Chapter one

● Companies have to develop items better than their competitors

● What is marketing?
○ Marketing is the activity, set of institutions, and processes for creating
communicating delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large
○ The primary focus is on satisfying needs and wants and customers' wants are
backed by buying power creating demand
● Marketing management' philosophy
○ Production
■ Focus on production may not work well when demand exceeds supply
and when economies of scale are important
● Ford focused on producing a low-cut cost by offering one car with
no options and no frills and avoiding all this, resulting in
economies of scale that would reduce costs. It only works if
customers are not picky.
● No wide practice
○ Product
■ Focus on producing the highest quality goods: but that's not what the
customer wants
● Some may feel quality is the overriding criterion but we aren't able
to afford quality and high-end features
○ Sales
■ Emphasizing push and hard-selling
● Aggressive selling and pushing sales. It isn't focused on
customers' needs and wants. Not a good long-term selling
strategy
○ Marketing
■ Achieving long-term goals for the company by best serving customers'
needs and wants
● Main philosophy used in firms. Theoretically, if they do this right it
will leave satisfied customers and bring back repeat business.
Should make aggressive selling redundant
●
○ Societal
■ It should be good for society
■ Should have the focus on the greater good for philosophy
■ Mainly long-term health and environmental
● Some other key concepts
○ Customer values
■ This is the value the customer derives from a product or service
■ Difference between the amount they pay and the service they receive
○ Customer satisfaction
 ■ CUSTOMER'S EVALUATION TO WHAT EXTENT THE PRODUCT HAS
APPEALED
● If customers are satisfied they come back
● Not efficient
○ Relationship marketing
■ The goal is to enhance and extend relationships with customers so they
come back

Chapter 2

● Strategic planning
○ Is the process of creating and maintaining a fit between the organization's
objective and resources
■ Ansoff strategic opportunity matrix
■
Existing product New product

Existing market Market penetration Product development

New Market Market Development diversification

● It's based on the nature of the product
● Market penetration
○ Keeps its existing product in its existing market but tries to
increase sales
■ This is accomplished by tweaking the r Ps of
marketing
● Market development
○ The company is developing a new market while keeping
the market it currently has
■ For Starbucks being implemented around the world
in new locations to expand its customer base
● Product development
○ A new product is developed to cater to the same market
● Diversification
○ The company offers a new product in a new market
■ It is risky because the company may not be able to
expand its product in a new market
■ An example would be if Olive Garden wanted to
start making phones
○ Portfolio matrix by BCG Boston Consulting grou[p
■ Sbu strategic business unit
● Maintains itself as an independent profit center
● Needs to make sure it has balanced portfolios
○ Bcg matrix asses that
● Ex. computer manufacturing

○
■ Anything more than 1 is high, less than one 1, low x
axis
■ Y axis market growth rate of 10 is high less is low
○ The Question mark is considered a problem child and is
less dominant in the beginning due to its lack of experience
in the market.
○ The star: If the product were to be dominant and grow, the
product would become a star
■ Stars just mean it has a very promising future, and
companies are going to want to invest in it
■ They may not turn a positive cashflow and that
burden lands on the csh cpw s
○ Cash cow:
■ If the product grow strongs and the market rate
slows down as in it stablaizes and matures the
product does not need significant investment
■ It starts turning a significant cash flow that is used
to support the other products like ? and stars
■ They are appealing and the goal is to keep up that
way for a long period of time
■ They may loos dominance and may eventually
become gos
○ Dogs:
■ They fend for themselves
■ They may provide cash flows but not alot
■ They do not need a lot of investment anymore
■ Most dogs leaves the market
● The goal is to get our stars and question marks into cash cows
 ● If a question market does not do well it will either go away or
become a dog
● Our goal is to extract as much profit as we can from them and this
is called harvesting
● When they are no longer profitable they may be sold to another
market and this is called divesting
● BCG matrix uses a simple framework to look at the overall
portfolio and provide guidance on what they should do.
● Portfolio matrix by GE
○ Similar to bce to evaluate how balanced a portfolio is
○ Uses a more elaborate index of business position on the x
○ On the y it uses market growth it uses market attractiveness
■ Market attractiveness also includes
● Profitability
● Lack of competition
● Consumer sensitivity to price
○ Instead of excluding on-market share include factors such as
■ Does the firm have adequate financial resources
■ Does it have the technology to penetrate the market
■ Can it maintain a cost advantage
○ A company would like to see SBU in the more attractive sales
○ With mid-levels, invest carefully
○ High attractive, maintain and grow them

● Marketing plan for strategic management

○ Involves designing activities relating to marketing objection
○ It's the document that guides the marketing activities
○ Steps involved in a marketing plan
■ Business mission
● Answers the question of what business is a company in
● Missions statements defined in narrow terms are restrictive
● If it is too broad, the statement can lose its meaning
■ Situation or SWOT analysis
● Is useful for assessing opportunities or threats in the market and
how strong or weak a company is in responding to those
● Look outward to the marketing environment to both positive and
negative elements that may impact the operation
○ These are called opportunities and threats respectively
● The best a company can do is carefully analyze the market
● It then looks at the company's strengths and weakness
● Even if there are good opportunities, they don't mean much if the
company can back it up
■ Business objective
 ● While a mission is abstract, the objective gives the business a
quantifiable goal that can be measured
● These are used as benchmarks
● These will end up guiding the company's objective so it is
important to keep them realistic
■ Marketing strategy
● Marking segmentation and target model
○ All markets have different segments and not all products
will serve all
○ If they are to succeed they need to meet their target
market
● Marketing mix 4 p’s of marketing
○ Product
■ This is at the center
■ Includes the core product and packaging
■ Used to cover tangible or goods or intangible
services
○ Place
■ This includes the channels on how a product is
distributed to its customers
■ The goal is to get the product market in the most
effective and appealing manor
○ Promotion
■ Advertising, sales promotion publicity and personal
selling
■ The goal is to inform and persuade the customer to
buy the product
○ Price
■ Not only the final price but discounts
■ Marketers can change prices to manage demands
■ Implentinationand control
● We started with a business mission and objective to guide a
company to its goals
● These may be revised to adapt to the market

Chapter 3
● Ethical Behavior
○ Ethics refers to principles and values that generally give the conduct of an
individual or group
■ Legal and ethical standards may not be the same
■ Companies should create an environmental ethical practic
○ Different than what is considered legal
○ Ethics are unwritten rules that the law dictate
○ Need for more ethical practices
 ○ What is ethics? The moral principles that govern the conduct of an
individual or group
○ What is a code of ethics? Clarification for employees what the company
values
■ Rules to follow
● Low tolerance for unethical behavior in the company
● Ethical behavior by top managers ss
● Standard of social norms established by managers
● Sustainability and corporate social responsibility (CSR)
○ Sustainability
■ Should go from the economic sustainability of corporations to
addressing the problems of society and caring for our environment
■ Capacity to endure
■ Implies long term outlook
■ The ability of an enterprise to sustain itself over a long-term
■ This should address the needs of society while keeping an eye on
the environment
○ Corporate social responsibility
■ The CSR pyramid
● Economic
○ Need to have profit and cashflow to survive
○
● Legal
○ Corporations have to follow the law
● Ethical
○ They should do what is right and ethical
● Philosophic
○ To do what is right and increase the quality of life
○
■ Green marketing
● People are willing to buy green products
■ Cause-related marketing
● For-profit corporations partner with nonprofits to do stuff
with the intent of helping society
○ Which of the following is an element of sustainability
■ Caring for our environment
○ What is the basis of green marketing
■ Consumers are willing to pay more for green products
○ A company manufactures and markets reusable metal straws, what factor
of the pyramid is the company likely to following?
■ Philanthropic responsibilities
Chapter 4
● Which of the following is a factor over which marketers are likely to have less
control?
○ Market growth rate
● Which of the following is not an environmental factor?
○ Infrastructure factors
● What two conditions define something as a marketing environment?
○ Significant impact on the company; the marketer has little control
● The marketing Environment
○ What is marketing environment
■ Is anything that satisfies two conditions
● Has a significant at impact on the company
● The marketer has very little control over it
○ Only thing you can do is be better prepared to it
and how to respond to it
○ Environmental factors
■ Social Factors
● Are enviornmental factors on how we funciton as a society
● Self sufficient
○ Everyon sould stand on their own
● Upward mobility
○ Work hard and play by the rules you can move up
in the social classes
● Work ethic
○ Hard work is to be admired and will be rewarded
● Conformity and equality
○ Everyone should be treated equally
● Sustainability
○ Consumers are willing to pay higher prices for a
more eco friendly alternative
● How social media have changed the way people
communicate
○ People are more interconnected online
○ Companies who participate in this are more likely to
be successful
● What are social factors
○ How we function as a society
● A jewlery company dos not have social media or allow
customers to share their jewlery online due to concerns of
privacy for their designs. Would th ecompany be
successful?
○ No, social media is a part of our culture and allows
interconnection.
■ Demographic Factors
 ● Population growth
○ Has an influence on products
■ Ex, birth rates decline, baby necessities
suffer
● Different generations (also correlated to individual life
cycles)
○ Baby boomers(1946-64)
■ Well off, big consumers and trying to stay
young
■ Higher density of population
■ High life rates
■ Have 80% of the spending power
○ Generation X (1965-78)
■ Cynical consumers and pressed for time
○ Generation Y (Millennials 1979-94)
■ Impatient opinionated diverse good time
managers street smart and connected
○ Generation z
○ Teens
○ tweens
● Which of the following is not a demographic factor?
○ Beliefs
● Which of the following is NOT a reason why baby boomers
are important to marketers?
○ They buy expensive products
● Japan is increasingly having more elderly people than
young, how would this affect the markets in Japan?
○ Markaters will need to make products for elderly
people.
■ Growing Ethnic Markets
● hispanic , african americans , asian
● 1 in 3 american belong in a minority group
● Hispanics are the fastest growing
● African and asian are growing as well
● Specific buyer behavior
● Politicians are trying to appeal to these demographics
● Why are growing ethnic markets treated as an important
environmental factor?
○ Because of the rapid growth of minorities
● Which of the following ethnic groups is the fastest growing
○ Hispanics
● What is one of the common ways companies are trying to
appeal to hispanics?
○ Advertising in spanish
■ Economic Factors
● Annual median household income is 50,000
● Impacts purchasing power
● Higher income and lower cost of income leads to higher
demand of most products
● Discretionary income can be reduced with high expenses
● Income
● Purchasing power
● Inflation
○ Reduces purchasing power
● Recession
○ Caused and impacted standard of living
● Which of the following is impacted by the US economy
slowing down?
○ Purchasing power
● If the economy were in a recession, what effect is it likely
to have?
○ Demand (especially) for durable goods is lower
● What years did the great recession take place?
○ 2007=2009
■ Technological Factors
● Research and development
○ US has invest significantly in basic and applied
research and promoted innovation
○ Can bring new products to the market and render
others obsolete
● Which of the following is at the base of technological
advancements?
○ A culture of innovation
● Why is there a high importance in technology
○ It can bring new products to the market
● How has the US managed to be at the forefront of
technology advancement?
○ It has invested in basic and applied research.
■ Political and legal factors
● Federal Legislation: regulates markets and protects
consumer
○ Affects all aspects of the marketing mix
● State laws: vary from state to state
○ California introduces strict auto restrictions
● Regulatory Agencies: FDA and FTC
○ Create regulations companies need to follow
○ FDA outlawed trans fats in foods
○ FTC restricts price discrimination
 ○ Which of the following is an agency?
■ FDa
○ What is the role of an agency?
■ Create regulations that companies need to
abide by
○ What is the primary purpose of federal legislation?
■ Regulating markets and protecting
consumers
● Marketers need to know these to operate in their confines
■ Competitive Factors
● Competitors moves an alter the marketplace dynamics and
companies have to respond to them in a respective way
● Price cut from a competitors can cause other companies to
follow
● Competition for market shares and profits
○
● Global Competition
○ Outsourcing work in china and india has increased
competitiveness of companies
● Why is there an increase in competition?
○ Globalization
● Which of the following factors has the most immediate
effect on companies?
○ Competition
● Globalization has led to an increase in competition in what
other ways has it impacted todays market?\
○ Employment rates
○ Income distribution
○ Changes in purchasing power

Chapter 5
● Developing a global vision
○ Reaching out to a global market makes the product stronger
○ Outsourcing work helps with production
○ Has front and back end benefits
○ The growth of global market- its importance and impact
○ Increase globalization will increase competition which will drive down
prices and rise qualities all in benefit of the consumer
○ Smaller companies have limited participation
○ Multinational take advantage of globalization to ride down cost and
increase sales
○ Markets are becoming homogenous and believe in standard globalization
○ What cant gillette grow it business int he united states?
 ■ The population is growing at a slower rate
○ If iphones are an American product, why are they manufactured in other
countries?
■ Cheaper labor
○ Which of the following is an export=driven economy
■ France
● Environmental Factors for global marketers
○ Cultural (significant variations)
■ Marketing is the task of satisfying needs and wants
■ Becomes more complicated when operating in other countries
■ Culture is deeply engaged in these people
■ The struggle is being able to understand the difference and be
able to deliver products
■ Lack of appreciation can lead to blunders
○ Economic (and currency exchange)
■ Marketers need to design and price their product accordingly to
accommodate the budget of other people
○ Political (can be unstable) and legal (tariffs and quotas) and trade
agreements (Nafta:eu)
■ Can vary from flexible to restrictive and companies need to adapt
to work in those guidelines.
■ Product can be blocked
■ Companies have entered into trading
■ Organizations like the world bank and g20 often play an important
role influencing global trade.
○ Why is it more difficult to meet customers' wants and needs on a global
scale?
■ Culture, traditions and preferences
○ An interior decoration company is releasing a new line of white only
ornaments in china. What could be a problem with this move?
■ Colors have different meanings in different cultures.
○ What is a way for countries to trade efficiently with other countries
■ Treaties
● Entering global market
○ Exporting
■ Most straightforward
■ Companie is essential selling its good to foreign buyers
■ No additional investments is needed
■ They are selling their product with minimal amount of marketing
○ Licensing (and franchising)
■ Allows another company access its intellectual property, patents
and trademarks
■ The licenses takes responsibilities
 ■ As long as the licenser knows the quality is being put at risk, then
risk is minimal
■ Franchising is a form of licensing
● Ex like pizza hut and chick fil a
○ Why do anything else
■ IF FOREIGN MARKET HAS HIGH POTENTIAL then companies
could get higher sales and profits if they wee actively invest in the
market
■ If the markets are promising and have a high probability of
success it is better to invest
○ Joint venture
■ Companies will seek a partner that gives complementary strengths
■ Financial investment, manufacturing capabilities, access to a good
distribution network or a good understanding of the foreign market
■ Companies share investment and share rewards
■ Companies are actively investment but are also sharing risk
○ Direct investment
■ Go at your own type of investment
■ Mosts riskiest
■ The scale of investment and need to operate in its market is
foreign
■ Only makes sense when odds of success is high to keep all profits
to themselves
○ Which Of the following is a way for a country to enter a global market?
■ Exporting
○ Which of the following carries the highest risk?
■ Direct investment
○ A company requires the assistance of another company. At the end they
both share the risks and rewards fairly equally. This is an example of what
entry mode?
■ Joint venue.

● Global Marketing mix

Same promotion Modified promotion

Same product standardized Promotion adaptation

Modified product Product adaptation Product invention

○ Pricing
■ Adjusting price accordingly to the markets and exchange rate
fluctuations
■ Place
● Choose channels appropriate to the markets
○ Which is the next step after figuring out an entry mode
 ■ The extent of modification needed in the marketing mix
○ A soda company has decided to seel its products in mexico but has
decide not to modify the product and use the same promotional appeal.
What form of marketing mi has been used
■ Standardization
○ What is product adaptation?
■ Modifying the product to suit the individual market
○
Chapter 6 what is product adaptation
● Consumer decision making
○ Need recognition
■ Gap between desire and actual state
■ Internal and external stimuli
○ Information search
■ Internal and external (some marketers controlled; others are not)
experienced with the products is important; aim to gain evoked set
■ Friends and families
○ Evaluations of alternatives
■ Buys evaluation options by consideration
■ Fishbein and disjunctive models
● Make a list and add up the scores of which ones better
● Only consider brands that meet certain criteria until a
certain brand is left
○ Purchase and post purchase behavior
■ Cognitive dissonance and repeat purchase
■ Buyers experience has a role in purchasing again
● Types of consumer buying decision
○ The bigger the price the bigger the decision process
○ Extensive decision making
○ Limited decision making
○ Routine response behavior
■ As products become less involving
● Buyers see products as commodities and
● Buyers become more price sensitive
● Factors influencing consumer decision
○ Culture, subculture and social class
■ Set of values norms and attitudes values intern are enduring
beliefs shared by a society
■ Culture is pervasive and as such has a significant impact on how
people think and behave.
■ Those with conservative values are more likely to be religious,
they are also likely to patronize products and services in line with
their beliefs.
 ■ Need to appreciate cultural differences and not influence because
these values are deeply ingrained and not easy to change.
■ Consumers are reluctant to chance to risk their money
■ Embarrassment among themselves or risk harm to themselves to
buy less known brands
■ Within a culture many subcultures may exist based on
demographic, geographic regions and national or ethnic
backgrounds
■ In the us we have subcultures like Indians, hispanics and Harley
Davidson bikers.
■ These subcultures are more homogeneous and share values
specific to their groups and these values give marketers clear
insight into their consumer behavior
■ A social class is defined by a status or esteem in the community.
■ Whil income is a factor in social classes, other factors include
professional status and educational background also play a role
■ The resulting categories are defined as upper, mid and lower
class. With each of these having further categories.
■ Since social class is based on income, and lifestyle, it has a strong
impact on consumer purchasing power and preferences.
■ An understanding of social classes also help marketers make a
decision on distribution promotional media and pricing
■ Consumer from the really affluent class will often pay excessive
prices as long as they believe they are getting something
exclusive
■ Consumers also seek options of others when seeking decisions
■
○ Social influences
■ Reference groups- aspirational and non aspirational
● Is one set source, these may be aspirational or sociative
groups
● Groups a person would like to identify with
● Alternatively they be non aspirational or dissociate groups
a person would like to stay away from, thus a finance MBA
may want to dress like a wall street banker but maybe
reluctant to wear caterpillar books
●
■ Opinion leaders
● Are part of a reference groups who can influence
consumption behavior of others because of standing in the
society or knowledge of the product category
● They are particularly sought after by the marketers and are
often requested to be brand ambassadors or
spokespersons
 ● Think hollywood stars of fashion products
■ Family
● Is a strong social factor
● Children growing up are heavily influenced by their parents
because of the close proximity in the formative years
● Interestingly children can also influence parents decision
particularly for products purchased for the children
● Example the purchase of the home are often based on
input by everyone in the family
○ Individual influences
■ Individuals are heavily influenced by many factors, they are also
predisposed to factors that are unique to them
■ Age and family life-cycle stages
● Needs and preferences change as they move through their
family life cycles
● The needs and expense patterns of newly weds are
different of parents of newborns and empty nester
● Even Though They may be in the same social class or
income category
■ Gender, personality and self concept
● Psychological difference between genders creates different
needs
● Even for products marketed for both genders, savvy
marketers tailor their products to appeal to the needs and
sensibility of men and women
● P and g ran a very successful campaign with their secret
campaign of deodorant

■ Personality and lifestyle

■ personality , self concept or self perception and lifestyle also
impact consumer behavior
■ All the the more challenging to asses, marketers use
psychographics to understand and segment these markets
○ Cost
■ Bigger ticket items are gonna make the consumer think about their
decision more
■ Interest in the product will more likely increase involvement
● Ex photography are more likely to examine camera
choices more likely
■ Lower ticket items has low involvement decisions and consumers
are less interested about learning about them beforehand
● This means there is a greater marketing emphasis at the
point of purchase at retail stores and online
●
○ Psychological influences
■ Some of the important ones
■ Perception
● Its often said that in marketing, perception is more
important than reality
● Eventhoug perception is often based on reality, there is
often a gap between the two and consumer based their
decision on their perceptions
● A typical consumer in the US is bombarded with 2500
commercial messages a day
● Since this is overwhelming and consumers don't have
interest in everything, they limit the information they notice.
This is referred to as selective exposure
● Even if they notice something, they cannot comprehend all
the information, especially pieces that conflict with their
preexisting beliefs
● They may destroy some of the information to make the
task more manageable for themselves.
● Sensitive exposure, selective distortion and selective
retention
● Other words, they selectively distort information
● The indulgent selective retention, only retaining information
they are really interested in
● Accordingly, marketing managers need to develop their
communication strategy to insure that it is effective
● They cannot assume that because they advertised their
products that consumers would pay attention and agree
with everything they say

■ Motivation
● Motivational theory can also explain consumer behavior
● One such theory is maslow, purposes that consumers
motives follow a hierarchical structure
● Motives are the driving forces behind any action
● Maslow's need hierarchy (physiological/ basic safety social
esteem self actualization)
○ At the very foundation is physiological needs. At
this stage consumer are primarily concerned with
needs like hunger and thirty and will be interested
in products to address shoes
○ Once basic needs are met they will think about their
safety needs, they will think about security and
protection.
 ○ After this they are interested in fulfilling their social
needs a wish to belong and to be needed or
accepted by their peers
○ This is followed with esteem or ego needs a desire
to be recognise and to enhance their self esteem
○ It can be argued that most of us are at that level
○ Finally there is a need of self actualization
○ People at this stage are most interested in self
expression and self fulfillment and are not
concerned with what others think of them or their
accomplishment s
○ It is believed that a small fraction belong to that
level
○ The basic premise is that lower level needs needs
be met first
■ Learning or experiential learning
● This refers to the change in consumer behavior that results
in their use of the product
● Marketers may be able to induce trial or the initial purchase
of the product
● Once consumers use the product they are more likely to
rely on their learning
● It is important for marketers to ensure post purchase
satisfaction with the product
● Beliefs and attitudes
○ It is important to understand this
○ Beliefs refers to the knowledge base of the
consumers
○ Attitudes are learned responses towards a given
object
○ Key difference is that beliefs are descriptive in
nature where are attitudes are evaluative or
judgemental in nature
○ As marketers it is important to understand that
attitudes and beliefs are the basis for product
evaluation
○ Sas such they would want to improve their product
on these dimensions
○ However attitudes are more resistant to change so
to accomplish this it should predicted with fact
based communications aimed at changing the
belief system
○ Once that is accomplished change attitude may
follow
 ○ The gap between the desired stat anf the actual state is called
■ needs
○ What is an evoked set?
■ A group of alternative brands that the consumer will consider
buying
○ Blank search refers to an internet search on websites such as yelp. Blank
search refers to knowledge based on personal experience
■ External search internal search
○ Blank happens when a consumer is familiar with the product but not with
the brand
■ Limited decision making
○ Which of the following is not a characteristic of an extensive
decision-making process?
■ Very few alternatives are considered
○ In blank, a consumer goes through all the stages of the decision process.
■ Extensive decision-making
○ Which of the following describes culture?
■ Culture is a set of values, norms. And attitudes
○ Which of the following is not a social factor influencing consumer
decision-making?
■ Motivation
○ Which of the following is false about social classes?
■ They have little to no impact on purchasing behavior
○ Marketers found out that consumers usually based their decision on blank
rather than reality
■ Marketers found out that consumers usually based their decision
on perception rather than reality
○ Blank is ignoring message that do not relate to you
■ Selective exposure is ignoring message that do not relate to you
○ Based on maslow's hierarchy of needs, prestige and feeling of
accomplishment can be defined as blank needs
■ esteem

Chapter 7
● Business marketing STOPED AT (0:25)
○ When you think of marketing the image that probably first comes to mind
is consumer marketing but there is a sizeable marketing activity that is not
aimed at consumers but at business instead
○ Business marketing often called industrial B2B or institutional marketing
involves selling to business.
○ So what is they key difference
●
● key difference between business and consumer markets and classifications
systems (NAICS)
 ● Business buyer behavior
But there is a sizable marketing activity that is not aimed at consumers, but on businesses
instead. Business marketing, sometimes called industrial, B2B, or institutional marketing,
involves selling to businesses. So what is the key difference between consumer markets
and business markets? The defining characteristic is whether the products are sold to the
end users, consumers, or to others who make purchases, not for self-consumption, but
instead to serve others in the process. There are four customer categories in business
markets – producers, resellers, governments, and other institutions. There are four
customer categories in business markets – producers, resellers, governments, and other
institutions. Let's examine each of these. Producers. This includes producers of goods and
services in a variety of industries, such as construction, finance, and transportation. It also
includes original equipment manufacturers, or OEMs, who may incorporate products
purchased from others in their finished products. Ford buys tires from Firestone but it
doesn't sell them directly it mounts them on their car and then sells them to the consumer
Resellers, including wholesalers and retailers, who buy goods and services with the intent
of selling down the chain, eventually to the end consumers. Governments, including federal
and state and local governing bodies, buy a wide variety of items, from fighter airplanes to
paper clips. Federal government, on its own, is the biggest buyer in the world, with $600
billion of annual purchases. Other institutions such as not for profit enterprises which often
offer services like education, health care, churches and environmental protection agencies.
It is important to understand that in each of these cases, it's not the nature of the good or
service that makes it business or consumer product. For that matter, the same product, for
example, tires, could be sold in both consumer and business markets. It is the intended use
that creates the distinction. If it is for self-consumption, it is considered a consumer market.
If it is used in the process of serving someone else, it is considered a business market.

Which of the following is the biggest buyer in the world

U.S. Federal Government
Which of the following is true
A consumer is the end user of the product
What does OEM stand for
Original equipment manufacturer

Key Differences between business and consumer markets and classification systems
NAICS
● Business marketing
● Key differences between business and consumer markets and business
classification systems
● They do not buy for their own consumption
○ Business resellers and governments
■ Business buyers are fewer in number but they buy in larger
quantities
 ■ While there are millions of consumers, each consumers may
buy a set a four tires once every 4 years
■ On the other hand there are a handful of auto manufactures but
they are likely to buy in millions
○ Fewer customers: large customers
○ Geographically concentrated
■ Business buyers tend to be geographically concentrated
■ Most of the film industry is in hollywood and many of the auto
manufactures are located in detroit michigan
○ SHorter channels
■ Channels for consumer goods can have several levels as the
goods may sometimes pass through many levels as the goods
may pass through wholesalers, rack jobbers and eventually
retailers before they get to the consumers
■ In business markets, because of the size of purchase it is
worthwhile to do direct selling.
■ Online business to business exchanges are one example
■ Because of the size of business customers building and
maintaining ongoing relationships is meaningful and
commonplace
■ One way of doing this is to for strategic alliances which are long
term relationships not only between buyers and sellers but
sometimes between manufactures offering complimentary
products
○ Demand
■ Finally demand for business markets is derived inelastic and
tends to fluctuate allot by its very definitions demand for auto
tires from auto manufacturer is derived in nature
■ Their demand for tires depends on the demand for their cars
from the end consumer
■ It also tends to be inelastic for instance demand for tires may
not change much if their prices were to go up
■ Demand for tires by the business market is dictated by the
damnd for cars by the consumer market
■ A substantial increase in the price of tires ia likely to increas the
price of the cars only marginally since tires are a small
component for the car
■ So the demand for car stays the same
■ As such increase in tire prices has a marginal impact on its
demand in the business markets
■ Demand for business goods tends to fluctuate
 ■ Since automobiles are big ticket durable goods, during
recessionary times, consumer postpone their purchase
■ A 1% drop in the GDP may decrease the demand for cares by
15% with a proportional drop for the demand of tires
■ Delivered
■ Inelastic
■ Fluctuating
● North american industrial classification system NAICS replaces standard
industrial classification SIC
○ Since business customers are few in numbers and are easy to identify
a system is in place called NAICS this system identifies each business
with a 6 digit hierarchical code
○ It is used by all three north american free trade agreements or nafta
partners usa canada and mexico and replaces the older standard
industrial classification or SIC codes
○ Classification suing NAICS helios everyone involved in the business
market do better planning
While the defining characteristic is the way the product is used, what is some of the key
differences of business markets and consumer markets, we will illustrate these using tire
examples
What is a characteristic of business buyers
Geographically concentrated
The demand for business tends to be
Derived
Why are business markets usually less price sensitive?
Because the cost only has a small impact on the end price of their products

Business buyer behavior

● Types of business products and business buying behaviors
● Business products include major equipment, accessory equipment, raw and
processed material, component parts, supplies and business services
○ Major equipment
■ including capital goods such as heavy machinery, building and
mainframe computers
○ Accessory equipment are cheaper and shorter lived
■ PC factory tools and fax machine
○ Raw and process materials
■ such are mineral ores lumber wheat and corn go into the
production of the finished foods
○ Component parts
■ Are finished or semi finished products that are bought and used by
OEMS
 ○ For examples rolls royce engines are used in airplanes and caterpillar
engines are used in high power trucks
○ Supplies
■ Are consumable items that do not become of the final product
■ Such as lubricants, machines and paper and pencils for office
work
○ Business services
■ include all supporting services such as legal, consulting and
research
● Systematic purchase process
○ Consumer markets have routine response behavior, limited decision
making and extensive decision making depending on the complexity
○ Similarly with a one to one correspondence business markets have
straight rebuy, modified rebuy and new buy
○ Again depending on the complexity of the purchase
■ New buy
● This typical involves a major purchase that is being done
for the first time
● As such, it follows a very elaborate process in which
several departments and personals may be involved
■ Modified rebuy
● Typically involves products the business may have been
purchasing but have since needed a change in the product
specifications or some vendors are offering newer options.
■ Straight rebuy
● Is for routine purchase made on a periodic basis
● Since no changes are needed, buyers cand just follow the
terms under the current contract and place and order for
routine inventory
● Use of buying centers
○ If it is indeed a new buy a buying center may be involved and serval
individuals and departments may be involved
○ This is necessitated by the fact that business purchases are characterized
by large volumes
○ As such the process they follow is one of systematic purchasing
○ The concept of impulse purchase in some consumer decisions is
practically non existent
○ for the same reason, besides price, buying centers are very particular
about quality the the ability of vendors to provide necessary service
include in on time delivery, warranties, maintenance and repairs
○ So who are the participants in the purchases made by thees buying
centers they are:
■ Initiators and users
 ● They are the ones that first suggest aking the purchase
and are often the ones that use the product
■ Influencers
● Or evaluators they influence the purchase decision
● Their help is typically sought by their knowledge and
technical expertise in evaluating the products to be
purchased
■ Gatekeepers
● They control the flow of information
● They are often from the purchase department or can even
be secretary to the important member o n the purchasing
team
■ Purchasers
● The person who negotiates the detail of the deals and it is
likely but not necessarily someone from the purchase
department
■ Decision makers
● They person with the formal or informal power to make the
choice
● In complex decisions this may be done by a group of
people
● Use quality, price, and service as a criteria
○ The ones who actually use the products as can be seen business buyer
behavior is a lot more systematic and complicated
○ From a sellers perspective for a successful outcome, it is important to
understand the participants their orles and the process
A mainframe computer falls into the category of
Major equipment
Which of the following is the purchase behavior in the business market>
Systematic purchase process
______ are the people who are knowledgeable about the product and are included in the
purchase decision for their expertise
Influencers

Chapter 8
Segmenting and targeting markets
Think of a product that is not differentiated, the same version is sold across the
entire market. If you are struggling, there is a good reason for that with the
possible exception of commodities like electricity or gas, almost all products are
differentiated
● Markets is a set of buyers who have same interest in the products
○ If we go with the very basic definition, it satisfies customers needs
and wants and we argue that the company that does the best job
at this will be the most successful. Consumers in any market have
 very diverse needs and wants. For some areas are about
transportation while for others they are means of self expression .
Even in the case of water, seemingly an undifferentiated product,
consumers make choices on price, flavor, packaging etc.
● The need for segmentation
○ So if there are consumers with differences and preferences then it automatically
follows that marketers should differentiate their products to appeal to these
groups also referred to as market segment and the segment a company chooses
to serve is then called the target market.
○ The goal of course is to best serve the need of their specific target markets
○ Once a target market is chosen, everything else, including the marketing mix,
follows from the needs and wants of the target market. Now any market can be
segmented on the bases of a wide variety of age, gender, purchasing power,
location, ect.
○ So what constitute effective segmentation
● Criteria for segmentation (M-A-R-S) MARS
○ A good segmentation scheme meets four criteria
■ Measurable
■ Accessible
■ Responsive (Actionable)
■ Substantial
● Each segment should be large enough that a meaningful marketing
strategy should be devised to be profitable. As a segment size
decreases
THe segment a company chooses to server is called
Target market
What does Mars Stand for?
Measurable, accessible, responsive, substantial
What is another term for responsive in the context of segmentation
Actionable
Data from the united states census is an example of _____ segmentation
Demographic
Which of the following is necessarily true about demographic data
Consumer sin the same income roup have similar demand patterns
Based on the usage rate date, why do marketers want to target light users instead of heavy
users?
Light users may have specific needs not met by the dominant players
What targeting strategy is the company using when deciding to go after the entire market with
one product?
Undifferentiated targeting

A market that targets a relatively small and well-defined segment of the population is called a
blank space.
Niche Market
Which of the following is not valid for companies practicing multi-segment targeting?
They promote the same brand in different segments

Chapter 9
An automobile manufacturing company wanted to come up with a new model that
targets female drivers with ages between 18 and 30. What type of data source should they use
during the product development stage?
Marketing research
The purpose of blank space is to try to gather and analyze a specific, well-defined set of data
that meet the project’s needs.
Marketing research
The purpose of blank space is to try to gather and analyze a specific, well-defined set of data
that meet the project’s needs.
Develop marketing concept
What are the different types of marketing research?
Exploratory descriptive and casual
Which of the following is not the typical data source for exploratory research?
surveys
Which of the following is false about causal research?
It is used to explore the research problem and provide insight
Data pulled from United States Census is an example of
Secondary data
Companies have to pay to get the following type of high-quality data
Syndicated data
Which of the following is typically not a downside of using public data?
May be expensive

Why do we use samples instead of the population when doing marketing research?
Save time
Which of the following is true about probability sampling?
More representative of the population
If a marketer wants to conduct personal interviews in a wide geographic, the most cost-effective
way is to sample a few cities instead of traveling all over the region. This is an example of the
use of _______
Cluster (area) sampling
In a health survey, people might say that they eat better than they do. This can be seen as a
____
Response bias
If more retirees respond to a survey, it will cause the answers to be systematically different from
the general population of interest. This will contribute to______
Non Response error
Increasing the response rate can help minimize ______
Nonresponse error
The task of actual data collection is typically done by ____
A contracted field service firm
What is the duty of the research team?
Present findings in a meaningful way
Which of the following is not an example of marketing research projects?
Increase brand awareness

Chapter 10
A box of cereal is an example of which category of goods?
Convenience goods

Which of the following products can be considered an impulse good?

Tabloid newspapers

A retailer may carry other brands besides their own, because consumers want to be able to make comparisons.
This is a good strategy for
Shopping goods

What marketing term refers to how many variations of the same product a
company has?
Depth
Companies often tweak formulations to make them more appealing. This is
called product
modification
Packaging for marketing and promotion purpose is also called a
Secondary packing
Target's Up and Costco's Kirkland brands are examples of
Private labels
Dove Men + Care, a new brand under Dove is an example of
Brand extension
McDonald’s McFlurries with M&Ms in them is an example of
Ingredient branding

Chapter 11
Launch of products that no other company has ever made is called:
New to worlds products
When Ford decided to manufacture and sell electric vehicles, it pursued
which of the following?
New product lines
A software company launches a basic program, but it already has
additional software that has more advanced features. What type of product
would this be?
Addition to existing product lines
Which of the following is the most expensive exercise that a company
undertakes?
Introductions of new products
Which of the following is not a step in the new product development
process?
Validation ]
What is the goal of idea generation?
Creat a long list of ideas

What are innovations?

Products that are perceived to be new by the consumer s
Which of the following is not a category of adopters?
Mid majority
When adopting technology products, Jennifer tends to be a variety seeker
and likes to try new products. She is likely to be a(n)
Innovator
Which of the following is a key characteristic impacting the rate of
adoption?
Compatibility
Which of the following products likely rated low on compatibility when it was
first introduced in the market?
Clothes washer
Which of the following is a characteristic of products that are easy to
understand, resulting in a faster adoption?
Simplicity
Which of the following is not part of the product life cycle?
Inception stage
Which of the following is true during the growth stage?
Competitors enter the market
What occurs in the maturity stage?
Sales stabilize
Chapter 12

Which of the following is not a service?

laptop
Bobby is going to travel to Singapore and is trying to search for the best
tourist company. What type of quality measure is Bobby using
search
What method do marketers use to impress on customers the quality of their
offering?
Opinions of others
Which of the following is not a service dimension that the customer uses to
evaluate quality
Price
Which of the following components treats the customer respectfully?
Empathy
What is gap analysis?
An analytical exercise to break down the gaps in perception of service at different levels

How much do nonprofits account for economic activity in the U.S?

20%
Which of the following is the largest nonprofit organization?
Governtments
Why are nonprofits also concerned about generating enough revenue
To keep operations going

Chapter 13
Which of the following is not an element of supply chain management?
Increase demand
Which of the following integrations delivers materials and services to offer
better value?
Material and service supplier integration
What is customer integration
Providing long lasting value added offering to customers
In which of the following do businesses put customers at the center,
manage every contact with them, and leverage this to better serve them
and increase sales?
Customer relationship management
How does demand management serve customers in the most cost-effective manner?

By managing inventory through collaborative planning to reduce costs

Which of the following maintains relationships with key suppliers?

Supplier relationship management
What is business logisticS?
The physical movement of products through the supply chain
What are the three groups of functions we talked about here?
Source make and deliver
Which of the following has facilitated order processing?
Electronic data interchange

What is 3PL?
Outsourcing an entire logistical function (correct

Why would an American company prefer to partner up with a company in

Mexico than a company in Singapore?
To reduce transportation costs (correct

How are companies protecting themselves in case of a natural calamity?

Supply chain security (correct)

What are companies in marketing channels also referred to as?

Trade members
How do intermediaries add value to the customer
They reduce the number of transactions
Who do wholesalers sell to?
Retailers

Which of the following is not a type of distribution system?

Matrix

User Answer Correct

When there is little or no relationship between channel members, it is calle

 Arms length

User Answer Correct

In which of the following, is there a goal for complete synergy between channel members?

Integrated

Chapter14
Which of the following is the most important for retailers
Product assortment
Why is it important for retailers to create a meaningful product mix of the
products on their shelves?
Their appeal to te=heir customers depends mainly on having a
sensible assortment
Which of the following is not a category of service provided in retail stores?
Part time service

Which of the following is not a retail store?

An industrial distributor
What type of stores have a wide and deep product mix with several
different departments in the same store?
Department stores
What type of retail store allows customers to buy items in the comfort of
their homes?
Online store

Chapter 15 :

Video 1: Marketing communications

● Marketing Communications
○ The idea is to get all promotional mix elements to work together
■ Promotion is another P in the 4 Ps in the marketing mix
■ And includes all communications that informs and persuades
buyers
■ A promotional strategy is a plan for optimal use of all elements of
promotion to elicit a particular response
 ■ The main focus is to convince the buyer that the companies
product offer a competitive advantage
■ A set a feature and benefits over others offering.
○ Promotional mix
■ There are five elements of the promotional mix
● Advertising (mass communications)
○ Is any form of impersonal paid mass
communications
■ With it marketers can reach large audiences
■ Even Though it may involve high cost
because of the mass appeal, the cost per
person is rather small
■ Also marketers have complete control over
the message
■ While this is an appealing proposition, the
flip side is that it has lower credibility
■ The audience realizes that it is paid
communications controlled by the marketers
■ A commercial during a prime time tv show is
a good example
● Public relations (unpaid effective but limited control)
○ Entails communicating with customers, suppliers,
employees and the community with the intent of
creating favorable publicity
■ While expenses are involved in running the
operation it isn't paid communication
■ Companies instead try to get exposure
through media relations, press release and
other ways to reach customers
■ Whiles these may be written in a positive
tone, any media outlet that run the story are
free to put these in their own words
■ This lack of control has a positive side to it
to
■ Consumers are more likely to trust
respectable media outlets on what they
have to share
■ A newview done by the new york times on a
new brand of cars is a examples of a public
relation effort
● Sales Promotion (Can have a variety of objects)
○ Sales promotions include all activities, other than
advertising and public relation that focus on
promoting sales with the internet of inducing trial fro
 new products increase sales or getting rid of extra
inventory
■ Typically these teen to have a short term
orientation, coupons rebates discount,
sweepstakes, ect are all examples of sales
promotions

● Personal selling (expensive face to face high impact)

○ Refers to in person selling
■ Typically for big ticket purchase or for
business market, personal selling can be
very effective
■ In business markets especially, companies
may rely on advertising to do the initial work
of informing the customers but use personal
selling in the later stages of the purchase
process
■ This gives an opportunity to the sales force
to impress on their customers the values of
their offering and to negotiate the deals
■ Although this is expensive, the high cost
can be justified by the size of the
transaction
● Social media
○ Is a relatively recent addition to the promotional mix
■ Traditionally the marketers have control
over their brands communication efforts
■ However with the advent of social media,
that control has shifted to some extent to
the consumer who are no long passive
recipients of information
■ With social media they can control the
information they wish to sees and create
content that they can share with other
consumers and also marketers
■ The information moves at an accelerated
pace and gets amplified as long as it
catches the fancy of the social media
participants
■ marketers who can appreciate the shift are
more likely to success by participating and
facilitating this communication rather than
dictating the content
 ■ Facebook, twitter, youtube and linkedin are
some of the bigger social media platforms
○ Integrated marketing communications (IMC)
■ Aims at aligning al elements of the promotional mix to get the best
results
Video 2: Promotional goals and AIDA concept
● Promotional Goals
○ In the process of serving their customers marketers need to impress on
them the values their products offer
○ This is accomplished by marketing communications
○ Depending on the stage of the product life cycle however the task may
vary
○ These tasks are as follow
■ Infroming
● Is typically the task of the rarely stages of the product life
cycle
○ When new brands are introduce the market is not
aware what the brands have to offer
○ So the focus is on informing the market
○ Sometimes the focus need not even be on the
companies own brand but on instead on creating
the primary demand of the product
■ Persuading
● In the late introduction growth and early maturity stages,
the marketers shift their focus to persuading the market to
by their product
○ Marketing communications may emphasis the
superiority of their products of their competitors in
an effort to convince the buyer to patronize their
brands
■ Reminding ‘
● Ln the later stage of the product life cycle all brands have
well established images
○ The market is familiar with what they have to offer
the goal then is to just remind the consumers in
creative ways to stay on top of their minds
■ Connection entails creating ongoing
relationship with the customers
■ Marketers may use a variety of tactics to
make their offering an integral part of their
buyers lives
■ Although it is not easy to accomplish this,
social media are particularly adept on
achieving this goal
 ■ It is important to understand that the same
promotional campaign may be aimed at
accomplishing more than one objective
■ Thus it is possible to connect to connect or
build relationship with customers and at the
same time remind them about the brand

● Promotional Goals and AIDA COncept

○ Marketers also use the AIDA framework to guide their communication
strategy
○ It refers to the sequential steps of creating attention, interest desire and
action in any communication
■ Attention
● The advertiser must first gain the attention of the target
market
○ Creativity is important in getting this attention
because consumers are flooded with commercial
messages
○ The goal is to create awareness
■ Interest ‘
● The next step is creating an interest in the product
● The message has to be appealing enough to capture the
consumers fancy’s
■ Desire
● The third step is creating a desire to buy the product, the
goal is for the message to be convincing enough to create
consumer preference for the brand
■ Action
● The final step is action
● Communication should have a call to action prodding the
consumers to purchase the product
● As can be seen, a successful promotion should move the
consumers through all stages to the actual purchase of the
product
● A SINGLE EXPOSURE MAY NOT BE ABLE TO
ACCOMPLISH THIS GOAL BUT THIS SHould be the goal
for any promotional campaign

Video 3 : Factors affecting promotional Mix

● Promotional mix can vary widely depending on a variety of factors
○ Nature of the product (business vs consumer: mass vs customized)
■ Consumer products are often mass produced with little to none
customization
● Mass media like advertising works well
 ● Business products however require a fair amount of
customization
● This customization then needs to be explained to the
buyers so personal selling is more suited for this
○ Stages in the products life cycle (heavy informative advertising in the
beginning)
■ in the early stages the emphasis is on advertising and public
relation to build awareness and sales promotion to induce trial
● Personal selling is useful for obtaining distribution
● In the growth stage, advertising and public relations are
used to emphasize the products differential advantage but
sales promotional effort to induce trial can be reduce
● During Maturity, awareness levels are high but competition
is more intense so persuasive and reminder advertise
continue and sales promotions comes back with an effort
to increase sales
● Finally during decline advertising is severely curtailed but
personal selling effort to continue at retail level
■ More importantly at each successive stage in a products life cycle
the objective of the each promotional elements changes
○ Types of buying decisions (simple vs elaborate)
■ Simple decision like routine purchases of low priced items do not
require any deliberation
■ Consumers are familiar with what different brands have to offer
■ Here advertising particular reminder advertising can be very
effective
■ Sales promotions can also be effective in increasing sales
■ However when it is a high involvement product particularly one
that is not a high routine purchase consumers are likely to seek
assistance personal selling can be very helpful the same is true for
shopping goods
■ In the context of business markets, advertising can be cheaper
and maybe used in early stages of the buying process to create
awareness among buyers
■ However in later stages personal selling may be more effective to
convince the buyer and close the deal
○ Push and pull strategies
■ Product flow down the channel from manufacture to say
wholesalers and onto retailers
■ One option is to use a push strategy to force the product through
the channel
■ Push strategy:
● This may be accomplished by giving incentives like trade
discounts to entice them to carry the product
 ● Once that happens they would be motivated ot push it
further down the channel with similar discounts or
promotions until it gets to the end consumer
■ Personal selling and trade and sales promotions are used in push
strategies
● An alternative is the pull strategy where manufacture try to
appeal to the consumer directly
● When that happens consumer are likely to ask the retailers
for the products and for retailers to stop the product they
have to request the same from higher up in the channel in
this case the product is being pulled in the channel by the
end consumer
■ Advertising is a very effective pull strategy most company=ies
typically adopt a mix of push and pull strategies

Chapter 16 advertising public relations and sales promotion

Video 1: Advertising
● Advertising is impersonal one way mass communication paid for by the markets
to increase sales in the long run
○ We know that advertising increases sales but the exact response is
difficult to asses
● Advertising response functions tends to be an elongated “S”
○ Take a look at the s shaped figure in it, the advertising response function
looks like an elongated s. Let's try to understand why that may be the
case

■
■ There is likely to be some sales even in the absence of advertising
which explains the y intercept then as the advertising is increase,
it may not have as much impact on sales initially because it maybe
unnoticeable before it hits a certain threshold level. Till then the
curve remains relatively flat. The middle portion of the elongated s
 is marked as a relatively high effectiveness. In this segment an
increase in advertising is likely to increase sales. Now we also
know this cannot continue endlessly so there has to be an upper
boundary. So the response curve asymptomatically approaches
this boundary. So towards the higher levels of advertising the
sales curve is flat again resulting in the elongated s shaped curve
○ Most companies operate in the zone of high effectiveness
○ This is a crude approximation of the effects of advertising on sales
○ The challenge however as companies increase their advertising budgets
it is difficult to gauge when the response may slow down
○ Also the effect of other factors create interference on advertising impacts
on sales
○ So determining the optimal level of advertising is not easy

Video 2: Major types of advertising

● There are two major types of advertising s
○ Institutional advertisements
■ Also called corporate advertising focuses on promoting the corporation as
a whole
● This makes sense when a company is using a parent brand name
for all its products as in the case Ford motor company
● It may also be used of advocacy advertising where companies
promote a positive image or try to overcome negative perceptions
○ Prominent gas companies often use advocacy advertising
to impress consumers about the good work they are doing
to help the environment because their products are
perceived as damaging to the environment
○ Product advertising
■ Focus on promoting individual products
■ There are three types of product advertising
● Pioneer advertising for primary demand: informative: prominent in
introductory stage
○ Is used during the early stages of the product life cycle
■ Because the product is they new the focus is on
explaining the products class and not on promoting
the specific brand
● Soda stream is looking to break into the
large soda drink market but has a very
different product position. It has the
customer prepare the product rather than
purchase the finished product
● To launch the product they enlisted scarlett
johansson and ran an ad during the super
bowl
 ● Competitive advertising: focused on persuasion to increase recall,
preference, often appeals to emotions, prominent in growth stage
○ Is most appropriate when a product enters growth stage
○ Other competitors come into the market and companies
shift their focus on convince the customers to buy their
own brands by creating valuable attitudes towards their
brands
■ Subway is known to most consumers so the
advertising is aimed on creating favorable
impressions so they decide on lunch at subway
rather than competing fast food restaurants like
mcdonalds or kfc
■
● Comparative advertising compares two or more brands, good for
lesser brands, more prominent in highly competitive markets
○ Companies may also promote their brands by comparing
them to competitor brands and is highly effective
○ This is a particularly useful strategy for smaller brans that
can make a convince case and aspire for stronger position
○ It is rarely an appealing strategy for bigger brands because
they don't have much to gan by comparing themselves to
lesser brands
○ Comparative advertising with an explicit message of a
competing brand is not legal in many countries.
■ When pepsi trailed coca cola they decided to
deploy competitive advertising with their take the
pepsi challenge champagne

Video 3: Creative Decision in Advertising

● An advertising budget maybe set in a variety of way

● One way is to follow the percentage of sales strategy where companies assign a fixed
percentage of their sales fro their advertising budget
● It is a straightforward and reasonable approach and is used by a large number of
organizations
● The problem of this approach during a downturn of sales, this method would reduce the
size of the advertising budget when more may be needed
● An alt approach is competitive parity that is spending at a level comparable to
competitors. In some why it gives a sense of equality to all participants, every company
is in a different position with varying emphasis on advertising
● AS such, use of parody as a benchmark can be questionable
● A more systematic way of proceeding is a DAGMAR
○ *Defining advertising goals for measured advertising results and AIDA (follow * to
avoid lecture notes)
■ The process starts with defining the goals advertising is expected to
accomplish
● Ex. a company may want to increase liking for its brand by 10%.
An analysis is then done by determining the number of
impressions needed and the cost of each impression, of course
the simplistic representation here becomes quite complicated in
practice which may explain why most companies use this
approach. Atht e end of the day it is useful
■ Now let's look at the steps involved in creating advertisements
● *Step 1. Identifying products and benefits
○ An attribute is a characteristic of the product like the size of
a car's engine. The benefit is what customers get out of it
■ Ex. a bigger engine may mean a more thrilling ride.
There seems to be some consensus that
advertising should focus more on benefits than on
attributes.
● Step 2. Developing advertising appeals (savings fear admiration
convenience fun ect)
○ This refer to what specifically should be stress
○ Ex. The thrill of the ride may have a fun and pleasure
appeal which may be emphasized.
○ Other common appeals include money savings, health,
fear, convenience, admiration of others, environmental
consciousness, ect and this is not an exhaustive list by any
means
○ The advertising appeal that is chosen often becomes what
is commonly called the brands unique selling proposition of
USP
■ Something that is special about the brand which is
emphasized on an ongoing basis
● Step 3*Executing the message (lifestyle slice of life humor
scientific fantasy image ect)
○ Once the appeal or message has been establish the next
step is to determine what would be the best way to convey
this message
○ Since consumers are flooded with advertisements it is
important that the creative is strong and effective tot get
noticed and eventually influence the buyer behavior
○ In other words the ad should be able to move the
consumer through the various stages of AIDA
■ Attention interest, desire and action
○ Some Of the common execution styles include fantasy,
humor, demonstration, scientific defense and testimonial
 ○ Sometimes advertiser use a lifestyle appeal to show how
the product fits into the consumer lifestyles or may depict
how the product ti s used in a normal setting which is
refereed to slice of life appeal
○ These categories are not exhausted and other execution
styles may be used
● *Step 4: Postcamapign evaluation
○ The final step is evaluating the success of the campaign,
this is typically done by comparing pre and post campaign
standing on the variable of interest.
○ The higher liking for the brand of our example
○ Data may come from internal sources as in the case of
product sales and market shares
○ Or surveys may be conducted if the respondents attitudes
and preference are of interest

Video 4: Media decisions in advertising

● Advertising medias decisions in advertising
● Several decision need to be made in the context of selecting media for advertising
including the choice of the appropriate media, the media mix and med ia schedule
● These decision are referred to as media planning
● We now take a look at the components of media planing
○ Media types
■ There are numerous media options available
● Newspapers, magazines, television, (including infomercials) radio,
outdoor advertising internet alternative
○ Each offers its own set of advantages.
○ News papers are cheap and offer geographic selectivity
○ Magazines provide better reproduction, high pass along
rates, longer lives for the advertisements and can be highly
targeted
○ Radio is low cost and highly localized
○ Television can be expensive but it has a higher impact. It is
more engaging and that makes it easier to demonstrate the
products . it also provides wide coverage which is
particularly appealing for nationwide product launches
○ The Internet is a new medium that offers highly
customizable options and to monitor the performance on a
real time basis.
○ Media selection considerations
■ Media mix
● Refers to the emphasis placed on all media outlets used and the
budget allocated to those. There is not perfect mix and numerous
options are possible but to determine the efficacy of a media mix
marketers look at a variety of criteria
○ cost , reach, frequency, audience, selectivity
■ The cost per contact. Is the cost of reaching each
person in the audience
■ Most media outlets make this number readily
available to their advertisers
■ Cost per thousand or CPM is the most commonly
used metric for this
■ Cost per click is often used as a key metric for the
online media
■ Reach is another criteria that is relevant and refers
to how many people does the medium have access
to
● Reach for television program is measured
using gross rating points or GRPS
○ GRPs refers to the percentage of all
tv audience at any point of time that
is tuned to a specific program
○ Since a single advertising is unlikely
to be sufficient, marketers aim to
expose multiple exposures across
the various media they chooe for
their campaign
■ Once again most media outlets provide information
on the number of profiles of their audience
■ Markers may be interested in media with wider
reach so that their media mix is not to fragmented
■ Frequency refers to the number of times an
individual is exposed to an advertisement
■ A good media mix has to also factor in audience
selectivity for instance the ability to reach the target
market
■ Cost per thousand may be lower for time magazine
but if the target audience is architects then
architectural digest’s higher cost may be justified
because of its audience selectivity
■ Advertiser have to be concerned about the noise
level that refers to the interference of everything
else
■ Noise level may be vary high for radio
advertisement because of the distractions front
other radio programs advertisements from other
 sources and attention people pay to the tasks they
are working on while they ar working on
● Media scheduling
○ Important consideration on where to place advertising. The
same amount of advertisements can be scheduled
differently to achieve varying results
■ Continuous, flighted and pulsing, (a combination of
the first two)
● Advertisements are run in a steady pass
through advertisement campaign. This
works very well for mature products
● As opposed to this in a flighted media
schedule ads are run heavily in short bursts
with no ads between these bursts
● The concentrated bursts help raise the
communication well above the noise level
and help to get the markets attention
● Pulsing media schedule is a combination of
continuous and lighter and it translate to a
continuous schedule at a lower amplitude
combined with a heavier advertising bursts
● Retail store may use this with bursts during
the heavy shopping through the year
● Seasonal media schedule matches
advertising with the seasonality of sales with
certain products
Video 5: Public Relations

● Public relations aims to impact public attitudes and execute programs to gain their
understanding and acceptance
● The hope is to get favorable publicity for the company and its products.
○ Proactive communication that is not paid for, high on credibility but less under
control
■ Marketers do this by influencing articles and editorials in media Through
their communication through the media and press releases.
■ Some of the functions of public relations include corporate
communication, product publicity employee and investor relations,
lobbying and management of the crisis that may take place
● includes press relations, product publicity and lobbying
● Major tools include
○ New product publicity
■ New products especially ones that are innovative
make appealing stories for the press as such new
product publicity os effective and used extensively
○ Product placement
■ Entails getting the brand to appear in a tv show,
movie, radio program ect as part of the narrative
■ It is a growing industry
■ The advent of digital video recorders have made it
possible for people to record their favorite shows
and movies when they play back their recording,
they often fast forward through the commercials
even when they are watching live programs they
may change channels during the commercial break
■ This is referred to as zipping and zapping of
commercials respectively.
■ The main appeal of placements is because the
brands are oven into the storyline they will be
noticed and also appropriate placements can really
improve the sales of brands as in the case of ray
ban aviators after tom cruise worse these
sunglasses in top gone, reese's pieces sales
surged after the release of tv and chevy camaro
cars after their use in the movie transformers
○ Consumer education
■ In some industries as in financial planning
educating the consumers may be helpful in
increasing sales many companies offer free
seminars and workshops to capitalize on this
○ Sponsorships
■ Sponsorship of an event can create a strong link
between the brand and the nature of the event
therefore major manufacturer of musical
instruments often sponsor concerts of leading
bands
○ internet web sales and social media
■ Company websites and social media are used
increasingly to provide read access to companies
news
■ New product launches , financial reports and other
information such as service location s
■ Companies also use social media to get favorable
stories about their brands to their target market
■ If any information catches the fancy of any
consumer, they automatically share it with other
making social media particularly for public relations
VIdeo 6: Sales Promotions

● These marketing efforts typically have a short term orientation intended to induce
product trial and additional sales
○ Sales promotions typically have a short term orientation they are intended to
include trial of new product and increase sales of existing products
● Consumer promotions (directed at consumers)
○ We now look at someone of the more popular consumer promotions tool s
■ Coupons and rebates
● Coupons often offered through free standing inserts FSI in
newspapers are good ways to reduce price to the buyers without
doing a permanent price cost
● Typically valid at a fixed time inducing the buyer to purchase right
away.
● Rebates also offer temporary price cuts but they typically need to
be mailed in
● As many as half the consumers who buy the product because of
rebated, fail to complete the paperwork to get the rebate
● This silage factor works in the advantage of the marketers
■ Premiums
● Extra items offered as incentives for the purchase of the original
items
● They may be used to reward consumers or to give consumers
new product the marketers want them to buy
○ So a toothbrush may be offered with toothpaste
■ Loyalty programs
● Are created to induce loyalty
● Consumers get some reward after purchasing a product after
multiple times
● Frequent flyer programs
■ Point of purchase promotion (and sampling)
● Including sampling are promotions done at the point of purchase
● These are effective for products consumers can make up their
mind at the store.
● Point of purchase or POP displays and product sampling are
examples of this type of promotions
● Trade Promotion directed at intermediates
○ ARE DIRECTED TOWARDS TRADERS or members of distribution channels
○ Common types of trade promotions:
■ Trade allowance
● Is a discount given by manufacturer to wholesaler and retailers for
doing something specific that helps the manufacturer
○ Examples include getting additional shelf space or
premium locatio nin the retail outles
 ■ Push money vs pull for advertising
● Is useful when manufacturer are emphasizing a push strategies
● Give push money as a bonus to push product s
● Ex is requiring sales people on the retail floor to recommend
manufacturer brands when buyers seek advice from them
■ Training
● Sometimes manufacturers will train retail sales people especially
is the product is complex of course, in the course of the training
they are likely to impress on the sales people the superiority of
their own brand s
● It is important to understand regardless of the specific approach
used, sales promotion is for the most part, short term oriented
even though it will have a spill over long term effect

Chapter 17
Video 1: PERSONAL SELLING
● Face to face communication
○ Personal selling is paid for face to face communication aimed at informing
and influence the customers to increase customer sales
○ Can be expensive so it is better utilized when the transaction value is
huge
○ Expensive so it is useful if
■ Product has high transactions value
● Large values being sold
● A large customer base may be better served with
advertising but personal selling can be more cost effective
for few customers
■ Product is custom made or complex
■ There are few customers
■ The buyer is later stages of purchase power
● It is more effective in the later stages of the purchase
process
● The old style selling used a well rehearsed canned
approach which gave a predesigned sale pitch with the
sole aim of making the sale
● Newer thinking is more aligned with the marketing concept
and emphasizes on developing relationships with the
buyers
● Relationship selling
○ Sales people work with buys in consultative roles, they try to understand
customers needs and offer solutions accordingly.
 ■ With this approach salespeople and buyers become partners in
solving he buyers problems leading to a long relationship between
the two
● Focuses on long term and therefore working with
customers as partners with extensive consultation and
follow up
Video 2:

● In customer relationship management or CRM business put customers on the center

stage and manage every contract with them with an intent of understanding their needs
and collecting relative information and leveraging this date to better serve the customers
and increase sales
○ Crm is a four step process
■ Identify customer relationship s
● Companies running a successful CRM program are customer
centric and develop their companies responses around the needs
and wants around their customers
● Collecting good data is critical to accomplishing this
● This is referred to as learning
■ Understand interactions with current customers
● Understanding its interactions with its customers is the very
foundation of CRM t
● Therefore companies identify all situations where customers can
interact with the company, not just personal interaction but also
online and exposure to advertising
● Point of sales interactions are useful in understanding customer
behaviors, these are referred to as touch points
● CRM aims to manage interaction tal all touchpoints to make sure
they are positive experiences for all its customers.
■ Capture customer data
● Companies then aim to capture the data at all touchpoints this
data is rich and available for all customers making it a very
valuable resource
● Companies often lay out a data collection plan from the time
customers start any interaction and continue it to all ongoing
interactions
● This data can come from a variety of sources and can therefore be
fragmented
● Companies rely on knowledge management to create a
centralized database that can be shared by everyone
■ Leverage customer and data mining
● Once this data is consolidating data mining can be used to identify
trends and relationships between different marketing variables,
customer behaviors and sales
 ● This data can be leverage in a variety of ways we look at some of
these briefly
● Campaign management is using the interaction data to create an
effective communication campaign
● Companies also use it to cultivate ti and retaining loyal customers
by studying them and customizing their preference and rewarding
them for multiple purchases or patronages over a longer duration
● By studying the needs of their loyal customer who have a
favorable opinion of the company anyway it can cross sell other
products and services
● The same is true for inducing a new trial of products the company
may develop finally by having a detailed understanding of their
customers companies can offer target communications about their
products and services
● Data warehouse data mining
○ The key is to understand that for companies, good quality data and building
ongoing relationships with their customers provides a solid foundation for better
serving their customers' needs by creating a variety of customer initiatives.

Video 3:

Chapter 18
Chapter 19
CHapter 20