Notesale: Turn your study into money

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Marketing
Chapter 1 – Marketing: creating and capturing customer value
• Example of Specsavers  directed to target group
o Hassle to buy glasses, makes it easier and more affordable to buy glasses
What is Marketing?
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Deals with customers
Marketing is managing profitable customer relationships
Two-fold goal: attract new customers by promising superior value, keep & grow
customers by delivering satisfaction
Marketing: The process by which companies create value for customers and build
strong customer relationships to capture value from customers in return
Satisfying customer needs
The aim of marketing is to make selling unnecessary
Build customer relationships
Marketing Process: Understand the marketplace and customer needs and wants 
design a customer-driven marketing strategy  construct an integrated marketing
programme that delivers superior value  build profitable relationships and create
customer delight  capture value from customers to create profits and customer
equity
Marketing is the intermediary between company and customers
Marketing management: The art and science of choosing target markets and building
profitable relationships with them
Market segmentation  target marketing
Customer management and demand management
Value proposition  benefits that will be delivered to customer thru product
Marketing management orientations:
o Production
o Product
o Selling
o Marketing
o Societal marketing
Production concept
o The idea that consumers will favour products that are available and highly
affordable and that the organisation should therefore focus on improving
production and distribution efficiency
Product concept
o Products that offer the most quality, performance, features  make
continuous product improvements
Selling concept
o Large-scale selling and promotion effort
Marketing concept
o Knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do

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The societal marketing concept
o Consider consumers’ wants, company’s requirements, consumers’ long term
interests, and society’s long-term interests
Integrated marketing plan and programme
The changing marketing landscape
o Uncertain economic environment
o Digital age
o Rapid globalisation
o Sustainable marketing – the call for more social responsibility
o Not for profit marketing
See diagram on p
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Firm blends these to produce the response it wants in
the target market  blends them into an effective integrated marketing programme
 delivers value to consumers, company’s tactical tool kit for establishing strong
positioning in the target markets

• 4 P’s
• Product: variety, quality, design, features, brand name , packaging, services  target
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customers
Price: List price, discounts, allowances, payment period, credit terms  target
customers
Promotion: Advertising, personal selling, sales promotion, public relations 
intended positioning
Place: Channels, Coverage, Locations, Inventory, Transportation, Logistics
 four P’s only seller’s view of the market
 four C’s buyer’s viewpoint

• 4 C’s
o Customer solution (Product)

o Customer cost (Price)
o Convenience (Place)
o Communication (Promotion)
• Marketers selling products / customers see themselves as buying value
• Managing the marketing effort: analysis, planning, implementation, evaluation and
control
• SWOT analysis (Strengths, Weaknesses, Opportunities and Threats)

Chapter 7 – Customer-driven marketing strategy: creating value for target
customers
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Segmentation - dividing up markets into meaningful customer groups
Targeting – choosing which customer groups to serve
Differentiation – creating market offerings that best serve targeted customers
Positioning – positioning offerings in the minds of customers
Tactical marketing tools – the four P’s
Instead of scattering their marketing efforts – “shotgun” approach
 firms are focusing on buyers who have greater interest in the value they create
best “rifle” approach
• four major steps in designing a customer – driven marketing strategy
o company selects the customers that it will serve
o market segmentation
▪ involves dividing a market into smaller segments of buyers with
distinct needs, characteristics or behaviours that might require
separate marketing strategies or mixes
o Market targeting/ targeting
▪ Consists of evaluating each market segment’s attractiveness and
selecting one or more market segments to enter
o How the company will create value  Differentiation & Positioning
o Differentiation
▪ Involves differentiating a firm’s market offering to create superior
customer value
o Positioning
▪ Arranging for a market offering to occupy a clear, distinctive and
desirable place relative to competing products in the minds of target
consumers
• Market segmentation
o Buyers in any market differ in their wants, resources, locations, buying
attitudes and buying practices
o Divide large, heterogeneous markets into smaller segments that can be
reached more efficiently and effectively with products and services that
match their unique needs

▪ Segmenting consumer markets, segmenting business markets,
segmenting international market, requirements for effective
segmentation
o Segmenting consumer markets
▪ Try different segmentation variables
• Geographic, demographic, psychographic and behavioural
variables
▪ Geographic
• World region or country, country region
• Nations, states, regions, counties, cities or neighbourhoods
• “creating store of community strategy” stores near universities
sell many frozen pizza’s etc
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o Focus on BRIC countries – Brazil, Russia, India and China because of rapidly
increasing buying power
o Political and legal factors such as type and stability of government,
receptivity to foreign firms, monetary regulations and amount of bureaucracy
o Cultural factors can also be used, grouping markets according to common
languages, religions, values and attitudes, customs and behavioural patterns
o Internet connect consumers around the world
o Intermarket segmentation also called cross-market segmentation form
segments of consumers who have similar needs in buying behaviours even
though they are located in different countries
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Ikea targets the aspiring global middle class selling good-quality furniture
that ordinary people worldwide can afford
• Requirements for effective segmentation
o Measurable
▪ Size, purchasing power and profiles of segments can be measured
o Accessible
▪ Effectively reached and served
o Substantial
▪ Are large and profitable enough to serve

o Differentiable
▪ Conceptually distinguishable and respond differently to different
marketing mix elements and programmes
o Actionable
▪ Effective programmes can be designed for attracting and serving
segments
• Market targeting
o Look at three factors
▪ Segment size, growth and segment structural attractiveness and
company objectives and resources
▪ Segment is less attractive when containing strong and aggressive
competitors
▪ Substitute products may limit prices and profits that can be earned in
a segment relative power if buyers also affects segment
attractiveness
▪  buyers with strong bargaining power relative to sellers will try to
force prices down, demand more services and set competitors against
one another – all at the expense of seller profitability
▪ segment will be less attractive if it contains powerful suppliers who
can control prices or reduce the quality or quantity of ordered goods
and services
▪ some segments can be dismissed quickly because they don’t fit with
company’s long-term objectives
▪ only enter market where company can create superior customer
value and gain advantages over its competitors
o Selecting target market segments
▪ Target market consists of a set of buyers who share common needs or
characteristics that the company decides to serve
• Undifferentiated (mass) marketing
• Differentiated (segmented) marketing
• Concentrated (niche) marketing
• Micromarketing (local or individual marketing)
▪ Undifferentiated marketing
• Target the whole market with one offer
• Common in the needs of consumer rather than on what is
different
• Ignore market segment differences
▪ Differentiated marketing
• Market coverage strategy in which a firm decides to target
several market segments and designs separate offer for each
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Toyota  prius to Toyota lexus each targeting its own
segments of car buyers
• Increases costs of doing business
• Extra marketing research, forecasting, sales analysis,
promotion planning and channel management

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Company must weigh increased sales against increased costs
when deciding on a differentiated marketing strategy
Concentrated marketing
• Firm goes after a large share of one or a few segments or
niches
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whole foods upmarket retailer has grown faster than
larger rivals concentrating on organic food
• Market more effectively by fine-tuning its products, prices and
programmes to the needs of carefully defined segments
• Market more efficiently targeting its products or services,
channels and communications programmes toward consumers
that it can serve best and most profitably
• That’s how small companies get into the market by targeting
niche markets and expand later
• It is also riskier to target just one or a few markets –
companies prefer to diversify in several market segments
Micromarketing
• Tailoring products and marketing programmes to the needs
and wants of specific individually and local customer
segments; it includes local marketing and individual marketing
• Suit the tastes of specific individuals and locations
• Rather than seeing a customer in every individual,
micromarketers see the individual in every customer
• Includes local marketing and individual marketing
Local marketing
• Tailoring brands and promotions to the need and wants of
local customer segments – cities, neighbourhoods and even
specific stores
• Geodemographics, stores neat offices etc
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Individual marketing
• Tailoring products and marketing programmes to the needs
and preferences of individual customers – also called one-toone marketing, customised marketing and markets-of-one
marketing
• Mass customisation is the process which through which firms
interact one-to-one with masses of customers to design
products and services tailor-made to individual needs
• Proactive merchandising – ads on TV screen are “watching”
you as well – see who is watching and change accordingly
Choosing a targeting strategy
• Best strategy also depends on the degree of product variability

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Market variability – if most buyers have the same tastes, buy
the same amounts and react the same way to marketing
efforts, undifferentiated marketing is appropriate
• Competitors’ marketing strategies are important, pay
attention to what competitor is doing
▪ Socially responsible target marketing
• The issue is not really who is targeted but rather how and for
what
• Controversies – unfairly target vulnerable segments or target
them with questionable products or tactics
• Socially responsible marketing calls for segmentation and
targeting that serve not just the interests of a company but
also the interests of those targeted
Differentiation and positioning
o Value proposition - how it will create differentiated value for targeted
segments and what positions it wants to occupy in those segments
o Product’s position is the way a product is defined by consumer on important
attributes – the place the product occupies in consumers’ minds relative to
competing products
o Consumers cannot always re-evaluate products therefore they position
products in their minds through perception, impression and feelings that
consumers have for the product compared with competing products
o Marketers must plan positions that will give their products the greatest
advantage in selected target markets and must design marketing mixes to
create these planned positions
Positioning maps (p
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Example: “To busy, mobile professionals who need to always be
in the loop, the BlackBerry is a wireless connectivity solution that gives you
an easier, more reliable way to stay connected to data, people and resources
while on the go”
Communicating and delivering the chosen position
o Once the position is chosen, company must take strong steps to deliver and
communicate the desired position to its target consumers
o All company’s marketing mix efforts must support the positioning strategy
o Concrete action
o Deliver position
o Build consistent and believable position
o Establish and maintain position through consistent performance and
communication
o Adapt it when needed
o Avoid abrupt changes because of confusion
o Position should evolve gradually as it adapts to ever-changing marketing
environment

Chapter 8 – Products, services and brands: building customer value
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What is a product?
o Anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need
o More than just tangibles also services, events, persons, places, organisations/
ideas or mixture of these entities
o Services are a form of product that consists activities, benefits or satisfactions
offered for sale that are essentially intangible and do not result in the
ownership of anything; banking, hotel services, airline travel, retail etc
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Manufactured materials and parts consist of component materials
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iron, yarn, cement and wires) and component parts (e
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small
motors, tyres and castings)
• Price and service are the major marketing factors, branding
and advertising tend to be less important
o Capital items
▪ Help in a buyer’s production or operations including installations and
accessory equipment
▪ Major purchases such as buildings (e
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factories and offices), fixed
equipment (e
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generators, drill presses, large computer systems and
lifts) accessory equipment includes portable factory equipment and
tools (e
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hand tools and lift trucks) and office equipment (e
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computers, fax machines and desks)
o Supplies and services
▪ Operating supplies (e
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lubricants, coal, paper and pencils) repair and
maintenance items (e
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paint, nails and brooms), supplies are the
convenience products of the industrial field
▪ Business services include maintenance and repair services (e
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window and computer repair) and business advisory services (e
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legal, management consulting and advertising) such services are
usually supplied under contract
Organisations, persons, places and ideas
o Organisation marketing
▪ Create, maintain or change attitudes and behaviour of target
consumers toward an organisation
• Sponsor public relations or corporate image advertising
campaigns to market themselves and polish their image
o Person marketing
▪ consists of activities undertaken to create, maintain or change
attitudes toward particular people
▪ Politicians, entertainers and sports figures to professionals such as
doctors, lawyers and architects use person marketing to build their
reputations
▪ Also companies use well-known personalities to help sell their
products or causes
o Place marketing
▪ Involves activities undertaken to create, maintain or change attitudes
or behaviour toward particular places; cities, states, regions and even
entire nations compete to attract tourists, new residents etc
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Colgate typically carries different brands within each line
o Depth
▪ Number of versions offered for each product in the line
o Consistency
▪ How closely related the various product lines are in end use,
production requirements, distribution channels or some other way
o Company can increase its business in four ways
▪ It can add new product lines, widening its product mix
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The market and demand
o How customers’ perceptions of value affect the prices they are willing to pay
o Consumer and industrial buyers balance the price of a product or service
against the benefits of owing it
Pricing in different types of markets
o Pure competition – the market consists of many buyers and seller trading a
uniform commodity, such as wheat, copper or financial securities, sellers do
not spend much time on marketing strategy
o Monopolistic competition – the market consists of many buyers and sellers
who trade over a range of prices rather than a single market price
▪ A range of prices exists because sellers can differentiate their offers to
buyers
▪ Sellers try to develop differentiated offers for different customer
segments, and in addition to price, freely use branding, advertising
and personal selling to set their offers apart
o Oligopolistic competition – the market consists of a few sellers who are
highly sensitive to each other’s pricing and marketing strategies
▪ Few sellers, each seller Is alert and responsive to competitor’s pricing
strategies
o Pure monopoly – the market consists of one seller
▪ May be a governed monopoly, a private regulated monopoly or a
private non-regulated monopoly
Analysing the price-demand relationship

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o Demand curve – a curve that shows the number of units the market will buy
in a given time period, at different prices that might be charged
o The higher the price the lower the demand
Price elasticity of demand
o Price elasticity of demand = %change in quality demanded
▪ % change in price
o if demand hardly changes with a small change in price, we say a demand is
inelastic
o if demand changes greatly, we say the demand is elastic
The economy
o Consumer spending is influenced by economy
o Lower prices mean lower margins
o May lessen consumers’ value perception of product
o To put prices up again may be difficult
o Emphasis value and financial savings
o Offer great value for money
Other external factors
o Must know what impact its prices will have on other parties in its
environment
o Government is another important external influence on pricing decisions
o Social concerns may need to be taken into account

Chapter 12 – Marketing channels: delivering customer value
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Supply Chains and the Value Delivery Network
o Building relationships with company’s supply chain
o Upstream and downstream partners
o Upstream from the company is the set of firms that supply the raw materials,
components, parts, information, finances and expertise needed to create a
product or a service
o Downstream on the distribution channels/marketing channels that look
toward the customer; wholesalers, retailers
o Make-and sell view of business
o Demand chain it suggests a sense-and-respond view of the market
o Planning starts by identifying the needs of the target customers
o Value delivery network
▪ A network composed of the company, supplies, distributors and,
ultimately, customers who “partner” with each other to improve the
performance of the entire system in delivering customer value
The Nature and importance of marketing channels
o Intermediaries, value delivery network
How channel member add value
o Create greater efficiency in making goods available to target markets
o Contacts, experience, specialisation and scale of operation, intermediaries
usually offer the firm more than it can achieve on its own
o Intermediaries reduce the amount of work
o Intermediaries play an important role in matching supply and demand

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o Channel members add value by bridging the major time, place and
possession gaps that separate goods and services from those who use them
o Intermediaries help with
▪ Information
▪ Promotion
▪ Contact
▪ Matching
▪ Negotiation
▪ Physical distribution
▪ Financing
▪ Risk taking
Number of channel levels
o Channel level – a layer of intermediaries that performs some work in bringing
the product and its ownership closer to the final buyer
o Number of intermediary levels indicates the length
o Direct marketing channel that has no intermediary levels
o Indirect marketing channel containing one or more intermediary levels
o Connected by flows; physical flow, flow of ownership, payment flow,
information flow, promotion flow
Channel behaviour and Organisation
Channel behaviour
o Channel members depend on each other
o Success of individual channel members depends on overall channel success
o Should understand and accept their roles, coordinate their activities and
cooperate to attain overall channel goals
o Channel conflict – disagreement among marketing channel members on
goals, roles and rewards – who should do what and for what rewards
▪ Horizontal conflict occurs among firms at the same level of the
channel some Ford dealers in the same location are complaining that
other dealer is “stealing deals”
Channel design decisions
o Struggle between what is ideal and what is practical
o Channel systems often evolve to meet market opportunities and conditions
o Marketing channel design – designing effective marketing channels by
analysing customer needs, setting channel objectives, identifying major
channel alternatives and evaluating those alternatives
Analysing consumer needs
o Are part of customer-value delivery network
o What do target consumers want from the channel
o Company must balance consumer needs not only against feasibility and costs
of meeting these needs but also against customer price preferences
o Success of discount retailing shows that consumers will often accept lower
service levels in exchange for lower prices
Setting channel objectives
o Which segments to serve
o Best channels to use in each case

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o Company wants to minimise the total channel cost of meeting customerservice requirements
o Also influenced by nature of the company, its products, its marketing
intermediaries, its competitors and the environment
o Company’s size and financial situation determine which marketing functions
it can handle itself in which it must give to intermediaries
Identifying major alternatives
Types of intermediaries
o Retailers, value-added resellers, independent distributors, dealers,
wholesalers
o The more intermediaries the less control
o Intermediaries help to have a bigger “spread” of the product though
Number of marketing intermediaries
o Intensive distribution
▪ Stocking the product in as many outlets as possible
o Exclusive distribution
▪ Giving a limited number of dealers the exclusive right to distribute the
company’s products in their territories
▪ Luxury brands
▪ Company gains more control
▪ Enhances image
o Selective Distribution
▪ The use of more than one but fewer than all the intermediaries who
are willing to carry the company’s products
▪ Develop good working relationships with selected channel members
and expect a better-than-average selling effort
▪ Good market coverage with more control and less cost than does
intensive distribution
Responsibilities of channel members
o Need to agree on terms and responsibilities of each channel member
o Agree on price policies, conditions of sale, territory rights and the specific
services to be performed by each party
o List price & fair set of discounts
o Define channel member’s territory
o Be careful about where it places new resellers
Evaluating the major alternatives
o Economic criteria, a company compares the likely sales, costs and profitability
of different channel alternatives
o Control issues, giving intermediaries control
o Adaptability criteria, keep channel flexible, so it can adapt to environmental
changes
Designing international distribution channels
o Each country has unique distribution system
o China is scattered – struggle with challenge of assembling efficient supply
chains in China
o Government regulations make it more difficult
o Local customs make it more difficult

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Channel Management Decisions
o Marketing channel management, selecting managing and motivating
individual channel members and evaluating their performance over time
Selecting Channel Members
o What characteristics distinguish the better ones
▪ Channel member’s years in business
▪ Other lines carried
▪ Growth and profit record
▪ Cooperativeness and reputation
▪ Store’s customers
▪ Location
▪ Future growth potential
Managing and motivating channel members
o Partner relationship management (PRM)
o See intermediaries as “customers” as well

Chapter 14 – Communicating customer value: Integrated Marketing
Communications Strategy
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The Promotion Mix
o Or marketing communications mix – The specific blend of promotion tools
that the company uses to persuasively communicate customer value and
build customer relationships
▪ Advertising
• Any paid form of non-personal presentation and promotion of
ideas, goods or services by an identified sponsor
• Broadcast, print, Internet, outdoor and other forms
▪ Sales Promotion
• Short-term incentives to encourage the purchase or sale of a
product or a service
• Discounts, coupons, displays and demonstrations
▪ Personal Selling
• Personal presentation by the firm’s sales force for the purpose
of making sales and building customer relationships
• Sales presentations, trade shows and incentive programmes
▪ Public relations (PR)
• Building good relations with the company’s various publics by
obtaining favourable publicity; building up a good corporate
image; and handling or heading off unfavourable rumours,
stories and events
• Press releases, sponsorships, special events and web
pages
▪ Direct Marketing
• Direct connections with carefully targeted individual
consumers to both obtain and immediate response and
cultivate lasting customer relationships

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Catalogues, telephone marketing, kiosks, Internet, mobile
marketing and more
Integrated Marketing Communications
The new marketing communications model
o Consumers are changing
o Use internet and other technologies to find information on their own
o Marketing strategies are changing
o Build closer relationships with customers in more narrowly defined micromarkets
o Sweeping advances in communications technology
o Less broadcasting and more narrowcasting
o Some ads and videos are being produced only for Internet viewing
o More-targeted and more-personalised media
o Find the mix of media that best communicates the brand message and
enhances the customer’s brand experience
o Traditional marketing  TV spots
The need for integrated marketing communications
o Consistent, clear and compelling company and brand messages are necessary
for a successful integrated marketing communications programme where
Advertising, Personal selling, Public Relations, Direct marketing and sales
promotions are used
o Communications come from different departments that is why some
messages are different and thus can be confusing for customers
o Each brand contact will deliver a message
o Marketing communications director who has overall responsibility for the
company’s communications efforts  helps to produce better
communications consistency and greater sales impact -> unifies the
company’s image
A view of the communication process
o Managing the customer relationship over time
o Communications model (see p
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▪ Feedback
• The part of the receiver’s response communicated back to the
sender – “Quick’s” research shows that consumers are either
struck by and remember the ad or they write or call “Quick”,
praising or criticising the ad or its products
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The sum of these costs is the
proposed promotion budget
Shaping the overall promotion mix
The nature of each promotion tool
Advertising
o Can reach masses of geographically dispersed buyers at a low cost per
exposure and it enable the seller to repeat a message many times
o Television advertising
o Build up long-term image for a product
o Advertising can trigger quick sales
o Is impersonal and cannot be as directly persuasive as can company
salespeople
o Only one-way communication – consumers do not need to respond
o Can be costly
o Newspaper, radio ads can be done on smaller budgets
Personal selling
o Most effective tool at certain stages of the buying process
o Salesperson keeps the customer’s interests at heart to build long-term
relationship by solving a customer’s problems
o Buyer usually feels a greater need to listen and respond
o Long-term commitment than does advertising
o Most expensive promotion tool
Sales promotion
o Coupons, contests, money-off deals, premiums and others
o Attract consumer attention, offer strong incentives to purchase and can be
used to dramatize product offers and boost sagging sales
o Reward quick response
o Short lived
o Not as effective as advertising or personal selling in building long-term brand
preference and customer relationships
Public relations
o News stories, features, sponsorships and events
o More real and believable to readers than ads
o Message gets to consumer through “news”
o Can be very effective and economical
Direct marketing
o Mail, catalogues, online marketing, telephone marketing and others
o Directed to specific person
o Immediate and customised
o Can be prepared very quickly
o Can be tailored to appeal to specific consumers
o Is interactive – allows dialogue between marketing team and consumer
o Highly targeted marketing efforts and building one-to-one customer
relationships
Promotion mix strategies

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o Push Strategy
▪ A promotion strategy that calls for using the sales force and trade
promotion to push a product through channels
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▪ Directs its marketing activities toward final consumers to induce them
to buy a particular product

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