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Session 1 Needs states of felt deprivation; physical needs, security needs, social needs, esteem needs, and self-actualization

n needs. Wants the form taken by human needs as they are shaped by culture and individual personality; objects that will satisfy the need. Demands wants backed by buying power. Product anything that can be offered in a market that will satisfy a need or a want. Market a set of actual and potential buyers Value the consumers estimate of the products overall capacity to satisfy his or her needs. Satisfaction the extent to which a products perceived performance matches a buyers expectations. Exchange the act or process of obtaining a product or service from someone by offering something in return. Transaction the basic unit of exchange. Industry a collection of sellers. Marketing managing markets to bring about exchanges for the purpose of satisfying human needs and wants. Marketing a social and managerial process by which individuals obtain what they need and want through creating, offering, and exchanging products of value with others. Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy individual and organizational goals. Marketing Management Philosophies: 1. Production concept holds that the market will favor products that are widely available and low in cost. Companies in this orientation concentrate on achieving high production efficiency and wide distribution. 2. Product concept holds that the consumers will favor those products that offer the most quality, performance, or innovative features. Companies in this orientation focus their energy on making superior products and improving them over time. 3. Selling concept holds that consumers, if left alone, will ordinarily not buy enough of the organizations products. The organization must therefore undertake an aggressive selling and promotion effort. 4. Marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets. 5. Societal marketing concept holds that the organizations task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys well-being.

Session 2 What are the 4Ps of Marketing? Product, Price, Placement, Promotion Definition: Product anything that can be offered to a market that can satisfy a need or a want. Price the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service. Placement the distribution channels where the products can be made available to the market. Promotion all communications that a marketer may use in the marketplace, or also called marketing communications program. The promotional mix includes advertising, sales promotion, public relations, and personal selling. Product levels 1. Core product the core benefits (or problem solving benefits) that the consumers are really buying when they obtain a product. a. Example sony camcorder core product is to capture important moments. 2. Actual product a products parts, quality level, features, design, brand name, packaging and other attributes that combine to deliver core product benefits. a. Example sony camcorder its parts, features, other attributes. 3. Augmented product additional consumer services and benefits built around the core and actual product. a. Example toll free service numbers, free user orientation Product classifications 1. Consumer Products products bought by final consumers for personal consumption. They can be classified according to how consumers go about buying them: a. Convenience products consumer products that the customer usually buys frequently, immediately, and with a minimum of comparison and buying effort. i. Staples products that consumers buy on a regular basis, such as ketchup, toothpaste, crackers. ii. Impulse products products purchased with little planning or search effort like candy bars and magazines, which are usually placed near checkout counters because shoppers may not otherwise think of buying them. iii. Emergency products products purchased when their need is urgent, like umbrellas and raincoats during rainy season. b. Shopping products less frequently purchased consumer products that customers compare carefully on suitability, quality, price and style. Consumers buying shopping products spend much time and effort in information gathering and making comparisons.

i. Homogenous closely similar in quality but there is a price difference, like, for example appliances (electric fans, aircons, etc.) ii. Heterogenous difference in style and price, where features are usually more important than the price factor, as is the case with clothing and furnitures. 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. Examples include special car brands like Rolls Royce. Buyers of specialty products do not normally compare the product with others. Buyers also usually are willing to travel great distances to buy one. d. Unsought products consumer products that the consumer usually do not know about or knows about but do not think of buying. New innovations usually are considered unsought until awareness is generated through marketing communications. Life insurance is an example. 2. Industrial Products products purchased for further processing or for use in conducting a business. If a person buys a lawn mower for home use, it is a consumer product. If he buys the same lawn mower for his landscaping business, its an industrial product. a. Materials and Parts industrial products that become part of the buyers product through further processing or as components. They include raw materials and manufactured materials and parts. i. Raw materials natural products ii. Manufactured materials and parts can be component materials (iron, yarn, cement), or component parts (iron made into steel, and yarn made into cloth) b. Capital items industrial products that aid in the buyers production or operations. They include installations and accessory equipments. i. Installations factory, offices ii. Accessory equipment can be factory equipment and hand tools (hand pallets, hand tools) or office equipments (fax machines, computers, etc) c. Supplies and services supplies (operating supplies like pencil, lubricants, etc); business services (preventive maintenance, computer repair, etc) Individual Product Line Decisions 1. Product Attributes a. Product Quality quality level that matches the needs of the target market and that of the competition. b. Product Features adding features differentiate a companys products over competitors. c. Product Design distinctive product design can add value to the customer. i. Style pertains to the looks of the product only. 2. Branding

a. Brand 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. It is a sellers promise to deliver consistently a specific set of features, benefits and services to buyers. A brand can convey four levels of meaning: i. Attributes ii. Benefits iii. Values iv. Personality Attributes Benefits Values Personality Mercedes Well engineered, well built, durable, expensive Comfortable, safe, need not be replaced often, makes a person feel successful and admired. Buyers of Mercedes value the benefits that it offers People are attracted to the brands that embody their personality. A young, wealthy, successful business executive will, for example, buy a Mercedes b. Brand Equity the value of a brand based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations and other assets, such as patents, trademarks, and channel relationships. *High brand equity translates into high brand awareness and loyalty, and the company will incur lower marketing costs relative to revenues because of this. The company also has more leverage in bargaining with resellers in high brand-equity products because consumers expect stores to carry the brand. New products through brand extensions can also be easier for high brand-equity products. c. Brand Name Selection brand names should be carefully selected based on the product, its benefits, target market and proposed marketing strategies. It should: i. Suggest something about the products benefits and qualities. ii. Be Easy to pronounce, recognize and remember iii. Be distinctive iv. Translate easily to foreign language v. Be capable of registration and legal protection d. Brand Sponsor i. Manufacturers brand a brand created and owned by the producer of a product or service. ii. Private brand a brand created and owned by a reseller of a product or service. iii. Licensing securing accreditation from one company to use names, symbols, characters, etc. previously created for a fee, to provide instant or proven brand name.

iv. Co-branding two established brand names are used on the same product at the same time. e. Brand Strategy i. Line extensions occur when a company introduces additional items in a given product category under the same brand name, such as new flavors, forms, colors, ingredients or package sizes. 1. example Colgate total, Colgate Mintirinse, Colgate Fresh Confidence, etc. ii. Brand extensions involve the use of a successful brand name to launch new or modified products in a new category 1. example ivory soap, ivory shampoo 2. example Honda cars, Honda motorcycles, Honda marine engines, etc. iii. Multibrands strategy wherein a seller develops two or more brands in the same product category. iv. New brands strategy employed when a company enters a new product category with a new brand name. Existing brand name New brand name Existing product category Line extension Multibrand New product category Brand extension New brands

3. Packaging includes the activities of designing and producing the container or wrapper for a product. - packaging has the power to create instant consumer recognition for the company or the brand. It can create instant advantage over competitors in terms of attention, while good packaging ergonomics can avoid waste to the consumer, maximize efficiency, and reduce hassle. - The packaging concept states what the package should be or do for the product (for protection? For new dispensing method?). a. Labeling the label identifies the product or brand; it may be used to grade the product; it may be used to describe several things about the product; it may be used to promote the product through attractive graphics. It may range from simple tags attached to products to complex graphics that are part of the package. 4. Product Support Services services that augment actual product Product Mix Decisions Product mix also called product assortment, is the set of all product lines and items that a particular seller offers for sale to buyers. Product Mix Width

Detergents

Toothpaste

Bar soap

Tide Gleem Ivory Charmin Product Ariel Crest Kirk Puffs line length Dreft Lava Banner Ivory Snow Camay *A companys product mix has a certain width, length, depth and consistency. Width of the product mix counted in terms of how many different product lines a company carries. Length of the product mix total number of items in the product mix. Depth of the product mix total number of variants offered per product in the line. Consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. The four dimensions of the product mix provide the handles for determining the companys product strategy: Add new product lines Lengthen each product line Deepen product mix by adding new variants Pursue more product line consistency

Disposable diapers Pampers Luvs

Paper tissue

The New Product Development Process 1. Idea Generation systematic search for new product ideas a. Internal sources b. Customers c. Distributors d. Competitors e. Suppliers f. Others 2. Idea Screening screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible 3. Concept Development and Testing (product idea, product concept, and product image) a. Concept development development of different new product concepts, find out how attractive each concept is, and choose the best one. b. Testing testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal. 4. Marketing Strategy Development designing an initial marketing strategy for a new product based on the product concept. The marketing strategy statement

5. 6.

7.

8.

consists of three parts the target market, the planned product positioning, and sales, market share, and profit goals for the first few years. (assignment) Business Analysis a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the companys objectives. Product development the stage after the product concept has passed the business test, where R&D/Engineering starts developing the concept into a physical product. After the prototype has been fully built, it will undergo functional testing as well. Test Marketing the stage at which both the product and the marketing program are tested in more realistic market settings; it is generally expensive and time consuming, which sometimes give competitors time to move ahead. a. Standard test markets small number of representative test cities, use full marketing campaign in these cities and uses surveys and store audits to gauge marketing performance. b. Controlled test markets controlled panel of stores c. Simulated test markets the consumers are exposed to ads and promo of several products including that of the company, then they are given money and asked to go to a laboratory store. They may keep the money or buy any product that they like, and the researchers take note of the consumers choice to buy the new product or its competing brand. Commercialization introducing the new product into the market

Product life-cycle 1. Introduction period of slow sales growth as the product is being introduced into the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction. 2. Growth period of rapid market acceptance and increasing profits. 3. Maturity 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 the product against competition. 4. Decline period when sales fall off and profits drop. *Style basic and distinctive mode of expression. Example: clothing formal vs casual. Once a style is invented, it may last for generations, coming in and out of vogue. A style has a cycle showing several periods of renewed interest. *Fashion a currently accepted or popular style in a given field. It grows slowly, remain popular for a while, then decline slowly. Example: clothing transition from checkered to stripes. *Fads fashions that enter quickly, are adopted with great zeal, peak early and decline very fast. Example: Drinks Zagu Five stages of the adoption process: 1. Awareness the consumer becomes aware of the innovation but lacks information about it. 2. Interest the consumer is stimulated to seek information about the innovation.

3. Evaluation the consumer considers whether to try the innovation. 4. Trial the consumer tries the innovation to improve his or her estimates of its value. 5. Adoption the consumer decides to make full and regular use of the innovation. Five adopter categories: 1. Innovators venturesome customers who are willing to take risks and try new ideas. 2. Early adopters they adopt products with care, guided by respect, and their communitys opinion leaders. 3. Early majority they adopt new ideas before the average person, but are rarely the leaders. 4. Late majority skeptical about new ideas, and therefore adopt only when majority has adopted the innovation. 5. Laggards tradition-bound, suspicious to changes, and will adopt an innovation only when it takes on a measure of tradition itself. Session 3 Marketing Environment Marketing Environment the actors and forces outside marketing that affect marketing managements ability to develop and maintain successful transactions with its target customers. It is composed of the microenvironment and a macroenvironment. Microenvironment the forces close to the company that affect its ability to serve its customers the company, market channel firms, customer markets, competitors and publics. Macroenvironment the larger societal forces that affect the whole microenvironment demographic, economic, natural, technological, political and socio-cultural. Microenvironment 1. The Company in developing marketing programs, marketing managers must consider different company departments. Top management takes mission into account. Finance looks at possible sources of funds. R&D focuses in designing safe and attractive products. Planning and purchasing is concerned with the availability of the raw materials. Manufacturing is responsible for producing the desired quality and quantity of goods. Accounting has to measure the revenues and costs to help marketing understand how well they are achieving their objectives. 2. Suppliers availability of supply of raw materials, shortages and price increases can impact marketing decisions. 3. Marketing Intermediaries firms that help the company to promote, sell, and distribute its goods to final buyers; they include middlemen, physical distribution firms, marketing service agencies, and financial intermediaries.

Physical distribution firms help stock goods from their point of origin to their destinations. Working with warehouse and transportation firms, a company must determine the best way to store and ship goods, balancing such factors as cost, delivery, speed and safety. Marketing services agencies marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its product to the right markets. Financial intermediaries banks and credit companies. - marketing intermediaries help a firm promote its product, sell and distribute its goods. Effective marketing intermediaries may make or break a marketing strategy. 4. Customers each customer group has its own characteristics that call for careful study by the seller. Consumer markets behave differently from business markets. 5. Competitors a companys marketing strategy should consider its own size and industry position compared to competitors. Not all firms can implement the same strategies. Big firms vs small firms. 6. Publics groups that have an actual or potential interest in or impact on an organizations ability to achieve its objectives. o Financial publics banks, investment houses, stockholders. o Media publics those that carry news, features, etc. o Government publics government departments must be consulted for product safety, etc. o Citizen-action publics consumer organizations, environmental groups, etc. o Local publics neighborhood, residents, etc. o General publics the general publics attitudes toward its products and services o Internal publics workers, managers, board of directors Macroenvironment 1. Socio-cultural Institutions and other forces that affect societys basic values, perceptions, preferences, and behaviors. 2. Economic factors that affect consumer buying power and spending patterns. 3. Political laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. 4. Technological forces that create new technologies, creating new product and market opportunities. 5. Natural natural resources that are needed as inputs by marketers or that are affected by marketing activities. 6. Demographics study of human population in terms of size, density, location, gender, age, race occupation and other statistics. Consumer Behavior Characteristics affecting consumer behavior

1. Cultural a. Culture the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. Example: Drive thru in China b. Subculture a group of people with shared value systems based on common life experiences and situations. It includes nationalities, religions, racial groups, and geographic regions. Example: Hispanic, Chinese, Indians, etc. c. Social class relatively permanent and ordered divisions in a society whose members share similar values, interests and behaviors. 2. Social a. Groups two or more people who interact to accomplish individual or mutual goals. i. Membership groups ii. Reference groups and opinion leaders b. Family influences of husband and wives, parents to their children, etc. c. Roles and status i. Roles consists of the activities people are expected to perform according to the persons around them. ii. Status the expression of a role in society. Example: As a manager in a company, my role is to oversee the performance of my people. To reflect my status as a manager, I wear long sleeves, or clothes that will reflect it. 3. Personal a. Age and lifecycle stage when you were young, you liked Jollibee. When you reached teens, you preferred KFC. When you started college, you preferred Gerrys grill. When you began working, you preferred dining in Mandarin Hotel. b. Occupation managers travel by air, workers travel by sea. c. Economic situation wealthy families go to El Nido, while less privileged families go to Pansol hot springs. d. Lifestyle a persons pattern of living in the world as expressed in the persons activities, interests, and opinions. Lifestyle portrays the whole person interacting with his or her environment. (Psychographics) e. Personality and self-concept i. Personality - a persons distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment. It is usually described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability and aggressiveness. Example: Filipinos, in general are less likely to complain and more agreeable compared to Americans. ii. Self-concept self-image. The premise is that peoples possessions contribute to and reflect their identities, or we are what we have. Example: People who think and feel that they are

sexy wear sexy clothes. People who think they are fashionable buy the latest fashion accessories and clothes. 4. Psychological a. Motivation a need that is sufficiently pressing to direct the person to seek satisfaction of the need. i. Freuds theory of motivation people are largely unconscious about the real psychological forces shaping their behavior. He sees the person as growing up and repressing many urges. These urges are never eliminated or under perfect control; they emerge in dreams, in slips of the tongue, in neurotic and obsessive behavior, or ultimately in psychoses. Example: Kris Aquinos father figure. ii. Maslows hierarchy of needs physiological needs, security needs, social needs, esteem needs, self actualization needs. iii. Herzbergs two-factor model satisfiers vs dissatisfiers b. Perception the process by which an individual selects, organizes and interprets information inputs to create a meaningful picture of the world. i. Selective attention: 1. People are more likely to notice stimuli that relate to a current need. 2. People are more likely to notice stimuli that they anticipate. (car brochures in car showrooms are noticed compared to road maps, because thats what they expect) 3. People are more likely t notice stimuli whose deviations are large in relation to the normal size of the stimuli. ($1000 discount vs $50 discount) ii. Selective Distortion people tend to twist information into personal meanings. They will interpret information in a way that will support rather than challenge their preconceptions. iii. Selective Retention People will tend to retain information that supports their attitudes and beliefs. He will likely remember good points mentioned about his favored brand and forget good points mentioned about competing brands. c. Learning changes in an individuals behavior arising from experience. It occurs through the interplay of drives, stimuli, cues, responses, and reinforcement. i. Drive a strong internal stimulus that calls for action. It becomes a motive when it is directed toward a particular drive-reducing stimulus. ii. Cues minor stimuli that determine when, where and how a person responds. iii. Response the behavior exercised after experiencing or attending to the cues. iv. Reinforcement the experience after the outcome will either reinforce the behavior (if the outcome is good) or not reinforce the behavior (if the outcome of the response is not good).

d. Attribution the causal inference that a person makes about a behavior. I was lucky to have purchased a high quality product. e. Beliefs and attitudes i. Belief a descriptive thought that a person holds about something. (what is your belief about this product or this person?) ii. Attitude a persons consistently favorable or unfavorable evaluations, feelings and tendencies toward an object or idea. (whether you like or dislike) Five Consumer Buying Roles 1. Initiator the person who first suggests or thinks of the idea of buying a particular product or service. 2. Influencer a person whose views or advise influences the buying decision 3. Decider the person who ultimately makes a buying decision or any part of it whether to buy, what to buy, how to buy or where to buy. 4. Buyer the person who makes an actual purchase. 5. User the person who consumes or uses a product or service Types of Buying Decision Behavior Significant differences High involvement Complex buying behavior - highly involving purchase with significant differences among brands. - Product is usually involving if it is expensive, risky, purchased infrequently, and highly self-expressive. Dissonance reducing buying behavior - highly expensive, risky, infrequent purchase, but see little difference among brands. - Buying carpets Low Involvement Variety seeking buying behavior - significant differences and low involvement. - Brand switching occurs because people would like to try the product for the sake of variety. - Cookies, restaurants Habitual buying behavior - behavior in situations characterized by low consumer involvement and few significant perceived differences. - Consumers do not search extensively for information about brands, evaluate brand characteristics, and make weighty decisions about which brands to buy. - Consumers do not form strong attitudes toward brand, but instead select a brand due to familiarity. - Marketers link low

Few differences

involvement products to high involvement activities. Toothpaste linked to cavities Coffee to evolving relationships

Involvement refers to consumers perceptions of importance or personal relevance for an object, event or activity. Consumers who perceive that a product has personally relevant consequences are said to be involved with the product and to have a personal relationship with it. Buying Decision Process 1. Need recognition the consumer recognizes a problem or a need. 2. Information search the consumer is aroused to search for more information; the consumer may simply have heightened attention. 3. Evaluation of alternatives the consumer uses information to evaluate alternative brands in the choice set. 4. Purchase decision the consumer actually buys the product. 5. Postpurchase behavior the consumers take further action after purchase based on their satisfaction or dissatisfaction. Buyer Decision Process for New Products (discussed already in the new products section) Target Marketing (Market Segmentation, Targeting and Positioning) Companies sometimes go through three stages: 1. Mass marketing seller mass produces, mass distributes and mass promotes one product to all buyers in the same way. This leads to lowest cost and prices, and create the largest potential market. 2. Product variety marketing seller produces two or more products that have different features, style, quality, sizes and so on. 3. Target marketing the seller identifies market segments, selects one or more of them, and develops products and marketing mixes tailored to each. Micromarketing a form of target marketing in which companies tailor their marketing programs to the needs and wants of narrowly defined geographic, demographic, psychographic, or behavioral segments. Market segmentation dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing mixes. Market targeting he process of evaluating each market segments 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; formulating competitive positioning for a product and a detailed marketing mix. Steps in market segmentation, targeting and positioning: 1. 2. 3. 4. 5. 6. Identify bases for segmenting the market. (segmentation) Develop profiles of resulting segment. (segmentation) Develop measures of segment attractiveness. (targeting) Select the target segments. (targeting) Develop positioning for each target segment. (positioning) Develop marketing mix for each target segment. (positioning)

Market Segmentation - markets consist of buyers who differ in their wants, resources, location, buying attitudes, and buying practices. - Most sellers face larger numbers of smaller buyers and do not find complete segmentation worthwhile. Instead, they look for broad classes of buyers who differ in their product needs or buying responses. Levels of Segmentation 1. Mass marketing seller engages in the mass production, mass distribution and mass promotion of one product for all buyers 2. Segment marketing a market segment consists of a large identifiable group within a market. A company that practices segment marketing recognizes that buyers differ in their wants, purchasing power, geographical locations, buying attitudes, and buying habits. The company therefore tries to isolate broad profitable segments that make up a market. 3. Niche marketing A niche is a more narrowly defined group, typically a small market whose needs are not being well served. Marketers usually identify niches by dividing a segment into subsegments or by defining a group with a distinctive set of traits who may seek a special combination of benefits. Niches are fairly small and normally attract only one or a few competitors. 4. Local marketing local marketing involves the implementation of marketing programs that are tailored to the needs and wants of local customer groups. 5. Individual marketing serving markets in segments of one. 6. Self-marketing a form of individual marketing wherein consumers take on more responsibility for determining which products and brands to buy. This is very common in internet shopping, and interactive media. Bases for Segmentation of Consumer Markets 1. Geographic Segmentation dividing the market into geographical units such as nations, regions, states, countries, cities or neighborhoods.

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. - most popular segmentation basis because consumer needs and wants and usage rates vary closely with demographic variables. - Easier to measure compared to other types of variables. Age and lifecycle stage consumer needs and wants change with age. Example: Mcdonalds targets children, teens, adults, and senior citizens with different ads and media. Gender gender segmentation is often used in clothing, cosmetics, magazines, etc. Deodorants used to be for both sexes, now you have secret that caters to ladies. Head & Shoulders vs Clear Men and Women. Income Rustans department store vs SM department stores Generation segmentation different generations have different mindsets, and may be served in different ways by different offerings. Family type Asian families usually buy products that they share within the household, unlike in the west. As such, growth of kids toothpaste did not materialize in Asia as compared to the west. Religion halal food vs haram Social class companies create products that serve to satisfy particular social classes. 3. Psychographic Segmentation divides buyers into different groups based on social class, lifestyle, or personality characteristics. Lifestyle peoples interest in different goods is affected by their lifestyles, and the goods they buy reflect those lifestyles. People who live a healthy lifestyle will probably buy non-fat milk, buy more than one pair of rubber shoes, buy jogging pants, gym clothes, etc. Personality marketers also use personality variables to segment markets, giving their products personalities that correspond to consumer personalities. 4. Behavioral Segmentation divides buyers according to their knowledge, attitudes, uses, or responses to a product. Occasions buyers can be distinguished when they develop a need(or get the idea to buy), purchase a product, or use a product purchased. Example, travel may be triggered by occasions related to business, vacation, or family. People may travel

for the purpose of spending time outside of work (vacation), or due to birthdays of special members of the family, or because there are business occasions that need to be attended (like induction of new board of directors, etc.) Benefits classifying products according to the benefits that they seek from the product. Some people play badminton for exercise, while others play badminton to socialize. User status markets can be segmented into non-users, ex-users, potential users, first time users, and regular users of a product. Blood banks, for example, do not rely only on regular donors, but also recruit new donors. Each group will require different communication messages. Usage rate markets can also be segmented into light, moderate and heavy user groups. Heavy users usually have common demographics, psychographics and media habits. Loyalty status consumers can be classified as loyal according to the following brand loyalty status: Hard-core loyals consumers who buy one brand all the time.(AAA) Split loyals consumers who are loyal to two or three brands. (AABBA) Shifting loyals consumers who shift from favoring one brand to another (AAAABBBB) Switchers consumers who show no loyalty to any brand (ACEBDFGA) Buyer-readiness stage some consumers are unaware about the product, some are aware, some are informed, some are interested, some desire the product, and some are interested to buy. Attitude enthusiastic, positive, indifferent, negative and hostile attitudes. Politicians usually spend time thanking enthusiastic voters, they spend more time in positive voters, and longer time in convincing indifferent voters. They do not try to convince voters with hostile and negative attitudes towards them. 5. Multiattribute model due to modern technology, segmentation is no longer limited to a few market segments. Each segment can now be further defined into smaller target groups. Requirements for effective segmentation: 1. Measurable size, purchasing power, and profile of the segments can be measured. 2. Substantial the segment should be big enough to be profitable. 3. Accessible the segment should be effectively served and reached.

4. Differentiable the segments are distinguishable and respond differently to different marketing mix strategies. 5. Actionable effective programs can be formulated to attract and serve the segments. Evaluating Market Segments 1. Determine whether the market segment is attractive in terms of size, growth, profitability, scale economies, low risk, and so on. 2. Determine the structural attractiveness of the segment (are competitors aggressive? Are there plenty of competitors? Are there substitutes? Is the barrier to entry high or low? Porters five forces) 3. Determine whether it is wise to invest in those selected markets considering the companys long-term goals and objectives. Selecting Market Segments Five Patterns of Target Market Selection: 1. Single-segment concentration the company selects a single segment and focuses all its efforts in that segment. Because it has all its effort in one segment, it is able to attain strong market position. The problem with this is that when the market segment suddenly turns sour, the business may go out of business. M1 M2 P1 P2 xxxxxxxx P3 P = product, M=market M3

2. Selective specialization here, the firm selects several of segments, each objectively attractive and appropriate, givenits objectives and resources. There may be no or little synergy among the segments, but each of them is a money maker. This reduces the companys risk by relying on several markets. M1 P1 P2 xxxxxxxx P3 M2 Xxxxxx M3 xxxxxxxx

3. Product specialization here, the firm concentrates on making a certain product for several segments. Example would be companies who specialize in the waterproofing of walls and roofings. They gain reputation by their ability to serve different markets with specialized products for each. However, one loophole of this is that if a new technology suddenly comes out, the company may lose business.

M1 P1 xxxxxxxx P2 P3

M2 Xxxxxx

M3 xxxxxxxx

4. Market specialization the firm concentrates on serving several needs of a particular customer group. M1 P1 xxxxxxxx P2 xxxxxx P3 xxxxxxxx M2 M3

5. Full market coverage the firm attempts to serve all customer groups with all the products that they might need. Only large firms are able to undertake such a strategy. (Example Panasonic/National/Matsushita) M1 P1 xxxxxxxx P2 xxxxxxxx P3 xxxxxxxx Competitive Differentiation Differentiation is the act of designing a set of meaningful differences to distinguish the companys offering from competitors offerings. Five Basic Dimensions of Differentiation (Differentiation Variables): 1. Product Differentiation Features characteristics that supplement the products basic function; color, shape, size, etc. Performance quality the level at which the products primary characteristics operate. Conformance quality the degree to which all the produced units are identical and meet the promised target specifications. Durability a measure of the products expectd operating life under natural and/or stressful conditions. Reliability measure of the probability that the product will not malfunction or fail within a specified period of time. Repairability a measure of the ease of fixing a product that malfunctions or fails. Style describes how well the product looks and feels to the buyer. (the look and the feel) M2 M3 Xxxxxxxxx Xxxxxxxx Xxxxxxxxx Xxxxxxxx Xxxxxxxxx Xxxxxxxx

Design totality of features that affect how a product looks and functions in terms of customer requirements. It involves the decision on tradeoffs as to how much to invest in features, performance, conformance, reliability, repairability, style and so forth. 2. Services Differentiation Ordering ease how easy to place an order Delivery how well the product or service is delivered to the customer; it includes speed, accuracy and care. Installation the work done to make a product operational in its planned location. Customer training training the customers employees on how to use the equipment/product properly Customer consulting data information systems and advising services that the seller offers free or for a price to buyers. Maintenance and repair the companys service program for helping customers to keep the product in good working order. Miscellaneous services other services 3. Personnel Differentiation

Better trained personnel exhibit six personnel characteristics: Competence Courtesy Credibility Reliability Responsiveness Communication 4. Channel Differentiation companies can differentiate their product by distributing through different channel coverage, channel expertise, and channel performance. 5. Image Differentiation brands develop a distinctive personality that consumers identify with. Identity comprises the ways that a company aims to identify itself to its public. Image is the way the public perceives the company. An effective image should: Convey a singular message Convey the message in a distinctive way so that it is not confused with competitors Delivers emotional power to stir the hearts and minds of buyers

Identity-building tools include: Symbols a strong image consists of one or more symbols that trigger company or brand recognition. Written and audio/visual media the chosen symbols must be worked into advertisements that convey the company or brand personality. The ads should convey a storyline, a mood, a performance level something distinctive. The message should be replicated in other publications, such as annual reports, brochures, and catalogs. The companys stationery and business cards should reflect the same image that the company wants to convey. Atmosphere the physical space in which the organization produces or delivers its products and services becomes another powerful image generator. Example: hotels Events a company can build an identity through the type of events it sponsors. Positioning for Competitive Advantage Product position the way the product is defined by consumers on important attributes the place the product occupies in consumers minds relative to competing products. Seven positioning strategies 1. Attribute positioning example: Samsung 1.3 megapixel camera phone 2. Benefit positioning example: Colgate toothpaste fights tooth decay 3. Usage/Application positioning example: C2 can be positioned as a healthy juice drink(green tea), but it can also be positioned as an ordinary flavored drink to quench thirst and keep yourself cool in summer. 4. User positioning example: Johnsons baby shampoo repositioned as a mild shampoo for adults. 5. Competitor positioning example: Pepsi challenge 6. Product category positioning Orbitz (an ordinary gum positioned as a gum that helps prevent plaque and tartar) 7. Combination Steps in Positioning: 1. Identifying possible competitive advantages (through differentiation) 2. Selecting the right competitive advantages (how many positions to promote and which differences to promote) Should be important Distinctive Superior Communicable Preemptive

Affordable Profitable 3. Communicating and delivering the chosen position (all elements of the marketing mix should support the chosen position, and they must deliver the position first before building the position)

Session 4 Price the amount of money charged for a product or service; it is the sum of the values that consumers exchange for the benefits of having or using the product or service. Only price represents revenue in the marketing mix, all others represent cost. Price is the most flexible element of the marketing mix. Factors to consider when setting prices: 2. Internal factors affecting pricing decisions: a. Marketing Objectives what is the market positioning strategy? 1. Survival the company may price a product lower in the hope of increasing market demand. This is often done when the company is facing too much excess capacity, heavy competition, or changing consumer wants. Companies in this situation often give more importance to survival than profits. While this is only a short-term objective, the company must learn how to add value, or otherwise, it will face extinction. 2. Current profit maximization they estimate what demand and costs will be at different prices and choose the price that will produce the maximum current profit, cash flow, or return on investment. 3. market-share leadership the company with the largest marketshare will enjoy the most economies of scale, have lowest cost, and highest long-term profit. To become market-share leaders, companies with this objective price their products as low as possible. 4. Product-quality leadership charging a high price to cover R&D costs for developing high quality products. b. Marketing mix strategy Price decisions should be coordinated with product design, distribution and promotion decisions to form a consistent and effective marketing program. Some companies employ target costing, where the price is set first, followed by the product development, while others deemphasize price to create nonprice positions. The best strategy is not to charge the lowest price, but rather to differentiate the marketing offer to make it worth a higher price.

c. Costs cost set the floor for the price that the company can charge for its product. A company wants to charge a price that both covers all its costs for producing, distributing and selling the product to deliver for itself a fair rate of return for its effort and risk. d. Organizational considerations different organizations set prices differently. In smaller companies, pricing is often set by top management. Larger organizations usually delegate the pricing strategy to marketing or sales departments, etc. 3. External factors affecting pricing decisions: a. The market and demand Pricing strategies can change according to the nature of the market and demand. 1. Pricing in different types of markets 1. Perfect competition in a perfect competition, there are many buyers and sellers selling uniform commodities. A seller cannot charge more than the going price because buyers can obtain as much as they need on the going price. Neither is the seller willing to charge less because buyers are willing to buy the product at the going rate. 2. Monopolistic competition in this market setup, there are many buyers and sellers trading over a range of prices rather than a single market price. The range is usually due to differentiation in product/service, as is the case with restaurants. Buyers usually see differences in products, and are willing to pay for them. 3. Oligopoly in this setup, there are few sellers who are highly sensitive to each others pricing and marketing strategies. 4. Pure monopoly there is only one seller and many buyers. Since the demand is inelastic, a monopoly can raise prices upto what the market will bear. A monopolist, however, will not necessarily charge a full price in order to avoid attracting competition, or in order to penetrate the market faster with a low price, or in order to avoid government intervention and regulation. 2. Consumer perception of price and value pricing decisions must be buyer oriented. Effective buyer-oriented pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that fits this value. 3. Pricedemand relationship the demand for a product must be considered in setting prices. Where adjustments in price are needed, the price elasticity must be carefully studied. b. Competitors cost, prices and offers competitors moves and pricing strategies affect the companys pricing decisions. c. Other external factors economic conditions, the government and other social concerns must also be considered in setting prices.

General Pricing Approaches: 1. Cost-based pricing a. Cost-plus pricing adding a standard mark-up to the cost of a product. b. Break-even analysis and target profit pricing computing for the target profit and break-even point first, and then setting the price that will meet the targets. 2. Value-based Pricing prices are set based on the products perceived value instead of the sellers cost. Example would be parker pens. 3. Competition-based pricing a. Going-rate pricing the firm bases its price largely on competitors prices, with less attention paid to its own costs or to demand. b. Sealed-bid pricing the firm wants to win a contract and wining the contract requires pricing less than other firms. In this scenario, the company prices according to how it thinks the competitors will price their bids. New Product Pricing Strategies: For imitative products, price positioning can be adjusted as follows: Price Higher Lower Higher Premium strategy Good-value strategy Quality Lower Overcharging Economy strategy strategy For new products, the following strategies may be employed: Market Skimming pricing setting high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales. Requisites for market skimming pricing: 1. The quality and image must support the higher price, and enough buyers must want the product at that price. 2. The cost of producing a smaller volume is not that high that it cancels the advantage of charging more. 3. Barriers to entry should be high enough to disallow competitors to undercut the price. 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. Requisites for Market Penetration Pricing: 1. The market must be highly price sensitive.

2. Production and distribution costs must fall as sales volume increases. 3. The low price must keep competition out. Product-mix Pricing Strategies Product line pricing Setting price steps between product line items - if the price difference between a more advanced model and a less advanced model is small, the buyer will usually take the more expensive one. If the price difference, however, is big, the buyer will usually buy the less advanced model Pricing optional or accessory products sold with the main product - stripping the product with options, and charging additional for each additional option availed. Pricing products that must be used with the main product - razor blades Pricing low-value by-products to get rid of them - selling by-products give additional revenues to the company, which allows the main product to be sold at a more competitive price. Pricing bundles of products sold together - happy meals

Optional product pricing

Captive product pricing By-product pricing

Product bundle pricing

Price-Adjustment Strategies Discount and allowance pricing Reducing prices to reward customer responses such as paying early or promoting the product - cash discounts - quantity discounts - functional discounts - seasonal discounts - allowances Adjusting prices to allow for differences in customers, products, or locations - customer segment pricing student vs adult rate in museums - product-form pricing different forms of the same product are priced differently, but not according to differences in their costs. - location pricing different locations are priced differently, even though the cost of offering each location is the same. Example, theater front seats vs back seats. - time pricing prices vary by the season, month, day and hour. peak vs off-peak Adjusting prices for psychological effect 300 vs 299.95

Segmented pricing

Psychological pricing

Promotional pricing Value pricing Geographical pricing International pricing Session 5 Placement distribution

Temporarily reducing prices to increase short-run sales - loss leaders to increase the probability of the buyer to buy other products Adjusting prices to offer the right combination of quality and service at a fair price - giving the same quality for less, like mcdonalds value meals Adjusting prices to account for the geographic location of customers Adjusting prices for international markets

Marketing channel/distribution channel sets of interdependent organizations involved in the process of making a product or service available for use or consumption. Reason for the use of distribution channels: Producers prefer producing few types of goods in large quantities, while consumers prefer assortments in small quantities. Distribution channels help match supply and demand. Key functions of distribution channels: Information gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange. Promotion developing and spreading of persuasive communication about an offer. Contact finding and communicating with prospective buyers. Matching shaping and fitting the offer to the buyers needs, including such activities as manufacturing, grading, assembling and packaging. Negotiation reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred. Ordering backward communication of intention to buy by the marketing channel members to the manufacturer Financing acquisition and allocation of funds required to finance inventories at different levels of the marketing channel. Risk-taking assuming the risk of carrying out the channel work Physical distribution transporting and storing of goods Retailing all activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use. Retailing 1. Store Retailing classifications: a. Amount of Service i. Self-service locate-compare-select ii. Limited service more sales assistants

iii. Full service salespeople assist customers in every phase of the shopping process b. Product Line i. Specialty stores narrow product line with deep assortment with that line (sporting goods store) ii. Department stores wide variety of product lines with each line managed by a separate department iii. Supermarket large, low cost, low margin, high volume, self service stores that carry a wide variety of food, laundry and household products. iv. Convenience store small stores that carry a limited line of high turnover convenience goods. v. Superstore/combination store/hypermarket 1. superstore generally twice the size of regular supermarkets with large assortment of routinely purchased food and nonfood items. 2. combination stores food and drug store combination 3. hypermarkets huge stores that combine supermarket, discount and warehouse retailing; carries food, appliances, furniture, clothing and many other products vi. Service business hotels, airlines, banks, hospitals, etc. c. Relative Prices i. Discount stores retail institution that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume.(Regularly sells national brands at lower prices, not inferior goods) ii. Off-price retailers retailers that buy at less than regular wholesale prices and charge consumers less than retail. They tend to carry a changing and unstable collection of higher quality merchandise, often leftover goods, overruns, and irregulars obtaine at reduced prices from manufacturers or other retailers. 1. Factory outlets- off-price retailers owned by manufacturers, normally carrying the manufacturers surplus, discontinued, or irregular goods. 2. Independent off-price retailers off-price retailers run by entrepreneurs, or divisions of larger retail corporations. 3. Warehouse clubs off-rpcie retailer that sells a limited selection of brand-name grocery items applicances, clothing and a hodgepodge of other goods at deep discounts to members who pay annual membership fees. iii. Catalog showroom wide selection of high-markup, fast-moving, brand name goods at discount prices d. Control of Outlets i. Corporate chain two or more outlets that are commonly owned and controlled, have central buying and merchandising, and sell similar lines of merchandise

ii. Voluntary chain and retailer cooperative independent retailers that band together iii. Franchise organization a contractual association between a manufacturer, wholesaler or service organization and independent business people who buy the right to own or operate one or more units in the franchise system. iv. Merchandising conglomerate corporations that combine different retailing forms under central ownership and share some distribution and management functions. e. Type of Store Cluster i. Central business district ii. Shopping center a group of retail businesses planned, developed, owned and managed as a unit. 2. Non-store Retailing a. Direct marketing marketing through various advertising media that interact directly with consumers, generally calling for the consumer to make a direct response. b. Direct selling selling door-to-door or office-to-office c. Automatic vending selling through vending machines Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use. Wholesalers perform the following functions better than manufacturers: Selling and promoting the wholesaler has more contacts and is often more trusted by the buyer than manufacturers. Buying and assortment building wholesalers can select items and build assortments needed by their customers, reducing the work on the part of consumers. Bulk-breaking wholesalers save their customers money by buying in carload lots and breaking bulk. Warehousing wholesalers hold inventories, reducing supplier inventory costs and risks of suppliers and customers. Transportation wholesalers hold inventories, thereby reducing the inventory costs and risks of suppliers and customers. Financing. Wholesalers finance their customers by giving credit, and they finance their suppliers by ordering early and paying bills on time. Risk-bearing wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence. Market information wholesalers give information to suppliers and customers about competitors, new products, and price developments. Management services and advice wholesalers often help retailers train their salesclerks, improve store layouts and displays, and setup accounting and inventory control systems.

Types of wholesalers 1. Merchant wholesalers independent businesses that take title to the merchandise they handle. a. Full service provides full set of services such as carrying stock, using a sales force, offering credit, making deliveries and providing management assistance. i. Wholesale merchants ii. Industrial distributor b. Limited service 2. Brokers and agents a. Broker brings buyers and sellers together and assists in negotiation; does not take title to goods. b. Agent represents buyers or sellers on a relatively permanent basis; does not take title to goods. 3. Manufacturers sales branches and offices wholesaling by sellers or buyers themselves rather than through independent wholesalers Promotional Mix: Advertising Sales Promotion Public Relations Personal Selling Advertising any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Major Decisions in Advertising 1. Setting objectives a. Advertising objective a specific communication task to be accomplished with a specific target audience during a specific period of time. It can be: i. To inform Informative advertising is used heavily when introducing a new product category. The objective is to build primary demand. ii. To persuade Persuasive advertising becomes more important as copetition increases. The objective is to build selective demand. iii. To remind Reminder advertising keeps consumers thinking about the product. 2. Setting the advertising budget the company wants to spend the amount that needed to achieve the sales goal. There are five factors that should be considered in setting the advertising budget: a. Stage in the product life cycle new products require large advertising budget to build awareness and gain consumer trial. b. Market share high-market-share brands usually need more advertising spending as a percent of sales than low-share brands. Building the market

or taking share from competitors requires larger advertising spending than simply maintaining current share. c. Competition and clutter a brand must advertise more heavily to be heard above the noise in the market d. Advertising frequency when repetitions are needed to present the brands message to consumers, the advertising budget must be larger. e. Product differentiation a brand that closely resembles other brands in its product class requires heavy advertising to set it apart. When the product differs greatly from competitors, advertising can be used to point out the differences to consumers. 3. Advertising strategy has two major elements: a. Creating advertising message i. Message strategy the first step is to plan a message strategy. It should be plain, straightforward outlines of benefits and positioning points that the advertiser wants to stress. These strategy statements must be turned into advertisements that will persuade consumers to buy or believe something. Next, the advertiser must develop a compelling creative concept or big idea that will bring the message strategy to life in a distinctive and memorable way. The creative concept may emerge as a visualization, a phrase, or a combination of the two. The creative concept will guide the choice of specific appeals to be used in an advertising campaign. Advertising appeals should be meaningful(should point out benefits that make the product mor desirable to consumers), believable (consumers should believe that the product will deliver the benefits promised) and distinctive (should tell how the product is better than competing brands). ii. Message execution conversion of the big idea into actual ad execution that will capture the target markets attention and interest. It may be any of the following: 1. Slice of life typical people using the product in a normal setting. 2. Lifestyle shows how a product fits in with a particular lifestyle (anlene high calcium ten thousand steps) 3. Fantasy creating a fantasy about a product or its use (coke commercial with angel) 4. Mood or image builds a mood around the product such as beauty, love or serenity 5. Musical one or more people or cartoon characters singing a song about the product 6. Personality symbol creation of a character that represents the product (yosi kadiri) 7. Technical expertise showing the technical expertise of the company in making the product (Welch grape juice) 8. Scientific evidence survey or scientific evidence that the brand is better or better liked (pepsi challenge)

9. Testimonial evidence highly believable endorsers (pamet doctors) b. Selecting the advertising media i. Deciding on the reach, frequency and impact 1. Reach the percentage of people in the target market exposed to an ad campaign during a given period. 2. Frequency the number of times the average person in the target market is exposed to an advertising message during a given period. 3. media impact the qualitative value of a message exposure through a given medium. ii. Choosing among media types deciding whether tv, newspapers, direct mail, radio, magazines, outdoor, etc., followed by selection of the right media vehicle with the most affordable cost per thousand, and verification of the right audience quality, best audience attention and the most believable editorial quality. iii. Deciding on the media timing seasonality of ads; deciding for continuity vs pulsing. 4. Advertising evaluation a. Measuring the communication effect also called copy testing tells whether the ad is communicating well. There are three methods of advertising pretesting: Direct rating (advertiser exposes a consumer panel to alternative ads and asks them to rate the ads), portfolio tests (consumers view or listen to a portfolio of advertisements, taking as much time as they need. Then they are asked to recall the ads and their content), and laboratory tests (use equipments to measure physiological reactions of consumers to an ad, like dilating pupils, heart rate, blood pressure, etc.) b. Measuring the sales effect One way to measure sales effect of advertising is to compare past sales with past advertising expenditures. Another way is thorugh experiments (three different areas, three different spend levels in advertising, then compare the results). Sales Promotional Objectives and Tools Sales Promotion short-term incentives to encourage purchase or sales of a product or service. It offers a reason to buy now. Give examples coupons, rebates, price-off, premiums, contests (consumer promotions), and buying allowances, free goods, merchandise allowances, cooperative advertising, push money, dealer sales contests (trade promotions), and bonuses, contests, and sales rallies (sales force promotion). Setting Sales-Promotion Objectives Consumer Promotions - to increase short term sales - to help build long-term market share - to facilitate trial - lure away customers from competitors - to get consumers to load up on mature products - to reward loyal customers

Trade Promotions - getting retailers to carry new items and more inventory - getting the retailers to advertise the product and give it more shelf space - getting the retailers to buy ahead Sales Force Promotions - getting more sales force support for current or new products - getting salespeople to sign up new accounts General objectives of Sales Promotions: 1. To help reinforce the products position and build long-term customer relationships with consumers. 2. To help build brand equity (instead of build short term sales) Selecting Sales-Promotions Tools Consumer Promotion Toos: Samples are offers of a trial amount of a product. Coupons certificates that give buyers a saving when they purchase a specified product. Cash refund offers offers to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer. Price packs or cents-off deals reduced prices that are marked by the producer directly on the label or package. Premiums goods offered at a low cost or free as an incentive to buy a product (bundling) Advertising specialties useful articles imprinted with an advertisers name, given as gifts to consumers. (bags, pens, promo items) Patronage records cash or other awards for the regular use of a certain companys products or services (frequent flyer programs). Point-of-purchase promotions displays and demonstrations that take place at the point of purchase or sale. Contests, sweepstakes, games promotional events that give consumers the chance to win something such as cash, trips, or goods by luck or through extra effort. Trade Promotion Tools: Contests Premiums Displays/point-of-purchase promotions Straight discount straight reduction in price on purchases during a stated period of time. Allowances promotional money paid by manufacturers to retailers in returnd for an agreement to feature the manufacturers products in some way. Business Promotion Tools:

Conventions Trade shows Sales contest contest for salespeople

Public Relations Public relations building good relationships with the companys various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Major PR tools include press relations, product publicity, corporate communications, lobbying, and counseling. Functions of public relations: Press relations or press agentry creating or placing newsworthy information in the media to attract attention to a person, product or service. Product publicity publicizing specific products Public affairs building and maintaining national or local community relations Lobbying building and maintaining relations with legislators and government officials to influence legislation and regulation. Investor relations maintaining relationships with shareholders and others in the financial community. Development public relations with donors or members of nonprofit organizations to gain financial or volunteer support. Public relations tools: News Speeches Special events news conferences, press tours, grand openings, and fireworks displays Written materials annual reports, brochures, articles, and company newsletters and magazines Audiovisual materials films, slide-and-sound programs, video and audio cassettes Corporate identity materials logos, stationery brochures, signs, business forms, business cards, buildings, uniforms, company cars and trucks Public service activities fund-raising, etc. PR decisions: Setting objectives (what do you want to achieve) Choosing public relations messages and vehicles (what vehicle do you want to use to create news that will achieve your objectives?) Implementing the public relations plan (taking the matter out to the media) Evaluating the public relations results (measuring the number of exposures in the media, change in product awareness, knowledge, and attitude) Personal Selling

Personal selling personal presentation by the firms sales force for the purpose of making sales and building customer relationships; it is the interpersonal arm of promotional mix. Salesperson an individual representing a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building. *Personal selling is the interpersonal arm of promotional mix because it involves a two way personal communication between salespeople and individual customers whether face to face, by telephone, through video or web conferences, etc. *Sales force roles may vary. Companies with business customers have sales forces that directly deal with clients. On the other hand, consumer product companies sales force usually deal with distributors and retailers, who deal with the customers directly. *The sales force of a company perform a critical link between the company and its customers. They represent the company to customers, and they represent the customers to the company by relaying what the customers prefer. Sales force management the analysis, planning, implementation and control of sales force activities. It includes designing sales force strategy and structure and recruiting, selecting, training, compensating, supervising, and evaluating the firms salespeople. Designing Sales Force Strategy and Structure Sales force structure 1. Territorial sales force structure a sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the companys full line. 2. Product sales force structure a sales force organization under which salespeople specialize in selling only a portion of the companys product or lines. 3. Customer sales force structure a sales force organization under which salespeople specialize in selling only to certain customers or industries. 4. Complex sales force structure a combination of two or more sales force structure. This is often employed by companies who have a wide variety of products selling to many types of consumers over a broad geographic area. Sales force size Workload approach 1000 type a accounts x 36 calls a year plus 2000 type B account x 12 calls a year = 36,000 + 24,000 calls. Total is 60,000 calls. If an average salesman makes 1000 calls a year, then 60 salespeople are needed. Recruitment must be careful in order to ensure that the right sales people are selected.

Training must be given to salespeople in the beginning and throughout the salespersons career. Training must include the following: Knowing about customers (and how to build relationships with them), its types, buying motives and buying habits Knowing the companys goals and objectives Knowing the companys chief products and markets Knowing competitors strategies The personal selling process: 1. Prospecting and qualifying the step in the selling process in which the salesperson identifies qualified potential customers. 2. Preapproach the step in the selling process in which the salesperson learns as much as possible about a prospective consumer before making a sales call. 3. Approach the step in the selling process in which the salesperson meets the customer for the first time. 4. Presentation and demonstration the step in which the salesperson tells the product story to the buyer, highlighting the customer benefits. 5. Handling objections the step in the selling process in which the salesperson seeks out, clarifies, and overcomes customer objections to buying. 6. Closing the step in the selling process in which the salesperson asks the customer for an order. 7. Follow-up the last step in which the salesperson follows up after the sale to ensure customer satisfaction and repeat business.