marketing - reference handbook
TRANSCRIPT
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Ganesh RamkumarEditor of Marketingmagazine
Ramesh GankumarAuthor of The Portable MBA inMarketing
CAPUTO`SUNEDITED PRINT. INTERNAL USE ON
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CHAPTER 1
Utilit!Want-satisfying power of good/service
T"es #$ Utilit!
- %#rm!Raw materials/components to finished goods/services; part of Prodction
- Time!!oods/services available when there is demand for it; part of Marketing
- Pla&e!!oods/services available at convenient " sitable location; part of Marketing
- O'nershi"!#ransfer title of goods/services from company to byer; part of Marketing
?? $ow does organi%ation create a cstomer&
- 'dentifying cstomer needs
- (esigning prodcts/services that meet those needs
- )ommnicating information abot those prodcts/services to prospective byers
* (efine ++ (arketin), An organi%ational fnction and set of processes for creating. commnicating and
delivering vale to cstomers while managing cstomer relationships in ways that benefit the company and its
stakeholders0
E*&han)e Pr#&ess! Activity in which two or more parties give something of vale to each other to satisfy
perceived needs 123ample+ e3changing money for tangible goods like video games and clothes4
!! %#ur Eras in (arketin) Hist#r + %i) 1.1, !!
Pr#-u&ti#n Era 5 A good prodct will sell itself; nothing bt prodction is re6ired
1Before 789:s4 5 (ominated bsiness philosophy for decades
Sales Era 5 )reative advertising/selling will overcome consmers resistance and persade them to
by
1Before 78ind a need in the market and fill it
1?ince 789:s4 5 2mergence of the Marketing concept; shift from a sellers market to a byers market
Relati#nshi" Era5 @ong-term relationships with cstomers and other partners lead to sccess
1?ince 788:s4 5 (evelopment of long-term relationships with sppliers. employees. etc; for mtal benefit
* , ?tronger byers market - need for nsumer #rientati#n+ emphasi%es first determining
nmet consmer needs and then designing a way to satisfy them
(arketin) (#"ia! Managements failre to recogni%e the scope of its bsiness
More byers than
goods and
services; few
companies
More goods and
services than people
willing to by them;
many companies
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!! N#nTra-iti#nal (arketin) + Ta/le 1.0 , !!
PersonMarketing (esigned to draw attention and preference of target market toward a personPlaceMarketing (esigned to attract visitors to particlar area; improve pblic image of city/nation
CauseMarketing 'dentification of a social isse. case or idea; Mothers against (rnk (rivingEventMarketing Marketing of sporting. cltral and charitable activities to target markets
OrganizationMarketing
Marketing of mtal-benefit. government. and non-profit orgs; Red )ross
?hift from transaction-based marketing to relationship marketing+
- Li$etime alueof cstomer+ revenes and benefits that cstomer brings
to org over avg lifetime. mins investment made to attract/keep cstomer
- (evelop repeat. loyal cst - increases lifetime vale - sorce of B%% marketing
- @oyalty @adder + +Cew )st 55 Reglar Byer 55 @oyal ?pporter 55 Advocate ,
!! 2 Uni3ersal (arketin) %un&ti#ns + %i) 1.0 , !!
7 4uin)! 2nsring availability of prodct to meet cstomer needs9 Sellin)! Dsing advertising. personal selling and sales promotion to match prodcts to cstomer needs
E Trans"#rtin)! Moving prodcts from prodction location to convenient prchasing locations
F St#rin)! Warehosing prodcts ntil needed for sale
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CHAPTER 7
* (efine ++ Plannin), Process of anticipating ftre events/conditions and determining the best way to
achieve goals0
- (arket Plannin)!implementing planning activities devoted to achieving marketing obJectives
- 23ample+ (eveloping long-term links with cstomers and sppliers for mtal benefit 1relationship
marketing4
Strate)i& Plannin) 8l#n)term -ire&ti#n9! determining organi%ations primary obJectives and adopting actions
that will achieve these obJs
Ta&ti&al Plannin) 8sh#rtterm -ire&ti#n9! planning that gides implementation of actions in the strategic plan
!! Ste"s in (arketin) Plannin) Pr#&ess !!
CORPORATE LEVEL BUSINESS UNIT LEVEL
(efine firms
(issi#n
(eterminefirms
O/:e&ti3es
Assess
resorces/2vala
te environmental
risks/opport
>ormlate
strategy
1Strate)i&
Plannin)4
'mplement strategy
throgh plans
1Ta&ti&al6O"erati#
nal Plannin)4
Monitor/Adapt
strategies when
needed 1based
on >eedback4
+ !! T##ls an- Te&hni;ues !! ,
P#rter
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CHAPTER 0
En3ir#nmental (ana)ement!Attaining firm obJectives by predicting/inflencing the competitive. political.
economic. technological and social environments
En3ir#nmental S&annin)!Process of collecting information abot e3ternal marketing environment to identify
potential trends; vital component of environmental management
C#m"etiti3e En3ir#nment!'nteractive process that occrs in the marketplace among marketers of directly
competitive prodcts. sbstitte prodcts. and marketers competing for consmers prchasing power
T"es #$ C#m"etiti#n!
- (irect+ Among very similar prodcts
- 'ndirect+ Among prodcts that can be sbstitted for each other
- Prchasing Power + among firms that compete for consmers prchasing power
De3el#"in) m"etiti3e Strate)!
- Sh#ul-we compete&
o (epends on firms obJectives. resorces and e3pected profit potential
- 'f so.'hat markets shold we compete in&
o Re6ires marketers to recogni%e firms limited resorces. and allocating them to areas of
greatest opp
- H#'shold we compete&
o Re6ires marketers to make marketing mi3 decisions 1F Ps4 that give firm competitive
advantage
Time/ase- C#m"etiti#n!?trategy of developing and distribting goods/services more 6ickly than
competitors
!! P#liti&alle)al En3ir#nment++
)omponent of marketing environment consisting of laws that re6ire firms to operate nder fair. competitive
conditions and to protect consmer rights
- )onsists of many >ederal @egislations 123+ )ompetition Act. )opyright Act. $a%ardos Prodcts Act.
etc4
C#m"etiti#n A&t!Most comprehensive legislation in )anada. designed to help both consmers and
bsinesses by promoting a healthy competitive environment
- )overs marketing practices sch as Price >i3ing. Misleading Advertising. #ied ?elling. Refsal to deal.
etc
!! S#&ial&ultural En3ir#nment !!
)omponent of marketing environment consisting of the relationship between the marketer and society and its
cltre
- #o remain competitive. marketers mst consider societys demographic shifts and changing vales
- Affects consmers reactions to diff prodcts and marketing practices
C#nsumerism!?ocial force within environment designed to aid and to protect the consmer by e3erting legal.
moral. and economic pressres on bsiness and govt
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C#nsumer Ri)hts!
- #he right to &h##se $reel. *from a range of goods/services,
- #he right to /e in$#rme-. *enogh prodct information to make edcated bying decisions,
- #he right to /e hear-. *e3press isses/opinions to sellers. assistance grops. cstomer service,
- #he right to /e sa$e. *assrance that goods/services prchased can be sed safely,
!! Ethi&al Issues in (arketin) !!
Pr#-u&tProdct 6ality/safety/warranties
>air packaging/labeling
Polltion
Pla&ement(mping
(ealer Rights
Predatory )ompetition
Pr#m#ti#n
>alse/(eceptive Advertising
Promotional Allowances
Bribery
Pri&in)
Price >i3ing/(iscrimination
(eceptive Pricing
Price 'ncreases
(arketin) Ethi&s!Marketers standards of condct and moral vales
!! S#&ial Res"#nsi/ilit in (arketin) !!Marketing philosophies. policies. procedres. and actions that aim at enhancing societys welfare
Philanthr#"i&.Be a good corporate citi%en
Ethi&al.(o what is right/fair
Le)al.Kbey the law
En#mi&.Be profitable
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CHAPTER =
C#nsumer 4eha3i#ur!Mental and physical activities that occr dring selection/prchase of a prodct
- 'ncldes both individal cstomers who by goods/services. and companies who prchase bsiness
prodcts
- 'nflenced by interactions of+
o interpersonal inflences L cltre. friends. relatives
o personal factors L attitdes. learning. perception
!! C#nsumer De&isi#n Pr#&ess !!
- E3#ke- Set!Cmber of alternatives that consmer actally considers when making a prchase
decision
- E3aluati3e Criteria!>eatres that consmer considers when choosing among alternatives
- C#)niti3e Diss#nan&e!'mbalance between beliefs and attitdes that occrs after an action/decision is
taken. sch as a prchase 123+ After bying car. consmer e3periences dissonance becase another
alternative1s4 has featres that the chosen model does not provide4
!! Inter"ers#nal Determinants #$ C#nsumer 4eha3i#ur !!
- Cultural In$luen&es! ales. beliefs. preferences. and tastes handed down throgh generations in a
society
- S#&ial In$luen&es!Corms that are deemed appropriate in social grop; ?tats of individal in grop;
Role and e3pectations of individal in the grop
o Re$eren&e Gr#u"s!People/instittions to whom a person looks for gidance in their own
vales. behavior and decisions
o O"ini#n Lea-ers!#rendsetters who prchase new prodcts before others in a grop and then
inflence others in their prchases
- %amil In$luen&es!Perhaps the most important determinant of consmer behavior; norms. vales
and roles in a family inflence prchasing decisions
!! Pers#nal Determinants #$ C#nsumer 4eha3i#ur !!
- Nee-!'mbalance between a consmers actal and desired states
T"es 8in #r-er #$ (asl#'
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- Sel$C#n&e"t The#r!A persons mltifaceted pictre of himself/herself 123+ )onsmer seeing himself
as msclar. will likely by tight-fitting shirts4
CHAPTER ?
4usinesst#4usiness 84749 (arketin)! Krgani%ational sales/prchases of goods " services to spport
prodction of other prodcts. for daily company operations. or for resale
!! C#m"#nents #$ 4usiness (arket !!
- C#mmer&ial (arket!'ndividals and firms that ac6ire prodcts to spport prodctions of other
goods/services. directly or indirectly
- Tra-e In-ustries!Retailers or wholesalers that prchase prodcts for resale to others; known as
resellers. marketing intermediaries
!! Se)mentin) Cust#mers #$ 474 (arkets !!
- Cust#mer/ase- Se)mentati#n!(ividing B9B market into homogeneos grops based on byers
prodct specifications
- En-use A""li&ati#n Se)mentati#n!?egmenting B9B market based on how indstrial prchasers willse prodct
- Pur&hase Cate)#ries Se)mentati#n!(ividing B9B market based on the stage of relationship
between bsiness and cstomer
!! Chara&teristi&s #$ a 474 (arket !!
- !eographic market concentration
- ?i%es and nmbers of byers
- Prchase decision procedres
- Byer-seller relationships
Gl#/al S#ur&in)! Prchasing goods and services from sppliers worldwide
!! 4usiness (arket Deman- !!
- Deri3e- Deman-!(emand for resorce that reslts from demand for goods/services that are prodced
with that resorce
- #latile Deman-!(emand that creates instability in market; even small shifts greatly affect the
bsiness
- @#int Deman-!(emand for a prodct that depends on the demand for another prodct sed in
combination with it
- Inelasti& Deman-!(emand that. throghot an indstry. will not change significantly de to price
change
- In3ent#r A-:ustments!)hanges in inventory and policies that can affect bsiness demand 123+
?dden increase in demand for bsiness when inventory has been set low will case its spplier to be
bombarded with orders4
O$$sh#rin)!Movement of high-wage Jobs from )anada to lower-cost overseas locations
Nearsh#rin)!Moving Jobs to vendors in contries close to the bsinesss home contry
Outs#ur&in)!Dsing otside vendors to prodce goods and services formerly prodce in-hose
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Analsis T##ls (to improve buyers purcase !ecisions"!
- alue Analsis!?ystematic stdy of components of a prchase to determine whether to delete item or
replace it with a more cost-effective sbstitte
- en-#r Analsis! Assessment of spplier performance in areas sch as price. back orders. delivery
time. and attention to special re6ests
4uin) Centre!Participants in an organi%ational bying decision
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CHAPTER
123clded for editing prposes L will be pblished in ftre editions4
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CHAPTER B
(arket Resear&h!Process of collecting and sing information for marketing decision-making
!! The (arket Resear&h Pr#&ess !!
7 (efine problem
9 )ondct e3ploratory research
E >ormlate a hypothesis
F )reate research design
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CHAPTER 2
(arket!!rop of people with sfficient prchasing power. athority. and willingness to by
T"es #$ (arkets!
- C#nsumer "r#-u&ts!Prodcts boght by ltimate consmers for personal se
- 4usiness "r#-u&ts!!oods/services boght for se in prodction of other goods/services. directly or
indirectly
(arket Se)mentati#n!(ivision of total market into smaller. relatively homogeneos grops
- Attempts to isolate the traits that distingish certain grop of consmers from overall market
!! Criteria $#r E$$e&ti3e Se)mentati#n !!
- ?egment mst present measrable prchasing power and si%e
- Marketers mst find a way to promote effectively and to serve market segment
- Marketers mst identify segments that are sfficiently large to give them good profit potential
- >irm mst aim for segments that match its marketing capabilities
!! Di$$erent Se)mentati#n A""r#a&hes !!
- Ge#)ra"hi& Se)mentati#n!(ivision of an overall market into grops based on their locations
- Dem#)ra"hi& Se)mentati#n!(ivision of market into grops based on variables sch as gender. age.
income. occpation. edcation. hosehold si%e. etc 1also called &$ocioeconomic $egmentation'4
- Ps&h#)ra"hi& Se)mentati#n!(ivision of market into grops that have similar psychological
characteristics. vales and lifestyles 1'nflences. family. motives. perceptions. Job. cltre. social
stats/activities. etc4
- Pr#-u&tRelate- Se)mentati#n!(ivision of overall market into grops based on their relationships to
the prodct;can take different approaches+
o Based on benefits that people seek when they by the prodct
o Based on sage fre6ency for the prodct
o Based on consmers brand loyalty toward the prodct
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CHAPTER
Transa&ti#n/ase- (arketin)!Byer and seller e3changes with limited commnication and little/no ongoing
relationship between parties
Relati#nshi"(arketin)!(evelopment and maintenance of long-term. cost-effective relationships with
individal cstomers. sppliers. employees. and other partners for mtal benefit
Internal (arketin)!Marketing that addresses internal cstomers L employees/departments within
organi%ation whose sccess depends on the work of other employees/departments
- 23ample+ ?alesperson sells a prodct; individal who boght the prodct is the e3ternal cstomer. and
the person processing an order for a new piece of the prodct is the internal cstomer
Elements #$ relati#nshi" marketin)!
- !ather information abot cstomers
- Analy%e data collected and se it to cstomi%e marketing mi3 to target individal cstomers
- Monitor interactions with cstomers and assess levels of satisfaction
- Dse knowledge of cstomers " their preferences to orient every part of organi%ation towards bilding
strong bonds with cstomers 1sing Cu$tomer Reation$hi( Management )CRM*?oftware4
!! 4uerSeller Relati#nshi" (arketin) Le3els !!
- Le3el 1!>ocs on Price
- Le3el 7!?ocial 'nteractions 123+ commnication. cstomer service. owner of store chatting with
cstomers4
- Le3el 0!'nterdependent Partnership 1member programs with disconts for cstomers4
!! (easurin)6Enhan&in) Cust#mer Satis$a&ti#n !!
- Dnderstand cstomer needs.
- Kbtain cstomer feedback.
- Measre and 2nsre satisfaction on an ongoing basis
!! 4uil-in) 4uerSeller Relati#nshi"s !!
- )onsmers form contining relationships becase of their desire to redce choices
- Retaining cstomers is far more profitable than losing them or finding new ones
- Bchance of selling again to same cstomer
- 7=chance of winning back e3-cstomer
- ?7chance only. of converting prospect to new cstomer
- %re;uen& (arketin)!>re6ent byer marketing programs that reward cstomers with cash. rebates.merchandise. or other premims
- A$$init (arketin)!Marketing effort that promotes/re6ests involvement by individals who share
common interests/activities 123+ Affinity credit cards with logo of organi%ation/prodct of interest to the
ser4
- Data/ase (arketin)!Dse of software to analy%e marketing information. to identify and target specific
grops of potential cstomers
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CHAPTER 1
>hat is "r#-u&t
Pr#-u&t! Bndle of physical. service. and symbolic attribtes designed to satisfy a cstomers wants and
needs
Ser3i&e! 'ntangible task that satisfies the needs of consmer and bsiness sers
G##-! #angible prodcts that cstomer can see. hear. smell. taste. or toch
Classi$in) )##-s an- ser3i&es $#r nsumer an- /usiness markets
C#n3enien&e "r#-u&t! 'mplse items sch as maga%ines. disposable camera. ?nack foods
Sh#""in) "r#-u&ts! $omogeneos prodct sch as airplane flights
S"e&ialit "r#-u&ts! Dni6e characteristics that case byers to pri%e those particlar brands
Uns#u)ht "r#-u&ts! Marketed to consmers who may not yet recogni%e any need for them
C#nsumer $a&t#r )onvenience prodct ?hopping prodct ?pecialty prodcts
Planning time
involved in prchase
ery little )onsiderable 23tensive
Prchase fre6ency >re6ent @ess fre6ent 'nfre6ent
'mportance of
convenient location
)ritical 'mportant Dnimportant
)omparison of price
and 6ality
ery little )onsiderable ery little
(arketin) (i*
%a&t#rs
Price @ow Relative high $igh
'mportance of sellers
image
Dnimportant ery important 'mportant
(istribtion channel @ong Relative short ery short
Cmber of sales
otlets
Many >ew ery few
Promotion Advertising and
promotion by
prodcer
Personal selling and
advertising by both
prodcer and retailer
Personal selling and
advertising by both
prodcer and retailer
Fualit as a "r#-u&t strate)
T#tal ;ualit mana)ement! )ontinos effort to improve prodcts and work processes with the goal of
achieving cstomer satisfaction and world Lclass performance4en&hmarkin)! ?et performance standards
Ser3i&e ;ualit is -etermine- / ? 3aria/les
7 #angibles
9 Reliability
E Responsiveness
F Assrance
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De3el#"ment #$ a "r#-u&t
Pr#-u&t line! ?eries of related prodcts offered by one company
Desire t# )r#'!)ompany limits its growth when it concentrates on single prodct. so the company show have
motive to come ot with different line of prodcts
Pr#-u&t mi*
Pr#-u&t mi*!'s the assortment of prodct lines and individals prodct offerings that the company sellsPr#-u&t mi* len)th! #he length of a prodct mi3 refers to the nmber of different prodct a firm sells
Pr#-u&t De"th+ ariations in each prodct that a firm markets in its mi3
Line e*tensi#n! introdction of a new prodct that is closely related to other prodcts in the firms e3isting line
Pr#-u&t li$e &&le
Pr#-u&t li$e &&le! Progression of a prodct throgh introdction. growth. matrity. and decline stage
Intr#-u&t#r sta)e! the beginning stage of the prodct life cycle. a firm works to stimlate demand for the new
market entry
Gr#'th sta)e! ?ales volme rapidly increases when new cstomers make initial prchases and early byers
reprchase the prodct(aturit sta)e! ?ales of a prodct category contine to grow and reaches its ma3imm potential
De&line! 'nnovations or shift in consmer preferences bring abot an obsolete decline in indstry sales
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CHAPTER 11
(ana)in) /ran-s $#r m"etiti3e a-3anta)e
4ran-! Came. term. sign. symbol design. or some combination that identifies the prodcts of one firm while
differentiating them from the competitions
4ran- re)niti#n! )onsmer awareness and identification of a brand
4ran- "re$eren&e! )onsmer reliance on previos e3periences with a prodct to choose that prodct again
4ran- insisten&e! )onsmer refsal of alternatives and e3tensive search for desired merchandise
T"es #$ /ran-
Generi& "r#-u&ts! Prodcts characteri%ed by plain labels. no advertising. and the absence of brand names
(anu$a&turer
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4ran- e*tensi#n! ?trategy of attaching a poplar brand name to a new prodct in an nrelated category
4ran- li&ensin)! Where growing nmber of firms have athori%ed other companies to se their brand names
Pr#-u&t -e3el#"ment strate)
Pr#-u&t -e3el#"ment
(arket "enetrati#n strate)! seeks to increase sales of e3isting prodcts in e3isting markets
Pr#-u&t "#siti#nin)! refers to consmers perception of a prodcts attribtes. se. 6ality. andadvantages and disadvantages relative to competing brands
(arket -e3el#"ment strate)!)oncentrates in finding new markets for e3isting prodct
Pr#-u&t -e3el#"ment!Refers to the introdction of new prodcts into identifiable or established
markets
Pr#-u&t -i3ersi$i&ati#n strate)!>ocses on developing entirely new prodcts for new markets
C#nsumer a-#"ti#n "r#&ess
A-#"ti#n "r#&ess! ?tages those consmers go throgh in learning abot a new prodct. trying it. and
deciding whether to prchase it again
Sta)es in a-#"ti#n "r#&ess
7 A'areness!'ndividals first learn of the new prodct. bt they lack fll information abot it
9 Interest! Potential byers begin to seek information abot it
E E3aluati#n!#hey consider the likely benefits of the prodct
C#nsumer inn#3at#rs! People who prchase new prodcts almost as soon as the prodcts reach the market
Di$$usi#n "r#&ess! Process by which new goods/services are accepted in the marketplace
Ne' "r#-u&t -e3el#"ment "r#&ess
7 'dea !enerating
9 ?creening
E Bsiness Analysis
F (evelopment
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H#ri5#ntal n$li&t! $ori%ontal conflict sometimes reslts from disagreements among channel members at the
same level
erti&al n$li&t! ertical relationships may reslt in fre6ent severe conflict
Gre )##-s! !oods prodced for sale in one market and then diverted to another market
erti&al market sstem8(S9! Planned channel system designed to improve distribtion efficiency and cost
effectiveness by integrating varios fnctions throghot the distribtion chain
- C#r"#rate marketin) sstem! M? that achieve channels coordination when a dominant channel
member e3ercises its power
- C#ntra&tual marketin) sstem! M? that coordinates channel activities throgh formal agreement
among participants
Phsi&al -istri/uti#n+
7 )stomer service+ What level of cstomer service the distribtion activities shold spport9 #ransportation+ $ow the firm shold ship its prodcts
E 'nventory control+ $ow mch inventory the firm shold maintain at each level
F Protective packaging and material handling+ $ow the firm can package and efficiently handle goods in
the factory. warehose. and transport terminals
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CHAPTER 10
Retailin)! Activitiesinvolved in selling merchandise to ltimate consmers
>heel #$ retailin)! $ypothesis that each new type of retailer gains a competitive foothold by offering lower
prices than crrent otlets charge; the reslt of redcing or eliminating services
7 Cew form of retail otlet appears with low level of service. low profit margins. low prices to consmer
9 Kvertime level of service increases. profit margin increases and prices to consmer increases
E More time level if service contines to increase. profit margin contine to increase and prices to
consmer contine to increase
Retail Strate)
Tar)et market! Retail starts to define its strategy by selecting a target market to certain demographics
(er&han-isin) strate)! A retailers merchandising strategy gides decisions regarding the items it will offer
Cate)#r mana)ement! )ategory managers oversees an entire prodct line for both vendors and
retailers and is responsible for the profitability of the prodct grop
St#&k kee"in) Units 8SU9!Kffering within a prodct line sch as a specific si%e of li6id detergent
Cust#merser3i&e strate)! ?ome stores bild their retailing strategy arond heightened cstomer services
for shopper for e3ample gift wrapping. alternation etc
Pri&in) strate)! Prices reflect a retailers marketing obJectives and policies
(arku"! Amont that a retailer adds to the cost of a prodct to determine its selling price
(ark-#'n!Amont by which a retailer redces the original selling price of a prodct
L#&ati#n6-istri/uti#n strate)! Retail e3perts often cite location as a potential determining factor in the
sccess or failre of a retail bsiness
Planne- sh#""in) &entre! !rop of retail stores planned. coordinated. and marketed as a nit
Pr#m#ti#nal strate)! #o establish store image the entice more shoppers. retailer se a variety of
promotional techni6es sch as locations. merchandise selection. hors of operation etc
St#re atm#s"here! While store location. merchandise selection. cstomer service. pricing. and promotional
activities all contribte to stores consmer awareness
T"es #$ retailers!
%#rm #$ #'nershi"! )orporate chain independent retailer
Sh#""in) e$$#rt e*"en-e- / &ust#mers!)onvenience retailers. shopping stores. and speciality
otlet
Ser3i&e "r#3i-e- $#r &ust#mers!?elf-self service. self-selection. limited-service
Pr#-u&t line!?pecialty retailer. limited-line retailer. general merchandise retailer
L#&ati#n #$ retail transa&ti#n!Retail stores. non store and internet retailing
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>h#lesalin) interme-iaries
>h#lesaler! )hannel intermediary that takes title to goods it handles and then distribtes these goods to
retailers. other distribtors. or B9B cstomers
>h#lesalin) interme-iaries! )omprehensive term that describes wholesalers as well as agents and brokers
T"es #$ 'h#lesalin) interme-iaries!
Dire&t marketin)! (irect commnications. other than personal sales contacts. other than personal sales
contacts. between byer and seller. designed to generate sales. information re6ests or store or website visits
Wholesaling intermediaries
Merchandise
Kwned
'ndependent
wholesaling
intermediaries
Retail owned
)ooperatives
and bying
Merchandise
wholesaler
1take title4
Agent and
brokers 1do
not take title4
>ll fnction @imited
fnction
Broker selling
agents
)ommission
Merchants
Action hose
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CHAPTER 1=
Inte)rate- marketin) mmuni&ati#n! )oordination of all promotional activities to prodce a nified
cstomer-focsed promotional message
Pr#m#ti#n! )ommnications link between byers and sellers >nction of informing. persading. and
inflencing a consmers prchase decision
(arketin) mmuni&ati#n!Messages that deal with byer-seller relationships
C#mmuni&ati#n "r#&ess!
AIDA n&e"t! ?teps throgh which an individal reaches a prchase decision+ attention. interest. desire and
action
7 't gains the receivers attention
9 't achieves nderstanding by both receiver and sender
E 't stimlates the receivers needs and sggests an appropriate method of satisfying them
O/:e&ti3es #$ "r#m#ti#n
7 Provide information to consmers and others
9 'ncrease demand
E (ifferentiate a prodct
F Accentate a prodcts vale
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Pullin) an- "ushin) "r#m#ti#nal strate)
Pullin) strate)! Promotional effort by the seller to stimlate final-ser demand. which then e3erts pressre
on distribtion channel
Pushin) strate)! Promotional effort by the seller directed to members of the marketing channel rather than
final sers
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CHAPTER 1?
A-3ertisin)! Paid. non-personal commnication throgh varios media abot a bsiness firm. not-for-profit
organi%ation. prodct. or idea by a sponsor identified in a message that is intended to inform or persade
members of a particlar adience
T"es #$ a-3ertisin)!
Pr#-u&t a-3ertisin)! Co personal selling of a particlar good or service
Instituti#nal a-3ertisin)! Promotion of a concept. idea. philosophy. or goodwill of an indstry.
company organi%ation. person geographic location. or government policy
O/:e&ti3es #$ a-3ertisin)!
In$#rmati3e a-3ertisin)! Promotion that seeks to develop initial demand for a good. service.
organi%ation. person. place. idea. or case
Persuasi3e a-3ertisin)!Promotion that attempts to increase demand for an e3isting good. service.organi%ation. person. place. idea. or case
Remin-er a-3ertisin)!Advertising that reinforces previos promotional activity by keeping the name
of a good. service. organi%ation. person. place. idea. or case before the pblic
A-3ertisin) strate)
C#m"arati3e a-3ertisin)! Advertising strategy that emphasi%es messages with direct or indirect promotional
comparisons between competing brands
Cele/rit testim#nial! A poplar techni6e for increasing advertising readership in a clttered promotional
environment and improving overall effectiveness of a marketing message involves the se of celebrity
spokesmanC##"erati3e a-3ertisin)! ?trategy in which retailer shares advertising cost with a manfactrer or wholesaler
Intera&ti3e a-3ertisin)! 'nvolves two-way promotional messages transmitted throgh commnication
channels that indce message recipients to participate actively in the promotional effort
Creatin) an a-3ertisement
A-3ertisin) &am"ai)n! ?eries of different bt related ads that se a single them and appears in different
media within a specified time period
Elements #$ a-3ertisin) "lannin) "r#&ess
7 Resear&h in"uts! )onsmer research. prodct research. market analysis9 Strate)i& -e&isi#ns!?etting obJectives. identifying and selecting target market. selecting message and
media strategy
E Ta&ti&al e*e&uti#n!2stablish advertising bdget. establish controls. write and prodce ads and
commercials
F (easurin) a-3ertisin) e$$e&ti3eness!Dse post test to determine the effectiveness of advertising
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4anners!Advertisement on a web page that link to an advertisers site. are the most common type of
advertising on the web
A-3ertisin) #r)ani5ati#n
A-3ertisin) a)en&! >irm whose marketing specialists assist advertisers in planning and preparing
advertisement
Pu/li& relati#n
Pu/li&it! Con-personal stimlation of demand for a good. service. place or organi%ation by npaid placement
of significant news regarding the prodct in a print or broadcast medim
Cr#ss "r#m#ti#n! Promotional techni6e in which marketing partners share the cost of a promotional
campaign that meets their mtal needs
(easurin) "r#m#ti#nal e$$e&ti3eness
(e-ia resear&h! assesses how well a particlar medim delivers the advertisers message. where and when
to place the advertisement. and the si%e of the adience(essa)e resear&h! tests consmer reactions to an advertisements creative message
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CHAPTER 1
Pers#nal sellin)! 'nterpersonal inflence process involving a sellers promotional presentation condcted on a
person-to-person basis with the byer
>ocs on cstomers need and problems. and offer soltions
(evelop knowledge abot the indstry in general as well as their own firms goods and services
!o to the e3tra mile #his means making an e3tra effort to flfill cstomers needObeyond their
e3pectation
%#ur sales &hannels
O3er the unter sellin)! Personal selling condcted in retail and some wholesale locations in which
cstomers come on the sellers place of bsiness sch as retail
%iel- sellin)! ?ales presentation made at prospective cstomers locations on a face to face basis
Telemarketin)! Promotional presentation involving the se of the telephone on an otbond basis by
salespeople or on an inbond basis by cstomers who initiate calls to obtain information and place ordersInsi-e sellin)! ?elling by phone. mail. and electronic commerce
Tren- in "ers#nal sellin)
Relati#nshi" sellin)! Reglar contacts between sales representatives and cstomers over an e3tended
period to establish a sstained sellerObyer relationship
C#nsultati3e sellin)! Meeting cstomer needs by listening to cstomers. nderstanding their problem. paying
attention to details. and following throgh after the sale
Team sellin)! ?elling sitation in which several sales associates or other members of the organi%ation are
recrited to assist the lead sales representative in reaching all those who inflence the prchase decision
Sales tasks
Or-er "r#&essi#n! ?elling. mostly at the wholesale and retail level that involve
7 'dentify cstomer needs
9 Point ot need to the cstomer
E )omplete the order
Creati3e sellin)! Personal selling that involves sitations in which a considerable degree of analytical decision
making on the byers part reslts in the need for skilfl proposals of soltions for the cstomers needs
(issi#nar sellin)! 'ndirect type of selling in which speciali%ed salespeople promote the firms goodwill
among indirect cstomers. often by assisting cstomers in prodct se
The sales "r#&ess
7 Prospecting and 6alifying L determine is the prospect a potential cstomer
9 Approach L Who am ' approaching and what are their Jobs within the company&
E PresentationOconvey yor message to the potential cstomer
F (emonstrationOopportnity to demonstrate the prodct
ollow-pOkeep toch with the cstomers
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C#m"ensati#n
C#mmissi#n! 's a payment tied directly to the sales or profits that a salesperson achieve
Salar!'s a fi3ed payment made periodically to an employee
Sales ;u#ta!?pecified sales or profit targets that the firm e3pects salespeople to achieve
Sales "r#m#ti#n!Sales "r#m#ti#n! Marketing activities other than personal selling. advertising. and pblicity to enhance
consmer prchasing and dealer effectiveness
C#u"#n! Kffer disconts on the prchase price of goods and services
Re$un-s #r re/ates! Kffer cash back to consmers who send in proof of prchasing one or more prodcts
!ives more control to the manfactrer
Sam"lin)!Refers to the free distribtion of a prodct in an attempt to obtain ftre sales
4#nus "a&k! ?pecially packaged item that gives the prchaser a larger 6antity at the reglar price
Premium! 'tems given free or at redced cost with prchases of other prodct
C#ntest! Re6ire entrants to complete a task sch as solving a p%%le or answering 6estions in trivia 6i%.
and they may also re6ire proof of prchasesS'ee"stakes! )hoose winners by chance. so no prodct prchase is necessary
S"e&ialit a-3ertisin)! ?ales promotion techni6e that places the advertisers name address. and advertising
message on sefl articles that are then distribted to target consmers
Tra-e #riente- "r#m#ti#n
Tra-e "r#m#ti#n! ?ales promotion that appeals to marketing intermediaries rather than to consmers
P#int#$"ur&hase 8POP9 a-3ertisin)! (isplay or other promotion located near the site of the actal bying
decision
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CHAPTER 1B
Pri&e! 23change vale of a good or service
C#m"etiti#n a&t! the most comprehensive legislation in )anada. designed to help both consmers and
bsinesses by promoting a healthy competitive environment
Pri&e -is&riminati#n! Kccrs when some cstomers pay more than others for the same prodct. dates back
to the very beginning of trade and commerce
Pri&e $i*in)! >orm of collsion in which sellers get together to collde to set prices higher than they wold
otherwise be in a free market
4i- ri))in)! Kccrs when sellers get together to collde to set prices with respect to one or more re6ests for
competitive proposals
Pre-at#r "ri&in)! Kccr when companies set process below their cost for a sfficiently long period of time to
discorage or eliminate competition and then raise their prices or otherwise interfere with competition
%alse #r mislea-in) "ri&e re"resentati#ns! Kne form of misleading advertisement
Profit Q Revene L 23penses
Revene Q Price Santity sold
Pr#$it ma*imi5ati#n! Point at which the additional revene gained by increasing the price of a prodct e6als
the increase in total cost
Tar)et return #/:e&ti3es! ?hort-rn or long-rn pricing obJectives of achieving a specified retrn on either
sales or investment
Resear&h im"a&t #$ (arket Strate)ies!Research that discovered a strong positive relationship between a
firms market share and prodct 6ality and its retrn on investment
alue "ri&in)! Pricing strategy emphasi%ing benefits derived from a prodct in comparison to the price and
6ality levels of competing offerings
(eth#-s #$ -eterminin) "ri&es!
Cust#mar "r#&ess! #raditional prices that cstomers e3pect to pay for certain goods and services
aria/le sts! )hanges with the level of prodction sch as raw materials and labor cost
%i*e- sts! Remain stable at any prodction level within a certain range
The n&e"t #$ elasti&it in "ri&in) strate)
Elasti&it! Measre of responsiveness of prchasers and sppliers to a change in price
4reak e3en analsis! Pricing techni6e sed to determine the nmber of prodcts that mst be sold at a
specified price to generate enogh revene to cover total cost4reake3en "#int in unit T#tal $i*e- st6"er unit ntri/uti#n t# $i*e- st
4reake3en "#int in -#llars T#tal $i*e- st6 1 3aria/le st "er unit "ri&e
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Tar)et return!Althogh breakeven analysis indicates the sales level at which the firm will incr neither profits
nor losses. most firms managers inclde a targeted profit in their analysis
4reake3en "#int 'ith -#llar tar)et return 8T#tal $i*e- st J Pr#$it #/:e&ti3e96"erunit ntri/uti#n
(#-i$ie- /reake3en analsis! Pricing techni6e sed to evalate consmer demand by comparing the
nmber of prodcts that mst be sold at a variety of prices to cover total cost with estimates of e3pected sales
at the varios price
Yiel- mana)ement! Pricing strategy that allows marketers to vary prices based on sch factors as demand.
even thogh the cost of providing those goods or services remains the same
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CHAPTER 12
Skimmin) "ri&in) strate)! Pricing strategy involving the se of an initial high price relative to competitive
offerings Price is dropped in incremental steps as spply begins to e3ceed demand. or when competition
catches p
Penetrati#n "ri&in) strate)! Pricing strategy involving the se of a relatively low entry price compared with
competitive offerings. based on the theory that this initial low price will help secre market acceptance
E3er-a l#' "ri&in) strate)! A strategy devoted to continos low prices as opposed to relying on short-
term. price-ctting tactics sch as cents-off copon. rebate and special sales
C#m"etiti3e "ri&in) strate)! Pricing strategy designed to de-emphasi%e price as a competitive variable by
pricing a good or service at the general level of comparable offerings
Pri&e ;u#tati#n
List "ri&es! #he normal rate 6oted to potential byer
(arket "ri&e! #he amont that a consmer pay. this may or may not e6al the list price
All#'an&e! ?pecified dedction from list price. inclding a trade-in or promotional allowance
%O4 "lant! Price 6otation that does not inclde shipping charge
%O4 #ri)inK $rei)ht all#'e-! Price 6otation system that allows the byer to dedct shipping e3penses from
the cost of prchases
Uni$#rme--eli3ere- "ri&e! Pricing system for handling transportation costs nder which all byers are
6oted the same price. inclding transportation e3penses sometimes known as postage-stmp pricing
#ne "ri&in)! Pricing strategy for handling transportation costs nder which the market is divided into
geographic regions and a different price is set in each region
Pri&in) "#li&ies
Pri&in) "#li&ies! gideline that reflects marketing obJectives and inflences specific pricing decisions
Ps&h#l#)i&al "ri&in)! Pricing policy based on the belief that certain prices or price ranges make a good or
service more appealing than others to byers
Pri&e $le*i/ilit! #he decision of whether to set one price that applies to every byer or to permit variable
prices for different cstomers
Pr#-u&t line "ri&in)! 's the practice of setting a limited nmber of prices for a selection of merchandise
Pr#m#ti#nal "ri&in)! Pricing policy in which a lower than normal price is sed as a temporary ingredients in a
firms marketing strategy
L#ss lea-er! Prodct offered to consmers at less than cost to attract them to stores in the hope that they will
by other merchandise at reglar prices
C#m"etiti3e /i--in)! Many government and organi%ational procrement department determine the lowestprices available for items that meet specification throgh this method
The trans$er "ri&in) -ilemma
Trans$er "ri&e! #he price for moving goods between profit centres. which are any part of the organi%ation to
which revene and controllable costs can be assigned
Canni/ali5ati#n! @oss of sales of an e3isting prodct de to competition from a new prodct in the same line
4un-le "ri&e! Kffering two or more complementary prodcts and selling them for a single price
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