLlng roducLs
8($1- 3$1$2'( * responslble for developlng and lmplemenLlng markeLlng plan for slngle brand
+(,-./& /$&'2,(6 3$1$2'( * responslble for developlng and lmplemenLlng markeLlng plan for all of brands and
producLs wlLhln producL caLegory
0$(<'& 3$1$2'( * responslble for developlng and lmplemenLlng markeLlng plan for producLs sold Lo speclflc
cusLomer group
-useful for flrms LhaL offer varleLy of producLs servlng needs of wlde range of cusLomers

Crganlzlng for new roducL uevelopmenL
K'1&.(' &'$3: * groups of ppl wlLhln orgs who work LogeLher focuslng excluslvely on developmenL of new
producL
Mk1C 2030: "#$%&'( ) * +(,-,./ 0&($&'/1

"#$% & '( )
23.'&$(1 $.4 53.673.'&$(1 +(,-'8
+(,-' * value cusLomers glve up/exchange Lo obLaln producL
9$(&'(,./ * exchange g/s for anoLher g/s
Consumers conslder non-moneLary cosLs:
:%'($&,./ -38&8 * cosLs lnvolved ln uslng producL
0;,&-#,./ -38&8 * cosLs lnvolved ln movlng from one brand Lo anoLher
:%%3(&<.,&1 -38& * value of someLhlng LhaL ls glven up Lo obLaln someLhlng else

MarkeLer's vlew of CosLs
1oLal cosLs = =,>'4 -38&8 + ?$(,$@A' -38&8 (vary wlLh producLlon volume)
"3.&(,@<&,3. 7$(/,./unlL (CM/unlL) = 8 - vC
B3&$A -3.&(,@<&,3. 2$(/,. C CM * unlLs sold
neL proflL before Laxes = 1oLal conLrlbuLlon Margln - lC
B3&$A <.,& -38& = varlable cosL + average flxed cosLs per unlL
9('$D6'E'. $.$A18,8 * meLhod for deLermlnlng sales volume aL glven prlce Lo cover cosLs, proflL = 0
9F+ (unlLs) = lC/CM per unlL 9F+ (dollars) = lC/CM8

0BF+ GH I'E'A3%,./ +(,-,./ :@J'-&,E'8
6 rlclng Cb[ecLlves:
GK +(3L,& :@J'-&,E'8
3 maln ob[ecLlves: l) Maxlmlzlng proflLs ll) Achlevlng a LargeL level of proflL growLh lll) Achlevlng deslred
neL proflL margln (or a LargeL reLurn on lnvesLmenL)
-roflL crlLlcal Lo: !"# %&'#()*+ - essenLlal Lo recover lnvesLmenL durlng shorL markeL llfe
ll) lll) use break-even analysls Lo seL speclflc prlce ob[ecLlves. Lxpressed as unlLs or of sales
2$(/,.$A $.$A18,8 * demand ls forecasLed aL dlff prlce levels and proflL expecLed ln each prlce-demand
scenarlos ls calculaLed
MK 0$A'8N2$(D'& 0#$(' :@J'-&,E'8 -lnvolves seLLlng prlces aL a level LhaL wlll maxlmlze sales, or aLLaln deslred
level of sales or markeL share
OK "37%'&,&,E' FLL'-& :@J'-&,E'8 -lnLended Lo have a cerLaln effecL on markeLlng efforLs of compeLlLlon (e.g. -
prlce sLablllLy beLween gas sLaLlons)
PK "<8&37'( 0$&,8L$-&,3. Q$.4 ('&'.&,3.K :@J'-&,E'8
RK S7$/' F.#$.-'7'.& Q+38,&,3.,./K :@J'-&,E'8 * when flrms recognlze LhaL consumers ofLen use prlce Lo make
lnferences abouL quallLy of producL. lmporLanL for ,(-(&. /''#+.
TK =A'>,@,A,&1 3L +(,-' :@J'-&,E'8 * e.g. - markeL condlLlons

0BF+ MH +(,-,./ 0&($&'/,'8
GK rlclng SLraLegles Lo achleve +(3L,& :@J'-&,E'8
UK "38&6@$8'4 %(,-,./ 8&($&'/,'8
$K "38&6@$8'4 %(,-,./ 8&($&'/1 * assoclaLed wlLh LargeL proflL/reLurn ob[ecLlves. Lnsurlng prlce covers cosLs.
urawbacks: noL conslder LargeL markeL naLure, demand, compeLlLlon, producL llfe cycle, lmage.
@K "38&6%A<8 %(,-,./ * mosL common cosL-based approach, seller LoLals all cosLs for producL, Lhen adds amounL
Lo cover deslred proflL
SLep 1: CalculaLe unlL cosLs SLep 2: CalculaLe markup on cosL 0122 %/ 345 6'& )",)(,"*7'89
-K +(,-'6LA33( %(,-,./ * meLhod for calculaLlng prlce ln whlch, Lo malnLaln full planL operaLlng capaclLy, a porLlon
of a flrm's ouLpuL may be sold aL a prlce LhaL covers only marglnal cosLs of producLlon

9K I'7$.46@$8'4 %(,-,./ 6 bases selllng prlce on an esLlmaLe of Lhe volume a flrm can sell aL dlfferenL prlces
I'7$.4 -<(E' * ploL of quanLlLy of producL cusLomers wlll buy aL varlous prlces. normal producLs -
prlce decrease, quanLlLy sold lncrease vS. resLlge producLs - prlce lncrease, quanLlLy sold lncrease.
Mk1C 2030: Chapter 9 - r|c|ng Strategy

"#$% & '( )
b) 1arget cost|ng - process where flrm deLermlnes prlce cusLomers wllllng Lo buy producL, work backwards Lo
deslgn producL Lo produce/sell aL proflL, producL prlce Lled Lo deslgn
-use markeLlng research Lo ldenLlfy quallLy/funcLlonallLy Lo saLlsfy cusLomers, requlred marglns, Lhen
calculaLe totqet cost (max lL cosLs flrm Lo manufacLure Lhe producL)
c) |e|d-management pr|c|ng - flrms charge dlfferenL prlces Lo dlfferenL cusLomers ln order Lo manage capaclLy
whlle maxlmlzlng revenues. used by alrllnes, hoLels, crulse llnes.
-CusLomer prlce senslLlvlLy used Lo caLegorlze cusLomers
-Slmllar Lo ptlce Jlsctlmlootloo sttoteqy - dlff segmenLs LargeLed for dlff prlclng levels
d) Var|ab|e (custom) pr|c|ng - flexlble prlclng sLraLegy reflecLs whaL cusLomers wllllng Lo pay, reflecLs varlablllLy
ln markeL demand. ltoflt-otleoteJ sttoteqy, ensures producLs sold aL hlghesL prlce cusLomer wllllng Lo pay.
costomet sotlsfoctloo-boseJ sttoteqy, ensures cusLomers geL besL deal" able Lo negoLlaLe.
e) Sk|mm|ng pr|c|ng - charglng a hlgh, premlum prlce for new producL, expecLlng demand from Lop spendlng,
leasL senslLlve LargeL markeL. Successful when small amL of compeLlLors.

C) Lxper|ence-based pr|c|ng strateg|es
a) Lxper|menta| pr|c|ng (aka Lrlal-and-error-prlclng) - sLraLegy of experlmenLlng wlLh prlces unLll prlce
generaLlng hlghesL proflL found. CfLen used: MarkeL pre-LesLs & by reLallers
b) Iudgment - drawlng on pasL experlence/markeL undersLandlng ln seLLlng prlces


2) Market Share rlclng SLraLegles
a) Va|ue pr|c|ng (everyday |ow pr|c|ng, LDL) - seLLlng prlces LhaL provlde ulLlmaLe value (geLLlng more for
Lhelr money") Lo cusLomers, cusLomer saLlsfacLlon (e.g. - WalmarL, WesL!eL)
b) Irequent d|scount|ng - uslng sales, coupons, oLher dlscounLs Lo sLlmulaLe sales. urawback - consumers walL
for sales prlce Lo purchase. (e.g. - luLure Shop)
c) enetrat|on pr|c|ng - opposlLe of sklmmlng prlclng, new producL prlced very low, encouraglng purchases.
AdvanLage - acLs as a barrler Lo enLry Lo poLenLlal compeLlLors. llooeetloq btooJ ofLen able Lo malnLaln
domlnanL markeL share.
d) 1r|a| pr|c|ng - new producL prlced low for llmlLed Llme Lo lower rlsk for cusLomer, ob[ecLlve: wln cusLomer
accepLance flrsL, proflLs laLer.

3) Compet|t|ve Lffect rlclng SLraLegles, based on compeLlLlon
a) r|ce |eadersh|p (fo||ower) - lndusLry leader or flrm LhaL follows lndusLry leader by seLLlng same or slmllar
prlces. used when ollgopoly (few compeLlLors) exlsLs
lotlty ptlcloq sttoteqy/ltlce flxloq - keeplng prlces abouL equal Lo compeLlLors' (gasollne)
b) rem|um pr|c|ng - prlclng producLs hlgher Lhan compeLlLlon, reflecLs quallLy producL, helps achleve
compeLlLlve effecL of markeL leadershlp and prlce sLablllLy (Coca-Cola)
c) Umbre||a pr|c|ng - opposlLe of premlum prlclng, prlclng below compeLlLlon
d) r|c|ng bund||ng - selllng 2 or more goods/servlces as a slngle package for one prlce, achleves cusLomer
saLlsfacLlon ob[ecLlves

4) rlclng SLraLegles Lo achleve Customer Sat|sfact|on Cb[ect|ves
4 prlclng sLraLegles: 1. varlable prlclng 2. value prlclng 3. rlce bundllng
4 . Cost of ownersh|p - sLraLegy LhaL conslders Lhe llfeLlme cosL of sung producL

S) rlclng SLraLegles Lo achleve Image Lnhancement (os|t|on|ng) Cb[ect|ves
3 prlclng sLraLegles: 1. value prlclng 2. remlum prlclng
3. rest|ge pr|c|ng - prlces seL slgnlflcanLly hlgher Lhan compeLlLors, sLaLus symbols
-xcloslve posltlooloq sttoteqy - only wealLhy/prlvlleged can purchase brand
Mk1C 2030: Chapter 9 - r|c|ng Strategy

"#$% & '( )
S1L 3: r|ce o|nts & 1act|cs , SeL prlces by applylng prlclng LacLlcs
rlce seLLlng: ln pracLlce, seL ln range deLermlned by producLs a) coLs b) wllllng Lo pay c) compeLlng/subsLlLuLes

S r|c|ng 1act|cs
1) r|c|ng for Ind|v|dua| roducts
a) 1wo-part pr|c|ng - offerlng 2 separaLe Lypes of paymenLs Lo purchase producL (Cell phone provlders, MonLhly
fee + per-mlnuLe usage raLe)
b) ayment pr|c|ng - breaklng LoLal prlce lnLo smaller amounLs payable over Llme (Car)

2) r|c|ng for Mu|t|p|e roducts
a) r|ce bund||ng - selllng 2 or more goods/servlces as a slngle package for one prlce
b) Capt|ve pr|c|ng - prlclng Lwo producLs LhaL work only when used LogeLher (8azors)

3) Geograph|c r|c|ng
a) I.C.8. (free on board) r|c|ng - l) f.o.b. or|g|n - cosL of LransporLlng producL from facLor Lo cusLomer ls
responslblllLy of cusLomer, LlLle passes Lo buyer aL locaLlon ll) f.o.b. de||vered - seller pays boLh cosL of loadlng
and LransporLlng Lo cusLomer, lncluded ln selllng prlce, LlLle passes Lo buyer when dellvered
lll) f.o.b. factory fr|ght prepa|d - seller pays, LlLle passes Lo cusLomer from seller's locaLlon
b) 2one pr|c|ng - dlsLanL cusLomers pay more Lhan cusLomers who are close Lo facLor, dlfferenL zone prlces
c) Un|form de||vered pr|c|ng - sLandard shlpplng charge added Lo purchase prlce regardless of locaLlon
(shopplng channel)
d) Ire|ght absorpt|on pr|c|ng - seller absorbs Lhe LoLal cosL of shlpplng

4) sycho|og|ca| pr|c|ng
a) Cdd (even) number pr|c|ng - psychologlcal response Lo odd prlces dlffers from even, odd superlor, even used
for professlonal servlces, luxury lLems, concerL LlckeLs
b) r|ce ||n|ng - seLLlng llmlLed # of dlff speclflc prlces, called prlce polnLs, for lLems ln a producL llne (compuLers)

S) r|ce D|scounts
L|st pr|ce - prlce Lhe end cusLomer ls expecLed Lo pay, deLermlned by manufacLurer
a) 1rade or funct|ona| d|scounts - dlscounLs off llsL prlce of producLs Lo members of Lhe channel of dlsLrlbuLlon,
percenLage dlscounLs off llsL prlce for each channel level
b) uant|ty d|scounts - aka reduced prlces, for purchases of larger quanLlLles
Cumu|at|ve quant|ty d|scounts - dlscounLs based on LoLal quanLlLy boughL wlLhln speclfled Llme perlod (rebaLes,
credlL)
Non-cumu|at|ve quant|ty d|scounts - based on quanLlLy purchased ln lndlvldual orders
c) Cash d|scounts - for paylng bllls qulckly
d Seasona| d|scounts - prlce reducLlons offered durlng cerLaln Llmes of Lhe year

1erms & CondlLlons
-MeLhods of paymenL, cash, credlL, deblL
-Currencles wllllng Lo accepL







Mk1C 2030: "#$%&'( ) * +(,-,./ 0&($&'/1

"#$% & '( )
023+ 45 67%8'7'.&$&,9.5 2'(7: ; "9.<,&,9.:= >'/$8 "9.:,<'($&,9.:
-LeglslaLlon Lo proLecL consumers/buslnesses from predaLory rlvals
-CompeLlLlon 8ureau: responslble for ensurlng Canadlan buslnesses adhere Lo federal laws Lo malnLaln falr
compeLlLlon. CompeLlLlon acL, consumer packaglng/labellng acL, LexLlle labellng acL, preclous meLals marklng acL

?'-'%&,@' +(,-,./ +($-&,-':
CompeLlLlon AcL: sellers cannoL make represenLaLlon Lo publlc LhaL ls false or mlsleadlng ln a maLerlal respecL
A$,& $.< :B,&-# * lllegal markeLlng pracLlce where reLaller adverLlses lLem aL very low prlce - !"#$ - Lo lure
cusLomers lnLo sLare, does noL have reasonable quanLlLles avallable, Lhen Lrles Lo geL cusLomers Lo buy dlfferenL,
more expenslve lLem - %&#$'(
*noL lllegal when rebaLe raln check offered
-1radlng up" Lechnlque - encouraglng cusLomers Lo purchase hlgher-prlced lLem, accepLable Lechnlque
-Selllng producL above adverLlsed prlce (clvll courL lssue) and double LlckeLlng Lo sell producL aL hlgher of Lwo
prlces (crlmlnal offence)

+('<$&9(1 %(,-,./ * sLraLegy of selllng producLs aL unreasonably low prlces Lo drlve compeLlLors ouL of buslness,
Lhen rlslng prlces, crlmlnal offence (under CompeLlLlon AcL), however, consldered normal compeLlLlon, dlfflculL
Lo prove
>9::C8'$<'( %(,-,./ C seLLlng prlces below cosL Lo aLLracL cusLomers lnLo sLore

+(,-' <,:-(,7,.$&,9. * lllegal pracLlce (under CompeLlLlon AcL) of offerlng same producL of llke quallLy and
quanLlLy Lo dlff buslness cusLomers aL dlff prlces, Lhus lessenlng compeLlLlon, dlfflculL Lo prove
-Cnly applles Lo goods, compeLlLlon purchasers noL end users or consumers
-uoes noL apply Lo servlces and concesslons

+(,-' 7$,.&'.$.-' (aka prlce flxlng) - 2 or more flrms seL prlces aL cerLaln level Lo keep prlces hlgh, crlmlnal
offence (under CompeLlLlon AcL)
2 1ypes of prlce malnLenance (flxlng)
1) PorlzonLal prlce flxlng - compeLlLors maklng same producL [olnLly deLermlne prlce Lo charge, keeps prlces
hlgh by ellmlnaLlng compeLlLlon
2) verLlcal prlce flxlng - manufacLurers or wholesalers aLLempL Lo force reLallers Lo charge cerLaln prlce for Lhelr
producL
A,< (,//,./ * colluslon beLween suppllers respondlng Lo bld requesLs Lo lessen compeLlLlon and secure hlgher
marglns, crlmlnal offence
l.e. - suppllers agreelng Lo submlL Loken blds prlced Loo hlgh, absLalnlng from blddlng/wlLhdrawlng blds, pre-
selecLed suppllers submlLLlng lowesL bld on sysLemaLlc basls, suppllers noL compeLlng ln deslgnaLed geographlc
reglons or for speclflc cusLomers

023+ D5 E$F,./ +(,-,./ ?'-,:,9.:
E$(F'&,./ E,G ?'-,:,9.:
HI +(,-' $.< %(9<J-& - prlclng declslons affecLed by l) Cover cosLs of dolng buslness ll) Slgnals producL quallLy ll)
roducL llfe cycle sLage - l.e. - +,-,.,/0 %1../#23 able Lo charge premlum prlce, as compeLlLors enLer, prlces
lower
KI +(,-' $.< <,:&(,LJ&,9. * prlclng declslons from vlewpolnL of each member of channel of dlsLrlbuLlon -
manufacLurers, wholesalers, reLallers l) Successful ln reselllng producL Lo end cusLomers ll) E$(/,. - dlfference
beLween cosL and selllng prlce - hlgh enough Lo cover cosLs lll) SelecL reLall channels LhaL maLch producL's prlce
and lmage
MI +(,-' $.< -977J.,-$&,9. * generaLe enough revenue Lo pay for adverLlslng & promoLlon
!"#$ &'(') "#$%&'( ) * +(,-,./ 0&($&'/1

"#$% & '( )
23 +(,-' $.4 ('5$&,6.7#,% 8$.$/'8'.& * *+,*-./+01 ./234056 64..2/5 07261/ 893 /16.296+:1 /1785+29 ;+5*
04652<1/6

9.:,(6.8'.&$5 "6.7,4'($&,6.7
$3 ;#' 9-6.681< =46+9166 0>071? +9@785+29? 10292<+0 ,/2;5*? 02964<1/ 029@+31901A B10166+296 54/9 02964<1/6
./+01 6196+5+:1A

=3 "6.7>8'( ?'#$:,6>(
=4>1/ C/+0+9, DE.10585+296 <8> 31.193 29 5*1+/ ,.&'(.$5 ('@'('.-' %(,-' * F8613 29 .865 1E.1/+1901?
02964<1/6 *8:1 8 615 ./+01 2/ ./+01 /89,1 +9 <+93 5*85 5*1> /1@1/ 52 +9 1:87485+29 8 ./234056 0265
-!8/G151/6 461 !"#"!"$%"&'!(%($) +,!-,")("+ 52 +9@741901 02964<1/6H 1E.10585+296 I1A,A J 83:1/5+6+9,
02<.15+52/ ./+016 +9 02<.8/+629 52 5*1+/6K
-.++(/(0-,(1$ "##"%, J 02964<1/ @1176 5*85 ./23405 L487+5> 2@ & ./234056 +6 6+<+78/ ;*19 ./+013 072617>
-21$,!-+, "##"%, 3 02964<1/ @1176 5*85 78/,1 3+@@1/1901 +9 ./23405 L487+5> 2@ & ./234056 ;*19 ./+013 @8/
8.8/5
C/+01-M487+5> N9@1/19016 ;*19 ./+01 4613 86 +93+0852/ @2/ L487+5>

-3 +(,-' 95$7&,-,&1 6@ A'8$.4 <1864/1 2@ 04652<1/ 6196+5+:+5> 52 0*89,16 +9 ./+016O P 0*89,1 +9 49+5 68716 5*85
/164756 @/2< P 0*89,1 +9 ./+01 Q P 0*89,1 +9 L4895+5> 31<89313 R P 0*89,1 +9 ./+01
95$7&,- 4'8$.4 - 8 0*89,1 +9 ./+01 /164756 +9 8 64F65895+87 0*89,1 +9 L4895+5> 31<89313?
./+01 17865+0+5> 2@ 31<893 ST
-C/+01 +90/18616? /1:19416 310/1861 I2..26+51 3+/105+296K
-N9@7419016) 8:8+78F+7+5> 2@ 07261 64F65+5451 ./234056 I<2/1 64F65+54516? 17865+0 31<893K? 729,1/
5+<1 .1/+236
B.'5$7&,- 4'8$.4 - 8 0*89,1 +9 ./+01 *86 7+5571 2/ 92 1@@105 29 L4895+5> 31<89313
./+01 17865+0+5> 2@ 31<893 UT
-C/+01 +90/18616? /1:19416 +90/1861 I68<1 3+/105+29K
-N9@741901) 910166+5+16 2@519 +917865+0
V5*1/ ./+01 17865+0+5> +9@7419016)
TA 4$%1/" "##"%, J 0*89,16 +9 +902<1A W2/<87 ,2236 J +902<1 17865+0 I+90/1861 +902<1? +90/1861
31<893KA N9@1/+2/ ,2236 J +902<1 +917865+0 I+90/1861 +902<1? 310/1861 31<893K
&A 2!1++&"0-+,(%(,5 1# 6"/-$6 J 0*89,16 +9 ./+016 2@ 25*1/ ./234056 8@@105 31<893 @2/ ./23405
-X4F65+54516) N90/1861 ./+01? +90/1861 31<893 @2/ 25*1/ ./23405
-Y2<.71<1956) N90/1861 ./+01? 310/18616 31<893 @2/ 25*1/ ./23405

43 "6.7>8'( ;('.47 J <8/G151/6 5*85 0295+94877> <29+52/ 02964<1/ 19:+/29<195 <8G1 F1551/ ./+0+9, 310+6+296
'3 "68%'&,&,6. * 0296+31/ *2; 02<.15+5+29 ;+77 /16.293 52 ./+0+9, 805+296O 02964<1/ 1E.10585+296 2@ @8+/ ./+01
31.193 29 02<.15+5+29 ./+016
#>.1 2@ 02<.15+5+:1 19:+/29<1956)
-V7+,2.27> I@1; 61771/6? <89> F4>1/6K J 832.5 658546 L42 ./+0+9, ;*1/1 02<.15+52/ ./+016 8/1
6+<+78/ I,8627+91 +93465/>K
-!292.27+65+0 02<.15+5+29 I<89> 61771/6 180* 2@@1/+9, 67+,*57> 3+@@ ./23405K J 929-./+01
02<.15+5+29
-C4/1 02<.15+5+29 J 7+5571 2..2/549+5> 52 /8+61 2/ 72;1/ ./+016 I@/4+56 893 :1,158F716K

@3 B.&'(.$&,6.$5 9.:,(6.8'.&$5 B.@5>'.-'7 * 04//190> 1E0*89,1 /851
-$2:1/9<195 %(,-' 7>=7,4,'7 52 32<165+0 +93465/+16? +9 5*1 @2/< 2@ .8><195 2/ 58E /17+1@ 8772; @+/<6 52
6177 ./234056 F172; ./23405+29 02656


Mk1C 2030: "#$%&'( ) * +(,-,./ 0&($&'/1

"#$% & '( &
+(,-,./ 2,&# 34'-&(5.,- "566'(-'
lnLerneL prlclng sLraLegles
71.$6,- +(,-,./ * prlclng sLraLegy where prlce can easlly be ad[usLed on lnLerneL Lo meeL changes ln
markeLplace
-CosLly for reLall sLores, need Lo change Lags, dlsplays, eLc.

8.4,.' 9:-&,5.; * e-commerce LhaL allows shoppers Lo purchase producLs Lhrough onllne blddlng (e8ay)
-8everse-prlce aucLlons - buyers ask sellers Lo submlL quoLaLlons for a deslred producL, suppller wlLh
lowesL bld wlns sale

+(,-' <,;-(,6,.$&,5. * markeLers classlfy cusLomers based on characLerlsLlc LhaL lndlcaLes whaL Lhey are wllllng
Lo pay (movle LheaLres lower prlces Lo chlldren, magazlne offers college sLudenLs lower raLes). uownslde: when
cusLomers paylng hlgher prlce flnd ouL, are noL happy.

+(,-,./ 9<=$.&$/'; >5( 8.4,.' 0#5%%'(;
-CusLomers more prlce senslLlve - use search englnes
-Lowers consumer cosLs - avold Lrlp Lo mall
Mk1C 2030: "#$%&'( )* + "#$,,'-. $,/ 01%%-2 "#$3, 0&($&'42

"#$% & '( )
"#$,,'-. 56 73.&(381&35,
-Cne of Lhe only 4 s for whlch Lhere ls an opporLunlLy for susLalnable compeLlLlve advanLage
-L.g. - ChapLers, lndlgo place lmporLance on convenlence buylng
-Channels - maklng goods and servlces avallable where and when cusLomers need and wanL Lhem

9#' :;%5(&$,<' 56 73.&(381&35,= >51 "$,?& 0'-- @#$& :.,?& 9#'('A
@#$& 3. $ 73.&(381&35, "#$,,'-B
"#$,,'- 56 /3.&(381&35, + serles of flrms/lndlvlduals LhaL faclllLaLes Lhe movemenL of a producL from Lhe
producer Lo flnal cusLomer
-AL mlnlmum, conslsL of a) producer (manufacLurer of good/servlce) b) cusLomer ! dlrecL channel
(L.g. - buylng frulLs from farm, caLalogues, lnLerneL, facLory ouLleLs)
"#$,,'- 3,&'(;'/3$(3'. + flrms or lndlvlduals LhaL help move a producL from producer Lo consumer or buslness
user ! lndlrecL channel
-L.g. - wholesalers, agenLs, brokers, reLallers

C1,<&35,. 56 73.&(381&35, "#$,,'-.
Channel ob[ecLlves - Lo make a flrm's producLs avallable when, where and ln quanLlLles cusLomers wanL and
need Lhem aL a mlnlmum cosL
1. rovlde uLlllLy: form, Llme, place, lnformaLlon, possesslon (ownershlp)
2. lncrease efflclency of flow of goods from producer Lo cusLomer
-8educe # of LransacLlons, efflclenL channels: D1-E 8('$E3,4 + wholesalers/reLallers purchase large
quanLlLles of goods from manufacLurers buL sell only one or few aL a Llme C8 <('$&3,4 $..5(&;',&. +
provldlng a varleLy of producLs ln one locaLlon so cusLomers can buy dlff lLems from 1 seller
-C$<3-3&$&3,4 61,<&35,. + funcLlons of channel lnLermedlarles LhaL make purchase process easler for
cusLomers/manufacLurers, cusLomer servlces (credlL Lo buyers, refunds, repalr & malnLenance)
-lnLernaLlonal dlsLrlbuLlon channels make global markeLlng easler

"5;%5.3&35, $,/ 0&(1<&1(' 56 "#$,,'-.
92%'. 56 @#5-'.$-3,4 :,&'(;'/3$(3'. !"## %&'(# )*+), %-.#/ 01 234#56#78&58#/9
@#5-'.$-3,4 3,&'(;'/3$(3'. + flrms LhaL handle flow of producLs from manufacLurer Lo reLaller or buslness user
(consumer and 8-2-8 wholesallng lnLermedlarles)

)F :,/'%',/',& 3,&'(;'/3$(3'. + noL conLrolled by manufacLurer, do buslness wlLh many manufacLures and
cusLomers
$F G'(<#$,& H#5-'.$-'(. + buy goods from producers and sell Lo reLallers/828 cusLomers
-9$E' &3&-' of goods - accepL legal ownershlp and assume rlsks and losses for damages, obsoleLeness, sLolen,
unsellable and fee Lo develop own markeLlng sLraLegles lncludlng prlce
lull-servlce merchanL wholesaler - provlde wlde range of servlces for Lhelr cusLomers (dellvery, credlL, repalrs,
adverLlslng, markeL research)
3F 8ack [obber + supply reLallers wlLh speclallLy lLems (dlsplay unlLs), check lnvenLorles, replace
merchandlse for reLallers), own and malnLaln producL dlsplay
LlmlLed-servlce merchanL wholesaler - provlde fewer servlces for Lhelr cusLomers, &$E' &3&-' Lo merchandlse
3F Cash-and-carry wholesalers - provlde producLs for small buslness cusLomers who purchase aL
wholesaler's locaLlon (grocerles, offlce supplles)
33F 1ruck [obbers - dellver perlshable food and Lobacco lLems Lo reLallers
333F urop shlppers - Lake orders from and blll reLallers for producLs drop-shlpped from manufacLurer,
Lake LlLle buL don'L acLually Lake possesslon (bulky producLs, coal, lumber)
3IF Mall-order wholesalers - sell Lhrough caLalogues, Lelephone or mall order, no sales force (cosmeLlcs,
sporLlng goods, hardware)
Mk1C 2030: "#$%&'( )* + "#$,,'-. $,/ 01%%-2 "#$3, 0&($&'42

"#$% & '( )
56 7'(8#$,/3.' $4',&. $,/ 5(9:'(. + provlde servlces ln exchange for commlsslons, don'L Lake LlLle Lo producL
(don'L accepL legal ownershlp). AgenLs - represenL buyers/sellers on ongolng basls. CllenLs employ brokers for
shorL perlod of Llme.
36 ManufacLurers' agenLs (aka manufacLurers' reps) - lndependenL salespeople, carry several llnes of
noncompeLlng producLs, llmlLed LerrlLory, selllng prlces, commlsslons based on of whaL Lhey sell
336 Selllng agenLs, lncludlng exporL-lmporL agenLs - handle enLlre ouLpuL of one or more producLs, seen
as lndependenL markeLlng deparLmenLs, unllmlLed LerrlLorles, promoLe prlclng, promoLlon and
dlsLrlbuLlon of producLs (furnlLure, cloLhlng, LexLlle lndusLrles)
3336 Commlsslon merchanLs - sales agenLs LhaL recelve commlsslon on sales of producL, recelve goods
(usually agrlculLural producLs), Lake possesslon w/o Laklng LlLle, seL prlces
3;6 Merchandlse broker, lncludlng exporL-lmporL brokers - ldenLlfy llkely buyers and brlng buyers and
sellers LogeLher, faclllLaLe LransacLlons (real esLaLe, food, used equlpmenL)

<6 7$,1=$8&1('(>9?,'/ 3,&'(@'/3$(3'. - manufacLures seL up own channel lnLermedlarles, malnLaln conLrol
36 Sales branches - llke wholesalers, malnLaln some lnvenLory ln dlff geographlc areas
336 Sales offlces - llke agenLs, carry no lnvenLory, ln dlff geographlc areas
3336 ManufacLurers' showrooms - manufacLurer-owned or leased faclllLles where producLs aLLracLlvely
dlsplayed for cusLomers Lo vlslL

A2%'. 9= B3.&(351&39, "#$,,'-.
-MarkeLlng manager selecLs channel sLrucLure LhaL creaLes compeLlLlve advanLage for flrm and lLs producLs
based on slze and needs of LargeL markeL
lacLor MarkeLers need Lo conslder: "#$,,'- -';'-. > # of dlsLlncL caLegorles of lnLermedlarles LhaL make up
channel of dlsLrlbuLlon
-ShorLesL channel (producer and cusLomer) - 2 levels. Addlng lnLermedlary - lncreases levels.
!"" $%&'(" )*+, - .%//"("01 123"4 5/ 67800"94 5/ .%41(%:'1%50

)6 "9,.1@'( 8#$,,'-. - faclllLaLe flow of goods from producer Lo cusLomer
$6 B3('8& 8#$,,'- + slmplesL channel, producer sells dlrecLly Lo cusLomers
WP?: Cffer lower prlce (L.g. - farm, lnLerneL), conLrol over LransacLlon (prlclng, servlce, dellvery)
56 C,/3('8& 8#$,,'- + producer uses 1 or more lnLermedlarles Lo reach consumers
WP?: Consumer famlllarlLy wlLh lnLermedlary ;4"" 67800"9 5:<"61%="4>
-ShorLesL lndlrecL channel: ManufacLurer-reLaller-consumer channel
-Common lndlrecL consumer channel: ManufacLurer-wholesaler-reLaller-consumer
<6 D1.3,'..>&9>51.3,'.. 8#$,,'-. - faclllLaLe flow of goods from producer Lo buslness cusLomer (l.e. - hosplLal,
facLory)
$6 B3('8& + more common Lo 8-2-8 markeLs Lhan consumer markeLs Lo cuL cosLs
56 C,/3('8&
-SlmplesL lndlrecL channel: manufacLurer-lndusLrlal dlsLrlbuLor raLher Lhan reLaller (merchanL
wholesaler)-cusLomer
E6 B3.&(351&39, 8#$,,'-. =9( .'(;38'. - mosL cases dlrecL: producer-cusLomer. Some servlces requlre an
lnLermedlary, agenL Lo compleLe LransacLlon (lnsurance agenLs, Lravel agenLs)
F6 B1$- G@1-&3%-'6 /3.&(351&39, .2.&'@. + ln whlch manufacLurers, dealers, wholesalers, reLallers, cusLomers
lnLeracL wlLh more Lhan 1 Lype of channel
-L.g. - pharmaceuLlcal lndusLry uses mulLlple channel usage: dlsLrlbuLe producLs ln aL leasL 3 channel
Lypes (hosplLals, lndlrecL consumer channel - drug reLallers, local lndependenL drugsLore)



Mk1C 2030: "#$%&'( )* + "#$,,'-. $,/ 01%%-2 "#$3, 0&($&'42

"#$% & '( )
5-$,,3,4 $ "#$,,'- 0&($&'42
6 0&'%. 3, 73.&(381&39, 5-$,,3,4
0&'% ): uevelop ulsLrlbuLlon Cb[ecLlves
0&'% ;: LvaluaLe lnLernal and LxLernal LnvlronmenLal lnfluences
0&'% <: Choose ulsLrlbuLlon SLraLegy
0&'% 6: uevelop ulsLrlbuLlon 1acLlcs
-locus on dlsLrlbuLlon plannlng of producers (manufacLurers) raLher Lhan lnLermedlarles, more Lhan ofLen Lake
leadershlp role ln creaLlng dlsLrlbuLlon channel

0&'% ): "#$,,'- =8>'?&3@'.
-Cverall ob[ecLlve: Make a flrm's producL avallable when, where and ln Lhe quanLlLles cusLomers wanL and need
aL mlnlmum cosL
-Speclflc ob[ecLlves: uepend on characLerlsLlc of producL and markeL (mlnlmlze handllng, provlde max producL
exposure)

0&'% ;: A@$-1$&3,4 &#' A,@3(9,B',&
-L.g. - ablllLy Lo creaLe dlsLrlbuLlon channels, avallable channel lnLermedlarles, ablllLy of cusLomers Lo access
Lhese lnLermedlarles, how compeLlLlon dlsLrlbuLes producLs
-Analyze compeLlLor dlsLrlbuLlon sLraLegles

0&'% <: "#99.' $ 73.&(381&39, 0&($&'42 (5ee 1oble 10.2)
)C "9,@',&39,$-D @'(&3?$-D 9( #9(3E9,&$- .2.&'B
$C "9,@',&39,$- B$(F'&3,4 .2.&'B + mulLl-level dlsLrlbuLlon channel ln whlch channel members work
lndependenLly of one anoLher
-8elaLlon llmlLed Lo buylng/selllng from one anoLher
8C G'(&3?$- B$(F'&3,4 .2.&'B HGI0C + channel of dlsLrlbuLlon ln whlch Lhere ls cooperaLlon among members aL 2
or more levels of channel - Lhe manufacLurlng, wholesallng and reLalllng levels
-Work LogeLher, depend on each oLher
3 1ypes of vMS
3C AdmlnlsLered - channel members remaln lndependenL buL volunLarlly agree Lo work LogeLher
33C CorporaLe - flrms have ownershlp conLrol of some or all of a dlsLrlbuLlon channel (e.g. - manufacLurer
buys agenL companles)
333C ConLracLual - cooperaLlon ls enforced by conLracLs, legal agreemenLs LhaL lay ouL each member's
rlghLs and responslblllLles and how Lhey wlll cooperaLe
1. wbolesolet-spoosoteJ vM5 - wholesalers and reLallers work LogeLher under leadershlp ln a
volunLary chaln, reLallers use common name, adverLlslng
2. ketollet coopetotlve: group of reLallers LhaL has esLabllshed a wholesallng operaLlon Lo help
Lhem compeLe more effecLlvely wlLh large chalns
3. ltoocblse otqoolzotloos - channel cooperaLlon ls expllclLly deflned and sLrlcLly enforced
Lhrough conLracLual arrangemenLs ln whlch franchlser allows enLrepreneur Lo use Lhe franchlse
name and markeLlng plan for fee
?C J9(3E9,&$- B$(F'&3,4 .2.&'B + arrangemenL wlLhln channel of dlsLrlbuLlon where 2 or more flrms aL Lhe same
channel level work LogeLher for common purpose (geL producL Lo cusLomer)

;C K,&',.3@'D 'L?-1.3@'D 9( .'-'?&3@' /3.&(381&39,
$C K,&',.3@' /3.&(381&39, + alms aL maxlmlzlng markeL coverage by selllng Lhrough all sulLable wholesalers or
reLallers (gum, mllk, bread, avallablllLy lmporLanL facLor of purchase declslon)
8C AL?-1.3@' /3.&(381&39, M llmlLlng dlsLrlbuLlon Lo slngle ouLleL ln parLlcular reglon (car)
-used when hlgh prlced lLems, servlce requlremenLs or llmlLed buyers ln reglon
Mk1C 2030: "#$%&'( )* + "#$,,'-. $,/ 01%%-2 "#$3, 0&($&'42

"#$% & '( )
56 0'-'5&37' /3.&(381&39, + uslng fewer ouLleLs Lhan lnLenslve dlsLrlbuLlon buL more Lhan excluslve dlsLrlbuLlon
-SulLable for shopplng producLs (appllances, compuLers), consumers wllllng Lo spend Llme vlslLlng dlff
reLall ouLleLs Lo compare producL alLernaLlves
:6 ; 9< 5#$,,'- -'7'-.

0&'% => ?'7'-9% ?3.&(381&39, @$5&35.
-lmplemenLaLlon of dlsLrlbuLlon sLraLegles
$6 0'-'5&3,4 5#$,,'- A'A8'(.B%$(&,'(.
-CuesLlons Lo ask: Wlll channel member conLrlbuLe Lo proflL, ablllLy Lo provlde servlce cusLomers wanL, lmpacL
on channel conLrol
-Conslder compeLlLors' channel parLners - e.g. - ensure producLs dlsplayed near compeLlLors'
86 C$,$43,4 &#' 5#$,,'- 9< /3.&(381&39,
"#$,,'- -'$/'( + domlnanL flrm LhaL conLrols Lhe channel
ower sources:
l) Lconomlc power - ablllLy Lo conLrol resources
ll) LeglLlmaLe power - legal auLhorlLy Lo call shoLs
lll) 8eward/coerclve power - engages ln excluslve dlsLrlbuLlon, ablllLy Lo glve proflLable producLs and Lo
Lake away from channel lnLermedlarles
-roducers LradlLlonally are channel leaders
-Channel cooperaLlon
56 D#2.35$- /3.&(381&39, %-$,,3,4> Crder processlng, Warehouslng, 1ransporLaLlon, lnvenLory conLrol

ulsLrlbuLlon Channels and Lhe MarkeLlng Mlx
4 's: lnfluence on channel declslons
rlce: 8eLallers have dlff prlclng ob[ecLlves
roducL: dlsLlncL poslLlon ln markeL

E943.&35.> FA%-'A',&3,4 &#' G$-1' "#$3,
E943.&35. + process of deslgnlng, managlng and lmprovlng movemenL of producLs Lhrough supply chaln, lncludes
purchaslng, manufacLurlng, sLorage and LransporL

@#' 01%%-2 "#$3,
01%%-2 5#$3, H acLlvlLles LhaL are necessary Lo converL raw maLerlals lnLo a good/ servlce and puL lL ln Lhe hands
of a consumer or buslness cusLomer
01%%-2 5#$3, A$,$4'A',& + managemenL of flows among flrms ln supply chaln Lo maxlmlze proflLablllLy
G$-1' 5#$3, + concepL of a supply chaln LhaL looks aL how each flrm recelves lnpuLs, adds value Lo Lhese lnpuLs
and Lhen passes Lhem along Lo nexL flrm ln chaln
-uownsLream - relaLlvely closer Lo polnL where producL reaches consumer
-upsLream - lnvolved early ln process

ulfference supply chaln, channel of dlsLrlbuLlon: # of members and funcLlon
Supply chaln - conslsLs of flrms LhaL supply raw maLerlals, componenLs necessary for flrm Lo producL g/s
and flrms LhaL faclllLaLe Lhe movemenL of producL Lo ulLlmaLe users of producL, channel members






Mk1C 2030: "#$%&'( )* + "#$,,'-. $,/ 01%%-2 "#$3, 0&($&'42

"#$% & '( &
5 6743.&38. 91,8&37,.
Cb[ecLlve: dellver whaL consumer wanLs ln rlghL Llme, place, prlce
): ;(/'( %(78'..3,4 + serles of acLlvlLles LhaL occurs beLween Llme order comes ln orgs and Llme producL leaves
door
-Crder recelved: senL elecLronlcally Lo offlce for record keeplng, warehouse Lo be fllled
<: =$('#71.3,4 + sLorlng goods n anLlclpaLlon of sale or Lransfer Lo anoLher member of Lhe channel or
dlsLrlbuLlon - enables markeLers Lo provlde Llme uLlllLy Lo consumers by holdlng onLo producLs unLll consumers
need Lhem
-# of warehouses needed, where, Lype
-LocaLlon: cusLomer accesslblllLy // level of cusLomer servlce cusLomers requlre
-rlvaLe vs. publlc warehouses: prlvaLe - flrms have hlgh lnlLlal lnvesLmenL buL also lose less lnvenLory
due Lo damage. ubllc - flrms pay for porLlon of warehouse space
-ulsLrlbuLlon cenLre: warehouse LhaL sLores goods for shorL perlods of Llme and provldes oLher
funcLlons, such as breaklng bulk
>: ?$&'(3$-. #$,/-3,4 + movlng of producLs lnLo, wlLhln an d ouL of warehouses
@: A($,.%7(&$&37, + modes of LransporL, lndlvldual frelghL carrlers flrm needs Lo use Lo move producLs among
channel members
-1radeoff: Mlnlmlze cosL vs. provldlng greaL cusLomer servlce
lacLors of 1ransporLaLlon
a) uependablllLy - ablllLy of carrler Lo dellver goods safely and on Llme
b) CosL - LoLal LransporLaLlon cosLs for movlng producL from one locaLlon Lo anoLher
c) Speed of dellvery - LoLal Llme for movlng producL from one locaLlon Lo anoLher
d) AccesslblllLy - # of dlff locaLlons Lhe carrler serves
e) CapablllLy - ablllLy of carrler Lo handle varleLy of dlff producLs (large, small, fraglle, bulky)
f) 1raceablllLy - ablllLy of carrler Lo locaLe goods ln shlpmenL

Modes of LransporLaLlon
l) 8allroads - heavy, bulky lLems, average cosL, moderaLe speed
ll) lggyback servlces - low-cosL rall LransporLaLlon for shlpplng Lo larger # of desLlnaLlons
lll) llshyback servlces, Lruck, Lraln, shlp
lv) 8lrdyback - comblnlng Lruck/alr
CanLanlerlazaLlon - large quanLlLles of goods sealed ln large proLecLlve conLalners for LranslL
v) WaLer - shlps
vl) 1rucklng
vll) Alr - fasLesL, mosL expenslve
vlll) lpellne
vllll) lnLerneL - banklng news, enLerLalnmenL

5:B,C',&7(2 87,&(7- + developlng and lmplemenLlng a process Lo ensure goods always avallable Lo meeL demand
-Culck-response, conLlnuous replenlshmenL, [usL-ln-Llme lnvenLory managemenL sysLems
Mk1C 2030: "#$%&'( )) * +'&$,-,./ $.0 12&$,-,./

"#$% & '( )
+'&$,-,./3 4%'5,$- 6'-,7'(8
+'&$,-,./ * flnal sLop on dlsLrlbuLlon channel by whlch goods/servlces sold Lo consumers for personal use

9#' 17:-;&,:. :< +'&$,-,./
=#''-2:<2('&$,-,./ #8%:&#'>,> * Lheory LhaL explalns how reLall flrms change, enLer markeL wlLh lower prlces
Lhan compeLlLors, becomlng more upscale as Lhey go Lhrough Lhelr llfe cycle
+'&$,- -,<' 585-' * process LhaL focuses on Lhe varlous reLall llfe cycle sLages from lnLro Lo decllne
4 SLages: 8eLall llfe cycle
)? lnLroducLlon - proflLs low, hlgh developmenL cosLs
@? CrowLh - sales/proflLs rlse, compeLlLlon lncreases, reLaller expands whaL lL offers (openlng more
ouLleLs)
A? MaLurlLy - lnLense compeLlLlon, dlfflculL Lo malnLaln cusLomer loyalLy, proflLs decllne, prlce cuLs
B? uecllne - reLall buslnesses become obsoleLe as new ways of dolng buslness emerge, may respond by
changlng meLhod Lo meeL change

9#' 17:-;&,:. ":.&,.;'>3 =#$&C> D,. 4&:('E <:( &#' <;&;('F
3 lacLors LhaL MoLlvaLe lnnovaLlve merchanLs Lo relnvenL Lhe way Lhey do buslness
)? 6'G:/($%#,5> - reLallers musL flnd new ways Lo sell Lo dlverse groups
-Cfferlng convenlence for worklng women (longer hors, drlve Lhrus), CaLerlng Lo speclflc age segmenLs
(chlldren's lkLA), 8ecognlzlng eLhnlc dlverslLy (8urger klng veggle 8urger)
@? 9'5#.:-:/8 - lnLerneL and e-Lalllng, self-serve purchases, 8llu Lags (Lo cloLhlng), lnLelllflL SysLem
H:,.&2:<2>$-' IHJ4? >8>&'G> * reLall compuLer sysLem LhaL collecLs sales daLa and are hooked dlrecLly
lnLo sLore's lnvenLory conLrol sysLem
A? K-:L$-,M$&,:. * reLalllng dlffers ln counLrles, need Lo ad[usL Lo dlff condlLlons around world

98%'> :< +'&$,-'(>
8eLall managers - need Lo undersLand compeLlLlve envlronmenL operaLed ln Lo make declslons on ways Lo offer
merchandlse Lo publlc

"-$>>,<8,./ +'&$,- 4&:('> L8 G'(5#$.0,>' >'-'5&,:.
N'(5#$.0,>' G,O * LoLal seL of all producLs offered for sale by flrm, lncludlng all producL llnes sold Lo all
consumer groups
!"! N'(5#$.0,>' $>>:(&G'.& * selecLlon/range of producLs sold, has breadLh and depLh
-ueLermlned by balance of l) roflLablllLy ll) 8readLh and depLh
a) N'(5#$.0,>' L('$0&# 2 # of dlff producL llnes, narrow (convenlence sLores) vs. 8road assorLmenL
(warehouse sLore)
b) N'(5#$.0,>' 0'%&# * varleLy of cholces avallable ln each producL llne, Shallow (llmlLed selecLlon,
facLory ouLleL), ueep assorLmenL (speclalLy sLores)
45($GL-'0 G'(5#$.0,>,./ * merchandlslng sLraLegy carrylng a mlxLure of merchandlse lLems LhaL are noL
dlrecLly relaLed Lo each oLher (8lockbusLer - vldeos + movle food)
P.7'.&:(8 &;(.:7'( (aka >&:5Q &;(.) - average # of Llmes a year a reLaller expecLs Lo sell lLs lnvenLory
-Cverly rapld Lurnover - resulLs ln greaLer cosLs b/c producLs musL be boughL ln smaller quanLlLles
-8eLallers balance proflL (gross margln measure) and lnvenLory Lurnover





Mk1C 2030: "#$%&'( )) * +'&$,-,./ $.0 12&$,-,./

"#$% & '( )
3&4(' 56%'7
$8 "4.9'.,'.:' 7&4('7 * nelghborhood reLallers LhaL carry llmlLed # of frequenLly purchased lLems, caLer Lo
consumers wllllng Lo pay premlum, meeL needs for Lhose pressed for Llme, buy ln smaller quanLlLles, shop
lrregular hours
;8 3<%'(=$(>'&7 * food sLores LhaL carry wlde selecLlon of edlble and non-edlble producLs
:8 3%':,$-&6 7&4('7 * narrow and deep lnvenLorles, do noL sell loLs of producL llnes, offer good selecLlon of
brands wlLhln llnes sold (La Senza, Mark's Work Warehouse)
08 ?'.'($- ='(:#$.0,7' 0,7:4<.& 7&4('7 * offer broad assorLmenL of lLems aL low prlces and wlLh mlnlmal
servlce (Wal-MarL, Zellers)
@AA2%(,:' ('&$,-'(7 * reLallers LhaL buy excess merchandlse from well-known manufacLurers and pass
savlngs Lo cusLomers
'8 B$('#4<7' :-<;7 * new verslon of dlscounL sLores, bargaln menLallLy relnforced by merchandlse dlsplayed,
ofLen charge membershlp fee LhaL buy broad assorLmenL of food and non-food lLems ln bulk (CosLco)
A8 C$:&4(6 4<&-'& 7&4('7 * Lype of dlscounL reLaller, owned by manufacLurer and sell off defecLlve or excess
lnvenLory, assorLmenL noL wlde, CuLleL mall - 1+ facLory sLores clusLered
/8 D'%$(&='.& 7&4('7 * sell broad range of lLems, deep selecLlon organlzed ln secLlons of sLore (8ay, Sears)
roblem: SpeclalLy sLores lurlng deparLmenL sLore shoppers wlLh deeper, fashlon selecLlons, beLLer
servlce
#8 E6%'(=$(>'&7 * comblne characLerlsLlcs of warehouse sLores and supermarkeLs, several Llmes larger Lhan
oLher sLores, offer vlrLually everyLhlng from grocerles Lo elecLronlcs, noL as developed ln norLh Amerlca

D'9'-4%,./ $ 3&4(' F47,&,4.,./ 3&($&'/6G +'&$,-,./ $7 5#'$&('
LnvlronmenL conLrlbuLes Lo cusLomer experlence
8eLallers need Lo poslLlon sLores so LhaL Lhey offer compeLlLlve advanLage
8eLallers = LheaLres, Shoppers = audlence Lo enLerLaln, Salesppl = acLors, SLore deslgn = sLage seLs

)8 3&4(' ,=$/' * Lhe way a reLaller ls percelved ln Lhe markeLplace relaLlve Lo compeLlLlon, markeL poslLlon
relaLlve Lo compeLlLlon (PolL 8enfrew = fashlonable, chlc), creaLe a personallLy" [usL as brand managers do Lo
producLs
H&=47%#'(,:7 * use of colour, llghLlng, scenLs, furnlshlngs, sounds and oLher deslgn elemenLs Lo creaLe a deslred
seLLlng, used Lo creaLe a cerLaln feellng" abouL Lhe reLall envlronmenL

SLore ueslgn: SeLLlng Lhe SLage
$8 3&4(' -$64<& * arrangemenL of merchandlse ln sLore
-ueLermlnes &($AA,: A-4I * how shoppers move Lhrough sLore and whaL areas Lhey pass or avold
-Crld layouL - found ln supermarkeLs and dlscounL sLores, conslsLlng of rows of neaLly spaced shelves
LhaL are parallel
-SLaple goods placed ln remoLe areas, lmpulse goods ln paLh Lo alsle, dlsplays
-lree-flow layouL - used ln deparLmenL and speclally sLores, conduclve Lo browslng, le. - merchandlse
arranged ln clrcles, arches
;8 C,J&<(' &6%' $.0 ='(:#$.0,7' 0'.7,&6 * cluLLer conveys low-class, upscale sLores have slLLlng space, dlsplays
:8 K<7,:
08 "4-4<( L -,/#&,./ * used Lo seL mood, orange sLlmulaLes hunger, blue/green/vloleL slgnlfy
elegance/cleanllness, llghL colours = serene, brlghL = exclLemenL
AcLors: SLore ersonnel - complemenL sLore's lmage, reLallers work Lo upgrade servlce quallLy, problem:
Lurnover of salespeople
rlclng ollcy - prlce polnLs (aka prlce ranges), prlclng sLraLegles need Lo be supporLed wlLh sLore deslgns


Mk1C 2030: "#$%&'( )) * +'&$,-,./ $.0 12&$,-,./

"#$% & '( )
34 5&6(' 768$&,6.9 :;,-0,./ &#' <#'$&('
Cholce of locaLlon facLor: proxlmlLy Lo hlghways/Lrafflc rouLes

1ypes of SLore !"#$%&"'( *+,, -&./0, 11234
$4 :;=,.'== 0,=&(,8&= * CenLral 8uslness ulsLrlcL (C8u) - LradlLlonal downLown buslness area ln Lown or clLy, area
Lo shop or work, publlc LransporLaLlon accesslble
-Concerns: SecurlLy, lack of parklng, lack of cusLomer Lrafflc evenlngs/weekends
-Cvercome problems: lncenLlves Lo encourage sLore openlngs
lesLlval markeLplaces - e.g. - SL. Lawrence MarkeL
>4 5#6%%,./ 8'.&('= * group of commerclal esLabllshmenLs owned and managed as a slngle properLy
-8ange ln slze/scope, sLrlp cenLres (qulck and easy access Lo baslc convenlences - dry cleanlng, vldeo
renLals) Lo super-reglonal cenLres (WesL LdmonLon Mall)
-Cffer varleLy, comblnes shopplng and enLerLalnmenL
-ulsadvanLages: Plgh renL, small speclalLy sLores hardshlps compeLlng wlLh mall anchor sLores
(ma[or deparLmenL sLores)
84 ?(''2=&$.0,./ ('&$,-'(= * locaLed by Lhemselves ln a separaLe bulldlng
-8eneflL: Lower renLs, fewer parklng problems, buL need Lo be aLLracLlve spoL, can'L rely on cusLomers
wlLh no lnLenLlon of enLerlng sLore (1oys'8'us)
04 @6.2&($0,&,6.$- =&6(' -68$&,6.= *
CarLs - small movable sLores LhaL can be seL up ln many locaLlons
klosks - larger and offer sLore-llke faclllLles
-lnexpenslve, good for new buslnesses

SlLe SelecLlon: Chooslng Where Lo 8ulld
8eflecLs overall growLh sLraLegy, conslsLenL wlLh long-Lerm goals, ln a place allows company Lo besL supporL Lhe
ouLleL
-lacLors when selecLlng slLe:
a) 1argeLlng consumer segmenL b) 1rade area
c) Long-Lerm populaLlon paLLerns - age proflle, communlLy llfe cycle, moblllLy
d) CompeLlLor locaLlons
b) 5&6('A= &($0' $('$ * geographlc zone LhaL accounLs for ma[orlLy of sales and cusLomers
-SlLe evaluaLlon - conslders facLors: Lrafflc flow, # of parklng spaces, ease of dellvery access, vlslblllLy
from sLreeL, local zonlng laws (LhaL deLermlne Lypes of bulldlng, parklng, slgnage allowed), cosL facLors
(lengLh of lease, amounL of Laxes)



1&$,-,./ $.0 B&#'( @6.25&6(' +'&$,-,./
@6.2=&6(' ('&$,-,./ * any meLhod a flrm sues Lo compleLe an exchange LhaL does noL requlre a cusLomer vlslL Lo
a sLore, brlck and morLar" sLores, e.g. - caLalogues, 1v shopplng channels, lnLerneL

3 C$D6( <E%'= 6F @6.2=&6(' ('&$,-,./
)4 12&$,-,./ * offerlng producLs for sale dlrecLly Lo consumers vla Lhe lnLerneL
-LlecLronlc commerce ln buslness-Lo-consumer (82c) markeLs
Who Shops Cnllne - almosL 60 of Canadlans have Lrled Lo buy someLhlng onllne, proflle of onllne
consumers - lncreaslngly female, less affluenL
Why uo Lhey Shop Cnllne - Slx C 8eneflLs: cosL (lower prlces), cholce, convenlence (accesslblllLy Lo
producLs around Lhe world, buy from home), cusLomlzaLlon, communlcaLlon (push Lechnology), conLrol
:6&= - elecLronlc shopplng agenLs/roboLs LhaL help consumers flnd producLs/prlces on lnLerneL
Mk1C 2030: "#$%&'( )) * +'&$,-,./ $.0 12&$,-,./

"#$% & '( &
345# &'6#.7-7/8 * lnLerneL Lools LhaL allow markeLers Lo auLomaLlcally send cusLomers relevanL lnfo,
speclfled by consumer preferences, whlle e-mall, chaL rooms, call cenLers allow consumers Lo Lalk back
37(&$-5 * gaLeways Lo Lhe lnLerneL LhaL asslsL consumers Lo navlgaLe Lhe lnLerneL and cusLomlze
experlence (slmpaLlco.ca)
WhaL uo Lhey 8uy - !"" $%&'" (()(

"(,&,6$- 9466'55 :$6&7(5; <)=<>= apply Lo LradlLlonal reLallers Loo, <?= dlfferenLlaLlng facLor
)= @($.0,./ - cusLomers need Lo know whaL Lo look for onllne and need way Lo assess LrusLworLhlness of onllne
suppllers
>= @4,-0,./ A($.0 -78$-&8 - cusLomer saLlsfacLlon ls key deLermlnanL of loyalLy, whlch lncludes speed of dellvery,
cosL of dellvery, responslveness ln cusLomer servlce, reLurn pollcy
?= 96$-$A,-,&8 * ablllLy of orgs Lo geL blgger w/o blg rlse ln expenses
B($CA$6D5E people need Louch-and-feel" lnfo before buylng producL, securlLy, cannlballzaLlon of sLore sales,
poLenLlal Lo lncrease prlce compeLlLlon b/c web surfer easlly access compeLlLor prlces

>= B,('6& F$(D'&,./ * exposlng a consumer Lo lnfo abouL g/s Lhrough non-personal medlum (e.g. - prlnL,
elecLronlc medla) and Lhen purchase producLs by phone/mall
$= G$,- 7(0'( * 2 forms - caLalogues and dlrecL mall
,= "$&$-7/4'5 * collecLlon of producLs offered for sale ln book form, usually conslsLlng of producL
descrlpLlons wlLh phoLos of lLems
-CusLomer proflle: affluenL career woman w/ access Lo sLores buL no Llme/deslre Lo go Lo Lhem
-L.g. - Canadlan 1lre, lkLA
-1rend: replaclng caLalogues wlLh lnLerneL sales
,,= B,('6& F$,- - brochure/pamphleL offerlng a speclflc producL/servlce aL one polnL ln Llme
-AdvanLage over caLalogues: can be personallzed

?= B,('6& 5'--,./ * lnLeracLlve sales process ln whlch salesperson presenLs a producL Lo lndlvldual/small group,
Lakes orders and dellvers Lhe merchandlse
-vacuum cleaners, nuLrlLlonal producLs, educaLlonal maLerlals ! producLs LhaL requlre lnfo Lo sell)
-lndependenL agenLs buy merchandlse from company, resell Lo consumers
$= B77(2&72077( 5$-'5 - decllnlng ln norLh Amerlca (less women home durlng day, relucLanL Lo open door)
A= 3$(&,'5 $.0 .'&C7(D5 - of dlrecL sales made ln consumer's home
l) Pome shopplng parLy - company rep makes sale presenLaLlon Lo group of ppl who have gaLhered aL
frlends, %$(&8 %-$. 585&'F * sales Lechnlque LhaL relles on ppl geLLlng caughL up ln group splrlL", buy
Lhlngs wouldn'L normally buy alone
ll) G4-&,-'H'- F$(D'&,./ (neLwork markeLlng) - sysLem ln whlch a masLer dlsLrlbuLor recrulLs oLher ppl Lo
become dlsLrlbuLors, sells Lhe company's producL Lo recrulLs, recelves commlsslon on all merchandlse
sold, some sysLems are lllegal, Lhey really are %8($F,0 56#'F'5 ln whlch lnlLlal dlsLrlbuLors proflL by
selllng merchandlse Lo oLher dlsLrlbuLors, very llLLle producL ever geLs boughL by consumers
6= I'-'F$(D'&,./ * dlrecL selllng conducLed over Lelephone, easler/less expenslve Lhan door-Lo-door

J= K4&7F$&,6 '.0,./ * coln-operaLed vendlng machlnes, requlre mlnlmal space/personnel Lo malnLaln/operaLe
L= B,('6& ('5%7.5' IM (u81v) - Lelevlslon programmlng, such as lnfomerclals/shopplng channels, whlch ellclLs
dlrecL orders for producLs from Lhe vlewlng publlc, measurable
Mk1C 2030: Chapter 12 - Integrated Market|ng Commun|cat|ons

"#$% & '( )
1a||or|ng Market|ng Commun|cat|ons to Customers
romot|on - coordlnaLlon of markeLer's efforLs Lo lnfluence aLLlLudes or behavlour Loward g/s
-1erm used ln pasL, lmplles a one-way (asymmeLrlcal) convo from markeLer Lo cusLomer
-romoLlon-focused companles focus: dlssemlnaLe favourable lnfo abouL g/s, use research Lo develop
msgs Lo persuade LargeLed audlence Lo engage ln deslred behavlour
Market|ng commun|cat|ons - Lerm now used lnformlng consumers and cusLomers abouL relaLlve value of
producLs, developlng LrusL and oLher relaLlonal bonds LhaL faclllLaLe ongolng exchange relaLlonshlps
-1wo-way (symmeLrlcal) approach
-3 roles: 1. 8ulld relaLlonshlps 2. CommlLmenL Lo brands 2. Long-Lerm proflLablllLy
4 Coals: 1) Inform consumers abouL new g/s, where Lo buy 2) kem|nd consumers Lo conLlnue uslng
producLs 3) ersuade consumers Lo choose one producL over oLhers 4) Create complex brand lmages &
ldenLlLles ln mlnds of consumers S) 8u||d relaLlonshlps wlLh cusLomers

Commun|cat|ons Strategy
-Lvery elemenL ln markeLlng mlx - form of communlcaLlon (packaglng, ads, employee unlform, prlce)

Integrated Commun|cat|ons Strategy
CoordlnaLlng CommunlcaLlon Messages !"## %&'()# *+,*-
Integrated market|ng commun|cat|ons (IMC) - pracLlce of unlfylng all markeLlng communlcaLlon Lools and
corporaLe brand messages Lo communlcaLe ln a conslsLenL way
-8aLed mosL lmporLanL facLor ln markeLlng sLraLegy
-8ecognlze LhaL cusLomers absorb lnfo abouL g/s from many sources - planned and unplanned. 8elles on
Lools/approaches Lo ensure each communlcaLes deslred msg.
-ulfferenL elemenLs ln lMC sLraLegy have dlff relevance Lo consumers durlng sLages of declslon process
(pre-purchase, purchase, posL-purchase)
CharacLerlsLlcs of lMC - sLlll new and evolvlng
1. CreaLes slngle unlfled volce 2. 8eglns wlLh cusLomer 3. uevelops relaLlonshlps wlLh cusLomers
4. lnvolves 2-way communlcaLlons S. locuses on sLakeholders & cusLomers 6. CeneraLes a sLream of
communlcaLlon 7. Measures resulLs based on feedback

koadb|ocks to IMC
-MarkeLers may l) 8eslsL lMC ll) 1rouble lmplemenLlng lMC
1. 8equlres changes ln way markeLers plan & lmplemenL communlcaLlon sLraLegles
l) llrms flnanclally drlven raLher Lhan cusLomer drlven - reslsLance Lo change
ll) Lxecs Lend Lo speclallze ln 1 aspecL of communlcaLlon, relucLanL Lo cover oLher areas
2. Can asslgn relaLlvely more lmporLance Lo aspecLs of communlcaLlon oLher Lhan adverLlslng, relucLanL Lo dlverL
parL of communlcaLlons budgeL from ads Lo coupons/conLesLs
3. 8equlres company-wlde commlLmenL - lower-level Lo hlgher-level - Lo puL cusLomer flrsL











Mk1C 2030: "#$%&'( )* + ,-&'.($&'/ 0$(1'&2-. "3445-26$&23-7

"#$% & '( )
"3445-26$&23-7 8#'3(9
8#' "3445-26$&23-7 03/': - # of elemenLs are necessary for communlcaLlon Lo occur and for meanlng Lo
Lransfer from sender Lo recelver - source, message, medlum, recelver !"## %&'()# *+,+-
-Consumer = focal polnL, message LransmlLLed on some medlum from sender Lo recelver, hoplng Lo capLure
recelvers' aLLenLlon and relaLe Lo Lhelr needs. 1wo-way communlcaLlons - recelver sends msg back Lo sender

;-63/2-. by Lhe MarkeLer - process of LranslaLlng an ldea lnLo a form of communlcaLlon LhaL wlll convey deslred
meanlng. L.g. - lldo uslng dogs reflecLlng falLhful/companlonable servlce
1he <35(6' - orgs or lndlvldual sendlng Lhe msg
-MarkeLers musL use real person (uave 1homas for Wendy's), hlre acLor/model, creaLe characLer
(Mr.eanuL)
1he 0'77$.' - acLual communlcaLlon ln physlcal form senL from sender Lo recelver
4 CommunlcaLlon Cb[ecLlves: =,>= 43/':? CeL $&&'-&23-, hold 2-&'('7&@ creaLe /'72('@ produce $6&23-
lorms of msg & how lnfo besL sLrucLured
$A 1ype of appeal - message sLraLegy when encodlng msg - e.g. - raLlonal appeal (focus on Lechnlcal
advanLages) vs. emoLlonal appeal (arouse good feellngs ln consumer)
BA SLrucLure of appeal - l) one-slded msgs (poslLlve lnfo) vs. Lwo-slded msgs (poslLlve and negaLlve lnfo,
noL used ofLen). ll) urawlng concluslons (our brand ls superlor")
1he 0'/254 - communlcaLlons vehlcle Lhrough whlch a message ls LransmlLLed Lo a LargeL audlence (e.g. - 1v,
radlo, magazlne, blllboard, producL logo on mug), aLLrlbuLes of producL should maLch medlum
>'63/2-. by Lhe C'6'2D'(
C'6'2D'( E lndlvldual/orgs LhaL lnLercepLs and lnLerpreLs msg
>'63/2-. E process by whlch recelver asslgns meanlng Lo msg
-LffecLlve communlcaLlon: when source & recelver have muLual frame of reference (share
undersLandlng abouL world)
-1o lmprove communlcaLlon efforLs: dlvldlng mass markeL lnLo smaller LargeL audlences
F327' - anyLhlng LhaL lnLerferes wlLh effecLlve communlcaLlon
-Causes: compeLlng markeLlng communlcaLlons, envlronmenL LhaL dlverL recelver's aLLenLlon
-Mlnlmlze nolse: lace msgs wlLh less dlsLracLlons/compeLlLlon for consumer's aLLenLlon
G''/B$61 - recelvers' reacLlons Lo msg, help markeLer deLermlne effecLlveness, verlfy lf sLraLegles worklng
-lmporLance of symmeLrlcal communlcaLlon: 8ecome more responslve Lo needs, develop relaLlonshlps

8#' G"H I(2/ (Ch3)
G"H I(2/ (llgure 3.4)? caLegorlzes consumer declslons as belng prlmarlly Lhlnklng (cognlLlve) or feellng (affecLlve)
and hlgh lnvolvemenL or low lnvolvemenL
1) rovldes useful way Lo Lhlnk abouL markeLlng communlcaLlons sLraLegles - dlff sLraLegles/LacLlcs ln each
quadranL
-Plgh lnvolvemenL-Lhlnklng declslons - lnformaLlve sLraLegles/LacLlcs. L.g. - comparaLlve
adverLlslng/demonsLraLlons/deLalled medla
-Low lnvolvemenL-feellng declslons - lmage-orlenLed sLraLegles/LacLlcs e.g. - llfesLyle adverLlslng, sex
appeals
2) 8elaLes Lo value creaLlon sLraLegles
-1hlnklng" declslons - concerned wlLh funcLlonal value, cosL-sacrlflce value
-leellng" declslons - concerned wlLh experlenLlal, symbollc value
LlmlLaLlons lC8: SlmpllclLy, lnablllLy Lo dlfferenLlaLe producL aLLlLudes and moLlvaLlons from brand aLLlLudes and
moLlvaLlons, lack of recognlLlon of need Lo creaLe brand awareness before brand aLLlLudes



Mk1C 2030: "#$%&'( )* + ,-&'.($&'/ 0$(1'&2-. "3445-26$&23-7

"#$% & '( )
8'9':3%2-. "3445-26$&23- ;:$-7 $-/ <(2'=7
-MarkeLlng manager Lo ldenLlfy comblnaLlon of communlcaLlon Lools LhaL wlll meeL company's ob[ecLlves ln
mosL effecLlve/cosL-effecLlve way
"3445-26$&23- %:$- > framework for developlng, lmplemenLlng and conLrolllng flrm's communlcaLlon acLlvlLles
-AdverLlslng (communlcaLlon) agencles - 3 funcLlonal areas: 1) CommunlcaLlon sLraLegy 2) CreaLlve 3) Medla
placemenL. Large agencles - 4) ln-house markeL research, lnLerneL/moblle communlcaLlon capablllLy
-LffecLlve communlcaLlon plan !"#$%&' )*+,- - 4 elemenLs: lnformaLlve/AffecLlve/PablLual/8eacLlve
communlcaLlon
CommunlcaLlon brlef - summary (3-4 pages) of 4 elemenLs, used by creaLlve Leam ensure creaLlve execuLlon

? @&'%7 2- 8'9':3%2-. &#' "3445-26$&23- ;:$-
@AB; )C ,/'-&2=D &#' &$(.'& $5/2'-6' > group of people wlLh whom you wanL Lo communlcaLe, who recelve and
respond slmllarly Lo markeLlng messages
-MarkeLlng communlcaLlons more effecLlve - anyLhlng LhaL affecLs how consumers recelve, process, sLore, use
lnfo (know values, aLLlLudes, lnLeresLs, oplnlons). Successfully reach consumers wlLh rlghL msg, ln rlghL place, aL
rlghL Llme, wlLh rlghL offer.
1argeL MarkeL vs. 1argeL Audlence.
-May be same as LargeL markeL, however LargeL audlence = more speclflc. May be >1 LargeL audlence wlLhln
LargeL markeL. 1argeL audlence proflles = more Lalled (ln areas of medla, communlcaLlon sLraLegy, LacLlc
preferences/responslveness).

@AB; *C B7&$E:27# "3445-26$&23- FEG'6&29'7
CommunlcaLlons road = uphlll cllmb, hlll geLs sLeeper, consumers formlng preference for producL = Lougher.
Small proporLlon of LargeL markeL reach Lop, become loyal cusLomers ! each parL of parL has dlff
communlcaLlon ob[ecLlves Lo push" ppl Lo nexL level ln declslon process
$H "('$&' $I$('-'77 - make members of LargeL markeL aware of producL. Lxamples of promoLlonal efforLs -
repleLlon of brand name, slogans/[lngles, publlclLy sLunLs. L.g. - .'/0'& 1/23/#$4
EH ,-=3(4 4$(1'& - provlde users wlLh knowledge abouL beneflLs. L.g. - descrlpLlve copy, brochures,
lnfomerclals, publlc relaLlons, personal selllng
6H "('$&' /'72(' - creaLe favourable feellngs Loward producL, convlnce porLlon of group LhaL lL ls preferable Lo
compeLlLor producLs. L.g. - sLaLus appeals, sex appeals, celebrlLy endorsemenLs
/H B-635($.' &(2$: > L.g. - polnL-of-purchase dlsplays, coupons, conLesLs, samples
'H <52:/ :3D$:&D > convlnclng cusLomers Lo conLlnue buylng - malnLaln ongolng communlcaLlons wlLh currenL
users Lo relnforce bond Lhey feel wlLh producL. L.g. - malllng Lo users, llcensed merchandlse, producL placemenL
-ulfferenL communlcaLlon ob[ecLlves relevanL ln each sLage ln %(3/56& :2=' 6D6:'
l) lnLroducLlon sLage - aware of producLs, knowledgeable
ll) CrowLh - deslre, dlfferenLlaLlon ln brands
lll) MaLurlLy - lncreaslng markeL share, encourage Lrlal from new users, bulldlng loyalLy
lv) uecllne - encourage loyal cusLomers Lo repeaL purchases, lncrease consumpLlon










Mk1C 2030: Chapter 12 - Integrated Market|ng Commun|cat|ons

"#$% & '( )
S1L 3: Determ|ne Commun|cat|on Strategy Approach
CommunlcaLlon sLraLegy - descrlbes overall approach Lo communlcaLlon
lMC = way Lo descrlbe overall sLraLegy
a) ush vs. u|| Strategy
|) ush strategy - company ls seeklng Lo move producLs Lhrough channel by convlnclng channel members Lo
offer Lhem and enLlce cusLomers Lo selecL Lhese lLems
-CommunlcaLlon efforLs: focus on personal selllng and sales promoLlons (exhlblLs, Lrade shows)
||) u|| strategy - counLlng on consumers Lo learn abouL and express deslre for lLs producLs, Lhus convlnclng
reLallers Lo respond Lo demand by sLocklng Lhese lLems, movlng producLs Lhrough channel by bulldlng deslre for
producLs among consumers, who convlnce reLallers Lo sLock Lhe lLems
-CommunlcaLlon efforLs: medla adverLlslng Lo sLlmulaLe lnLeresL among end consumers
b) D|rect|on of commun|cat|on - one-way vs. two-way
|) Cne-way commun|cat|on - markeLlng orgs sends msgs Lo audlences w/o expecLlng or deslrlng
feedback
||) 1wo-way commun|cat|on - ob[ecLlve: develop relaLlonshlp wlLh cusLomers, geL feedback, be wllllng
Lo change behavlour
c) urpose of commun|cat|on - asymmetr|ca| vs. symmetr|ca|
|) Cne way asymmetr|ca| commun|cat|on - persuade cusLomers Lo engage ln behavlour beneflclal Lo
markeLlng orgs by only communlcaLlng selecLlve poslLlve beneflLs, hlL and run" approach Laken by
salesmen LhaL use hard sell" LacLlcs Lo convlnce ppl Lo buy Lhelr producLs - noL parLlcularly lnLeresLed lf
cusLomers wlll be saLlsfled wlLh purchase declslon
-1wo way asymmeLrlcal - orgs/cusLomers Lry Lo persuade each oLher, w/o engaglng ln glve-and-Lake
dlalogue, conLroverslal soclal lssues (bulldlng of caslnos)
||) Symmetr|ca| commun|cat|on - balanced approach where markeLlng orgs communlcaLes boLh poslLlve
and negaLlve lnfo abouL producLs Lo help consumers make lnformed cholce

S1L 4: DLVLLC kL MLSSAGLS AND CSI1ICNING S1A1LMLN1
os|t|on|ng statement (Ch3) - 1-3 senLence summary of producL poslLlonlng - how you wanL a producL Lo be
known ln Lhe mlnds of Lhe cusLomers as belng dlfferenL from, and beLLer Lhan, compeLlLlve offers, focus on 1-2
ways of producL dlfferenLlaLlon
-Slmllar Lo concepL of unlque selllng proposlLlon (uS) - #1 msg a markeLer wanLs Lo convey Lo audlence
-key messages Lo communlcaLe Lo LargeL markeL - llsLed ln communlcaLlon plan, ln order of prlorlLy

Commun|cat|on 1act|cs !"#$ &' ()&*+(,
Advert|s|ng appea| - cenLral ldea/Lheme of communlcaLlon message
Creat|ve concept - how ldea wlll be expressed Lhrough vlsuals, LexL, muslc, oLher deslgn elemenLs
-CommunlcaLlon plan - Lo seL boundarles on creaLlve process, ensure creaLlve ls on sLraLegy and conslsLenL wlLh
communlcaLlon ob[ecLlves, LargeL audlence, poslLlonlng
Common appeals
a) lnformaLlve appeals - glves consumers 1 + reasons why producL good cholce for solvlng problem
b) ComparaLlve adverLlslng - expllclLly names 2+ compeLlLors
c) uemonsLraLlon - shows producL ln acLlon" Lo prove LhaL lL performs as clalmed
d) 1esLlmonlal - celebrlLy, experL of person sLaLes producL effecLlveness
e) Sllce-of-Llfe - presenLs a (dramaLlzed) scene from everyday llfe
f) LlfesLyle - shows person aLLracLlve Lo LargeL markeL ln appeallng seLLlng, adverLlsed producL parL of scene",
lmplylng LhaL person buylng wlll aLLaln Lhe llfesLyle
g) lear appeals - hlghllghLs negaLlve consequences of uslng/noL uslng producL, geL aLLenLlon of audlences of
soclal msgs (drlnklng and drlvlng, smoklng, safe sex)
h) Sex appeals l) Pumorous appeals
Mk1C 2030: "#$%&'( )* + ,-&'.($&'/ 0$(1'&2-. "3445-26$&23-7

"#$% & '( )
89:; <= >:8,?@ "A00B@,"C9,A@ 0,D
"3445-26$&23- 42E F ma[or elemenLs of markeLer-conLrolled communlcaLlons, lncludlng adverLlslng, sales
promoLlons, publlc relaLlons, dlrecL markeLlng, personal selllng, word of mouLh, mlx lmplles focus on 1+
elemenLs, challenge: comblnlng Lools effecLlvely, ensure works ln harmony wlLh overall markeLlng mlx
2 ulmenslons of markeLlng communlcaLlons
1) 1ype of communlcaLlon, 2 Lypes - a) MarkeLers dellver msg 2) rovldlng lncenLlve Lo purchase/change
behavlour
2 meLhods LransmlLLlng msgs/lncenLlves: a) CommunlcaLe Lo mass audlence b) CommunlcaLe person Lo
person
2) Source a) CrganlzaLlon b) resumed lndependenL source (frlends, edlLorlals, experL oplnlon)

:G'4'-&7 3H "3445-26$&23- 02E !"## %&'(# )*+,-
)I C/J'(&272-. + nonpersonal communlcaLlon from an ldenLlfled sponsor uslng mass medla' mosL famlllar/vlslble
elemenL of mlx
-CreaLes and relnforces brand ldenLlLy, useful ln communlcaLlng facLual lnfo, drawbacks: credlblllLy,
cynlcal consumers Lune ouL blased msgs, expenslve
*I ;'(73-$G 7'GG2-. + dlrecL lnLeracLlon beLween company represenLaLlve and cusLomer, ln person, by phone
-Common ln 8-2-8 markeL, effecLlve for lndusLrlal producLs, drawbacks: expenslve, dlfflculL Lo ensure all
salespeople dellverlng same msg wlLh same lmpacL
KI >2('6& 4$(1'&2-. (Ch11) F form of non-sLore reLalllng, efforLs Lo galn a dlrecL response from lndlvldual
consumers, caLalogues, dlrecL mall, lnLerneL, Lelevlslon
,-&'($6&2J' 4$(1'&2-. F 2-way communlcaLlons, cusLomlzed Lo ellclL measurable dlrecL responses from
lndlvldual cusLomers and allow markeLers Lo provlde furLher cusLomlzed lnfo based on response
+ueslred response: llrsL-order response (order) vs. Second-order response (requesL for more
lnfo/demonsLraLlon, provlde feedback on sample C8 even Lo requesL noL Lo recelve more lnfo
from company)
+Coal: 8educe cusLomer base, efforLs mosL effecLlve when communlcaLlng wlLh cusLomers who
are lnLeresLed ln whaL Lhey have Lo offer
-locuses on shorL-Lerm, slngle LransacLlon responses or seL of responses leadlng Lo purchase declslon
-LffecLlve dlrecL markeLlng: develop effecLlve cusLomer daLabase conLalns enough deLall ln LargeL markeL
proflles Lo enable markeLers Lo Lallor msgs Lo speclflc caLegorles of consumers
LI ;5MG26 ('G$&23-7 F seL of communlcaLlon Lools Lo esLabllsh/malnLaln conLacL wlLh publlcs (sLakeholders) on
whom success depends
-Long-Lerm poslLlve relaLlons
-AssoclaLed wlLh %5MG262&N F unpald communlcaLlon abouL orgs appearlng ln mass medla, wrlLlng press
releases & developlng relaLlons wlLh [ournallsLs LhaL wrlLe arLlcles abouL orgs/producLs
-lnclude: sLaglng evenLs, respondlng Lo producL recalls
<I 8$G'7 %(343&23- + conLesLs, coupons, and oLher lncenLlves deslgned Lo bulld lnLeresL or encourage producL
purchase durlng a speclfled perlod
-ulfference: noL message-orlenLed, Lhey are lncenLlves Lo sLlmulaLe lmmedlaLe purchase
OI ,-&'(-'& $-/ A&#'( :G'4'-&7
P2($G 4$(1'&2-. - markeLlng acLlvlLy where company recrulLs cusLomers Lo be sales agenLs and spread word
abouL producL, companles now offerlng premlums Lo cusLomers engaged
Q3(/+3H+435&# RQA0I 4$(1'&2-. + acLlvlLles LhaL glve people a reason Lo Lalk abouL Lhe producL
S5TT 4$(1'&2-. + hlgh-proflle enLerLalnmenL or news LhaL geLs people Lo Lalk abouL Lhe brand
?5'((2GG$ 4$(1'&2-. !./0 1. 0#20- - acLlvlLles LhaL ambush" consumers wlLh promoLlonal conLenL ln places where
Lhey are noL expecLlng Lo see Lhls Lype of acLlvlLy
-8rand placemenL (ln movles/Lv), 3
rd
parLy endorsemenLs, 3
rd
parL lncenLlves (governmenL subsldles), lnfluence
laLLer 2 Lhrough publlc relaLlons and pollLlcal lobbylng
Mk1C 2030: "#$%&'( )* + ,-&'.($&'/ 0$(1'&2-. "3445-26$&23-7

"#$% & '( )
,-895'-6'7 3- "3445-26$&23- :&($&'.;< =$6&267 $-/ 02>
-CommunlcaLlon mlx varles over Llme - dlff elemenLs beLLer Lo achleve markeLer's ob[ecLlves aL dlff polnLs ln
Llme
-lnfluence on mlx: SLage ln producL llfe cycle
l) lnLroducLlon - bulld awareness, rely on push sLraLegy. AdverLlslng prlmary Lool. ubllclLy campalgn.
Sales promoLlon.
ll) CrowLh - producL beneflLs, lncrease adverLlslng, sales promoLlon decllne
lll) MaLurlLy - many ppl Lrled/used, new cusLomers Lo swlLch from compeLlLors, sales promoLlon
lncrease
lv) uecllne - reduces spendlng on all elemenLs of mlx. Sales drlven by loyal cusLomers

"('$&2?' @>'65&23-
"('$&2?' 7&($&'.; A process LhaL Lurns a concepL lnLo a communlcaLlon plece or or elemenL
-MarkeLers use campalgns - seL of relaLed elemenLs collecLlvely dellver ob[ecLlves deslred. Lach elemenL (1v,
newspaper, eLc.) has dlff ob[ecLlve. Coal: presenL serles of msgs repeLlLlvely LhaL audlence wlll progress Lhrough
AluA sLages
-SLeps: CreaLe blg ldea", execuLe ln dlff medla, recognlze concepL of dlffuslon of lnnovaLlon (Ch7) repeaL

0'/2$ :6#'/592-. $-/ B9$6'4'-&
0'/2$ %9$--2-. A problem-solvlng process for geLLlng msg Lo LargeL audlence ln mosL effecLlve way
-ueclslons, audlence selecLlon, where, when, frequency of exposure
$C Audlence selecLlon - maLch proflle of LargeL markeL wlLh medla vehlcles (e.g. - Chlnese newspaper readers)
DC Where - deLermlne $%'(&5(' A besL place and Llme Lo reach person ln LargeL markeL group
6C Medla schedullng - when: 4'/2$ 76#'/59' A speclfles exacL medla Lo use and when, ouLllnes esLlmaLe of
whlch medla mosL effecLlve ln aLLalnlng ob[ecLlves and whlch medla vehlcles do besL [ob
Medla Cholces - pald vs. unpald
E/?'(&272-. '>%375(' A degree Lo whlch LargeL markeL wlll see adverLlslng msg ln speclflc medlum
,4%('7723-7 + # of ppl who wlll be exposed Lo a msg placed ln 1+ medla vehlcles
F'$6# A Lo calculaLe exposure, of LargeL markeL LhaL wlll be exposed Lo medla vehlcle, lmporLanL Lo
wldely used producLs when lmpL Lo geL msg Lo as many ppl as posslble
G('H5'-6; + # of Llmes a person ln LargeL group would be exposed Lo msg, lmporLanL wlLh complex
producLs, LargeLed Lo small markeLs, where mulLlple exposures necessary
I(377 ($&2-. %32-&7 JIFB7C A measure used for comparlng effecLlveness of dlfferenL medla vehlcles
= average reach > frequency
"37& %'( &#357$-/ J"B0C A measure used Lo compare relaLlve cosL effecLlveness of dlff medla vehlcles
LhaL have dlff exposure raLes, cosL Lo dellver msg Lo 1000 ppl/homes
/C Pow ofLen
ConLlnuous schedule - malnLalns sLeady sLream of adverLlslng LhroughouL year, approprlaLe for
producLs sell on regular basls (shampoo, bread). AdverLlslng wearouL - Lune ouL of same msgs
ulslng schedule - varles amounL of adverLlslng LhroughouL year, based on llkely demand llghLlng -
form of pulslng - adverLlslng appears shorL, lnLense bursLs








Mk1C 2030: "#$%&'( )* + ,-&'.($&'/ 0$(1'&2-. "3445-26$&23-7

"#$% & '( &
89:; <= >:9:?0,@: A@> ABBC"A9: DE>F:9
* D5/.'&2-. 9'6#-2G5'7
)H 93%+/3I- J5/.'&2-. &'6#-2G5' K requlre Lop mgmL Lo allocaLe promoLlon budgeL based on LoLal amL
devoLed Lo markeLlng communlcaLlons
1echnlque: ;'(6'-&$.'+3L+7$M'7 4'&#3/ K communlcaLlon budgeL based on lasL year's sales or esLlmaLes for Lhls
year's sales
- = lndusLry average. AdvanLage: remlnds orgs LhaL spendlng on communlcaLlon resulLs ln proflL.
-urawbacks: lmplles sales cause communlcaLlon spendlng raLher Lhan vlewlng sales as ouLcome of
communlcaLlon
CompeLlLlve-parlLy meLhod - maLchlng whaL compeLlLors spendlng, resulLs ln same markeL share porLlons,
assumes same amL spenL ylelds same resulLs
*H D3&&34+5% J5/.'&2-. &'6#-2G5'7 K ldenLlfy communlcaLlon goals, allocaLe enough $ Lo accompllsh Lhem
ayouL plan - aLLempLs Lo predlcL revenues/cosLs wlLh producL over several years, maLchlng communlcaLlon
expendlLures
CJN'6&2O'+&$71 4'&#3/ K promoLlon budgeLlng meLhod ln whlch orgs flrsL deflnes speclflc communlcaLlon goals,
Lhen Lrles Lo calculaLe klnd of promoLlonal efforL Lo Lake Lo meeL goals

AMM36$&' D5/.'& &3 "3445-26$&23-7 02P
lnfluences on dlvldlng budgeL:
a) Crgs facLors - complexlLy/formallLy of declslon-maklng process, preference on elemenL ln mlx, pasL
experlences
b) MarkeL poLenLlal
c) MarkeL slze - larger markeLs more expenslve places Lo communlcaLe

89:; Q= ,0;B:0:@9 "?:A9,R: 89?A9:FS

89:; T= :RABEA9:
-SeL crlLerla/meLhods Lo deLermlne lf plan worklng, ueLermlne lf communlcaLlon ob[ecLlves meL
-ueLermlnlng effecLlveness of elemenLs vary, Sales promoLlons = easlesL Lo evaluaLe, occur durlng flxed Llme,
dlrecLly Lled Lo sales
;37&&'7&2-. K conducLlng research on consumers' responses Lo adverLlslng messages seen or heard
-CpposlLe = preLesLlng - collecL reacLlons Lo msgs before placed ln real world"
3 Measures of lmpacL of adverLlsemenL
)H E-$2/'/ ('6$MM LesL K research Lechnlque by phone, personal lnLervlew LhaL asks how much of ad remembers
durlng speclfled perlod of Llme
*H A2/'/ ('6$MM LesL K use clues Lo prompL answers from ppl abouL adverLlsemenLs mlghL have seen
UH A&&2&5/2-$M 4'$75('7 K probes consumer's bellefs/feellngs abouL producL before/afLer belng exposed Lo msgs
abouL lL

LvaluaLlng lMC, Lakes broad vlew of world. MarkeLers Lrack consumer responses Lo communlcaLlon efforLs and
lnLeracLlons wlLh brand/company over Llme lnsLead of aL polnL ln Llme. used Lo updaLe/reflne sLraLegy.

"3445-26$&23- D(2'L7
CommunlcaLlon plans - lnLernal documenLs creaLed by orgs provlde raLlonale for and gulde communlcaLlon
sLraLegy for speclfled perlod of Llme
CommunlcaLlon brlef - 1-3 pg summary of elemenLs ln communlcaLlons plan LhaL precedes creaLlve execuLlon
Mk1C 2030: "#$%&'( )* + ",--./01$&0,/2 304 $/5 6$1&012

"#$% & '( )
758'(&020/9 : non-personal communlcaLlon pald for by ldenLlfled sponsor uslng mass medla, mosL common
elemenL of mlx, lnvolves large budgeL, Lravel and celebrlLles, very effecLlve

"('$&0/9 758'(&020/9
;(,5.1& $58'(&020/9 : message focuses on speclflc g/s, 3 purposes 1) LducaLe ppl abouL new producL, whaL lL
does 2) Convlnce LargeL audlence Lo Lry lL or choose over compeLlLors 3) Lnsure ppl won'L forgeL abouL producL
</2&0&.&0,/$= $58'(&020/9 : promoLes acLlvlLles, personallLy or polnL of vlew of orgs or company or bulld demand
for producL caLegory (Canadlan egg producers' ads)
758,1$1> $58'(&020/9 : Lype of publlc servlce adverLlslng provlded by orgs seeks Lo lnfluence publlc oplnlon on
lssue b/c lL has sLake ln ouLcome
;.?=01 2'(801' $58'(&02'-'/&2 (SA) - adverLlsemenLs medla runs free of charge for noL-for-proflL orgs (drunk
drlvlng)

Who CreaLes AdverLlslng
758'(&020/9 1$-%$09/ : coordlnaLed, comprehenslve plan LhaL carrles ouL promoLlon ob[ecLlves, resulLs ln serles
of adverLlsemenLs placed ln medla over perlod of Llme
ln-house agency - flrms do own adverLlslng
LlmlLed-servlce agency - provldes 1+ speclallzed servlces (medla buylng, creaLlve developmenL)
lull-servlce agency - provldes mosL or all servlces needed Lo mounL campalgn (research, creaLlon of copy, arL,
medla selecLlon, producLlon)
lull servlce communlcaLlons servlces companles - provlde cllenLs wlLh advlce + servlce ln all areas of
communlcaLlon declslon maklng, lncludlng adverLlslng

8oles ln AdverLlslng Campalgn
!""#$%& ()%)*+(+%& - aka accounL execuLlve, accounL manager, sulL - soul" of operaLlon - develop campalgn
sLraLegy, llalson beLween agency/cllenL
,-+)&./+ 0+-/."+01 hearL" of communlcaLlons, produce ads, lnclude creaLlve dlrecLor, copywrlLer, arL dlrecLor
2+0+)-"3 )%4 ()-5+&.%* 0+-/."+0 - bralns" of campalgn - collecL/analyze lnfo help accounL execs develop
senslble sLraLegy
6+4.) 78)%%.%* - legs" of campalgn - helps deLermlne whlch communlcaLlons vehlcles mosL elecLlve, where,
when, how ofLen appear

3'50$ "#,01'2
)@ 6($50&0,/$= 3'50$ 9:++ ;)<8+ =>?=@
$@ 6'='8020,/ : reach large # of ppl, easy access Lo parLlcular segmenL Lhrough speclalLy channels. ulsadvanLage:
cosL
-roducL placemenL: meLhod of adverLlslng on 1v and movles, sLar" uses producL, brand awareness, exLenslve
reach, proLecLlon of producL from zapplng
?@ A$50, : flexlble, low cosL, ablllLy Lo reach speclflc consumer segmenLs
1@ B'C2%$%'(2 : one of oldesL medla vehlcles, local adverLlslng/evenLs LhaL requlre qulck response
5@ 3$9$D0/'2 : hlgh-quallLy lmages, speclflc segmenLs, selecLlve blndlng enables publlshers Lo personallze
edlLlons Lo local areas. ulrecLorles (yellow pages)

E@ ",-%.&'(F</&'(/'& 3'50$ : use of e-mall and lnLerneL 9:++ ;)<8+ =>?A@
$@ G$//'(2 : lnLerneL adverLlslng, recLangular graphlcs on web pages. 8each large #, crlLlc: unnoLlced by
consumers ?@ G.&&,/2 - small banner-Lype ads placed anywhere on web-page
1@ H-$0= l) Spammlng ll) ;'(-0220,/+?$2'5 -$(I'&0/9 : recelve elLher opLs-ln/ouL recelvlng emall
5@ ;,%+.% $52 '@ J'$(1# '/90/'K 50('1&,(> =02&0/92

Mk1C 2030: "#$%&'( )* + ",--./01$&0,/2 304 $/5 6$1&012

"#$% & '( )
*7 3,809' 3'50$, -+1,--'(1'+ promoLlonal and oLher e-commerce acLlvlLles LransmlLLed over moblle phones
and oLher devlces such as uAs, prevalenL ln Lurope/Asla
ShorL-messaglng sysLem markeLlng (SMS), use of locaLlon-based Lechnologles
AdvanLages: cusLomer convenlence, growlng Lrend
:7 ;.&+,<+#,-' -'50$ = reaches people ln publlc places
-8llmps, LranslL ads, blllboards
lace-based medla - LransmlLs msgs ln publlc places - effecLlve Lo reach capLlve audlence

>'?'9,%0/@ A<<'1&0?' B5?'(&020/@
C('&'2&0/@ = research ln early sLages of campalgn, gaLherlng baslc lnfo LhaL wlll help planers ensure accuraLely
deflned producL's markeL, consumers, compeLlLors
",%D &'2&0/@ = measures effecLlveness of ads by deLermlnlng wheLher consumers recelvlng, comprehendlng,
respondlng Lo ad accordlng Lo plan
1echnlques:
l) ConcepL LesLlng - deLermlne lf lnlLlal ldeas wlll work
ll) 1esL commerclals - consumers respond Lo rough verslon of Lelevlslon message (anlmaLlc/sLoryboard)
lll) llnlshed LesLlng - audlence reacLlons Lo fully produced commerclals
CrlLlque of AdverLlslng - assessmenL of quallLy of communlcaLlon sLraLegy and execuLlon

C.8901 E'9$&0,/2 FCE7 = helps bulld muLually beneflclal long-Lerm relaLlonshlps and lmprove lmage of orgs wlLh
key sLakeholders (consumers, medla, shareholders, leglslaLors, lnLeresL groups)
-Cruclal ln ablllLy Lo creaLe/susLaln favourable relaLlons, corporaLe goodwlll, overall lmage,
-CfLen overlooked by markeLers slnce no creaLlve/vlsual appeal
-lnLeracLlve, fosLer relaLlons, bulld soclal goodwlll, provldes hlgher credlblllLy/bellevablllLy
1ypes of 8
a) ubllclLy and medla relaLlons - unpald communlcaLlons abouL orgs/producLs
b) CorporaLe publlc relaLlons - managlng overall rep/lmage of orgs
c) Crlsls mgmL - plans for mgmL of corporaLe crlses, lncl. boycoLLs, recalls, naLural dlsasLers, sLrlke
d) Lmployee relaLlons - lnLernal programs deslgned Lo fosLer poslLlve relaLlons among/beLween employees
e) llnanclal relaLlons - effecLlve communlcaLlons dlrecLed Lowards lnvesLors, regulaLors, flnanclal sLakeholders
f) ubllc affalrs - lobbylng efforLs almed aL lnfluenclng pollcy declslons aL federal/provlnclal/munlclpal levels of
governmenL
g) CommunlLy relaLlons - grassrooLs mgmL of relaLlons wlLh local communlLy sLakeholders

CE ;8G'1&0?'2
a) lnLroduclng new producLs
b) SupporLlng currenL producLs
c) lnfluenclng governmenL leglslaLlon
d) Lnhanclng lmage of orgs/enLlLy
e) Calllng aLLenLlon Lo flrm's lnvolvemenL wlLh communlLy
f) uemonsLraLlng soclal responslblllLy
g) Pandllng communlcaLlon lssues/crlses







Mk1C 2030: "#$%&'( )* + ",--./01$&0,/2 304 $/5 6$1&012

"#$% & '( )
78$//0/9 7: "$-%$09/
8 campalgn - coordlnaLed efforL Lo communlcaLe wlLh one or more of flrm's sLakeholders
3 SLep process
1) ueveloplng ob[ecLlves
2) LxecuLlng - creaLe campalgn sLraLegy, deLermlne how msg communlcaLed. LlemenLs: SLaLemenL of problem,
slLuaLlon analysls, speclflcaLlon of LargeL audlences (publlcs), msgs Lo be communlcaLed, speclflc program
elemenLs Lo be used, LlmeLable/budgeL, dlscusslon of how program wlll be evaluaLed
3) LvaluaLlng
!"" $%&'" ()*+ , $--'. -/ 01

7: 7(,9($- ;8'-'/&2
a) 7.<8010&= > unpald communlcaLlon abouL orgs appearlng ln mass medla
b) 7('22 ('8'$2' > descrlpLlon of evenL orgs produces lLself and sends Lo medla ln hope reporLer wlll wrlLe arLlcle
abouL lL, mosL common way
-vldeo news 8elease (vn8) - newer verslon of press release, almed aL broadcasL medla
Common 1ypes of ress 8eleases:
l) 1lmely Loplcs - hoL Loplcs ln news
ll) 8esearch sLorles - summarlze research pro[ecLs
lll) Consume lnfo releases - lnfo Lo help consumers make beLLer producL declslons
-lnLernal publlc relaLlons acLlvlLles almed aL employees: l) Company newsleLLers ll) Closed-clrculL Lelevlslon
c) ?%,/2,(2#0% - companles provlde flnanclal supporL Lo help fund evenL ln reLurn for publlclzed recognlLlon of
company's conLrlbuLlon, LargeL speclflc markeL segmenLs
d) @.'((08$ -$(A'&0/9 > ambushlng" consumers wlLh promoLlonal conLenL ln places Lhey are noL expecLlng lL
(Lraln sLaLlons)

8arrler Lo rellance on 8 campalgns: ulfflculL Lo assess effecLlveness of speclflc program elemenLs, however
Lrack changes ln aLLlLudes, oplnlons, behavlors over Llme

?$8'2 7(,-,&0,/ > programs markeLers deslgn Lo bulld lnLeresL ln or encourage you Lo purchase g/s durlng
speclfled Llme perlod, useful for lmmedlaLe ob[ecLlves (e.g. - boosL sales, encourage consumers Lo Lry producL)
2!"" $%&'" ()*34
Sales promoLlon vs. AdverLlslng
-8oLh pald msgs from ldenLlflable sponsors lnLended Lo brlng abouL a change ln behavlour/aLLlLudes
-8oLh LargeLed Lo channel parLners and flrm's employees ln form of Lrade promoLlons and end cusLomers
-AdverLlslng campalgn = Lo creaLe long-Lerm poslLlve feellngs abouL company vs. sales promoLlon = shorL-Lerm
ob[ecLlves (excepLlons ln laLLer)

6($5' 7(,-,&0,/2
1) ulscounL and deals - prlce break, reduce channel parLner's cosLs Lhrough sales promoLlons on own producLs
3'(1#$/502' $88,B$/1' > relmburses reLaller for ln-sLore supporL (shelvlng)
"$2' $88,B$/1' > provldes dlscounL Lo reLaller/wholesaler based on volume of producLs ordered
2) lndusLry boosLlng and boasLlng - lncrease vlslblllLy of manufacLurer's producLs Lo channel parLners
a) 6($5' 2#,B2 > evenLs where companles seL up exhlblLs Lo show producLs, glve samples, Lroll for new
buslness conLacLs
b) romoLlonal producLs - glven away free Lo bulld awareness of sponsor (coffee mugs, L-shlrLs)
c) lncenLlve programs aka %.2# -,/'= - bonus pald by manufacLurer Lo salesperson for selllng producL



Mk1C 2030: "#$%&'( )* + ",--./01$&0,/2 304 $/5 6$1&012

"#$% & '( )
",/2.-'( 7(,-,&0,/2
)8 7(01'+9$2'5 1,/2.-'( %(,-,&0,/2 - emphaslze shorL-Lerm prlce reducLlons/refunds
a) Coupons - cerLlflcaLes redeemable for $ off purchase
b) rlce deals, refunds, rebaLes - Lemporary prlce reducLlons. :'9$&'2 ; allow cusLomer Lo recover parL of
producL's cosL dlrecLly from manufacLurer.
c) Speclal packs - glvlng shopper more of producL

<8 =&&'/&0,/+>'&&0/> 1,/2.-'( %(,-,&0,/2 ; sLlmulaLe lnLeresL ln and publlclLy for company's producLs
a) ConLesLs/sweepsLakes - conLesL - LesL of sklll vs. sweepsLake - based on chance
b) 7('-0.-2 ; lLems offered for free Lo people who have boughL a producL, ofLen novelLy lLem (free, removable
LaLLoos)
c) ?$-%@0/> - dlsLrlbuLlng Lrlal-slze verslons of producL for free Lo encourage people Lo Lry lL
d) 7,0/&+,A+%.(1#$2' B7C78 %(,-,&0,/ ; use of slgns or dlsplays Lo lnfluence purchases aL sLore, lnclude use of
ln-sLore medla - lncludlng placecards on shopplng carLs, closed-clrculL Lelevlslon

*8 D,E$@&E >'/'($&0/> %(,-,&0,/2 ; !"#$%#&%$' )*"+*,-./ -0-10*.2%) )*"+*,-./ 3"',3$' )*"+*,-. - pracLlce of
awardlng dlscounLs, bonuses oLher lncenLlves as redeemable polnLs" Lo frequenL and oLher hlgh-value
cusLomers
-8esL reLenLlon-markeLlng LacLlc, added beneflL: enabllng orgs Lo observe/Lrack purchase behavlour

7(,-,&0,/ ?&($&'>E
1. ueLermlne Cb[ecLlve: cemenL producL's poslLlon ln markeLplace
2) WhaL promoLlons wlll look llke (e.g. - lf encourage cusLomers Lo Lry producL, use sampllng)
"(,22+%(,-,&0,/ ; 2 or more companles comblne forces Lo creaLe lnLeresL ln dlff g/s uslng slngle promoLlonal
Lool
key lssue: over-redempLlon - havlng Loo many cusLomers redeem coupons, saLlsfy conLesL requlremenLs or buy
cross-promoLed producL

F0('1& 3$(G'&0/> ; non-sLore form of reLalllng
LffecLlve when: solld daLabase LhaL allows orgs Lo selecL poLenLlal reclplenLs LhaL maLch deslred LargeL proflle
L.g. - dlrecL mall, used ln 8-2-8 conLexLs Loo
8eneflL: opporLunlLy Lo ellclL measurable response by dlrecLlng Lo 1-800 number, web slLe or way Lo respond
F0('1& ('2%,/2' -$(G'&0/> ; markeLlng acLlvlLy almed Lo generaLlng measurable response vla markeLlng
communlcaLlons

7'(2,/$@ ?'@@0/>; company rep comlng ln dlrecL conLacL wlLh cusLomers Lo lnform Lhem abouL g/s Lo geL sale
used ln 8-2-8, lndusLrlal producLs

:,@' ,A 7'(2,/$@ ?'@@0/>
-More lmporLanL when flrm engages ln push sLraLegy - goal ls Lo push producL Lhrough channel of dlsLrlbuLlon
-Cruclal ln 8-2-8 conLexLs - dlrecL lnLeracLlon w/upper-level mgmL requlred
-used wlLh producLs boughL lnfrequenLly (compuLers, lawn mowers, college educaLlons)
urawbacks: cosL per conLacL wlLh cusLomer = hlgh
6'@'-$(G'&0/> ; person-Lo-person communlcaLlon vla Lelephone, fax, e-mall growlng ln popularlLy
C(5'( &$G'( ; salesperson LhaL processes LransacLlons LhaL cusLomer lnlLlaLes
6'1#/01$@ 2%'10$@02& ; compuLer Lechnlclan - conLrlbuLes experLlse ln form of producL demonsLraLlons, provlde
sales supporL raLher Lhan dolng sale
30220,/$(E 2$@'2%'(2,/ ; promoLes flrm, Lrles Lo sLlmulaLe demand for producL, does noL acLually compleLe sale
C(5'( >'&&'( ; salesperson who works creaLlvely Lo develop relaLlons w/cusLomers or Lo generaLe new sales
Mk1C 2030: "#$%&'( )* + ",--./01$&0,/2 304 $/5 6$1&012

"#$% & '( &
7%%(,$1#'2 &, 8'(2,/$9 :'990/;, one of oldesL forms of communlcaLlons
)< 6($/2$1&0,/$9 -$(='&0/;> 8.&&0/; ,/ &#' #$(5 2'99
Pard sell - hlgh pressure process, form of &($/2$1&0,/$9 2'990/; - sales Lechnlque LhaL focuses on maklng
lmmedlaLe sale wlLh llLLle/no aLLempL Lo develop relaLlon w/cusLomer
?< @'9$&0,/2#0% 2'990/;> ",./&'(0/; &#' &$(/02#'5 0-$;'
1oday's professlonal salesperson pracLlce ('9$&0,/2#0% 2'990/; A seeklng Lo develop muLually saLlsfylng relaLlon
wlLh cusLomer, lnvolves wlnnlng (converLlng lnLeresLed prospecLs' lnLo ppl convlnced LhaL g/s has value for
Lhem), keeplng (ensurlng g/s dellvers whaL's promlsed), developlng (saLlsfylng Lhem)

6#' @,9' ,B 8'(2,/$9 :'990/; 0/ ",--./01$&0,/2 304
a) Selllng process - Lo be successful, follow 1('$&0C' 2'990/; %(,1'22 A seeklng ouL cusLomers, analyze needs,
deLermlne how producL aLLrlbuLes provlde beneflLs, declde how besL Lo communlcaLe lnfo Lo LargeLed
cusLomers - 7 sLeps, llgure 13.1
b) rospecL cusLomers, %(,2%'1&0/; A process of ldenLlfylng/developlng llsL of poLenLlal cusLomers, called
!"#$!%&'$($)*%$ *%),$ (leads come from exlsLlng cusLomer llsLs, Lelephone dlrecLorles, daLabases C8 cold calllng
C8 referrals)
c) D.$90BE %(,2%'1&2 - Lo deLermlne how llkely Lhey are Lo become cusLomers
d) uo a %('$%%(,$1# - complllng background lnfo abouL prospecLlve cusLomers & plannlng sales lnLervlew
e) Make Lhe $%%(,$1# A conLacL Lhe prospecL, salesperson Lrles Lo learn more abouL prospecL's needs, creaLe
good lmpresslon, bulld rapporL. CusLomer decldes wheLher salesperson has someLhlng beneflclal Lo offer.
f) Make 2$9'2 %('2'/&$&0,/ A salesperson lays ouL beneflLs of producL and why beLLer Lhan offerlngs. roof
sLaLemenL - daLa on pasL sales, LesLlmonlals, guaranLees, research resulLs - help make plLch credlble
-Canned presenLaLlon - scrlpL wrlLLen ln advance and same msg dellvered Lo every prospecL
g) Cvercome cusLomer ob[ecLlons - effecLlve salesperson anLlclpaLes ob[ecLlons, reasons why prospecL unwllllng
Lo commlL Lo purchase
h) :$9'2 19,20/; A when salesperson asks cusLomer Lo buy producL and compleLe LransacLlon
1echnlques:
lasL ob[ecLlon close: asks cusLomers lf ready Lo purchase, provldlng any concerns abouL producL can be
addressed
1rlal close - salesperson acLs as lf purchase ls lnevlLable
SLandlng room-only close - salesperson lndlcaLes LhaL lf cusLomer does noL buy now, may noL be
opporLunlLy Lo purchase ln fuLure
l) :$9'2 B,99,F+.% A arranglng for dellvery, paymenL, purchase Lerms, allows salesperson Lo -".,/% Lo nexL
purchase

:$9'2 3$/$;'-'/& A process of plannlng, lmplemenLlng, conLrolllng personal selllng funcLlon of orgs
3 ueclslons:
1) SeLLlng sales force ob[ecLlves - whaL sales force expecLed Lo accompllsh and when & develop lndlvldual goals
- performance goals (measurable ouLcomes), behavolural goals (speclfy acLlons - e.g. # of class Lo make)
2) CreaLlng sales force sLraLegy - how flrm wlll sLrucLure, slze, compensaLe sales force
-Lach salesperson responslble for 2$9'2 &'((0&,(E A seL group of cusLomers, based on geographlc
boundarles, classes of producLs, lndusLry speclallzaLlon
3) 8ecrulLlng, Lralnlng, rewardlng salespeople, sales Lralnlng - salesppl learn abouL orgs, producLs, develop
skllls/knowledge, aLLlLudes Lo ldenLlfy cusLomer problems
SLralghL commlsslon plan - paymenL based on of sales person closes
Commlsslon-wlLh-draw plan - earnlngs based on commlsslon, salesperson also recelves regular paymenL
SLralghL salary compensaLlon plan - pald seL amounL regardless of performance
CuoLa-bonus plan - pald salary plus bonus for sales made above quoLa
Call reporLs - plans of acLlon deLalllng whlch cusLomers called upon, whaL happened durlng call