Chapter 1 : Evolution of Marketing

Marketing: Organizational function and a collection of processes designed to plan for, create, communicate, and
deliver value to customers and to build effective customer relationships that benefit organization and its stakeholders.

1. Mid 1800s - 2. 1930s-1950s 3. 1950s-1980s 4. 1980s 5. Last Decade

1920s Product Sales Orientation Consumer Relationship Social
Orientation Orientation Orientation Responsibility
Focus on
Marketing & advertising & Focus on Create value- How product
sales activities personal selling satisfying unmet added affect global
support customer needs relationships with environment
production Create demand and wants suppliers &
and move High ethical
Efficient consumers standards
product inventory
production and Support long
distribution term
Little emphasis relationships to
on marketing reinforce value
strategy relative to
competition
Chapter 2: Marketing Environment
A set of forces ( controllable & uncontrollable) influence ability of a business to create value and attract and serve
customers.

Marketing
Environment

Internal External
Environment Environment

Human & Financial Microenvironment

Capital ~Forces influence the Macroenvironment
Brands & Patents ability of a business to
serve its customers

Customers
Suppliers
Competitors
Chapter 2: Marketing Environment
Macroenvironment: Societal forces that essentially uncontrollable and influence microenvironment of business.
Influence consumer purchase ability & buying behaviour
Inflation rates, income levels, unemployment levels
1. Economic Inflation , Price of items , demand
Unemployment levels , Ability of individuals to purchase

Needs and wants of society and culture

2. Socio and Cultural Demographic, age, race, household structure

Rules & penalties for violations to protect society & consumers from unfair
3. Legal business practise, businesses from unfair competitive practise

Select national leadership, create laws, and provide a process for discourse on
4. Political issues
Protesting in cities influence consumer attitudes & interest

5. Competitive Nature, quantity & potential actions of competitors

6. Technological Scientific actions & innovations

Chapter 3 Consumer Insight
~ Perceived meanings of data collected from the study of consumer behaviour.

Marketing research: Acquisition and analysis of information used to identify marketing opportunities that connect
consumers to marketers.
1. Make
better
decisions-
valuable
information

3 Purpose
of market
research 2. Identify &
3. Monitor define
marketing marketing
performance opportunities
and problem
Market Research Process (5 steps)

1. Define 2. Design 3. Conduct 4. Analyse 5. Address

problem research Research Research Problem

Primary/ secondary Non sampling error Statistical analysis Write report

data (fatigue, confusion) Descriptive analysis Evaluate findings
3 categories- Quality of research ( findings & Develop conclusion
Exploratory, - Validity (strength relationships) Answer research
Descriptive, of conclusion), Group differences question
Explanatory Reliability (level of
Recommendations
2 types consistency of
qualitative(focus measurement)
group, interviews,
ethnographic
research),
quantitative(surveys)
Marketing Information System: A series of steps that include collection, analysis, and presentation of information for use in
making marketing decisions. (4 elements)

Internal company Market intelligence Marketing Marketing decision

data system research system support system
Order status, Available Collection of Connect
stock levels, marketing results of marketing
production information that marketing activity to
schedule, human allow marketing research company
resource status, activity function database
redemption effectively Analytical tools
details Competitive to decision
Influence intelligence track makers
marketing competitive
decisions actions and plan
thus help fend
off competitive
attack
Chapter 4 : Consumer Behaviour
~ Dynamic interaction of affect and cognition, behaviour, and the environment in which human beings conduct the
exchange aspect of their lives.
*Consumer Decision-making process: Steps that consumers take to identify and evaluate choice options.

1. Problem/
2. Information
opportunity
search
recognition

5. Postpurchase 4. Purchase 3. Evaluation

evaluation decision of alternatives
Chapter 4 : Consumer Behaviour

Business Buying Process (8 steps)

2. Determination of 3. Description of
1. Recognition of 4. Search for and
characteristics of characteristics of
organizational qualification of
items and quantity item and quantity
problem or need potential sources
needed needed

6. Evaluation of
8. Performance 5. Acquisition and
7. Selection of an proposals and
feedback and analysis of
order routine selection of
evaluation proposals
suppliers
 Influence on decision making

Personal Social Psychological Situational

1. Self-identity ( uniqueness,
tend to select based on
perception of self-identity)
2. Personality (
characteristics relevant to
consumers)
3. Lifestyle ( how to spend
time & personal resources)
4. Age & life stage (
Generation X & Y, cognitive
age)
5. Vocation (occupation
influences behaviour)
6. Affluence (financial
determine opportunity to
purchase)
1. Culture ( shared values, beliefs &
preferences through religion,
morality, habits)
2. Subculture ( groups of
people with similar
behaviours & values)
3. Global (culture differences
in every countries)
4. Group (individual by group
influenced , norms standard of
behaviours, opinion leader influence
greatest on group)
5. Social class ( wealth, vocation,
education, power, place of residence,
ancestry)
6. Gender roles
7. Family ( members are first
influencer)
1. Perception ( cognitive
impression of incoming
stimuli influences action &
behaviours)
2. Motivation ( drive
towards action to fulfil need
and want)
3. Attitudes & beliefs ( state of
readiness based on experience
that influence response, sense of
truth about something)
4. Learning ( knowledge
acquired through experiences,
include cue, drive, response &
reinforcement)
1. Purchase environment
( energetic music make
bold choice, slow-paced
music make more
purchase)
2. Time ( length &
amount of effort in
shopping process)
3. Digital environment (
social networking, blogs,
product-rating sites, online
research)
Chapter 4 : Consumer Behaviour

Consumer problem solving: how someone comes to a conclusion about a situation.

1. Routine 2. Limited 3. Significant

problem solving problem solving problem solving
Fast-moving Shopping Expensive
goods goods goods
Well-developed Little amount High effort
process to fulfil of effort High risk
needs & wants Limited risk Multiple
Low risk Internal search alternatives
Internal search Few alternative Need more
Single time
alternative
Chapter 5: Segmenting, Targeting and Positioning

Segmentation: Division of consumer markets into meaningful and distinct customer groups.

1.
Homogeneous
set

5. Robust & 2. Different

replicable from other
over time segments
5
Segmentation
criteria

4. Core
similarities of
attitude, 3. Critical
behaviour, mass
and
economics
Chapter 5: Segmenting, Targeting and Positioning
Segmentation base: a group of characteristics that is used to assign segment members

Age, gender, family size, family life cycle, income,

occupation, education, religion, ethnicity,
1. Demographic segmentation generation, nationality, sexual orientation
Easy to obtain but no great insight of consumers

2. Psychographic segmentation Lifestyle, class, personality characteristics

What customer prefer & what motivates customer

3. Values segmentation response to marketing activities
Reflect customer perception

Knowledge, attitudes, uses, responses to

4. Behavioural segmentation product/service
High to low level of usage

Current & desired level of interaction with market

5. Needs segmentation category
Chapter 5: Segmenting, Targeting and Positioning

Targeting: process of evaluating and selecting the most viable market segment to enter.

1. Undifferentiated 2. Differentiated
3. Niche marketing
marketing marketing
Treat market as a Separate different Small but well- 3 Factors of targeting
whole market segments defined consumer
Focus on similarity with unique segment
products Attractiveness ( Level of
among needs to Company with competition within segment &
customers Distinctive marketing limited resources/ strategies used)
Create to appeal to plan for each exclusive products
Size & growth potential (
greatest number of segment Strong position Variability & viability of
potential buyers Total sales , great within segment segment)
Cost-effective relevance across Better Brand objectives & resources (
segments, strong understanding of basis for competition)
position within each consumer needs
segment Specialized
Cost
Great loyalty
Chapter 5: Segmenting, Targeting and Positioning Unique Selling Preposition (USP)
Brand Position Statement
Positioning: Placement of a product or service offering in the minds of consumer targets.
3 Types of
positioning 6 Condition of
position selected
1. Functional 2. Symbolic 3. Experiential
positioning positioning positioning Deliver valued benefit to
target
Characteristics of Distinctive with respect to
Attributes of Characteristics of brand competitors
products brand that enhance that stimulate sensory/
self-esteem of Offer a superior benefit that
emotional connections easy communicate
customers with customers
Corresponding Difficult for others to copy
benefits Affordable to target
E.g. Physical appearance Required revenues and
E.g. Feeling of joy profits to brand
Solve problems &
fulfil needs

E.g. High quality

Chapter 6: Products and Services
Products: items consumed for personal / business, set of attributes that include its features, benefits, and uses.
Services: activities that deliver benefits to consumers / businesses.

*4 ways services differ from physical 1. Core Fundamental product

goods Benefit benefits
1. Intangibility - cannot perceived by five e.g. car for transportation
sense before it is purchased
2. Inseparability - must be bought, produced
and used simultaneously
3. Variability - inconsistent quality 2. Actual
4. Perishability - cannot be stored for later use Product
Attribute deliver to core
benefit
e.g. status symbol 3. Augmented
Product
Additional benefits
enhance actual
product
e.g. extended
warranty
 Chapter 6: Products and Services
Consumer products: Products directly fulfil desires of consumers and are not intended to assist in manufacture of other
products.
1. Convenience products
1) Purchase frequency Bought frequently with no planning
2) Amount of comparison Low price
and shopping effort e.g. Potato chips
Widely distributed, can buy easily
3) Brand loyalty Use advertising & promotions
4) Price
2. Shopping products
5) Distribution
6) Promotion More complex & bought less frequently
7) Examples Spend time compare product features e.g. Clothing
Higher price& distribute at fewer locations
Industrial products Use personal selling
1. Equipment (machines) 3. Specialty products
2. MRO products Unique characteristics & purchase infrequently
(maintenance, repair, Consumer spend more effort, search more locations, spend more time
operation) High prices & distributed in far fewer locations
e.g. Cars
3. Raw materials Use promotional activities
4. Processed materials 4. Unsought products
(fabric for clothing) Often do not like to think about purchasing
5. Components (finished Unaware brand names / benefits e.g. Funeral plots
products) Infrequently purchase & minimum amount of shopping effort
Use heavy promotion & personal selling
 Chapter 6: Products and Services
*New Product Development (7 steps)
1 2 3 4 5 6 7

Idea Idea Concept Marketing Business Concept

Commercialization
generation screening development strategy analysis testing
Formulate Review ideas Define Product Validate new Prototype of Launch in
ideas for to meet product introduction product meet product for marketplace
new customer features and For intended sales and concept
products wants and benefits customers profit testing
Large company objectives
number of goals Meet
ideas Ideas have financial
market requirements
potential
Diffusion of Innovation

Early Early Late

Innovators Laggards
adopters majority majority
Willing to Consider Do not want Consider too Last to
adopt implication to be first & risky adopt,
innovations of new last to try rendered
products obsolete by
another one
Chapter 6: Products and Services
*Product life cycle: model that describes the evolution of a products sales and profits throughout its lifetime.

1. Introduction stage
Low sales
Build awareness for product / trial
Few outlets
Heavy expenditure to build target
awareness

4. Decline stage 2. Growth stage

Decline sales Sales & profit increase
Eliminate product / reduce investment Growing demand, build brand preference
Phase out unprofitable outlet More outlets
Promotion reduce to minimum level Mass communication to build general
awareness

3. Maturity stage
Maximum sales
Diversify to attract new customers
Maximum number of outlets
Mass communication to build
brand preference
Chapter 7: The Brand
Brand: Promise to deliver specific benefits associated with products or services to consumers.

Product Brand

Produced in factory Created through marketing

Can be duplicated by communication & experience
competitors Unique
Can be outdated Timeless
Generic term Has personality, characteristics &
associations
Chapter 7: The Brand
Brand equity: Power of a brand through creation of distinct image to influence customer behaviour.

2. Channel 3. Relationship 4. Brand

1. Brand alliances 5. Outsourcing
switching building stretching

Brand Application

1. Loyalty 2. Commitment 3. Customer equity

Purchase loyalty ( market Psychological attachment Brand knowledge of
share) customer response to
Attitudinal loyalty ( marketing efforts
relative price)

Building Brand Equity

Chapter 7: The Brand

Strong Brand: Occupies a distinct position in consumers minds based on relevant benefits and creates an emotional
connection between businesses and consumers.

Brand name Brand Brand

Brand Positioning
selection Sponsorship Development

Location that brand in Memorable & Licensing Line extension

market can be achieved distinctive Co-branding Bundling
on hierarchy of values, Appropriate for Brand extension
benefits & attributes. category Multibrands
Brand personality Extendable New brands
Exportable
Protectable
Brand Management: overall coordination of a brands equities to create long-term brand growth through overseeing
marketing mix strategies.
Devaluing brands Reducing legitimate Damaging consumer Creating liability-related
Bad publicity profits confidence exposure
Cost on fighting Unsafe to purchase Lawsuits
counterfeits
Chapter 8: Pricing Strategies
Price: Exchange value of a product or service in the marketplace.
Pricing practises: Consideration that must be taken into account when establishing a price for a product/service.
Pricing strategy: Identifies what a business will charge for its products or services. Setting price
1. Profitability
Maximize 1. Develop pricing
profit/ achieve objectives
target
2. Estimate demand

4. Prestige Pricing objectives

Create image of goals that keep 2. Volume 3. Determine cost
exclusiveness & marketing action Maximize
quality by setting align with business market share
high price objectives 4. Evaluate the
pricing environment

3. Meeting 5. Choose a pricing

competition strategy
Matching
6. Develop pricing
competitor
tactics
price
 Chapter 8: Pricing Strategies

New product & service

pricing strategies
Price adjustment strategies
Skimming price (set Penetration price ( low
above market price) price than competitor)

Product better than 1. Cash discount

alternatives high Demand is elastic
quality (Price is sensitive) Percentage off when pay in cash

Early adopter value High production to 2. Quantity discount

product highly reduce cost
Larger quantity results in discount
Demand is inelastic Threat of competitor
imitation strong 3. Trade-in

No segment willing Cash value in trade toward new purchase

Avoid price war
to pay high price
4. Rebate
Prevent
competitors enter Makes a cash payment back to customer who purchase at full price
market
Chapter 9: Marketing Channels
~ A network of all parties involved in moving products / services from producers to consumers / business customers.

Marketing channel function

1. Gather information about customers,

competition & marketing environment
2. Develop communication to stimulate
purchasing
3. Agreement on price & other terms
4. Place order with manufacturers
5. Store & transport products
6. Provide credit and other purchasing
options
7. Oversee actual sale
Type of intermediaries
1. Wholesalers Large amount of
products from manufacturer, sort, store,
resell to retailers
2. Retailers Selling to consumers
3. Agents Facilitate exchange of
products, do not take title
4. Facilitators Assist in distribute
goods, do not take title & negotiate
sales
Chapter 9: Marketing Channels
Channel strategy: Describes the levels, organization, and distribution intensity of a marketing channel

3. Intensity of distribution
Intensive distribution
2. Organize channels (convenience products,
more outlets)
Selective distribution
(Shopping products,
1. Level of intermediaries through retailers)
Exclusive distribution
(luxury items, maintain
prestige)
Chapter 9: Marketing Channels
Logistics: Coordination of all activities related to transportation / delivery of products & services that occur within the
boundaries of a single business / organization. ( Inbound, outbound, reverse)
Physical distribution: Process of carrying goods to customers. (Shippers, consignees, carriers)

Production-
type,
quantity, time
produced
Warehousing: Physical facilities used
Information primarily for storage of goods held in
- data in Inventory-
anticipation of sale / transfer within
distribution level
5 areas in marketing channel
process
managing Breaking bulk
logistics
Create assortment of variety products
Location-
production &
storage
Transportation
facilities,
selling place
Chapter 10: Promotion
Marketing communication process: Way in which sender encodes a marketing idea and conveys it through message
and medium so receivers can decode and understand it, then response with
feedback. Need
recognition
How consumer Build awareness &
Remind about think about a interest
brand problem Think & feel about
Brands value product & find out
& repeat more
purchasing

7
Reinforce buying Communication Inform benefits
decision objectives
Brands ability
Thoughts & to satisfy
feeling to buy needs

Persuade value
Stimulate
action Brands
competitive
Intention
superiority in
to buy
satisfying need
Chapter 10: Promotion
Advertising: Paid, nonpersonal communication of a marketing message by identified sponsor through mass media.
(Place-based, specialty)

Pros
Cons
1. Alert target audience to
1. Unnoticed
product to satisfy needs
2. Misinterpret- react differently
2. Cost-effective
3. Intrusive
3. Creative
4. Offend
4. Educate
5. Build dialogue

AIDA model
Awareness attention to message
Interest information
Desire for product / service
Action Make purchase
Chapter 10: Promotion
Public Relations: Two-way communication to improve mutual understanding and positively influence relationship
between marketer and its internal and external public.

Gauge
public Publicity: Unpaid, positive
opinion media coverage
e.g. News release, media kit,
new conference, public
Establish appearance
Foundation dialogue about
of ongoing interests and
marketing concerns
efforts
5
Objectives 1. Corporate PR
Evaluate & shape long term opinion of
company
2. Marketing PR
Achieve marketing objective by
Build / targeting consumer with product focus
Enhance message
rebuild
image e.g. Product placement
trust
Chapter 10: Promotion
Sales Promotion: Marketer-controlled communication to stimulate immediate audience response by enhancing the
values of an offering for a limited time.
Consumer SP
1. Coupons- Try new product, keep
buying at limited time discount
2. Sample & trial offers- Try &
evaluate at free / low price
3. Refund & rebates- Return
purchase price to encourage trial &
repeat purchase
4. Loyalty program- Rewards for
repeat purchase
5. Contest & sweepstakes- Prize to
build excitement & customer
involvement
6. Premiums- Give free items in
package to encourage buying
7. Point-of-purchase displays- Eye-
catching in-store display
Trade SP
1. Trade show exhibits- Showcase
products to buyers
2. Trade allowance- Reward retailers
for promoting
3. Co-operative advertising
allowance- Include product in other
advertising
4. Sales contest- Reward
salespeople for meeting goals
5. Training- product knowledge &
sales skills
Chapter 10: Promotion
Sponsorship: Way of publicly associating a brand with an event or activity that company supports financially.

How company evaluate ROI from sponsorship?

Exposure (How many people, frequency)

Efficiency (Compare cost of this sponsorship and other tools)
Reaction (Positive effect on audience)
Image (Enhance)
Synergy (Impact & influence audience)
Chapter 11: Promotion
Personal Selling: Representative of a company interact directly with consumer to provide information to help consumer
make a buying decision about a product / service.

Pros Cons
1. Development of personal 1. High cost- compensation,
relationship- influence decision management, support,
2. Ability to engage in consultative motivation
selling- solving customer problem 2. Personal relationship beyond
3. Better target customer- desirable company
customer
Condition to use
Company use push strategy
Complex product / service
Purchase infrequently product
Expensive product
Long consideration period
Require post-purchase service
Negotiation is required
 Chapter 11: Promotion
Personal Selling Process: Practise used by salespeople to identify, research, and approach potential customers to sell
products & services.

1. Prospecting & 2. Preapproach 3. Approach 4. Sales 5. Overcome 6. Close the

Qualifying Detailed Introduction Presentation Objections sale
Research sources research Build rapport Build Testimonials Reinforce
to find potential about with prospect rapport decision 7.
customers prospect How can Make Follow
Cold calling Identify key deliver value general & -up
(contact decision specific
someone who maker & benefit
have no influencer on statement
relationship) purchase
Chapter 11: Promotion
Sales Management : Process of planning, implementing, and controlling the personal selling function.
Sales Management Process : Comprehensive approach that sales managers use to determine size & type of sales force
and how they will hire, recruit, manage, motivate and evaluate performance of individual
salespeople.

1. Setting sales 2. Develop sales 3. Recruiting, compensating, training & 4. Evaluate sales
force force strategy motivating sales force force
objectives
Organize people Salesperson characteristics Track
Develop & positions Pay-for-performance compensation performance
goals strategy (commission) against objectives
Product, sales, personal development
training
Chapter 11: Promotion
Direct Marketing: Communication addressed to a consumer to generate a response.
e.g. Mail order, catalogues, direct mail, telemarketing, direct-response advertising, internet,

Pros Cons
1. Targeting- Deliver message to 1. High expense- Paper, printing,
target audience postage
2. Measurability- Trackable, 2. Response rate- low
calculate ROI 3. Lack of general brand awareness-
3. Testing- Fine-tune companys other consumer do not receive not
marketing efforts aware of the product
4. High ROI
Condition to use
Clear defined target audience
Time sensitive
Available in particular geographic location
Encourage repeat purchase of previous purchaser
Offer to select consumer group