marketing management models

Marketing ManagementMarketing ManagementModelsModels

Eleventh EditionEleventh Edition

Marketing ManagementMarketing ManagementModelsModels

Eleventh EditionEleventh Edition

DEFINING DEFINING MARKETING FOR THE MARKETING FOR THE 2121STST CENTURY CENTURY

CHAPTER 1

Simple Marketing System

Industry(a collectionof sellers)

Industry(a collectionof sellers)

Market(a collectionof buyers)

Market(a collectionof buyers)

Communication

Goods / Services

Money

Information

Structure of Flow of Modern For-Ex

Resourcemarkets

Manufacturemarkets

Consumermarkets

Intermediarymarkets

Governmentmarkets

Resources

Taxes, goods

Money

Goods and Services

Resources

Goods and Services

MoneyMoney

Money

Services

Taxes

Taxes, goods

Services, money

Services, money

Services, money

Taxes, goods

4 P’s of Marketing Mix

Product

Place

Promotion

Price

Product Variety

Quality

Design

Features

Brand Image

Sales Promotion

Advertising

Sales Force

Public Relation

Direct Marketing

List Price

Discounts

Allowances

Payment period

Credit terms

Packaging

Sizes

Services

Warranties

Returns

Channels

Coverage

Assortment

Location

Inventory

Transport

Marketing Mix Strategy

Sales promotion

Advertising

Sales force

PublicRelation

Direct mail, telemarketing, and Internet

CompanyProductServicesPrices

Target Customer

Distributionchannel

Promotion Mix

Offering Mix

Sales Concept vs Marketing Concept

Starting Point

Focus Means Ends

Factory Products Selling and

promotion

Profits through sales volume

Profits through customer

satisfaction

Integrated marketing

Customer needs

Target market

(a) The Selling Concept

(b) The Marketing Concept

Customer Concept

Starting Point

Focus

Means Ends

Individual customer

One-to-one marketing integration and value chain

Profitable growth through capturing customer share, loyalty, and lifetime value

Customer needs and values

Marketing’s Role in Company

Production Finance

Marketing Human Resources

Marketing as an equal function

First -

Marketing’s Role in Company

Production

Finance

Marketing

Human Resources

Marketing as an more important function

Second -

Marketing’s Role in Company

Production

Finance

Human Resources

Marketing as the major function

Third -

Marketing

Marketing’s Role in Company

Production Finance

Human Resources

Marketing as the major function

Fourth -

Marketing

Customer

Marketing’s Role in Company

Production

Fina

nce

Hum

an

Resources

The customer as the controlling function and marketing as the integrative function

Fifth -

Marketing

Customer

ADAPTING ADAPTING MARKETING TO THEMARKETING TO THENEW ECONOMYNEW ECONOMY

CHAPTER 2

Supplier – Customer Relationship

SALES BUYING

CustomerSupplier

Executives

Merchandise

Systems

Buyers

Finance

Warehousing

Executives

Marketing

Systems

Sales

Finance

Manufacturing

TRADITIONAL STRUCTURE

Supplier – Customer Relationship

CustomerSupplier

Executives

Merchandise

Systems

Buyers

Finance

Warehousing

Executives

Marketing

Systems

Sales

Finance

Manufacturing

NEW ECONOMY STRUCTURE

BUILDING CUSTOMERBUILDING CUSTOMERSATISFACTION, SATISFACTION, VALUE VALUE ANDANDRETENTIONRETENTION

CHAPTER 3

Determinants of Customer-Delivered Value

Customer delivered value

Total customer value Total customer cost

Product value

Service value

Personnel value

Image value

Monetary cost

Time cost

Energy cost

Psychic cost

The Generic Value Chain

Firm infrastructure

Human Resource Management

Technology Development

Procurement

Inbound Logistics

Operations Outbound Logistics

Marketing & Sales

Service

Margin

Mar

gin

Primary Activities

Support Activities

The Customer-Development Process

Partners

Advocates

Members

Clients

Repeatcustomer

First-Timecustomer

ProspectSuspect

Disqualifiedprospect

Inactive or ex-customer

Levels of Relationship

Many customers/ distributors

Accountable Reactive Basic or reactive

Medium number of customers/ distributors

Proactive Accountable Reactive

Few customers/ distributors

Partnership Proactive Accountable

High Margin Medium Margin Low Margin

Customer-Product Profitability Analysis

P1 + + + Highly profitable product

P2 + Profitable product

P3 - - Losing product

P4 + - Mixed-bag product

C1 C2 C3

High–profit

customer

Mixed-bag

customer

Losing customer

PPRROODDUUCCTTSS

CUSTOMERCUSTOMERSS

WINNING MARKETS WINNING MARKETS THROUGH THROUGH MARKET-ORIENTED MARKET-ORIENTED STRATEGIC PLANNINGSTRATEGIC PLANNING

CHAPTER 4

The Strategic-Planning Implementation and Control Process

Corporate planning

Division planning

Business planning

Product planning

Measuring results

Diagnosing results

Taking correctiveaction

Organizing

Implementation

Planning Implementation

Controlling

BCG’s Growth-Share Matrix

StarsStars Question MarksQuestion Marks

Cash CowsCash Cows DogsDogs

Relative Market Share

Rela

tive M

ark

et

Sh

are

10x

0.1x1x

0

20%

10%

4

53

2

1

6 7

8

The Strategic-Planning Gap

Time (years)

Sale

s

0 5

Strategic-planning gap

Three Intensive Growth Strategies:Ansoff’s Product-Market Expansion Grid

1. Market-penetration strategy

3. Product-development

strategy

2. Market-development

strategy

(Diversification strategy)

Current Products

New Products

Current Markets

New Markets

The Business Strategic-Planning Process

Business mission

External Environment(opportunity &threat analysis)

Internal Environment(strength/weaknesses

analysis)

SWOT analysis

Goal formulation

Strategy formulation

Program formulation

Implementation

Feedback and Control

McKinsey 7-S Framework

StructureStructure

SharedSharedvaluesvalues

StaffStaff

SystemsSystems

StyleStyleSkillsSkills

StrategyStrategy

Hardware of Success

- Strategy

- Structure

- Systems

Software of Success

- Skills

- Skills

- Staff

- Shared values

Factors Influencing Company Marketing Strategy

Demographic/ economic environment

Political/ legal environment

Social/ cultural

environment

Technological/ physical

environment

Competitors

Suppliers Publics

Marketing Intermediarie

s

Targetcustomers

Product

Promotion

PricePlace

Marketing control

systemMar

ketin

g or

gani

zatio

n

and

impl

emen

tatio

n

syst

em

Marketing planning

system

Mar

ketin

g in

form

atio

n

syst

em

GATHERING GATHERING INFORMATION AND INFORMATION AND MEASURING MARKET MEASURING MARKET DEMANDDEMAND

CHAPTER 5

The Market Research Process

Defining theproblem

andresearchobjective

Defining theproblem

andresearchobjective

Develop the

research plan

Develop the

research plan

Collect the

information

Collect the

information

Analyze the

information

Analyze the

information

Present the findings

Present the findings

Make thedecision

Make thedecision

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

SCANNING THE SCANNING THE MARKETING MARKETING ENVIRONMENTENVIRONMENT

CHAPTER 6

Major Macro-environment Forces

Forces

DEMOGRAPHIC ENVIRONMENT

Worldwide population growthPopulation age mixEthnic and other marketsEducational groupsHousehold patternsGeographical shifts in populationFrom mass mkt to micro mkts

ECONOMIC ENVIRONMENT

Income distributionSavings, debt, and credit availability

POLITICAL-LEGAL ENVIRONMENTGrowth of special-interest groups

NATURAL ENVIRONMENT

Shortage of raw materialsIncreased energy costAnti-population pressuresChanging role of government

SOCIO-CULTURAL ENVIRONMENTHigh persistence of core cult valuesExistence of sub-cultureShifts of secondary cultural values through time

TECHNOLOGICAL ENVIRONMENT

Acceleration pace of changeUnlimited opportunity for innovationVarying R&D budgetsIncreased regulation of technological change

ANALYSING ANALYSING CONSUMER MARKET CONSUMER MARKET AND AND BUYING BEHAVIOURBUYING BEHAVIOUR

CHAPTER 7

Model of Buying Behaviour

Marketingstimuli

Otherstimuli

Buyer’scharacteristics

Buyer’s decision process

Buyer’sdecision

ProductPricePlacePromotion

EconomicTechnologicalPoliticalCultural

CulturalSocialPersonalPsychological

Problem recognitionInformation searchEvaluation of alternativesPurchase decisionPost-purchase behaviour

Product choiceBrand choiceDealer timingPurchase timingPurchase amount

The VALS Framework

Actualizers

Strugglers

Achievers Experiencers

Strivers Makers

Fulfilleds

Believers

Principle oriented

Status oriented

Action oriented

High Resources High Innovation

Low Resources Low Innovation

U r a Mouse Potato or a Techno-Striver..?

Mouse Potatoes(willing to spend for the

latest in technotainment)

New Age Nurtures(big spender, focused ontechnology for home use)

Fast forwards(biggest spenders, early

adopters of new technologyfor all use)

Gadget-Grabbers(favor online entertainment

but have less cash to spend)

Digital Hopefuls(limited budget but still interested in new tech)

Techno-Strivers(use technology from cell phones and pagers to

online services primarily)

Media Junkies(seek entertainment, cannot find online, prefer TV and

other older media)

Traditionalists(willing to use tech but

slow to upgrade)

Hand-Shakers(older consumer, do not touch computers, leave

them to assistants)

SIDELINED CITIZENS (not interested in technology)

CAREER FAMILY ENTERTAINMENT

OP

TIM

ISTS

PES

SIM

ISTS

MORE AFFLUENT LESS AFFLUENT

Maslow’s Hierarchy of Needs

Physiological needs(Food, water, shelter)

(security, protection)

(sense of belonging, love)

(self esteem, recognition, status)

(self development and realization)

Safety needs

Social needs

Esteem needs

Self- actualization

needs

1

2

3

4

5

Types of Buying Behaviour

Complex buying behaviour

Variety-seeking buying behaviour

Dissonance-reducing buying behaviour

Habitual buying behaviour

High Involvement

Low Involvement

Significant Difference between Brands

Few Difference between Brands

5-Stage Model of Consumer Buying Process

Problemrecognition

Informationsearch

Evaluation ofalternatives

Purchasedecision

Post-purchasebehaviour

Purchaseintention

Attitudesof others

UnanticipatedSituational

factors

Purchase decision

Successive Sets Involved in Consumer Decision Making

Total set Awareness set

Consideration set

Choice set Decision

IBMAppleDellHewlett- PackardToshibaCompaqNECTandy....

IBMAppleDellHewlett- PackardToshibaCompaq

IBMAppleDellToshiba

IBMAppleDell

?

ANALYSING ANALYSING BUSINESS MARKETS BUSINESS MARKETS AND BUSINESS AND BUSINESS BUYING BEHAVIOUR BUYING BEHAVIOUR

CHAPTER 8

Factors Influencing Industrial Buying Behaviour

ENVIRONMENT

Level of demandEconomic outlookInterest rateRate of techno- logical changePolitical and regulatory developmentCompetitive developmentSocial responsibility

ORGANIZATIONAL

Objectives

Policies

Procedures

Organizational structures

Systems

INTERPERSONAL

Interests

Authority

Status

Empathy

Persuasiveness

INDIVIDUAL

AgeIncomeEducationJob positionPersonalityRisk attitudesCulture

BUSINESSBUYER

DEALING WITH DEALING WITH THE THE COMPETIONCOMPETION

CHAPTER 9

Michael Porter’s 5-Competitive Forces Model

IndustryCompetitors(Segment

Rivalry)

Buyers(BuyerPower)

Suppliers(SupplierPower)

PotentialEntrants

(Threats ofMobility)

Substitutes(Threat of

Substitutes)

Barriers and Profitability

Low, stablereturns

Low, riskyReturns

High, stablereturns

High, riskyreturns

Exit Barriers

En

try B

arr

iers Low

Low

High

High

Hypothetical Market Structure

40%40%

20%20%

10%10%

30%30%

Market Leader

Market Challenger

Market Follower

Market Nicher

Defense Strategies

ATTACKER(3) Preemptive

(4) CounteroffensiveDEFENDER

(6)Contraction

(2) Flank

(5)Mobile

(1)Position

ATTACKER(3) Preemptive

(4) Counteroffensive

(6)Contraction

(2) Flank

(5)Mobile

(1)Position

Attack Strategies

ATTACKERDEFENDER

(3) Encirclement attack

(1) Frontal attack

(2) Flank attack

(3) Bypass attack

(5) Guerrilla attack

IDENTIFYING MARKET IDENTIFYING MARKET SEGMENTS AND SEGMENTS AND SELECTING SELECTING TARGET MARKETSTARGET MARKETS

CHAPTER 10

Basic Market-Preference Patterns

(a) Homogeneous preferences

(b) Diffused preferences

(c) Clustered preferences

Sweetness Sweetness Sweetness

Cre

am

iness

Steps in Segmentation Process

Needs-based SegmentationNeeds-based Segmentation

Segment IdentificationSegment Identification

Segment AttractivenessSegment Attractiveness

Segment ProfitabilitySegment Profitability

Segment PositioningSegment Positioning

Segment ‘Acid Test’Segment ‘Acid Test’

Marketing-Mix StrategyMarketing-Mix Strategy

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Major Segmentation Variables for Consumer Markets

GEOGRAPHIC

Region

City or metro size

Density

Climate

DEMOGRAPHIC

AgeFamilyFamily sizeFamily life cycleGenderIncomeOccupationEducationReligionRaceGenerationNationalitySocial class

PSYCHOLOGICAL

Lifestyle

Personality

BEHAVIORIAL

Occasions

Benefits

User status

Usage rates

Loyalty status

Readiness status

Attitude towards product

Major Segmentation Variables for Business Markets

DEMOGRAPHIC

IndustryCompany sizeLocation

PURCHASING APPROCHES

Purchasing-function organization

Power structure

Nature of existing relationship

General purchase policy

Purchasing criteria

SITUATIONAL FACTOR

UrgencySpecific applicationSize of order

OPERATING VARIABLES

TechnologyUser or non-userCustomer capabilities

PERSONAL CHARACTERISTICS

Buyer-seller similarityAttitude towards riskLoyalty

5-Patterns of Target Market Selection

P1

P2

P3

M1 M2 M3

Single-segment concentration

P1

P2

P3

M1 M2 M3

Selective specialization

P1

P2

P3

M1 M2 M3

P1

P2

P3

M1 M2 M3

P1

P2

P3

M1 M2 M3

Product specialization

Market specialization

Full market coverage

P – ProductP – Product

M - MarketM - Market

Segment-by-Segment Invasion Plan

Company A Company B Company C

Airlines Railroads Truckers

Large computer

s

Midsize computer

s

Personal computer

s

Product variety

Customer group

POSITIONING AND POSITIONING AND DIFFERENTIATING DIFFERENTIATING THE MARKET THE MARKET OFFERINGS THROUGH OFFERINGS THROUGH PRODUCT LIFE CYCLEPRODUCT LIFE CYCLE

CHAPTER 11

Method for Competitive-Advantage Selection

Competitive Advantage Technology

Cost Quality

Service

Company Standing 8 6 8 4

Competitor Standing 8 8 6 3

Importance of Improving Standing (H-M-L)

L H L H

Affordability and Speed(H-M-L)

L M L H

Competitor’s Ability to Improve Standing (H-M-L)

M M H L

Recommendation Action Hold Monitor Monitor Invest

H = High M = Medium L = Low

The BCG Competitive Advantage Matrix

VOLUME

STALEMATED

SPECIALISED

FRAGMENTED

Larg

eSm

all

Few Many

Size of the Advantage

Number of Approaches to Achieve Advantage

Sales and Product Life-Cycle

I II III IVSale

s and P

rofits

Time

Introduction Growth Maturity Decline

Strategies for each Stage continued in next slides…

Strategies for PLC – Stage I (Introduction)

High Skimming

Low Skimming

Low Penetration

High Penetration

Price Promotion

Strategies for PLC – Stage II (Growth)

Lower prices to attract the next layer of price-sensitive buyersLower prices to attract the next layer of price-sensitive buyers

nnnnnn

Shift from product awareness advertising to product preference advertisingShift from product awareness advertising to product preference advertising

Increase its distribution coverage and enter new distribution channelsIncrease its distribution coverage and enter new distribution channels

Enter new market segmentsEnter new market segments

Add new models and flanker productsAdd new models and flanker products

Improve product quality, adds new product features, improved stylingImprove product quality, adds new product features, improved styling

Strategies for PLC – Stage III (Maturity)

Growth Maturity

Stable Maturity Decaying Maturity

Market Modification Product Modification Market-Mix Modification

Converting nonuser

Entering new market segment

Winning competitors’ customers

Improve Quality

Improve Feature

Price

Distribution

Advertising

Sales Promotion

Personal Selling

Services

Strategies for PLC – Stage IV (Decline)

Identify theDecline Stage(compulsory)

KILL

SHELL

SELL

Common Product Life-Cycle Patterns

Time TimeTime

Sale

s V

olu

me

(a) Growth-slump-maturity pattern

(b) Cycle-recycle pattern

(c) Scalloped pattern

Primary circle

Recycle

Time TimeTime

Fashion FadStyle

Sale

s

DEVELOPING NEW DEVELOPING NEW MARKET OFFERINGMARKET OFFERING

CHAPTER 12

The New-Product Development Decision Process

1. Idea generation

2. Idea screening

3. Conceptdevelopment & testing

4. Marketing strategydevelopment

DROPDROP

Yes

Yes

Yes

Yes

No

No

No

No

5. Business analysis

6. Product development

7. Market testing

8. Commercialization

DROPDROP

Should we send the idea back for

productdevelopment?

Would it help tomodify the product

or marketingprogram?

Yes

No

Yes

No

No No

Yes

No No

Yes

Yes

Yes

Layfutureplans

DESIGNING GLOBAL DESIGNING GLOBAL MARKET OFFERINGSMARKET OFFERINGS

CHAPTER 13

Major Decisions in International Marketing

Deciding whetherto go abroad

Deciding which marketto enter

Deciding how toenter the market

Deciding on the marketing program

Deciding on the marketing organization

How many market to enter

Regional free trade zones

Evaluating potential markets

Next Slide…

5-Modes of Entry into Foreign Markets

Amount of commitment, risk, control and profit potential

Indirectexporting

Directexporting

LicensingJoint

venturesDirect

investment

5-International Product andPromotion Strategies

StraightExtension

Communicationadaptation

Productadaptation

Dualadaptation

Productinvention

Product

Do Not Change Product

Adapt Product

Develop New

Product

Pro

moti

on

Do Not Change Promotion

Adapt Promotion

Whole-Channel Concept for International Marketing

Seller

Seller’sinternationalmarketing

headquarterChannelsbetweennations

Channelwithinforeignnations

Finalbuyers

SETTING THE SETTING THE PRODUCT AND PRODUCT AND BRANDING STRATEGYBRANDING STRATEGY

CHAPTER 14

Components of the Market Offering

Attractivenessof the market

Offering

Attractivenessof the market

Offering

Value-based prices

Product features and quality

Service mix and quality

5-Product Levels

Core benefit

Basic Product

Expected Product

Augmented Product

Potential Product

Product-Mix Width and Product-Line LengthFor Procter & Gamble Products (Including Dates of Introduction)

Product-Mix Width

Pro

du

ct-

Lin

e

Len

gth

Detergents

Ivory Snow (1930) Dreft (1933) Tide (1946) Cheer (1950) Oxydol (1954) Dash (1954) Bold (1965) Gain (1966) Era (1972)

Toothpaste

Gleem (1952) Crest (1955)

Disposable Bar Soap

Ivory (1879) Kirk’s (1885) Lava (1893) Camay (1926) Zest (1952) Safeguard (1963) Coast (1974) Oil of Olay (1993)

Diapers

Pampers (1961) Luvs (1976)

Paper Tissue

Charmin (1928) Puffs (1960) Banner (1982) Summit (1992)

An Overview of Branding Decision

BrandNo Brand

ManufacturerbrandDistributor(private) brandLicensed brand

Individual namesBlanket familynameSeparate family namesCompany-individualnames

Line extensionBrandextensionMulti-brandsNew brandsCo-brands

RepositioningNorepositioning

Branding Decision

Brand-Sponsor Decision

Brand-Name Decision

Brand-Strategy Decision

Brand-Repositioning

Decision

DESIGNING DESIGNING AND AND MANAGING SERVICESMANAGING SERVICES

CHAPTER 15

Service-Characteristics

SERVICE

Intangibility Inseparability

VariabilityPerishability

Elements in a Service Encounter

Service Business

Not visible to customer

InternalOrganizational

System

Physicalenvironment

Contractpersonal

Visible tocustomer

The Service Business as a System

Service X

OtherService

Customer A

OtherCustomer

Direct Interaction Secondary Interaction

AdvertisingBilling and paymentSales callMedia storiesWord-of-mouth comments

3-Types of Marketing in Service Marketing

Cleaning/ maintenance services

Financial/ banking services

Restaurant industry

Inte

rnal

Mar

ketin

g

External Marketing

Internal MarketingEmployees Customers

Company

Service-Quality ModelWord of mouthcommunication

Personal needs Past experience

Expected service

Perceived service

Service delivery(including pre & post-contract)

Management perception ofconsumer expectation

Translation of perceptionsinto service-quality specification

Externalcommunication

to consumer

GAP 5

GAP 3

GAP 2

GAP 1GAP 2

Consumer

Marketer

Importance-Performance Analysis

Extremely important

Slightly important

Exte

rnal p

erfo

rmanceFa

ir p

erf

orm

ance

A. Concentrated here

B. Keep up the good work

C. Low priceD. Possible overkill

DEVELOPING DEVELOPING PRICE STRATEGY PRICE STRATEGY AND AND PROGRAMPROGRAM

CHAPTER 16

Nine Price-Quality Strategies

1. Premium strategy

2. High-value strategy

3. Super-value

strategy

4. Overcharging

strategy

5. Medium-value

strategy

6. Good-value

strategy

7. Rip-off strategy

8. False economy strategy

9. Economy strategy

PriceP

rod

uct

Qu

ality

High

High

Medium

Medium

Low

Low

Price Should Align with Value

High

High

Low

Low

Pri

ce p

aid

Value received

Medium

Medium

Mixed opportunities

Price = value

Undelivered value

Setting Pricing Policy

1. Setting thepricing objectives

2. Determiningdemand

3. Estimating costs

4. Analyzing competitors,costs, prices & offers

5. Selecting a pricingmethod

6. Selecting the finalprice

PRICE SENSITIVITY ESTIMATING DEMAND CURVES PRICE ELASTICITY OF DEMAND

TYPE OF COSTS AND LEVELS OF PRODUCTION

MARKUP PRICING TARGET-RETURN PRICING PERCEIVED-VALUE PRICING VALUE PRICING GOING-RATE PRICING AUCTION-TYPE PRICING

Price-Reaction Program for Meeting a Competitor’s Price Cut

Has competitorCut his price?

Hold our price at presentlevel; continue to watch

competitor’s price

Is the price likelyto significantlyhurt our sales?

How much has hisprice been cut?

Is it likely to be apermanent price

cut?

By less than 2%Include a cents-off

coupon for thenext purchase

By more than 4%Drop price to

competitor’s price

By 2-4%Drop price by half

Of the competitor’sprice cut

No

NoNo

YesYes

Yes

DESIGNING AND DESIGNING AND MANAGING VALUE MANAGING VALUE NETWORKS AND NETWORKS AND MARKETING MARKETING CHANNELSCHANNELS

CHAPTER 17

How a Distributor Effects an Economy of Efforts

M

M

M

C

C

C

M

M

M

C

C

C

a) Number of contacts

M x C = 3 x 3 = 9

a) Number of contacts

M + C = 3 + 3 = 6

M = Manufacturer C = Customer D = Distributor

D

1

12

34

5

6

7 8

9

2

3

4

5

6

5-Marketing Flows in the Marketing Channels

S-Supplier T-Transporter, warehouses B-Banks M-Manufacturer D-Dealer C-Customer A-Adv Agency

1. Physical Flow

2. Title Flow

3. Payment Flow

4. Information Flow

5. Promotion Flow

SS

SS

SS

SS

SS

TT

BB

T,BT,B

AA

BB

T,BT,B

AA

TT

TT

TT

TTMM

MM

MM

MM

MM

CC

CC

CC

CC

CC

DD

DD

DD

DD

DD

Consumer Marketing Channels

Manufacturer ManufacturerManufacturerManufacturer

WholesalerWholesaler

Jobbler

RetailerRetailerRetailer

Consumer ConsumerConsumerConsumer

0-level 1-level 2-level 3-level

Industrial Marketing Channels

Manufacturer ManufacturerManufacturerManufacturer

Manufacturer’srepresentative

Manufacturer’srepresentative

Industrialdistributors

Industrialcustomer

Industrialcustomer

IndustrialcustomerIndustrial

customer

0-level 1-level 2-level 3-level

The Value-Adds vs Cost of Different Channels

High

High

Low

Low

Valu

e-a

dd

of

sale

s

Cost per transaction

Internet

Telemarketing

Retail stores

Distributors

Value-addedpartners

Sales forces

Direct sales

channels

Indirect channels

Direct marketing channels

Channels Value Added and Market Growth Rate

• Introductory - PC’s hobbyist stores - Designer apparel: boutiques

4. Declining - PC’s mail order - Designer apparel: off-price stores

2. Declining - PC’s specialty

retailers - Designer apparel: better departmental

stores

3. Declining - PC’s mass

merchandisers - Designer apparel: mass merchandisers

High

High Low

Low

Mark

et

Gro

wth

R

ate

Value Added by the Channels

MANAGING MANAGING RETAILING, RETAILING, WHOLESALING, AND WHOLESALING, AND MARKET LOGISTICSMARKET LOGISTICS

CHAPTER 18

Retail Positioning Map

Bloomingdale’s Wal-Mart

Tiffany Sunglass Hut

Narrow

High Low

Broad

Bre

ad

th o

f th

e p

rod

uct

lin

e

Value Added

Major Retail Types

Retail Types

Specialty Stores

Department Stores

Super-market

Convenience Stores

Discount Stores

Off-price Retailer

Superstore

Catalog Showroom

Retail – Marketing Decision

Target MarketProduct

Assortment &Procurement

Service andStore

AtmospherePrice Decision

PromotionDecision

Place Decision

Wholesale Type

MerchantWholesaler

Full-ServiceWholesaler

Limited-ServiceWholesaler

Broker and Agent

Agents

MiscellaneousWholesaler

Manufacturers’ and Retailers’Branches and Offices

Brokers

Wholesaler – Marketing Decision

Target MarketProduct

Assortment &Services

Price DecisionPromotionDecision

Place Decision

Market-Logistics Decision

OrderProcessing

Warehousing Inventory Transportation

MANAGING MANAGING INTEGRATED INTEGRATED MARKETING MARKETING COMMUNICATIONCOMMUNICATION

CHAPTER 19

Communication Process – Elements

SENDER

Encoding Decoding

RECEIVER

Media

Message

Feedback Response

Noise

Developing Effective Communication – Steps

Identify targetaudience

Manageintegratedmarketing

communication

Determiningobjectives

Measureresults

Selectchannels

Decide onmedia mix

Establishbudget

Designmessage

1

2

3

4 5

6

7

8

Response Hierarchy Models

Models

Stages

Cognitive stage

Affective stage

Behaviour stage

AIDA Model

Hierarchy-of-Effects Model

Innovation-Adoption

Model

Communications Model

Attention

Interest

Desire

Action

Awareness

Knowledge

Liking

Preference

Conviction

Purchase

Awareness

Interest

Evaluation

Trial

Adoption

Exposure

Cognitive response

Reception

Attitude

Intention

Behaviour

MANAGING MANAGING ADVERTISING, SALES ADVERTISING, SALES PROMOTION, PUBLIC PROMOTION, PUBLIC RELATION, AND DIRECT RELATION, AND DIRECT MARKETINGMARKETING

CHAPTER 20

5-Ms of Advertising

Mission

Sales goalsAdvertising objectives

Money

Factors to consider Stages in PLC Market share and consumer base Competition and clutter Advertising frequency Product substitutability

Messages

Message generationMessage evaluation and selectionMessage executionSocial-responsibility review

Media

Reach, frequency, impactMajor media typesSpecific media vehiclesMedia timingGeographical media allocation

Measurement

Communication impactSales impact

Major Media Types

Newspaper Television Direct Mail Radio

Magazine Outdoor Yellow Pages Newsletters

Brochures Telephone Internet

Classification of Advertising Timing Patterns

Level Rising Falling Alternating

Con

cen

trate

dC

on

tin

uou

sIn

term

itte

nt

Number of messages per month

Month

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10) (11) (12)

Formula for Measuring Sales Impact of Advertising

Share ofexpenditure

Share ofvoice

Share ofmind and

heart

Share ofmarket

Business and Sales Force Promotion Tools

Trade Showsand

ConventionsSpecialtyAdvertising

SalesContract

Major Tools in Marketing

PublicationsPublications

SpeechesSpeeches

SponsorshipsSponsorshipsEventsEvents

Public-ServicePublic-ServiceActivitiesActivities

NewsNews

IdentityIdentityMediaMedia

MANAGING MANAGING THE THE SALES FORCESALES FORCE

CHAPTER 21

Designing a Sales Force

Designing theSales Force

Sales forceobjectives

Sales forcestrategy

Sales forcestructure

Sales forcesize

Sales forcecompensation

Managing the Sales Force

Managing theSales Force

Recruiting andSelecting salesrepresentatives

Trainingsales

representatives

Supervisingsales

representatives

Motivatingsales

representatives

Evaluatingsales

representatives

Major Steps in Effective Selling

Prospectingand

qualifying

Pre-approach

Approach

Follow-upand

maintenance

Closing

Overcomingobjectives

Presentationand

demonstration

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Classic Bargaining Tactics

- Acting Crazy - Big Pot - Get Prestigious Ally - The Well Is Dry - Limited Authority - Whipsaw/Auction - Divide and Conquer - Get Lost/Stall for Time - Wet Noodles - Be Patient - Let’s Split the

Difference - Trial Balloon - Surprises

MANAGINGMANAGINGTHE THE TOTAL MARKETING TOTAL MARKETING EFFORTEFFORT

CHAPTER 22

Functional Organization

Marketingvice-president

Marketingvice-president

Marketingvice-president

Marketingvice-president

Marketingvice-president

Marketingvice-president

Thank YouThank You