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Summary Marketing: The Core - Chapters 1-4, 6-9, 12-13
Introduction to Marketing (Mount Royal University)
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Marketing 2150
Personal Notes
Chapter 1
Summary on page 26
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Marketing definition
o The process of planning and managing goods, services, or ideas to meet
consumer needs and organizational objectives. It includes the conception of
these products and the pricing, promotion, and distribution programs designed
to make a profit and generate revenue or support for an organization
Based on understanding consumers
o How they think
o What drives purchases
o What does not drive purchases
More complex competitive space as marketers compete with online and offline
resources for both local and global brands
Understanding consumer trigger points is highly important to marketing success
Marketers need to
o Stay on top of new technology
o Understand how it’s used
o Integrate it into their work
4 p’s of marketing (marketing mix): Example on page 3
o Product
 Attributes that make up a good, a service, or an idea, including product
design, features, colour, packaging, warranty, and service levels
o Price
 Expected regular retail or sale price for a product
o Place
 Distribution channels, retail formats, and merchandising used to sell
product
o Promotion
 Communication tools needed to inform consumers about a product,
including advertising, public relations, sales promotion, direct response,
event marketing and sponsorship, and personal selling
Different selling points
o Sponsorship – brand is located somewhere visible
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o Brand ambassadors – top athletes are given product to wear
o Digital marketing – email, social media, and company website
Marketing reality
o Success only comes from focusing on customer needs by providing goods and
services that meet them
Marketing main objective
o Drive profits for a company or, if working for non-profit, to generate revenue and
support
Customer value
o The unique combination of benefits received by targeted buyers that includes
quality, price, convenience, delivery, and both before sale and after sale service
How the online environment is used for marketing
o Initial point of contact with a product is online through their website
 Websites must therefore be engaging ad accurately reflects products
o Consumers must be able to find the website easily through a search engine
o Consumers are impatient and the website must therefore load quickly and be
navigated through easily
How companies provide customer value
o Companies create products that provide customers with goods and services that
have added value versus competitive offerings
o Companies reward customers for their loyalty rough marketing programs that
focus on repeat purchases and incentives to encourage future purchases
Creating products with added value
o Product design
o Pricing strategies
o Service elements
Target market
o The specific group of existing and potential consumers to which marketers direct
their marketing efforts
Marketing process
o The process of (1) identifying consumer needs, (2) managing the marketing mix
to meet these needs, and (3) realizing profits
Exchange
o The trade of things of value between buyers and sellers so that each benefit
Product
o A good, service, or idea
Good
o A product you can touch or own
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o Adidas running shoes
o Red bull
Service
o A product that is intangible, that you cannot touch
o Going to a movie
o Physiotherapy session
Idea
o A concept that typically looks for support
o Earth hour campaign
o World wildlife fund
Market
o Potential consumers with both the willingness and ability to buy
Production orientation
o Focusing organizational efforts on the manufacture of goods
o This was in place before the 1930s (industrial revolution)
o Manufactured goods tended to sell, regardless of quality, due to lack of other
products
o Consumer needs weren’t a priority
Sales orientation
o Focusing organizational efforts on selling as many products as possible
o From 1930s-1960s
o Market was more competitive
o Production more efficient
o Products were more common
o Consumer needs still weren’t important
Marketing orientation
o Focusing organizational efforts to collect and use information about consumer
needs to create customer value
o 1960s-1990s
o Marketing concept
 The idea that an organization should strive to satisfy the needs of
consumers while also trying to achieve organizational goals
Relationship marketing
o When organizations create long term links with customers, employees, suppliers,
and other partners to increase loyalty and customer relation
o 1990s-present
Social media
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o A form of online media that allows members to create their own network of
friends and contacts to share comments, videos, and images as a form of selfexpression
o Consumers between the ages 18-34 spend most of their time on the internet
(39%) versus other forms of media
o Canada has highest rate, with 95 website visits per month
 US has 80
 Brazil at the bottom with 57
o Four ways that it can be used
 Marketers can engage and connect with consumers
 Coupons can be sent to customers
 Marketers can monitor real-time consumer engagement and band buzz
 Marketers can measure the impact of specific promotional programs
 Marketers can identify informal brand advocates that can spread positive
messages about a brand
Customer relationship management (CRM)
o The overall process of building and maintaining profitable customer relationships
by delivering superior customer value ad satisfaction
o Less expensive to maintain customers than to obtain new ones
o Build loyalty programs to appeal to valued customers
o Can even apply to a phone call updating them of special deals/offers
o Air miles
Corporate social responsibility (CSR)
o When organization voluntarily consider the wellbeing of society by taking
responsibility for how their businesses impact consumers, customers, suppliers,
employees, shareholders, communities, the environment, and society in general
o Can include
 The sponsorship and/or spearheading of community programs
 The sponsorship and/or involvement in fundraising initiatives for
charitable organizations
 Business philosophy that permeates an organization that implements
socially responsible business practices to positively impact the
community at large
Social marketing concept
o Marketing programs that focus on the consumer and the wellbeing or society
Experimental marketing
o Creating opportunities for consumers to directly interact with brands
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o Instead of relying on mass media, a brand creates an occasion for a few
customers to interact personally with the brand and then spread the word
o Often this involves a combination of public relations, event marketing, and
promotions
Partnership marketing
o The creation of formal associations between brands that will result in
incremental business for both brands that could not have been achieved
separately
Promotional partnerships
o Simple short-term promotional offers between brands
o Brands with similar customers but different distribution channels can combine
marketing expertise and use each other’s strengths to build brand awareness
o When shoppers provides customers with 20$ Esso cards with purchases over
75$, this is an example
Strategic alliances
o Long term strategic alliances between companies with similar values and
marketing objectives that extend beyond short term promotional offers into long
term formal business agreements
o example: scene members and Scotiabank
Metrics
o Measures and monitors business performance through the collection and usage
of data used to evaluate marketing programs
o Routine metrics
 Measured against marketing plan targets and look at elements such as
sales, market share, profit margins, and profit levels.
o Program Specific Metrics
 Analyze specific marketing programs and measure performance against
benchmarks and targets.
 Return on investment, awareness levels, ad recall, sales conversions,
coupon redemption rates, contest entries, o media mentions
Possible careers
o Marketing coordinators, marketing analysts, marketing assistants, sales
representatives, and account coordinators.
Chapter 2
Summary on page 53
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Marketing environment
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o The factors that marketers monitor to stay current and informed
 Demographic forces
 Statistical study of populations
 Gender, age, ethnicity, income, education, and occupation
o Aging population, diverse generations big city dwelling,
ethnic diversity, world markets
 Four main generational groups of consumers
o Baby boomers
 Generation of people born between 1948-1964
o Generation x
 People born between 1965-1974
 Not as brand loyal as baby boomers, more selfreliant, entrepreneurial, and better educated. Less
prone to materialism and extravagance
o Generation y
 Millennials
 People born tween 1975-1991
 Children of baby boomers
 Music, video, games, sports, and computer
purchases are geared toward this group
o Generation z
 Net generation
 People born after 1992
 Avid users of social media, very objective in their
purchase, not very brand loyal
 Socio-cultural forces
 More difficult to pinpoint than demographic changes
 Tend to be gradual, over a prolonged period of time, and
sometimes being very subtle
 Cultural values, ideas, and attitudes that are learned and shared
among a group of people
 Media usage, food consumption, health and fitness,
environmental awareness, evolving gender roles
 Economic forces
 Economy
o He collective income, expenditures, and resources that
affect the cost of running a business or a household
o Economic ability of a consumer to purchase a product
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Macroeconomic forces
o The state of a country’s economy as a while as indicated by
its growth rates, inflation rates, unemployment rates, and
consumer confidence indexes
o Inflation
 A period when the cost to produce and buy
products and services gets higher as prices rise
o Recession
 A time of slow economic activity with two
consecutive periods of negative growth
 Microeconomic forces
o The supply and demand of goods and services and how
this is impacted by individual, household, and company
decisions to purchase
o Gross income
 Total amount of money made in one year by a
person, household, or family unit, including taxes
o Disposable income
 Balance of income left after paying taxes; income
that is used for spending and saving
o Discretionary income
 Money that consumers have left after paying taxes
and buying necessities
Technological forces
 Inventions from science or engineering research
Competitive forces
 Alternative products that can satisfy a specific market’s needs
 Direct competitors
o Similar products sold in the same category
 Indirect competitors
o Products competing for the same buying dollar in a slightly
different, but related category
 Monopoly
o When only one company sells in a particular market
 Oligopoly
o Type of competition that occurs when a few companies
control a market
 Monopolistic competition
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o Type of competition where a large number of sellers
compete with each other, offering customers similar or
substitute products
 Perfect competition
o Type of competition where there are many sellers with
nearly identical products and little differentiation
 Regulatory forces
 Regulations
o Restrictions placed on marketing practices by government
and industry associations
 Do not call list
o Gives customers the ability to not receive telemarketing
calls on cellphones, landline phones, and fax machines by
registering the numbers of their communication devices
 CRTC restricts TV ads to the following
o 12 mins per hour on specialty channels
o No advertising on pay television, pay per view, and video
on demand channels
o No limits on am and fm radio stations
o No limits on regular tv stations
o No advertising on cbc radio networks except for programs
that are available only on a sponsored basis
 Privacy, spam, contests
o Spam
 The dissemination of unsolicited electronic
messages to recipients that have requested them
Marketing environmental scan
o Process of continually acquiring information on events occurring outside an
organization to identify trends and pinpoint opportunities and threats to a
business
Chapter 3
Summary on page 7
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Consumer behavior
o Actions a person takes when purchasing and using products and services
Purchase decision process
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o Stages that a buyer passes through when making choices about which products
or services to buy
o 5 stages
 Problem recognition
 A person realizes the difference between what he or she has and
what he/she would like to have
 Information search
 Begin to search for information about what product or service
might satisfy the newly discovered need
 Internal and external
 Alternative evaluation
 Clarifies the problem by suggesting criteria, and developing
consumer value perceptions
 Purchase decision
 Post-purchase behavior
Involvement
o Personal, social, and economic significance of a purchase to the consumer
o Low involvement – toothpaste
o High involvement – car
o Routine problem solving
 Little effort seeking external information and evaluating alternatives
 Low priced, frequently purchased items
o Limited problem solving
 Low consumer involvement but significant perceived difference among
brands
o Extended problem solving
 High involvement purchases
Situational influences
o Purchase task
 Reason for engaging in the decisions in the first place
o Social surroundings
 Other people present when a purchase decision is made
o Physical surroundings
 Décor, music, and crowding in retail stores may influence purchase
decision
o Temporal effects
 Time of the day or amount of time available
o Antecedent states
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 Consumer mood or the amount of cash on hand
Psychological influences
o Motivation
 Energizing force that stimulates behavior to satisfy a need
 Maslow’s Hierarchy of Needs
 Physiological needs
o Food, water, shelter
 Safety needs
o Freedom from harm, financial security
 Social needs
o Friendship, belonging, love
 Esteem needs
o Status, respect, prestige
 Self-actualization needs
o Fulfillment of ambitions and hopes
Personality
o Persons character traits that influence behavioral responses
o Assertiveness, extraversion, compliance, dominance, and aggression
Perception
o Process by which someone selects, organizes, and interprets information to
create a meaningful picture of the world
o Selective perception
 Filters the information so that only some of it is understood or
remembered or even available to the conscious mind
o Selective exposure
 People pay attention to messages that are consistent with their attitudes
and beliefs and ignore messages that are inconsistent
o Selective comprehension
 Interpreting information so that it is consistent with you attitudes and
beliefs
o Selective retention
 Consumers do not remember all the information they see, read, or hear,
even min safer exposure to it
Perceived risk
o Anxiety felt when a consumer cannot anticipate possible negative outcomes of a
purchase
Learning
o Behaviors that result from repeated experience or reasoning
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o Behavioral learning
 Process of developing automatic responses to a type of situation built up
through repeated exposure to it
 Drive (a need that moves an individual to action), cue (stimulus or symbol
that one perceives), response (action taken to satisfy the drive), and
reinforcement (the reward)
 Stimulus generalization
 A response brought about by one stimulus is generalized to
another stimulus
 Stimulus discrimination
 Ones ability to perceive differences among similar products
o Cognitive learning
 Making connections between two or more ideas or simply observing the
outcomes of others behaviors and adjusting your own accordingly
o Brand loyalty
 Favorable attitude toward and consistent purchase of a single brand over
time
Values, beliefs, and attitudes
o Attitude formation
 Attitude
 Tendency to respond to something in a consistently favorable or
unfavorable way
 Attitude change
o Changing beliefs about the extent to which a brand has
certain attributes
o Changing the perceived importance of attributes
o Adding new attributes to the product
 Beliefs
 Consumers perceptions of how a product or brand performs
Socio-cultural influences
o Personal influence
 Opinion leadership
 Opinion leaders
o Individuals who have social influence over others
 Word of mouth
 People influencing each other in personal conversations
 Buzz marketing
o Brand becoming popular as a result of people talking
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Viral marketing
o Online version of word of mouth
o Reference groups
 A group of people who influence a person’s attitudes, values and behavior
 Membership group
 A person actually belongs, including fraternities and sororities,
social clubs, and the family
 Aspiration group
 One that a person wishes to be a member of or wishes to be
identifies with
 Dissociative group
 One that a person wishes to maintain a distance from because of
difference in values or behaviors
o Family influence
 Consumer socialization
 People acquire the skills, knowledge, and attitudes necessary to
function as consumers
 Family life cycle
 A family’s progression from formation to retirement, with each
phase bringing distinct needs and purchasing behaviors
 Family decision making
Culture
o A set of values, ideas, and attitudes that are learned and shares among the
members of a group
Subcultures
o Subgroups within a larger culture that have unique values, ideas, and attitudes
Cross cultural analysis
o Study of similarities and differences among consumers in two or more societies
Values
o Socially preferable modes of conduct or states of existence that tend to persist
over time
Customs
o Norms and expectations about the way people do things in a specific country or
culture
Cultural symbols
o Objects, ideas, or processes that represent a particular group of people or society
Back translation
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o Retranslating a word or phrase back into the original language by a different
interpreter to catch errors
Chapter 4
Summary on page 98
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Market research
o Used by marketers to reduce the risk of making poor decisions
o Drive decision making by using clear, accurate, and actionable designs
o Process of planning, collecting, and analyzing information in order to recommend
actions to improve marketing activities
o Helps identify consumer needs, assess future opportunities, evaluate new ideas,
and determine purchase intent
o Classified into three basic areas
 Exploratory research
 Preliminary research conducted to clarify the scope and nature of
a marketing problem
 Provides a clear direction and identifies where business problems
and opportunities may lie
 Descriptive research
 Research designed to describe basic characteristics of a given
population or to clarify its usage and attitudes
 Already has a general idea of marketing problem and is seeking
more conclusive data that answers particular questions
 Examples of research include
o Providing more detailed profiles of product purchases
o Describing the size and characteristics of markets
o Detailing product usage patterns
o Outlining consumer attitudes toward particular brands
 Casual research
 Research designed to identify cause and effect relationships
among variables
 Usually an expectation out the relationship to be explained, such
as predicting the influence of a price change on product demand
 Examine areas such as
o Effect of advertising on sales
o Relationship between price and perceived product quality
o Impact of package design on sales
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Quantitative studies are required for greater certainty
o Define the problem/issue/opportunity
 Objectives
 Specific, measurable goals
 Common research objectives are to discover consumer needs and wants,
and to determine why a product is not selling
o Design the research plan
 Information requirements
 Sometimes data is collected that is interesting but not relevant
 Collection methods
 Have a data collection plan
 How to collect data is just as important as collecting the data
 Different ways to collect the data
o In depth personal interviews
o Focus groups
o Telephone surveys
o Central location surveys
o Personal questionnaires
o Mail surveys
 Sampling plan identifies who is to be sampled, how large the sample
should be, and how the sample will be selected
 Sampling
 The process of gathering data from a subset of the total
population rather than from all members of the particular group
 Probability sampling
 Selecting a sample so that each element of a population has a
specific known chance of being selected
 Non probability sampling
 Selecting a sample so that the chance of selecting a particular
element of a population is either unknown or zero
o Conduct exploratory and qualitative research
 Preliminary research conducted to clarify the scope and nature of
marketing problem
 First avenue is to collect secondary data
 Available through internal company documents or external online
and offline published reports
 Qualitative research
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A form of research that uses approaches such as focus groups, indepth interviews, online communities, online bulletin boards, and
social listening to provide insightful and directional information
o Collect quantitative primary research
o Compile, analyze, and interpret data
o Generate reports and recommendations
SW&A works with its clients to bring a fact based approach to marketing decisions
o Does this by fusing marketing, market research information, strategy, and
innovation thinking into the services it provides
Internet provides
o Online communities
o Bulletin boards
o Publicly available syndicated studies
o Social listening
o Online surveys
Research has its limitations
o Questions are not always the right ones to ask
o Respondents do not always have the answers
Successful research needs
o Vision
o Hypotheses
o Instincts
o Energy
Need to anticipate competitive moves and predict consumer wants, needs, and
preferences
Consumers can be grouped by their attitudes
o Runners (29% Canadian Population)
 Anxious but optimistic achievers with high ambitions and expectations
 Purchase branded items
o Walkers (47% of Canadian Population)
 Positive and contended family orientated people, concerned about
society
 Ted to be older females who purchase brands for functionality rather than
fashion
o Spectators (24% of Canadian Population)
 Primarily males who are either younger or older and not very optimistic
 Enjoy spending time alone and purchase items out of necessity
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 Few brands are seen as relevant
o Information is presented in two ways
 Marketing information system
 Market research studies
Marketing information system
o A set of procedures and processes for collecting, sorting, analyzing, and
summarizing information on an ongoing basis
o Collects information on and analyzes it to provide a current market assessment
 Market conditions
 Competitive marketing actions
 Local sales figures
Secondary data
o Facts and figures that have already been recorded by a third party
 External
 Outside organization which can track what consumers watch on tv,
mobile devices, or online, as well as what they buy from online or
offline retails
 Internal
 Within a company and includes data such as sales reports,
profitability data, and costing information
o Statistics Canada reports include
 Economic indicators
 International trade
 Culture and leisure
 Agriculture
 Tourism and travel
 Manufacturing
 Government
 Environment
 Justice and crime
 Health
o Refer to page 89 for picture on information sources
Primary data
o Data that is original and specifically collected for a project
Focus group
o A research technique where a small group of people (usually six to ten) meet for
a few hours with a trained moderator to discuss predetermined areas
In-depth interview
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o A detailed interview where a researcher questions an individual at length in a
free-flowing conversational style in order to discover information that may solve
a marketing problem
Secondary data is lower in cost and easier to obtain than primary data
Secondary data disadvantages
o The secondary data may be out of date
o Definitions or categories may not be right for the project
o Data may not be accurate or specific enough for the study
Online research communities
o The use of consumer groups, brought together privately in an online
environment, to answer questions, respond to ideas, and collaborate with
researchers in real time
Online research bulletin boards
o Private online static forums, without real time dialogue and engaging
conversations, where respondents can post their responses to questions posed
by researchers
Social listening
o Research that monitors public online consumer conversations on social media
sites such as social networks, blogs, and forums
Quantitative research
o Statistically reliable information that uses observational and/or questioning
techniques such as observations, surveys, and experiments
o Advantage
 Statistically accurate and is less open to interpretation
o Disadvantage
 Far more costly and time consuming
o Techniques include
 Observations
 Surveys
 Experiments
Observational research
o Obtained by watching how people behave in person or by using a machine to
record events
o Can also be obtained in person with researchers watching things like how kids
play and which toys they use frequently
o Costly and unreliable as human behavior is not 100% foolproof
Questionnaire
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o Obtaining information by posing standardized questions through surveys that can
be conducted in person, through the mail, on the telephone, or through the
internet
Syndicated studies
o A hybrid of primary and secondary research whereby the cost of a research study
is shared among clients made and made available at a price to interested parties
Panel
o A large sample of respondents that voluntarily complete questionnaires on a
regular basis s that researchers can assess changes in behavior and attitudes
Portable people meter
o Monitors TV-viewing and radio-listening habits
Omnibus survey
o The voluntary participation of respondents in routine research surveys that allow
marketers to add a small number of questions to an existing survey to receive
cost-effective data
Experiment
o In marketing, changing a variable involved in a customer purchase to find out
what happens
Test market
o An in-market localized regional approach, or short term online destination, used
to test the success of promotional offers, new services, or new product launches
Organizations need to ask for separate permission for using an individual’s personal
information is three areas
o Service renewal
o Marketing purposes
o The use of personal sensitive data
Chapter 6
Summary on page 140
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Essence of market segmentation, target markets, and product positioning is based on
three facts
o Consumers have diverse needs
 Single product cannot satisfy everyone
o Companies have finite amounts of money and it needs to spent efficiently and
effectively on their target market
o Marketers need to have clear, consumer insights on target market in terms of
 Product needs
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 Price expectations
 Purchase habits
 Communication tools used to gather information
Market segment (piece of market)
o Market segmentation
 The aggregation of prospective buyers into groups that have common
needs and respond similarly to marketing programs
 Relatively homogeneous and consist mainly of people who are fairly
similar in
 Consumption behavior
 Attitudes
 Target market profiles
o Included in annual marketing plan
o Two main segment markets
 Consumer
 Consists of products, ideas, and services that a person can
purchase or support for personal use
 Business
 Products that are purchased either to run a business or to be used
as a component in another product or service
o In order to segment a market, a company can use
 Mass marketing
 The marketing of a product to the entire market with no
differentiation at all
 Not as prominent today due to high competitiveness and need to
address consumer directly
 Segment marketing
 Designing specific product and services to meet the needs of
different target groups
 Most common followed by large companies
 Kellogs is an example with different cereals catering to different
people
 Niche marketing
 Allows a company to focus its efforts of a limited segment in the
market
 Kashi – healthy food lovers
 Individualized marketing
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Involves customizing offers and, in some cases, products to fit
individual needs
 New technology has made this more prominent
 Database technology used to
o Track consumer purchases
o Predict interests and future purchases
Product differentiation
o Involves positioning a product apart from the competition in the eyes of
consumers
 Does not mean product is better than others
Segmenting a market needs marketers to have
o Strong analytical skills
o Sound strategic thinking
o Understanding the consumer
o Vision of where the market is heading
o How these fit in with company direction
Process of segmenting a market
o Review strategic company objectives
 Need to be clear and quantifiable
 Include
 Sales
 Revenue
 Profit targets
 Corporate social responsibility
 New business direction
o Identify specific business unit objectives
o Identify consumer/customer needs and common characteristics in the market
o Cluster common consumer/customer variables to create meaningful market
segments
o Conduct SWOT analyses on the segments to determine strengths, weaknesses,
opportunities, and threats
 SWOT analysis
 Process by which a company can identify opportunities and
whether it has the strengths to compete in a segment that may
already be well-served by the competition
 Strengths, weaknesses, opportunities, and threats
o Strengths/weaknesses – internal like packaging
o Opportunities/threats – external like competition
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o Identify the segment that best meets strategic company objectives
o Identify marketing programs and budget requirements needed for this segment
o Create a sales forecast for this segment
o Conduct a profit-and-loss financial analysis for this segment
o Check financial forecasts against specific business unit objectives
Identify target market by
o Geographics
 Where a target market lives using variables such as country, region,
province, city size, and types of location such as urban, suburban, or rural
o Demographics
 Ranges for age, gender, family, life cycle, income, occupation, education,
ethnic background, and home ownership
 Easiest variable to understand
o Psychographics
 Understanding consumers attitudes to life, their general interests,
opinions, personalities, and activities
 One of the most difficult variables to understand
o Behaviouristics
 Why consumers buy a product, the product benefit, how they use it, and
whether they are brand loyal in their purchase behavior
 Usage rate is also included
Product positioning
o The impression of the product you want to establish in consumers minds relative
to their needs and the competition
o Three factors
 Image
 Leaders, contenders, or rebels in the market, also taking on
characteristics such as trusted, prestigious, or thrifty
 Product attribute
 Products that can be differentiated form others
 Price
 Brand parity and little product differentiation
Positioning statement
o A tool that identifies the main reasons the target market buys a product and
what sets it apart in market
o Included in annual marketing plan
o Identify two main areas
 How the product meets the consumer needs
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 How the product is differentiated in the market versus competition
o Are written in a short paragraph and identify 4 elements
 Product name
 Category in which the product competes
 One or two main reasons the target market buys the product (product
benefits)
 What sets the product apart from competition
Repositioning
o A revamping of a product and its marketing mix to more accurately meet
consumer needs
o Mcdonalds
 Interior and exterior store design changes
 Healthier menu choices
 Product ingredient changes
 New website components
 Focused advertising methods
Positioning maps (perceptual maps)
o Example on page 138
o Visual representations of how products are positioned in a category to
consumers
o Can reveal gaps where people may be underserved
Chapter 7
Summary on page 162
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Product
o A good, service, or an idea consisting of tangible and intangible features
 Tangible
 Color, sweetness, physical attributes
 Intangible
 How it makes you feel
 Things you cannot touch
o Three main categories
 Non-durable goods
 An item that does not last and is consumed only once, or for a
limited number of times
 Durable goods
 An item that lasts over an extended number of uses
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Services
 Intangible activities, benefits, or satisfactions
 Supplementary services
o Distinguish between products by offering after purchase
things
 Virtual services
o Services that exist only online and have no person-toperson interaction
 Service continuum
o A range from tangible goods to intangible services
Unique elements of services (four Is of service)
o Intangibility
o Inconsistency
o Inseparability
o Inventory
 Perishability
 When products cannot be stored for long periods of time to use at
a later date
 Idle production capacity
 When the supply of a service exceeds its demand
Total product concept
o Core product layer
 Fundamental benefit that a consumer derives from having the product
o Actual product layer
 Physical good or the service that a consumer purchases when buying a
product
 Branding, design, features
o Augmented product layer
 Additional features and attributes that accompany a product
 Warranty, service contract, delivery options, installation assistance,
website used to distinguish the product from competition
Product line
o A group of similar products with the dame product and brand name that is
directed at the same general target market and is marketed together
o Product mix
 The combination of product lines offered by a company
Product width and depth
o Width
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 Number of categories offered by the company
o Depth
 Variety of product lines and products sold within its product categories,
groups, and lines
Consumer products
o Products purchased for their personal by the ultimate consumer
o Four types of consumer products (page 153 diagram)
 Convenience
 Items purchased frequently that are inexpensive and require
minimum risk and shopping effort
 Inexpensive and easy to purchase
 Little risk
 Bread, newspapers, vending machine items
 Shopping
 Items that require comparison
 Shopping between different brands and an investment of
shopping time
 Greater investment of shopping time
 More expensive than convenience
 Require more assurance of purchase satisfaction
 Jeans, books, TVs
 Specialty
 Items for special occasions that require a specific product or brand
and require considerable time and effort to purchase
 More expensive branded items
 High purchase satisfaction needed
 Rolex watch, cruise, wedding dress, wedding ring
 Unsought
 Unknown items or those of no interest to the purchaser
 Diapers for a person who does not have a baby
Business products
o Aka industrial goods or organizational products
o Products that are purchased either to run a business or to be used as a
component in another product or service
o Production goods and services
 Items used in manufacturing process
 Raw materials such as grain/lumber, door hinges
o Support goods and services
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Items used to assist in producing other goods and services
 Installations
o Buildings and fixed equipment
 Accessory equipment
o Tools and office equipment and is usually purchased in
small order sizes
 Supplies
o Business equivalent of consumer convenience goods
o Products that are used continually
o Stationary, paper clips, brooms
 Services
o Intangible activities needs to assist a business in its
operation and its goods and services
o Transportation service, maintenance, and repair services
Brand
o A name or phrase uniquely given by a company to a product to distinguish it from
the competition
o Brand equity
 The value of a brand that results from the favorable exposure,
interactions, associations, and experiences that consumers have with a
brand over time
 Patent
 Used to legally protect new technologies, unique processes, or
formulations form usage by other companies
 A right, granted by the government, to exclude others from
making, using, or selling an invention
 Canada = covers for 20 years
 Copyrights
 Used to legally protect written word, a sound recording, or a form
of communication being copied by others
 Music, literature, performances, slogans
 Trademarks
 Used to legally protect brand images, names, and designs form
usage by others
 15 years, but can be renewed
 Protects a brand name and its related logo, colors, and various
combinations for use in a particular category
o Brand extension
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When a new good or service is introduced under and existing flagship
brand name
o Individual brand
 When a company uses a brand name solely for a specific product category
o Family brand
 When a company uses a brand name to cover a number of different
product categories
o Brand loyalty
 The degree of consumer attachment to a particular brand
 Global brands
 Brand that is sold in a variety of international markets and enjoys
wide recognition in these markets
o Coca-cola, Microsoft, google, and IBM
o Brand personality
 A set of human characteristics associated with a brand
Brand name selections
o The name should suggest the product benefits
o The name should be memorable, distinctive, and positive
o The name should fit the company or product image
o The name should have the ability to be legally protected
o The name should be simple
Types of brands
o Manufacturer’s brands
 A brand owned and produced by the manufacturer
 Tylenol is one from Johnson and Johnson
o Private label brands
 Otherwise known as a store brand, a brand owned by a retailed that
contracts its manufacturing to major suppliers, and then sells the product
at its own retail stores
 Cheaper than manufacturers brands
 Presidents choice
o Generic brands
 A product that has no branding and is produced as a cheap alternative to
a manufacturer’s brand and to branded private label products
What marketers do to market products and brands
o Create annual marketing plans
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o Analyze daily sales numbers, review profit targets, be alerted to changes in
product costs, be in contact with the sales force, and understand changes in the
selling environment
o Be aware of market research insights, understand consumer interests, and create
meaningful marketing programs
o Markets main interests now
 Green conservation programs
 Multicultural composition of our society
 Impact of internet on purchasing behavior
Chapter 8
Summary on page 187
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Product life cycle
o The stages that a new product goes through starting with introduction and
evolving into growth, maturity, and decline
o Introduction stage
 First introduced
 Sales grow slowly, profits are minimal
 Profit levels are result from three things
 Slow sales growth
 High research and development costs to bring the product to the
market
 High levels of marketing spending needed to launch new product
 Pricing is usually high
 Price skimming strategy
 Sometimes a low price is used to generate sales
 Penetration pricing strategy
o Growth stage
 Increase in competition
 Rapid rise in sales and profits
 Marketers focus on product differentiation
 Pricing levels are generally lowered to become more competitive
 Promotion is more product specific
o Maturity stage
 Slowdown of growth in both sales and profit areas
 Competitors are well established
 Fewer consumers enter the market
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 Generally longest stage
o Decline stage
 And profits consistently decline over time
 Either the product is deleted, or it will be harvested
 Harvesting
o When a company keeps a product by reduces marketing
support in an attempt to reap minor profits
Shape of the product life cylce
o High learning products
 Significant consumer education is required for these products, which have
an extended introductory period
 Extended introductory period due to the significant efforts required to
educate customers on the usage and benefits of the product
o Low learning products
 Little consumer education is required, resulting in a short introductory
stage for the product
 Short introductory stage
 Benefits are self-evident
o Fashion products
 The life cycle for fashion is relatively short and cyclical, going from
introduction to decline within two to three years, only to resurface again
a few years later
 Cyclical
 Length of cycle is generally short
o Fad products
 Novelty products with very short product life cycles that experience
immediate rapid growth, followed by an equally rapid decline
 No real maturity stage
How to extend product life cycle
o Targeting current users with extended usage strategies
 Strong brand equity and a loyal consumer base
o Targeting new consumers through new consumer approaches
 Expensive proposition that yields few results
o Revitalizing a product with product improvements and line extensions
 Products can remain competitive and address new market trends
 Line extension
 New product is added onto a pre-existing line
 Greenwashing
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The deceptive use of marketing practices to give the impression
that a good, service, or organization is environmentally friendly
o Repositioning a product
 Often occurs at maturity stage
 Needs to be renewed so it can compete again
o Introducing a new product
 Provide the focus that a mature product needs
o Finding new users for a product
 Not easy
 Many products cannot have new users
Innovation classification
o Minor innovations
 No consumer adjustments needed
 Consumers do not need to be educated on how to use the product
 Relatively common
o Continuous innovation
 New products that include more than just a minor product improvement
 Do not require radical changes in consumer behavior
 Not common
 Requires extensive product development
o Radical innovation
 Least common
 Entirely new product
 Success is dependant on education
 Extensive advertising
 Public relations efforts
o Add credibility
Adoption curve
o The sequential diffusion and acceptance of an innovation into the market by
consumers
o Takes the point of view that some consumers are more ready than others to buy
a product
o 2.5 of Canada are innovators
 Risk takers who are first to purchase an innovative product
 Higher educated
 Use multiple information sources
o 13.5 of Canada are early adopters
 Will accept a new offering sooner rather than later
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 Leaders in social setting
 Slightly above average education
o 16 of Canada are laggards
 Either reluctant or late purchasers
 Fear of debt
 Neighbors and friends are information sources
o 34 of Canada
 Early and late majority
 Once accepted by early adopters, product moves to early majority and
late majority who respond to well-established product in the market.
Then goes to laggards who are reluctant to purchase and may in fact
never buy it
 Early majority
 Skeptical
 Below average social status
 Late majority
 Skeptical
 Below average social status
 Influenced by peers purchases
Reasons for new product failure
o Insignificant point of differences
 One of most important factors
 A distinctive and meaningful point of difference is essential for a new
product to compete
o Incomplete new concept definition
 Needs a well-defined, consumer based reason for being
o Insufficient market attractiveness
 Product having a strong appeal in a category with both growth and profit
potential
o Inadequate marketing support
o Insensitivity to critical consumer needs
o Bad timing
o Limited access to buyers
Approaches to new product development
o Strategic direction
 Dependent on the degree of risk and investment that companies are
willing to make
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Most common forms of innovation take either a market penetration or
product development slant
 Either focusing on current consumers with promotional (market
penetration) tactics od looking to develop a new product for these
current consumers (product development)’
 Higher risk considerations include either a market development or
diversification
 More expensive approach of either targeting new products with
current products (market development) or moving out into new
arenas with totally new products (diversification)
o Company structure
 Team based approach
 Individual approach
 Full department approach
 New venture team
New product development process
o Sequence of steps that a firm takes to develop a new product idea and take it to
market
o Step one: new product development strategy
 Setting the new product strategic direction for the company as a whole,
and the precise objectives for the project at hand
o Step two: idea generation
 Focuses on brainstorming sessions to prompt new ideas
 Brainstorming sessions focused on participants coming up with new ideas
for the project at hand
 Ideas come from inside or outside the company
o Step three: screening and evaluation
 Reduces the list of brainstorming ideas down to a list of promising
concepts
 Concept tests
 External evaluations of a new product idea, rather than the actual
product itself
 How the customer perceives the product, who would use it, how
it would be used
 Learn strengths and weaknesses of concepts
o Step four: business analysis
 Financial projections on the impact of bringing the new product to market
and selling it in the future
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Cover a three year period and look five years into the future
Involve sales and revenue forecasts, cost projections, and budget
requirements for marketing support
 Need to determine market share projections, price points, cost
parameters, special discounts, distribution requirements, research needs
o Step five: development
 The new product idea is turned into a prototype for further consumer
research and manufacturing tests
 Complex level
o Step six: test marketing
 Offering a new product for sale on a limited basis in a defined geographic
area to assess its success
 Expensive to conduct and immediately alert competition
o Step seven: commercialization
 When the new product is brought to market with full-scale production,
sales, and marketing support
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Chapter 9
Summary on page 212
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Price
o Money or other considerations exchanged for the ownership or use of a good or
service
Barter
o Exchanging goods or services for other goods or services rather than for money
Price equation
o Final price = list price – (incentives + allowances) + extra fees
Value
o The ratio of perceived benefits to price
o Value = perceived benefits / price
o Value pricing
 Increasing product or service benefits while maintaining or decreasing
price
Profit equation
o Profit = total revenue – total cost
o Total revenue = unit price x quantity sold
Approximate price level
o Used to find a reasonable starting point
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o Four approaches to finding this
 Demand oriented
 Emphasize factors underlying expected customer tastes and
preferences more than such factors as cost, profit, and
competition
 Skimming price
o Setting the highest initial price that those customers really
desiring the product will pay
o Not very price sensitive
o Price goes down as more people are satisfied
 Penetration pricing
o Setting an initial low price to appeal immediately to the
mass market
o Discourages competition from entering
 Prestige pricing
o Setting a price high so that quality or stats conscious
consumers are attracted to the product and buy it
 Price lining
o Selling a line of products that are priced at a number of
different specific pricing points
 Odd-even pricing
o 99 cents instead of a full dollar
 Target pricing
o Manufacturer deliberately adjusting the composition and
features of a product to achieve the target price to
consumers
 Bundle pricing
o He marketing of two or more products in a single package
price
o Values the package more than the individual items
 Yield management pricing
o Charging of different prices to maximize revenue for a set
amount of capacity at any given time
 Cost oriented
 Price is more effected by the cost side of the pricing problem than
the demand side
 Startup markup pricing
o Markup
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The difference between selling price and cost,
usually expressed as a percentage of cost
 Referred to as gross margin
 Cost plus pricing
o Summing the total unit cost of providing a product or
service and adding a specific amount to the cost
o Most commonly used method for business products
 Profit oriented
 Balance both revenue and cost to set price
 Target profit pricing
o A firm sets an annual target of a specific dollar amount of
profit
 Target return on sales pricing
o Prices that will give them a profit that is a specified
percentage of the sales volume
o Often used because of the difficulty in establishing a
benchmark of sales or investment to show how much of a
firms effort is needed to achieve the target
 Target return on investment pricing
 Competition oriented
 Based on what the competition is doing
 Customary pricing
o Products where tradition, a standardized channel of
distribution, or other competitive factors dictate the price
 Above, at, or below market pricing
o Market price is what consumers are willing to pay
 Loss leader pricing
o Commonly used products sold at very low prices
Fundamentals of estimating demand
o Demand curve
 Graph relating quantity sold and price, which shows how many units will
be sold at a given price
 Consumer tastes
 Depend on factors such as demographics, culture, and technology
 Price and availability of similar products
 Consumer income
 As income increases, demand increases
o Movement along versus demand shift
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Movement along a demand curve means all other factors other than
price remain unchanged
 Shift of the demand curve means that something other than the price
changes
o Price elasticity of demand
 How sensitive consumer demand and the firms revenues are to changes
in the products price
 Elastic demand
 Slight decrease in price results in a relatively large increase in
demand
 Inelastic demand
 Slight decrease in price will result in little change in demand
Fundamentals of estimating revenue
o Total revenue
 Total money received from the sale of a product
 PxQ
o Importance of controlling costs
 Total cost
 Total expenses incurred by a firm in producing and marketing a
product; total cost is the sum of fixed cost and variable costs
 Fixed cost
 Firms expenses that are stable and do not change with the
quantity of product that is produced and sold
 Variable cost
 Sum of the expenses of the firm that vary directly with the
quantity of products that is produced and sold
o Break even analysis
 Examines the relationship between total revenue and total cost to
determine profitability at different levels of output
 Break-even point
 Quantity at which total revenue and total costs are equal
 Fixed cost / unit price – unit variable cost
 Applications of a break-even analysis
 Used most frequently to study the impact on profit of changes in
price, fixed cost, and variable cost
Pricing objectives
o Expectations that specify the role of price in an organizations marketing and
strategic plans
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o Profit
 Often measured in terms of return on investment
 Managing for long run profits
 In which a company gives up immediate profit in exchange for
achieving a higher market share
 Products are priced relatively low compared to their cost to
develop
 Maximizing current profit
 Targets can be set and performance measured quickly
 Target return
 When a firm sets its price to achieve a profit goal
o Sales
 Must have firms profit rate high enough to focus on sales revenue
 Increase in sales revenue will lead to an increase in market share and
profit
o Market share
 Ratio of the firms sales to those of the industry (competitors plus the firm
itself)
 This is often pursued when industry sales are relatively flat or declining
o Volume
 The quantity produced or sold
 Sell the same product as several different prices, at different times, or in
different places in an attempt to match customer demand with the
company’s production capacity
 Can be misleading from a profit standpoint
 Can be increased by lowering prices, giving rebates, or offering lower
interest rates
o Survival
o Social responsibility
Identifying customer constraints
o Factors that limit the range of price a firm may set
o Consumer demand for the product clearly affects the price that can be charged
o Demand for the product class, product, and brand
 Number of potential buyers
o Newness of the product: stage in the product life cycle
 Newer the product, the higher the price
o Cost of producing and marketing the product
o Competitors prices
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High price: firm believes its offering represents a higher value in
comparison to competing products
 Same price: firm is relying on some aspect other than price to position
and differentiate its products in the minds of customers
 Lower price: larger volumes may result
Legal and ethical considerations
o Price fixing
 When competitors collaborate and conspire to set prices, they agree to
increase, decrease, or stabilize a price for their benefit
 It is illegal
 Competition act prohibits this
o Price discrimination
 Different prices are charged to different customers for the same or very
similar goods
 Competition act bans this
 Needs to be evidence of this being a recurring event
o Deceptive pricing
 Price offers that mislead the consumer
 Competition act
 Difficult to police and the laws are hard to enforce
o Predatory pricing
 Charging a very low price for a product with the intent of undercutting
competitors and possibly driving them out of the market
Global pricing strategy
o Dumping
 Occurs when a firm sells a product in a foreign country below its domestic
prices or below its actual cost
o Grey market
 Parallel importing
 Situations where products are sold through unauthorized channels of
distribution
 Individuals buy products in a lower priced country from a manufacturers
authorized retailers, ship them to higher priced countries, and then sell
them below the manufacturer’s suggested retail price
Setting the final price
o Step 1: select and approximate price level
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Balance must be struck between factors that might drive a price higher
(such as a profit oriented approach) and other forces (such as increased
competition from substitutes) that may drive a price down
o Step 2: set the list or quoted price
 One price policy
 Setting one price for all buyers of a product or service
 Flexible price policy
 Setting different prices for products and services depending on
individual buyers and purchase situations in light of demand, cost,
and competitive factors
o Step 3: make special adjustments to the list or quoted price
 Discounts
 Reductions from list price that a seller gives a buyer as a reward
for some activity of the buyer that is favorable to the seller
 Quantity discounts
o Reductions in unit costs for a larger order
 Seasonal discounts
o Encourage buyers to stock inventory earlier than their
normal demand would require
 Trade (functional) discounts
o Reward wholesalers and retailers for marketing functions
they will perform in the future
o These reductions off the list or base price are offered to
resellers in the channel of distribution
o on the basis of where they are in the channel and the
marketing activities they are expected to perform in the
future
o List price - $100, less 30/10/5
 First number always refers to the retail end of the
channel
 Last number always refers to the wholesaler or
jobber closest to the manufacturer in the channel
 Cash discounts
o To encourage retailers to pay their bill quickly
 Allowances
 Trade in allowances
o Price reduction given when a used product is part of the
payment on a new product
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o Reduces price to buyers without reducing price
 Promotional allowances
o Sellers in the channel of distribution can qualify for
promotional allowances for undertaking certain advertising
or selling activities to promote a product
 Geographical adjustments
 Made by manufacturers or even wholesalers to list or quoted
prices to reflect the cost of transportation of the products from
seller to buyer
 FOB origin pricing
o FOB = free on board
o Seller pays the cost of loading the product
o Title of ownership to the goods passes to the buyer at the
point of loading
 Buyers becomes responsible for picking mode of
transportation, transportation costs, and for
handling of the product
 Uniform delivered pricing
o The price the seller quotes includes all transportation costs
o Seller selects mode of transportation, pays freight costs,
responsible for all damages
o Seller retains title until goods are delivered to buyer
o Step 4: monitor and adjust prices
Chapter 12
Summary on page 294
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Age of selective reception
o Social media keeps marketers and advertisers honest in 140-charcter
bursts and where marketers increasingly interact in two-way
conversations with consumers through digital formats such as blogs,
social networks, podcasts, ad online video
Consumers 18-24 years spend 39 percent of their time on the internet
Social media
o A form of online media that allows members to create their own network of
friends and contacts to share comments, videos, and images as a form of selfexpression
Tv advertising ranks first in costs while internet advertising was second in 2012
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Marketing communications industry
o The media
 Tv, newspaper, magazine, radio, out of home, mobile
 Out of home advertising
o Casually referred to as outdoor
o Reaches consumers outside the home in outdoor
locations, in transit, or in commercial or business locations
o Billboards, posters, transit, electronic signage, closed
circuit tv, or street furniture
 Mobile marketing
o The marketing on mobile devices such as cellphones and
tablet computers
o Online mobile ads, apps, QR codes, text messaging, email,
mobile search, and web content
 Internet
o Paid media
 The media time purchased so that messages can be
disseminated through channels that are controlled
by others
o Owned media
 The media channels that a company controls,
either fully or partially, such as a website, microsite,
or social media page that is used to directly
communicate with consumers
o Earned media
 The free publicity secured through unpaid media
mentions and consumers who spread through word
of mouth or the internet
o Marketing communication agencies
 Broad spectrum integrated agencies or specialist agencies that provide
marketers with expertise on how best to communicate messages to their
audiences
o Research companies
o Associations
o Regulatory bodies
 Advertising standards Canada
 Self-regulatory, non-government association hat sets and
regulates advertising
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The competition bureau
 Independent law enforcement agency with jurisdiction on many
areas
 Fraudulent advertising and misleading representation to sell
products, including price and warranty claims
 The Canadian radio-television and telecommunications commission
 The Canadian marketing association
 Code of ethics and standards of practice to guide the marketing
industry in Canada on telemarketing, email marketing, mobile
marketing, internet marketing, and promotional contests.
Outbound marketing
o Marketers seek out consumers by widely broadcasting messages using
advertising, direct mail, email marketing, telemarketing, and personal selling
approaches
Inbound marketing
o Wen interested consumers find the product and its messaging by using online
techniques that marketers facilitate, including search engine optimization, pay
per click ads, and the use of social media to connect with consumers
o Result of paid, earned, and owned media
Integrates marketing communications
o A communications approach that coordinates all promotional activities to
provide a consistent message to a target audience
Marketing communication tools
o Advertising, public relations, sales promotion, direct response, event marketing
and sponsorship, and personal selling
o Examples of strengths and weaknesses are on page 275
o Advertising
 Paid form of media used to communicate to consumers
 Includes broadcast, print, out of home, and digital media
 Television, internet
 Examples of advantages and disadvantages are on page 276
 Display advertising
 The use of online ads with graphics or animation that are placed
on websites
 Banner ads
o Online ads that can stretch across the top of a web page or
be formatted in various sizes, such as leader boards,
rectangles, big boxes, and skyscrapers
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o Leaderboards
 Banner ads that stretch across the top of a web
page
o Skyscrapers
 Banner ads that are tall, slim, and vertical and
appear along the side of a web page
o Advergaming
 Placing ads in online or offline video games
 Online video advertising
 The use of video ads on the internet
 Pay per click advertising
o Ads that appear on search engines and their networks, and
on facebook, linkedin, or youtube in response to key word
triggers
o Often referred to as search advertising
 Home page takeovers
o Entire ad obscures the website home page
 Newspapers
 Three types
o Daily paid circulation newspapers
o Free daily newspapers
o Free community newspapers
o Public relations
 A communications tool that seeks to influence the opinions and attitudes
of target groups through the use of unpaid media exposure
 Targets the media in an attempt to generate positive publicity for a
company, product, or individual
 Publicity
 A non-personal form of communication that appears in the media
and is not paid directly by the organization
 Public relations tools
 Press releases
o Most frequent use
o An announcement written by an organization and sent to
the media
 Press conference
o A planned event where representatives of the media are
invited to an informational meeting with the company
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o Often used during crisis management situations
 Special events
o The creation, support, r sponsorship o special events such
as company sponsored seminars, conferences, and
sporting and entertainment events
 Company reports
 Social media
o Social media release
 A multimedia online press release platform that
includes video, text, and images, as well as social
media buttons for sharing on social networks and
comment areas where viewers can leave comments
o Sales promotion
 A communications tool that provides short term incentives to generate
interest in a product or cause and encourages purchase or support
 User generated content
 Consumer content that is created by participants
 Augmented reality
 When real world images interact with computer generated
information to provide additional information
 Use of quick response
 Black and white patterned squares that consumers may scan with
an enabled smartphone in order to access online content
 Consumer promotions
 Short term marketing tools used to encourage immediate
consumer purchase
 Coupons, premiums, contests, sweepstakes, samples, continuity
programs, point of purchase materials, and rebates
 Trade promotions
 Short term promotional tools used to generate support, with
wholesalers, distributors, or retailers
o Direct response
 A marketing communications tool designed to communicate with
consumers one on one and elicit a direct action either online or offline
 Lead generation
 The requests for additional information that result from direct
response marketing
 Traffic generation
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The visits to a location or website that result from direct response
marketing
o Event marketing and sponsorship
 Event marketing
 The creation or involvement of a brand in an experience or
occasion that will heighten its awareness , create positive
associations, and generate a desired response
 Sponsorship
 When an advertiser paus a fee in exchange for inclusion in an
event, involvement in its advertising opportunities, or exposure
within the event itself
o Personal selling
 The two way flow of communication between a buyer and seller, often
face to face, or facilitated through communication devices to influence an
individual and group purchase decision
 Relationship selling
 The practice of building long term loyalty from customers based
on a salespersons attention and commitment to customer needs
over time
 6 stages
o Prospecting, pre-approach, approach, presentation, close,
and follow up
o Detailed don page 286
o Alternative marketing communication approaches
 Word of mouth
o Transparent and honest communication
o The spread of positive messages about a product listening
to consumers, identifying influential individuals that can
spread the word, and making it easier for them to do so
o Viral level
 Tries to create buzz through public relations events
and social media that seed fun and interesting
messages with influential people that spread the
word
o Grassroots level
 Identifies key communities, opinion leaders, and
product advocates who get personally involved
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with the band and have the ability to influence
others
o Professional level
 Official referral programs may be put in place to
reward satisfied customers who refer the bran to
their friends and contacts
Product placement and branded entertainment
o Product placement
 The inclusion of a product in a movie or tv program
in return for payment
o Branded entertainment
 The creation of an entertainment program, such as
a tv episode, that is highly focused on a brand in
exchange for payment
Unique online tools
o Search engine marketing
 Includes the use of search engine optimization and pay per click
advertising to market on search engines
o Search engine optimization
 Ensuring that websites are written, indexed, and coded so that they are
highly rated and ranked by the search engines
o Microsites
 Promotional websites created for short term promotional purposes, often
allowing consumers to enter contests and access promotional information
o Corporate websites
 Websites that provide corporate and brand information to consumers and
the media
o Social network marketing
 The use of online communities or social networks to openly interact with
the communities by sharing ideas, activities, events, and offers
o Affiliate marketing
 When companies promote their business through a network of online
associates (affiliates) to drive traffic, leads, and purchases
 Affiliates are provided with ads and links to business websites and
rewarded with commissions for resultant business
o Email marketing
 The use of opt in email lists where consumers register and give
permission to receive online communications
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Permission based email
 When a recipient chooses to receive email from an advertiser
Spam
 Unsolicited email
Push strategy
o When marketers focus communication on the distribution channel to gain
support from retailers, distributers, and wholesalers
Pull strategy
o When marketers focus communication efforts on ultimate consumers to build
awareness, trial, and demand for a product
o Got to page 289
Customer advocacy funnel
o A communication approach that takes consumers down a path of initial product
awareness through to brand advocacy
o Go to page 290
o Awareness
o Interest
o Engagement
o Trial
o Purchase
 Retargeted ads
 Display ads that ad networks redeliver to a computers IP address
when a consumer previously clicked on an ad but did not respond
to its contents
o Loyalty
o Advocacy
Marketing communication process steps
o Specify the IMC objectives
 Building brand awareness, creating customer engagement, or increasing
brand loyalty
o Identify the target audience
 Pinpoints target audience
 Demographics, behavioristic, geographics
 Consumer touch points
 The points of interactions that can be used to connect with
consumers, including personal time in the home, shopping time,
workplace situations, social situations, travel time, and even face
to face product time
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o Set the promotional budget
o Design the promotional program
 Promotional mix
 The selection of promotional tools used to communicate with a
target market
o Schedule and run the IMC elements
o Evaluate the program and recommend changes
 Messaging is often evaluated before a program is fully developed to
gauge responses so that adjustments can be made before launch
 Measure campaign awareness and messaging elements such as likeability,
message comprehension, and attitude changes toward the brand
 Elements will be evaluated against expectations
 Promotional program will be evaluated against its objectives
Chapter 13
Summary on page 311
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Customer relationship management
o The overall process of building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction
Customer experience management
o Managing customer interactions to build brand equity and improve long term
profitability
o Touch points
 Any situation in which a customer comes into contact with a brand or
company
The increased profitability that is associated with customer retention is due to several
factors that occur after a relationship has been establish with a customer
o The cost of acquiring a customer occurs only at the beginning of a relationship,
so the longer the relationship, the lower the amortized cost
o Long term customers tend to be less inclined to switch, and also tend to be less
price sensitive
o Long term customers may initiate word of mouth activity and referrals
Loyalty programs
o Programs specifically designed for customer retention
Pareto’s rule
o The concept that 80% of a brands sales come from 20% of its customers
Data mining
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o A process of analyzing customer patterns and insights to make better marketing
decisions
Data warehouse
o A central repository of an organizations electronically stored data
Customer lifetime value
o The potential sales that will be generated by a customer if the customer remains
loyal to that company for a lifetime
Share of wallet
o The percentage of a customer’s purchases that a company has in a specific
product category
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