-Marketing session 1
Marketing and Society – Role of Sustainability
Conscious consumption
If you need the product you buy it, if you don’t need the product you don’t buy it.
Example pantagonia jacket: don’t buy this jacket
McDonald example of sustainable marketing: For them, it implies consumers’ wellbeing; packaging and less calories…
Sustainable Marketing is not only about environment but also about consumer wellbeing.
A. Sustainable Marketing
Sustainable Marketing
Socially and environmentally responsible marketing that meets the present needs of
consumers and businesses while also preserving or enhancing the ability of future
generations to meet their needs.
Create customer value that satisfies both present and future needs. The difference
with traditional marketing is that traditional marketing is only about creating value to
satisfy present customer needs.
Sustainable Marketing is both about future customer and business needs. (SEE table)
Social marketing concept is about building a good brand image. So, it is about
building a good image for the company (present) to increase the sales (future).
B. Social criticism of Marketing
Some marketing practices hurt individual consumers, society, and other business
firms. Some of this criticism is justified; much is not.
1. High prices
The criticism comes from three factors: High costs of distribution, advertising
and promotion and excessive mark-ups.
Response:
2. Deceptive Practices
Marketers are sometimes accused of deceptive practices that lead consumers
to believe they will get more value that they do. Deceptive practices fall into
three groups: deceptive pricing, deceptive promotion, and deceptive packaging.
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Deceptive pricing includes practices such as falsely advertising “factory” or
“whole-sale” prices or large price reduction from a phony high retail “list
price”.
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Deceptive promotion includes practices such as misrepresenting the
product’s features or performance.
- Deceptive packaging includes exaggerating package contents through
subtle design, using misleading labelling, or describing size in misleading
terms.
Response:
3. High pressure selling
Salespeople are sometimes accused of high-pressure selling that persuades
people to buy goods they had not thought of buying, no intention of buying it.
Response:
4. Harmful, or unsafe products
Too often, products and services are not made well or do not perform well.
Product safety includes product complexity and poor product quality control.
Response:
5. Planned Obsolescence
Companies are criticised of causing their products to become obsolete before
they should need replacement.
Response:
6. Poor service to disadvantaged consumers
In urban areas where the population is poorer, there are fewer supermarkets
and when there are supermarkets, they sale lower product quality at higher
prices. Therefore, the critics accuse major chain retailers of redlining, drawing
a red line around disadvantaged neighbourhoods and avoiding placing stores
there.
Response:
7. False wants and too much materialism
Critics have charged that the marketing system urges too much interest in
material possessions. People are judged by what they own and not by who they
are. Marketers are accused of having stimulated people’s desires for goods and
created a materialistic world with an endless cycle of mass consumption.
Response:
Session 2:
Consumerism is the organized movement of citizens and government agencies to
improve the rights and power of buyers in relation to sellers.
Consumerism’s rights:
• The right not to buy a product that is offered for sale
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The right to expect the product to be safe
The right to expect the product to perform as claimed
The right to be well informed about important aspects of the product.
The right to be protected against questionable products and marketing
practices
The right to influence products and marketing practices in ways that will
improve the “quality of life”
The right to consume now in a way that will preserve the world for future
generations of consumers
Environmentalism is an organized movement of concerned citizens, businesses, and
government agencies to protect and improve people’s living environment.
Environmental sustainability involves earning profits while helping to save the
planet.
Nutri-score
Apple’ charger USB-C
Business actions towards sustainable marketing:
• View marketing activities from the consumer’s point of view (ConsumerOriented Marketing)
• Invest in customer-value-building marketing and Create value FOR customers
(Customer-Value Marketing)
• Company seeks real product and marketing improvements (Innovative
Marketing)
• Define mission in broad social terms rather than narrow product terms (Senseof-Mission Marketing)
• Long-run consumer benefit: (Societal marketing)
Corporate marketing ethics policies are broad guidelines that everyone in the
organization must follow that cover distributor relations, advertising standards,
customer service, pricing, product development, and general ethical standards.
Session 3:
Digital Marketing is a set of activities that a company or person runs on the Internet
in order to attract new businesses and develop a brand identity
Digital marketing:
Advantages
• Interactive
• Personalized (Can offer or send tailored information/messages)
• Can trace effects (e.g., by clicks on a page/ad)
• Contextual placement
• Can place advertising based on search engine keywords
Disadvantages
• Consumers can screen out most messages
• Ads can be less effective than they appear (bogus clicks) - Cost
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Lost control over online messages via hacking/vandalism
5 D’s of managing Digital Marketing Interactions
i.
Digital Devices (Smartphones, Laptops, Gaming Devices, Virtual Assistants
(like Alexa) and other IoT (involves M2M interaction)
ii.
Digital Platforms (Fb, Instagram, Youtube, Twitter, LinkedIn etc)
iii.
Digital Media (different communications channels)
iv.
Digital Data (Insights collected by businesses - data protection)
v.
Digital Technology/Marketing Technology (to create interactive experience
from websites/apps/kiosks etc)
Reachactconvertengage
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Categories of Digital communications
• Digital Page (e.g., websites, pages on intermediaries, Landing pages)
• Digital Promotions messages (Emails, Display Ads on 3rd party websites
or social pages, mobile promos)
• Search Engine Optimization
• Search Engine Marketing (e.g., CPM, CPC)
• Affiliate Marketing (e.g., influencer (Increasingly, CPA) collab,
partenariat
• Social Media Marketing – Customer to Customer interaction (e.g., Fb,
Instagram, Pinterest, Quora, etc.)
• Content Marketing (e.g., tweet, youtube, etc.)
• Mobile Marketing (e.g., within games, in-app push notifications)
Search engine:
 SEO: Make it correct visibility (Improve the rank order of the brand when
consumers search for relevant terms. E.g., using trending captions, appropriate
links and pictures in the content etc.)
 SEM: a paid version of the above. You start paying for those keywords, e.g.,
CPM (pay-per-impression (shown))/CPC (click (took action))
Session 4:
Retailing includes all the activities in selling goods or services directly to final
consumers for their personal, nonbusiness use
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Franchises are contractual associations between a manufacturer, wholesaler, or
service organization (a franchisor) and independent business people (franchisees)
who buy the right to own and operate one or more units in the franchise system
Major product variable decisions include:
 Product assortment
 Services mix
 Store atmosphere
Retailer decisions: price and place (shopping center, business districts…)
Everyday low pricing (EDLP) involves charging constant, everyday low prices and
offering few sales or discounts.
High-low pricing involves charging higher prices on an everyday basis, coupled with
frequent sales and other price promotions.
The growing importance of retail technology provides better forecasts, inventory
control, electronic ordering, transfer of information, scanning, online transaction
processing, improved merchandise handling systems, and the ability to connect with
customers.
Green retailing
4 considerations for retail design
 Store Layout (How the aisle are)
 Space Planning (Where you put stuff inside the store layout)
 Presentation (How the merchandise is presented within its space/department)
 Atmospherics (Sound, music, smell, colors, etc.)
 There are three general types of store layout designs:
 Grid
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 Found in most grocery and drug stores.
 Contains long gondolas of merchandise and aisles in a repetitive pattern.
 Not aesthetically pleasing but effective if people are planning to go through
whole store.
 It is cost efficient (i.e., less wasted space.
 Standardized shelving is also less expensive.
 Racetrack
 The racetrack (AKA: loop) effectively draws the customers into the store.
 The racetrack’s pattern forces the customer to visit multiple departments
as they pass through.
 A major aisle connects with the entrances and loops the customers
through the departments.
 This looping effect facilitates impulse buying.
 The newest merchandise is prominently displayed on these main aisles.
 Free-form
 A free-form layout (AKA: boutique layout) arranges fixtures and aisles
asymmetrically.
 Can be used in specialty stores and within departments of department
stores.
 Tends to provide a more relaxed atmosphere.
 Setup is expensive because fixtures are custom made.
 Personal selling is required because customers are not naturally led
around store.
 Lends itself to higher rates of theft because of blocked vision.
Space planning:
 Decisions about allocation of space to departments, categories, and items is
complicated.
 Four questions that need to be answered are as follows::
1. What items, vendors, categories, and departments should be carried?
2. How much of each item should be carried?
3. Where should the merchandise be located?
4. How much space should the merchandise take?
Session 5:
Best locations:
-main floor
-near entrances, escalators, main aisles
- to the right of an entrance is more attractive
To determine where merchandise should be located within departments, planograms
are developed.
 A planogram is a diagram created from photographs, computer output, or
artists’ renderings that illustrates exactly where every SKU should be placed.
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Four basic principles:
1. Merchandise should be displayed in a manner consistent with the store’s
image.
2. Consider the nature of the product (e.g., Levis can be stacked; dresses should
be hung).
3. Packaging often dictates how the product is displayed (e.g., bulk, self-service
vs. packaged).
4. Profit potential influences display decisions (e.g., low-profit, high-turnover items
require less elaborate displays).
Atmospherics:
-Lightning
-Colors (Warm colors increase blood pressure, respiratory rate, and other
physiological responses. Cool colors are relaxing, peaceful, calm, and pleasant.)
-Music
-scent
Manufacturingwholesalerretailerconsumer
The marketing channel=economies of scale
Channel alternatives:
– Exclusive distribution
– Selective distribution
– Intensive distribution
Session 6:
Channel conflict: refers to disagreement among channel members over goals, roles,
and rewards.
-Horizontal conflict
-Vertical conflict
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Number of intermediaries:
• Exclusive distribution
• Selective distribution
• Intensive distribution
Price is the amount of money charged for a product or service, or the sum of all the
values that customers exchange for the benefits of having or using the product or
service.
Valuation, or perceived value, is the simultaneous appraisal by buyers and sellers of
the economic and psychological worth of a market offering.
Price floor= No profits below this value
Price ceiling= No demand above this price
Session 7and 8:
3 major pricing strategy:
-Product cost
-Competition prices
-Consumer perceptions of value (uses the buyers’ perceptions of value rather
than the seller’s cost)
Good-value pricing is offering just the right combination of quality and good service
at a fair price.
Value-added pricing attaches value-added features and services to differentiate the
companies offers and thus their higher prices.
Fixed costs are the costs that do not vary with production or sales level.
• Rent
• Heat
• Interest
• Executive salaries
Variable costs vary directly with the level of production.
• Raw materials
• Packaging
Total costs are the sum of the fixed and variable costs for any given level of
production.
Cost-plus pricing adds a standard markup to the cost of the product.
• Benefits
• Sellers are certain about costs.
• Price competition is minimized.
• Buyers feel it is fair.
• Disadvantages
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Ignores demand and competitor prices
Break-even pricing (target return pricing) is setting price to break even on costs or
to make a target return.
Competition-based pricing is setting prices based on competitors’ strategies, costs,
prices, and market offerings.
Target costing starts with an ideal selling price based on consumer value
considerations and then targets costs that will ensure that the price is met.
Session 9:
Other Internal and External Considerations Affecting Price Decisions:
-Price elasticity is a measure of the sensitivity of demand to changes in price.
-Inelastic demand is when demand hardly changes with a small change in
price.
-Elastic demand is when demand changes greatly with a small change in price.
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Promotion involves any form of purposeful communications employed by
channel members with the intent of informing, reminding, and/or persuading
prospects and customers regarding some aspect of their market offering.
Pricing is a form of promotion in that the seller is suggesting a sense of value.
The promotional mix is divided into:
• Personal selling
• Non-personal selling
Personal selling: interpersonal communication process by which a seller
uncovers and satisfies the needs of a buyer, to the mutual long-term benefit of
both parties.
Non-personal selling: all other types of promotions.
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Advertising
Reseller Support
Publicity
Sales promotions
displays
demonstrations
trade shows
Promotional tools:
-Free Sample
High acceptance rate
Increase the follow-up purchase
Develop positive brand attitude
-Coupon
Passing along savings directly to consumers
Create added traffic for retailers
Increase purchase incentives
-Loyalty Program
Stop competing on price with competitors
Retain existing customers
Increase Customer Lifetime Value
Build personal relationships
Create brand advocates
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A pull strategy is persuasive communication aimed at the ultimate consumer.
• e.g., supermarket coupons
Customer demand pulls the product through the channel.
• Consider all of the advertising for prescription drugs.
Push strategies are aimed at channel intermediaries, and typically consist of
some type of price reductions.
Can include:
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Allowances
Advance Notice
Training and Support
Point of purchase?
Potential Promotional Problems:
• Trade loading or Forward buying: When channel member buy far more than
they can sell in a reasonable time.
• This results in extra good throughout the channel, creating gridlock and
reducing the distribution process (slowing delivery times).
• Costs consumers $20 billion of the $400 billion they spend on Groceries
each year
• Only 30% of the discounts (promotional/trade allowances) go to
customers, 35% is lost in inefficiencies, and 35% goes in the retailers’
pocket
• Deals can erode brand loyalty (can send poor image, diminish the perceived
quality of the products, encourage switching).
• Customers may decide to buy only when there is a deal if they are too frequent.
• Channel members may decide to buy only when there is a deal if they are too
frequent.
• Merchandise may be re-sold to other retailers or wholesalers at a price below
what they would pay the manufacturer (pass-through).
Integrated marketing communications (IMC) involves carefully integrating and
coordinating the company’s many communications channels to deliver a clear,
consistent, and compelling message about the organization and its products.
Advertisements are messages paid for by those who send them and are intended to
inform or influence people who receive them.
Attention: the process by which the consumer allocates part of his or her mental
activity to a stimulus.
Association: the process of making symbolic connections between a brand and
characteristics that represent the brand’s image and personality.
An advertising objective is a specific communication task to be accomplished with a
specific target audience during a specific time.
Informative advertising is used when introducing a new product category to build
primary demand.
• Communicating customer value
• Building a brand and company image
• Telling the market about a new product
• Explaining how a product works
• Suggesting new uses for a product
• Informing the market of a price change
• Describing available services & support
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Correcting false impressions
Persuasive advertising is important with increased competition to build selective
demand.
• Building brand preference
• Encouraging switching to a brand
• Changing customer perceptions of product value
• Persuading customers to purchase now
• Persuading customers to receive a sales call
• Convincing customers to tell others about the brand
Comparative advertising is when a company compares its brand with other brands.
Reminder advertising is important with mature products to help maintain customer
relationships and keep customers thinking about the product.
• Maintaining customer relationships
• Reminding consumers that the product may be needed in the near future
• Reminding consumers where to buy the product
• Keeping the brand in a customer’s mind during off-seasons
Reach is a measure of the percentage of people in the target market who are exposed
to the ad campaign during a given period of time.
Frequency is a measure of how many times the average person in the target market
is exposed to the message.
Impact is the qualitative value of a message exposure through a given medium.
Engagement is a measure of things such as ratings, readership, listenership, and
click-through rates.
Selecting media vehicles involves decisions presenting the message effectively and
efficiently to the target customer and must consider the message’s:
• Impact
• Effectiveness
• Cost
Return on advertising investment (ROI) is the net return on advertising investment
divided by the costs of the advertising investment.
(Return–Investment)
Investment
Communication effects indicate whether the ad and media are communicating the
ad message well and can be tested before or after the ad runs.
Sales and profit effects compare past sales and profits with past expenditures or
through experiments.
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Public relations involves building good relations with the company’s various publics
by obtaining favorable publicity, building up a good corporate image, and handling or
heading off unfavorable rumors, stories, and events.
Functions of PR
• Build a global identity
• Introduce products or services
• Anticipating and encountering public criticism
• Crisis management
Press relations or press agency involves the creation and placing of newsworthy
information to attract attention to a person, product, or service.
Public affairs involves building and maintaining national or local community relations.
Lobbying involves building and maintaining relations with legislators and government
officials to influence legislation and regulation.
Investor relations involves maintaining relationships with shareholders and others in
the financial community.
Development involves public relations with donors or members of nonprofit
organizations to gain financial or volunteer support.
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