Paid form of non-personal presentation and promotion of ideas, goods or services by an intensified sponsor
A variety of short term incentives to encourage trial or purchase of a product or service
Ex: Coupons, rebates, sampling, contests, etc.
A variety of programs designed to promote or protect a company’s image or its individual products
Face to face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders
Mission, Money,Message, Media, Measurement
(Objective: AIDA = Awareness, interest, desire, action)
– What is our advertising objectives
Mission is also known as
Specific communication tasks and achievement level to be accomplished with a specific target audiences during a specific period of time
– How much to spend and how do we allocate across media types
What message to send / media to us
Message & Media
– How to evaluate results
Task Specific Advertisement, 4 types
Informative, persuasive, comparative, reminder
Inform consumers or build primary demand. Contains a lot of information (Words)
Ex: Electric cars
Build selective demand. Create liking, preference, conviction, and purchase of a product or service. (Gives a message)
Ex: VISA – “Ito’s everywhere you want to be.”
Keeps consumers thinking about a product (Different from the other that is the brand is established so it does not need to inform, persuade, and compare)
Ex: Coca Cola
5 Factors to consider for advertisement budget
Stage in PLC
Firms systematically switch advertising on and off at high frequency
– Concentrated in a few weeks
– Steady levels of positive advertising
– Short term, seasonal demand
Main Message, creative concept, appeals
2 Media Communication
– Two way communication with immediate feedback
– Flexible: multiple messages conveyed
– Undivided attention
– High cost per customer
Emphasis: Impact per message
Ex: Personal selling (Sales person)
– One way communication with indirect feedback with delay
– Structured: usually only one message conveyed
– Low cost per message
Emphasis: Number of messages
– Reaches broad spectrum of consumers
– Low cost per exposure
– Ability to demonstrate product use and to portray brand image
– High cost production and placement
– Lack of attention by viewers
– The number of times within a specified time period that an average person or household is exposed to an advertising message
– The number of people who receive an advertisement
Products makes cameo appearance in movies and on television
– Often free if firms supply their products in return for exposure or simply because of the creative demands of the storyline
Ex: Reese sales increase after appearing in E.T.
Communication Mix (Promotions) IMC (Integrated Marketing Communication
Advertisement, personal selling, public relations, sales promotion
(Integrated Marketing Communication)
Digital Communication Mix
Search Engine marketing & Social Media Marketing
Promotion leads to participation
# of clicks / #of impressions
Clock Through Rate (CTR)
– Occurs when a click leads directly to a desired user action such as a purchase, sign up, registration, lead, or view of key page
# of conversion / # of clicks
Click through conversion rate
– Ad or organic search result view leads directly to a user action such as a purchase, sign up, registration, lead, or view of a key page
– # of conversion / # of impression
View through conversion rate
Google Earn Money though
Sponsored link and advertising revenue based on CPC (Cost per click)
Anything that can be offered to satisfy customer need or want
Core, basic, Expected, Augmented, Potential
Customer Value Hierarchy
Product decision mainly focuses on
– How to improve the benefit component of consumer surplus
– CS = Benefit – (Price – Risk – Search / Purchasing / Use) Costs
Product with unique identity
– “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.”
Consumer Benefits in role of brands
– Identify course / maker that satisfies their needs
– Simplifies decision making
– Reduces risk
Marketer Benefits in role of brands
– Simplify product handling (Offers legal protection)
– Protect unique features
– Create loyalty
– Establish barriers to entry (That is with high brand loyalty)
The added value endowed on products and services which may be reflected in the way consumers, think, feel, and act with respect to the brand because of the brand
– important intangible asset that has psychological and financial value to the firm
How to brand a product
All about creating differences between products (Key: Make consumes to not think that all brands in category are the same)
Introduction, Growth, Maturity, Decline
Innovators, early adopters, early majority, late majority, LAGGARD
play a critical rile by leading opinions & word of mouth
Innovators and early adopters
Geoffrey Moore’s Crossing the Chasm
The chasm exists between the visionaries and pragmatists. Many high tech products fall into chasm due to their inability to realize that the 2 different markets are completely different and are in need for a different strategy. Its the same idea in crossing the chasm because you need to figure an alternative or different strategy to cross it.
– Predicts future adoptions even when the product has not been launched yet
– Forecasting adoption (first purchase) of an innovation (a new product) for which no closely competing alternatives exist in the marketplace. It embeds a contagion process (Contagious spread) to characterize the spread of WOM between those who adopted and those who have not yet adopted.
– Predict how many customers eventually adopt the innovation and when they will adopt
Bass Diffusion Model
company’s offering and image to occupy a distinct and valued place in the minds of the target customer / market
– locate the brand in the minds of consumers to maximize the potential benefit to the firm.
– Good brand positing helps clarify brand essence and uniqueness in helping its consumers.
Three Case of Product Positioning
Repositioning Positioning of a new product & weight change
Product Positioning Procedures
Form segments, identify who’s in segments, choose target segments with 3 C’s, Choose 4 P’s
Questions for Determining a Frame of Reference
Marketers need to know
– Who the target consumer is (Criteria for effective segmentation + competition
– Who the main competitors are (The selection of target market often defines competition. Don’t define competition too narrowly)
– How the brand is similar to these competitors
– How the brand is different from them
Attributes or benefits that are not necessarily unique to the brand but may be shared with other brands
– helps marketers to place the product in line with the consumer’s frame of reference.
POP two segments
Category & competitive
Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find the same extent with a competitive brand
– Strong, favorable and unique brand associations may be based on any type of attributes or benefit
Three key criteria in POD
desirability, deliverability and differentiability
Occurs when a company lengthens its product line beyond its current range.
Downward market: Introduce product at low price due to
– Middle market stagnation
– Potential for growth in down market
– Aim to tie up low end competitors
Ex: Mercedes intro to C – Class
There are risks such as lowering brands reputation.
Upward market: Enter the high end of the market
– Obtain higher growth
– Increase its margins
– Position itself as full line manufacturers
Ex. Honda higher brand Acura
Different products for different segments
– Different attributes important to different segments
– Different benefit price trade off across segments
Product Line Management
The products are substitutes and cannibalization occurs
– Cannibalization is the decreased demand for an existing product that occurs when its vendor releases a new and similar product. For example, when Hewlett-Packard puts out a new printer, they realize that older printers will suffer some erosion of sales or market share; that erosion is referred to as cannibalization.
Products in same product line
Products in the different product lines
Substitutes, complements, independent
When Complements there will be
cross selling, rating, bundling
Offer customer a product or service related to whatever they already bought or they are buying
In order to buy one product, the consumer must purchase another product in a separate market. That is buying a main product requires you to buy a complementary exclusively from same supplier.
Ex: Coffey machine and packets
Joining related products together for the purpose of selling them as a single unit with inducement (without forcing and separately available)(Usually set low since individual is pricey)
Ex: Restaurants three course meal
No bundle is offered
Individual products are priced separately
Pure Component Pricing
Only the bundle is offered, the products cannot be bought individually
Both the bundle and individual products are offered for sale
5 step buying process before actual purchase
Evaluation of alternatives
Post purchase behavior
It is where the buyer recognizes a need / problem triggered by internal and external stimulus.
– Internal: Person’s normal needs (hunger, thirst, sex)
– External: Admire other people’s things or see an intriguing ad.
For this step, marketers try their best to understand consumers and use that information to bring attention / consumer motivation.
they will seek for more information.
– Mild state of arousal = heightened where consumers are aware.
– Active state of arousal is where they read, phone friends, going online and visiting stores to learn about the product.
– Influential sources to a product are: Personal (Family, friends); Commercial (Advertising, Web, Dealers); Public (Mass media, Consumer rating orgs.); and Experimental (Handling, examine, using)
– These influences vary between consumers characteristics and product category.
– Consumers receives most info from commercial while the most effective information comes from personal and public sources, especially now, the internet
– Consumers will find competing brands & features.
– Total set: Set of brands available to the consumer
– Awareness set: Subset from total of brands that individual consumers know
– Consideration set: Brands that meet initial buying criteria
– Choice set: After informational gathering, only few remain as strong contenders where consumers would finalize a set
– Brands focus to get consumers into consideration set by building awareness.
Information Search (Where / how)
– Consumers trying to satisfy a need & look for certain benefits from the product & they see products as bundle of attributes with varying abilities that satisfy their needs.
– Consumer chooses items from consideration set that maximizes consumer surplus (Benefit – Cost or Willing to pay more of a product when the market price is a lot lower.)
– Evaluation reflects on beliefs and attributes
– Belief: descriptive thought that a person hold one something
– Attitudes: Peoples frame of mind in liking or dialing an object.
– Use Multi Attribute Model
Evaluation of Alternatives (Consideration – Choice)(What / Why)
Customers rank products based on product characteristics and brand beliefs (Positive and negatives)
– To make comparisons across products, always remember to set = 1
– Price can be included as an attribute
Multi Attribute Model / Expectancy Value Model / Fishbein Model
Customers rank products based on product characteristics and brand beliefs (Positive and
– How good consumer thinks of product depends on its attributes
– Perceived benefit / utility = set of attributes
– Perspective of marketers = products are defined on consumers perception
– Due to production variation or uncertain perceptions
– Risk averse = higher risk = less benefit. If comparing a product to a risk free one, they neglect the benefits of the risky product
– Price, financial risk, search costs (High in general: Time & Financial), purchasing costs (Taxes, delivery, convenience, privacy), & use costs (Installation, training, maintenance)
Product / Brand is viewed as a
Bundle of attributes
Bundle of Attributes
Compensatory decision rule
2 MA Model
Linear (Preferred for related goods) & Ideal point (Ex. Taste)
Consumer attributes & Engineering attributes
Does not equal. Consumers is subjective thus perception. Is vital
Use relative importance weights.
– Useful since consumers are heterogeneous in their relative importance weights
– Not directly observable
– When consumers and products overlap = implies repositioning
– Level of engagement and active processing undertaken by the consumer in respond to the marketing stimulus (From viewing an ad or evaluating product or service.)
– High level = expectancy value model or MA model & 5 stage model.
Considering products in absence of significant brand differences
– Ex: Sugar & toothpaste (You reach fro product out of habit not strong brand loyalty, this especially happen in low cost frequently purchased good.
– Need recognition to Purchase decision to Post purchase behavior
– 2/3 of low involvement decisions are made at the point of purchase.
3 Common patterns in low involvement
– Expand product line or create different packs like lays multi packs
– Get customers early, first mover advantage
– Make consumers more aware of their purchase decision, feature and store displays, repetitive advertising, in pack coupons
Post purchase Behavior 3 to monitor
Satisfaction, action, uses
– Satisfaction = closeness between expectations and perceived performance. If performance falls short, customers are disappointed. If expectations are met, customers are satisfied. If performance was greater than expected, customers are delighted.
– The satisfaction or dissatisfaction of produced influence subsequent behavior. Satisfied = Say good things and spread the word. Dissatisfied = bad reviews, complaints, returns. Probability of repurchasing
– The faster consumers use the product, that sooner they are back to repurchase.
– They also need to know hoe consumers dispose the product.
A set of interdependent organizations involved in the process of making a product or service available for use by the consumer or business user
– # of intermediaries (Deist. & Ret) can vary
– Manu – Distr. – Ret – Consumer
– Reduce # of channel transactions. Compare Manufacturer & customer vs. Manufacturer, distributer and customer. Distributed helps be the middle man and provide direct simple connections
– Channel decisions constantly interact with other marketing mix decisions (Product, price, promotion)
– A strong distribution system can be a competitive edge
– Channel decisions involve a long term commitment to other firms
Purpose of Channel
– Match supply from producers to demand from consumers
2 Channel Design
Direct and indirect
– Selling through personal contacts from the company to prospective customers by mail, phone, electronics means, in – person visit and so forth
– Logistics (management of the flow of goods between the point of origin and the point of consumption in order to meet requirements of customers or corporations) are important
– Product quality, customization and information needs have to be high
– Selling though third party intermediaries such as agents or broker representatives, wholesalers, or distributors, and retailers or dealers
– Broad assortment is essential
– Availability is critical
– After service is important
– Manu to wholesaler to jobbers (Essential small scale wholesaler) to retailer to customer
3 – Level
Multi Channel Pro
Maximum market coverage by enhancing accessibility and allowing for a number of price points
Multi Channel Con
Difficulties in coordinating multiple channels and as a consequence, brand image dilution
Nike uses a variety of direct and indirect channels to sell its shoes, apparel, and equipment.
this requires that a lot of demand has to be guaranteed
3 Indirect Intermediaries
Exclusive, selective and intensive distribution
– Severely limiting the number of intermediaries used when manufacturers want to maintain control over the service level and outputs offered by the resellers
– More than few, but less than all intermediaries used by established companies and by new companies seeking distribution
– Placing goods or service in as many outlets as possible products for which the consume wants great deal of location convenience
Comprises the producer, wholesaler(s), and retailer(s) acting as a unified system. One channel member, the channel captain, owns the others or franchises them or has so
– One channel member, the channel captain, owns the others or franchises them or has so much power that they all cooperate.
– Control channel behavior
and eliminate the conflict that results when independent members pursue their own objectives.
– Achieve economies through size, bargaining power
3 Types of VMS
Corporate, Contractual, Administered
Using the push strategy is most appropriate when
the product being sold is an impulse item
The most advanced supply-distributor arrangements for ________ vertical marketing systems rely on distribution
coordinates successive stages of production and distribution through
the size and power of one of the members
A(n) ________ VMS consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone.
A franchise organization is an example of a(n) ________ vertical marketing system.
A(n) ________ vertical marketing system combines successive stages of production and distribution under single ownership.
In a ________ marketing system, two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity.
A firm uses its sales force to sell to large accounts and outbound telemarketing to sell to medium-sized accounts. The firm is using ________