Chep#1: Marketing an Introduction
Marketing: Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and
value with others.
Marketing as selling and advertizing: Marketing is not only selling and telling but is to satisfy the customer needs. They must to understand the consumer needs, develop
products, that provide superior value, and price, distributes and promotes them effectively, this product will sell easily.
Needs, wants and demands: Needs are states of felt deprivation. They may be physical, social and individual. Wants are the forms taken by human needs as they are
shaped by culture and individual personality. E.g. soft water in united state. Demands are human wants that are backed by buying power.
Product: Any thing that can be offered to a market for attention that might satisfy a want or need. It includes physical objects, services, persons, places, organizations, and
ideas.
Customer value, satisfaction and quality: The consumer’s assessment of the product’s overall capacity to satisfy his or her needs. If the product’s performance exceeds
expectations, the buyer is satisfied or delighted. Quality has the direct impact on product or service performance. The program design to improve the quality of product,
services and marketing is called total quality management.
Marketing offers: Marketing offers are of two types:
a) Physical i.e. products, or services
b) Tangible i.e. info or experiences.
These offers are to satisfy the consumer needs and wants.
Exchange, Transactions, and Relationships: Exchange is the act of obtaining a desired object from someone by offering something in return. Transaction is a trade b/w two
parties that involve at least two things of value, agreed upon conditions, a time of agreement and a place of agreement. Relationship is the process of creating and
maintaining strong relationships with customers and other stakeholders.
Market: The set of all actual and potential buyers of a product or service. It is a place where buyers and sellers gather to exchange their goods and values.
Marketing mix: A set of controllable tactical marketing tools—product, price, place, and promotion--that work together to affect the market place.
Marketing Strategy: The marketing logic by which the business unit is supposed to achieve its marketing objectives.
Core marketing activities:
1) product development
2) research
3) communication
4) distribution
5) pricing
6) services
Exchange process:
1) Seller must search for the buyers.
2) Identify their needs.
3) Design good products and services.
4) Set reasonable price for them.
5) Promote them effectively.
6) Deliver them efficiently.
Marketing myopia: It focuses on the existing wants of the customer not on the needs. It bring loose sight on the needs. E.g. people of united nation want soft water.
Core Marketing concept: To examine and understand the:
a) needs, wants, and demands;
b) products;
c) value, satisfaction, and quality;
d) exchange, transactions, and relationships;
e) markets.
Marketing management: The analysis, planning, implementation, and maintenance of beneficial exchanges with target buyers for the purpose of achieving organizational
objectives. It involve following two factors.
1. Demand management: Marketing mgt is not only to find the customers. Every org has a desired level of demand for its product. At any point there may be:
a) no demand
b) adequate demand
c) irregular demand or
d) too much demand.
Power co’s sometimes have trouble meeting demand during peak usage periods. In these cases of excess demand, the needed marketing task, called:
de marketing—a kind of marketing to reduce the demand temporarily or permanently; the aim is not to destroy demand, but only to reduce or shift it in such a
way that helps the org to achieve its objectives.
2. Building profitable customer relationships: It concern to attract the new customers while keeping and satisfying the old ones. Also to retain current customers and
build lasting customer relationship.
Marketing mgt orientation: There are five concepts under which orgs conduct their marketing activities:
1. Production concept: It holds that consumers will favor products that are available and highly affordable and that mgt should therefore focus on improving
production and distribution efficiency. There are two situations for this concept:
a) when the demand for a product exceeds the supply, here mgt look the way to increase the production
b) when the product’s cost is too high and is needed to bring it down.
2. Product concept: It holds that consumers will favor products that offer the most quality, performance, and features and that the org should therefore devote its
energy to making continuous product improves.
3. Selling concept: the idea that consumers will not buy enough of the organization’s product unless the org under takes a large scale selling and promotion effort. E.g.
encyclopedia and insurance.
4. Marketing concept: Achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more
effectively and efficiently than competitors do.
5. Societal marketing: The org should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively than
competitors to maintain society’s well being.
Customer relationship mgt: To build profitable customer relationships by delivering the values and satisfaction to customers. It concerns to attract retain and grow the
customers by lowing price, improving the quality and services of the product. Also the product must match the customer’s expectations.
1. To retain and grow new customers:
a) It is difficult to attract new customers rather than to retain existing one.
b) More effort is required to attract new customers rather than to retain existing one.
2. Customer loyalty and retention: Customer satisfaction is directly proportional to the loyalty, if the customer is not satisfied, he will not be loyal and vice versa.
3. Growing share to customers: Through cross selling means(gathering more business from current customers by selling new products to them with additional offers.
Social and financial benefits provide to customers like to create customer communities in clubs.
Marketing challenges in global world: Media, technologies, computer, telecommunication, video conferencing, internet advertisement etc. are used to meet the global
competition. Move from mass marketing—to make the small segment of market, it is standard way to any customer.
Chep#2: Company and marketing strategy
Strategic planning: The process of developing and maintaining a strategic fit between the organization’s goals and its changing marketing opportunities. It consists of
developing a clear company mission, supporting objectives, a sound business portfolio and coordinated functional strategies. There are three types of strategic plans
1) Annual plans
2) Long range plans
3) strategic plans.
Annual and long range plans deal with the company’s current businesses and how to keep them going. In contrast, the strategic plan involves adapting the firm to
take advantage of opportunities in its constantly changing environment.
Starting Focus
point
Means
Faculty
Selling and
promoting
Existing
Products
Ends
Profits through
sales volume
The selling concept
Market Customer
Needs
Integrated
Marketing
Profit through
customer satisfaction
The marketing concept
Figure 1 Core marketing concepts
Mission statement: A statement of the organization’s purpose—what it wants to accomplish in the larger environment. A mission statement should be
1) market oriented—satisfying basic customer needs
2)
3)
4)
5)
6)
7)
product oriented
)company oriented
avoid making it too narrow or too broad
realistic
specific
motivating.
Corporate level
Defining the company mission
Setting company objectives and goals
Business unit, product and market level
Designing the business portfolio
Planning marketing and other function strategies
Setting company’s objectives and goals:
1) Marketing objectives—selling in market at low cost.
2) Business objectives—to increase production accordingly.
Designing the business portfolio: Business portfolio is the collection of business needs and products that make up the company. The best business portfolio is one that best
fits the company’s strengths and weaknesses to opportunities in the environment. The company’s business portfolio planning involves two steps: The company must
1) analyze the current business portfolio and decide which businesses should receive more, less or no investment and
2) develop growth strategies for adding new products or business to the portfolio.
Portfolio analysis—a tool by which mgt identifies and evaluates the various business that make up the company.
1. Strategic business unit: A unit of the company that has a separate mission and objectives and that can be planned for independently from other company business.
It can be a company division or a single product or brand. SBU’s portfolio analysis method evaluated on two dimensions:
1) attraction of SBU’s market
2) strength of SBU’s position to market.
2. The Boston consulting group approach: Using this approach, a company classifies all its SBU’s according to the growth—share matrix—a portfolio planning method
that evaluates a company’s strategic business units in terms of their market growth rate and relative market share. SBU’s are classified as:
1) Stars—are high growth, high share products, need heavy investments to finance their rapid growth. Eventually their growth will slow down and they will turn
into cash cows.
2) Cash cows—are low growth, high share products, need less investment to hold their market share. Thus they produce a lot of cash that the company uses to
pay its bills and to support other SBU’s that need investment.
3) Question mark—are low share business units in high growth markets. They require a lot of cash to hold their share. Mgt has to think hard about which question
marks it should try to build into stars and which should be phased out.
4) )Dogs—are low growth, low share products, they may generate enough cash to maintain themselves, but do not promise to be large sources of cash. Worst
category, have to convert into question marks or phased out. If a company have too much dogs and few cash cows and stars then its better to close that
business.
Four strategies for each SBU:
1) Company can invest more in the business unit in order to build its share
2) It can invest just enough to hold the SBU’s share at the current level.
3) It can harvest the SBU, milking its short term cash flow regardless of the long term effect.
4) It can divest the SBU by selling it or phasing it out and using the resources elsewhere.
Life cycle of each SBU: Many SBUs start out as question marks and move into the stars category if they succeed. They later become cash cows as market growth
falls th3en finally die off or turn into dogs toward the end of their life cycle. The company needs to add new products and units continuously so that some of them
will become stars and eventually, cash cows that will help finance other SBUs.
Problems with matrix approach: Difficult, time consuming, costly to implement. Difficult to measure market share and growth. Focus on classifying current
business but provide little advice for future planning.
Developing growth strategies: A strategy for company’s growth by offering modified or new products to current market segments. Developing strategy for growth and
downsizing.
Product/market expansion grid: A portfolio planning tool for identifying company growth opportunities through market penetration, market development, product
development, or diversification.
Market penetration—a strategy for company growth by increasing sales of current products to current market segments without changing the product in any way.
Market development—a strategy for company growth that identifies and develops new market segments for current company products.
Product development—a strategy for company growth that offers modified or new products to current market segments . the product concept is developed into a physical
product in order to assure that the product ideas can be turned into a workable product.
Diversification—a strategy for company growth that starts or acquires businesses outside the company’s current products and markets.
Downsizing—producing business portfolio by eliminating products or business units that are not profitable or not fit for long term company’s strategy.
Value chain: A major tool for identifying ways to create more customer value. It includes:
a) Marketing efforts
b) Analysis
c) Planning
d) Implementation and
e) Control.
Marketing process: The process of
1) analyzing marketing opportunities,
2) selecting target markets,
3) developing the marketing mix and
4) managing the marketing efforts.
Market segmentation: Dividing a market into distinct group of buyers with different needs, characteristics or behavior who might require separate products or marketing
mixes.
Market segment: A group of consumers who respond in a similar way to a given set of marketing stimuli.
G
r
o
w
t
h
r
a
t
e
H
i
g
h
L
o
w
High
Low
Relative market share
Figure 2 The BCG growth share matrix
Figure 3 Life cycle
Market targeting: The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Market positioning: Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Figure 4 The four P's of the marketing mix
efforts relationship
Figure 5 Marketing
Marketing Implementation: The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives
Marketing Control: The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that marketing objectives
are attained.
Marketing audit: A systematic and independent examination of a company’s environment, objectives, strategies, and activities to determine problem areas and to set a
plan to improve the company’s performance.
Chep#3 Marketing Environments
Marketing environment: The actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful transactions with its
target customers. The marketing environment offers both opportunities and threats. Successful companies know the vital importance of constantly watching and adapting
to the changing environment.
Microenvironment: The forces close to the company that affect its ability to serve its customers—the company itself, suppliers, market channel firms, customer markets,
competitors, and publics.
Macro environment: The larger societal forces that affect the whole microenvironment—demographic, economic, natural, technological, political, and cultural forces.
The company’s Microenvironment: Marketing management’s job is to attract and build relationships with customers by crating customer value and satisfaction. Their
success depends on other actors in the company’s microenvironment—other company departments, suppliers, marketing intermediaries, customers, competitors, and
various publics, which combine to make up the company’s value delivery system.
1. The company: The groups such as top mgt, finance, research and development (R&D), purchasing, manufacturing, and accounting. Top mgt sets the company’s
mission, objectives, broad strategies, and policies.
2. Suppliers: Suppliers are an important link in the company’s overall customer “value delivery system. ‘’ They provide the resources needed by the company to
produce its goods and services. Also monitor price.
3. Marketing intermediaries: Firms that help the company to promote, sell, and distribute its goods to final buyers; they include
1) resellers—distribution channel firms that help the company find customers or make sales to them. These include
a) wholesalers and
b) retailers who buy and resell merchandise.
2) physical distribution firms—help the company to stock and move goods from their points of origin to their destinations. Working with warehouse and
transportation firms, a company must determine the best ways to store and ship goods, balancing such factors as cost, delivery, speed and safety.
3) marketing services agencies—are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target
and promote its products to the right markets. Financial intermediaries—include bands, credit companies, insurance companies, and other business that help
finance transactions or insure against the risks associated with the buying and selling of goods.
4. Customers: The company needs to study its customer markets closely. There are five types of customer markets:
1) Consumer markets—consist of individuals and households that buy goods and services for personal consumption.
2) Business markets—buy goods and services for further processing or for use in their production process.
3) Reseller markets—buy goods and services to resell at a profit.
4) Govt. markets—are made up of Govt. agencies that buy goods and services in order to produce public services or transfer the goods and services to other who
need them.
5) International markets—consist of these buyers in other countries including consumers, producers, resellers, and governments.
5. Competitors: The marketers must do more than simply adapt to the needs of target consumers. They also must provide good offers against their competitors to
their consumers.
6. Publics: Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. There are seven types of publics:
1) Financial publics—influence the company’s ability to obtain funds. E.g. banks and stockholders.
2) Media publics—carry news, features and opinions. E.g. newspapers, T.V, Radio, etc.
3) Govt. public—Marketers must often consult the company’s lawyers on issues of product safety, truth an other matters.
4) Citizen-action publics—public relation department can help to stay in touch with consumer and citizen groups.
5) Local public.
6) General public.
7) Internal public—workers
The company’s Macro environment: It include six major factors:
1) Demographic environment—the study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics.
2) Economic environment—factors that effect consumer buying power and spending patterns. Major economic trends are:
a) Change in income—Marketers should pay attention to income distribution as well as average income. At the top are:
supper class consumers, whose spending patterns are not affected by current economic events and who are a major market for luxury goods, then
middle class that is somewhat careful about its spending but can still afford the good life.
Working class must stick close to the basics of food, clothing and shelter and must try hard to save.
Underclass persons on welfare must count their pennies when making even the most basic purchases.
b) Changing in consumer spending patterns—changes in major economic variables such as income, cost of living, interest rates, and savings and borrowing
patterns have a large impact on the marketplace. Companies watch these variables by using economic forecasting.
3) Natural environment—natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of the
following four trends in the natural environment:
a) Shortage of raw materials—nonrenewable resources such as oil, coal, and various minerals, pose a serious problem.
b) Increased cost of energy—Energy is also a problem, in fact hundreds of firms already are offering products that use solar energy for hearing homes and other
uses.
c) Increased Pollution,
d) Govt. intervention in natural resource mgt.
4) Technical environment—forces that create new technologies, creating new products and market opportunities. The marketers should watch the following trends in
technology:
a) Fast pace of technological change
b) High R&D budget
c) Concentration on minor improvements
d) Increased regulation.
5) Political environment—Laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society.
6) Cultural environment—Institution and other forces that affect society’s basic values perceptions, preferences, and behaviors. Following are the cultural
characteristics:
i)
Persistence of cultural Values—People in a society hold many beliefs and values, which have a high degree of persistence:
a) Core belief and values—are passed on form parents to children and are reinforced by schools by schools, churches, business, and Govt.
b) Secondary beliefs and values—are more open to change. Belief in marriage is a core belief; believing that people should get married early in lie is a
secondary belief.
ii)
Shift in secondary cultural values—The major cultural values of a society are expressed in:
a) people’s views of themselves,
b) people’s view of others,
c) people’s views of organizations,
d) people’s views of society,
e) people’s views of nature,
f) people’s views of the universe.
Environment management perspective: A management perspective in which the firm takes aggressive actions to affect the public and forces in its marketing environment
rather than simply watching and reacting to it.
Chep#4: Consumers market and consumer buying behavior
Consumer Buying Behavior: The buying behavior of final consumers --individuals and households who buy goods and services for personal consumption.
Consumer Market: All the individuals and households who buy or acquire goods and services for personal consumption.
Model of Consumer Behavior:
1. Marketing stimuli: It consists of the four Ps:
a) product,
b) price,
c) place, and
d) promotion.
2. Other stimuli: It include major forces and events in the buyer’s environment:
a) economic,
b) technological,
c) political, and
d) cultural.
Model of Buyer’s Behavior:
Marketing and other stimuli:
1. Product, price,
Buyer’s Black Box:
1. Buyer’s
Buyer’s Responses:
1. Product choice
Characteristics Affecting Consumer Behavior:
1. Cultural Factors: Cultural factors influence the customer behavior, so marketer needs to understand the role played by the buyer’s culture, subculture, and social
class.
a. Culture: Culture is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. E.g.
colors having different means for diff people.
b. Subculture: A group of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, and
geographic regions.
Example: Here are four important subcultures.
i. Hispanic Consumers: They are Americans, Mexican, and South American consist of 26 million consumers. They use Spanish language and their products are
computers, financial services, etc. They tend to buy higher quality products. Also they are very brand loyal.
ii. African American Consumers: They are price conscious, give importance to brand name, strongly motivated by quality, do less shopping, brand loyal and
prefer online services. E.g. coca cola.
iii. Asian American Consumers: Invest to store and stock, trade two or more times to get profit and shares, include Japanese, Asian Indians.
iv. Mature Consumers: Above 50 years, have more time and money , their ideal markets are restaurant, fashion, furniture, and financial services.
c. Social Class: Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors. They can’t determined by a
single factor but is measured as a combination of occupation, income, education, wealth etc. This class show distinct product and brand preferences.
2. Social Factors: A consumer’s behavior is also influenced by social factors, such as:
1) Groups--Two or more people who interact to accomplish individual or mutual goals. There may be:
a) Primary groups—with whom there is regular but informal interaction such as family, friends
b) Secondary groups—which are more formal and have less regular interaction
c) Reference groups—serve as direct or indirect points of comparison or reference in forming a person’s attitudes or behavior
d) Asp rational group—is one to which the individual wishes to belong. Opinion leaders—people within a reference group who, because of special skills,,
knowledge, personality traits, or other characteristics, exert influence on others.
2) Family—The family is the most important consumer buying org in society, an it has been researched extensively.
3) Roles and Status—A person belongs to many groups, the persons position in each group can be defined in terms of both role and status. Each role caries a
status reflecting the general esteem given to it by society. A role consists of the activities that people are expected to perform according to the persons around
them.
3. Personal factors: Such as buyer’s:
a) Age and life cycle stage—People change4 the goods and services that they buy over their lifetimes. Tastes in food, clothes etc. are often age related. The stage
thru which families might pass as they mature over time is called family life cycle
b) Occupation—A person’s occupation affects the goods and services bought
c) Economic situation—A person’s economic situation will affet product choice
d) Lifestyle—A person’s pattern of living as expressed in his or her
psychographics—It involves measuring the consumers major AIO dimensions:
i) Activities—work, hobbies, shopping, sports, social events
ii) Interests—food, fashion, family recreation
iii) Opinion—about themselves, social issues, business, products. Several firms have developed lifestyle classification. The most widely used is the SRI values
and lifestyle(VALS) topology:—
Classify the people according to how they spend their time and money. It divides consumers into eight groups based on two major dimensions: self
orientation and resources;
 Self oriented—
1) Principle oriented consumers who buy based upon their views of the world; ii)Status oriented—who base their purchases on the actions and
opinions of others
2) Action oriented—who are driven by their desire for activity, and risk.
3) Abundant resources
 Minimal resources. Life style also include Techno graphic scheme—consists of:
1) Fast forward—biggest spenders for personal
2) New age Nurtures—Big spenders for family,
3) Mouse potatoes—willing to spend for new technology,
4) Techno Services—Consumers that use technology temporarily,
5) Hand shakers—Consumers or managers that do not touch the computer and have assistants
e) personality and self concept—A person’s distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own
environment.
Types—Personality is usually described in terms of traits such as:
i) Self confidence b)Dominance,
ii) Sociability,
iii) Autonomy,
iv) Defensiveness,
v) Adaptability,
vi) Aggressiveness.
Brand personality—our choice, mix of traits. Traits may be
i) Sincerity(honesty),
ii) Excitement,
iii) Competence,
iv) Sophistication(charming),
v) Rigidness(tough).
Self concept—also called self image, to reflect the people’s identities
4. Psychological factors: A person’s buying choices are further influenced by four major psychological factors:
a) Motivation—A need that sufficiently pressing to direct the person to seed satisfaction of the need.
Types:
i) Biological—arising from states of tension such as hunger, thirst etc.
ii) Psychological—arising from the need for recognition, esteem, or belonging,
b) Perception—The process by 2which people select, organize, and interpret info to form a meaningful picture of the world. It have three perceptual processes:
i) Selective attention—the tendency for people to screen our most of the info to which they are exposed to attract the customer’s attention,
ii) Selective distortion—the tendency of people to interpret info in away that will support what they already believe ,
iii) Selective retention—tend to retain info that supports their attitudes and beliefs Subliminal advertizing(demerits)—E.g. drama and repetition in sending
messages to their market. Although most marketers worry about whether their offers will be perceived at all, some consumers are worried that they
will be affected by marketing messages without even knowing it,
c) Learning—Changes in an individual’s behavior arising from experience. It consist
i) Belief—a descriptive thought that a person hold about something.
ii) Attitude—A person’s consistently favorable or unfavorable evaluations, feeling, and tendencies toward and object or idea.
5. Buying behavior: Buying behavior of a customer may be:i)
Complex: Learn and search. Product conscious persons have this behavior, they check different market and prices. Differences among brands occur.
ii)
Dissonance reducing: High consumer involvement. Expensive, may be risky. Post purchased dissonance occur. Few perceived difference among brand occur.
Post purchase dissonance—the behavior to which consumer discomfort after purchasing. The stag4e of the buyer’s decision process which consumer take
further action after purchase based on their satisfaction or dissatisfaction.
iii)
Habitual: Low consumer involvement, few difference among brand. No need to have special attitude.
iv)
Variety seeking: Low consumer involvement but significant brand difference. Brand switching due to long time.
Cognitive dissonance—buyer discomfort caused by post purchased conflict.
The buyer decision process: Buyer decision process consists of following five stages:Need
recognition
Information
Search
Evaluation of
alternatives
Purchase
decision
Post purchase
behavior
1) Need recognition: The consumer recognizes a problem or need. The buyer senses a difference between his or her actual state and some desired state. The need can
be triggered by internal or external factors.
2) Information search: The consumer is aroused to search for more info, the consumer may simply have heightened attention to info or may go into active info search.
The consumer can obtain info from any of following sources:i)
Personal source—Family, friends, neighbors, acquaintances
ii)
Commercial source—Advertising, salespeople, dealers, packaging, displays
iii)
Public sources—Mass media, consumer rating organizations
iv)
Experiential sources—Handling, examining, using the product
3) Evaluation of alternatives: The consumer uses info to evaluate alternative brands in the choice set. This process contain:
i)
Product attributes
ii)
Degree of importance to different attributes
iii)
Brand beliefs--Brand image—the set of belief that consumers hold about a particular brand.
iv)
Total product satisfaction
v)
Arrival at attitudes toward the different brands
4) Purchase decision: In this stage the consumer actually buys the product. Two factors can come between the purchase intention and the purchase decision:
i)
Attitudes of others
ii)
Unexpected situational factors
5) Post purchase behavior: In this stage the consumer take further action after purchase based on their satisfaction or dissatisfaction. It concerns with two factors:
i)
Consumer’s expectations
ii)
Perceived performance
Cognitive dissonance—buyer discomfort caused by post purchase conflict.
The buyer decision process for new products
New product—A good, service, or idea that is perceived by some potential customers as new.
Adoption process—The mental process through which an individual passes from first hearing about an innovation to final adoption.
Stages in the adaptation process:1) Awareness—The consumer becomes aware of the new product, but lacks information about it.
2) Interest—The consumer seeks info about the new product.
3) Evaluation—The consumer considers whether trying the new product makes sense.
4) Trial—the consumer tries the new product on a small scale to improve his or her estimate of its value.
5) Adoption—The consumer decides to make full, regular use of the new product.
Influence of product characteristics on rate of adoption: Five characteristics are especially important in influencing an innovation’s rate of adoption:1) Relative advantage
2) Compatibility
3) Complexity
4) Divisibility
5) Communicability
Chapter#5 Target marketing
1. Three major steps in target marketing:
a. Marketing segmentation—Dividing a market into distinct groups of buyers with different need, characteristics, or behavior who might require separate
products or marketing mixes.
b. Target market—The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
c. Market positioning—Formulating competitive positioning for a product and creating a detailed marketing mix.
a. Market segmentation:
1) Geographical—Dividing a market into different geographical units such as nations, states, regions, countries, cities, or neighborhoods. Localizing their
products, advertising, promotion, and sales efforts to fit the needs of individual regions, cities.
2) Demographic segmentation—Dividing the market into groups based on demographic variables such as age, sex, family size, family life cycle, income,
occupation, education,, religion, race, and nationality.
i. Age and life cycle stage—Dividing a market into different age and lifecycle groups. As user needs and wants change with the age.
ii. Gender segmentation—Dividing a market into different groups based on sex.
iii. Income segmentation—Dividing a market into different income groups.
3) Psychographic—Dividing a market into different groups based on social class, lifestyle, or personality characteristics.
4) Behavioral—Dividi8ng a market into groups based on consumer knowledge, attitude, use, or response to a product. It includes:i. Occasion—Dividing a market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the
purchased item.
ii. Benefit—Dividing a market into groups according to the different benefits that consumers seek from the product.
iii. User status—Market can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product. Potential users
and regular users may require different kinds of marketing appeals.
iv. User/market rate—Market also can be segmented into light, medium, and heavy user groups.
v. User loyalty(direct comparison marketing)—A market can also be segmented by consumer loyalty. Consumers can be loyal to brands, stores,
and companies. Buyers can divided into groups according to their degree of loyalty.
5) Geo demographic segmentation—Also called multi variable segmentation combination of geographical and demographical segmentation.
Segmenting business Markets:
1. Demographic variables
2. Operating variables
3. Purchasing approaches
4. Situational factors
5. Personal characteristics
Segmenting international markets: International market can be segment by geographic location, grouping countries regions such as middle east etc. It can be segmented
on the bases of :1. Economic factors—Countries mighty be grouped by population income levels or by their overall level of economic development.
2. Political and legal factors—Such as the type and stability of government, receptivity to foreign firms, monastery regulations, and the amount of bureaucracy.
3. Cultural factors—Cultural factors cha be used, grouping markets according to common languages, religions, values and attitudes, customs and behavioral patterns.
Inter market segmentation—Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.
Requirements for effective segmentation: To be useful, market segments must have the following characteristics:1. Measurability—The size, purchasing power, and profiles of the segments can be measured.
2. Accessibility—The market segments can be effectively reaches and served.
3. Substantiality—The market segments are large or profitable enough to serve.
4. Action ability—Effective programs can be designed for attracting and serving the segments.
5. Differentia table—Must be distinguished from other market.
Selecting market segments: After evaluating different segments, the company must decide which and how many segments to serve is called target market selection.
Target market—A set of buyers sharing common needs or characteristics that the company decides to serve.
Following strategies are used for target market selection:1. Undifferentiated marketing—A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one
offer. Focuses on common needs not on different.
2. Differential marketing—A market coverage strategy in which a firm decides to target several market segments and designs separate offers for each.
3. Concentrated marketing—A market coverage strategy in which a firm goes after a large share of one or a few submarkets.
4. Micro marketing:
i.
Local
ii.
Individual
Positioning:
1. Product positioning—The way that the product is defined by consumers on important attributes—the place that the product occupies in consumers minds relative
to competing products.
2. Competitive advantage—An advantage over competitors gained by offering consumers greater vale, either through lower prices or by providing more benefits that
justify higher prices.
Choosing and implementing a positioning strategy: Each firm must differentiate its offer by building a unique bundle of competitive advantages that appeals to a
substantial group within the segment.
1. Identifying possible competitive advantages—To give the consumers greatest value, providing superior value to selected target markets, either by offering lower
prices than competitors do or by providing more benefits to justify higher prices. Positioning begins with actually differentiating the company’s marketing offer so
that it will give consumers more value than competitors offers do. A company or market offer can be differentiated along the lines of product, services, personnel,
or image, channel.
i.
Product differentiation—A company can differentiate its physical product by standardizing the product. Similarly companies can differentiate their products
on such attributes as consistency, durability, reliability or repair ability.
ii.
Services differentiation—Some companies gain competitive advantage through speedy, convenient, or careful delivery. Installing can also differentiate one
company from another. Companies can further distinguish themselves through their repair services. Some companies differentiate their offers by providing
customer training service. Other companies offer free or paid consulting services—data or info and advising services that buyers need.
iii.
Personnel differentiation—Companies can gain a strong competitive advantage through hiring and training better people than their competitors do.
Personnel differentiation requires that a company select its customer contact people carefully and train them well.
iv.
Image differentiation—Even when competing offers look the same, buyers may perceive a difference based on company or brand images. Thus companies
work to establish images that differentiate them from competitors. A company or brand image should convey the product’s distinctive benefits and
positioning. Developing a strong and distinctive image calls for creativity and hard work.
v.
Channel differentiation:
a) Product
b) Performance
c) Experts
d) Sale
2. Selecting the right competitive advantages—To decide that how many differences to promote and which ones.
i. How many differences to promote—Unique selling proposition(USP) for each brand and stick to it. In general a company needs to avoid three major positioning
errors.
a) Under positioning—Failing to ever really position the company at all.
b) Over positioning—Giving buyers too narrow picture of the company.
c) Confused positioning—Leaving buyers with a confused image of a company.
iii.
Which differences to promote—Following differences are to be promote.
a) Important—High valued.
b) Distinctive—That competitor do not offer.
c) Superior—Superior to other ways and beneficial for customers.
d) Communicative—Visible to buyers.
e)Preemptive—Competitors cannot easily copy.
f) Affordable—Buyers can afford to pay for.
g) Profitable—The company can introduce the difference profitably.
3. Selecting an overall positioning strategy--??????????????????????????
Effective marketing strategies:
1. Depend on company resources. If there are limited resources then we will use concentrated strategies. If resources are much enough then we will use mass
strategies.
2. Best strategy also depends upon degree of product variability and undifferentiated strategy is used for uniform product.
i.
For uniform product undifferentiated strategy is used.
ii.
For varying product differentiated strategy is used.
3. Product life cycle:
i.
When new product is launched in market for first time then undifferentiated or concentrated strategy is used.
ii.
For mature stag4e of a product differentiated strategy is used
4. If buyer demand the same product, same prices and react in same way then use undifferentiated strategy.
5. Competitor marketing strategies—use opposite strategy against competitor’s strategy.
Chapter#5 Product and services strategies:
Product—Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.
Services—Services are products that consist of activities, benefits, or satisfactions that are offered for sale, such as banking, hotel, tax preparation, and home repair
services.
Services are essentially intangible and do not result in the ownership of anything. Or any activity or benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything.
Levels of product and services: The product planners need to think about products and services on following three levels:
1. Core product—It addresses the question: What is the buyer really buying? The core product stands at the center of the total product. It consists of the core problem
solving benefits that consumers seek when they buy a product or service.
2. Actual product—The product planner must next build an actual product around the core product. Actual products may have as many as five characteristics:
a. A quality level
b. Features
c. Design
d. A brand name
e. Packaging
3. Augmented product—The product planner must build an augmented product around the core and actual products by offering additional consumer services and
benefits.
Product classification: In developing marketing strategies for their products and services, marketers have divided products and services into two broad classe:
1. Consumer products—Products bought by final consumers for personal consumption. They include:
a. Convenience products—Consumer products that the customer usually buys frequently, immediately, and with a minimum of comparison and buying efforts.
b. Shopping products—Consumer products that the customer, in the process of selection and purchase, characteristically compares on such bases as
suitability, quality, price and style.
c. Specialty products—Consumer products with unique characteristics or brand identification for which a significant group of buyers is willing to make a
special purchase effort.
d. Unsought products—Consumer products that the consumer either does not know about or knows about but does not normally think of buying.
2. Industrial products—Products bought by individual and organizations for further processing or for use in conducting a business. Following are three industrial
marketing group:
a. Materials and parts—Include raw materials and manufactured materials and parts. Raw materials consist of:
i.
Farm products i.e. wheat, cotton, fruits, etc.
ii.
Natural products i.e. fish, iron, etc.
Manufactured materials and parts consist of component materials i.e. cement, wires, etc. and component parts i.e. small motors, tires etc.
b. Capital items—These are industrial products that aid in the buyer’s production or operations, including:
i.
Installation—consists of major purchases i.e. factories, offices, etc.
ii.
Accessory equipment—consists portable equipments and tools i.e. hand tools, lift trucks, etc.
c. Supplies and services—Supplies include:
i.
Operating supplies i.e. paper, pencils, etc.
ii.
Repair and maintenance i.e. paint, nails, etc.
Repair services are usually supplied under contract i.e. advertising, computer repair, etc.
Individual product decisions: Individual product decision is important in development and marketing of individual products and services. It include:
Product
attribute
s
Branding
Packaging
Labeling
Product support
services
1. Product attributes—To define the benefits of a product that it will offer. They may be:
a. Product quality—The ability of a product to perform its functions; it includes the product’s overall durability, reliability, precision, ease of operation and
repair, and other valued attributes. Product quality has two dimensions:
i. Level—In developing a product, the marketer must first choose a quality level that will support the product’s position in the target market.
ii. Consistency—Freedom from defects and consistency in delivering a targeted level of performance. Concern with conformance quality.
Total quality Management: An effort to constantly improve product and process quality in every phase of their operations. The ultimate goal of total
quality is to improve customer value. For example when Motorola first began its total quality program in the early 1980’s its goal was to drastically reduce
manufacturing defects. In recent years, however, Motorola’s quality concept is total customer satisfaction.
b. Product features—Features are competitive tool for differentiating the company’s product from competitor’s products. The company can create higher
level models by adding more features.
c. Product design/Style—Product design is a way to add customer value. Design is a larger concept than style. Style simply describes the appearance of a
product. Styles can be eye catching or yawn inspiring. A sensational style may grab attention,, but it does not necessarily make the product perform better.
In some cases it might even result in worse performance. For example, a chair may look great yet be very uncomfortable. Unlike style, design goes to the
very heart of a product.
2. Branding—A name, term, sign, symbol, or design, or a combination of these intended to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors.
a. Brand Equity—The value of a brand, based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand association,
and other assets such as pates, trademarks, and channel relationships.
b. Brand name selection—A good name can add greatly to a product success.
Qualities:
i.
It should suggest something about the product’s benefits and qualities e.g. spic and span
ii.
It should be easy to pronounce, recognize, and remember.
iii.
The brand name must be distinctive.
iv.
The brand should translate into foreign languages easily
v.
It should be capable of registration and legal protection.
c. Brand sponsor—A manufacturer has four sponsorship options:
i. Manufacturer’s brand—A brand created and owned by the producer of a product or service.
ii. Private brand—A brand created and owned by reseller of a product or service.
Manufacturer’s versus private brand—Manufacturer’s brands are less expensive and create number of retailers and wholesalers. On the other
hand private brands can be hard to establish and costly to stock and promote but they give high profit.
iii. Slotting fees—Payments demanded by retailers from producers before they will accept new products and find slots for them on the shelves.
iv. Licensing—To create their own brand name
d. Co-Branding—The practice of using the established brand names of two different companies on the same products.
e. Brand development—A company has four choices when it comes to brand development:
i. Line extension—Using a successful brand name to introduce additional items in a given product category under the same brand name, such as new
flavors, forms, colors, or package size.
iii. Brand extension—Using a successful brand name to launch a new or modified product in a new category.
iv. Multi branding—A strategy under which a seller develops two or more brands in the same product category.
v. New brands—A company may create a new brand name when it enters a new product category for which none of the company’s current brand
names are appropriate.
3. Packaging—The activity of designing and producing the container or wrapper for a product. Innovative packaging can give a company and advantage over
competitors. Developing a good package for a new product requires making many decisions such as size, shape, materials, color, text,, brand mark etc.
4. Labeling—The label might describe several things about the product—who made it, where it was made, when it was made, and how to use it. Finally the label
might promote the product through attractive graphics. It also concern with unit pricing, open dating, and life of the product.
Product Support Services—To determine customer service needs and the value customers assign to different services involves more than simply monitoring complaints that
come in over toll free telephone lines or on comment cards.
Product Line Decisions—A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed
through the same types of outlets, or fall within given price ranges. In developing product line strategies, marketers face following decisions:
1. Product line length—The number of items in the product line. The line may too short or too long depending upon the increase or decrease in profit.
2. Product line stretching—It occurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or
both ways.
3. Product line filing—Adding more items within the present range of the line. There are several reasons for product line filling e.g. reaching for extra profits etc.
Product Mix decisions—An org with several product lines has a product mix.
Product Mix—The set of all product lines and items that a particular seller offers for sale to buyers. A company’s product mix has four important dimensions:
1. Width—The width refers to the number of different product lines the company carries.
2. Length--The length refers to the total number of items that the company carries.
3. Depth--The depth of product refers to the number of versions offered of each product in the line.
4. Consistency--The consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution
channels, or in some other way.
The Service Profit Chain—The chain that links service firm profits with employee and customer satisfaction.
1. Internal marketing—Marketing by a service firm to train and effectively motivate its customer contact employees and all the supporting service people to work as a
team to provide customer satisfaction.
2. Interactive marketing—Marketing by a service firm that perceived service quality depends heavily on the quality of buyer seller interaction.
Company
Internal
marketing
Marketing
Strategy
External
marketing
Business
analysis
Concept
developing
Test
Marketing
Idea
Screening
Commercialization
Idea
generation
Employee
Interactive marketing
Customer
Product
development
Implementation
Product Development Stages
Marketing Organizations, persons, places and ideas:
1. Organization marketing—Activities undertakes to create, maintain, or change attitudes and behavior of target audiences toward an org.
2. Person marketing—Activities undertaking to create, maintain, or change attitudes and behavior of target audiences toward particular person.
3. Place marketing-- Activities undertaking to create, maintain, or change attitudes and behavior of target audiences toward particular place.
4. Idea marketing—Also called social marketing—the marketing of social ideas, such as public health campaigns, environmental campaigns, another campaigns such as
family planning, human rights, and racial equality.
5. Social marketing—The design, implementation and control of programs seeking to increase the acceptability of a social idea, cause, or practice among a target
group.
Chapter#6 New Product Development strategies:
New product development—The development of original products, product improvements, products modifications, and new brands through the firm’s own efforts. It have
following Stages:
1. Idea generation—The systematic search for new product ideas. Major sources of new product idea include:
a. Internal sources—Within the company. The company can find new ideas through formal research and development.
b. External sources—Good new product ideas also come from watching and listening to customers.
2.
3.
4.
5.
6.
7.
8.
c. Competitors—Good source of new product ideas. Companies watch competitors ads and other communications to get clues about their new products.
d. Distributors—Resellers are close to the market and can pass along information about consumer problems that need solution and new product possibilities.
e. Suppliers--Suppliers can tell the company about new concept, t4echniques, and material s that can be used to develop new products.
Idea Screening—Screening new product ideas in order to spot good ideas and drop poor ones as son as possible.
Concept development and testing—A detailed version of the new product ideas stated in meaningful in consumer terms. It includes:
a. Concept development—It might create the following product concepts for the electric car:
i. Concept1--An inexpensive subcompacts design
ii. Concept2--A medium cost, medium size
iii. Concept3--A medium cost sporty compact appealing to young people.
iv. Concept4--An inexpensive subcompact appealing to conscientious people who wasn’t basic transportation.
b. Concept testing—Testing new product concepts with a group of target consumers to determine if the concepts have strong consumer appeal.
Marketing Strategy Development—Designing an initial marketing strategy for a new product based on the product concept.
Business analysis—A review of the sales, costs, and profit projections for anew product to determine whether these factors satisfy the company’s objectives.
Product Development—The product concept is developed into a physical product in order to assure that the product idea can be turned into a workable product.
Test marketing—The stage of new product development where the product and marketing program are tested in more realistic market settings. It includes:
a. Standard test marketers
b. Controlled test marketers
c. Simulated test marketers
Commercialization—Introducing a new product into the market. The company must decide that where to launch the new product.
Speeding up new product development: Following approaches are used.
a. Sequential Product development—A new product development approach in which one company department works individually to complete its stage of the
process before passing the new product along to the next department and stage.
b. Simultaneous product development—An approach t developing new products in which various company departments word closely together overlapping the
steps in the product developments process to save time and increase effectiveness.
Product Life Cycle Strategies:
Sales
Profit
s
Product
development
Introduction Growth Maturity Decline
Product life cycle—The course of a product’s sales and profits over its lifetime.
It involves five distinct stages:
1. Product development—It begins when the company finds and develops a new products idea. During product development sales are zero and the company’s
investment costs mount.
2. Introduction—A period of slow sales growth as the product enters in the market. Profits are nonexistent in this stage because of the heavy expenses of product
introduction.
3. Growth—A period of rapid market acceptance and increasing profits.
4. Maturity—A period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of
increased marketing outlays to defend product against competition.
5. Decline—the period when sales fall off and profits drop.
The PLC concept can describe a profit class , a product form, or a brand. It also applied to:
1. Style—A basic and distinctive mode of expression.
2. Fashion—A currently accepted or popular style in a given field.
3. Fads—Fashions that enter the market quickly, are adopted with great zeal, peak early, and decline very fast.
A brief detail of rest of stages of PLC is given below:
1. Introduction Stage—In this stage the new product is first distributed and made available for purchase. Introduction takes time, and sales growth is slow. Profits are
negative or low due to high expenses.
2. Growth stage—The PLC stage at which a product’s sales start climbing quickly. Early adopters will continue to buy, and later buyers will start following their lead.
Profit increase and unit manufacturing costs fall.
3. Maturity Stage—The stage where sales growth slows or levels off. Posses strong challenges.
a. Modifying the market—The company tries to increase the consumption of the current product. It look for new users and market segments.
b. Modifying the product—Changing characteristics such as quality, features or style to attract new users and to inspire more usage.
c. Modifying the marketing mix—Improving sales by changing one or more marketing mix elements. They can cut prices to attract new users.
4. Decline Stage—The PLC stage at which a product’s sales decline. Decline may be due to technological advances, or increased competition etc.
Chapter#7 Pricing strategies:
New product pricing strategies:
1. Market skimming pricing—Setting a high price for a new product to skim maximum revenues layer by layer from the segments that are willing to pay the high price,
the company make fewer but more profitable, sales.
2. Market penetration pricing—Setting a low price for a new product in order to attract a large number of buyers and a large market share.
Product mix pricing strategies:
1. Product line pricing—Setting the price steps between various products in a line, based on cost differences between products, customer evaluation of different
features, and competitors prices. Companies usually develop product lines rather than single products e.g. a cloth store may have a suit with three price levels.
2. Optional product pricing—Pricing optional or accessory products that are being sold along with a main product. E.g. a car buyer may order for CD player with it.
3. Captive product pricing—Setting a price for products that must be used along with a main product, such as camera film, and computer software.
4. By product pricing—Setting a price for by-products in order to make the main products price more competitive.
5. Product Bundle pricing—Combining several products and offering the bundle at a reduced price. E.g. Visual studio 20x.
Price Adjustment strategies: Here are six price adjustment strategies:
1. Discount and allowance pricing:
a. Discount—A straight reduction in price on purchases during a stated period of time. It may be:
i. Cash discount—A price reduction to buyers who pay their bills promptly. E.g. to pay bill within 10 days etc.
ii. Quantity discount-- A price reduction to buyers who purchase in large volume. E.g. R.s 30 for 5 pieces and 20 for 2 pieces etc.
iii. Functional Discount—A discount offered by the seller to trade channel members who perform certain functions, such as selling, storing, and r4ecord
keeping. Also called trade discount.
iv. Seasonal discount—A price reduction to buyers who purchase merchandise or services out of season. E.g. warm clothes in winter.
b. Allowances—Promotional money paid by manufacturers to retailers who agree to feature the manufacturer’s products in some way.
Promotional Allowances—These are the Payments or price reductions to reward dealers for participating in advertising and sales support programs.
2. Segmented Pricing—Selling products or services at two or more prices, even though the difference in prices is not based on differences in costs. To allow for
differences in customers, products, and locations. Segmented pricing takes several forms.
a. Under customer segment pricing, different customers pay different prices for the same product or service. E.g. museums will charge a lower admission for
students.
b. Using location pricing, a company changes different prices for different locations even though the cost of offering each location is the same.
c. Using time pricing, a firm varies its price by the season, the month the day and even the hour.
3. Psychological pricing—A pricing approach that that considers the psychology of prices and not simply the economics; the price is used to say something about the
product.
Reference prices—Prices that buyers carry in their minds and refer to when looking at a given product.
4. Promotional pricing—Temporarily pricing products below list price, and sometimes even below cost, to increase short run sales.
5. Geographic pricing—Deciding how to price products for customers located in different parts of the country or world.
a. FOB origin pricing –Free on board a carrier; the pricing based upon origin and location.
b. Uniform delivered pricing—the exact opposite of FOB (free onboard carrier), the company charges the4 same price plus freight to all customers, regardless of
their location.
c. Zone pricing--Falls between FOB origin price and uniform delivered pricing. The company sets up two or more zones. All customers within a given zone pay a
single total price the more distant the higher the price.
d. Using basing-point pricing—The seller selects a given city as a basing point and charges all customers the freight cost from that city to the customer location,
regardless of the city from which the goods are actually shipped.
e. Freight-absorption pricing—the seller who is anxious to do business with a certain customer or geographical area.
6. International Pricing—Companies that market their products internationally must decide what a prices to charge in the different countries in which they operate.
Chapter#8 Distribution Channels:
Value delivery Network: A network made up of company, supplier, distributers who pattern with each other to make or work for.
Nature of distribution channels:
Distribution channel/market channel—A set of interdependent orgs involved in the process of making a product or service available for use or consumption by the
consumer or business user.
Functions of distribution channel: Members of the marketing channel perform many key functions.
1. Information—Gathering and distributing marketing research sand intelligence information about actors and forces in the marketing environment that are needed
for planning and aiding exchange.
2. Promotion—Developing and spreading persuasive communications about an offer.
3. Contact—Finding and communicating with prospective buyers
4. Matching—Shaping and fitting the offer t the buyer’s needs, inclusion such activities as manufacturing, grading etc.
5. Negotiation—Reaching an agreement o price and other terms of the offer so that ownership or possession can be transferred.
6. Physical distribution—Transporting and storing goods
7. Financing—Acquiring and using funds to cover the costs of the channel work.
8. Risk taking—Assuming the risks of carrying out the channel work.
Number of channel levels:
Channel level—A layer of middlemen that performs some work in bringing the product sand its ownership closer to the final buyer.
Direct marketing channel—A marketing channel that has no intermediary levels;
Indirect marketing channels—Channels containing one or more intermediary levels.
Chapter#9Retailing and wholesaling:
Retailing—All activities involved in selling goods or services directly to final consumers for their personal, non business use.
Retailers—Business whose sales come primarily from retailing.
Store Retailing--They are classified in following characteristics:
1. Amount of service—Retailers may offer one of three levels of service:
a. Self service retailers—Customers were willing to perform their own locate-compare-select process to save money.
b. Limited service retailers—Provide more sales assistance because they carry more shopping goods about which customers need information. Their increased
operating costs result in higher prices.
c. Full service retailers—Such as specialty stores and first class department stores, salespeople assist customers in every phase of the shopping process. These
stores carry usually more specialty goods for which customer like them.
2. Product Line—They include the following:
a. Specialty store—A retail store that carries a narrow product line with a deep assortment within that line.
b. Department store—A retail org that carries a wide variety of product lines—typically clothing, home furnishing and house hold goods.
c. Supermarkets—Large, low cost, low-margin, high-volume, itself-service stores that carry a wide variety of food, laundry, and household products.
d. Convenience store—A small store located near a residential area that is open long hours seven day a week and carries a limited line of high turnover
convenience goods.
e. Superstore—A store almost twice the size of a regular super-market that carries a large assortment of routinely purchased food and nonfood items and offers
many services.
f. Hypermarkets—Huge stores that combine supermarket, discount, and warehouse retailing; in addition to food they carry furniture, appliances, clothing, and
many other products.
g. Category killer
3. Relative prices—They are classified as follows:
a. Discount Stores—A retail institution that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume.
b. Off-price retailers—Retailers that buy at less than regular wholesale prices and sell at ales than retail. Following are three main types of off-price retailers:
i. Independent off-price retailers—Off-price retailers that are either owned and run by entrepreneurs or are divisions of larger retail corporations.
ii. Factory outlets—Off-price retailing operations that are owned and operated by manufacturers and that normally carry the manufacturer’s surplus,
discontinued, or irregular goods.
iii. Warehouse club—Off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing and a hodgepodge of other goods at
deep discounts to members who pay annual membership fees.
c. Catalog showroom—A retail operation that sells a wide selection of high markup, fast moving brand name goods at discount prices.
4. Retail organizations—Major type of retail orgs are:
a. Chain stores—Two or more outlets that are commonly owned and controlled have central buying and merchandising, and sell similar lines of merchandise.
b. Franchise—A contractual association between a manufacturer wholesaler or service org and independent businesspeople who buy the righty to own and
operate one or more units in the franchise system.
Wholesaling—All activities involved in selling goods and services to those buying for resale or business use.
Wholesaler—A firm engaged primarily in wholesaling activity. These are often better at performing one or more of the following channel functions:
1. Selling and promoting—To reach many customers at low cost.
2. Buying and assortment building—Selecting items according to customer needs.
3. Bulk breaking –Breaking large lots into small quantities.
4. Warehousing—By holding inventories to reduce the cost and risk of customer.
5. Transportation—To provide quicker delivery to buyers.
6. Financing—Customer finance by ordering early and paying bills on time.
7. Risk bearing—To bear the cost of theft, damage, etc.
8. Market information—Giving info to customers about competitors and new products.
9. Mgt services and advice—To help retailers and train them.
Types of wholesalers: Wholesalers fall into three major groups:
1. Merchant wholesalers—Independently owned business that take title to the merchandise that they handle. The may be:
a. Full service wholesalers—Provide a full set of services.
b. Limited services wholesalers—Offer fewer services to their suppliers and customers.
2. Broker—A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation.
3. Agent—A wholesaler who represents buyers or sellers on a relatively permanent basis, performance only a few functions, and does not take title to goods.
Chapter#10 Integrated marketing communication strategy:
Marketing Communication mix—Also known as promotional mix. It consists of specific land of advertizing. Sales promotion, public relation, personal selling and direct
marketing tools that the company use to achieve advertise and marketing objectives.
5 –Major promotional tools:
1. Advertizing—Any paid form of non personal and promotion of idea by an identify sponsor.
2. Sales promotion—Short term incentives to encourage the purchase of products or service.
3. Public relations—Building good relation with company’s various publics by obtaining favorable publicity build up a good cooperate image and handling unfavorable
events
4. Personal Selling—Personal presentation by the firm sale force for the purpose of going sales and building the out relationships.
5. Direct marketing—It will carefully target individuals. Bothe take a immediate respons3e and make good customer relationships.
Chapter#10 Advertisement and public relations:
3-Basic objectives:
1. Informative advertising—Telling the market about a new product and explaining how the product works. It concerns with:
a. Describing available services
b. Correcting false impressions
c. Reducing consumer’s fears
d. Building a company image.
2. Persuasive advertising—Building brand preference and changing customer’s perception of product attributes. It concerns with:
a. Persuading customer to purchase now
b. Persuading customer to receive a sales call
3. Reminder advertising—Reminding consumer that the product may be needed in the near future and reminding consumer where to buy it. it concerns with:
a. Keeping in consumers mind during off-seasons.
b. Maintaining its top of mind awareness.
Forms of direct marketing:
1. Telephonic marketing
2. Catalog marketing
3. Email marketing
4. Direct response marketing
5. Online marketing
6. Integrated direct marketing
(Smile is Just After Your Effort, Don’t Miss it)