Marketing All

MARKETING
MKT 2153
Week 1:
Marketing in a Changing World:
Creating Customer Value and
Satisfaction
Prepared by : MISS. ANJALI DEWI
Learning Outcome
Upon completion of this chapter the students will be
able to:
(1) To describe the core marketing concepts: needs,
wants, and demands
(2) To explain the modern marketing system
(3) To elaborate on Marketing management
(4) To identify the difference between on marketing and
sales
Definitions of Marketing
The process of planning and executing the
conception, pricing, promotion, and distribution of
goods, services and ideas to create exchanges that
satisfy individual and organizational objectives
Marketing is an organizational function and a set of
processes for creating, communicating and delivering
value to customers and for managing customer relationships in
ways that benefit the organization and its stakeholders
The process by which companies create value
for customers and build strong customer
relationships in order to capture value from
customers in return
The Marketing Process

Understand the marketplace and
customers needs and wants
Design a customer-driven marketing
strategy
Construct a marketing program that
delivers superior value
Create value
for customers
and build
customers
relationships
Build profitable relationships and

create customer delight
Capture value from customers to

create profits and customers quality
Capture value
from customs
in return
Core Marketing Concepts

Needs, wants and demands
Market
Exchange,
transaction, and
relationship
Marketing offers
(products,
services, and
experiences
Value and satisfaction
Understanding the Marketplace

Core concepts
Needs, wants, and demands
o Needs
State of felt deprivation
Example: need food
o Wants
needs shaped by culture and personality
Example: want a big mac
o Demands
wants backed by buying power
Need
Want
Cont
Marketing offers
o Combination of products, services, information or
experiences that satisfy a need or want
o Offer may include services, activities, people,
places, information or ideas
Value
o Customers form expectations regarding value
o Marketers must deliver value to consumers
Satisfaction
o A satisfied customer will buy again and tell others
about their good experience
Cont
Value Satisfaction
o Perceived Value
The customers evaluation of the difference
between benefits and costs.
Customers often do not judge values and costs
accurately or objectively.
Customer Satisfaction
o Products perceived performance relative to
customers expectations.
o If the products performance falls short of
expectations, the customer is dissatisfied.
Cont
If performance matches expectations, the customer
is satisfied.
o If performance exceeds expectations, the customer
is highly satisfied or delighted.
o
Exchange, transactions and relationships

o The act of obtaining a desired object from
someone by offering something in return
o One exchange is not the goal, relationships with
several exchanges are the goal
o Relationships are built through delivering value and
satisfaction
Cont
Markets
o The set of actual and potential buyers shared
common need
o Marketers seek buyers that are profitable
Elements of a
Modern Marketing System
Company
[Marketers]
Marketing
intermediaries
Suppliers
Competitors
Major environmental forces
Final users
Marketing Management
Marketing management is the art and science of
choosing target markets and building profitable
relationships with them.
The marketing management philosophy that holds that
achieving organisational goals depends on knowing the
needs and want of target markets and delivering the
desired satisfactions better than the competitors do
Selecting Customers
and Creating Value
Customer Management
What customers will we serve?
Marketers select customers that can be served
profitably
Value Proposition
How can we serve these customers best?
Includes the set of benefits or values a company
promises to deliver to consumers to satisfy their
needs
Marketing Management Orientations

Over time five alternative concepts have develop
under which organizations design and carry out their
marketing strategies.
PRODUCTION
CONCEPT
PRODUCT
CONCEPT
SELLING
CONCEPT
MARKETING SOCIETAL
CONCEPT
CONCEPT
Production Concept
Consumers will favor products that are available and
affordable
Product Concept
Consumers will favor products that offer the most in
quality, performance, and innovative features
Marketing strategy focuses on making continuous
product improvements.
Selling Concept
Consumers will not buy enough without a large scale
selling and promotion effort
The concept is typically practiced with unsought goods
those that buyers do not normally think of buying, such
as insurance or blood donations.
These industries must be good at tracking down
prospects and selling them on product benefits.
Marketing Concept
Focus on satisfying the needs and wants of target
markets.
Customer focus and value are the paths to sales and
profits.
The job is not to find the right customers for your
product but to find the right products for your
customers.
Customer-driven marketing is about understanding
customer needs and creating products and services
that meet existing and latent needs.
The Societal Marketing Concept

The societal marketing concept questions whether the
pure marketing concept overlooks possible conflicts
between consumer short-run wants and consumer
long-run welfare.
The societal marketing concept holds that marketing
strategy should deliver value to customers in a way
that maintains or improves both the consumers and
the societys well being.
Cont
Society
[Human
welfare]
Consumer
[Want
satisfaction]
Societal
marketing
concept
Company
[Profits]
Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Trying to serve all customers may mean that no
customer is served well
Segmenting markets, targeting segments
Choosing a Value Proposition
The set of benefits and values it will deliver to
customers
Must differentiate and position the company in the
marketplace
Managing Marketing Orientations
Production Vs product Vs selling Vs marketing
The Selling and Marketing

Concepts Contrasted
Starting
point
The selling
concept
The
marketing
concept
Factory
Market
Focus
Existing
products
Customer
needs
Means
Ends
Selling and
promoting
Profits
through
sales
volume
Integrated
marketing
Profits
through
customer
satisfaction
Preparing a Marketing Plan

and Programme
The 4Ps a gross over-simplification of what
marketing is about
Product
Need-satisfying?
Price
How much?
Place
How made available?
Promotion
How communicated?
Building Customer Relationships

Customer Relationship Management
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction
Relationship Building Blocks
Customer Value evaluation and perception of offer
Customer Satisfaction does performance meet or
exceed expectation?
Customer Relationship Levels and Tools
Stranger, friend, partner?
Brands, clubs and cards
The Changing Nature of

Customer Relationships
Relating
With more
carefully selected For the long-term
customers
Directly
Capturing Value from Customers

Creating Customer Loyalty and Retention
The concept of customer lifetime value
Get customers, then keep them
Growing Share of Customer
The portion of a customers purchasing that a
company gets
Building Customer Equity
The combined customer lifetime values of all the
companys customers
Customer Relationship Groups
High
profitability
Potential
profitability
Low
profitability
Butterflies
True Friends
Good fit between

companys offerings
and customers needs;
high profit potential
Good fit between

companys offerings
highest profit potential
Strangers
Barnacles
Little fit between

companys offerings
and customers
needs; lowest profit
potential
Limited fit between

companys offerings
low profit potential
Short-term customers
Long-term customers
Projected loyalty
An Expanded Model of the

Marketing Process
Understand the
marketplace and
customer needs
and wants
Research
customers and the
marketplace
Manage marketing
information and
customer data
Design a customerdriven marketing

strategy
Select customers to
serve: market
segmentation and
targeting
Decide on a value
proposition:
differentiation and
positioning
Construct a
programme that
delivers superior
value
Build profitable
relationships and
create customer
delight
Capture value from

customers to create
profits and
customer equity
Product and service

design: build strong
brands
Customer
relationship
management: build
strong relationships
with chosen
customers
Create satisfied,
loyal customers
Pricing: create real

value
Distribution:
manage demand
and supply chains
Promotion:
communicate the
value proposition
Harness marketing
technology
Manage global
markets
Partner relationship
management: build
strong relationships
with marketing
partners
Ensure ethical and

social responsibility
Capture customer
lifetime value
Increased share of
market and share
of customer
Think
Do you think marketing is important? Why? And why not?
Do you think studying marketing will help you? Why? And why
not?
Recapitulation
Needs
Wants
Demand
Market Offerings
Value Proposition
Product
Price
Place
Promotion
Production Concept
Product Concept
Selling Concept
Marketing Concept
Reference and Content

Main
reference
supporting
the course
Additional
reference
supporting
the course
Philip Kotler & Gary Armstrong (2014),

Principles of Marketing,15th Edition
Pearson Education Publication.
Charles Lamb, Joseph Hair and Carl
McDaniels, 2010
Essential in Marketing
South West Publications
WEEK
LESSON PLAN
Marketing in a Changing
WEEK 1 World: Creating Customer
Value and Satisfaction
Core Marketing Concepts:
Needs, Wants, and
Demands
Modern Marketing System
Marketing Management
Marketing and Sales
Concepts Contrasted
L
T P O T
3
hours
THANK YOU
MARKETING
MKT 2113
WEEK 2:
Product Concept and
Management
Learning Outcome
able to:
(1) Describe the level of product
(2) Define product classification
(3) Identify the importance of innovation
(4) Elaborate the product factor affecting the rate of
adoption
What is a Product?
Cont
38
A product is anything that can be offered to a market

for attention, acquisition, use, or consumption that
might satisfy a want or need.
Broadly defined, products also include services,

events, persons, places, organizations, ideas, or mixes
of these.
Cont
39
Product
Tangible
GOODS
Intangible
SERVICES
Cont
Services
Services are a form of product that consists of
activities, benefits, or satisfactions offered for sale
that are essentially intangible and do not result in the
ownership of anything.
Cont
Products, Services, and Experiences
A companys market offering often includes both
tangible goods and services.
At one extreme, the offer may consist of a pure
tangible good, such as soap or toothpaste.
At the other extreme are pure services, for which the
offer consists primarily of a service.
To differentiate their offers, marketers are creating and
managing customer experiences with their brands or
company.
The Product Experience

When you buy an iPad, you are buying more than the
physical product. You are also buying the experience
of using it, as well as the emotion associated with it.
The Service Experience

Keeping in touch with changing trends, McDonalds in
Malaysia differentiates itself from other fast-food
restaurants by providing an atmosphere that
encourages people, especially youngsters, to spend
time there while enjoying the restaurants food.
Three Levels of Products
Levels of Products
45
Product planners need to think about products and

services on three levels.
Core customer value, which addresses the
question, What is the buyer really buying?
Actual product.
Augmented product, which is created around the
core benefit and actual product by offering
additional consumer services and benefits.
Cont
46
When developing products, marketers first must

identify the core customer value that consumers seeks
from the product.
They must then design the actual product and find

ways to augment it in order to create this customer
value and the most satisfying customer experience.
Types of Products
47
Consumer products
Consumer products are products
and services bought by final
consumers for personal
consumption
Industrial products
Industrial products are those
purchased for further processing or
for use in conducting a business.
Cont
Convenience Products
Convenience products are consumer products and
services that customers usually buy frequently,
immediately, and with a minimum of comparison and
buying effort.
Cont
Shopping Products
Shopping products are less frequently purchased
consumer products and services that customers
compare carefully on suitability, quality, price, and
style.
Cont
Specialty Products
Specialty products are consumer products and
services with unique characteristics or brand
identification for which a significant group of buyers
is willing to make a special purchase effort.
Cont
Unsought Products
Unsought products are consumer products that the
consumer either does not know about or knows
about but does not normally think of buying.
Marketing Considerations
for Consumer Products
Marketing
consideration Convenience
Customer
buying
behavior
Price
Type of consumer product
Shopping
Specialty
Unsought
Frequent
Less frequent
Strong brand
Little
purchase,
purchase,
preference and
product
little planning, much planning loyalty, special awareness
little
and shopping
purchase
,
comparison
effort,
effort, little
knowledge
or shopping comparison of comparison o
effort, low
brands on
brands, low
customer
price, quality .
price
involvement
style
sensitivity
Low price
Higher price
High price
Varies
Distribution
Widespread
distribution,
convenient
location
Promotion
Mass
Advertising and
More
Aggressive
promotion by personal selling
carefully
advertising and
the producer
by both
targeted
personal selling
producer and promotion by by producer and
resellers
both
resellers
producer and
resellers
Examples
Toothpaste
Magazines
Laundry
detergent
Selective
distribution in
fewer outlets
Major
appliances
Television,
furniture,
clothing
Exclusive
distribution in
only one or a
few outlets
per market
area
Luxury
goods, such
as Rolex
watches or
fine crystal
Varies
Life insurance,
blood donation
Industrial Product
Industrial product
Material and parts
o Raw material
o Manufactured material and parts
Capital items
o Installations
o Accessory equipment
Supplies and services
o Operating supplies
o Repair and maintenance items
Cont
Raw Materials/Parts
Materials and parts include raw materials and
manufactured materials and parts.
Cont
Capital Items
Capital items are industrial products that aid in the
buyers production or operations, including
installations and accessory equipment.
Cont
Supplies/Services
Supplies and services include operating supplies
and maintenance and repair services
New Product Classification System
Importance of Innovation
Coming up with new way to produce a product or a solution.
A service industry can expand with another type of
service to fulfil the ever changing needs of their clients.
Producers can come up with another product from the raw
materials and by-products.
Key value for the longevity of a business.
Kept evolving the product to make it better, easier and more
useful.
Manufacturers are constantly innovating to produce more
without sacrificing the quality.
Able to compete with large industry and see their value in
the economy
Product Factors Affecting the

Rate of Adoption
Consumer adoption process
Learn about new products
Try them
Adopt or reject them
Factors beyond the marketers control:
Characteristics of the new product or innovation
1. Some products catch on immediately, whereas
others take a long time gaining acceptance
2. An innovations rate of adoption depends on:
o Relative advantage
The degree to which the innovation appears
superior to the existing products
Cont
o Compatibility
The degree to which the innovations matches
the value and experiences of individual
o Complexity
Degree to which the innovation is relatively
difficult to understand or use.
o Divisibility
The degree to which the innovation can be
tried on a limited basis.
o Communicability
The degree to which the beneficial results of
use are observable or describable to others
Cont
Consumers and organizations willingness to try
new products
oSome people are the first to adopt new clothing
fashion or new appliances
oEx: some doctors are the first to prescribe new
medicines.
Personal influences
o examples?

Main reference Principles of Marketing 13th Eds (2009)
supporting the Philip Kotler & Gary Armstrong
course
Pearson Education, Inc Upper Saddle
River, New Jersey
Additional
Strategic Direction
reference
Supply Chain Management: An
supporting the International Journal
course
European Journal of Marketing
European Business Review
WEEK LESSON PLAN

Product Concept and
WEEK Management
2
Levels of Product
Product Classifications
The Importance of
Innovation
Product Factors Affecting
the Rate of Adoption
L T P O T
3
hours
tHaNk YoU
MARKETING
MKT 2113
WEEK 3:
New Product Development
Learning Outcome
able to:
(1) Describe the new product development
(2) Explain the basic stages in new product
development
(3) Identify marketing strategies
The Importance of
1st, new products become necessary for meeting
the changes in consumer needs.
2nd, new products become necessary for making
new profits.
3rd, new products become necessary for
combating environmental threats.
What else?

Strategy
A firm can obtain new products in two ways:
Acquisitionby buying a whole company, a patent,
or a license to produce someone elses product.
New-product development efforts.
Reasons For New Products

Failure
Although an idea may be good, the company may
overestimate market size.
The actual product may be poorly designed. Or it
might be incorrectly positioned, launched at the wrong
time, priced too high, or poorly advertised.
A high-level executive might push for a favorite idea
despite poor marketing research findings.
Sometimes the costs of product development are
higher than expected, and sometimes competitors fight
back harder than expected.
New-Product
Development Process
Cont
1.
2.
3.
4.
5.
6.
7.
8.
Idea generation
Idea screening
Concept development and testing
Market strategy development
Business analysis
Product development
Market testing
Commercialization
1. Idea Generation
Idea generation is the systematic search for new
product ideas.
The new product development process starts with
the search for ideas.
Consumers problems are the most fertile ground
for the generation of new product ideas.
New product ideas come from interacting with
various groups & from using creativity generation
techniques like Brainstorming, Synectics etc.
Others?
Cont
Unmet customer needs
Technological innovation
Encouraged by the open innovation movement, many
firms are going outside their bounds to tap external
sources of new ideas, including customers, employees,
scientists, engineers, channel members, marketing
agencies, top management, and even competitors.
Interacting with employees
Toyota claims its employees submit 2 million ideas
annually (about 35 suggestions per employee)
Kodak give monetary, holiday, or recognition awards
to employees who submit the best ideas.
Cont
Crowd sourcing
Lead users
Competitors
Run informal sessions with customers
Allow time off for technical people to putter on pet
projects
Make customer brainstorming a part of plant tours
Survey your customers
Undertake fly on the wall research to customers
2. Idea Screening
The first idea-reducing stage is idea screening, which
helps spot good ideas and drop poor ones as soon as
possible
Thus an idea/product evaluation committee is formed
to classify the proposed ideas into 3 categories, such
as: promising, marginal & rejects.
In screening ideas, the companies normally face 2
serious errors & they must try to avoid these mistakes
as far as possible, those 2 serious errors are:
Cont
Drop error
o Error which occurs when the company rejects
one really good idea having potential.
Go error
o Error which occurs, when the company permits &
facilitates a poor idea to move onto further
development stages & commercialization.
3. Concept Development and Testing

A concept is an elaborated version of a product idea
expressed in meaningful consumer terms.
In concept development, several descriptions of the
product are generated to find out how attractive each
concept is to customers. From these concepts, the best
one is chosen.
Example: A leading soft drink company, wants to add
a new product
o Fruit juice to its product lines, then the following
concepts can came across:
Concept 1: Fruit juice for young & grown ups as a
funny thirst quenching item.
Cont
Concept 2: Fruit juice for children as a health
supplements.
Concept 3: For adults as a nutritional energy
supplements
This is a product idea, but consumers dont buy
product ideas; they buy product concepts. A product
idea can be turned into several concepts.
Who will use this product? It can be aimed at
infants, children, teenagers, young or middle-aged
adults, or older adults.
Second, what primary benefit should this product
provide: Taste, nutrition, refreshment, or energy?
Cont
Third, when will people consume this drink:
Breakfast, midmorning, lunch, mid-afternoon, dinner,
late evening?
The best concept chosen after finding the answer for
these questions.
After the product concept has been developed, the stage
is now set for testing them.
It is here the prospective consumer understand the
product idea.
Here whether they are receptive towards the idea & their
willingness to try out such product is tested.
Cont
Concept testing means presenting the product concept
to target consumers, physically or symbolically, and
getting their reactions.
The more the tested concepts resemble the final
product or experience, the more dependable concept
testing is.
Concept testing of prototypes can help avoid costly
mistakes, but it may be especially challenging with
radically different, new-to-the-world products.
Visualization techniques can help respondents match
their mental state with what might occur when they are
actually evaluating or choosing the new product.
Cont
The concept testing depends upon:Communicability and believabilityAre the benefits
clear to you and believable? If the scores are low,
the concept must be refined or revised.
Need levelDo you see this product solving a
problem or filling a need for you? The stronger the
need, the higher the expected consumer interest.
Gap levelDo other products currently meet this
need and satisfy you? The greater the gap, the
higher the expected consumer interest. Marketers
can multiply the need level by the gap
Cont
Purchase intentionWould you (definitely,
probably, probably not, definitely not) buy the
product? Consumers who answered the first three
questions positively should answer Definitely
here.
Perceived valueIs the price reasonable in
relationship to value? The higher the perceived
value, the higher is expected consumer interest.
4. Marketing Strategy Development

The marketing strategy statement consists of three parts.
Describes the target market; the planned product
positioning the sales, market share, and profit goals
for the first few years.
The marketing strategy statement outlines the
products planned price, distribution, and marketing
budget for the first year.
Describes the planned long-run sales, profit goals,
and marketing mix strategy.
5. Business Analysis
This stage will decide whether from financial as well as
marketing point of view, the project is beneficial or not.
The projects overall impact on the corporations
financial position with & without the new product are
estimated & compared.
Here management needs to prepare sales as well as
cost & profit projections to determine whether they
satisfy company objectives.
6. Product development
In product development, R&D or engineering develops
the product concept into a physical product.
The product development step calls for a large jump in
investment. The new product must have the required
functional features and also convey the intended
psychological characteristics.
Cont
At Gillette, 200 volunteers from various departments come to work

unshaven and enter small booths with a sink and mirror. There they take
instructions from technicians on the other side of a small window as to which
razor, shaving cream, or aftershave to use. The volunteers evaluate razors
for sharpness of blade, smoothness of glide, and ease of handling. In a
nearby shower room, women perform the same ritual on their legs and
underarms.
7. Market Testing
Test marketing is the stage at which the product and
marketing program are introduced into realistic market
settings.
Test marketing gives the marketer experience with
marketing the product before going to the great
expense of full introduction.
It lets the company test the product and its entire
marketing programpositioning strategy, advertising,
distribution, pricing, branding and packaging, and
budget levels.
Cont
The amount of test marketing needed varies with each
new product.
Test marketing costs can be high, and it takes time,
perhaps allowing competitors to gain advantages.
When the costs of developing and introducing the
product are low, or when management is already
confident about the new product, the company may do
little or no test marketing.
Companies often do not test-market simple line
extensions or copies of successful competitor products.
Cont
However, when introducing a new product requires a big
investment, or when management is not sure of the
product or marketing program, a company may do more
test marketing.
In controlled test markets new products and tactics are
tested among controlled groups of customers and stores.
Within test stores, such factors as shelf placement, price,
and in-store promotions for the products being tested
can be controlled.
Cont
In simulated test markets researchers measure
consumer responses to new products and marketing
tactics in laboratory stores or simulated shopping
environments. Many marketers are now using new
online simulated marketing technologies to reduce the
costs of test marketing and speed up the process are
basically simulated shopping environments.
Cont
KFC test-marketed its new Kentucky grilled Chicken

product for three years before rolling it out nationally. Says
the chains President, We had to get it right.
8. Commercialization
When (timing) suppose a company has almost
completed the development work on its new product and
learns a competitor is nearing the end of its development
work. The company faces three choices:
First entrythe first firm entering a market usually
enjoys the first mover advantages of locking up key
distributors and customers and gaining leadership.
But if rushed to market before it has been thoroughly
debugged, the first entry can backfire.
Parallel entrythe firm might time its entry to
coincide with the competitors entry. The market may
pay more attention when two companies are
advertising the new product.
Cont
Late entrythe firm might delay its launch until
after the competitor has borne the cost of
educating the market, and its product may reveal
flaws the late entrant can avoid. The late entrant
can also learn the size of the market.

Main reference Principles of Marketing 13th Eds (2009)
supporting the Philip Kotler & Gary Armstrong
course
Pearson Education, Inc Upper Saddle
River, New Jersey
Additional
Strategic Direction
reference
Supply Chain Management: An
supporting the International Journal
course
European Journal of Marketing
European Business Review
WEEK LESSON PLAN

WEEK
Major Stages in New
3
Product Development
Idea Screening
Concept development and
testing
Marketing Strategy
Development
L T P O T
3
hours
THANK YOU
MARKETING
MKT 2153
Week 4:
Managing Marketing Information
Learning Outcome
Upon completion of this chapter the students will be able
to:
1. To elaborate on assessing marketing information needs
2. To discuss on developing marketing information
Marketing Information and

Customer Insights
Gaining insights
Gaining insights refers to the process of discovering
buyers needs and wants.
These insights :o Can be difficult to obtain
o Result from better marketing information, rather
than more information.
o Into customers needs and wants
o Difficult to obtain
Not obvious
Customers unsure of their behavior
Cont
Should result in better information and more
effective use of existing information
Cont
Gaining Insights
With key customer insights, innovative designs, and

usability, Apple has made the iPod a huge success,
changing how people listen to music and play games.
It now captures more than 75 percent market share
and has spawned other Apple blockbusters such as
the iPhone and iPad.
Cont
Information Overload
In this oh-sooverwhelming
information age, its all
too easy to be buried,
burdened, and burned
out by data overload.
The Marketing Information System

Marketing information system (MIS) is used
To assess information needs
Develop the needed information
Help decision makers use the information to
generate customer and market insights.
The users of the information and the larger marketing
environment serve as key inputs to an MIS.
Cont.
It interacts with information users to assess
information needs.
It develops needed information from:
Internal company databases
Marketing intelligence activities,
Marketing research.
It helps users to analyze information to put it in the
right form for making marketing decisions and
managing customer relationships.
It distributes the marketing information and helps
managers use it in their decision making.
Assessing Marketing
Information Needs
A good MIS...
Balances users information desires against what
they need and what is feasible to offer
MIS Balancing Costs And Benefits

Amount of information.
Too much information can be as harmful as too little.
Availability of information.
Sometimes the company cannot provide the needed
information either because it is not available or
because of MIS limitations.
Costs.
The costs of obtaining, processing, storing, and
delivering information can mount quickly. Marketers
should not assume that additional information will
always be worth obtaining
Developing Marketing Information

Marketers information sources
1. Internal databases
o Databases are electronic collections of consumer
and market information obtained from data sources
within the company network.
2.
Marketing intelligence
o Marketing intelligence is the systematic collection
and analysis of publicly available information about
consumers, competitors, and developments in the
marketplace.
Cont
Competitors often reveal intelligence information
through their annual reports, business
publications, trade show exhibits, and Web
pages.
o Firms can also collect marketing intelligence by
monitoring media sources and through industry
network contacts.
o
3.
Marketing research
o The systematic design, collection, analysis, and
reporting of data relevant to a specific marketing
situation
Cont
Internal database Pizza Hut can slice and dice its

extensive customer database by favorite toppings, what
you ordered last, and whether you buy a salad with your
cheese and pepperoni pizza; targeting coupon offers to
specific households based on past buying behaviors and
preferences. (www.pizzahut.com)

Main
reference
supporting
the course
Additional
reference
supporting
the course

McDaniels, 2010
Week
Lesson plan
Managing Marketing
Week 4 Information
Assessing Marketing
Information Needs
Developing Marketing
Information
L
T P O T
3
hours
THANK YOU
MARKETING
MKT 2153
Week 5:
Managing Marketing Information
Cont
Learning Outcome
to:
1. To explain on marketing research system
2. To describe on developing the research plan
The Marketing Research Process

Defining the problem and research objectives
2. Developing the research plan for collecting
information
3. Implementing the research plan collecting and
analyzing the data
4. Interpreting and reporting the findings
1.
1. Defining The Problem

And Research Objectives
Defining the research problem and objectives is often a
very difficult part of the research process.
A marketing research project may have one of three
types of objectives.
a) Exploratory
o Objective is to define the problem and refine
research questions.
o This preliminary information also helps suggest
hypotheses.
o Examples
Focus groups
Qualitative interviews
Cont
b)
o
c)
Descriptive
Describes things, markets, environment,
competition, etc
Causal
o Tests hypothesis about cause and effect
relationships
2. Developing the Research Plan

i.
Marketing problem
ii.
What information
do we need?
Management problem
Research objectives
Information needed
iii.
How will it be
obtained?
How the results will help

management decisions
Budget
iv.
What is the budget?
Cont
To be relevant, the research plan begins with the
specific marketing problem.
It then addresses the questions shown in the figure.
In doing so, the plan outlines sources of existing data
and spells out the specific research approaches,
contact methods, sampling plans, and instruments that
researchers will use to gather new data.
Cont
Red Bull example
A decision by Red Bull
to add a line of
enhanced waters to its
already successful mix
of energy and cola
drinks would call for
marketing research that
provides lots of specific
information.
3. Information Needed
a) Primary
Primary data consist of information collected for

the specific purpose at hand. It will be tailored to
the marketing problem but is costly to obtain.
b) Secondary
Secondary data consists of information that

already exists somewhere, having been collected
for another purpose
Cont
a) Primary
i.
Research approach
Observational
o Gathering of primary data by observing relevant
people, actions, and situations. Can be personal
observation or with cameras
Ethnographic
Ethnographic research borrows from anthropology
and the researcher gains in-depth information from
a few informants.
The outcome of ethnographic research is
qualitative data such as transcripts of interviews.
Cont
Survey
o Survey research is the workhorse of marketing and
it produces quantitative data.
o Requires a large sample and careful survey
design.
o Survey research is the most widely used method
and is best for descriptive information
knowledge, attitudes, preferences, and buying
behavior
o Advantages
Flexible
Cont
Disadvantages
People can be unable or unwilling to answer
Gives misleading or pleasing answers
Privacy concerns
Experimental
o Experimental research is best for gathering
causal informationcause-and-effect
relationships.
o For example, one could develop different designs
for a toaster and determine how aesthetics
influences the
o
Cont
Observational
Fisher-Price set up an observation lab in which it could

observe the reactions of little tots to new toys.
Cont
Ethnographic
Nokia In trying to add new customers, Nokia
invested heavily in ethnographic research, focusing
especially on emerging countries.
Nokia deployed teams of anthropologists to study deeply
the behavior of mobile-phone owners in such markets as
China, Brazil, and India.
By living with the locals, Nokia obtained subtle insights
into the nuances of each culture.
Cont
For example, it knows that half the worlds women keep
their phones in their handbags (and miss 20 percent of
their calls) and that most Asian early adopters who watch
mobile TV ignore the mobile part and tune in from home.
Importantly, Nokia found out that mobile phones in poor
rural areas are often used not individually, but by entire
families or even villages, because of the cost.
Based on this finding, Nokia designed its 1200 and 1208
phones which made shared use the top priority.
These phones contain a long-life battery and multiple
phone books so that each family or village member can
keep his or her own contacts and numbers separately
from others.
Cont
Experimental
Proctor & Gamble When Procter & Gamble entered
China, Chinese families were using kaidangku (
)colorful open crotch pants that let children squat
and relieve themselvesas part of potty training.
P&G had to convince parents to switch to using
disposable diapers. Together with the Beijing Childrens
Hospitals Sleep Research Center, it conducted two
extensive experiments involving 6,800 home visits and
over 1,000 babies in eight cities. aign.
Cont
Babies were tucked into bed with cloth or Pampers.
P&G found that babies using disposable diapers fell
asleep 30 percent faster and slept an extra 30 minutes
every night versus those using cloth.
The study also linked the extra sleep to improved
cognitive development, a compelling point in a society
concerned with academic achievement.
Findings such as Baby Sleeps with 50 percent Less
Disruption and Baby Falls Asleep 30 percent Faster
were used in its Golden Sleep ad camp
ii.
Contact method
Mail
Poor
Good
Telephone Personal
Good
Excellent
Fair
Excellent
Flexibility
Quantity of
data collected
Control of
Excellent
Fair
interviewer
effects
Control of
Fair
Excellent
sample
Speed of data
Poor
Excellent
collection
Response rate
Poor
Poor
Cost
Good
Fair
Online
Good
Good
Poor
Fair
Good
Excellent
Good
Excellent
Good
Poor
Good
Excellent
Cont.
Mail surveys: Flexible method that produces a lot of
data.
Major problem with response rate - often only 5%
Cont.
Telephone surveys: Flexible method that has speed
advantages.
Major problem with response rate due to telemarketing
abuse and caller ID on subjects phones.
Cont
Personal interviews:
Flexible method that produces high quality data.
Very costly compared to other methods.
Cont
Focus group interviews:
Very common method for exploratory research. One
needs a good moderator to keep the group on track
and make sure it addresses the needed questions.
Focus group interviews usually :o It is an unstructured, freeflowing interview with a
small group of people.
o The group meets at a central location with a
moderator who encourages discussion of a brand,
advertisement, or newproduct concept.
o Allow people to discuss their true feelings,
anxieties, and frustrations in their own words.
Cont.
Group composition
o Six to 10 people
o Relatively homogeneous
o Similar lifestyles and experiences and
communication skills
o Researchers who wish to collect information from
different types of people should conduct several
focus groups.
Cont.
Environmental conditions
o Commercial facilities that have videotape cameras
in observation rooms behind oneway mirrors and
microphone systems connected to tape recorders
and speakers to allow observation by others who
arent in the room.
o Mood as relaxed and natural as possible.
The moderator
o Develops rapport helps people relax
o Promotes interaction among its members
o Listens to what people have to say
o Everyone gets a chance to speak.
Cont.
Planning the focus group outline
Discussion guide: a document prepared by the
focus group moderator that contains remarks
about the nature of the group and outlines the
topics or questions to be addressed.
Advantages of a focus group
o Fast, inexpensive, and easy to execute.
o Numerous topics can be discussed and many
insights can be gained.
o Synergy: combined effort of the group will
produce a wider range of information, insights,
and ideas.
Cont.
Snowballing: bandwagon effect where a
comment from one individual triggers a chain of
responses from others. Includes brainstorming.
o greater opportunity to develop an idea to its full
potential.
o individual can find some comfort when others
share similar feelings.
o individual responses can be more spontaneous if
they are not required to answer any given
question
o
Cont.
Shortcomings of a focus group
o Focus groups require sensitive and effective
moderators.
o Since focus group participants are screened to
have similar backgrounds and experiences, they
many not be representative of the entire market.
Cont.
Online Research:
Online research: Increasingly, researchers are
collecting data through online marketing research.
About 1/3 of all research is collected online.
Online research usually costs less than research
conducted through traditional means.
Online research can be used to gather qualitative
(online focus groups) or quantitative data. Online
surveys can also be used to gain information from
hard to reach groups.
Cont.
Types of online research:
o Online marketing research
o Internet surveys
o Online panels
o Online experiments
o Click-stream data
o Online focus groups
Online Research Advantages
o Low cost and speed
o Higher response rates
o Good for hard to reach groups
Cont.
Online Focus Group
o A primary qualitative Web-based research
approach is online focus groups.
o Such focus groups offer many advantages over
traditional focus groups.
o Participants can log in from anywhere; all they
need is a laptop and a Web connection.
o Thus, the Internet works well for bringing
together people from different parts of the
country or world, especially those in higherincome groups who cant spare the time to travel
to a central venue.
Cont.
Researchers can conduct and monitor online focus
groups from just about anywhere, eliminating travel,
lodging, and facility costs.
Finally, although online focus groups require some
advance scheduling, results are almost immediate.
Drawbacks of Online Focus Groups
o One major problem is controlling whos in the
online sample. Without seeing respondents, its
difficult to know who they really are.
o To overcome such sample and context problems,
many online research firms use opt-in communities
and respondent panels.
Cont.
o
Alternatively, many companies are developing their

own custom social networks and using them to gain
customer inputs and insights
Cont.
Adidas and Facebook
adidas created its

own private online
community to obtain
consumer feedback
about its brand, ideas,
and marketing
campaigns.
Cont.
iii.
Sampling plan
A segment of the population selected to represent
the population as a whole.
For most surveys, a sample will be used.
Important decisions are ;
o
Who is to be surveyed? sampling unit
o
How many people should be surveyed?
sampling size
o
How should the people be chosen? sampling
procedure
Cont.
Probability Sample members of the population
have a known chance (probability) of being
selected into the sample.
o Simple random sampling: the probability of
being selected into the sample is known and
equal for all members of the population.
o Stratified sampling: the population is separated
into different strata and a sample is taken from
each one.
o Cluster sampling: the population is divided into
groups, any of which can be considered a
representative sample.
Cont.
Non-Probability Sample the chances (probability)
of selecting members from the population into the
sample are unknown.
o Convenience samples: samples drawn at the
convenience of the interviewer. The research
selects the easiest population members
o Judgment samples: samples that require a
judgment as to who should represent the
population
o Quota samples: use a specific quota of certain
types of individuals to be interviewed or
surveyed
Cont.
iv.
Research instrument
Questionnaire
o Most common
o Flexible administration
o Need careful wording
o Can use closed-end or open-end questions
Mechanical instrument
o Checkout scanners
o People meters
o Physiological measures
Cont
b) Secondary
Advantages
o Cost
o Speed
o Could not get data otherwise
Disadvantages
o current
o Relevant
o Accuracy
o Impartial
Cont
Secondary data is a good starting point for any
research project because it is low cost and quick to
obtain.
If secondary data answers the marketing question,
there is no need to spend additional money to
reinvent the wheel.
Disadvantages include data quality and age.
Examples include trade association reports,
government data, and grocery scanner data.
Analyzing Marketing Information

Customer Relationship Management
CRM consists of
sophisticated software
and analytical tools
that integrate customer
information from all
sources, analyze it in
depth, and apply the
results to build
stronger customer
relationships.
Distributing and Using

Marketing Information
Information distribution involves entering information
into databases and making it available in a timeuseable manner
Intranet provides information to employees and other
stakeholders
Extranet provides information to key customers and
suppliers

Main
reference
supporting
the course
Additional
reference
supporting
the course

McDaniels, 2010
Week
Lesson plan
Managing Marketing
Week 5 Information
Marketing research
System
Developing the
Research Plan
L
T P O T
3
hours
THANK YOU
MARKETING
MKT 2113
WEEK 6:
Pricing Concept and Strategy
Learning Outcome
to:
(1) Explain on the importance of price
(2) Elaborate on the factor that influence pricing decision
(3) Describe internal factors
(4) Discuss the marketing mix strategy
(5) Elaborate on the pricing in different types of markets
Introduction
Pricing and value:Amount of money charged for a product or service.
Sum of all the values that customers give up in
order to gain the benefits of having or using a
product or service.
Only element in the marketing mix that produces
revenue.
Price is one of the most flexible marketing mix
elements.
No matter what the state of the economy,
companies should sell value, not price
Marketing Mix
Cost
Product
Cost
Place
Revenue
Producer
Price
Promotion
Cost
Internal and External Factor

Considerations
Marketing strategy
Objectives
Market mix
Nature of the market and demand
Competitors strategies and prices
Cont
Customer perceptions of the products value set the
ceiling for prices. If customers perceive that the price is
greater than the products value, they will not buy the
product.
Product costs set the floor for prices. If the company
prices the product below its costs, company profits will
suffer.
In setting its price between these two extremes, the
company must consider a number of other internal and
external factors, including its overall marketing strategy
and mix, the nature of the market and demand, and
competitors strategies and prices.
The Importance of Price

Attract customers
Profitably retain existing customers
Prevent competition from entering market
Stabilize the market
Keep loyalty and support of resellers
Avoid government intervention
Help sales of other products
Factor That Influence

Pricing Decision
Shared cost
Sunk investment
Inventory effect
Items bought more frequently (more sensitive) /
infrequently (less sensitive)
Unique value effect (quality, prestige or exclusiveness)
Substitute awareness by buyers
Difficult comparison by buyers
Name a few?
Pricing in Different
Types of Markets
1.
Cost-based pricing
involved setting prices based on the costs for
producing, distributing, and selling the product plus
a fair rate of return for its effort and risk.
Product-driven.
If the price turns out to be too high, the company
must settle for lower markups or lower sales, both
resulting in disappointing profits.
The company designs what it considers to be a
good product, adds up the costs of making the
product, and sets a price that covers costs plus a
target profit.
Cont
Marketing then convinces buyers that the products
value at that price justifies its purchase.
2.
Value based pricing

Uses buyers perceptions of value, not sellers cost,
as the key to pricing.
Price is considered along with the other marketing
mix variables before the marketing program is set.
The company first assesses customer needs and
value perceptions, then sets its target price based
on customer perceptions of value.
Cont
Two types of value-based pricing are good-value
pricing and value-added pricing
o Good-value pricing
Good-value pricing is offering just the right
combination of quality and good service at a
fair price.
o Value-added pricing
Value-added pricing is the strategy of attaching
value-added features and services to
differentiate their offers and thus support higher
prices.
Cont
3.
Price-quality inferences
Consumers use price as an indicator of quality.
Image pricing is especially effective with egosensitive products such as perfumes, expensive
cars, and designer clothing.
4.
Price endings
Many sellers believe prices should end in an odd
number. Customers see an item priced at $299 as
being in the $200 rather than the $300 range; they
tend to process prices left-to-right rather than by
rounding.
Cont
Another explanation for the popularity of 9
endings is that they suggest a discount or bargain.
Prices that end with 0 and 5 are also popular and
are thought to be easier for consumers to process
and retrieve from memory.
Cont
5.
Reference prices
Consumers compare an observed price to an
internal reference price they remember or an
external frame of reference such as a posted
regular retail price.
Possible consumer reference prices:a) Fair price - (what the product should cost)
b) Typical price (usually stock)
c) Last price paid
d) Upper-bound price (reservation price or what
most consumers would pay)
Cont
e) Lower-bound price (lower threshold price or
the least consumers would pay)
f) Competitor prices
g) Expected future price
h) Usual discounted price
6.
Fixed costs
Also known as overhead
Costs that do not vary with production or sales
level.
Cont
7.
Variable costs
Vary directly with the level of production.
They are called variable because their total varies
with the number of units produced.
8.
Total costs
The sum of the fixed and variable costs for any given
level of production.
9.
Competition-based pricing
Involves setting prices based on competitors
strategies, costs, prices and market offerings
Cont
Consumers will base their judgments of a products
value on the prices that competitors charge for
similar products.
No matter what price you charge relative to the
competitionhigh, low, or in-betweenbe certain
to give customers superior value for that price.
Cont
10. Market-skimming pricing
Many companies that invent new products set high

initial prices to skim revenues layer-by-layer from
the market. This is called market-skimming pricing.
Market skimming makes sense only under certain
conditions:
o The products quality and image must support its
higher price, and enough buyers must want the
product at that price.
o The costs of producing a smaller volume cannot be
so high that they cancel the advantage of charging
more.
Cont
o
Competitors should not be able to enter the market easily

and undercut the high price.
This pricing works well when : Superior quality and image
Enough buyers
Competitors cannot charge low price
Example: When Apple first introduced the iPhone, its initial
price was as high as $599 per phone. The phones were
purchased only by customers who really wanted the sleek
new gadget and could afford to pay a high price for it. Six
months later, Apple reduced the price to $399 for an 8 GB
model and $499 for the 16 GB model to attract new buyers.
Within a year, its prices dropped again to $199 and $299
respectively
Cont
11. Market-penetration pricing
Rather than setting a high price to skim off small

but profitable market segments, some companies
use market-penetration pricing.
They set a low initial price in order to penetrate the
market quickly and deeplyto attract a large
number of buyers quickly and win a large market
share.
Conditions favoring market-penetration pricing:
The market must be highly price sensitive so that
a low price produces more market growth.
Cont
o
Production and distribution costs must fall as

sales volume increases.
The low price must help keep out the
competition, and the penetration pricier must
maintain its low-price positionotherwise, the
price advantage may be only temporary.
This pricing works well when :Market is price sensitive
Cost fall with large volume
Competition is kept out
Low price can be maintained
Cont
o
Example: To lure the famously frugal Chinese

customers, IKEA slashed its prices. The strategy
worked. Weekend crowds at its Beijing store are
so big that employees need to use megaphones
to keep them under control.
Cont
12. Product Mix Pricing Strategies
Product line pricing setting price steps between

product line items
o The price steps should take into account cost
differences between the products in the line.
More importantly, they should account for
differences in customer perceptions of the value
of different features.
o The sellers task is to establish perceived quality
differences that support the price differences.
Cont
Optional product pricing pricing optional or
accessory products sold with the main product.
o Many companies use optional product pricing
offering to sell optional or accessory products
along with their main product.
o Pricing these options is a sticky problem. The
company has to decide which items to include in
the base price and which to offer as options.
o Example : Tune Hotels adopts an optional-product
pricing by charging guests for add-ons that they
desire. These add-ons include air-conditioning,
towel and toiletries kit, and television access.
Cont
Captive product pricing pricing products that
must be used with the main product.
o Companies that make products that must be
used along with a main product are using captive
product pricing. Producers of the main products
often price them low and set high markups on
the supplies.
o In the case of services, this strategy is called
two-part pricing. The price of the service is
broken into a fixed fee plus a variable usage rate
Cont
By-product pricing pricing low-value by-products
to get rid of them.
o Using by-product pricing, a company will seek a
market for by-products and should accept any
price that covers more than the cost of storing
and delivering them.
o By-products may even turn out to be profitable.
Product bundle pricing- pricing bundles of products
sold together
o Using product bundle pricing, sellers often
combine several of their products and offer the
bundle at a reduced price.
Cont
o
Price bundling can promote the sales of products

consumers might not otherwise buy, but the
combined price must be low enough to get them
to buy the bundle.
Cont
13. Price-Adjustment Strategies
Discount and allowance pricing reducing prices

to reward customer responses such as paying
early or promoting the products.
Segmented pricing adjusting prices to allow for
differences in customers, products, or locations
Psychological pricing adjusting prices for
psychological effect
Promotional pricing temporarily reducing prices
to increase short-run sales
Geographical pricing adjusting prices to account
for the geographical location of customers.
Cont
Dynamic pricing adjusting prices continually to
meet the characteristics and needs of individual
customers and situations.
International pricing adjusting prices for
international markets

Main reference
supporting the
course
Additional
reference
supporting the
course

McDaniels, 2010
WEEK LESSON PLAN

Pricing Concept and Strategy
WEEK
The Importance of Price
5
Factor that influence pricing
decision
Internal Factors
Marketing Mix Strategy
Pricing in Different Types of
Markets
L TPOT
3
hours
THANK YOU
MARKETING
MKT 2153
Week 7
Promotion and Marketing
Communication
Learning Outcome
able to:
(1) Describe promotional mix
(2) Elaborate interactive/internet marketing
(3) Discuss communication process
The Promotion Mix

Communication is through ALL elements of the
marketing mix
Product, price, place, and promotion, must be

coordinated for greatest communication impact.
Cont
Promotion mix
Advertising
Direct marketing
Sales promotion
Personal selling
Public relations
The Promotion Mix

The Promotions Mix
A companys total promotion mixalso called its
marketing communications mixconsists of the
specific blend of advertising, sales promotion,
public relations, personal selling, and directmarketing tools that the company uses to pursue
its advertising and marketing objectives.
Advertising
Paid non-personal presentation and promotion of
ideas, goods, or services by an identified sponsor.
Sales Promotion
Short-term incentives used to encourage the purchase
of a product or service
Public Relations
Building good relations with the companys publics
through favorable publicity, a good corporate image,
and effective handling of unfavorable news.
Personal Selling
Personal presentation by the sales
force used to enhance sales and
customer relationships.
Direct Marketing
Gain an immediate response and lasting relationship
with targeted consumers.
Integrated Marketing
Communications
Importance of marketing communications
Building good customer relationships calls for more
than just developing a good product, pricing it
attractively, and making it available to target
customers.
Companies must also communicate their value

propositions to customers, and what they
communicate should not be left to chance.
Cont
All communications must be planned and blended
into carefully integrated programs.
Just as good communication is important in
building and maintaining any kind of relationship, it
is a crucial element in a companys efforts to build
profitable customer relationships.
The New Marketing

Communications Model
Consumers are changing. They are better informed
and more communications empowered.
Marketing strategies are changing.
As mass markets have fragmented, marketers are
shifting away from mass marketing.
More and more, they are developing focused
marketing programs designed to build closer
relationships with customers in more narrowly
defined micro-markets.
Cont
New information technologies
Marketers can now
amass (assemble)
detailed customer
information and keep
even closer track of
customer needs.
Cont
Although television, magazines, and other mass media
remain very important, their dominance is declining.
Advertisers are now adding a broad selection of morespecialized and highly targeted media to reach smaller
customer segments.
The new media range from specialty magazines, cable
television channels, and video on demand (VOD) to
Internet catalogs, e-mail, podcasts, cell phones, and
online social networks.
Cont
Companies are doing less broadcasting and more
narrowcasting.
Many large advertisers are shifting their advertising
budgets away from network television in favor of more
targeted, cost-effective, interactive, and engaging
media.
It seems likely that the new marketing communications
model will consist of a shifting mix of both traditional
mass media and a wide array of exciting new, moretarget, more-personalized media
Media fragmentation
Audiences are
splintering off in
new directions
and watching
videos on new
portable devices,
such as the iPad.
Sales Literature On New Media
Company sales
literature can be
found across
various platforms,
including
YouTube.
Internet Marketing
Internet marketing is marketing of products or services
over the internet.
Benefits:Lower cost for the distribution of information
Media to global audience
Providing instant response
Eliciting responses
Instant conversion few clicks of a mouse and the
product is sold.
24/7
Easy to offer content, audio, video clips at low cost
Cont
Unlimited time and space as the ads up for a longer
time and pay much less
covering a broad spectrum of market
Types of online marketing.

Article marketing
o To build links for your site, enhance your websites
search engine ranking and getting traffic.
Forum marketing
o Is a place where people gather and discuss their
problems, strategies and etc.
Cont
Search engine marketing
o This involves search engine optimization of your
website design and content.
Pay per click advertising
o This is a paid service where you pay the service
provider every time your link is clicked.
Link exchange
o Website places a link for other website in
exchange for its link on that site.
Link purchase
o You can purchase placement of your website link
on other website.
Cont
Classified advertising
o Advertise your website on classified websites on
the web like Craiglist.com and Usfreeads.com
Ezine marketing
o Email marketing
Lead purchase
o Paid services which will provide names and email
addresses of the people or leads against a
payment. Also called as lead generation.
Joint venture
o Two or more marketers come together and
promote a product or service in a way that it will
benefit them all.
Cont
Press releases
o Press release build in website and submitted to
one or more press release sites.
Viral marketing
o E-book, software or similar item built, and
allowed to be passed freely.
Blog marketing
Video marketing
Social sites
Podcasting
Need for IMC

Selling
Advertising
Sales
promotion
Consistent, clear,
compelling
messages
Direct
marketing
Public
relations
Need for Integrated Marketing

Communications
Customers dont distinguish between message
sources the way marketers do.
In the consumers mind, advertising messages from
different media and different promotional approaches
all become part of a single message about the
company. Conflicting messages from these different
sources can result in confused company images and
brand positions.
Cont
Too often, companies fail to integrate their various
communications channels. Mass-media
advertisements say one thing, while a price promotion
sends a different signal and a product label creates
still another message. Company sales literature says
something altogether different and the companys Web
site seems out of sync with everything else.
The problem is that these communications often come
from different company sources.
Integrated Marketing
Communications
Today, more companies are adopting the concept of
integrated marketing communications (IMC).
Under this concept, the company carefully integrates
and coordinates its many communications channels to
deliver a clear, consistent, and compelling message
about the organization and its brands.
The Communications Process

IMC involves identifying the target audience and
shaping a well-coordinated promotional program to
obtain the desired audience response.
Today, marketers are moving toward viewing
communications as managing the customer
relationship over time.
Because customers differ, communications programs
need to be developed for specific segments, niches,
and even individuals.
Cont
The communications process should start with an
audit of all the potential contacts target customers may
have with the company and its brands.
To communicate effectively, marketers need to

understand how communication works.
Communication involves the nine elements as shown
in following figure :
The Communications Process
Elements of the
Communication Process
Sender: The party sending the message to another
party.
Encoding: The process of putting thought into symbolic
form.
Message: The set of symbols that the sender
transmits.
Media: The communication channels through which
the message moves from sender to receiver.
Decoding: The process by which the receiver assigns
meaning to the symbols encoded by the sender.
Cont
Receiver: The party receiving the message sent by
another party.
Response: The reactions of the receiver after being
exposed to the message.
Feedback: The part of the receivers response
communicated back to the sender
Noise: The unplanned static or distortion during the
communication process that results in the receivers
getting a different message than the one the sender
sent.

Main reference
supporting the
course
Additional
reference
supporting the
course
Philip Kotler & Gary Armstrong

(2014),
Charles Lamb, Joseph Hair and
Carl McDaniels, 2010
Week
Lesson plan
Promotion and marketing
Week 7 communication
The promotional mix
Interactive/internet
marketing
The communication
process
L
T P O T
3
hours
THANK YOU
MARKETING
MKT 2153
Week 8
Promotion and Marketing
Communication
Cont
Learning Outcome
able to:
(1) Explain steps in effective communication
(2) Elaborate communication objectives
(3) The Total Promotion Budget
Steps In Developing Effective

Marketing Communication
1.
2.
3.
4.
5.
Identify target audience

Set communications objectives
Design the message
Choose the media
Select message source
Identify target audience

A marketing communicator starts with a clear target
audience in mind.
The audience may be potential buyers or current
users, those who make the buying decision or those
who influence it.
The audience may be individuals, groups, special
publics, or the general public.
The target audience will heavily affect the
communicators decisions on what will be said, how it
will be said, when it will be said, where it will be said,
and who will say it.
Cont
Once the target audience has been defined, the
marketing communicator must decide what response
is sought.
The marketing communicator needs to know where
the target audience now stands and to what stage it
needs to be moved.
The target audience may be in any of six buyerreadiness stages, the stages consumers normally
pass through on their way to making a purchase.
Cont
Buyer-readiness stages
i.
Awareness
ii.
Knowledge
iii.
Liking
iv.
Preference
v.
Conviction
vi.
Purchase
Cont
The communicator must first build awareness and
knowledge.
Assuming target consumers know about the product,
how do they feel about it?
These stages include liking (feeling favorable about
the product), preference, (preferring it to other brands),
and conviction (believing that the product is best for
them).
Cont
Some members of the target market might be
convinced about the product, but not quite get around
to making the purchase.
The communicator must lead these consumers to take

the final step. Actions might include offering special
promotional prices, rebates, or premiums.
Design the Message

Having defined the desired audience response, the
communicator turns to developing an effective message.
The message should get Attention, hold Interest, arouse
Desire, and obtain Action (a framework known as the AIDA
model).
A attention - awareness
I interest of the customer.
D desire:
A action:
In putting the message together, the marketing
communicator must decide what to say (message content)
and how to say it (message structure and format).
Cont
Rational appeal
Rational appeals relate to
the audiences selfinterest. They show that
the product will produce
the desired benefits.
Cont
Emotional appeal
Emotional appeals attempt to stir up either
negative or positive emotions that can motivate
purchase.
Communicators may use positive emotional
appeals such as love, pride, joy, and humor.
Communicators can also use negative emotional
appeals, such as fear, guilt, and shame that get
people to do things they should or to stop doing
things they shouldnt.
Cont
Moral appeal
Moral appeals are directed
to the audiences sense of
what is right and
proper. They are often
used to urge people to
support social causes
such as a cleaner
environment, better race
relations, equal rights for
women, and aid to the
disadvantaged.
Cont
The communicator must also decide how to handle
three message structure issues.
The first is whether to draw a conclusion or leave it
to the audience. Recent research suggests that in
many cases, rather than drawing a conclusion, the
advertiser is better off asking questions and letting
buyers come to their own conclusions.
The second message structure issue is whether to
present the strongest arguments first or last.
Presenting them first gets strong attention but may
lead to an anticlimactic ending.
Cont
The third message structure issue is whether to
present a one-sided argument (mentioning only the
products strengths) or a two-sided argument
(touting the products strengths while also
admitting its shortcomings).
Message Format
The marketing communicator also needs a strong
format for the message.
In a print ad, the communicator has to decide on the
headline, copy, illustration, and color. To attract
attention, advertisers use novelty and contrast; eyecatching pictures and headlines; distinctive formats;
message size and position; and color, shape, and
movement.
If a message is to be carried over the radio, the
communicator has to choose words, sounds, and
voices.
Cont
If the message is to be carried on television or in
person, then all these elements plus body language
have to be planned. Presenters plan their facial
expressions, gestures, dress, posture, and hairstyles.
If the message is carried on the product or its
package, the communicator has to watch texture,
scent, color, size, and shape.
Choose the media

Personal
In personal communication channels, two or more

people communicate directly with each other.
Some personal communication channels are
controlled directly by the company.
For example, company salespeople contact buyers
in the target market.
But other personal communications about the
product may reach buyers through channels not
directly controlled by the company.
Cont
Word-of-mouth influence has considerable effect in
many areas.
Other personal medias are:
o
Opinion leadership
Buzz
Buzz marketing involves cultivating opinion
leaders and getting them to spread information
about a product or service to others in their
communities.
Cont
Marketers can influence personal communication
channels
o Companies can take steps to put personal
communication channels to work for them.
o They can create marketing programs that will
generate favorable word-of-mouth
communications about their brands.
o Companies can create opinion leaderspeople
whose opinions are sought by othersby
supplying influencers with the product on
attractive terms or by educating them so that
they can inform others.
Cont
Non-personal channels
Non-personal communication channels are media
that carry messages without personal contact or
feedback.
Major media
o Major media include print media, broadcast media,
display media, and online media.
Atmospheres
o Atmospheres are designed environments that
create or reinforce the buyers leanings toward
buying a product.
Cont
245
Events
o Events are staged occurrences that
communicate messages to target audiences.
Selecting a Message Source

The messages impact on the target audience is
also affected by how the audience views the
communicator. Messages delivered by highly
credible sources are more persuasive.
Marketers often hire celebrity endorsers to deliver
their message. But companies must be careful
when selecting celebrities to represent their
brands.
Cont
After sending the message, the communicator must
research its effect on the target audience.
This involves asking the target audience members
whether they remember the message, how many
times they saw it, what points they recall, how they felt
about the message, and their past and present
attitudes toward the product and company.
Cont
The communicator would also like to measure
behavior resulting from the messagehow many
people bought a product, talked to others about it, or
visited the store.
Feedback on marketing communications may suggest
changes in the promotion program or in the product
offer itself.

Main reference
supporting the
course
Additional
reference
supporting the
course

(2014),
Week
Lesson plan
Week 8 Promotion and marketing
communication
Steps in effective
communication
Determining the
communication
objectives
The total promotion
budget
L
T P O T
3
hours
THANK YOU
MARKETING
MKT 2153
Week 9
Distribution Channel and
Retailing
Learning Outcome
able to:
(1) Describe distribution channel
(2) Elaborate structure of marketing channel
(3) Discuss functions of the channel of distribution
(4) Explain types of distribution channels
(5) Elaborate channel design decision
Introduction
Marketing Channels
Producers try to forge a marketing channel (or
distribution channel) which is a set of interdependent
organizations that help make a product or service
available for use or consumption by the consumer or
business user.
Cont
The role of marketing intermediaries is to transform the

assortments of products made by producers into the
assortments wanted by consumers.
Functions of Marketing
Channel Members
Completing transactions
Information
Gathering and distributing marketing research and
intelligence information about actors and forces in
the marketing environment needed for planning and
aiding exchange.
Promotion
Developing and spreading persuasive
communications about an offer.
Contact
Finding and communicating with prospective buyers.
Cont
Matching
Shaping and fitting the offer to the buyers needs,
including activities such as manufacturing, grading,
assembling, and packaging.
Negotiation
Reaching an agreement on price and other terms
of the offer so that ownership or possession can be
transferred.
Cont
Facilitating the completion of transactions
Physical distribution
Transporting and storing goods.
Financing
Acquiring and using funds to cover the costs of the
channel work.
Risk taking
Assuming the risks of carrying out the channel
work.
Number of Channel Levels

A channel level is each layer of marketing intermediaries
that performs some work in bringing the product and its
ownership closer to the final buyer.
The number of intermediary levels indicates the length of
a channel.
Cont
A direct marketing channel has no intermediary levels;
the company sells directly to consumers.
An indirect marketing channel contains one or more
intermediaries.
From the producers point of view, a greater number of
levels mean less control and greater channel complexity.
Consumer Marketing Channels

Producer
Producer
Producer
Wholesalers
Consumer
Channel 1
Retailers
Retailers
Consumer
Consumer
Channel 2
Channel 3
Business Marketing Channels

Producer
Producer
Producer
Manufacture's
representatives or
sales branch
Business
Consumer
Channel 1
Business
distributor
Business
distributor
Business
Consumer
Business
Consumer
Channel 2
Channel 3
Direct Marketing Channels

A direct marketing channel, has no intermediary levels;
the company sells directly to consumers. For example,
Avon and Amway sell their products door to door,
through home and office sales parties, and on the
Web.
Channel Behavior
A marketing channel consists of firms that have
partnered for their common good. Each channel member
depends on the others.
Each channel member plays a specialized role in the
channel. The channel will be most effective when each
member assumes the tasks it can do best.
Disagreements over goals, roles, and rewards generate
channel conflict.
Channel Behavior and Organization

Comparison of conventional distribution with vertical
marketing system.
Conventional Distribution Channel

A conventional distribution channel consists of one or
more independent producers, wholesalers, and retailers.
Each is a separate business seeking to maximize its own
profits, perhaps even at the expense of the system as a
whole.
Vertical Marketing System (VMS)
A vertical marketing system (VMS) consists of

producers, wholesalers, and retailers acting as a
unified system.
One channel member owns the others, has contracts
with them, or wields so much power that they must all
cooperate.
Corporate VMS
A Corporate VMS integrates successive stages of
production and distribution under single ownership. Zara
is an example:
Zara has control over almost every aspect of the supply
chain, from design and production to its own worldwide
distribution network.
Zara makes 40 percent of its own fabrics and produces

more than half of its own clothes, rather than relying on a
hodgepodge of slow-moving suppliers.
Cont
New designs feed into Zara manufacturing centers,
which ship finished products directly to Zara stores in 68
countries, saving time, eliminating the need for
warehouses, and keeping inventories low.
Effective vertical integration makes Zara faster, more
flexible, and more efficient than its competitors.
Contractual VMS
A contractual VMS consists of independent firms at

different levels of production and distribution who join
together through contracts to obtain more economies or
sales impact than each could achieve alone.
Horizontal System
Happens when two or more companies at one level join
together to follow a new marketing opportunity.
McDonalds joined forces with Sinopec, Chinas largest

petrol retailer, to place restaurant at its more than
30,000 petrol stations. Here, the presidents of the two
companies shake hands while announcing the
partnership
Multichannel Distribution Systems

Catalogs, telephones, internet
Retailers
Consumer
Segment 2
Retailers
Consumer
Segment 3
Producer
Distributors
Consumer
Segment 1
Consumer
Segment 4
This occurs when a single firm sets up two or more marketing
channels to reach one or more customer segments.
Multi-channel Systems
In Asia, there are a
variety of channel
intermediaries from
modern airconditioned
supermarkets to
traditional non-airconditioned wet
markets or
standalone stores
Changing Channel Organizations

Changes in technology and the explosive growth of direct
and online marketing have affected the nature and
design of marketing channels.
One major trend is toward disintermediation.
Disintermediation occurs when product or service
producers cut out intermediaries and go directly to final
buyers, or when radically new types of channel
intermediaries displace traditional ones.
For example, companies such as Dell and Singapore
Airlines sell directly to final buyers, cutting retailers from
their marketing channels.
Disintermediation Besides selling tickets through travel

agents and from its salespeople, Singapore Airlines also
sells its tickets through its Web site. (www.singaporeair.com)
New forms of resellers

New forms of resellers are displacing traditional
intermediaries.
For example, online marketing is taking business away
from traditional brick-and-mortar retailers. Consumers
can book hotel rooms and airline tickets from zuji.Com
and electronics from sonystyle.Com.
Online music download services such as itunes are
threatening the existence of traditional music store
retailers.
Amazon.Com has a reputation for strong service by
letting customers get what they want without ever
talking to an employee.
Online marketers such as zuji.com offer a new form of

reselling, replacing traditional brick-and-mortar retailers.
Opportunities of Disintermediation
To avoid being swept aside, traditional intermediaries
must find new ways to add value to the supply chain.
To remain competitive, product and service producers
must develop new channel opportunities such as the
Internet and other direct channels.
Problems of Disintermediation
However, developing these new channels often brings
them into direct competition with their established
channels, resulting in conflict.
Avoiding Disintermediation Problems

Black & Decker knows that many customers might prefer to
buy its power tools and outdoor power equipment online.
But selling directly through its Web site would create
conflicts with its retail partners.
So, although Black & Deckers Web site provides detailed
information about the companys products, you cant buy
them there.
Instead, the Black & Decker site refers you to resellers
Web sites and stores.
Thus, Black & Deckers direct marketing helps both the
company and its channel partners.
Channel Design
Analyze consumer
needs
Set channel objectives
Identify channel
alternatives
Evaluation
1. Analyze needs
The company must

balance consumer
needs not only
against the feasibility
and costs of meeting
these needs but also
against customer
price preferences
Cont
Designing the
marketing channel
Marketers need to know
what target consumers
want from the channel,
for example, whether
they prefer to buy in
person or online.
2. Setting Channel objectives

Companies should state their marketing channel
objectives in terms of targeted levels of customer
service.
The company should decide which segments to serve
and the best channels to use in each case.
The companys channel objectives are influenced by the
nature of the company, its products, its marketing
intermediaries, its competitors, and the environment.
Environmental factors such as economic conditions and
legal constraints may affect channel objectives and
design.
3. Identifying Major Alternatives

Types of Intermediaries
o A firm should identify the types of channel
members available to carry out its channel work.
Number of Marketing Intermediaries

o Companies must also determine the number of
channel members to use at each level.
Number of Intermediaries
Companies must also determine the number of channel
members to use at each level. Three strategies are
available:
Few
Many
Number of outlets
Exclusive
Selective
Intensive
Intensive distribution
Intensive distributionideal for producers of convenience
products and common raw materials. It is a strategy in
which they stock their products in as many outlets as
possible.
Exclusive distribution
Exclusive distributionis when producers purposely limit
the number of intermediaries handling their products.
The producer gives only a limited number of dealers the
exclusive right to distribute its products in their territories.
Cont
Exclusive distribution
Luxury car
makers such as
Bentley sell
exclusively
through a limited
number of
retailers. Such
limited distribution
enhances the
cars image and
generates
stronger retail
support.
Selective distribution
Selective distributionis the use of more than one, but
fewer than all, of the intermediaries who are willing to
carry a companys products.
Channel Management Decision

Select channel members
Evaluate years in business, other lines carried,
growth and profit record.
Manage and motivate channel members
Practice partner relationship management
Evaluate channel members
Check against sales quota, average inventory
level, customers delivery time ad etc.
Marketing channel management calls for selecting,
managing, and motivating individual channel members and
evaluating their performance over time.
Channel Management Decisions

Selecting Channel Members
When selecting intermediaries, the company should
determine what characteristics distinguish the better
ones.
Managing and Motivating Channel Members
The company must sell not only through the
intermediaries but to and with them.
Most companies practice strong partner relationship
management (PRM) to forge long-term partnerships
with channel members.
4. Evaluating Channel Members

The company should recognize and reward
intermediaries who are performing well and adding
good value for consumers.
Those who are performing poorly should be assisted
or, as a last resort, replaced.
Finally, manufacturers must be sensitive to their
dealers.
Partner management
Samsung The
Samsung P3
creates close
partnerships with
key value-added
resellers (VARs)
channel members
that assemble IT
solutions for their
own customers
using products from
Samsung and other
manufacturers.

Main reference
supporting the
course
Additional
reference
supporting the
course

McDaniels, 2010
WEEK
LESSON PLAN
Distribution Channel &
WEEK 9 Retailing
Distribution Channel
Structure of Marketing
Channel
Functions of the Channel
of Distribution
Types of Distribution
Channels
Channel Design Decision
L
T P O T
3 hours
THANK YOU
MARKETING
MKT 2153
Week 10
Consumer Markets and
Consumer Buyer Behavior
Learning Outcome
able to:
(1) Describe four types of buying behavior
Model of Consumer Behavior
Consumer buyer
behavior : the
buying behavior of
final consumers,
individuals and
households, who buy
goods and services
for personal
consumption
Cont
The central question for marketers is:
How do consumers respond to various marketing
efforts the company might use?
The starting point is the model of buyer behavior as
shown in the model.
Model of Buying Behavior

Marketing
Product
Price
Place
Promotion
Other Stimuli
Economic
Technology
Political
Cultural
Stimuli
Buyers black
box
Buyer
characteristics
Buyer decision
process
Black Box
Buyer Response
Buying attitudes
and preferences
Purchase behavior:
what the buyers buy,
when, where, and
how much
Brand and company
relationship behavior
Responses
Factors Influencing
Consumer Behavior
1.
Cultural
Culture
Sub-culture
Social class
2.
Social
Reference groups
Family
Roles and status
Cont
Personal
Age and life-cycle stage
Occupation
Economic situation
Lifestyle
Personality and self-concept
4. Psychological
Motivation
Perception
Learning
Beliefs and attitudes
3.
1. Culture
Culture is the broadest influence on consumers. We
are rarely aware of its influence until we travel to a
foreign culture.
Culture reflects the learned values, perceptions,

wants, and behavior that stem from family and other
important institutions.
Cont
i.
Culture
Product packaging
in Japan is an art;
here, a box of
cookies is wrapped
first in decorative
paper, then with a
sheer piece of
cloth.
Cont
ii.
Subculture
Each culture contains smaller subcultures, or
groups of people with shared value systems based
on common life experiences and situations.
Subcultures include nationalities, religions, racial
groups, and geographic regions.
Many subcultures make up important market
segments, and marketers often design products
and marketing programs tailored to their needs.
Cont
iii. Social Class
Social classes are societys relatively permanent

and ordered divisions whose members share
similar values, interests, and behaviors
Measured by a combination of occupation, income,
education, wealth, and other variables
2. Social
Reference group
Groups that we refer to in making a purchase.
They also serve as a comparison point
ii. Membership Groups
Groups of which a consumer is officially a member.
iii. Aspirational Groups
Groups to which a consumer is not a member, but
aspires to join.
Which groups would you like to join in the future and
how this aspiration may affect your buying
behaviors?
i.
3. Personal Influences
Personal influences includes demographic variables
such as age and life-cycle stage, occupation,
economic situation, lifestyle, and personality and selfconcept.
Cont
i.
Age/ Lifecycle
People change the goods and services they buy
over their lifetimes.
Tastes in food, clothes, furniture, and recreation
are often age-related. Buying is also shaped by the
stage of the family life cycle.
Marketers often define their targets in terms of lifecycle stage and develop appropriate products and
marketing plans for each stage
Cont
Cont
ii.
Occupation
Occupation and income affect products desired and
purchased.
iii. Economic Situation
A persons economic situation will affect product

choice.
Marketers of income sensitive goods observe trends
in personal income, savings, and interest rates.
If economic indicators point to a recession,
marketers can take steps to redesign, reposition,
and re-price their products closely. es to match
Cont
Some marketers target consumers who have lots
of money and resources, charging price
iv. Lifestyle/AIOs
Lifestyle is a persons pattern of living as

expressed in his or her psychographics
Measures a consumers AIOs (activities, interests,
opinions) to capture information about a persons
pattern of acting and interacting in the environment
Cont
Lifestyle/AIOs
Lifestyle- These billboard ads in Hong Kong illustrate how

ads are positioned to appeal to sporty young women, as
well as youths seeking individual expression and creativity.
Cont
v.
Personality and Self-Concept

Personality refers to the unique psychological
characteristics that lead to consistent and lasting
responses to the consumers environment
Personality is usually described in terms of traits
such as self-confidence, dominance, sociability,
autonomy, defensiveness, adaptability, and
aggressiveness.
Personality can be useful in analyzing consumer
behaviour for certain product or brand choices
Cont
Brand Personality
o A brand personality is the specific mix of human traits
that may be attributed to a particular brand.
o One researcher identified five brand personality traits:
1. Sincerity (down-to-earth, honest, wholesome,
and cheerful)
2. Excitement (daring, spirited, imaginative, and
up-to-date)
3. Competence (reliable, intelligent, and
successful)
4. Sophistication (upper class and charming)
5. Ruggedness (outdoorsy and tough)
Cont
vi.
Self-Concept
Many marketers use a concept related to
personalitya persons self-concept (also called
self-image).
The basic self-concept premise is that peoples
possessions contribute to and reflect their
identities; that is, we are what we have.
Thus, to understand consumer behaviour, the
marketer must first understand the relationship
between consumer self-concept and possessions.
3. Psychological Factors
i.
ii.
Motivation
A motive is a need that is sufficiently pressing to
direct the person to seek satisfaction
Motivation research refers to qualitative research
designed to probe consumers hidden,
subconscious motivations
Perception
Perception is the process by which people select,
organize, and interpret information to form a
meaningful picture of the world from three
perceptual processes.
Cont
Selective attention
Tendency for people to screen out most of the
information to which they are exposed
b) Selective distortion
Tendency for people to interpret information
in a way that will support what they already
believe
c) Selective retention
Tendency to remember good points made
about a brand they favor and forget good
points about competing brands
a)
Cont
iii. Learning is the change in an individuals behavior
arising from experience and occurs through interplay

of:
Drives
Stimuli
Cues
Responses
Reinforcement
Cont
Key elements of Learning
o A drive is a strong internal stimulus that calls for
action.
o A drive becomes a motive when it is directed
toward a particular stimulus object.
o Cues are minor stimuli that determine when,
where, and how the person responds.
Cont
iv.
Beliefs and Attitudes

A belief is a descriptive thought that a person has
about something.
Attitude describes a persons relatively consistent
evaluations, feelings, and tendencies toward an
object or idea. Attitudes are difficult to change.
Types of
Buying Decision Behavior
High Involvement
Cont
Purchase decisions vary in terms of consumer effort
and amount of deliberation.
High involvement purchases lead to more active,
careful decision making.
The involvement or interest is based on perceived
risks in the purchase. A baby seat purchase is likely to
be high in safety risks and a wedding dress has high
levels of social risk. Both of these risks generate high
involvement and more careful buying
Cont
Low Involvement
Most purchases are not highly involving.
For example, grocery items are bought as quickly
and efficiently as possible because prices and risks
are low.
Four Types of Buying Behavior
Significant
differences
between brand
Few differences
between brand
High
Involvement
Low
Involvement
Complex Buying
Behavior
Variety Seeking
Buying Behavior
Dissonance
Buying Behavior
Habitual Buying
Behavior
1. Complex Buying Behavior

Consumers undertake complex buying behavior when
they are highly involved in a purchase and perceive
significant differences among brands.
Consumers may be highly involved when the product

is expensive, risky, purchased infrequently, and highly
self-expressive.
Typically, the consumer has much to learn about the
product category.
2. Dissonance-Reducing
Buying Behavior
Dissonance-reducing buying behavior occurs when
consumers are highly involved with an expensive,
infrequent, or risky purchase, but see little difference
among brands.
After the purchase, consumers might experience postpurchase dissonance (after-sale discomfort) when they
notice certain disadvantages of the purchased brand
or hear favorable things about brands not purchased.
3. Habitual Buying Behavior

Habitual buying behavior occurs under conditions of
low consumer involvement and little significant brand
difference.
Consumer behavior does not pass through the usual
belief-attitude-behavior sequence.
Consumers do not search extensively for information
about the brands, evaluate brand characteristics, and
make weighty decisions about which brands to buy.
They passively receive information as they watch
television or read magazines
Cont
Causes and effects of habitual buying behavior
Causes
Low
consumer
involvement
Few brand
differences
Effects
Habitual
buying
behavior
No extensive search
for brand information
Little evaluation of
brand characteristics
Passive reception of
brand information
Brand attitude weak
Cont
Low involvement and classical conditioning
KFC entered China five years ahead of McDonalds. It has
more outlets and more per capita spending than
McDonalds, in large part because it adapts its menu to
local tastes.
One senior executive at McDonalds decided to personally
find out the reasons for that. He stood at KFCs entrance
and asked the incoming consumers a simple question,
Why dont you go to McDonalds? To his surprise, many
replied, They dont sell chicken there.
Recognizing consumers strong preference for chicken over
beef, McDonalds in China started to reduce its association
with hamburgers and feature chicken more prominently in
its menu.
4. Variety-Seeking
Buying Behavior
Consumers undertake variety-seeking buying behavior
in situations characterized by low consumer
involvement but significant perceived brand
differences.
In such cases, consumers often do a lot of brand
switching.

Main reference
supporting the
course
Additional
reference
supporting the
course

(2014),
Week
Lesson plan
L
T P O T
Consumers Markets and
3
Week 10 Consumer Buyer Behavior hours
Four types of buying
behavior
THANK YOU
MARKETING
MKT 2153
Week 11
Consumer Markets and
Consumer Buyer Behavior
Cont
Learning Outcome
able to:
(1) Elaborate stages of the buying decision process
(2) Discuss stages in the adoption process
(3) Explain adopter categories
The Buyer Decision Process

Need recognition
2. Information search
If the consumer does not have adequate information
to make a purchase, search will occur.
The amount of search is commensurate with the
level of involvement in the purchase.
Sources of information:o Personal sources (family, friends, neighbors,
acquaintances)
o Commercial sources (advertising, salespeople,
Web sites dealers, packaging, displays)
1.
Cont
Public sources (mass media, consumer-rating
organizations, Internet searches)
o Experiential sources (handling, examining, using
the product)
3. Evaluation of alternative
Alternative evaluation is how the consumer
processes information to arrive at brand choices.
How consumers go about evaluating purchase
alternatives depends on the individual consumer and
the specific buying situation.
In some cases, consumers use careful calculations
and logical thinking
o
Cont
At other times, the same consumers do little or no
evaluating; instead they buy on impulse and rely
on intuition
4. Purchase decision
Generally, the consumers purchase decision will
be to buy the most preferred brand.
Two factors can come between the purchase
intention and the purchase decision.
oAttitudes of others
oUnexpected situational factors
Cont
Post-purchase behavior
The difference between the consumers
expectations and the perceived performance of the
good purchased determines how satisfied the
consumer is.
If the product falls short of expectations, the
consumer is disappointed; if it meets expectations,
the consumer is satisfied; if it exceeds
expectations, the consumer is said to be delighted.
Customer Satisfaction
Customer satisfaction is the key to building profitable
relationships with consumers to keeping and growing
consumers and reaping their customer lifetime value.
Satisfied customers buy a product again, talk favourably

to others about the product, pay less attention to
competing brands and advertising, and buy other
products from the company.
Many marketers go beyond merely meeting the
expectations of customers they aim to delight the
customer
Stages in the Adoption Process

Awareness
The consumer becomes aware of the new product,
but lacks information about it.
2. Interest
The consumer seeks information about the new
product.
3. Evaluation
The consumer considers whether trying the new
product makes sense.
4. Trial
The consumer tries the new product on a small
scale to improve his or her estimate of its value.
1.
Cont
5.
Adoption
The consumer decides to make full and regular
use of the new product.
The Buyer Decision Process

for New Products
Adopter categorization on the basis of relative time of
adoption of innovations
Cont
The Five Adopter Categories
1. Innovators are venturesomethey try new ideas
at some risk.
2. Early adopters are guided by respectthey are
opinion leaders in their communities and adopt
new ideas early but carefully.
3. The early majority are deliberatealthough they
rarely are leaders, they adopt new ideas before
the average person.
4. The late majority are skepticalthey adopt an
innovation only after a majority of people have
tried it.
Cont
5.
Laggards are tradition boundthey are

suspicious of changes and adopt the innovation
only when it has become something of a tradition
itself.

Main reference
supporting the
course
Additional
reference
supporting the
course

(2014),
Week
Lesson plan
L
T P O T
Consumers Markets and
3
Week 11 Consumer Buyer Behavior hours
Stages of the Buying
Decision Process
Stages in the Adoption
Process
Adopter Categories
THANK YOU
MARKETING
MKT 2113
WEEK 12
Analyzing
Business Markets
Learning Outcome
able to:
(1) Elaborate characteristics of business market
(2) Discuss on the types of decision and the decision
process
(3) Explain the a model of business buyer behaviour
(4) Describe on buying situation
(5) Elaborate on participants in business buying
system
Business Markets
Business buyer behavior refers to the buying behavior
of the organizations that buy goods and services for
use in production of other products and services that
are sold, rented, or supplied to others.
Business buying process involves stages:Business buyers determine which products and
services are needed to purchase
Find products and services
Evaluate products and services
Choose among alternative brands
Cont
The business market is huge
Business markets involve far more dollars and items
than do consumer markets.
The business buyers are
Fewer and larger
Geographically concentrated
More decision participants
Professional purchasers
Characteristics of Business Markets

1.
Market structure and demand

Business markets contain fewer but larger buyers
Business buyer demand is derived from final
consumer demand
Demand in many business markets is more
inelastic not affected as much in the short run
by price changes.
Demand in business markets fluctuates more,
and more quickly.
Cont
2.
Nature of the buying unit

Business purchase involve more buyers.
Business buying involves a more professional
purchasing effort.
3.
Types of decisions and the decision process

Business buyers usually face more complex
buying decisions.
The business buying process is more formalized.
In business buying, buyers and sellers work
closely together and build long term relationship.
Types of Decisions and

the Decision Process
Business buyers usually:More complex buying decisions than do consumer
buyers.
Involve large sums of money
Complex technical and economic considerations
Interactions among many people at many levels of
the buyers organization.
The business buying process also tends to be more
formalized than the consumer buying process.
Business Buyer Behavior

At the most basic level, marketers want to know how
business buyers will respond to various marketing
stimuli.
Within the organization, buying activity consists of two
major parts:
The buying center and
The buying decision process
Model of Business Buyer Behavior
361
Buying Situations
Straight Re-buy
Modified Re-buy
In a modified re-buy, the buyer wants to modify the
product specifications, prices, terms, or suppliers.
The modified re-buy usually involves more decision
participants than does the straight re-buy.
New-task Buy
A company buying a product or service for the first
time faces a new task situation.
In such cases, the greater the cost or risk, the larger
the number of decision participants and the greater
their efforts to collect information will be.
Participants in the
Business Buying Process
The decision-making unit of a buying organization is
called its buying center: all the individuals and units that
participate in the business decision-making process.
The buying center includes all members of the
organization who play any of five roles in the purchase
decision process.
The participants in the business buying process:i.
Users are members of the organization who will
use the product or service.
ii.
Influencers often help define specifications and
also provide information for evaluating
alternatives.
Cont
iii.
iv.
v.
Buyers have formal authority to select the

supplier and arrange terms of purchase.
Deciders have formal or informal power to select
or approve the final suppliers.
Gatekeepers control the flow of information to
others
Stages in the
Business Buying Process
1.Problem Recognition
Problem recognition can result from internal or
external stimuli.
Internally, the company may decide to launch a new
product that requires new production equipment and
materials.
Externally, the buyer may get some new ideas at a

trade show, see an ad, or receive a call from a
salesperson who offers a better product or a lower
price.
2. Need Description
The buyer next prepares a general need description
that describes the characteristics and quantity of the
needed item.
For standard items, this process presents few

problems.
For complex items, however, the buyer may have to
work with othersengineers, users, and consultants
to define the item.
3. Product Specification
The buying organization next develops the items
technical product specifications, often with the help of a
value analysis engineering team.
Product value analysis is an approach to cost reduction

in which components are studied carefully to determine
if they can be redesigned, standardized, or made by less
costly methods of production.
The team decides on the best product characteristics
and specifies them accordingly.
4. Supplier Search
The buyer now conducts a supplier search to find the
best vendors. The buyer can compile a small list of
qualified suppliers by reviewing trade directories, doing
a computer search, or phoning other companies for
recommendations.
Today, more and more companies are turning to the
Internet to find suppliers.
The newer the buying task, the more complex and
costly the item, and the greater the amount of time the
buyer will spend searching for suppliers.
5. Proposal Solicitation
In the proposal solicitation stage of the business
buying process, the buyer invites qualified suppliers to
submit proposals.
When the item is complex or expensive, the buyer will
usually require detailed written proposals or formal
presentations from each potential supplier.
6. Supplier Selection
During supplier selection, the buying center often will
draw up a list of the desired supplier attributes and their
relative importance.
Buyers may attempt to negotiate with preferred suppliers

for better prices and terms before making the final
selections. In the end, they may select a single supplier
or a few suppliers.
Many buyers prefer multiple sources of suppliers to
avoid being totally dependent on one supplier and to
allow comparisons of prices and performance of several
suppliers over time.
7. Order Routine Specification

Stockless purchase plans
Vendor-managed inventory
Continuous replenishment
8. Performance Review
The performance review may lead the buyer to
continue, modify, or drop the arrangement.
The eight-stage model provides a simple view of the
business buying-decision process.
The actual process is usually much more complex.

Main
reference
supporting
the course
Additional
reference
supporting
the course

McDaniels, 2010
WEEK
WEEK
12
LESSON PLAN
L
T P O T
Business Markets and
3 hours
business Buyer Behaviour
Characteristics of
Business Markets
Types of Decisions and
the Decision Process
A Model of Business
Buyer Behaviour
Buying Situation
Participants in business
buying system
THANK YOU
Learning Outcome
able to:
(1) Elaborate strategic planning
(2) Discuss on the designing the business portfolio
(3) Explain the shape the future business portfolio
(4) Describe on product/ market expansion grid
Strategic Planning
Strategic planning is defined as:
The process of developing and maintaining a
strategic fit between the organizations goals and
capabilities and its changing marketing
opportunities.
Planning activities occur at the business unit, product,
and market levels, and include:
Defining the purpose and mission
Setting objectives and goals
Designing the business portfolio
Developing detailed marketing and departmental
plans
Statement
Mission statements should . . .
Serve as a guide for what the organization wants
to accomplish.
Be market-oriented rather than productoriented.
Be neither too narrow, nor too broad.
Fit with the market environment.
Be motivating.
Cont
Mission statements guide the development of
objectives and goals.
Objectives are developed at each level in the
organization hierarchy.
Strategies are developed to accomplish these
objectives.
Business Portfolio
Business portfolio is the collection of businesses
and products that make up the company.
Designing the business portfolio
is a key element of the strategic planning process.
Designing the Business Portfolio

Analyze the current business portfolio
Shape the future business portfolio
Identify strategic business units (SBUs)
Assess each SBU:
The BCG growth-share matrix classifies SBUs into
one of four categories using the:
Market growth rate
SBUs relative market share within the market.
BCG Growth-Share Matrix
High
Market
Growth
Low
Market
Growth
Stars
Cash
Cows
High Relative
Market Share
Question
Marks
Dogs
Low Relative
Market Share
Shape the Future

Business Portfolio
Determine the future role of each SBU and choose the
appropriate resource allocation strategy:
Build
Hold
Harvest
Divest
SBUs change positions over time
Cont
Matrix approaches to formal planning share many
problems:
Difficult, time-consuming, and costly to implement.
Focus only on current businesses.
Too strongly emphasize market share growth or
growth via diversification.
Cont
Designing the business portfolio also involves:
Developing strategies for growth by identifying,
evaluating, and selecting promising new market
opportunities.
o Product/market expansion grid
Developing strategies for downsizing the business
portfolio.
Product/Market Expansion Grid
Existing Products
Existing
Markets
Market
Penetration
New
Markets
Market Development
New Products
Product
Development
Diversification
Planning Marketing
Marketing plays a key role in the strategic planning
process.
Marketers must practice CRM and Partner
Relationship Management.
Partnering with other departments in the company
as well as other firms in the marketing system
helps to build a superior value delivery-network.

Analyzing marketing opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing effort
The strategic planning and business portfolio analysis
processes help to identify and evaluate marketing
opportunities.
The purpose of the marketing process is to help the
firm plan how to capitalize on these opportunities.
Cont
The segmentation process divides the total market into
market segments.
Target marketing determines which segment(s) are
pursued.
The market positioning for the product is then
determined.
Cont
Competitor analysis guides competitive marketing
strategy development.
Strategy leads to tactics by way of the marketing mix:
The Four Ps product, price, place, promotion
(seller viewpoint)
The Four Cs customer solution, cost,
convenience, and communication (customer
viewpoint)

Marketing analysis
Provides information helpful in planning,
implementation, and control
Marketing planning
Strategies and tactics
Marketing implementation
Turns plans into action
Marketing control
Operating control
Strategic control
Marketing audit

Main
reference
supporting
the course
Additional
reference
supporting
the course

McDaniels, 2010
WEEK
LESSON PLAN
L
Company and Marketing
3 hours
WEEK 13 Strategy: Partnering to Build
Customer Relationships
Strategic planning
Statement
Designing the business
portfolio
Shape the future business
portfolio
Product/ Market Expansion
Grid
P O T
THANK YOU
MARKETING
MKT 2113
WEEK 14
Marketing in Digital Age and
Marketing Environment
Learning Outcome
able to:
(1) Elaborate on the major forces shaping the digital
age
(2) Discuss on the new types of intermediaries
(3) Explain the E-Business and E-Commerce
(4) Describe on The promises and challenges of Ecommerce
Major Forces Shaping the

Digital Age
1.
Digitalization and connectivity

Intranets connect people within a company.
Extranets connect a company with its suppliers,
distributors, and outside partners.
Internet connects users around the world.
2.
The explosion of the internet

Explosive worldwide growth forms the heart of the
New Economy.
Increasing numbers of users each month.
Companies must adopt Internet technology or risk
being left behind.
Cont
New types of intermediaries
Direct selling via the Internet bypassed existing
intermediaries (disintermediation).
Brick-and-mortar firms became click-and-mortar
companies.
As a result, some click-only companies have
failed.
4. Customization and customerization
With customization, the company custom designs
the market offering for the customer.
With customerization, the customer designs the
market offering and the company makes it.
3.
Marketing Strategy in the Digital Age

Requires a new model for marketing strategy and
practice
Some suggest that all buying and selling will
eventually be done electronically
Companies need to retain old skills and practices but
add new competencies
E-Business in the Digital Age

Involves the use of electronic platforms to conduct
company business.
Web sites for selling and customer relations
Intranets for within-company communication
Extranets connecting with major suppliers and
distributors
E-Commerce in the Digital Age

More specific than e-business.
Involves buying and selling processes supported by
electronic means, primarily the Internet.
Includes:
e-marketing
e-purchasing (e-procurement)
E-Marketing in the Digital Age

The marketing side of e-commerce.
Includes efforts to communicate about, promote, and
sell products and services over the Internet.
E-purchasing is the buying side of e-commerce.
It consists of companies purchasing goods,
services, and information from online suppliers.
Benefits to Buyers
Convenience
Buying is easy and private
Provides greater product access and selection
Provides access to comparative information
Buying is interactive and immediate
Benefits to Sellers
Powerful tool for building customer relationships
Can reduce costs
Can increase speed and efficiency
Offers greater flexibility in offers and programs
Is a truly global medium
The Promises and

Challenges of E-commerce
Promises
Robust growth
Modify the retail logistics chain
Meet customer expectations
Challenges
Online privacy
Online security
Internet fraud
Segmentation and discrimination
Access by vulnerable or unauthorized groups

Main
reference
supporting
the course
Additional
reference
supporting
the course

McDaniels, 2010
WEEK
WEEK
14
LESSON PLAN
Marketing in Digital Age
and Marketing
Environment
Major Forces Shaping the
Digital Age
New Types of
intermediaries
E-Business and ECommerce
The promises and
challenges of E-commerce
L
T P O T
3 hours
THANK YOU

Marketing All

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MARKETING

The Marketing Process

Build profitable relationships and

Capture value from customers to

Core Marketing Concepts

Value and satisfaction

Understanding the Marketplace

Exchange, transactions and relationships

Major environmental forces

Marketing Management Orientations

The Societal Marketing Concept

The Selling and Marketing

Preparing a Marketing Plan

Building Customer Relationships

The Changing Nature of

Capturing Value from Customers

Customer Relationship Groups

Good fit between

Good fit between

Little fit between

Limited fit between

An Expanded Model of the

Design a customerdriven marketing

Capture value from

Product and service

Pricing: create real

Ensure ethical and

Reference and Content

Philip Kotler & Gary Armstrong (2014),

A product is anything that can be offered to a market

Broadly defined, products also include services,

The Product Experience

The Service Experience

Three Levels of Products

Product planners need to think about products and

When developing products, marketers first must

They must then design the actual product and find

Type of consumer product

New Product Classification System

Product Factors Affecting the

Reference and Content

WEEK LESSON PLAN

New Product Development

Reasons For New Products

3. Concept Development and Testing

4. Marketing Strategy Development

At Gillette, 200 volunteers from various departments come to work

KFC test-marketed its new Kentucky grilled Chicken

Reference and Content

WEEK LESSON PLAN

Marketing Information and

With key customer insights, innovative designs, and

The Marketing Information System

MIS Balancing Costs And Benefits

Developing Marketing Information

Internal database Pizza Hut can slice and dice its

Reference and Content

Philip Kotler & Gary Armstrong (2014),

The Marketing Research Process

1. Defining The Problem

2. Developing the Research Plan

How the results will help

What is the budget?

Primary data consist of information collected for