Académique Documents
Professionnel Documents
Culture Documents
LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
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PrinciplesofMarketing,SeventhCanadian Edition
NASCARWhatistheirsecret?
NASCARisthe#1 televisedmotorsportin Canada Compellingblendoflive racingevents,media coverageandWebsites Showthecustomera goodtime To T develop d l customer relationshipNASCAR createsawholesome familyoriented environment.
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Fansarep passionateabout NASCAR Fansspendnearly$700a yearonNASCAR merchandise Secondhighestregular seasonsportonTV NASCARattractsover 250big bi namesponsors BigpartoftheNASCA experienceisthefeeling ofaccessibility
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
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PrinciplesofMarketing,SeventhCanadian Edition
WhatisMarketing?
Marketingisaboutmanagingprofitable customerrelationships
Attractingnewcustomers Retainingandgrowingcurrentcustomers
MarketingDefined:
Marketingisasocialandmanagerialprocessby whichindividualsandgroupsobtainwhattheyneed andwantthroughcreatingandexchangingvalue withothers
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
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PrinciplesofMarketing,SeventhCanadian Edition
Understandingthe Marketplace
CoreConcepts
Understandthemarketplace p andcustomerwantsand needs Designacustomerdriven marketingstrategy Constructamarketing programthatdeliverssuperior value Buildprofitablerelationships andcreatecustomerdelight Capturevaluefromcustomers tocreateprofitsandcustomer quality
Need
Stateoffeltdeprivation p
Wants
Theformofneedsasshaped bycultureandthe individual
Demands
Wantswhicharebackedby buying y gp power
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PrinciplesofMarketing,SeventhCanadian Edition
Understandingthe Marketplace
CoreConcepts
Understandthemarketplace p andcustomerwantsand needs(cont.) Designacustomerdriven marketingstrategy Constructamarketing programthatdeliverssuperior value Buildprofitablerelationships andcreatecustomerdelight Capturevaluefromcustomers tocreateprofitsandcustomer quality
Marketingoffer
Combinationof products,services, informationor experiencesthat satisfyaneedor want Offermayinclude services, i activities, ti iti people,places, informationor ideas
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PrinciplesofMarketing,SeventhCanadian Edition
Understandingthe Marketplace
CoreConcepts
Understandthemarketplace p andcustomerwantsand needs(cont.) Designacustomerdriven marketingstrategy Constructamarketing programthatdeliverssuperior value Buildprofitablerelationships andcreatecustomerdelight Capturevaluefromcustomers tocreateprofitsandcustomer quality
Value
Customers Cu to e form fo expectationsregarding value Marketersmustdeliver valuetoconsumers
Satisfaction
Asatisfiedcustomerwill buyagainandtellothers abouttheirgood experience
1 9 PrinciplesofMarketing,SeventhCanadian Edition
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DiscussionQuestionsCustomer Satisfaction
Whenhaveyou, personally been personally, extremelysatisfiedor dissatisfiedwitha product?Why? Whyisitsodifficult forcompaniesto delivervalueto consumers?
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PrinciplesofMarketing,SeventhCanadian Edition
Understandingthe Marketplace
CoreConcepts
Understandthemarketplace p andcustomerwantsand needs(cont.) Designacustomerdriven marketingstrategy Constructamarketing programthatdeliverssuperior value Buildprofitablerelationships andcreatecustomerdelight Capturevaluefromcustomers tocreateprofitsandcustomer quality
Exchange
Theactofobtaining ga desiredobjectfrom someonebyoffering somethinginreturn Oneexchangeisnotthe goal,relationshipswith severalexchangesarethe goal Relationships p arebuilt throughdeliveringvalue andsatisfaction
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PrinciplesofMarketing,SeventhCanadian Edition
Understandingthe Marketplace
CoreConcepts
Understandthemarketplace p andcustomerwantsand needs(cont.) Designacustomerdriven marketingstrategy Constructamarketing programthatdeliverssuperior value Buildprofitablerelationships andcreatecustomerdelight Capturevaluefromcustomers tocreateprofitsandcustomer quality
Market
Setofactual a tualand a d potentialbuyersofa product Marketersseekbuyers thatareprofitable
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
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PrinciplesofMarketing,SeventhCanadian Edition
DesigningaCustomerDriven MarketingStrategy
Marketingmanagementistheartand scienceofchoosingtargetmarketsand buildingprofitablerelationshipswith them. Awinningmarketingstrategy
Whatcustomerswillweserve? How H canweservethese th customers t best? b t?
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PrinciplesofMarketing,SeventhCanadian Edition
DesigningaCustomerDriven MarketingStrategy
Whatcustomerswillweserve?
Ma Market ketsegmentation e e tatio a and dtarget ta etmarketing a keti Marketersselectcustomersthatcanbeserved profitably Knownascustomermanagementanddemand management
Howcanweservethesecustomersbest?
Bydefiningavaluepropositionthatwilldifferentiate andpositionthebrandinthemarketplace Issetofbenefitsorvaluesacompanypromisesto delivertoconsumersinordertosatisfytheirneeds
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Netflix DVDsbymail
Netflixbeganinearly2000 DVDsaredeliveredtoyourhomewithreturn mailenvelope Monthlychargewithunlimitedrentals limited amountoutatonetime
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PrinciplesofMarketing,SeventhCanadian Edition
DiscussionQuestions Netflix
1. HowmightNetflix defineitstarget g market? 2. Whatneedorwantdoes itfulfill? 3. Whatisitsmarketing offer? 4. Whatisitsvalue proposition?Isita strong t value l propositionforitstarget market?
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PrinciplesofMarketing,SeventhCanadian Edition
MarketingManagement Orientations
TheProductionConcept
Consumerswillfavourproductsthatare availableandhighlyaffordable
TheProductConcept
Consumerswillfavourproductsthatofferthe mostinq quality, y p performance,andinnovative features
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PrinciplesofMarketing,SeventhCanadian Edition
MarketingManagement Orientations
TheSellingConcept
Consumerswillnotbuyenoughofthefirms productsunlessitundertakesalargescale sellingeffort.
TheMarketingConcept
Achieving gorganizational g g goalsdepends p on knowingtheneedsandwantsoftarget marketsanddeliveringthedesired satisfactionsbetterthancompetitorsdo.
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MarketingManagement Orientations
TheSocietalMarketingConcept
Themarketingstrategyshoulddelivervalue tocustomersandotherstakeholdersaffected bymarketingdecisionsinawaythat maintainsorimprovestheconsumersand thesocietys wellbeing.
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PreparingaMarketingPlan andProgram
Buildcustomerrelationshipsby transformingthemarketingstrategyinto action Includesthemarketingmixandthe4Psof marketing
Product Pi Price Place Promotion
121
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
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PrinciplesofMarketing,SeventhCanadian Edition
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BuildingCustomer Relationships
CRM Customerrelationship management t... istheoverallprocessofbuildingand maintainingprofitablecustomer relationshipsbydeliveringsuperior customervalueandsatisfaction.Itdeals withallaspectsofacquiring,keepingand growingcustomers.
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PrinciplesofMarketing,SeventhCanadian Edition
RelationshipBuildingBlocks: ValueandSatisfaction
CustomerPerceivedValue
Thecustomersevaluationofthedifference betweenbenefitsandcosts. Customersoftendonotjudgevaluesand costsaccuratelyorobjectively.
CustomerSatisfaction
Productsperceivedperformancerelativeto customersexpectations.
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PrinciplesofMarketing,SeventhCanadian Edition
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CustomerRelationship LevelsandTools
Basicrelationships
lowmargincustomers
Fullpartnerships
keycustomers
Frequencymarketingprograms
Rewardcustomerswhobuyfrequentlyorinlarge amounts
Clubmarketingprograms
Offermembersspecialdiscountsandcreatemember communities
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PrinciplesofMarketing,SeventhCanadian Edition
TheChangingNatureofCustomer Relationships
RelatingwithmoreCarefullySelected C t Customers RelatingfortheLongTerm RelatingDirectly
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PartnershipRelationship Management
Workingcloselywithpartnersinother companydepartments d t t and doutside t id th the companytojointlybringgreatervalueto customers PartnersInsidetheCompany PartnersOutsidetheFirm
Strategicpartners Supplychainmanagement
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PrinciplesofMarketing,SeventhCanadian Edition
CapturingValuefromCustomers
CreatingCustomerLoyaltyandRetention
Cu Customer to e deli delight htleads lead toe emotional otio al relationshipsandloyalty Customerlifetimevalueshowstrueworthof acustomer
GrowingShareofCustomer
Shareofcustomers customer spurchaseinaproduct category Achievedthroughofferinggreatervariety, crosssellandupsellstrategies
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CapturingValuefromCustomers
BuildingCustomerEquity
Thecombinedcustomerlifetimevaluesofall currentandpotentialcustomers Measuresafirmsperformance,butina mannerthatlookstothefuture Choosingthebestcustomersiskey
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PrinciplesofMarketing,SeventhCanadian Edition
CapturingValuefromCustomers
Thecompanycanclassifycustomers according di to t their th i potential t ti lprofitability fit bilit andmanageitsrelationshipsaccordingly.
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LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
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PrinciplesofMarketing,SeventhCanadian Edition
TheNewMarketingLandscape
Challenges
TheDigital Di italAge A e RapidGlobalization EthicsandSocial responsibility NotforprofitMarketing
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TheNewMarketingLandscape
Challenges
TheDigital Di italAge A e RapidGlobalization EthicsandSocial responsibility NotforprofitMarketing
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TheNewMarketingLandscape
Challenges
TheDigital Di italAge A e RapidGlobalization EthicsandSocial responsibility NotforprofitMarketing
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PrinciplesofMarketing,SeventhCanadian Edition
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TheNewMarketingLandscape
Challenges
TheDigital Di italAge A e RapidGlobalization EthicsandSocial responsibility NotforprofitMarketing
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PrinciplesofMarketing,SeventhCanadian Edition
WhatisMarketing?
Theprocessofbuildingprofitable customer t relationships l ti hi b bycreating ti value l forcustomersandcapturingvaluein return
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LearningGoals
1. 2. 3. 4. 5. Definemarketingandoutlinethemarketingprocess. Explaintheimportanceofunderstandingcustomers andthemarketplace,andidentifythefivecore marketplaceconcepts Identifythekeyelementsofacustomerdriven marketingstrategyanddiscussthemarketing managementorientations. Discusscustomerrelationshipmanagementand id tif strategies identify t t i for f creating ti and dcapturing t i value l fromcustomers. Describethemajortrendsandforceschangingthe marketinglandscape.
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PrinciplesofMarketing,SeventhCanadian Edition
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PrinciplesofMarketing,SeventhCanadian Edition
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PrinciplesofMarketing,SeventhCanadian Edition
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PrinciplesofMarketing,SeventhCanadian Edition
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Ch t 2 Chapter
Companyand M k ti Strategy: Marketing St t PartneringtoBuild Customer Relationships
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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PrinciplesofMarketing,SeventhCanadian Edition
CaseStudyDisneyWhatareits challenges?
Beganasanimatedfilms75 yearsago Themeparks:fourmajor NorthAmericanresorts WaltDisneyworld:worlds#1 touristdestination Keysuccessfactors:
Sparklingcleanliness Friendlinessofemployees Mission:makepeoplehappy; dreamcometrue Outstandingcustomerservice
Nowadiversified,mediaand entertainment t t i tconglomerate l t Disneyhasgrownvia diversification.Isittoolarge? Originallyknownforfilms, animation,themeparks.Will consumers/investorsaccept newbusinesses? Satisfyingthecustomeris everyones job. b Is I this h culture l changing? Whatcanitdoduringtravel andeconomicdownturns?
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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PrinciplesofMarketing,SeventhCanadian Edition
CompanywideStrategicPlanning: DefiningMarketingsRole
StrategicPlanningDefined
Theprocessofdevelopingandmaintaininga strategicfitbetweentheorganizationsgoals andcapabilitiesanditschangingmarketing opportunities
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PrinciplesofMarketing,SeventhCanadian Edition
Defininga MarketOrientedMission
Missionstatement
Astatementofanorganizationspurpose; whatitwantstoaccomplishinthelarger environment;needstobespecific,realistic, andmotivating;todaysstatementsare marketoriented
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PrinciplesofMarketing,SeventhCanadian Edition
Defininga MarketOrientedMission
Amissionstatement asks asks..
Whatisourbusiness? Whoisthecustomer? Whatdoconsumers value? Whatshouldour businessbe?
Amissionstatement shouldbe:
Aninvisiblehand Neithertoonarrow nortoobroad Fittingofmarket environment Basedondistinctive competencies Motivating
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PrinciplesofMarketing,SeventhCanadian Edition
DiscussionQuestions MissionStatements
Underwhat circumstanceswould yousuggesta companychangeits mission? Whatchallenges mightitencounteras itimplementsa changeinits mission?
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SettingCompany ObjectivesandGoals
Themissionisturnedintodetailed b i business and dmarketing k ti objectives bj ti Marketingstrategiesandprogramsmust developtosupportmarketingobjectives
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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PrinciplesofMarketing,SeventhCanadian Edition
DesigningTheBusinessPortfolio
Abusinessportfolioisthecollectionof businessesandproductsthatmakeup thecompany Businessportfolioplanninginvolves twosteps:
1. Analyzing y gitscurrentbusinessportfolio p 2. Shapingthefutureportfoliobydeveloping strategiesforgrowthanddownsizing
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PrinciplesofMarketing,SeventhCanadian Edition
DesigningTheBusinessPortfolio
AnalyzingtheCurrentBusinessPortfolio
Portfolioanalysisisastrategicplanningtoolto identify/evaluatebusinessesthatmakeupthefirm andmakeresourceallocationdecisions
Strategicbusinessunit(SBU):
Unitwithseparatemissionandobjectives Plannedindependentlyfromothercompany businesses Usedasthebuildingblockofportfolioanalysis
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PrinciplesofMarketing,SeventhCanadian Edition
TheBusinessPortfolio BCGMatrix
Build
Increasemarket share Workswellfor questionmarks
Harvest
Increasesshortterm cashflow Goodforweakcash cows,question marksanddogs
Hold
Preservemarket share Goodforcash cow
Divest
Sellorliquidate Goodfordogsand questionmarks
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PrinciplesofMarketing,SeventhCanadian Edition
DesigningTheBusinessPortfolio
DevelopingStrategiesforgrowthand D Downsizing i i
Marketingmustidentify,evaluate,andselect marketopportunitiesandlaydownstrategies forcapturingthem ProductMarketExpansionGrid
Aportfolioplanningtoolforidentifyingcompany growthopportunities
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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PrinciplesofMarketing,SeventhCanadian Edition
PlanningMarketing:Partneringto BuildCustomerRelationships
Provideaguidingphilosophy Identifyattractiveopportunities Designeffectivestrategies BuildCustomerandPartnerRelationship management
F Formstrongvalue l chains h i Formsuperiorvaluedeliverynetworks
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PrinciplesofMarketing,SeventhCanadian Edition
PlanningMarketing:Partneringto BuildCustomerRelationships
PartneringwithOtherCompany D Departments t t
Coordinationofthevaluecreatingactivities performedbyeachdepartmentwithinthe company
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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PrinciplesofMarketing,SeventhCanadian Edition
MarketingStrategyandthe MarketingMix
MarketingStrategy
Themarketing a keti logic lo i bywhich hi hthebu business i e unithopestoachieveitsmarketingobjectives
MarketingMix
Thecompanydesignsamixmadeupof factorsunderitscontrol
CustomerCentered MarketingStrategy
1. MarketSegmentation 2 Targetmarketing 2. 3. MarketPositioning Dividingamarketinto groupswithdistinct needswhomightrequire (respondto)different marketingmixes Marketsegmentisa groupofconsumerswho respond e po i insimilar i i a ways ay tomarketingefforts Basesforsegmentation
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CustomerCentered MarketingStrategy
1. MarketSegmentation 2 Targetmarketing 2. 3. MarketPositioning Evaluatingthe attractivenessofeach marketsegment Selectionofsegments withgreatestlongterm profitability Decidingwhich segment(s)toenter Acompanycanchoose oneorseveralsegments totarget
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PrinciplesofMarketing,SeventhCanadian Edition
CustomerCentered MarketingStrategy
1. MarketSegmentation 2. Targetmarketing 3. MarketPositioning Theplacetheproduct occupies p inthe consumersmind Productsarepositioned relativetocompeting products Marketerslookforclear, distinctiveanddesirable placesinpositioning Differentiationby offeringanddelivering greatervalue
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PrinciplesofMarketing,SeventhCanadian Edition
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DevelopingtheMarketingMix
Themarketingmixincludescontrollableand tacticalmarketingtoolsknowsasthe4P 4Ps s The4Psinclude
Product Place Promotion Price
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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Managingthe MarketingEffort
1. 2 2. 3. 4. Analysis Pl Planning i Implementation Control Findingopportunities A idi th threats t Avoiding Understanding strengths Analyzing weaknesses
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Managingthe MarketingEffort
1. 2 2. 3. 4. Analysis Planning Implementation Control Marketingplans include:
Executivesummary Analysisofcurrent situation Objectives Targetsand positioning Marketingmix Budget Controls
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Managingthe MarketingEffort
1. 2 2. 3. 4. Analysis Planning Implementation Control Processthatturns strategiesandplans intomarketingactions thataccomplish strategicmarketing objectives Goodimplementation isachallenge Marketingdepartment organization
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Managingthe MarketingEffort
1. 2 2. 3. 4. Analysis Planning Implementation Control InvolvesEvaluating theresultsof marketingstrategies andplansandtaking correctiveaction Checksfordifferences betweengoalsand performance Operatingcontrol, strategiccontrol, marketingaudit
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MeasuringandManaging ReturnonMarketing
Returnonmarketing(marketingROI)
Thenet etreturn etu from f o amarketing a keti investment i e t e tdivided di ided bythecostsoftheinvestments
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4. 5. Explaincompanywidestrategicplanninganditsfour steps p Discusshowtodesignbusinessportfoliosanddevelop strategiesforgrowthanddownsizing Explainmarketingsroleinstrategicplanningandhow marketingworkswithitspartnerstocreateand delivercustomervalue Describetheelementsofacustomerdrivenmarketing strategy t t and dmix, i and dthe th forces f that th tinfluence i fl them th Listthemarketingmanagementfunctions,including theelementsofamarketingplan
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PrinciplesofMarketing,SeventhCanadian Edition
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Ch t 3 Chapter
TheMarketing Environment
Copyright2008PearsonEducationCanada
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Describetheenvironmentalforcesthataffect p y ability ytoserveitscustomers thecompanys 2. Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions 3. Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and 4. Explain culturalenvironments 5. Discusshowcompaniescanreacttothe marketingenvironment
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CaseStudy McDonalds
Challenges g
Shiftingconsumer lifestyles Lowratingsoffoodand servicequality Atmospherenotupscale Imageofbeingunclassy, unculturedanduncoolto youngertargetmarkets
Marketing gInitiatives
Focusoncorecompetency ofconsistentproductsand reliableservice Upscalealternative includingMcCafeand BistroGourmet Healthierfoodoptions p witheliminationof supersizeand introductionofGoActive! AdultHappyMeal
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LearningGoals
1. Describetheenvironmentalforcesthataffect p y ability ytoserveitscustomers thecompanys 2. Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions 3. Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and 4. Explain culturalenvironments 5. Discusshowcompaniescanreacttothe marketingenvironment
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TheMarketingEnvironment
MarketingEnvironment:
Theactors a to and a dforces fo e outside out idemarketing a keti thataffect affe t marketingmanagementsabilitytobuildand maintainsuccessfulrelationshipswithtarget customers
Microenvironment
Includestheactorsclosetothecompany
Macroenvironment
Involveslargersocietalforces
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Microenvironment TheCompany
Marketingmustconsiderotherpartsof th organization, the i ti i including l di fi finance,R&D R&D, purchasing,operationsandaccounting Marketingdecisions mustrelatetobroader companygoalsand strategies
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Microenvironment Suppliers
Marketersmustwatchsupplyavailability and dpricing i i Effectivepartnership relationship managementwith suppliersisessential
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Microenvironment MarketingIntermediaries
Helptopromote,sellanddistributegoodsto finalbuyers Includeresellers,physicaldistributionfirms, marketingservicesagenciesandfinancial intermediaries Companiesmustwork withtheirintermediaries aspartnersrather h than h simplyaschannels throughwhichtheysell theirproducts.
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Microenvironment Customers
Thefivetypesofcustomermarkets
Consumer Business Reseller Government International
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Microenvironment Competitors
Conductingcompetitoranalysisiscritical f successof for fth thefi firm Amarketermustmonitor itscompetitorsofferings tocreatestrategic advantage
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Microenvironment Publics
Anygroupthathasanactualorpotential interestinorimpactonanorganization Sevenpublicsinclude:
Financial Media Government Citizenaction Local General Internal
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LearningGoals
1. Describetheenvironmentalforcesthataffect p y ability ytoserveitscustomers thecompanys 2. Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions 3. Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and 4. Explain culturalenvironments 5. Discusshowcompaniescanreacttothe marketingenvironment
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DemographicEnvironment
DemographicEnvironment:
Thestudyofhumanpopulationsintermsof size,density,location,age,gender,race, occupationandotherstatistics Worldpopulationwillexceed8.1billionby 2030
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DemographicEnvironment
Canada:populationisexpectedtoexceed33 millionby2011 ChangingagestructurewithinCanada TheCanadianpopulationisgettingolder.The medianageis37.6years(2001Census) Thethreelargestagegroupsare:thebaby b boomers, Generation G i X X,and dG Generation i Y Y.
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DiscussionQuestion
Howmightchanges inconsumerspending patternsaffectMaster Card? Changesintheage andfamilystructure? Increasingdiversity?
?
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DemographicEnvironment
KeyGenerations
BabyBoomers GenerationX GenerationY
Bornbetween1946and 1964 BabyboominCanada startedandfinishedlater thanU.S. Represent30%ofthe population,makeup40% oftheworkforceandearn morethan50%ofall personalincome income. Manyminisegments existwithintheboomer group Enteringpeakearning yearsastheymature
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DemographicEnvironment
KeyGenerations
BabyBoomers GenerationX GenerationY
Bornbetween1965and 1976 Firstgenerationof latchkeychildren Maintainacautious economicoutlook Respondtosocially responsiblecompanies Skeptical,impatient,and highlymobile, Primarymarketby2010
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DemographicEnvironment
KeyGenerations
BabyBoomers GenerationX GenerationY
Bornbetween1977and 1994 Childrenofthebaby boomersrepresent20%of thepopulation Rangeinagefrom preteenstomidtwenties. Newproducts,services, and dmedia di cater t to t GenY G Y Attractiveand challengingtargetfor marketers
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DemographicEnvironment
TheChangingCanadianHousehold
Thenuclearfamilyhasledtothecrowded crowdednest nest withboomerangkids,andextendedfamilies Delayedmarriages Commonlawarrangements Fewerchildren Highdivorcerate Singleparentfamilies Alternativearrangements Workingwomen:48%ofworkforce Moredualincomefamilies
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DemographicEnvironment
GeographicShiftsinPopulation
Growthinpopulationisnotuniform Continuedmovementfromruraltourban areas Interprovincialmoves Growthofsuburbanareas Peoplewhotelecommutehasincreased creatingaboomingSOHOmarket
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DemographicEnvironment
BetterEducatedPeople
Increase I ea ein i post o tsecondary e o da yeducation edu atio
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DemographicEnvironment
Increasingdiversity
Ca Canada adais i more o eofacultural ultu almosaic, o ai than tha themelting elti potoftheU.S. Ethnicmarketsarenoteasilytargetedandserved Diversityincludesmorethanjustethnicity: gay/lesbianpopulation Respectingdiversitymaybethekeytoeconomic survivalformanycompanies
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EconomicEnvironment
Factorsthataffectconsumerbuying powerand dspending di patterns tt Typesofeconomywillinfluenceresources toworkwith
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EconomicEnvironment
ChangesinIncome Marketersshouldpayattentiontoincome distributionaswellasaverageincome.
Upperclass,middleclass,workingclass,and underclass
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EconomicEnvironment
ChangingConsumerSpendingPatterns Engels E l l laws:amount tspent tonvarious i categorieschangesasincomerises
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LearningGoals
1. Describetheenvironmentalforcesthataffect p y ability ytoserveitscustomers thecompanys 2. Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions 3. Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and 4. Explain culturalenvironments 5. Discusshowcompaniescanreacttothe marketingenvironment
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NaturalEnvironment
Involvesthenaturalresourcesthatareneededas inputsbymarketersorthatareaffectedby marketingactivities Trends
Shortagesofrawmaterials Increasedpollution Increasedgovernmentintervention Canadianfederallaw:EnvironmentalProtectionAct (1989) Greenmovement Focusonenvironmentalsustainabilitystrategies
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TechnologicalEnvironment
Themostdramaticforceshapingourdestiny Rapidlychangingforcewhichcreatesmanynew marketingopportunitiesbutalsoturnsmany existingproductsextinct Researchanddevelopmentisakeyelement
CanadianspendingonR&Dislow,ranked15thinthe world ManygovernmentprogramstoencouragemoreR&D spending
Governmentagenciestoregulatenewproduct safety
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LearningGoals
1. Describetheenvironmentalforcesthataffect p y ability ytoserveitscustomers thecompanys 2. Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions 3. Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and 4. Explain culturalenvironments 5. Discusshowcompaniescanreacttothe marketingenvironment
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PoliticalEnvironment
Consistsoflaws,governmentagencies,and pressuregroupsthatinfluenceorlimitvarious organizationsandindividualsinagivensociety
Legislationaffectingbusinessesworldwidehas increased Lawsprotectcompanies,consumersandtheinterests ofsociety Increasedemphasisonsociallyresponsibleactions
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CulturalEnvironment
Madeupofinstitutionsandotherforces thataffectasociety societys sbasicvalues values, perceptions,preferencesandbehaviors. PersistenceofCulturalValues SecondaryCulturalValuesaremoreopen tochange
Peoplesviewsofthemselves,others, organizations,society,nature,andthe unniverse
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CulturalEnvironmentIncludes peoplesviewsof
Themselves
Ide Identify tifywith ithbrands ba d forselfexpression
Society
Patriotism Pat ioti on o therise i e
Nature
lifestylesofhealth andsustainability (LOHAS)consumer segment
Others
Recentshiftfrom metowesociety
Organizations
Trendofdeclinein trustandloyaltyto companies
Universe
Includesreligionand spirituality
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LearningGoals
1. Describetheenvironmentalforcesthataffect p y ability ytoserveitscustomers thecompanys 2. Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions 3. Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and 4. Explain culturalenvironments 5. Discusshowcompaniescanreacttothe marketingenvironment
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Respondingtothe MarketingEnvironment
Therearethreekindsofcompanies:those who h make k things thi happen, h those th who h watch t h thingshappen,andthosewhowonder whatshappened.
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LearningGoals
Describetheenvironmentalforcesthataffectthe p y ability ytoserveitscustomers companys Explainhowchangesinthedemographicand economicenvironmentsaffectmarketing decisions Identifythemajortrendsinthefirmsnatural andtechnologicalenvironments p thekey ychanges g inthepolitical p and Explain culturalenvironments Discusshowcompaniescanreacttothe marketingenvironment
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Chapter p 4
Marketingand Society: SocialResponsibility andMarketing Ethics
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LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
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Ben&Jerrys TheBodyShop
Early1980srevolutionariessuchasBen& Jerrys Jerry sorTheBodyShopweresocialactivists first,businesspeoplesecond Secondwavearebusinesspeoplewhoare passionateaboutacause Companiescanimprovetheirbottomlineswhile doinggoodbysellingqualityproducts,treating employees, l vendors, d and dfranchisees f hi with i h integrityandupgradingtheirenvironmental practices
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MountainEquipmentCoop(MEC)
MountainEquipmentCooperative(MEC) foundedin1971 Itsearlymissionwastoprovidequalityoutdoor equipmentataffordableprices Memberownedcooperative Focusonenvironmentalresponsibility Statementofvaluesandethicalbehaviour Developmentoflifetimerelationshipswithits members 2millionmembers,salesof$197min2005 Operatesretailstoresin9Canadiancities
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LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing. 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
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SocialandEthical CriticismsofMarketing
MarketingsImpactonIndividual Consumers
HighPrices
Highcostsofdistribution Highadvertisingandpromotioncosts Excessivemarkups
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SocialandEthical CriticismsofMarketing
MarketingsImpactonIndividual Consumers
DeceptivePractices
Pricing Promotion Packaging
HighPressureSelling
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SocialandEthical CriticismsofMarketing
Consumergroups,including GenerationGreenareclaiming thatSplendascampaignmade fromsugarsoittasteslikesugar ismisleading Theclaimisthatitleads customerstobelievethatSplenda isanatural i a u a sugar uga a alternative e a i e ratherthananartificialsweetener ThegroupisappealingtotheFTC tohavethemstopthiscampaign
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SocialandEthical CriticismsofMarketing
MarketingsImpactonIndividual Consumers
Shoddyorunsafeproducts Plannedobsolescence Poorservicetodisadvantagedconsumers
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SocialandEthical CriticismsofMarketing
MarketingsImpactonSocietyasaWhole
Falsewantsandtoomuchmaterialism Toofewsocialgoods Culturalpollution Toomuchpoliticalpower
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SocialandEthical CriticismsofMarketing
MarketingsImpactonOtherBusinesses
Acquisitionsofcompetitors Marketingpracticeswhichcreatebarriersto entry Unfaircompetitivemarketingpractices
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LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing. 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
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Citizen&PublicActions toRegulateMarketing
Consumerism
Traditionalsellersrights Fundamentalconsumerrights Additionalrightsproposedbyconsumer advocates
Eachproposedrighthasledtomore specificproposalsbyconsumerists
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Citizen&PublicActions toRegulateMarketing
Environmentalism
A Anorganized o a i edmovement o e e tofconcerned o e ed citizens,businessesandgovernmentagencies toprotectandimprovepeoplesliving environment EnvironmentalSustainability
Pollutionp prevention Productstewardship Newenvironmentaltechnologies Sustainabilityvision
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Citizen&PublicActions toRegulateMarketing
PublicActionstoRegulateMarketing
Majo Majorlegal le alissues i ue affect affe tevery e e yarea a eaofmarketing a keti management,including: Sellingandadvertisingdecisions Channeldecisions Productdecisions Packaging g gdecisions Pricedecisions Competitivereactiondecisions
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LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
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BusinessActionsTowardSocially ResponsibleMarketing
EnlightenedMarketing
ConsumerOrientedMarketing:
Companiesviewandorganizetheirmarketing activitiesfromtheconsumerspointofview.
InnovativeMarketing:
Companiesseekrealproductandmarketing improvements improvements.
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BusinessActionsTowardSocially ResponsibleMarketing
EnlightenedMarketing
CustomerValueMarketing:
Companiesputmostoftheirresourcesintovalue buildingmarketinginvestments.
SenseofMissionMarketing:
Companiesdefinetheirmissioninbroadsocial termsratherthaninnarrowproductterms terms.
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BusinessActionsTowardSocially ResponsibleMarketing
EnlightenedMarketing
SocietalMarketing:
Companiesmakemarketingdecisions byconsideringconsumerswants,the companysrequirements,consumers longruninterests,andsocietys longruninterests.
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BusinessActionsTowardSocially ResponsibleMarketing
EnlightenedMarketing
SocietalClassificationofProducts
Deficientproducts Pleasingproducts Salutaryproducts Desirableproducts
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LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
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BusinessActionsTowardSocially ResponsibleMarketing
MarketingEthics
Corporate Co o atemarketing a keti ethics ethi policies oli ie
Distributorrelations,advertisingstandards,customer service,pricing,productdevelopmentandgeneralethical standards
Guidingprincipleinpolicydetermination
Freemarketandlegalsystem Individualcompaniesandmanagers
Internationalethicalpoliciesareaspecialchallenge
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LearningGoals
1. Understandmarketingsmultiple responsibilities andidentifythemajor responsibilities, socialandethicalcriticismsofmarketing 2. Defineconsumerism andenvironmentalism andexplainhowtheyaffectmarketing strategies 3 Describe 3. D ib the th principles i i l of fsocially i ll responsiblemarketing 4. Explaintheroleofethicsinmarketing
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Chapter 5 Chapter5
Managing Managing Marketing I f Information ti
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TheresultingMarketingcampaignwonUnilever Canadamultipleawards.
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AssessingMarketing InformationNeeds
TheMISservescompanymanagersas p wellasexternalpartners TheMISmustbalanceneedsagainst feasibility:
Notallinformationcanbeobtained Obtaining,processing,sorting,and deliveringinformationiscostly g y
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Step1:Definingtheproblemand researchobjectives
Helpstoknowwhatyouarelooking for! Themanagerandtheresearchermust worktogether. k h Theseobjectivesguidetheentire j g process. Exploratory,descriptive,andcausal Exploratory descriptive and causal researcheachfulfilldifferent objectives objectives.
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Step2:DevelopingtheResearch Plan
Translatingtheresearchobjectivesinto T l i h h bj i i specificinformationneeds Researchplanisawrittendocument yp p , whichoutlinesthetypeofproblem, objectives,dataneeded,andthe usefulnessoftheresults.Includes:
Secondarydata:Informationcollectedfor anotherpurposewhichalreadyexists p p y Primarydata:Informationcollectedforthe specificpurposeathand p p p
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Advantages:
Obtainedquickly Obt i d i kl Lessexpensivethanprimarydata
Disadvantages:
Informationmaynotexistormaynotbeusable
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Surveyresearch y
Effectivefordescriptive information
Experimentalresearch
investigatescauseand effect relationships effectrelationships
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Mechanicalinstruments
Nielsenspeoplemeters Checkoutscanners Ch k Eyecameras
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Step3:ImplementingtheResearch Plan
Dataiscollectedbythecompanyoran outsidefirm Thedataisthenprocessedandchecked for accuracy and completeness and coded foraccuracyandcompletenessandcoded foranalysis Finallythedataisanalyzedbyavarietyof statistical methods statisticalmethods
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Step4:InterpretingandReporting theFindings
Theresearchinterpretsthefinding,draws p g conclusionsandreportstomanagement Managersandresearchersmustwork together to interpret results for useful togethertointerpretresultsforuseful decisionmaking
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DistributingandUsing MarketingInformation
Routinereportingmakesinformation R i i k i f i availableinatimelymanner. Userfriendlydatabasesallowforspecial q queries. Intranetsandextranetshelpdistribute information to company employees and informationtocompanyemployeesand valuenetworkmembers.
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Chapter 6 Chapter6
ConsumerMarkets andConsumer uye e av ou BuyerBehaviour
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CaseStudy HarleyDavidson
MeasuringSuccess
1/5ofallNorth A Americanmotorbike i t bik sales,1/2ofall heavyweight segment heavyweightsegment Demandabovesupply 19yearsofrecord 19 years of record sales/income
BuildingSuccess
Understandingthe customersemotionsand customers emotions and motivation Determining the factors Determiningthefactors ofloyalty Translatingthis g informationtoeffective advertising
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CaseStudy HarleyDavidson
N Nolongerjustforstereotypicalbikegangs l j tf t t i l bik Harleyscoreclientele:older,affluent,andbetter educated; rubbies educated; rubbies Usedfocusgroupsandsurveystoidentifycorevalues andattitudesofcustomers Identifiedsevencustomertypes Buyingabike,lifestyle,andanattitude Independence,freedom,andpower
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Definitions
Consumerbuyerbehaviourreferstothe buyingbehaviouroffinalconsumers y g individualsandhouseholdswhobuy goods and services for personal goodsandservicesforpersonal consumption Allofthesefinalconsumerscombineto All f h fi l bi p makeuptheconsumermarket
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FactorsAffecting ConsumerBehaviour
Cultural Social Personal Psychological Culture C l
Influenceapersons wants and behaviour wantsandbehaviour
Subculture
Smaller Smallergroupswith groups with sharedvaluesystems
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FactorsAffecting ConsumerBehaviour
Cultural Social Personal Psychological Groups
Membership Reference Aspirational Opinionleaders Buzzmarketing
Family
Manyinfluencers y
Rolesandstatus
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FactorsAffecting ConsumerBehaviour
Cultural Social Personal Psychological A Ageandlifecycle d lif l stage Occupation O ti Economicsituation Lifestyle
AIO Activities, i t interestsandopinions t d i i VALS Lifestylesegmentation Lifestyle segmentation
Personalityandself concept
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FactorsAffecting ConsumerBehaviour
Cultural Social Personal Psychological Motivation
Aneedthatdrivesthepersonto seeksatisfactionoftheneed
Perception p
Theprocessbywhichpeople select,organize,andinterpret information
Learning
Changesinanindividuals behaviourarisingfromexperience
Beliefs
A Adescriptivethoughtabout d i ti th ht b t something
Attitudes
Apersonsconsistentlyfavourable p y orunfavourableevaluations, feelings,andtendenciestowards something
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PsychologicalFactors Motivation
Amotiveisaneedthatissufficientlypressingto directthepersontoseeksatisfaction MotivationresearchisbasedonFreud.Looks forhiddenandsubconsciousmotivation Masloworderedneedsbasedonhowpressing t ey a e to t e co su e theyaretotheconsumer
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PsychologicalFactors Perception
Perceptionistheprocessbywhichpeopleselect, organize,andinterpretinformation. PerceptionIncludes:
Selectiveattention
Consumersscreenoutinformation
Selectivedistortion
Peopleinterprettosupportbeliefs
Selectiveretention
Peopleretainpointstosupportattitudes
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DiscussionQuestion Perception
1. Howmanyads wereyouexposed totoday? 2. Whichonesdoyou y remember?Why?
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PsychologicalFactors Learning
L Learningdescribeschangesinanindividuals i d ib h i i di id l behaviourarisingfromexperience Learningoccursthrough Learning occurs through
Drives
Astronginternalstimulusthatcallsforaction g
Stimuli
Objectsthatmovedrivetomotive
Cues
Minorstimulithataffectresponse
Reinforcement
Feedbackonaction
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PsychologicalFactorsBeliefs andAttitudes
Belief B li f
adescriptivethoughtaboutabrandorservice maybebasedonrealknowledge,opinion,or faith
Attitude
describes describesaperson a persons sevaluations,feelingsand evaluations, feelings and tendenciestowardanobjectoridea They are difficult to change Theyaredifficulttochange
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TypesofBuyingDecision Behaviour
Degreeofinvolvement:
Howmuchtheconsumercaresaboutthepurchase decision Higherlevelsforproductsthatareexpensive,risky, purchasedinfrequently,andhighlyselfexpressive h di f tl d hi hl lf i
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Cognitivedissonance
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BuyerDecisionProcess forNewProducts
NewProducts
Good,serviceorideathatisperceivedbycustomers asnew.
TheAdoptionProcess
Mentalprocessthroughwhichanindividualpasses fromfirsthearingaboutaninnovationtofinal adoption. d i
FiveStagesintheAdoptionProcess
Awareness,interest,evaluation,trial,andadoption.
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BuyerDecisionProcess forNewProducts
IndividualDifferencesinInnovativeness
Consumerscanbeclassifiedintofiveadopter p categories,eachofwhichbehavesdifferently towardnewproducts. p
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BuyerDecisionProcess forNewProducts
InfluenceofProductCharacteristicson p RateofAdoption
RelativeAdvantage Compatibility Complexity Divisibility y Communicability
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BuyerDecisionProcess forNewProducts
ConsumerBehaviourAcrossInternational Borders
Values,attitudesandbehavioursdiffergreatlyin othercountries. Physicaldifferencesexistwhichrequirechangesin themarketingmix. Customsvaryfromcountrytocountry. C t f t t t Marketersmustdecidethedegreetowhichtheywill adapt their marketing efforts adapttheirmarketingefforts.
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Chapter 7 Chapter7
BusinessMarkets Business Markets andBusiness B BuyerBehaviour B h i
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CaseStudy UPS
CustomerNeeds
Consumersneedfast, y p g friendly,lowcostpackage delivery Businessneedsaremore complex complex Shippingpartof complexlogistics processincluding l d purchasing,inventory, orderstatus,invoices, payments,returns
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Services
Employs407,200people, 88,000 vehicles, and 600 88,000vehicles,and600 aircraftworldwide Helpscustomernavigatethe complexitiesofinternational l iti fi t ti l shipping Offersawiderangeof g financialservices Providesconsultingservicesto improve logistics operations improvelogisticsoperations
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Definition
BusinessBuyerbehaviour: B i B b h i
Thebuyingbehaviouroforganizationsthat buygoodsandservicesforuseinthe productionofotherproductsandservicesthat aresold,rented,orsuppliedtoothers. ld t d li d t th Alsoincludedareretailingandwholesaling fi firmsthatacquiregoodsforthepurposeof th t i d f th f resellingorrentingthemorothersataprofit.
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Businesscustomers
aremoregeographically g g p y concentrated
Demandisdifferent
Demandisderived Demandispriceinelastic that can fluctuatequickly thatcanf luctuate quickly
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Modifiedrebuy
Requiresmodificationtopriorpurchase
Newtask
Firsttimepurchase Fi t ti h
SystemsSelling
Buyingapackagedsolutiontoaproblemfromasingleseller. Buying a packaged solution to a problem from a single seller Oftenakeymarketingstrategyforbusinessesseekingtowin andholdaccounts.
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BusinesstoBusinessCompany DuPontChemicals
E Establishedin1802withgunpowderasitsfirstproduct t bli h d i 1802 ith d it fi t d t In1910movedawayfromexplosiveswiththefirstnon leather material which was snatched up for upholstery leathermaterial,whichwassnatchedupforupholstery andautomobileparts Today,thefirmdeliverssciencebasedsolutionsthat y makerealdifferencesinpeopleslivesaroundtheworld inareassuchasfoodandnutrition,healthcare,apparel, safety and security construction electronics and safetyandsecurity,construction,electronicsand transportation Revenueof$27billion
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BusinesstoBusinessCompany DuPontChemicals
ExamplesofB2Bmarketsandproducts: l f k d d
HeathCare Medicalfabricstoprovidecomfortandsafetyto surgeons Automobile airbagfibersandengineeringplasticsforsafety Dental filamentsfortoothbrushes Glass technologytoreduceglareandnoise,saveenergy, protectagainstbreakage Footware Footware flexibilityforrubber,strengthofplastic flexibility for rubber strength of plastic Farming pesticides Guitarmanufacturers DuPontproductgivethelookofvintage p g g lacquer
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ParticipantsintheBusiness BuyingProcess
BuyingCenter B i C
Thedecisionmakingunitofabuying organization Includesallindividualsandunitsthat participateindecisionmaking
Users Influencers Buyers Deciders D id Gatekeepers
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DiscussionQuestion BuyerBehaviour
You Youhavejustbeenreassigned have just been reassigned fromCocaColasconsumer divisiontoitsInstitutional Division.Yourfirst assignmentistoconvinceyour formercollegetoswitchfrom PepsitoCocaColaintheir dining halls Consider the dininghalls.Considerthe following Howwilldemanddifferfrom the consumer market? theconsumermarket? Howdoesthebuyingprocess differ?Describethemembers y y g oftheybuyingcenter. Isthisanewtask,modified rebuyorstraightrebuy?
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MajorInfluenceson BusinessBuyers
Environmental Organizational Interpersonal Individual Economictrends Shortages of raw Shortagesofraw materials,risingcosts, andpolitical p developments g Technological changes Actionsof competitors Cultureandcustoms
715 PrinciplesofMarketing,SeventhCanadianEdition
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MajorInfluenceson BusinessBuyers
Environmental Organizational Interpersonal Individual Objectives Policies Procedures Organizational structure Systems
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MajorInfluenceson BusinessBuyers
Environmental Organizational Interpersonal Individual Influenceofmembers in the buying center inthebuyingcenter
Authority Status Empathy Persuasiveness
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MajorInfluenceson BusinessBuyers
Environmental Organizational Interpersonal Individual Personal characteristics of characteristicsof membersinthe buying center buyingcenter
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DiscussionQuestion BusinessBuyerBehaviour
Y YourjobsellingCocaColato j b lli C C l youroldcollegehasproven moredifficultthanyou imagined.Thereseemtobe manyinfluencesonyour buyersbehaviourthatyoudid y y notexpect.
Whatenvironmentalfactor might exist? mightexist? Organizationalfactors? Interpersonalfactors? Individualfactors?
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StagesintheBusiness BuyingProcess
Problemrecognitioncanresultfrominternalorexternal bl l f l l stimuli Generalneeddescription:describingthegeneral G l dd i ti d ibi th l characteristicsandquantityofaneededitemorservice
Part Partofthemoreformalizedprocessofbusinessbuying;may of the more formalized process of business buying; may needtechnicalexpertisetowritethis Thisstagecanbeinfluencedbysalespeoplepromotingthe uniqueaspectsoftheirproducts;helpingtowritethe i f h i d h l i i h specification
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StagesintheBusiness BuyingProcess
Productspecification:decidingonand specifyingthebesttechnicalproduct characteristicsforaneededitem
Theresponsibilityisonsupplierstomeetthe specificationsdemandedandprovidethebestvalue Valueanalysisisanapproachtocostreductionin whichcomponentsarestudiedforredesign, hi h t t di d f d i standardization,orlesscostlymethodsofproduction
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StagesintheBusiness BuyingProcess
Suppliersearch:thebuyersearchesforthebestvendors l h h b h f h b d fortheproductorservicesneeded
Sources: Sources:existingsuppliers,contactsfromnewsuppliers, existing suppliers contacts from new suppliers supplierdirectories,orthroughInternetbuyingsites Trendtowardssupplierdevelopment
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StagesintheBusiness BuyingProcess
Supplierselection:reviewingtheproposalssubmitted l l h l b d andchoosingthesupplierwhichbestmeetsthe specifications asked for specificationsaskedfor
Politicalconsiderationsmayenterintothisprocess,suchas reciprocalbuyingagreements,localpurchasingrequirements,or pasthistory Factorsotherthanpricemaybegivenconsideration:availability, servicing capabilities installation training location or servicingcapabilities,installation,training,location,or reputation
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StagesintheBusiness BuyingProcess
Orderroutinespecification:writingthefinalorderfor d f h f l d f thegoodstobepurchased;canbeaveryspecific,written document (purchase order or contract) to ensure document(purchaseorderorcontract)toensure accountability
Blanketcontractscanbeusedforfuturerepeatpurchasing p p g
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BusinessBuying ontheInternet
Eprocurementisgrowingrapidly. Online auctions and online trading Onlineauctionsandonlinetrading exchanges(emarketplaces)accountfor much of the online purchasing activity muchoftheonlinepurchasingactivity. Eprocurementoffersmanybenefits:
Accesstonewsuppliers Lower purchasing costs Lowerpurchasingcosts Quickerorderprocessinganddelivery
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Institutionaland GovernmentMarkets
InstitutionalMarkets I i i lM k
Consistofchurches,schools,prisons, hospitals,nursinghomesandother institutionsthatprovidegoodsandservicesto peopleintheircare. l i th i Oftencharacterizedbylowbudgetsand captivepatrons. ti t Marketersmaydevelopseparatedivisions andmarketingmixestoserviceinstitutional d k ti i t i i tit ti l markets.
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PrinciplesofMarketing,SeventhCanadianEdition
Institutionaland GovernmentMarkets
GovernmentMarkets
TheGovernmentofCanadabuys$14billioningoods andservicesfromthousandsofsuppliers PublicWorksandGovernmentServicesCanadaisthe governmentslargestpurchasingorganization t l t h i i ti averaging60,000contractsannually. Requiresupplierstosubmitbidsandoftengivejobto Require suppliers to submit bids and often give job to lowestbidder Favordomesticsuppliers Favor domestic suppliers Muchredtapecanexist
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Chapter8
Segmentation, Targeting,and Positioning: BuildingtheRight Relationships withtheRight Customers
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Definethethreestepsoftargetmarketing: marketsegmentation,targetmarketing,and marketpositioning 2. Listanddiscussthemajorbasesfor segmentingconsumerandbusinessmarkets 3. Explainhowcompaniesidentifyattractive marketsegmentsandchooseatarget marketing k i strategy 4. Discusshowcompaniespositiontheir productsformaximumcompetitiveadvantage inthemarketplace
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Copyright2008PearsonEducationCanada
LearningGoals
1. Definethethreestepsoftargetmarketing: marketsegmentation,targetmarketing,and marketpositioning 2. Listanddiscussthemajorbasesfor segmentingconsumerandbusinessmarkets 3. Explainhowcompaniesidentifyattractive marketsegmentsandchooseatarget marketing k i strategy 4. Discusshowcompaniespositiontheir productsformaximumcompetitiveadvantage inthemarketplace
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Segmentation,Targeting,and Positioning
Marketsegmentation:dividingmarketinto distinctgroupswithdistinctneeds, needs characteristics,orbehaviours,whomightrequire separateproductsormarketingmixes Targetmarketing:choosingwhichgroup(s)to appealto Marketpositioning:creatingaclear clear,distinctive distinctive, anddesirablepositioninthetargetconsumers mind,relativetocompetition
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LearningGoals
1. Definethethreestepsoftargetmarketing: marketsegmentation,targetmarketing,and marketpositioning 2. Listanddiscussthemajorbasesfor segmentingconsumerandbusinessmarkets 3. Explainhowcompaniesidentifyattractive marketsegmentsandchooseatarget marketing k i strategy 4. Discusshowcompaniespositiontheir productsformaximumcompetitiveadvantage inthemarketplace
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SegmentingConsumerMarkets
Geographicalsegmentation Demographicsegmentation
Mostpopularbasesforsegmentingconsumer markets
Psychographicsegmentation
Lifestyle,socialclass,andpersonalitybased segmentation
Behaviouralsegmentation g
Occasions,benefitssought,userstatus,usagerate, loyaltystatus.
Usingmultiplesegmentationbases
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GeographicSegmentation Variables
Worldregion orcountry U.S.region State City Neighborhood Cit or City metrosize Density Climate
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PrinciplesofMarketing,SeventhCanadian Edition
Demographic SegmentationVariables
Age G d Gender Familysize Familylifecycle Income Occupation Ed Education ti Religion Race Generation y Nationality
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PrinciplesofMarketing,SeventhCanadian Edition
BehaviouralSegmentation Variables
Occasions Benefits B fit Userstatus Userrates L Loyalty lt status t t Readinessstage Attitudetowardthe product
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DiscussionQuestion
Basedonthecar examplesonthe followingslide,how docarmanufacturers usethefollowing segmentswhen marketingproducts?
Geographic Demographic Psychographic behavioural
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SegmentingBusinessMarkets
Geographicsegmentation Demographicsegmentation
Industry,companysize,location
Operatingcharacteristics
Technology,usagestatus,customercapabilities
Purchasingapproaches Situationalfactors
Urgency, U e y specific e ifi application, a li atio size i eoforder o de
Personalcharacteristics
Buyersellersimilarity,attitudestowardrisk,loyalty
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Segmenting InternationalMarkets
Geographicsegmentation
Locationorregion
Economicfactors
Populationincomeorlevelofeconomicdevelopment
Politicalandlegalfactors
Type/stabilityofgovernment,monetaryregulations, amountofbureaucracy,etc.
Culturalfactors
Language,religion,values,attitudes,customs, behaviouralpatterns
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Segmenting InternationalMarkets
Intermarketsegmentation
Formingsegmentsofconsumerswhohave similarneeds,eventhoughtheylivein differentcountries
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SegmentingMarketsEffectively
Measurable
Size, Size purchasingpower, power andprofileofsegment
Accessible
Canbereachedandserved
Substantial
Largeandprofitableenoughtoserve
Differentiable
Responddifferently
Actionable
Effectiveprogramscanbedeveloped
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LearningGoals
1. Definethethreestepsoftargetmarketing: marketsegmentation,targetmarketing,and marketpositioning 2. Listanddiscussthemajorbasesfor segmentingconsumerandbusinessmarkets 3. Explainhowcompaniesidentifyattractive marketsegmentsandchooseatarget marketing k i strategy 4. Discusshowcompaniespositiontheir productsformaximumcompetitiveadvantage inthemarketplace
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TargetMarketing
TargetMarket
Consistsofasetofbuyerswhosharecommon needsorcharacteristicsthatthecompany decidestoserve
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TargetMarketing
EvaluatingMarketSegments
Segmentsizeandgrowth Segmentstructuralattractiveness
Levelofcompetition Substituteproducts Powerofbuyers Powerfulsuppliers
Companyobjectivesandresources
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TargetMarketingStrategies
Undifferentiated(mass)marketing:
Marketcoveragestrategythatignoresmarketsegmentdifferencesand targetsthewholemarketwithoneoffer
Differentiated(segmented)marketing:
Marketcoveragestrategythattargetsseveralmarketsegmentsand designsseparateoffersforeach
Concentrated(niche)marketing:
Marketcoveragestrategyinwhichacompanypursuesalargeshareof oneorafewsubmarkets
Micromarketing:
Thepracticeoftailoringproductsandmarketingprogramstothe needs/wantsofspecificindividualsandlocalcustomergroups Includes:localmarketingandindividualmarketing
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Choosinga TargetMarketingStrategy
Considerationsinclude:
Companyresources Thedegreeofproductvariability Productslifecyclestage Marketvariability Competitorsmarketingstrategies Competitors
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TargetMarketing
SociallyResponsibleTargeting
Somesegments,especiallychildren,areat specialrisk Spilloverfromadulttochildrenmarkets ManypotentialabusesontheInternet, includingfraudInternetshoppers Productsofquestionablebenefit Controversyoccurswhenthemethodsused arequestionable
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LearningGoals
1. Definethethreestepsoftargetmarketing: marketsegmentation,targetmarketing,and marketpositioning 2. Listanddiscussthemajorbasesfor segmentingconsumerandbusinessmarkets 3. Explainhowcompaniesidentifyattractive marketsegmentsandchooseatarget marketing k i strategy 4. Discusshowcompaniespositiontheir productsformaximumcompetitiveadvantage inthemarketplace
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Positioning
Thewaytheproductisdefinedbyconsumers
onimportant i t tattributes tt ib t the th place l the th product d t occupiesinconsumersmindsrelativeto competingproductsrelativetocompeting products Involvesimplantingthebrandsuniquebenefits anddifferentiationinthecustomermind Perceptualpositioningmapsshowperceptions ofbrandsonimportantbuyingdimensions
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ChoosingaPositioningStrategy
IdentifyingPossible Competitive Advantages Choosingtheright competitiveadvantage SelectinganOverall PositioningStrategy Differentiationcanbe basedon:
Products Services Channels People Image
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ChoosingaPositioningStrategy
IdentifyingPossible CompetitiveAdvantages Choosingtheright competitiveadvantages SelectinganOverall PositioningStrategy Howmanydifferencesto promote?
Uniquesellingproposition Severalbenefits
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PrinciplesofMarketing,SeventhCanadian Edition
ChoosingaPositioningStrategy
IdentifyingPossible Competitive Advantages Choosingtheright competitiveadvantages SelectinganOverall PositioningStrategy Valuepropositions representthefull positioningofthe brand Possiblevalue propositions:
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WestJetsValueProposition: LessforMuchLess
Foundedin1996toprovidelowfareairtravelacross westernCanada SpecializesinservingtheVFRmarket(peoplevisiting friendsandrelatives). Maincompetitor:thefamilycar Peoplewouldchoosetoflyratherthandriveifoffered lowfares Onetypeofplane,offersbasicinflightservice(no g classservice,nobaggage gg g meals,nomovies),single transfer f serviceswith hother h airlines, l etc. However:lessserviceforlessmoneyisdefinedas feweramenitiesforalowerfare,notlesscustomer service. Generates$1billioninrevenues
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Developinga PositioningStatement
Apositioningstatementsummarizesthe companyorbrand b dpositioning iti i EXAMPLE:To(targetsegmentandneed) our(brand)is(concept)that(pointof difference)
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CommunicatingandDeliveringthe ChosenPosition
Companiesmusttakestrongstepsto d li and deliver dcommunicate i t th thed desired i d positiontotargetconsumers Themarketingmixeffortsmustsupport thepositioningstrategy Positionsmustbemonitoredandadapted overtimetomatchchangesinconsumer needsandcompetitorsstrategies
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LearningGoals
1. Definethethreestepsoftargetmarketing: marketsegmentation,targetmarketing,and marketpositioning 2. Listanddiscussthemajorbasesfor segmentingconsumerandbusinessmarkets 3. Explainhowcompaniesidentifyattractive marketsegmentsandchooseatarget marketing k i strategy 4. Discusshowcompaniespositiontheir productsformaximumcompetitiveadvantage inthemarketplace
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Ch t 9 Chapter
Product,Services, andBranding Strategies
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
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CaseStudy lululemonathletica
Foundedin1998,inKitsilano, Vancouver,inresponsetothe growingnumberoffemales takingupsports,speciallyyoga. Startedasadesignstudio surroundedbyaretailstore providingyogainspired clothingtofemalesinCanada andaroundtheglobe. Tolululemoncustomers,the gearisntjust g j clothing. g Itisa wayoflife.Anexperience.A statement Thus,lululemondoesmuch morethanjustsellathletic apparel.Itcreatesan unparalleledexperience. Originally g ydesign g forathletes,the lululemonclothingcanbeusedby almostanyoneforanyactivity Althoughwomenwerethe originaltarget,lululemon currentlyhasalineofmens clothing. Thebrandisdefinedthroughthe storeexperience,superiorquality garnments,andetincingretail stores. Thelululemongearisnotcheap. And,yet,peopleflocktoitsstores. Customersarepasionateaboutthe brand,andtheysharethispassion withothers.
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LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
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WhatIsaProduct?
Aproductisanythingthatcanbeofferedtoa marketforattention, attention acquisition, acquisition use use,or consumptionthatmightsatisfyaneedorwant. Aserviceisaformofproductthatconsistsof activities,benefitsorsatisfactionsofferedforsale thatareessentiallyintangibleanddonotresult intheownershipofanything anything.
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WhatIsaProduct?
Products,Services,andExperiences
Marketofferingsmayconsistofacombination ofgoodsandservices Experiencesareusedtodifferentiateofferings Corebenefit,actualandaugmentedproduct
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WhatIsaProduct?
Threelevelsofproduct
Augmentedproduct Actualproduct Corebenefit
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PrinciplesofMarketing,SeventhCanadian Edition
DiscussionQuestion
ConsiderStarbucks
Whatgoodsand servicesdotheyoffer? Howdothey differentiatethrough experience? Whatistheircore, core actualandaugmented productoffering?
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WhatIsaProduct?
TypesofConsumer Products
Convenience Shopping Specialty Unsought
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PrinciplesofMarketing,SeventhCanadian Edition
WhatIsaProduct?
TypesofConsumer Products
Convenience Shopping Specialty Unsought
Lessfrequentpurchases Moreshoppingeffortfor comparisons Higherthanconvenience goodpricing Selectivedistributionin feweroutlets Advertising Ad and dpersonal l selling
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WhatIsaProduct?
TypesofConsumer Products
Convenience Shopping Specialty Unsought
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PrinciplesofMarketing,SeventhCanadian Edition
WhatIsaProduct?
TypesofConsumer Products
Convenience Shopping Specialty Unsought
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ProductandServiceClassifications
ConsumerProducts BusinessProducts
Materialsandparts Capitalitems Suppliesandservices
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ProductandServiceClassifications
Organizations,persons,places,andideas
O Organizational a i atio almarketing a keti makes ake use u eofcorporate o o ate imageadvertising Personmarketingappliestopoliticalcandidates, entertainmentsportsfigures,andprofessionals Placemarketingrelatestotourism Socialmarketingpromotesideas
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LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
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IndividualProductand ServiceDecisions
ProductandServiceAttributes
Quality
Linedtocustomervalueandsatisfaction
Thewholecompanyneedstobeinvolved(TQM)
Features
Competitivetoolfordifferentiatingproduct Shouldbevaluedbythecustomerasdeterminedthrough marketresearch
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IndividualProductand ServiceDecisions
Branding
Brand: a aname, a e,term, e ,sign, ig ,symbol, y o ,o ordesign e ig that a identifiestheproduct Brandingcanaddvaluetoaproduct Brandinghelpsbuyers
Identifyproducts Determinequality
Brandinghelpssellers
Conveyproductquality Providelegalprotection Segmentmarkets
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PrinciplesofMarketing,SeventhCanadian Edition
IndividualProductand ServiceDecisions
Packaging
Oftenincludesprimary,secondaryand shippingpackages Functionsofpackaging
Containandprotect Promotetheproduct Differentiatetheproduct
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IndividualProductand ServiceDecisions
Labellingservestoidentifytheproduct Describes D ib th theproduct d t Promotestheproduct Mustbecarefulnotto:
Misleadcustomers g Failtodescribeingredients Failtoincludesafetywarnings
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PrinciplesofMarketing,SeventhCanadian Edition
IndividualProductand ServiceDecisions
Productsupportservices
Surveycustomersregularlytoassesscurrent customerservice Companiesuseamixofphone,email,fax, Internetandinteractivevoiceanddata technologies
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PrinciplesofMarketing,SeventhCanadian Edition
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02/11/2011
ProductLineDecisions
Productline
Agroupofproductsthatarecloselyrelatedbecause theymay
functioninasimilarmanner aresoldtothesamecustomergroups Marketthroughthesametypesofoutlets fallwithingivenpriceranges
Productlinelength g
Linestretching:addingproductsthatarehigheror lowerpricedthantheexistingline Linefilling:addingmoreitemswithinthepresent pricerange
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ProductMixDecisions
ProductMix
Alsoknownasproductassortment Consistsofalltheproductlinesanditemsthat aparticularselleroffersforsale
Width:#ofproductlines Length:#ofproductsinlines Depth:#ofversionsofeachproductcarried Consistency:howcloselyrelatedtheproductlines are
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02/11/2011
LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
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BrandingStrategy
Brandequityisthepositivedifferentialeffect thatknowingthebrandnamehasoncustomer responsetotheproductorservice Onemeasureofequityistheextenttowhich customersarewillingtopaymoreforthebrand Brandvaluationistheprocessofestimatingthe totalfinancialvalueofabrand
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BrandingStrategy
Brandswithstrongequityhavemany competitive titi advantages: d t
Highconsumerawareness Strongbrandloyalty Helpswhenintroducingnewproducts Lesssusceptibletopricecompetition
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PrinciplesofMarketing,SeventhCanadian Edition
BuildingStrongStrategy
Threelevelsof BrandPositioning positioning: Brand dNameSelection Sl i Productattributes BrandSponsorship Leasteffective BrandDevelopment Benefits
Beliefsandvalues
Tapsintoemotions
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BuildingStrongStrategy
BrandPositioning BrandNameSelection BrandSponsorship BrandDevelopment
GoodBrandNames:
Suggestsomethingabout theproductoritsbenefits Areeasytosay,recognize andremember Aredistinctive Areextendable Translatewellintoother languages Canberegisteredand legallyprotected
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BuildingStrongStrategy
BrandPositioning BrandNameSelection BrandSponsorship BrandDevelopment
Manufacturerbrands Private(store)brands
Costlytoestablishand promote Higherprofitmargins
Licensedbrands
Nameandcharacter licensing ghasgrown g
Cobranding
Advantages/ disadvantages
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BuildingStrongStrategy
BrandPositioning BrandNameSelection BrandSponsorship BrandDevelopment
Lineextensions
Minorchangestoexisting products
Brandextensions
Successfulbrandnames helpintroducenew products
Multibrands
Multipleproductentriesin aproductcategory
Newbrands
Newproductcategory
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ManagingBrands
Brandsareknownthroughadvertising,personal experience wordofmouth experience, mouth,theInternet Everyoneinthecompanyrepresentsthebrand Companiesneedtoperiodicallyrunabrand audit
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LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
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ServicesMarketing
Services
Accountfor68%ofCanadasGDP,almost 75%ofemployment,andnearly90%ofnew jobcreation. Serviceindustriesincludebusiness organizations,government,andprivatenot f profit for fitorganizations i ti
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CharacteristicsofServices
Intangibility Inseparability Variability Perishability
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MarketingStrategiesfor ServiceFirms
TheServiceProfitChain
InternalMarketing ExternalMarketing InteractiveMarketing
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MarketingStrategiesfor ServiceFirms
ManagingServiceDifferentiation ManagingServiceQuality ManagingServiceProductivity
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
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AdditionalProductConsiderations
ProductDecisionsand SocialResponsibility
Governmentregulation Foodandproductsafety Pricingandadvertising Labelling,weights,and measures Hazardousproducts Productliability
InternationalProductand ServicesMarketing
Standardizationversus localadaptation Electricalstandards, packaging Culturaldifferencesin meaning Barrierstotrade
Copyright2008PearsonEducationCanada
937
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. Defineproductandthemajorclassificationsofproductsand services Describethedecisionscompaniesmakeregardingtheir individualproductsandservices,productlines,andproduct mixes Discussbrandingstrategythedecisionscompaniesmakein buildingandmanagingtheirbrands Identifythefourcharacteristicsthataffectthemarketingofa serviceandtheadditionalmarketing gconsiderationsthatservices require Discusstwoadditionalproductissues:sociallyresponsible productdecisionsandinternationalproductandservices marketing
3. 4.
5.
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Ch t 10 Chapter
NewProduct Developmentand LifeCycle Strategies
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Explainhowcompaniesfindand d develop l newproduct d tid ideas 2. Listanddefinethestepsinthenew productdevelopmentprocess 3. Describethestagesoftheproductlife cycle 4. Describehowmarketingstrategies changeduringtheproductslifecycle
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CaseStudy Nokia
Focus ocuso onI Innovation o a io
Namesitscultureof continuousinnovation renewal Organizesinto autonomousunits,which helpsfosterinnovation LargeR&Dbudgetof$3 billionwith40%of employeesinvolvedin R&D
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Explainhowcompaniesfindand d develop l newproduct d tid ideas 2. Listanddefinethestepsinthenew productdevelopmentprocess 3. Describethestagesoftheproductlife cycle 4. Describehowmarketingstrategies changeduringtheproductslifecycle
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NewProduct DevelopmentStrategy
NewProductDevelopment
Thedevelopmentoforiginalproducts, productimprovements,product modifications,andnewbrandsthroughthe firmsownR&Defforts.
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NewProduct DevelopmentStrategy
Newproductscanbeobtainedvia acquisition i iti ord development. l t Newproductssufferfromhighfailure rates. Severalreasonsaccountforfailure.
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DiscussionQuestion
Thinkofproducts youhaveseen recentlyinstores. Canyouthinkofany thatseemdoomedto fail? Why?
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LearningGoals
1. Explainhowcompaniesfindand d develop l newproduct d tid ideas 2. Listanddefinethestepsinthenew productdevelopmentprocess 3. Describethestagesoftheproductlife cycle 4. Describehowmarketingstrategies changeduringtheproductslifecycle
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StagesoftheNewProduct DevelopmentProcess
Stage1:IdeaGeneration
Thesystematicsearchfornewproductideas Internalsources:brainstorming,employees fromalldepartments,R&D Externalsources:customers,competitors, distributors,suppliers,andothers
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StagesoftheNewProduct DevelopmentProcess
Stage2:IdeaScreening
Thepurposeistoidentifygoodideasand droppooronestoavoidspendinganymore moneyondevelopingthem Criteriaused:
Usefulnesstoconsumers Goodfitwithcompanyobjectivesandstrategies Havetheresources Addvalue
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StagesoftheNewProduct DevelopmentProcess
Stage3:ConceptDevelopmentand T ti Testing
Conceptdevelopmentcreatesadetailed versionoftheideastatedinmeaningful consumerterms. Concepttestingaskstargetconsumersto evaluateproductconcepts.
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StagesoftheNewProduct DevelopmentProcess
Stage4:MarketingStrategyDevelopment
t statementdescribes 1st d ib the h targetmarket, k product d positioning,andsales,share,andprofitgoalsfor thefirstfewyears. 2nd statementoutlinestheproductsprice, distribution,andmarketingbudgetforthefirst year. 3rd statementdescribesthelongrunsalesand profitgoals,andthemarketingmixstrategy.
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StagesoftheNewProduct DevelopmentProcess
Stage5:BusinessAnalysis
Re Review ie ofthesales, ale costs, o t a and dprofit ofit projectionsforanewproducttodetermineif theywillsatisfycompanyobjectives
Stage6:ProductDevelopment
Developingtheproductconceptintoa physicalproducttoensurethatitcanbedone
Requireslargeinvestment Buildingaprototype Testingforsafety,durability,andacceptability
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PrinciplesofMarketing,SeventhCanadian Edition
StagesoftheNewProduct DevelopmentProcess
Stage7:TestMarketing,testingtheproductand marketing gp program g inmorerealisticmarketsettings: g Todeterminethetargetmarketprofile Assessconsumeracceptability,trial,repeatpurchase rate Evaluatetradereceptionanddistributionpenetration Designeffectivemediaplans
Standardtestmarkets Controlledtestmarkets Simulatedtestmarkets
Stage8:Commercialization
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StagesoftheNewProduct DevelopmentProcess
Stage8:Commercialization,introducinga newproduct d ti into t th themarket k t
Largeinvestmentrequired Needtodecideonintroductiontimingand scaleofevent Marketrolloutorfullscaleintroduction
Copyright2008PearsonEducationCanada
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PrinciplesofMarketing,SeventhCanadian Edition
OnlineTestMarketing IsItintheNearFuture?
LeviandNikehavepartnered withThereformarketresearch data. Levishasfoundthatjeansand jeanjacketbuyersweremore likelytobevirtualclubgoers. Theycanalsotrackhowlong peoplewearacertainjeanor j k ti jacket inth their i virtual i t lworld. ld DiscussionQuestion:Doyou believetheInternetcansupply valuabletestmarketingdata?
?
PrinciplesofMarketing,SeventhCanadian Edition
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Organizingfor NewProductDevelopment
Sequentialproductdevelopment:working ononepiece i of fth thenewproduct d tat tati time Simultaneous(teambased)product development:developingmultiplepieces oftheproductatthesametime;todays method e o due ueto odistributed i i u e computing o pu i g
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Explainhowcompaniesfindand d develop l newproduct d tid ideas 2. Listanddefinethestepsinthenew productdevelopmentprocess 3. Describethestagesoftheproductlife cycle 4. Describehowmarketingstrategies changeduringtheproductslifecycle
Copyright2008PearsonEducationCanada 1018 PrinciplesofMarketing,SeventhCanadian Edition
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StagesofthePLC
Introduction Growth Maturity Decline
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ProductLifeCycleStrategies
Theproductlifecycleconceptcanbe applied li dt toa:
Productclass(softdrinks) Productform(dietcolas) Brand(DietDr.Pepper)
Using gthePLCtoforecastbrandp performanceorto developmarketingstrategiesisproblematic
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LearningGoals
1. Explainhowcompaniesfindand d develop l newproduct d tid ideas 2. Listanddefinethestepsinthenew productdevelopmentprocess 3. Describethestagesoftheproductlife cycle 4. Describehowmarketingstrategies changeduringtheproductslifecycle
Copyright2008PearsonEducationCanada 1021 PrinciplesofMarketing,SeventhCanadian Edition
ProductLifeCycleStrategies
IntroductionStage
Salesstartatzeroandbeginto climbslowly;profitscontinueto declineduetocostsoflaunching theproduct Themainpromotionalgoalisto makeabignoisetoattract attentionandtoeducatebuyers aboutthenewproductconcept Marketpioneerstakethemost riskbutmayreapthebiggest rewards,eg.Chryslerminivan Fewproductvariants,no competitiontospeakof Pricingstrategy:skimmingor penetration Distribution:notalloutlets coveredassomemaynotwant therisk
GrowthStage
Salesofthenewproductbeginto climbq quickly yasawarenesswithin thetargetmarket(s)builds Profitsmaybecomepositiveas developmentandlaunchcostsare recoveredandthecompany achieveseconomiesofscale Competitionnoticesandrushes theirversionsintoproduction Productqualitycanbeimproved, extrafeaturesandversions developedtosustaingrowthand differentiatefromcompetition Distributionincreasesasthe productbecomesmoreknown Pressureonpricingas competitionincreases
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MarketingStrategies: IntroductionStage
Product Offerabasicproduct Price Usecostplusbasistoset Distribution Buildselective distribution Advertising Buildawarenessamong early l adopters d t and dd dealers/resellers l / ll SalesPromotion Heavyexpenditures tocreatetrial
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MarketingStrategies: GrowthStage
Product Offerproductextensions, service, i warranty t Price Penetrationpricing Distribution Buildintensivedistribution Advertising Buildawarenessandinterest inthemassmarket SalesPromotion Reduceexpendituresto takeadvantageofconsumerdemand
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ProductLifeCycleStrategies
MaturityStage
Sales a e o ofthe enew e product po u continuetoclimbandthen peakasthemajorityofthe targetmarket(s)havetriedthe product Profitscontinuetogrowand staypositivethroughout Competitionismostintense atthisstage;manyversions andbrands Strategiestoprolongthis stage:
Modifythemarket Modifytheproduct Modifythemarketingmix
Copyright2008PearsonEducationCanada 1025
Decline
Salesofthenewproductdrop quicklyasthetargetmarket(s) moveontootherthings Profitsdeclineascompetitive pressuresforcelowerprices andincreasedpromotional spendingtomaintainshare Competitionhasdeclinedas weakerbrandshaveleftthe market Decisionsabouttheproduct
Maintainspendinglevelsto fightitoutforwhatisleft Harvestbycuttingspending andridingitout Droptheproductandmove ontothenextthing
PrinciplesofMarketing,SeventhCanadian Edition
Discussion
Howcanmarketers helpproductsbounce backfromthedecline stage?
?
1026 PrinciplesofMarketing,SeventhCanadian Edition
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LearningGoals
1. Explainhowcompaniesfindand d develop l newproduct d tid ideas 2. Listanddefinethestepsinthenew productdevelopmentprocess 3. Describethestagesoftheproductlife cycle 4. Describehowmarketingstrategies changeduringtheproductslifecycle
Copyright2008PearsonEducationCanada 1027 PrinciplesofMarketing,SeventhCanadian Edition
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Ch t 11 Chapter
Pricing
Copyright2008PearsonEducationCanada
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
Identifyanddefinetheinternalfactorsaffectinga firmsp pricing gdecisions Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactofconsumer perceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices Discusshowcompaniesadjusttheirpricestotake intoaccountdifferenttypesofcustomersand situations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
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CaseStudy priceline.com
Launchedin1998asanew service i to t empowerconsumers tonametheirownprices. Theideacaughtonand Pricelinehasbecomethe leadingnameyourownprice Internetservice Dealsprimarilyintime sensitivetravelrelated products d Theconcepthasrealappealto consumers IfyougetitislikeIwon! Buysunsoldrooms,seatsor vacation ti packages k at theavily h il discountedrates Unevensuccessingrowing beyondtravelservices Sellingproductsandservices thatarenttimesensitiveis difficult. Pricelinehashundredsor thousandsofhappyrepeat customers.Howevernotall customersarethrilledwith theironlineexperience.
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LearningGoals
Identifyanddefinetheinternalfactorsaffectinga firmsp pricing gdecisions Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactofconsumer perceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices Discusshowcompaniesadjusttheirpricestotake intoaccountdifferenttypesofcustomersand situations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
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WhatIsPrice?
Theamountofmoneychargedfora product d torservice, i orth thesumof fth the valuesthatconsumersexchangeforthe benefitsofhavingorusingtheproductor service.
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PriceHasManyNames
Rent F Fare Fee, F Rate Commission Assessment Tuition Toll Premium R t i Retainer Bribe Salary Wage Interest Tax
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TodaysNewPricingEnvironment
DynamicPricing,chargingdifferentprices dependingonindividualcustomersand situations DynamicpricingontheWeballowsSELLERSto:
Monitorcustomerbehaviorandtailoroffers. Changepricesontheflytoadjustforchangesin demandorcosts. Aidconsumerswithpricecomparisons. Negotiatepricesinonlineauctionsandexchanges.
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Pricing:AnImportantbut DifficultDecision
PriceandtheMarketingMix
Onlyelementtoproducerevenues Mostflexibleelement Canbechangedquickly
CommonPricingMistakes
Reducingpricestooquicklytogetsales Pricingbasedoncosts,notcustomervalue
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FactorstoConsiderWhen SettingPrice
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizational considerations
Copyright2008PearsonEducationCanada
FactorstoConsiderWhen SettingPrice
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizationalconsiderations
Pricingmustbecarefully coordinatedwiththe othermarketingmix elements Targetcostingisoften usedtosupportproduct positioningstrategies based a e o onp price i e Nonpricepositioning canalsobeused
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DiscussionQuestion
Youarethemarketer ofanewhighend coffeemaker.What shouldyouconsider whenplanningyour:
1. 2. 3 3. 4. Price Product Place Promotion
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PrinciplesofMarketing,SeventhCanadian Edition
FactorstoConsiderWhen SettingPrice
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizationalconsiderations
Costssetthefloor,or lowestamountthat should h ldbe b charged h d Ideally,pricescharged coverallcostsandleave somethingleftoverfor profit Typesofcosts:
Variable Fixed Totalcosts
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FactorstoConsiderWhen SettingPrice
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizationalconsiderations
Marketskimmingpricing
Usedwhentheproductis newtechnology,andnot easilycopied
Marketpenetration pricing
Usedwhenthereare advantagestobegainedby l large volumes l early l in i the th lifecycle
Productlinepricing
Settingthepricesteps betweenproductsinaline
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FactorstoConsiderWhen SettingPrice
InternalFactors
Marketingobjectives Marketingmixstrategy Costs Productconsiderations Organizational considerations
Whosetstheprice?
Smallcompanies: CEOortop management Largecompanies: Divisionalorproduct linemanagers
Copyright2008PearsonEducationCanada
14/11/2011
LearningGoals
Identifyanddefinetheinternalfactorsaffecting pricing gdecisions afirmsp Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactof consumerperceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices p adjust j theirp pricesto Discusshowcompanies takeintoaccountdifferenttypesofcustomers andsituations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
Copyright2008PearsonEducationCanada 1115 PrinciplesofMarketing,SeventhCanadian Edition
FactorstoConsiderWhen SettingPrice
ExternalFactors
Natureofmarketanddemand Competitorscosts,prices, andoffers Otherenvironmentalelements
Typesofmarkets
Purecompetition Monopolisticcompetition Oligopolisticcompetition Puremonopoly
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FactorstoConsiderWhen SettingPrice
ExternalFactors
Natureofmarketanddemand Competitorscosts,prices,and offers Otherenvironmentalelements
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FactorstoConsiderWhen SettingPrice
ExternalFactors
Natureofmarketanddemand Competitorscosts,prices, andoffers Otherenvironmentalelements
Economicconditions
Affectproductioncosts Affectbuyerperceptionsof priceandvalue
Copyright2008PearsonEducationCanada
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LearningGoals
Identifyanddefinetheinternalfactorsaffecting pricing gdecisions afirmsp Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactof consumerperceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices p adjust j theirp pricesto Discusshowcompanies takeintoaccountdifferenttypesofcustomers andsituations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
Copyright2008PearsonEducationCanada 1119 PrinciplesofMarketing,SeventhCanadian Edition
GeneralPricingApproaches
CostBasedPricing:CostPlusPricing
Addingastandardmarkuptocost Ignoresdemandandcompetition Popularpricingtechniquebecause:
Itsimplifiesthepricingprocess Pricecompetitionmaybeminimized Itisperceivedasmorefairtobothbuyersand sellers
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GeneralPricingApproaches
CostBasedPricingExample
Variablecosts:$20
Expectedsales:100,000units Fixedcosts:$500,000 DesiredSalesMarkup:20%
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GeneralPricingApproaches
CostBasedPricing:BreakEvenAnalysis and dT Target tP Profit fitP Pricing i i
Breakevenchartsshowtotalcostandtotal revenuesatdifferentlevelsofunitvolume. Theintersectionofthetotalrevenueandtotal costcurvesisthebreakevenpoint. Companieswishingtomakeaprofitmust exceedthebreakevenunitvolume.
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GeneralPricingApproaches
BreakEvenAnalysisandTargetProfitPricing
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GeneralPricingApproaches
ValueBasedPricing:
U Uses e buye buyers perceptions e e tio ofvalue aluerather athe than tha sellerscoststosetprice. Measuringperceivedvaluecanbedifficult. Consumerattitudestowardpriceandquality haveshiftedduringthelastdecade. Valuepricingattheretaillevel
Everydaylowpricing(EDLP)vs.highlowpricing
Copyright2008PearsonEducationCanada
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LearningGoals
Identifyanddefinetheinternalfactorsaffecting pricing gdecisions afirmsp Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactof consumerperceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices p adjust j theirp pricesto Discusshowcompanies takeintoaccountdifferenttypesofcustomers andsituations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
Copyright2008PearsonEducationCanada 1125 PrinciplesofMarketing,SeventhCanadian Edition
PriceAdjustmentStrategies
Discount/allowance S Segmented td Psychological Promotional Geographical International Typesofdiscounts
Ca Cash hdiscount di ou t Quantitydiscount Functional(trade) discount Seasonaldiscount
Allowances
Tradeinallowances Promotional allowances
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PriceAdjustmentStrategies
Discount/allowance Segmented Psychological Promotional Geographical International Typesofsegmented pricingstrategies:
Customersegment Productformpricing Locationpricing Timepricing
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PriceAdjustmentStrategies
ConditionsNecessaryforSegmented P i i Eff Pricing Effectiveness ti
Marketmustbesegmentable Segmentsmustshowdifferentdemand Pricingmustbelegal Costsofsegmentationcannotexceedrevenues earned Segmentedpricingmustreflectreal differencesincustomersperceivedvalue
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PriceAdjustmentStrategies
Discount/allowance Segmented Psychological Promotional Geographical International Thepriceisusedtosay somethingaboutthe product.
Pricequalityrelationship Referenceprices Differencesassmallasfive centscanbeimportant Numericdigitsmayhave symbolic b l and dvisual l qualitiesthat psychologicallyinfluence thebuyer
Copyright2008PearsonEducationCanada
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PriceAdjustmentStrategies
Discount/allowance Segmented Psychological Promotional Geographical International Temporarilypricing productsbelowthelist priceorevenbelowcost
Lossleaders Specialeventpricing Cashrebates Lowinterestfinancing, longerwarranties,free maintenance
Promotionalpricingcan haveadverseeffects
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PriceAdjustment Strategies
PromotionalPricingProblems
Easilycopiedbycompetitors Createsdealproneconsumers Mayerodebrandsvalue Notalegitimatesubstituteforeffective g planning p g strategic Frequentuseleadstoindustrypricewars whichbenefitfewfirms
Copyright2008PearsonEducationCanada
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PrinciplesofMarketing,SeventhCanadian Edition
PriceAdjustmentStrategies
Discount/allowance S Segmented td Psychological Promotional Geographical International Typesofgeographic pricingstrategies:
FOBoriginpricing Uniformdelivered pricing Zonepricing Basing gp pointp pricing g Freightabsorption pricing
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PriceAdjustmentStrategies
Discount/allowance Segmented Psychological Promotional Geographical International Priceschargedina specificcountry dependonmany factors
Economicconditions Competitivesituation Laws/regulations Distributionsystem Consumerperceptions Corporatemarketing objectives Costconsiderations
1133 PrinciplesofMarketing,SeventhCanadian Edition
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LearningGoals
Identifyanddefinetheinternalfactorsaffecting pricing gdecisions afirmsp Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactof consumerperceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices p adjust j theirp pricesto Discusshowcompanies takeintoaccountdifferenttypesofcustomers andsituations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
Copyright2008PearsonEducationCanada 1134 PrinciplesofMarketing,SeventhCanadian Edition
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PriceChanges
Initiatepricecuts whena firm: Hasexcesscapacity Facesfallingmarket shareduetoprice competition Desirestobeamarket shareleader Initiatepriceincreases whenafirm canincreaseprofit facescostinflation facesgreaterdemand thancanbesupplied
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PriceChanges
AlternativestoIncreasingPrice
Exploremorecosteffectiveproductionor distribution Reduceproductsize Removefeatures product Unbundlethep
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PriceChanges
Buyerreactionstopricechangesmustbe considered. id d Competitorsaremorelikelytoreactto pricechangesundercertainconditions.
Numberoffirmsissmall Productisuniform Buyersarewellinformed
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RespondingtoCompetitors PriceChanges
Respondingtocompetitorspricechanges
Evaluatethecompetitorsreasonfortheprice change Evaluatemarketplaceresponsetotheprice change Considersownproductsstrategy
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PublicPolicyandPricing
Pricefixing
Co Competitors etito cannot a otwork o kwith ithea each hothe otherto setprices
Pricediscrimination
Customersmustbeofferedproportionally equaldiscountswhenused
Deceptivepricing
Cannotmisleadcustomersastovalue received.
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EthicalIssuesinPricing
Compliancewiththelawistheminimum standard t d dwhen h judging j d i whether h th pricing i i practicesareethical Canconsumersunderstandpricesand comparethem? Consumersareunawaretheycan negotiatesomeprices Abilitytonegotiateprices
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LearningGoals
Identifyanddefinetheinternalfactorsaffecting pricing gdecisions afirmsp Identifyanddefinetheexternalfactorsaffecting pricingdecisions,includingtheimpactof consumerperceptionsofpriceandvalue Contrastthetwogeneralapproachestosetting prices p adjust j theirp pricesto Discusshowcompanies takeintoaccountdifferenttypesofcustomers andsituations Discussthekeyissuesrelatedtoinitiatingand respondingtopricechanges
Copyright2008PearsonEducationCanada 1141 PrinciplesofMarketing,SeventhCanadian Edition
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1143
PrinciplesofMarketing,SeventhCanadian Edition
Copyright2008PearsonEducationCanada
1144
PrinciplesofMarketing,SeventhCanadian Edition
22
Ch t 12 Chapter
Distribution Channels andSupplyChain Management
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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CaseStudy Caterpillar
Dominatesworlds marketsforheavy constructionandmining equipment. Independentdealersare keytosuccess Dealernetworkislinked viacomputers
Caterpillar p stresses dealerprofitability, extraordinarydealer support,personal relationships,dealer performanceandfull, h honest, and dfrequent f communications
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LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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SupplyChainsandtheValue DeliveryNetwork
Asupplychainconsistsofupstreamand downstreampartners Marketershavetraditionallyfocusedonthe downstreamside
Supplychain makeandsellview Demandchain senseandrespondview
ValueDeliveryNetwork
Thenetworkmadeupofthecompany,suppliers, distributors,andultimatelycustomerswhopartner witheachothertoimprovetheperformanceofthe entiresystem.
125
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Nature&Importanceof DistributionChannels
Marketingchannel
Setofinterdependentorganizationsinvolved intheprocessofmakingaproductorservice availableforuseorconsumptionbythe consumerorbusinessuser.
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Nature&Importanceof MarketingChannels
Channelchoicesaffectotherdecisionsin th marketing the k ti mix i
Pricing,marketingcommunications
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Nature&Importanceof MarketingChannels
HowChannelMembersAddValue
Fe Fewer e contacts. o ta t Matchproductassortmentdemandwithsupply. Bridge,time,place,andpossessiongapsthatseparate productsfromusers.
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HowChannelMembersAddValue
Channelmembersaddvaluebybridging th major the j ti time,place, l and dpossession i gaps. Keyfunctions:
Information Promotion Contact Matching Negotiation
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Nature&Importanceof MarketingChannels
NumberofChannelLevels
Thenumberofintermediarylevelsindicates thelengthofamarketingchannel.
DirectChannels IndirectChannels
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ChannelMembersareConnected ViaaVarietyofFlows
PhysicalFlow PaymentFlow InformationFlow PromotionFlow FlowofOwnership
Copyright2008PearsonEducationCanada
1211
LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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ChannelBehaviourand Organization
ChannelConflict
Occurswhenchannelmembersdisagreeon roles,activities,orrewards. TypesofConflict:
Horizontalconflict:occursamongfirmsatthe samechannellevel Vertical V ti lconflict: fli t occursamongfirms fi at tdifferent diff t channellevels
Copyright2008PearsonEducationCanada
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ChannelBehaviourand Organization
ConventionalDistributionChannels
Consist o i of o one o eor o more o eindependent i epe e channel a e members Eachseekingtomaximizeitsownprofits Oftenresultinpoorperformance
VerticalMarketingSystems
Producers,wholesalers,andretailersactasaunified system One O channel h lmember b owns,h hascontracts t t with, ith orh has somuchpowerthattheyallcooperate Benefitsshouldincludegreatercontrol,lessconflict, andeconomiesofscaleduetothesizeofthesystem
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ChannelBehaviourand Organization
VerticalMarketSystem (VMS)
CorporateVMS ContractualVMS AdministeredVMS
Integratessuccessive stagesofproductionand distributionundersingle ownership channel ownershipisestablished throughcommon ownership Coordination oo i a io a andconflict o i throughregular organizationalchannels
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1215
ChannelBehaviourand Organization
VerticalMarketSystem (VMS)
CorporateVMS ContractualVMS AdministeredVMS
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ChannelBehaviourand Organization
VerticalMarket System(VMS)
CorporateVMS ContractualVMS AdministeredVMS
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ChannelBehaviourand Organization
HorizontalMarketingSystems
Co Companies a ie atthesame a ele level elwork o ktogether to ethe with ith channelmembers
MultichannelDistributionSystems
Alsocalledhybridmarketingchannels Occurswhenafirmusestwoormoremarketing channels
ChangingChannelOrganization
Disintermediation
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LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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ChannelDesignDecisions
Step1:AnalyzingConsumerNeeds
Costandfeasibilityofmeetingneedsmustbe considered
Step2:SettingChannelObjectives
Setchannelobjectivesintermsoftargetedlevelof customerservice Manyfactorsinfluencechannelobjectives
Natureofthecompany(size/financialposition)andits products Marketingintermediaries Competition Marketingenvironment
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ChannelDesignDecisions
Step3:IdentifyingMajorAlternatives
Typesofintermediaries
Companysalesforce,manufacturersagency, industrialdistributors
Numberofmarketingintermediaries
Intensive,selective,andexclusivedistribution
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ChannelDesignDecisions
Step4:EvaluatingMajorAlternatives
Economiccriteria Controlissues Adaptivecriteria
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ChannelDesignDecisions
DesigningInternationalDistribution Ch Channels l
Globalmarketersusuallyadapttheirchannel strategiestostructuresthatexistwithin foreigncountries Keychallenges:
Maybecomplexorhardtopenetrate Maybescattered,inefficient,ortotallylacking
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LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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ChannelManagementDecisions
Selectingchannel members Managingand motivatingchannel members Evaluatingchannel members Whichcharacteristics areimportant?
Yearsinbusiness Linescarried Growthandprofit record Cooperativeness p and reputation Typeofcustomer Location
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ChannelManagementDecisions
Selectingchannel members Managingand motivatingchannel members Evaluatingchannel members Partnerrelationship management(PRM) forlongterm partnerships Softwareavailableto coordinatemembers
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13
ChannelManagementDecisions
Selectingchannel members Managingand motivatingchannel members Evaluatingchannel members Checkchannel performanceof:
Sales Inventory Customerdelivery Promotionand g training Customerservice
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PublicPolicyand DistributionDecisions
Exclusivedealing. Sellerscannotdemandexclusivity fortheirproductfromresellersifitcanbeproven thatitwilllessencompetitionorcreateamonopoly Exclusiveterritories. Sellersmaygrantexclusive territories,butmayhavetroubledemandingthat resellersdealonlywithinthatexclusiveterritory y gagreements. g demanding gthatresellersbuy y Tying and/orstockallproductswithinaproductline,asa conditionofdoingbusiness.Notillegalbutasource ofmuchchannelconflict
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PublicPolicyand DistributionDecisions
Dealersrights. Producersarefreetoselect dealers butarelimitedintheirabilityto dealers, terminatedealers;theymustshowcause,and cannotdropdealerswhorefusetoparticipatein doubtfullegalarrangements Sourcesofsupply. Ethicalconcernsoversupply sourcesfromcountrieswithhumanrights violationsorusetheproceedstofundarmed conflict
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LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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15
MarketingLogisticsandSupply ChainManagement
Marketinglogistics(physicaldistribution).
Tasksinvolvedinplanning,implementing, andcontrollingthephysicalflowofmaterials, finalgoodsandrelatedinformation
Supplychainmanagement.
Managing g gupstream p anddownstreamvalue addedflowsofmaterials,finalgoods,and relatedinformationamongsuppliers,the company,resellers,andfinalconsumers
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MarketingLogisticsandSupply ChainManagement
MarketingLogistics
Outbounddistribution Inbounddistribution Reversedistribution Involvestheentiresupplychainmanagement y system
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MarketingLogisticsandSupply ChainManagement
WhyGreaterEmphasisisBeingPlacedon L i ti Logistics:
Offersfirmsacompetitiveadvantage Canyieldcostsavings Greaterproductvarietyrequiresimproved g logistics Improvementsindistributionefficiencyare possibleduetoinformationtechnology
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MarketingLogisticsandSupply ChainManagement
GoalsoftheLogisticsSystem
Nosystemcanbothmaximizecustomer serviceandminimizecosts. Thegoalofmarketinglogisticsshouldbeto provideatargetedlevelofcustomerserviceat theleastcost. Firmsmustfirstweighthebenefitsofhigher serviceagainstthecosts.
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MarketingLogisticsandSupply ChainManagement
MajorLogisticsFunctions
Warehousing InventoryManagement Transportation LogisticsInformationManagement
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MarketingLogisticsandSupply ChainManagement
TransportationCarrierOptions
Truck Rail Water Pipeline Air Internet
Intermodaltransportation isbecomingmorecommon
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MarketingLogisticsandSupply ChainManagement
IntegratedLogisticsManagement
Crossfunctionalteamworkinsidethe companyiscritical Logisticspartnershipsarealsobuiltthrough sharedprojects Outsourcingoflogisticsfirmstothirdparty firmsisbecomingmorecommon
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LearningGoals
1. Explainwhycompaniesusedistributionchannelsand discussthefunctionsthatthesechannelsperform 2. Discusshowchannelmembersinteractandhowthey organizetoperformtheworkofthechannel 3. Identifythemajorchannelalternativesopentoa company 4. Explainhowcompaniesselect,motivate,andevaluate channelmembers 5. Discussthenatureandimportanceofphysical distribution
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Ch t 13 Chapter
Retailingand Wholesaling
Copyright2008PearsonEducationCanada
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Describethemajortypesofretailers. 3. Understandthemarketingdecisions facingretailersandwholesalers. 4 Identifythemajortypesofwholesalers. 4. wholesalers
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TheForzaniGroup
FoundedbyJohn Forzani formerCFL Forzani, player Corporatesegment:252 stores(SportChek, SportsExperts,Coast MountainSports) Franchisesegment:192 stores( (Athmosphere, p , RnR) 2005salesof$1.2billion, has16.1%marketshare ofCanadiansporting goodsmarket
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Explosivegrowthinthe 1980s 1980 s ChallengedbyU.S.big boxstores,whooffer largerstores,deeper selection Storedesignsareflexible, abletolocateinshopping malls Useservicelevelsand communityinvolvement asadifferentiator Focusonkeepingcosts low
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Knowthemajortypesofretailers. 3. Understandthemarketingdecisions facingretailersandwholesalers. 4 Knowthemajortypesofwholesalers 4. wholesalers.
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Retailing
Retailing
Allactivitiesinvolvedinsellinggoodsor servicesdirectlytofinalconsumersfortheir personal,nonbusinessuse.
Retailer
Businesswhosesalescomep primarily yfrom retailing.
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LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Knowthemajortypesofretailers. 3. Understandthemarketingdecisions facingretailersandwholesalers. 4 Knowthemajortypesofwholesalers 4. wholesalers.
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TypesofRetailers
Amountofservice Productlines Relativeprices Organizationalapproach Selfserviceretailers
Customersarewilling gto selfservetosavemoney Conveniencestoresand fastmovingshopping goods
Limitedserviceretailers
Mostdepartmentstores
Fullserviceretailers
Salespeopleassist customersineveryaspect ofshoppingexperience Highenddepartment storesandspecialtystores
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DiscussionQuestion RetailerLevelofService
Selfservicecheckout scannersaregrowing inuse. Whatadvantagesfor retailer?Consumer? Whatarethe disadvantages?
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TypesofRetailers
Amountofservice Productlines Relativeprices Organizationalapproach Specialtystores
Narrowproductlineswith d deep assortments t t
Departmentstores
Widevarietyofproduct lines
Supermarkets Conveniencestores
Limitedline
Superstores S t
Food,nonfood,and services
Categorykillers
Giantspecialtystores
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TypesofRetailers
Amountofservice P d tlines Product li Relativeprices Organizational approach Discountstores
Lo Lowmargins a i are a eoffset off et byhighvolume
Offpriceretailers
Independentoffprice retailers
TJMaxx,Marshalls
Factoryoutlets
LeviStrauss,Reebok
Warehouseclubs
SamsClub,Costco
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TypesofRetailers
Amountofservice P d tlines Product li Relativeprices Organizational approach Corporatechain stores stores. Voluntarychains Retailercooperatives Franchise organizations Merchandising conglomerates
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LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Knowthemajortypesofretailers. 3. Understandthemarketingdecisions facingretailersandwholesalers. 4 Knowthemajortypesofwholesalers 4. wholesalers.
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RetailerMarketingDecisions
TargetmarketandPositioningdecision
Defi Define ewell elltarget ta etmarket a keta and dstrong to positioning
Productvariables
Assortment Servicesmix Store St atmosphere t h
Pricedecision:
Markupsandvolumeareinverselyrelated
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RetailerMarketingDecisions
Promotion
Retailers Retaile use u eany a yor o allfive fi etool toolstoreach ea hconsumers o u e
Placedecision
Locationiscriticaltoattractthetargetmarket Centralbusinessdistricts Shoppingcentres
Regional Neighbourhood
Powercentres
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PrinciplesofMarketing,SeventhCanadian Edition
Retailing
TheFutureofRetailing
Ne Newretail etailfo formsa and dshortening ho te i retail etaillife cycles
Wheelofretailingconcept
Growthofnonstoreretailing
Mailorder,television,phone,onlineshopping
Retailconvergence
Themergingofconsumers,products,prices,and retailers
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Retailing
TheFutureofRetailing
Riseofmegaretailers Growingimportanceofretailtechnology Globalexpansionofmajorretailers RetailstoresasCommunitiesor g Hangouts
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LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Knowthemajortypesofretailers. 3. Understandthemarketingdecisions facingretailersandwholesalers. 4 Knowthemajortypesofwholesalers 4. wholesalers.
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Wholesaling
Wholesaling
Allactivitiesinvolvedinsellinggoodsand servicestothosebuyingforresaleorbusiness use.
Wholesaler
Afirmengaged g g primarily p yinwholesaling g activity.
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Wholesaling
Wholesalersaddvaluebyperformingthe followingfunctions:
Sellingandpromoting Buyingandassortmentbuilding Bulkbreaking Warehousing Transportation Fi Financing i Riskbearing Marketinformation Managementservicesandadvice
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TypesofWholesalers
MerchantWholesalers BrokersandAgents Manufacturersand retailersbranchesand offices Fullservicewholesalers
Wholesalemerchants Industrialdistributors
Limitedservice wholesalers
Cashandcarry wholesalers Truckwholesalers(j (jobbers) ) Dropshippers Rackjobbers Producerscooperatives Mailorderwholesalers
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TypesofWholesalers
MerchantWholesalers BrokersandAgents Manufacturersand retailersbranchesand offices Brokersandagentsdo nottaketitleofthegoods. Brokers
Bringbuyersandsellers togetherandassistin negotiation
Agents
Manufacturersagents g Sellingagents Purchasingagents Commissionmerchants
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TypesofWholesalers
MerchantWholesalers BrokersandAgents Manufacturersand retailersbranchesand offices Salesbranchesandoffices
Branchescarryinventory: lumber,autoequipment, parts Officesdonotcarry inventory:drygoods
Purchasingofficers
Performrolessimilarto b k and brokers dagents; t however,theseindividuals areemployeesofthe organization
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TrendsinWholesaling
Fierceresistancetopriceincreases Successful S f lwholesalers h l l must tadd ddvalue l by b increasingefficiencyandeffectiveness Thedistinctionbetweenlargeretailersand wholesalerscontinuestoblur Moreserviceswillbeprovidedtoretailers Manywholesalersaregoingglobal
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LearningGoals
1. Understandtherolesofretailersand wholesalers h l l i inth themarketing k ti channel. h l 2. Knowthemajortypesofretailers. 3. Knowthemajortypesofwholesalers. 4. Understandthemarketingdecisions facingretailersandwholesalers wholesalers.
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Ch t 14 Chapter
Integrated Marketing Communications Strategy
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Nameanddefinethefivetoolsofthe marketingcommunicationsmix 2. Discusstheprocessandadvantagesof integratedmarketingcommunications 3. Outlinethestepsindevelopingeffective marketingcommunications 4 Explain 4. E l i the h methods h d for f setting i the h marketing k i communicationsbudgetandfactorsthataffect thedesignofthepromotionmix
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CaseStudy BMWMINI
Marketingtheanythingbut ordinarycarpresentedbig challenges. TheMINIisatinybutpotentcar thathasaretro60slook. Canadianstendtobeseriousabout theircars. Themarketingteamconcludedthat InCanadathecarperformancewas themainattributetostress. BMWchooseTaxiasitsadvertising agency. T icreated Taxi t danintegrated i t t dstrategy t t withunifiedbrandpersonality: TheMINIisanindividualistic, highperformance,premium vehiclethatsfuntodrive. Thecampaignbeganwitha60 secondmovietheatrespotcalled Anthem. Traditionalprintandoutdoor advertisingfollowednext:parks parksas fasterthanaFerrari,Onrampsare foreplay,andTheworldisyourgo karttrack. Adswereplacedeverywhere EdgyandhumorousTVspotswere alsoused. Othercomponents: Velocityparties, onlinecontests,drivingevents,and investmentsinshowroom improvements. Hipdealershipswereselectedand trainedinanewsoftsellapproach. Productplacementintheremakeof TheItalianJob,onlinemarketing,and publicity. Finallywordofmouth. Thecampaignwasahugesuccessand annualsalesgoalswereexceeded.
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LearningGoals
1. Nameanddefinethefivetoolsofthe marketingcommunicationsmix 2. Discusstheprocessandadvantagesof integratedmarketingcommunications 3. Outlinethestepsindevelopingeffective marketingcommunications 4 Explain 4. E l i the h methods h d for f setting i the h marketing k i communicationsbudgetandfactorsthataffect thedesignofthepromotionmix
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TheMarketing CommunicationsMix
MarketingCommunicationsMix
Thespecificmixofadvertising,personal selling,salespromotion,andpublicrelationsa companyusestopursueitsadvertisingand marketingobjectives.
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TheMarketing CommunicationsMix
Advertising:
Anypaidformofnon personal lpresentation t ti and d promotionofideas,goods, orservicesbyanidentified sponsor
Personalselling:
Personalpresentationby th fi the firms sales l f forcef forth the purposeofmakingsales andbuildingcustomer relationships
Salespromotion:
Shorttermincentivesto encouragepurchaseorsale ofaproductorservice
Directmarketing:
Directcommunications withtargetedindividuals toobtainanimmediate p andlasting g response customerrelationships
Publicrelations:
Buildinggoodrelations andcorporateimagewith thecompanyspublics usingpublicity,and handlingunfavourable events
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LearningGoals
1. Nameanddefinethefivetoolsofthe marketingcommunicationsmix 2. Discusstheprocessandadvantagesof integratedmarketingcommunications 3. Outlinethestepsindevelopingeffective marketingcommunications 4 Explain 4. E l i the h methods h d for f setting i the h marketing k i communicationsbudgetandfactorsthataffect thedesignofthepromotionmix
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IntegratedMarketing Communications
TheMarketingCommunicationsEnvironmentis Changing:
Massmarketshavefragmented,causingmarketersto shiftawayfrommassmarketingtotargetmarketing. Improvementsininformationtechnologyare facilitatingsegmentation Mediafragmentationhasoccurredwithcompanies doinglessbroadcastingandmorenarrowcasting
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IntegratedMarketing Communications
TheNeedforIntegratedMarketing Communications
Conflictingmessagesfromdifferentsourcesor promotionalapproachescanconfusecompanyor brandimages Theproblemisparticularlyprevalentwhen functionalspecialistshandleindividualformsof marketing k ti communications i ti independently i d d tl
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PrinciplesofMarketing,SeventhCanadian Edition
IntegratedMarketing Communications
TheNeedforIntegratedMarketing C Communications i ti
TheInternetmustbeintegratedintothe broaderIMCmix Bestbetistowedtraditionalbrandingefforts withtheinteractivityandservicecapabilities ofonlinecommunications
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IntegratedMarketing Communications
IntegratedMarketingCommunications
Theconceptunderwhichacompanycarefully integratesandcoordinatesitsmany communicationschannelstodeliveraclear, consistent,andcompellingmessageaboutthe organizationanditsproducts.
Copyright2008PearsonEducationCanada
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PrinciplesofMarketing,SeventhCanadian Edition
DiscussionQuestion
Howdoes TacoBell practice IMC?
?
1412 PrinciplesofMarketing,SeventhCanadian Edition
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LearningGoals
1. Nameanddefinethefivetoolsofthe marketingcommunicationsmix 2. Discusstheprocessandadvantagesof integratedmarketingcommunications 3. Outlinethestepsindevelopingeffective marketingcommunications 4 Explain 4. E l i the h methods h d for f setting i the h marketing k i communicationsbudgetandfactorsthataffect thedesignofthepromotionmix
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PrinciplesofMarketing,SeventhCanadian Edition
TheCommunication Process
Communicationseffortsshouldbeviewedfrom theperspectiveofmanagingcustomer relationshipsovertime. Thecommunicationprocessbeginswithan auditofallpotentialcontactsacustomermight havewiththebrand. Effectivecommunicationrequiresknowledgeof h communication how i i works. k
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StepsinDeveloping EffectiveCommunication
Step1:IdentifyingtheTargetAudience
Affe Affects t decisions de i io related elatedtowhat, hat how, ho when, he and a d wheremessagewillbesaid, aswellaswhowillsayit
Step2:DeterminingCommunication Objectives
Sixbuyer y readinessstages g
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StepsinDeveloping EffectiveCommunication
Step3:DesigningaMessage
AIDAframework f a e o kguides uide message e a edesign de i Messagecontentcontainsappealsorthemesdesigned toproducedesiredresults
Rationalappeals:relatetotheaudiencesselfinterest Emotionalappeals:stirupnegativeorpositivefeelingsusing humour,fear,pride,joy,orevendisgust Moralappeals:relatedtheaudiences audience ssenseofrightversus wrong
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PrinciplesofMarketing,SeventhCanadian Edition
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StepsinDeveloping EffectiveCommunication
Step3:DesigningaMessage
Me Message a eStructure: St u tu e Keydecisions de i io are a erequired e ui edwith ith respecttothreemessagestructureissues:
Whetherornottodrawaconclusion Onesidedvs.twosidedargument Orderofargumentpresentation
MessageFormat:Design,layout,copy,color,shape, movement words, movement, words sounds, sounds voice, voice bodylanguage, language dress,etc.
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PrinciplesofMarketing,SeventhCanadian Edition
StepsinDeveloping EffectiveCommunication
Step5:SelectingtheMessageSource
Hi Highly hlycredible ediblesources ou e are a emore o epersuasive e ua i e Apoorspokespersoncantarnishabrand
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PrinciplesofMarketing,SeventhCanadian Edition
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DiscussionQuestion Effectivespokespeople?
Whatmakesan effective spokesperson? Whenshouldthey NOTbeused?
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PrinciplesofMarketing,SeventhCanadian Edition
StepsinDeveloping EffectiveCommunication
Step6:CollectingFeedback
Recognition,recall,andbehaviouralmeasures areassessed Maysuggestchangesinproduct/promotion
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PrinciplesofMarketing,SeventhCanadian Edition
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AdvertisingRecall
Putawayyournotes Recallalltheadsandmarketingmessages youhaveseensofarinthislecture
Copyright2008PearsonEducationCanada
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Nameanddefinethefivetoolsofthe marketingcommunicationsmix 2. Discusstheprocessandadvantagesof integratedmarketingcommunications 3. Outlinethestepsindevelopingeffective marketingcommunications 4 Explain 4. E l i the h methods h d for f setting i the h marketing k i communicationsbudgetandfactorsthataffect thedesignofthepromotionmix
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SettingtheTotal PromotionBudget
AffordabilityMethod
Budgetissetatalevelthatacompanycan afford
PercentageofSalesMethod
Pastorforecastedsalesmaybeused
CompetitiveParityMethod
Budgetmatchescompetitorsoutlays
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PrinciplesofMarketing,SeventhCanadian Edition
SettingtheTotal PromotionBudget
ObjectiveandTaskMethod
Specificobjectivesaredefined Tasksrequiredtoachieveobjectivesare determined Costsofperformingtasksareestimated,then summedtocreatethepromotionalbudget
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SettingtheOverall CommunicationMix
Determinedbythenatureofeach promotion ti t tool land dth theselected l t d promotionmixstrategy
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PrinciplesofMarketing,SeventhCanadian Edition
SettingtheOverall CommunicationMix
Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Reacheslarge,geographically dispersed p audiences,oftenwith highfrequency Lowcostperexposure,though overallcostsarehigh Consumersperceiveadvertised goodsasmorelegitimate Dramatizescompany/brand Buildsbrandimage;may stimulateshorttermsales Impersonal;oneway communication
1426 PrinciplesofMarketing,SeventhCanadian Edition
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SettingtheOverall CommunicationMix
Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Mosteffectivetoolforbuilding buyerspreferences,convictions, buyers andactions Personalinteractionallowsfor feedbackandadjustments Relationshiporiented Buyersaremoreattentive Sales S l f forcerepresentsalong l termcommitment Mostexpensiveofthe promotionaltools
1427 PrinciplesofMarketing,SeventhCanadian Edition
Copyright2008PearsonEducationCanada
SettingtheOverall CommunicationMix
Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Makesuseofavarietyof formats:premiums,coupons, contests,etc. Attractsattention,offersstrong purchaseincentives,dramatizes offers,boostssaggingsales Stimulatesquickresponse Shortlived Noteffectiveatbuildinglong termbrandpreferences
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SettingtheOverall CommunicationMix
Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Highlycredible Manyforms:newsstories, stories news features,eventsand sponsorships,etc. Reachesmanyprospectsmissed viaotherformsofpromotion Dramatizescompanyorbenefits Often Of the h mostunderused d d elementinthepromotionalmix
Copyright2008PearsonEducationCanada
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PrinciplesofMarketing,SeventhCanadian Edition
SettingtheOverall CommunicationMix
Advertising PersonalSelling SalesPromotion PublicRelations DirectMarketing Manyforms:Telephone marketing,directmail,online marketing,etc. Fourdistinctivecharacteristics: Nonpublic Immediate Customized Interactive Wellsuitedtohighlytargeted marketingefforts
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IntegratingthePromotionMix
Analyzetrends(internalandexternal) A ditcommunications Audit i ti spending di Identifyallpointsofcontact Teamupincommunicationsplanning Makeallcommunicationelementscompatible performancemeasures Createp AppointanIMCmanager
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PrinciplesofMarketing,SeventhCanadian Edition
SociallyResponsible Communication
AdvertisingandSalesPromotion
Avoidfalseanddeceptiveadvertising Nobaitandswitchadvertising Tradepromotionscannotfavorcertain customersoverothers gtop promotesocially y Useadvertising responsibleprogramsandactions
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SociallyResponsible Communication
PersonalSelling
Sale Salespeople eo lemust u tfollow follo therules ule offair fai competition Threedaycoolingoffruleprotectsultimate consumersfromhighpressuretactics Businesstobusinessselling
Bribery,industrialespionage,andmakingfalseand di disparaging i statements t t t about b tacompetitor tit areforbidden f bidd
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PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Nameanddefinethefivetoolsofthe marketingcommunicationsmix 2. Discusstheprocessandadvantagesof integratedmarketingcommunications 3. Outlinethestepsindevelopingeffective marketingcommunications 4 Explain 4. E l i the h methods h d for f setting i the h marketing k i communicationsbudgetandfactorsthataffect thedesignofthepromotionmix
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Ch t 15 Chapter
Advertising,Sales Promotion,and PublicRelations
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Definetherolesofadvertising,sales promotion andpublicrelationsinthe promotion, promotionmix 2. Describethemajordecisionsinvolvedin developinganadvertisingprogram 3. Explainhowsalespromotioncampaignsare developedandimplemented 4. Explainhowcompaniesusepublicrelationsto communicatewiththeirpublics
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TheUnitedWayofGreaterToronto
In2003thousandsofcharities appearedtobefightingforthe samesmall5%ofdonorsin Canada. TheUnitedWayneededa campaignthatwouldbreak throughtheclutterandhiredthe advertisingagencyArnold Worldwide Focusgroupsconfirmedthat donorsgivetoorganizationsthat havepersonalmeaningtothem. them Theyalsodiscoveredthisdonors feltanunderlyingguiltfornot givingdirectlytothepoor. Also,TheUnitedWayisseenas ahelpinghandtothosein need.
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Strategy:GivingtotheUnited Wayisthesimplewaytotake careofthosemostvulnerable inthecity. Thecampaignusedthe imageryofthehandasan iconofprotection. Thecampaignrunfortwo yearshelpingtogenerate$10 millionindonatededitorial andpromotionalmedia. Results Re ult for fo United U itedWay: Way Donationsincreasedinboth 2003and2004 Advertisingawareness increasedby10%inoneyear. Brandimagewaspositively affected
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LearningGoals
1. Knowthemajordecisions involvedindevelopinganadvertising program. 2. Learnhowsalespromotioncampaignsare developedandimplemented. 3. Learnhowcompaniesusepublicrelationsto communicatewiththeirpublics. 4. Understandtherolesofadvertising,sales promotion,andpublicrelationsinthe promotionmix.
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Advertising
Advertising
Anypaidformofnonpersonalpresentation andpromotionofideas,goods,orservicesby anidentifiedsponsor.
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Advertising
Signageinancienttimesoffersevidenceof early l advertising. d ti i Modernadspendingtops$11billionin Canadaannually,$498billionworldwide. Businessfirms,notforprofit,social agencies andprofessionalsalladvertise agencies, advertise.
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KeyAdvertisingDecisions
Settingobjectives Settingthebudget Developingtheadvertising strategy Evaluatingadvertising campaigns Advertisingobjectives canbeclassifiedby primarypurpose:
Inform
Introducingnewproducts
Persuade
Becomesmoreimportant ascompetitionincreases Comparativeadvertising
Remind
Mostimportantfor matureproducts
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KeyAdvertisingDecisions
Settingobjectives Settingthebudget Developingtheadvertising strategy Evaluatingadvertising campaigns Methodsofbudget settingwerelistedin chapter14 Severalfactorsshouldbe consideredwhensetting theadbudget:
StageinthePLC Marketshare Levelofcompetition Adclutter Degreeofbrand differentiation
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KeyAdvertisingDecisions
Settingobjectives Settingthebudget Developingtheadvertising strategy Evaluatingadvertising campaigns Creativechallenges
Advertisingclutter TiVoandPVRs
Creatingadmessages
Messagestrategy
CreativeconceptorBig Idea Advertisingappeal
Messageexecution
Manyexecutionstyles Tone,format,illustration, headline,copy
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Advertising
CreativeExecutionStyles
SliceofLife Lifestyle Fantasy MoodorImage Musical TestimonialEvidence orEndorsement PersonalitySymbol TechnicalExpertise ScientificEvidence
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KeyAdvertisingDecisions
Settingobjectives Settingthebudget Developingtheadvertising strategy(cont.) Evaluatingadvertising campaigns Selectadvertisingmedia
Decideonlevelofreach, frequencyandimpact Chooseamongthemajor mediatypesby considering:
Consumermediahabits, natureoftheproduct, typesofmessages,and costs
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Advertising
MajorMediaTypes
Newspapers Television DirectMail Radio Magazines Outdoor Internet
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KeyAdvertisingDecisions
Settingobjectives Setting S tti th theb budget d t Developingthe advertisingstrategy (cont.) Evaluatingadvertising campaigns i Measuring communications effect
Copytesting
Measuringsaleseffect
Comparepastsales withpastadvertising expenditures Experiments
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OtherAdvertisingConsiderations
OrganizingforAdvertising
Smallvs.largecompanies Natureofadvertisingagencies
Advantagesofadvertisingagencies Consolidationandgrowthofagencies Creativeboutiques
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OtherAdvertisingConsiderations
InternationalAdvertisingDecisions
Standardizing Sta da di i worldwide o ld ideadvertising ad e ti i
Advantagesincludeloweradvertisingcosts, greaterglobaladvertisingcoordination,andconsistentglobal image Drawbacksincludeignoringdifferencesinculture, demographics,andeconomicconditions
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LearningGoals
1. Knowthemajordecisions involvedindevelopinganadvertising program. 2. Learnhowsalespromotioncampaignsare developedandimplemented. 3. Learnhowcompaniesusepublicrelationsto communicatewiththeirpublics. 4. Understandtherolesofadvertising,sales promotion,andpublicrelationsinthe promotionmix.
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SalesPromotion
SalesPromotion
Salespromotionsareshorttermincentivesto encouragethepurchaseorsaleofaproductor service.
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SalesPromotion
SalesPromotions
Ca Canbetargeted ta etedatfinal fi albuye buyers,retailers etaile and a d wholesalers,businesscustomers,and membersofthesalesforce. Theuseofsalespromotionshasbeengrowing rapidly. Today, y,salespromotion p accountsfor76%of allmarketingexpenditures.
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SalesPromotion
Factorscontributingtogrowthofsales promotion: ti
Greaterfocusonincreasingsalesintheshort term Greatercompetition gefficiency y Declineinadvertising Consumersaremoredealoriented
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SalesPromotionObjectives
Objectives ConsumerPromotions:
Increaseshorttermsalesorlongtermmarketshare Generateproducttrial
Objectives TradePromotions:
Obtainingdistributionandshelfspace Encouragingretailerstoadvertisethebrand
Objectives j SalesForcePromotions:
Signingupnewaccounts
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MajorSalesPromotionTools
ConsumerPromotionTools
Samples Coupons CashRefunds (Rebates) Pricepacks(centsoff deals) ) AdvertisingSpecialties Premiums PatronageRewards PointofPurchase Communications Contests,Games,and Sweepstakes p
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MajorSalesPromotionTools
TradePromotionTools
Di Discounts ou t (also (al ocalled alledprice i eoff, off offlist, li t a and d offinvoice) Allowances
Advertisingallowances Displayallowances
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MajorSalesPromotionTools
BusinessPromotionTools
Includesmanyofthesametoolsusedin consumerandtradepromotions Twoadditionaltools:
Conventionsandtradeshows Salescontests
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SalesPromotion
KeyDecisionsWhenDevelopingtheSales P Promotion ti Program: P
Sizeoftheincentive Conditionsforparticipation Promotionanddistributionoftheactualsales promotionprogram p p g Lengthofthepromotionalprogram Evaluation
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LearningGoals
1. Knowthemajordecisions involvedindevelopinganadvertising program. 2. Learnhowsalespromotioncampaignsare developedandimplemented. 3. Learnhowcompaniesusepublicrelationsto communicatewiththeirpublics. 4. Understandtherolesofadvertising,sales promotion,andpublicrelationsinthe promotionmix.
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PublicRelations
PublicRelations:
Buildinggoodrelationswiththecompanys variouspublicsbyobtainingfavorable publicity,buildingupagoodcorporate image,andhandlingorheadingoff unfavorablerumors,stories,andevents.
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PublicRelationsFunctions
PressRelations Product P d tP Publicity bli it PublicAffairs Lobbying Investor I t Relations R l ti Development
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PublicRelations
RoleandImpactofPublicRelations
Strongimpactonpublicawarenessatlower costthanadvertising Greatercredibilitythanadvertising Publicityisoftenunderused publicrelationscanbeap powerful Goodp brandbuildingtool
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MajorPublicRelationsTools
News S Speeches h BuzzMarketing CorporateIdentity Materials Mobile Marketing SpecialEvents W itt Materials M t i l Written Audiovisual Materials PublicService Activities Internet
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LearningGoals
1. Knowthemajordecisions involvedindevelopinganadvertising program. 2. Learnhowsalespromotioncampaignsare developedandimplemented. 3. Learnhowcompaniesusepublicrelationsto communicatewiththeirpublics. 4. Understandtherolesofadvertising,sales promotion,andpublicrelationsinthe promotionmix.
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Ch t 16 Chapter
PersonalSelling and dDirect Di Marketing
Copyright2008PearsonEducationCanada PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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CaseStudy CDWCanadaInc.
CDWCanadaserves businessesandpublicsector customers CDWsdirectmarketing modelcombineshightouch personalsellingwithmodern hightechwebpresenceto buildlastingcustomer relationships. Highlydevotedtocustomer withCircle CircleofService Service philosophy Nearly2000account managersareresponsiblefor buildingandmaintaining customerrelationships Accountmanagersworkclosely withcustomers. Salespeoplearehighly knowledgeable Trainingisextensive Ninetechnologyteamswith morethan150specialists supportsalespeoplescustomer problemsolvingefforts. Accountmanagersareenergetic dpassionately i l customer and focused CDWaccountmanagers succeedbyhelpingcustomers, assessingtheirneeds,and solvingtheirproblems
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LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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PersonalSelling
TheNatureofPersonalSelling
Salespersoncoversawiderangeofpositions fromordertakertoordergetterresponsible forrelationshipbuilding
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PersonalSelling
Salespeoplehavemanynames
Agents A Salesconsultants SalesRepresentatives Account Executives SalesEngineers DistrictManagers Marketingrepresentatives AccountDevelopment Representatives
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PersonalSelling
TheRoleoftheSalesForce
T Two oway aypersonal e o alcommunication o u i atio Moreeffectivethanadvertisingincomplex sellingsituations Thesalesforceplaysamajorroleinmost companies Thesalesforceworkstorepresentsthe companytocustomers Theyalsorepresentthecustomerstothe company
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LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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MajorStepsin SalesForceManagement
Pharmaceuticalcompanies haveextensivesalesforces whichvisit/sellto physicians. Whatwouldbethe challengesineachstepof salesforcemanagement forthesalesforceofa pharmaceuticallike Viagra?
?
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ManagingtheSalesForce
DesigningSalesForceStrategyand St t Structure
SalesForceStructure
Territorialsalesforcestructure Productsalesforcestructure Customersalesforcestructure Complexsalesforcestructure
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ManagingtheSalesForce
SalesForceStrategyandStructure
SalesForceSize
Manycompaniesusetheworkload approachtosetsalesforcesize
OtherIssues
Outsideandinsidesalesforces Team T selling lli
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ManagingtheSalesForce
RecruitingandSelectingSalespeople
Carefulrecruitingcan:
Increaseoverallsalesforceperformance Reduceturnover Reducerecruitingandtrainingcosts
TraitsofSuccessfulSalespeople
Intrinsicmotivation Disciplinedworkstyle Theabilitytocloseasale Abilitytobuildrelationshipswithcustomers
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ManagingtheSalesForce
TrainingSalespeople
Trainingperiodcanbeanywherefromafew weekstoayearormore Trainingisexpensive,butyieldsstrong returns ManycompaniesareaddingWebbasedsales trainingprograms
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ManagingtheSalesForce
TrainingSalespeople
Trainingprogramshavemanygoals
Identifywiththecompanyanditsproducts Knowaboutcustomersandcompetitors Thebasicsofthesellingprocess
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ManagingtheSalesForce
CompensatingSalespeople
Compensationelements:salary, salary bonuses, bonuses commissions,expenses,andfringebenefits Basiccompensationplans:
Straightsalary Straightcommission Salaryplusbonus Salarypluscommission
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ManagingtheSalesForce
CompensatingSalespeople
Compensationelements:salary, salary bonuses, bonuses commissions,expenses,andfringebenefits Basiccompensationplans:
Straightsalary Straightcommission Salaryplusbonus Salarypluscommission
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ManagingtheSalesForce
SupervisingSalespeople
Supervision p isusedtodirectandmotivatesalespeople p p Companieswillvaryinhowcloselytheysupervisetheir salespeople;willvarydependingontheskilllevelandmaturity ofthesalesforce,andtypeofselling
Toolsused:
Annualcallplansandtimeanddutyanalysiscanhelpprovide direction Salesforceautomationsystemsassistincreatingmoreefficient sales l f forceoperations TheInternetisthefastestgrowingsalestechnologytool
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ManagingtheSalesForce
SupervisingSalespeople
Effectivesupervisorsalsomotivatethesales force
Organizationalclimate Salesquotas Salesmeetings Positive P iti incentives i ti
Salesmeetings,salescontests,honors,etc.
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ManagingtheSalesForce
EvaluatingSalespeople
Severaltoolscanbeused
Salesreports Callreports Expensereports
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LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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ThePersonalSellingProcess
Thegoalofthepersonalsellingprocessis t find to fi dnewcustomers t and dsell llthem th something Mostsalespeoplespendtheirtime maintainingexistingaccountsand building ui i glong o gterm e customer u o e relationships e a io ip Notallstepsrequiredineverysale
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ThePersonalSellingProcess
ProspectingandQualifying
Ide Identifying tifyi customers u to e thatmay ayhave ha eaneed eedfor fo the productorservicebeingsold Onlyasmallnumberofprospectsbecomecustomers Prospectingrequireseffort,time,andcommitment
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ThePersonalSellingProcess
Preapproach:
Lea Learnas a much u habouttheprospective o e ti ecustomer u to e as a possible,priortoapproachingthemtoaskfora meeting Useallresourcestolearnbeforemeeting Settingcallobjectivesisimportanttobeing productiveandnotwastingthecustomerstime
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ThePersonalSellingProcess
Approach:
Meeti Meetingand a dgreeting eeti thecustomer u to e for fo thefi first ttime ti e Involvessalespersonsappearance,openinglines,and thefollowupremarks Listeningtothecustomeriscrucial
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ThePersonalSellingProcess
Presentationanddemonstration:
What a happens appe during u i gthe esales a e call a Purposeistouncoverneedsandthenattemptto satisfythem Questioningandlisteningskillsareimportant Technologycanhelporgetintheway Customersvalueempathy,honesty,punctuality, reliability,thoroughness,andfollowthrough
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ThePersonalSellingProcess
Handlingobjections:
The esalesperson a e pe o seeks ee ou out, ,clarifies, a i ie ,a ando overcomes e o e customerobjectionstobuyingtheproductorservice Customersobjectfordifferentreasons:noneed,lack ofinformation,productlimitation,orasanegotiating tactic Handlingobjectionsisimportant,butpreventing themismoreeffective;needtolookatqualifying skillsanduseoffeatures,advantages,andbenefits
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ThePersonalSellingProcess
Closingthesale:
Asking A ki thecustomer u to e tobuy(o (order) de )theproduct odu t Theonlystepthatproducesrevenue;mostimportant Fearofrejectionmakesthisstepthemostdifficult Keepitsimple,honest,anddirect;differenttypesof closingtechniquesmakeassumptionsthatcanbe dangerousifusedimproperly
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ThePersonalSellingProcess
Followup:
Whattakes take place la eafter afte thesale ale Toensurecustomersatisfaction Tokeepthedooropenforrepeatbusiness Askforreferrals
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PersonalSellingandCustomer RelationshipManagement
Theprincipalsjustdescribedaretransaction oriented Companieswanttoencouragerepeat purchasingbecauseitismoreefficientthan tryingtoreplacelostcustomers Ittakesdifferentskillstobuildrelationships withcustomers yprofitable p relationships p arebuilton Mutually creatingvalue,offeringpackagedsolutionsto problems,andimprovingproductsand processes
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LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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DirectMarketing
DirectMarketingconsistsofdirectoneto oneconnections ti with ithcarefully f ll targeted t t d individualconsumerstobothobtainan immediateresponseandcultivatelasting customerrelationships.
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DirectMarketing
ThenewDirectMarketingModel
DirectMarketingisboth,adirectmarketing channelandanelementofthemarketing communicationsmix Technologyhasmadeofdirectmarketinga newandcompletemodelfordoingbusiness. Firmsemployingthisdirectmarketingmodel (suchasDellComputer)useitastheonly approach
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HowDellChangedanIndustry
Dellcomputersrevolutionizedanindustry Previously,companiesbuiltcomputersforinventory,soldthrough retail ld distribution b network k Biggestchallenge:fastpaceoftechnologicalchangeincomputer componentscreatedobsoleteinventory Dellsbigidea:onlybuildcomputerstoorder,selldirectto customers,usejustintimeinventorymanagementtoeliminate obsolescence Sellingdirectlowerscostsandprices Thechallenge:providingthelevelsofcustomersalesassistanceand servicethatwerepreviouslygivenbyretailers Result:DellmarketshareofPCmarketisnow31%;dominatesthe industry
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FormsofDirectMarketing
Telephonemarketing:outboundandinbound,suffers fromconsumerburnout,technologytoblockcalls Directmailmarketing:flexible,personalized,butsuffers fromjunkmailimage Cataloguemarketing:thebigwinnersintheriseofthe Internet;hugecostefficienciesbymovingcatalogue offeringonline Directresponsetelevisionmarketing: marketing infomercialswork, work despiteapoorreputation Kioskmarketing:goingwherethecustomersare
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BenefitsofDirectMarketing
Forbuyers:
Convenient Easytouse Private Accesstoawealthofinformation Immediate Interactive
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BenefitsofDirectMarketing
ForSellers
Powerfultoolforbuildingrelationships Allowsfortargetingofsmallgroupsorindividuals withcustomizedoffersinapersonalizedfashion Canbetimedtoreachprospectsattherighttime Offersaccesstobuyersthatcouldntbereachedvia otherchannels Lowcost, cost effectivealternativeforreachingspecific markets
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CustomerDatabasesand DirectMarketing
Customerdatabase:organizedcollectionof comprehensive p dataaboutindividualcustomersor prospects,includinggeographic,demographic, psychographic,andbehavioraldata
Databasesincludecomprehensivedataincludinggeographic, demographic,psychographicandbehavioral Databasescanbeusedtoidentifyprospects,tailorproducts,and maintaincustomerrelationships Databasemarketingrequiressubstantialinvestmentin h d hardware, software, ft personnel l Buildcustomerloyaltybytailoringnewofferstotheirspecific interests
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LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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DirectMarketing
IntegratedDirectMarketing
Di Direct e tmarketing a keti campaigns a ai thatuse u ecoordinated, oo di ated multiplepromotionalvehiclesandmultiplestagesto improveresponseratesandprofits Avoidsconfusingthecustomer Generatesleverageofmoniesspent Suitstodaysmediaobsessedconsumer
Figure16.5
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DirectMarketing
PublicPolicyandEthicalIssues
Irritation,Unfairness,Deception,andFraud InvasionofPrivacy PersonalInformationProtectionandElectronic DocumentsAct (2004):
Consumerconsent Limitations Accuracy Righttoaccess
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LearningGoals
1. 2. 3. 4 4. 5. Discusstheroleofacompanyssalespeopleincreating valueforcustomersandbuilding gcustomer relationships Identifyandexplainthesixmajorsalesforce managementsteps Discussthepersonalsellingprocess,distinguishing betweentransactionorientedmarketingand relationshipmarketing D fi direct Define di tmarketing k ti and ddi discussits it benefits b fit t to customersandcompanies Identifyanddiscussthemajorformsofdirect marketing
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Ch t 17 Chapter
Marketinginthe DigitalAge
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LearningGoals
1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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CanadianTire
Foundedin1922bytwo brothers,A.J.BilesandJ.W. Biles l Startedoffrepairingvehicles, movedinautomotiveparts Introducedcataloguein1928 Nationalinstitution;462stores, 259gasstationsacrossCanada. Totalretailsales:$9billion Canadiantire.caoffersmore th 15 than 15,500 500products d t 1930s:offeredfirsttire guarantee 1958:CanadianTiremoney Waiteduntil2002tolaunch onlinestore
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2003:Crosspromotionwith g Canadadaily yrental Budget company Morethan1000itemsare availableonlyonline Recently,Canadiantire.cawas completelyredesignedto makeshoppingfaster,better, andeasier. eFlyerisfullyintegratedinto thewebstore Bymeldingitsonlineand traditionalretailworlds CanadianTirehascreateda powerfulnewmodelof retailing
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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MajorForcesShaping theDigitalAge
DigitalizationandConnectivity
Text,data,sound,andimagescanbe convertedintobitstreams Todayscomputers,appliances,automobiles, andcommunicationdevicesalloperateusing bitsofdigitalinformation Connectingthesedevicescreateshuge potentialforconvenienceandnewservices Intranet,Extranet,Internet
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MajorForcesShaping theDigitalAge
TheInternetExplosion
Wo World ldwide ideweb eband a dbrowsers b o e created eatedin i early ea ly1990s 1990 Dot.comcrashof2000didnotsloweddownusage growth Endof20thcentury:400millionwebsurfers Estimated2007:1.5billionwebsurfersworldwide penetrationinCanadahasreached78% Internetp TheInternethasbecometheprimarysourceof information Empowerscustomerswhenmakingdecisions
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MajorForcesShaping theDigitalAge
NewTypesofIntermediaries
Internet I e e o only ycompanies o pa ie such u a asAOL, AO ,A Amazon.com, a o o , Dell,eBay Traditionalcompaniesfeareddisintermediationby newetailers Newchannelrelationshipsdeveloping Manyclickonlycompaniesfailedtodevelopa profitablebusiness Lateentryclickandmortarcompaniesemergeas strongercompetitorsthanclickonly Notallgoodsandservicessuitableforvirtual purchasing
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MajorForcesShaping theDigitalAge
Customization:
Oldeconomy e o o ywas a builton o standardization ta da di atio ofgoods ood andservices Neweconomyrunsoninformation;easierto differentiate,customize,personalize,and communicate Todayscustomerwantstheproducttheirway Firmsletthecustomersdesigntheproductoffering Companiesbecomefacilitators Consumersbecomepro(active)sumers
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LearningGoals
1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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MarketingStrategy intheDigitalAge
Ebusiness:
Useselectronicmeansandplatformsto conductbusiness
Ecommerce:
Buyingandsellingprocessessupportedby electronicmeans
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MarketingStrategy intheDigitalAge
Emarketing:
Includeseffortsthatinform,communicate, promote,andsellproductsandservicesover theInternet
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MarketingStrategy intheDigitalAge
BenefitstoBuyers
Convenience Buyingiseasyandprivate Greaterproductaccess/selection Accesstocomparativeinformation Onlinebuyingisinteractiveandimmediate
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MarketingStrategy intheDigitalAge
BenefitstoSellers
Powerfultoolforcustomerrelationship building Reducecosts Increasespeedandefficiency greatflexibility y Offersg Globalaccess,globalreach
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1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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ECommerceDomains
B2C B2B C2C C2B Onlinesellingofgoodsandservicesto consumers lservices,clothing, l h computer Travel hardware/software,electronics,books,music, andvideoOnlineconsumers Onlineconsumers
Nowmoremainstreamanddiverse
Hascreatednewecommercetargeting opportunities Onlinebehaviordiffersbyage
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ECommerceDomains
B2C B2B C2C C2B Usingtradingnetworks,auctionsites,spot exchanges,onlinecatalogues,andbartersites toreachorganizationalcustomers B2BvolumeismuchlargerthanB2C;$28.3 billion Usedtoprovidebetterservice,increased efficiencies,andmorecompetitivepricing Opentradingexchanges
Emarketspacebringingsellersandbuyers together g
Privatetradingexchanges
Linkssellerswiththeirowntradingpartners
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ECommerceDomains
B2C B2B C2C C2B Onlineexchangesofgoodsand informationbetweenconsumers Theseexchangesaretheelectronic fleamarket eBayisthemostpopularauctionsite Otheruses:
Forums Newsgroups
Blogs
Allowsinterchangesofinformationfor specialinterestgroups Highlycredibleforadvertisers
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ECommerceDomains
B2C B2B C2C C2B Allowconsumerstosearchoutsellers, learnaboutoffers,initiatepurchase, di t t purchase h terms t ordictate
Ex:Priceline.com
Consumersbecomemoreactiveinthe process;empowered Consumershavedirectchannelto companiesforsuggestionsand complaints Some S sites it facilitate f ilit t the th feedback f db k processbetweencustomersand companies
Ex:Planetfeed.com
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ConductingECommerce
PurePlay/ClickOnlyCompanies
Etailers, tailers searchenginesandportals, portals ISPs ISPs,transaction sites,somecontentsites,enablersites Duringthedot.comgoldrushofthelate1990s stockspricesreacheddizzyingheights
Dot.comsfailedformanyreasons
Lackofplanningandresearch Didnotdevelopmarketingstrategiesandspent lavishlyofflineonmassmarketing Overemphasisonacquisitionvs.retention Lowmargins
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ConductingECommerce
ClickandMortarCompanies
Co Combine bi etraditional t aditio aland a donline o li eoperations o e atio Channelconflictwasinitiallyaconcern Ecommerceoftencreatednewcustomers,ratherthan cannibalizingexistingones Manyfirmsnowenjoygreatersuccessthantheir clickonlycompetition
Trustedbrandnames,greaterfinancialresources,larger customerbase,industryknowledge,andstrongsupplier relationshipswerekeyadvantages
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LearningGoals
1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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SettingupanEmarketingPresence
Creatingwebsites Placingonlineadsand promotions Creatingor participatinginWeb communities Using gEmail Corporatewebsites
Buildgoodwilland relationships;generate excitement
Marketingwebsites
Engageconsumers andattemptto purchase influencep
Websitedesign
7Csofeffective websitedesign
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SettingupanEmarketingPresence
SevenCsofWebsiteDesign
Context Content Community Customization Communication Connection Commerce
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SettingupanEmarketingPresence
Creatingwebsites Placing Pl i online li ads d and d promotions Creatingor participatinginWeb communities Using U i Email il Onlineformsofads andpromotions
Bannerads/tickers Skyscrapers Interstitials Contentsponsorships Microsites Viralmarketing
Futureofonlineads
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DiscussionQuestion
Whatistheconsumer responsetoInternet advertising? Whenisitwelcomed bytheconsumer? Whatelsecan advertisersdoto reachtheirtargets?
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SettingupanEmarketingPresence
Creatingwebsites Placingonlineadsand promotions Creatingorparticipatingin Webcommunities UsingEmail Sitesformembersto congregate g g onlineand exchangeviewson commoninterests Attractionisthestrong senseofcommunity generated Webcommunitiesallow memberswithspecial intereststoexchange views
Socialcommunities Workrelatedcommunities
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SettingupanEmarketingPresence
Creatingwebsites Placing Pl i online li ads d and d promotions Creatingor participatinginWeb communities Using U i Email E iland d Webcasting Emailmarketing
Keytoolfor fo B2Band a d B2Cmarketing Clutterisaproblem Enrichedformsof emailattemptto breakthroughclutter Spamisaproblem Permissionbased marketing
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LearningGoals
1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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PromiseandChallenges ofECommerce
TheContinuingPromiseofECommerce
O Online li emarketing a keti will illbe become o easuccessful u e ful businessmodelforsomecompanies ForotherstheInternetshouldbeusedasone approachortoolinthefullyintegrated marketingmix Theq questionishow, , notwhether, , to deployInternettechnology
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PromiseandChallenges ofECommerce
TheWebsDarkerSide
Internet I te etProfitability P ofitability
FewB2Ccompaniesareprofitable Limitedexposure,skeweddemographics NavigatingtheWebisoftenproblematic
LegalandEthicalIssues
Onlineprivacyandsecurityconcerns Internet I t tf fraud, d th thedi digital it ldi divide, id accessb byvulnerable l bl or unauthorizedgroups
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LearningGoals
1. 2 2. Identifythemajorforcesshapingthenewdigitalage Explainhowcompanieshaverespondedtothe Internetandnewtechnologieswithebusiness strategies,resultinginbenefitsforbothbuyersand sellers Describethefourmajorecommercedomains Discusshowcompaniesconductecommerceto profitablydelivermorevaluetocustomers Overviewthepromiseandchallengesthatecommerce presentsforthefuture
3. 4. 5.
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Ch t 18 Chapter
TheGlobal Marketplace
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LearningGoals
1. Discusshowtheinternationaltradesystem,economic, politicallegal, p g andculturalenvironmentsaffecta companysinternationalmarketingdecisions. 2. Describethreekeyapproachestoenteringinternational markets. 3. Explainhowcompaniesadapttheirmarketingmixes forinternationalmarkets. 4. Identifythethreemajorformsofinternational marketing k ti organizations. i ti
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CaseStudy McCainFoodsLimited
Foundin1956in Florenceville,N.B. Globalleaderamongfood processors Producesabout1/3ofthe frenchfriedpotatoes producedinternationally Worldslargestfrenchfry supplier pp toMcDonalds preferredbyJollibeeand BurgerKing Employs20,000people, generated$5.71billionin revenuesin2005selling productsinmorethan110 countries
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WinnerofCanadasexport awardstwotimes Shipshundredsofmillionsof kgs.offrozenproductayear customizedforlocaltastesand requirements UseimportsfromCanadato builditsChinesebusiness Establishincountry y operationsaftercareful researchandexperimentation Workedcloselywiththe Chinesegovernmentwhen enteringintoChina SimilartacticsinIndia.
PrinciplesofMarketing,SeventhCanadian Edition
LearningGoals
1. Discusshowtheinternationaltradesystem,economic, politicallegal, p g andculturalenvironmentsaffecta companysinternationalmarketingdecisions. 2. Describethreekeyapproachestoenteringinternational markets. 3. Explainhowcompaniesadapttheirmarketingmixes forinternationalmarkets. 4. Identifythethreemajorformsofinternational marketing k ti organizations. i ti
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Definitions
Globalization
Thegrowingintegrationofeconomiesand societiesaroundtheworld
GlobalFirm
Afirmthat,byoperatinginmorethanone country, y g gainsR&D,production, p marketing, g andfinancialadvantagesinitscostsand reputationthatarenotavailabletopurely domesticcompetitors.
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MajorDecisionsin InternationalMarketing
Acompanyfacessixmajordecisionsin i t international ti lmarketing k ti
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LookingattheGlobal MarketingEnvironment
TheInternationalTradeSystem
Ta Tariffs, iff quotas, uota embargos, e ba o exchange e ha econtrols, o t ol nontarifftradebarriers WorldTradeOrganizationandGATT Regionaleconomiccommunitiesorfreetrade zones
EU EuropeanUnion NAFTA NorthAmericanFreeTradeAgreement MERCOSUR Otherfreetradeareas
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LookingattheGlobal MarketingEnvironment
EconomicEnvironment
Industrialstructure
Subsistenceeconomies Rawmaterialexportingeconomies Industrializingeconomies Industrialeconomies
Income I d distribution b
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LookingattheGlobal MarketingEnvironment
PoliticalLegalEnvironment
Attitudestowardinternationalbuying Governmentbureaucracy Politicalstability Monetaryregulations
Exchange g rates, ,exchange g controls, ,etc.
Countertrade
Barter,compensation/buyback,counterpurchase
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LookingattheGlobal MarketingEnvironment
CulturalEnvironment
ImpactofCultureonMarketingStrategy
Culturaltraditions,preferences,businessnorms andbehaviorvaryfromcountrytocountry.
ImpactofMarketingStrategyonCultures
Exposuretoforeignproductsandmediacause changesinvalues, values muchtothechagrinofsome withinlocalmarkets GlobalizationorAmericanization
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DecidingWhetherto GoInternational
Notallcompaniesneedtoventureinto i t international ti lmarkets k t
Thedomesticmarketplaceiseasierandsafer
However,companiesneedtomonitor internationalbusinesses
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DecidingWhetherto GoInternational
Severalfactorsmaydrawnafirmintothe internationalarena
Growthopportunitiesoutsideofdomesticmarkets Asacounterattackagainstcompetitionathome Reducedependenceonexistingmarkets Needalargercustomerbasetoachieveeconomiesof scale
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DecidingWhich MarketstoEnter
Beforegoingabroad:
Defi Define einternational i te atio almarketing a keti objectives obje ti e and a dpolices, oli e andforeignsalesvolumegoals Decidehowmanycountriestotarget Evaluatethecountriesattractivenessbasedonthe product,culturaldistance,incomeandpopulation, politicalclimate,andotherfactorssuchas:market size, i market k growth, h costof fdoing d i business, b i competitiveadvantage,etc. Rankeachofthepossibleinternationalmarkets
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DecidingWhich MarketstoEnter
Possibleglobalmarketsshouldberanked onseveral lfactors. f t
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DecidingWhich MarketstoEnter
In1983Dominosopeneditsfirst internationalstoreinCanada, thenAustralia In1985AsiaandEngland In1988Colombia Dominoscontinuestogrowits internationallocationswithmore than2000storesoutsidetheU.S. HowdoyouthinkDominos choosesitscountries?
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LearningGoals
1. Discusshowtheinternationaltradesystem,economic, politicallegal, p g andculturalenvironmentsaffecta companysinternationalmarketingdecisions. 2. Describethreekeyapproachestoenteringinternational markets. 3. Explainhowcompaniesadapttheirmarketingmixes forinternationalmarkets. 4. Identifythethreemajorformsofinternational marketing k ti organizations. i ti
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MarketEntryStrategies
Thecompanymustdeterminethebestmodeof y entry. Eachsubsequententrystrategyinvolvesmore commitmentandrisk,butalsomorecontroland potentialprofits.
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DecidingHowto EntertheMarket
Exporting
Directvs.indirect
JointVenturing
Licensing,contractmanufacturing, managementcontracting,jointownership
DirectInvestment
Assemblyfacilities,manufacturingfacilities
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LearningGoals
1. Discusshowtheinternationaltradesystem,economic, politicallegal, p g andculturalenvironmentsaffecta companysinternationalmarketingdecisions. 2. Describethreekeyapproachestoenteringinternational markets. 3. Explainhowcompaniesadapttheirmarketingmixes forinternationalmarkets. 4. Identifythethreemajorformsofinternational marketing k ti organizations. i ti
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DecidingontheGlobal MarketingProgram
Thedecisionontheglobalmarketing programis i aconstant t tsearch hfor f abalance b l betweenstandardizationandadaptation. Marketerssuggestthatcompaniesshould thinkgloballybutactlocallyand advocate a o a eaglocal g o a strategy. a egy
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DecidingontheGlobal MarketingProgram
StandardizedMarketingMix
Samebasicproduct,advertising,distribution, andotherelementsofthemarketingmixare usedinallinternationalmarkets.
AdaptedMarketingMix
Themarketing gmixelementsareadjusted j for eachinternationaltargetmarket.
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DecidingontheGlobal MarketingProgram
GlobalPromotionStrategies
Standardizedglobalcommunication
Advertisingthemesarestandardizedfrom countrytocountrywithslightmodifications
Communicationadaptation
Advertisingmessagesarefullyadaptedtolocal markets
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DecidingontheGlobal MarketingProgram
GlobalPricingStrategies
Companiesfacemanyproblems
Priceescalation Pricingtoforeignsubsidiaries Recenteconomicandtechnologicalforces TheInternet
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DecidingontheGlobal MarketingProgram
GlobalDistributionChannels
Wholechannelview
Sellersheadquartersorganization Channelsbetweennations Channelswithinnations Numbersandtypesofintermediaries Size Si and dcharacter h t of fretail t ilunits it abroad b d
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LearningGoals
1. Discusshowtheinternationaltradesystem,economic, politicallegal, p g andculturalenvironmentsaffecta companysinternationalmarketingdecisions. 2. Describethreekeyapproachestoenteringinternational markets. 3. Explainhowcompaniesadapttheirmarketingmixes forinternationalmarkets. 4. Identifythethreemajorformsofinternational marketing k ti organizations. i ti
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DecidingontheGlobal MarketingOrganization
ManagingInternationalMarketing A ti iti Activities
Step1:Organizeexportdepartment Step2:Createaninternationaldivision Step3:Becomeaglobalorganization
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InternationalMarketing Organizations
Internationaldivisionorganizations
Geographicalorganization Worldproductgroups Internationalsubsidiaries
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LearningGoals
1. Discusshowtheinternationaltradesystem,economic, politicallegal, p g andculturalenvironmentsaffecta companysinternationalmarketingdecisions. 2. Describethreekeyapproachestoenteringinternational markets. 3. Explainhowcompaniesadapttheirmarketingmixes forinternationalmarkets. 4. Identifythethreemajorformsofinternational marketing k ti organizations. i ti
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