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Chapter 3: Understanding Consumer Behavior To understand consumer behavior, we need to answer the following core questions: Who is important

in the buying decision? What are their choice criteria? How do they buy? Where do they buy? When do they buy?

Who buys? 5 roles in decision making process: 1. Initiator 2. Influencer 3. Decider 4. Buyer 5. User One person may perform multiple roles. The role played by different household members vary with the type of product under consideration and the stage of the buying process. How they buy? Consumer decision-making process: 1. Need recognition/problem awareness: 2 issues govern the degree to which the buyer intends to resolve the problem: o the magnitude of gap between the desired and present situation o the relative importance of the problem 2. Info search - The search can be internal (memory)/external (Personal sources such as friends, family, and Commercial sources) - Objective is to build up the array of brands that may provide solution to the problem 3. Evaluation of alternatives - Consumers level of involvement is a key determinant of the extent to which they evaluate brand - 4 factors that affect involvement: o Self-image o Perceived risk o Social factors o Hedonistic influences (pleasure) - High-involvement situation suggests that marketing managers need to provide a good deal of information about the positive consequences of buying - Low-involvement situations: gaining top-of-mind awareness, providing positive reinforcement through advertising, and seeking to gain trial are more important than providing masses of info about consequences of buying the brand. 4. Purchase

5. Post-purchase evaluation of decision Some customers may experience some post-purchase concerns, known as Cognitive Dissonance What are the choice criteria? 1. Technical criteria - relates to the performance of the products/services 2. Economic criteria - cost aspects of purchase 3. Social criteria - impact that the purchase makes on the persons perceived relationship with other people 4. Personal criteria - emotions are important element of decision-making Influences on consumer behavior Comprises of 3 elements: 1. The buying situation: 3 kinds of situations a. Extended problem solving high degree of info search + close examination of alternatives b. Limited problem solving the consumers have some experience info search through memory c. Habitual problem solving consumers repeat-buy products little/no evaluation 2. Personal influences a. Info processing: 2 key aspects are i. Perception = means by which we select, organize and interpret sensory stimulation into a meaningful picture of the world. 3 processes used to sort the masses of stimuli that could be perceived into a manageable amount are selective attention, selective distortion and selective retention. ii. Learning b. Motivation can be grouped into 5 categories: i. Physiological fundamental of survival ii. Safety iii. Belongingness and love iv. Esteem v. Self-actualisation c. Beliefs and attitudes attitude is an overall favorable or unfavorable of a product. The consequence of a set of beliefs may be a positive or negative attitude toward the product. Changing attitude is important in convincing consumers to try a brand. d. Personality e. Lifestyle i. Mainstreamers habitual purchase behavior, brand loyal ii. Aspirer buy fads, are impulse shoppers iii. Succeeders iv. Transitionals impulsive behavior, unique product v. Reformers have eclectic taste, authenticity and ecology concerned vi. Struggling poor price-based but also look for instant gratification

vii. Resigned poor price-based but also look for instant reassurance of branded goods f. Life cycle 3. Social influences a. Culture there has been a strong trend of increased internationalization of cultures (e.g. sushi and Korean barbecue available around the world now) b. Social class in UK social class based on occupation c. Reference groups a group of people that influences an individuals attitude or behavior (opinion leader can exert enormous power over purchase decision) Influences on organizational buying behavior 3 influencing factors are: 1. The buy class org purchases may be classified as a. New task little/no experience, thus a lot of info is required b. Straight buy buy previously purchased items c. Modified rebuy some change has occurred to require alteration to the normal purchase procedure The buy classes affect organizational buying in the following ways: - Membership of the Decision-Making Unit (DMU) changes - Decision-making process can be longer as the buy class changes from a straight to a modified rebuy and to a new task - DMU members are more likely to be receptive to new task and modified rebuy than straight buy 2. The product type a. Materials b. Components c. Plant and equipment d. Products and services for MRO (maintenance, repair and operation) 3. The importance of purchase important when it involves large sum of money, high cost of making wrong decision, and high uncertainty about the outcome of alternative offerings Key features of organizational purchasing practice - JIT purchasing - Online purchasing creates vertical electronic marketplaces (industry specific) and horizontal electronic marketplace (cross industry boundaries) - Relationship marketing create, develop and enhance relationships with customers and other stakeholders - Reverse marketing the buyer attempts to persuade the supplier to provide exactly what the org wants

Chapter 5 Market Segmentation, Targeting and Positioning Market segmentation is the identification of individuals or organizations with similar characteristics that have significant implications for the determination of market strategy. The benefits of market segmentation: Better matching of customer needs; Enhanced profitability; Enhanced opportunities for growth; Improved customer retention; More effective targeting of communications; Opportunities for segment dominance. Consumer segmentation methods: Variable Examples Behavioural Convenience, status, performance Benefits sought Self-buy, gift Purchase occasion Solus buying, brand switching, Purchase behaviour innovators Usage Heavy, light or non-users of selected Perceptions and beliefs product category Favourable, unfavourable Psychographic Trendsetters, conservatives, Lifestyle sophisticates Personality Extroverts, introverts, aggressive, submissive Profile Under 12, 12-18, 19-25, 26-35, 36-49, Age 50-64, 65 Gender Female, male Life cycle Young single, young couples, young Social class parents, middle-aged empty-nesters, Terminal education age retired Income Upper middle, middle, skilled working, Geographic unwaged Geodemographic 16, 18, 21 years Income breakdown according to study objectives and income levels per country North vs south, urban vs rural, country Upwardly mobile young families living in larger owner-occupied houses, older people living in small houses, European regions based on language, income, age profile and location Segmenting organizational markets:

Organizational markets could be segmented by the following criteria: Organizational size; Industry; Geographic location; Choice criteria (key criteria used by organizations when they are evaluating suppliers offerings); Purchasing organization (decentralized versus centralized purchasing). Criteria for successful segmentation: 1) Effective; 2) Measurable; 3) Accessible (the company must be able to formulate effective marketing programmes for the segments that it identifies); 4) Actionable (the company must have resources to exploit the opportunities identified through the segmentation scheme); 5) Profitable. Target marketing: Once the market segments have been identified, the next important activity is the selection of target markets. Target marketing refers to the choice of specific segments to serve, and is a key element in market strategy. An organization need to evaluate the segments and decide which ones to serve using the five criteria outlined above. Positioning is the act of designing the companys offering so that it occupies a meaningful and distinct position in the target customers mind.

Developing a positioning strategy: Deciding what position to try to occupy in the market requires consideration of three variables, namely the customers, the competitors and the company itself. Once the overall positioning is agreed, the next step is to develop a positioning statement. A positioning statement is a memorable, imageenhancing, written summation of the products desired stature. The statement could be evaluated using the criteria shown in the figure below.


Creditibilit y

Successful Positionin g

Consistenc y

Competeti veness

Repositioning involves changing the target market, the differential advantage or both. There are four repositioning strategies: image repositioning and/or product repositioning; intangible repositioning (e.g. retaining the product but changing the market segment) or tangible repositioning (e.g. moving up- or downmarket by introducing a new range of products to meet the needs of new customers).

CHAPTER 6: BRANDS PRODUCTS VS BRANDS Products can be anything that has a capacity to satisfy customer needs. Distinguish between products (being tangible, e.g. car) and services (being intangible, e.g. medical examination). Branding is the process by which companies distinguish their product offerings from the competition. o Building and maintaining a brand is one of the critical tasks of the marketing manager. o The power of brands to affect perceptions is particularly noticeable in blind product testing. o Understanding core benefits provided by products is important term to identifying potential source if competition. BRANDING Developing a brand is difficult , expensive and takes time The benefits of brands, strong brands deliver: o Company value: The financial value of companies can be greatly enhanced by the possession of strong brands. o Consumer preference and loyalty: can have positive effects on consumer perceptions and preferences. o Barrier to competition: the impact of the strong, positive perception held by customer about top brands.

o High profits: strong, market-leading brands are rarely the cheapest; because brand equity means that consumers receive added value over their less powerful rivals. o Base for brand extensions: A strong brand provides a foundation for leveraging positive perceptions and goodwill from the core brand to brand extensions. BUILDING BRANDS Involves making decisions about: brand name and how the brand is developed and positioned. Naming brands: Good brands give industrial manufacturers the opportunity to compete on bases other than price. Brand name should be memorable and easy to pronounce. Brand name may suggest product benefits. Be distinctive. Market research is used to test associations, memorability, pronunciation and preferences. Ensure that brand name does not infringe an existing brand name. 3 brand name strategies: Family brand name o Used for all products o The goodwill attached to the family brand name benefits all brands. o Use it in advertising helps the promotion of all. o Risk: If one of brands receives unfavourable publicity or unsuccessful the reputation of the whole range of brands can be tarnished. Individual brand name o Doesnt use its company name on its brands. o This may be necessary when it is believed that each brand requires a separate, unrelated identify. Combination o Family and individual brand names are combined. o Capitalize on the reputation of the company while allowing the individual brands... to be distinguished and identified. o One criterion for deciding on a good brand name is that it evokes positive associations. Developing brands: Brand building involves a deep understanding of both the functional (e.g. case of use) and emotional (e.g. confidence) values that customers use when choosing between brands Successful brand becomes established, it tends to endure for a very long time. Management must be prepared to provide a consistently high level of brand investment to establish and maintain the position of a brand in the marketplace. Brand building is expensive.

Analytical framework can be used to dissect the current position of a brand in the marketplace and to form basis of a new brand positioning strategy. The brand position is built on six elements: o Brand domain Brands target market o Brand heritage the background and its culture o Brand values core values and characteristics o Brand assets what makes the brand distinctive o Brand personality the character described in terms of other identities. o Brand reflection how the brand relates to self identity. Brand domain corresponds to the choice the target market; and the other elements provide avenues for creating a clear differential advantage. BRANDS MANAGEMENT ISSUES Manufacturer brands versus own-label brands Manufacturer brands are created by producers and bear their own chosen brand names. Own-label brands are created and owned by distributors. E.g. : the power of low-price supermarket own-label brands has focused many producers of manufacturer brands on introducing socalled fighter brands Brand extension and stretching tangible value is added to a company by the goodwill associated with respected brand name. The higher financial value is called BRAND EQUITY. Brand names with high brand equity are candidates to be used on other new brands. A brand extension is the use of an established brand name on a new brand within the same broad market. E.g. Unilever expanded Dove soap brand into deodorants, shower gel and bodywash. McCafe has been a successful extension of the McDonald's. o Important marketing tool. o 2 key advantages: it reduces risk in releasing new products and less costly than alternative launch strategies. o Distributors and consumers may perceive less risk if the new brands comes with an established brand name. o The task of building awareness of the new brand is eased. o Cannibalization, where new brand gains sales at the expense of the established brand. o If the new brand name is extended too far there can be a loss of credibility and this is something that management needs to guard against. A brand stretching is when an established brand name is used for brands in unrelated markets. e.g.: Celebrities extend their brand into a variety of product categories. Pan-european and global branding A pan-European brand is one that has successfully penetrated the European market. Global brand is one that has achieved global penetration levels.

Pan-European and Global brands have advantages: o They can attain tremendous economies of scale. o Standardized. o The uniform image of many global brands is reassuring to consumers o Ability to offer a worldwide service. Difficult to implement a standardized branding strategy across countries. The questions is which parts of the brand can be standardized and which must be varied across countries. Co-branding Where to brands are combined Product-based co-branding or communications-based co-branding Product-based co-branding, involves the linking of 2 or more existing brands from different companies to form a product. o Two variants: Parallel co-branding, 2 independent brands join forces to form a combined brand. Ingredient-co-branding, where one supplier explicitly chooses to position its brand as an ingredient of a product. o Advantages about alliance Can capture multiple resources of brand equity and add value and provide a point of differentiation. Can position a product for a particular target market Can reduce the cost of product introduction sinces two well-known brands are combined, accelerating awareness, acceptance and adoption. Communications -based co-branding, involves the linking of 2 or more existing brands from different companies or business units for the purposes of joint communications. o Very popular in sponsorship deals. (Shells brand name appearing on Ferrari cars). MANAGING BRAND AND PRODUCT PORTFOLIOS The process of managing groups of brands and product lines is called PORTFOLIO PLANNING. Management needs to decide which brands to invest in, hold or withdraw support from. The Boston consulting Groups (BCGs) growth-share matrix is a technique borrowed from strategic management in helping companies to make product mix and/or product line decisions. The axes of which are based on market growth rate and relative market share

o Stars The market leaders in High-growth are known as stars. Resources should be invested to maintain/increase the leadership position. o Problem Children or Question marks. Cash drains because they have low profitability and require investment to enable them. o Cash cows High market share in low-growth markets means that cash cows should be defended. Can be allocated as necessary to the different products line to ensure that a balanced portfolio is maintained. o Dogs Weak products that compete in low-growth markets. MANAGING BRAND AND PRODUCT LINES OVER TIME: THE PRODUCT LIFE CYCLE Product life cycle is a useful tool for conceptualizing the changes that may take places during the time. It has 4 stages: o Introduction When product is first introduced on to the market its sales growth is typically low and losses are incurred as a result of heavy development and initial promotional cost. Companies will be monitoring the speed of product adoption. The strategy marketing objective is to build sales by expanding the market for the product. The brand objectives will be to create product awareness so that customers will become familiar with benefits. Promotion will support the brand objectives. Typically, price will be high. o Growth Period of faster sales and profits growth The strategy marketing objective is to build sales and market share. The strategic focus will be to penetrate the market by building brand preference. Product will be redesigned to create differentiation Promotion will be stress the functional and/or psychological benefits.

Price will fall. o Maturity Sales will eventually peak and stabilize as saturation occurs, hastening competitive shakeout. The survivors now battle for market share by introducing products improvements, using advertising and sales promotional offers, dealer discounting and price cutting but the result is strain on profit margins. The need for effective brand building is felt most acutely during maturity as brand leaders are in the stronger position. o Decline When new technology or changes in consumer tastes work to reduce demand for the product, sales and profits fall. Promotional and product development budget may be slashed. Observations: Not all products follow the classic S-Shaped curve, the duration of the PLC is unpredictable, It is the result of marketing activities, not the cause. NEW PRODUCT DEVELOPMENT Introduction of new products to the marketplace is the life blood of corporate success. Companies have to work on new product development programmes and nurture an innovative climate. 4 broad categories of new product: o Product replacement: new products are launched, and include revisions and improvements to existing products, repositioning and cost reductions. o Additions to existing products: new products that add to a company's existing product lines. o New product lines: new products launches and represent a move into a new market. o New-to-the-world products: new product launches, and create entirely new markets. Carry the highest risk. MANAGING THE NEW PRODUCT DEVELOPMENT PROCESS New product development is expensive, risky and time consuming. A seven-step new product development process consists in: Idea generation o Internal source: Some companies can be use brainstorming technique. o External soured: Examining competitors products, distributors can also be a source of new ideas directly, keeping in close contact with customers. Screening o The ideas need to be screened in order to evaluate their commercial value. o Other companies may use: more flexible open discussion among members of the new product development committee.

Concept testing o Allows the views of customers to enter the new product development process at an early stage. Business analysis o Estimates of sales, costs and profits will be made, based on the results of the concept test, as well as on considerable managerial judgement; this is known as the business analysis. Product development o Usually necessary to integrate the skills of designers, engineers, production, finance and marketing specialists. o Two reasons why product development is being accelerated: Consumer electronic and cars change so fast. Cutting time to market can lead to competitive advantage. o Marketing testing: Takes measurement of customer acceptance. Exist 2 methods: Simulated market: set up a realistic market situation in which sample of customers choose to buy goods from a range provided by the organizing company. Test Marketing: when the new product is launched in one, or a few, geographical areas chosen to be representative of its intended market. It's an acid test, more realistic, give more accurate sales penetration and repeat purchasing estimates. Potential problems: test towns and areas may not be representative of the nation market, need to run for long enough to enable the measurement. Commercialization o Commercialization strategy relies on marketing management making clear choices regarding the target marketing. o An understanding of the diffusion of innovation process is a useful starting point for choosing a target market. The actors curve are: innovators, early adopters, early majority, late majority and laggards PRODUCTS MANAGEMENT ISSUES Product safety: one of major concerns about product safety has been that of the safety of genetically modified products. Planned obsolescence: the main thrust is to know what is an acceptable length of time before replacement is necessary. Deceptive packaging: Happen when a product is presented in an oversized package, giving the impression that the consumer is getting more than is actually the case.


Marketing of service enterprises presents additional challenges, i.e. services are produced and consumed at the same time Unique Characteristics of Services (see Figure 7.1) Intangibility Inseparability Variability Perishability Service Marketing Mix 7-Ps: product, promotion, price, place, people, physical evidence, process Product 4 characteristics of successful brand names: 1. Distinctiveness: identifies service provider and differentiates from competition 2. Relevance: communicates nature of service and benefit 3. Memorability: easily understood and remembered 4. Flexibility: covers current business as well as foreseeable new ventures Promotion Cowells 4 approaches: 1. Persuade satisfied customer to inform others 2. Develop materials that customers can pass on 3. Target opinion leaders in advertising campaigns 4. Encourage potential customers to talk to current customers Also target communication at employees Price Key marketing tool for 3 reasons: 1. Indicator of perceived quality 2. Controlling demand 3. Price sensitivity as segmentation variable Place Expansion means multi-site strategy, therefore store location is critical People Personnel influence customer perception of product quality; moments of truth Complex relationship between staff satisfaction and customer satisfaction Physical evidence Layout of service operation can be a compromise between the operations need for efficiency and marketings desire for effectively servicing the customer Process Procedures, mechanisms and flow of activities

Drive for efficiencies could mean outsource parts of service process, which increases risks for service performance and reputation (in-flight meal) Barriers to Matching of Expected and Perceived Service Levels Misconceptions Inadequate resources (cost reduction, inconvenience) Inadequate delivery Exaggerated promises Meeting Customer Expectations 10 criteria used to evaluate outcome and experience of a service encounter: 1. Access 2. Reliability 3. Credibility 4. Security 5. Understanding the customer 6. Responsiveness 7. Courtesy 8. Competence 9. Communication 10. Tangibles Relationship Marketing Ongoing or periodic desire for the service by customer (insurance) Customer controls selection of service provider (select hotel vs. random taxi) Customer has alternatives to choose (restaurants vs. one utility provider) 6 Benefits of Developing Customer Relationships 1. Increased purchases 2. Lower costs 3. Lifetime value 4. Sustainable competitive advantage 5. Word-of-mouth 6. Employees job satisfaction 2 Aspects of Building Relationships Bonding 1. Level 1: financial incentives (discounts); easy to copy hence low sustainable competitive advantage 2. Level 2: financial + social bonds (customize service) 3. Level 3: financial + social + structural bonds (design service to solve customers problems, e.g. logistics) Service Recovery Solve problem, restore customers trust, and improve service system Set up tracking system, train staff, encourage learning Non-profit Organizations Segment into donors and clients

Same marketing procedures and short distribution systems, but different pricing Political parties: focus groups provide feedback mechanism Event marketing to raise funds Use further promotion (direct mail) and publicity to attract sponsorship, which is vital income source See pg.185 for glossary Marketing Chapter 8 Pricing Strategy 1. Three basic approaches to setting prices Shapiro and Jackson identified three methods of setting prices and in practice, it is sensible for a company to adopt an integrated approach to pricing, paying attention not only to customer needs but also to cost levels (cost-based pricing) and competitor prices. 1.1. Cost: (See Action 8.2 for the French motor company, Renaults Logan) 1.1.1. Strengths: -give an indication of the minimum price (break even) -applicable after other pricing methods are used to check if worthwhile to launch the product. Note 1: direct cost pricing or marginal cost pricing which refers to set price below full costs (used commonly in services companies such as aircraft or hotel rooms to cover direct costs and contribute to overheads. Not a long term sustainable approach. Note 2: Once direct and fixed costs have been measured, break-even analysis can be used to estimate the sales volume needed to balance revenue and costs at different price levels. 1.1.2. Limitations: -leads to an increase in the price as sales fall -illogical because a sales estimate is made before a price is set -focuses on internal costs instead of customers willingness to pay -technical problem in allocating overheads in multi-product firms 1.2. Competition: price levels set by competitors. Some firms are happy simply to benchmark themselves against their major competitors, setting their prices at levels either above, the same as or below them. Three forms: 1.2.1. Firms follow the prices charged by leading competitors 1.2.2. Producers take the going-rate price 1.2.3. Contracts are awarded through a competitive bidding process Advantage: simple and easy to use (except for competitive bidding where guessing competitive bids prices might be difficult) Flaws: 1) Differential advantages of the firm are not taken into account which might justify the price differences 2) Risky if a firms cost position is weaker than that of its competitors.

1.3. Marketing: focuses on the value that customers place on a product in the marketplace and the nature of the marketing strategy used to support the product. Three useful techniques to uncover customers value perceptions 1.3.1. Trade-off/conjoint analysis: measurement of the trade-off between price and other product features which enable their effects on product preference to be established. Respondents are asked to choose preferred product profile consisting of product features and prices. Using computer model to analyze the answers and measure the impact on preferences of increasing or reducing the price. Ex: 3M use this technique at the test marketing stage for new products. Risk: No cash expenditure is involved so respondent may act differently in real purchase. 1.3.2. Experimentation Overcome Trade-off analysis risk by placing a product on sale at different locations with varying prices. Test marketing is often used to compare the effectiveness of varying prices. Restrictions: the areas would need to be matched in terms of target customer profile so the result can be comparable and the test needs to be long enough (suggested 6-12 months) for trial and repeat purchase at each price can be measured. More useful when pricing consumer products. 1.3.3. Economic value to the customer (EVC) analysis Commonly used in industrial markets where economic value considerations such as reducing costs/increasing revenue are prime objectives. Revealing for products whose purchase price represents a small proportion of the lifetime costs to the customer. EVC figure is the total amount a customer would have to pay to make the total life cycle costs of a new and a reference product the same. 2. Key factors that influence price-setting decisions In addition to above mentioned, marketing decisions below will also influence price levels. 1) Position strategies: Aldi and Lidl target cost-conscious grocery shoppers with a policy of lowest prices on a range of frequently purchased household goods. VS yachts, luxury cars, golf club memberships etc. Price is an indicator of quality. Psychological pricing: $2.99 instead of $3.00 2) New product launch strategies Figure 8.2 New product launch strategies

Rapid Skimming: Microsoftx Xbox, Apples iPod Slow Skimming: Bosch Rapid penetration: easyJet, Ryanair Slow penetration: own-label brands A skimming strategy is most suitable in situations where customers are less price-sensitive while penetration pricing strategies are more likely to be driven by company circumstances where the company is seeking to dominate the market, where it is comfortable to establish a position in the market initially and make money later, and/or where it seeks to create a barrier to entry for competitors. 3) Production-line strategies Economy cars, family saloons, executive cars, and so on. 4) Competitive marketing strategies Four strategic objectives relating to pricing: Build Hold Harvest: implies the maintenance or raising of profit margins. Reposition 5) Distribution channel strategies Products sold through intermediaries such as distributors or retailers. Price strategy is dependent on understanding not only ultimate customer but also the needs of distributors and retailers. 6) International marketing strategies Challenges: price escalation for shipping and transporting cost, margins paid to local distributors, customs duties or tariffs, sales taxes, exchange rates, inflation rates difference. Be careful with parallel importing (products destined for an international market are re-imported back into the home market and sold through unauthorized channels at levels lower than the company wishes to charge) 3. Managing price changes 3.1. Initiating price changes Table 8.3 Initiating price changes

3.2. Reacting to competitors price changes Table 8.4 Reacting to competitors' price changes

Background knowledge (read if you have more time): Companies decide the price V.S. Consumers decide how much to pay (music industry: Radiohead, a band offered fans to download their album, In Rainbows from Radiohead.com and paid whatever they liked in Oct. 2007. By doing so, margin eaters such as record company, distributors, and retailers were cut off. In Nov. average amount fans paid was US$6, substantially less than the regular CD price but better than nothing, which is what bands receive for illegal downloads.) Price is revenue earner which is different from other marketing mix elements such as product, promotion, place, physical evidence and etc. which are costs. Price is just one element of the marketing mix which should be blended with product, promotion and place to form a coherent mix that provides superior customer value. Price is an important part of positioning strategy since it often sends quality cues to customers. Use of technology, greater levels of globalization and retail competition help to drive down cost. Internet development and euro introduction gives greater levels of price transparency. Thus price setting and management are key activities that influence firms profitability.

CH 9 Promotion mix, 7 technique tools: 1. Advertising 2. Sales promotion 3. Publicity 4. Sponsorship 5. Direct marketing 6. Internet marketing 7. Personal selling In addition to these seven tools, other techniques: exhibitions; product placement in movies, songs or video games. The promotional mix used must be aligned with the decisions made with regard to product, pricing and distribution, in order to communicate benefits to target market. Integrated marketing communications(IMC) Five considerations will have major impact on the choice of the promotional mix 1. Resource availability and the cost of promotional tools 2. Market size and concentration 3. Customer information needs 4. Product characteristic 5. Push versus pull strategies: a)distribution push b) consumer pull Table 9.1

The communication process

Stages in developing an integrated communications campaign

Advertising Developing advertising strategy: direct marketing; sales promotion Defining advertising objectives Setting the advertising budget Message decisions: advertising message; advertising platform Media decisions

Choice of media class and media vehicle are two key decisions Media class options 1. Television 2. Press National newspaper Regional newspaper Trade and technical Magazines 3. Posters 4. Cinema 5. Radio Other factors affect the media class decision: size of advertising budget; competitive activity; the views of the retail trade Media vehicle is the choice of a particular newspaper, magazine, television spot, poster site, etc. Executing the campaign The key organizational issue is to ensure that the right advertisements reach the right media at the right time. Evaluating advertising effectiveness The results provide important input from the target consumers themselves rather relying solely on advertising agency views. Organizing for campaign development

Sales promotion Key reasons for the growth in sales promotion: 1. Increased impulse purchasing 2. The rising cost of advertising and advertising clutter 3. Shortening time horizons 4. Competitor activities 5. Measurability Sales promotion strategy Selecting the type of sales promotion to use Consumer promotion techniques Coupons; Premiums; Money off; Bonus packs; Free samples; Prize promotions; Loyalty cards Trade promotion techniques Price discounts; Competitions; Allowances; Free goods Pre-testing techniques: group discussions; hall tests; experimentation

Public relations and publicity 9.5 P234 9.3 P236 Sponsorship Gaining publicity

Creating entertainment opportunities Fostering favourable brand and company associations Improving community relations Creating promotional opportunities New developments in sponsorship

Other promotional tools: Exhibitions Product placement