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Principles of Marketing Revision
Nov 2014
Nghiem Huyen Anh
Final exam format
2 hours
Section A: 20 MCQs (30 Marks)
Section B: 3 short answers (30 marks)
Section C: Case study with 4 questions (40
marks)
Chapter Seven
Customer-Driven Marketing
Strategy:
Creating Value for Target Customers
Market Segmentation
Market segmentation
Dividing a market into smaller segments
with distinct needs, characteristics, or
behavior that might require separate
marketing strategies or mixes.
Market Segmentation
Market Segmentation
Segmenting Consumer Markets
Geographic
segmentation
Demographic
segmentation
Psychographic
segmentation
Behavioral
segmentation
Market Segmentation
Segmenting Consumer Markets
• Geographic segmentation divides the
market into different geographical units
such as nations, regions, states, counties, or
cities
Market Segmentation
Segmenting Consumer Markets
Demographic segmentation
divides the market into
groups based on variables
such as age, gender, family
size, family life cycle, income,
occupation, education,
religion, race, generation,
and nationality
Market Segmentation
Age and life-cycle stage segmentation is the
process of offering different products or using
different marketing approaches for different
age and life-cycle groups
Gender segmentation divides the market based
on sex (male or female)
Market Segmentation
Segmenting Consumer Markets
Income segmentation divides
the market into affluent,
middle-income or lowincome consumers
Psychographic segmentation
divides buyers into different
groups based on social class,
lifestyle, or personality traits
Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation
divides buyers into groups
based on their knowledge,
attitudes, uses, or responses
to a product
• Occasions
• Benefits sought
• User status
• Usage rate
• Loyalty status
Market Segmentation
Using Multiple Segmentation Bases
Multiple segmentation is used to identify smaller,
better-defined target groups
Market Segmentation
Requirements for Effective Segmentation
To be useful, market segments must be:
Measurable
Accessible
Substantial
Differentiable
Actionable
Market Targeting
Selecting Target Market Segments
Target market consists of a set of buyers who
share common needs or characteristics that
the company decides to serve
Market Targeting
Evaluating Market Segments
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
.
Market Targeting
Target Marketing Strategies
Undifferentiated marketing targets the whole
market with one offer
– Mass marketing
– Fo uses o o
o
different
eeds rather tha
hat’s
Market Targeting
Target Marketing Strategies
Differentiated marketing targets several
different market segments and designs
separate offers for each
• Goal is to achieve higher sales and stronger
position
• More expensive than undifferentiated
marketing
Market Targeting
Target Market Strategies
• Concentrated marketing
targets a small share of a
large market
• Limited company resources
• Knowledge of the market
• More effective and efficient
Differentiation and Positioning
Product position is the way
the product is defined by
consumers on important
attributes—the place the
product occupies in
o su ers’ i ds
relative to competing
products
Perceptions
– Impressions
– Feelings
Differentiation and Positioning
Positioning maps
show consumer
perceptions of
their brands
versus competing
products on
important buying
dimensions
Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
• Identifying a set of possible competitive
advantages to build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy
• Communicating and delivering the chosen
position to the market
Differentiation and Positioning
Identifying Possible Value Differences and
Competitive Advantages
Competitive advantage is an advantage over
competitors gained by offering consumers
greater value, either through lower prices
or by providing more benefits that justify
higher prices
Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Identifying a set of possible
competitive advantages to build
a position by providing superior
value from:
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
Differentiation and Positioning
Choosing the Right Competitive Advantage
Difference to promote should be:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
Differentiation and Positioning
Selecting an Overall Positioning Strategy
Value proposition
is the full mix of
benefits upon
which a brand is
positioned
Chapter Eight
Product, Services, and Brands:
Building Customer Value
What Is a Product?
Levels of Product and Services
What Is a Product?
Product and Service Classifications
• Consumer products are products and
services for personal consumption
• Classified by how consumers buy them
– Convenience products
– Shopping products
– Specialty products
– Unsought products
What Is a Product?
Product and Service Classifications
Convenience products
consumer products and services that
the customer usually buys frequently,
immediately, and with a minimum
comparison and buying effort
– Newspapers
– Candy
– Fast food
What Is a Product?
Product and Service Classifications
Shopping products
consumer products and services that
the customer compares carefully on
suitability, quality, price, and style
– Furniture
– Cars
– Appliances
What Is a Product?
Product and Service Classifications
Specialty products
consumer products and services with unique
characteristics or brand identification for which a
significant group of buyers is willing to make a
special purchase effort
• Medical services
• Designer clothes
• High-end electronics
What Is a Product?
Product and Service Classifications
Unsought products
consumer products that the consumer does not
know about or knows about but does not
normally think of buying
• Life insurance
• Funeral services
• Blood donations
Product and Service Decisions
Individual Product and Service Decisions
Product and Service Decisions
Individual Product and Service Decisions
Product or service attributes
communicate and deliver the benefits
• Quality
• Features
• Style and design
Product and Service Decisions
Individual Product and Service Decisions
•
•
Product Quality Level is the level of quality that
supports the produ t’s positio i g
Product Conformance Quality is the produ t’s
freedom from defects and consistency in
delivering a targeted level of performance
Product and Service Decisions
Individual Product and Service Decisions
Product features
• are a competitive tool for differentiating a product
fro o petitors’ produ ts
• are assessed based on the value to the customer
versus the cost to the company
Product and Service Decisions
Individual Product and Service Decisions
Style describes the
appearance of the product
Design contributes to a
produ t’s useful ess as
well as to its looks
Product and Service Decisions
Individual Product and Service Decisions
Brand is the name, term, sign, or design—or a
combination of these—that identifies the maker
or seller of a product or service
Product and Service Decisions
Individual Product and Service Decisions
Packaging involves designing and producing the
container or wrapper for a product
Labels identify the product or brand, describe
attributes, and provide promotion
Product and Service Decisions
Individual Product and Service Decisions
Product support services augment actual products
Product and Service Decisions
Product Line Decisions
Product line is a group of products that are closely
related because they function in a similar manner,
are sold to the same customer groups, are
marketed through the same types of outlets, or fall
within given price ranges
Product and Service Decisions
Product Line Decisions
Product linelength is the number of items in the
product line
• Line stretching
• Line filling
Product and Service Decisions
Product Mix Decisions
Product mix consists of all the products and items
that a particular seller offers for sale
» Width
» Length
» Depth
» Consistency
Branding Strategy: Building Strong Brands
Brand Name Selection
Desirable qualities
1. Suggest benefits and qualities
2. Easy to pronounce, recognize, and
remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal
protection
Branding Strategy: Building Strong Brands
Brand Sponsorship
Ma ufa turer’s ra d
Private brand
Licensed brand
Co-brand
Branding Strategy: Building Strong Brands
Brand Development Strategies
Chapter Nine
New-Product Development and
Product Life-Cycle Strategies
New-Product Development Process
Major Stages in New-Product Development
Copyright © 2012 Pearson Education
9- 48
Product Life-Cycle Strategies
Product Life Cycle
Product Life-Cycle Strategies
• Product development
– Sales are zero and investment costs mount
• Introduction
– Slow sales growth and profits are nonexistent
• Growth
– Rapid market acceptance and increasing profits.
• Maturity
– Slowdown in sales growth and profits level off or
decline
• Decline
– Sales fall off and profits drop
Product Life-Cycle Strategies
Introduction Stage
• Slow sales growth
• Little or no profit
• High distribution and promotion expense
Product Life-Cycle Strategies
Growth Stage
• Sales increase
• New competitors enter the market
• Price stability or decline to increase
volume
• Consumer education
• Profits increase
• Promotion and manufacturing costs gain
economies of scale
Product Life-Cycle Strategies
Maturity Stage
•
•
•
•
•
Slowdown in sales
Many suppliers
Substitute products
Overcapacity leads to competition
Increased promotion and R&D to
support sales and profits
Product Life-Cycle Strategies
Maturity Stage Modifying Strategies
• Market modifying
• Product
modifying
• Marketing mix
modifying
Product Life-Cycle Strategies
Decline Stage
• Maintain the product
• Harvest the product
• Drop the product
Chapter Ten
Pricing:
Understanding and Capturing
Customer Value
Major Pricing Strategies
Customer Value-Based Pricing
Understanding how
much value
consumers place on
the benefits they
receive from the
product and setting a
price that captures
that value
Major Pricing Strategies
Customer Value-Based Pricing
Major Pricing Strategies
Customer Value-Based Pricing
Value-based pricing uses the uyers’
perceptions of value, not the sellers
cost, as the key to pricing. Price is
considered before the marketing
program is set.
• Value-based pricing is customer driven
• Cost-based pricing is product driven
Major Pricing Strategies
Customer Value-Based Pricing
Major Pricing Strategies
Customer Value-Based Pricing
Good-value pricing
offers the right combination of quality and
good service at a fair price
Major Pricing Strategies
Customer Value-Based Pricing
Everyday low pricing (EDLP) charging a
constant everyday low price with few or
no temporary price discounts
Major Pricing Strategies
Customer Value-Based Pricing
High-low pricing charging higher prices on an
everyday basis but running frequent
promotions to lower prices temporarily on
selected items
Major Pricing Strategies
Customer Value-Based Pricing
• Value-added pricing attaches value-added
features and services to differentiate offers,
support higher prices, and build pricing power
Major Pricing Strategies
Cost-Based Pricing
Cost-based pricing setting prices based on the
costs for producing, distributing, and selling
the product plus a fair rate of return for
effort and risk
Major Pricing Strategies
Cost-Based Pricing
Cost-based pricing adds a standard markup to
the cost of the product
Major Pricing Strategies
Cost-Based Pricing
Types of costs
Fixed
costs
Variable
costs
Total
costs
Major Pricing Strategies
Cost-Based Pricing
Fixed costs are the costs that do not
vary with production or sales level
–
–
–
–
Rent
Heat
Interest
Executive salaries
Major Pricing Strategies
Cost-Based Pricing
Variable costs are the costs that vary with the
level of production
– Packaging
– Raw materials
Major Pricing Strategies
Cost-Based Pricing
Total costs are the sum of the fixed and variable
costs for any given level of production
Chapter Eleven
Pricing Strategies
New-Product Pricing Strategies
Pricing Strategies
• Market-skimming
pricing
• Marketpenetration
pricing
New-Product Pricing Strategies
Market-skimming pricing is a strategy with high
i itial pri es to ski re e ue layers fro the
market
• Product quality and image must support the price
• Buyers must want the product at the price
• Costs of producing the product in small volume
should not cancel the advantage of higher prices
• Competitors should not be able to enter the market
easily
New-Product Pricing Strategies
Market-penetration pricing sets a low initial
price in order to penetrate the market quickly
and deeply to attract a large number of buyers
quickly to gain market share
• Price sensitive market
• Inverse relationship of production and
distribution cost to sales growth
• Low prices must keep competition out of the
market
Product Mix Pricing Strategies
Product line
pricing
Optionalproduct
pricing
By-product
pricing
Captiveproduct
pricing
Product
bundle
pricing
Product Mix Pricing Strategies
Product line pricing takes into account the
cost differences between products in the
line, customer evaluation of their features,
a d o petitors’ pri es
Optional-productpricing takes into account
optional or accessory products along with
the main product
Product Mix Pricing Strategies
Captive-product pricing
involves products that
must be used along with
the main product
Price Mix Pricing Strategies
By-product pricing refers to products with little
or no value produced as a result of the main
product. Producers will seek little or no profit
other than the cost to cover storage and
delivery.
Price Mix Pricing Strategies
Product bundle pricing combines several
products at a reduced price
Price-Adjustment Strategies
Discount and
allowance
pricing
Psychological
pricing
Geographic
pricing
Segmented
pricing
Promotional
pricing
Dynamic
pricing
International
pricing
Price-Adjustment Strategies
Discount and allowance pricing reduces prices
to reward customer responses such as paying
early or promoting the product
• Discounts
• Allowances
Price-Adjustment Strategies
Segmented pricing is used
when a company sells a
product at two or more
prices even though the
difference is not based
on cost
Price-Adjustment Strategies
Segmented Pricing
To be effective:
• Market must be segmentable
• Segments must show different degrees of
demand
• Watching the market cannot exceed the
extra revenue obtained from the price
difference
• Must be legal
Price-Adjustment Strategies
Psychological pricing occurs when sellers
consider the psychology of prices and not
simply the economics
Reference prices are prices that buyers carry in
their minds and refer to when looking at a
given product
– Noting current prices
– Remembering past prices
– Assessing the buying situations
Price-Adjustment Strategies
Promotional pricing is when prices are
temporarily priced below list price or cost to
increase demand
• Loss leaders
• Special event pricing
• Cash rebates
• Low-interest financing
• Longer warrantees
• Free maintenance
Price-Adjustment Strategies
Risks of promotional pricing
• Used too frequently, and copies by
o petitors a reate deal-pro e
customers who will wait for promotions
and avoid buying at regular price
• Creates price wars
Price-Adjustment Strategies
Dynamic pricing is when
prices are adjusted
continually to meet the
characteristics and
needs of the individual
customer and
situations
Chapter Twelve
Marketing Channels: Delivering
Customer Value
The Nature and Importance of
Marketing Channels
Number of Channel Levels
Connected by types of flows:
• Physical flow of products
• Flow of ownership
• Payment flow
• Information flow
• Promotion flow
Channel Behavior and Organization
Multichannel Distribution Systems
Hybrid Marketing Channels
Multichannel Distribution systems (Hybrid
marketing channels) are when a single firm
sets up two or more marketing channels to
reach one or more customer segments
Channel Behavior and Organization
Multichannel Distribution System
Channel Design Decisions
Analyzing
consumer
needs
Setting
channel
objectives
Identifying
major
channel
alternatives
Evaluation
Channel Design Decisions
Setting Channel Objectives
•
•
•
•
Targeted levels of customer service
What segments to serve
Best channels to use
Minimizing the cost of meeting customer service
requirements
Channel Design Decisions
Identifying Major Alternatives
• Types of intermediaries
• Number of marketing intermediaries
• Responsibilities of channel members
Channel Design Decisions
Identifying Major Alternatives
Intensive distribution
• Candy and toothpaste
Exclusive distribution
• Luxury automobiles and prestige clothing
Selective distribution
• Television and home appliance
Channel Design Decisions
Evaluating the Major Alternatives
Each alternative should
be evaluated against:
– Economic criteria
– Control
– Adaptive criteria
Channel Design Decisions
Designing International Distribution Channels
• Channel systems can
vary from country to
country
• Must be able to
adapt channel
strategies to the
existing structures
within each country
Retailing
Types of Retailers
•
•
•
•
Amount of service
Self-service
Limited service
Full service
Retailing
Product Line
Specialty stores
• Narrow product line with deep assortment
Department stores
• Wide variety of product lines
Convenience stores
• Limited line of high-turnover goods
Superstores
• Non-food goods
Category killers
• Deep in category with sales staff
Retailing
Types of Retailers
Organizational Approach
Franchise organizations are
based on some unique
product or service; on a
method of doing
business; or on the trade
name, good will, or
patent that the franchisor
has developed
Retailing
Retailer Marketing Decisions
Copyright © 2012 Pearson Education
13- 101
Retailing
Retailer Marketing Decisions - Place Decision
Central business districts are located in cities and
include department and specialty stores, banks, and
movie theaters
Shopping center is a group of retail businesses planned,
developed, owned, and managed as a unit
Retailing
Retailing Trends and Developments
New Retail Forms and Shortening Retail Life Cycles
s
Growth of non-store retailing includes:
• Mail order
• Television
• Phone
• Online
Chapter Fourteen
Communicating Customer Value:
Integrated Marketing
Communications Strategy
The Promotion Mix
• The promotion mix is the specific blend of
advertising, public relations, personal selling,
and direct-marketing tools that the company
uses to persuasively communicate customer
value and build customer relationships
The Promotion Mix
The Promotion Mix
Advertising is any paid form of non-personal
presentation and promotion of ideas,
goods, or services by an identified sponsor
• Broadcast
• Print
• Internet
• Outdoor
The Promotion Mix
The Promotion Mix
Sales promotion is the short-term incentive to
encourage the purchase or sale of a product
or service
• Discounts
• Coupons
• Displays
• Demonstrations
The Promotion Mix
The Promotion Mix
Public relations involves building good relations
ith the o pa y’s arious pu li s y
obtaining favorable publicity, building up a
good corporate image, and handling or
heading off unfavorable rumors, stories, and
events
• Press releases
• Sponsorships
• Special events
• Web pages
The Promotion Mix
The Promotion Mix
Personal selling is the personal
prese tatio y the fir ’s sales for e
for the purpose of making sales and
building customer relationships
• Sales presentations
• Trade shows
• Incentive programs
The Promotion Mix
The Promotion Mix
Direct marketing involves making direct
connections with carefully targeted
individual consumers to both obtain an
immediate response and cultivate lasting
customer relationships—through the use of
direct mail, telephone, direct-response
television, e-mail, and the Internet to
communicate directly with specific
consumers
• Catalog
• Telemarketing
• Kiosks
Integrated Marketing Communications
The Need for Integrated Marketing Communications
Integrated marketing communications is the
integration by the company of its communication
channels to deliver a clear, consistent, and
compelling message about the organization and its
brands
A View of the Communication
Process
The Communication Process
Copyright © 2012Pearson Education
14 -112
Steps in Developing Effective
Marketing Communication
Identify the target audience
Determine the communication objectives
Design the message
Choose the media
Select the message source
Copyright © 2012Pearson Education
14 -113
Steps in Developing Effective Marketing
Communication
Determining the Communication Objectives
• Marketers seek a purchase response that results
from a consumer decision-making process that
includes the stages of buyer readiness
Steps in Developing Effective Marketing
Communication
Designing a Message
Message content is an
appeal or theme that
will produce the
desired response
• Rational appeal
• Emotional appeal
• Moral appeal
Message Format
Steps in Developing Effective Marketing
Communication
Designing a Message
Rational appeal relates to the audie e’s selfinterest
Emotional appeal is an attempt to stir up
positive or negative emotions to motivate a
purchase
Steps in Developing Effective Marketing
Communication
Designing a Message
Moral appeal is
directed at the
audie e’s se se
of right and
proper
Steps in Developing Effective Marketing
Communication
Choosing Media
Personal communication involves two or more
people communicating directly with each
other
• Face to face
• Phone
• Mail
• E-mail
• Internet chat
Steps in Developing Effective Marketing
Communication
Choosing Media
Personal communication is effective because
it allows personal addressing and
feedback
Control of personal communication
• Company
• Independent experts
• Word of mouth
Steps in Developing Effective
Marketing Communication
Non-Personal Communication Channels
Non-personal communication
is media that carry
messages without personal
contact or feedback,
including major media,
atmospheres, and events
that affect the buyer
directly
Steps in Developing Effective Marketing
Communication
Non-Personal Communication Channels
Major media include print, broadcast, display,
and online media
Atmospheres are designed environments that
reate or rei for e the uyer’s lea i gs
toward buying a product
Steps in Developing Effective Marketing
Communication
Nonpersonal Communication Channels
Events are staged occurrences that
communicate messages to target
audiences
• Press conferences
• Grand openings
• Exhibits
• Public tours
Steps in Developing Effective Marketing
Communication
Selecting the Message Source
The essage’s i pa t o the target
audience is affected by how the
audience views the communicator
• Celebrities
– Athletes
– Entertainers
• Professionals
– Health care providers
Setting the Total Promotion
Budget and Mix
Setting the Total Promotion Budget
Affordable budget
method sets the
budget at an
affordable level
• Ignores the effects
of promotion on
sales
Setting the Total Promotion
Budget and Mix
Setting the Total Promotion Budget
Percentage of salesmethod sets the budget at a
certain percentage of current or forecasted
sales or unit sales price
• Easy to use and helps management think
about the relationship between promotion,
selling price, and profit per unit
• Wrongly views sales as the cause rather than
the result of promotion
Setting the Total Promotion
Budget and Mix
Setting the Total Promotion Budget
Competitive-parity method sets the budget to match
competitor outlays
• Represents industry standards
• Avoids promotion wars
Setting the Total Promotion
Budget and Mix
Setting the Total Promotion Budget
Objective-and-task method sets the budget based on
what the firm wants to accomplish with promotion
and includes:
• Defining promotion objectives
• Determining tasks to achieve the objectives
• Estimating costs
Shaping the Overall Promotion
Mix
Promotion Mix Strategies
Shaping the Overall Promotion
Mix
Promotion Mix Strategies
Chapter Fifteen
Advertising and Public Relations
Advertising
Major Advertising Decisions
Advertising
Setting Advertising Objectives
Informative advertising is used when introducing a new
product category; the objective is to build primary
demand
Persuasive advertising is important with increased
competition to build selective demand
Reminder advertising is important with mature products to
help maintain customer relationships and keep
customers thinking about the product
Table 15.1
Possible Advertising Objectives
Advertising
Creating the Advertising Message
Slice of life
Lifestyle
Fantasy
Mood or
image
Musical
Personality
symbol
Technical
expertise
Scientific
evidence
Testimonial or
endorsement
Public Relations
Major Public Relations Tools
News
Speeches
Special events
Written
materials
Corporate
identity
materials
Public service
activities
Buzz marketing
Social
networking
Internet
Chapter Sixteen
Personal Selling
and
Sales Promotion
Managing the Sales Force
Designing Sales Force Structure
Territorial sales force structure
Product sales force structure
Customer sales force structure
Complex sales force structure
The Personal Selling Process
The goal of the personal selling process is to
get new customers and obtain orders from
them
The Personal Selling Process
Steps in the Personal Selling Process
Prospecting identifies qualified
potential customers through referrals
from:
• Customers
• Suppliers
• Dealers
• Internet
The Personal Selling Process
Steps in the Personal Selling Process
Qualifying is identifying good customers
and screening out poor ones by looking
at:
–
–
–
–
–
Financial ability
Volume of business
Needs
Location
Growth potential
The Personal Selling Process
Steps in the Personal Selling Process
Pre-approach is the process of learning as much as possible
about a prospect, including needs, who is involved in the
buying, and the characteristics and styles of the buyers
Objectives
• Qualify the prospect
• Gather information
• Make an immediate
sale
Approaches
• Personal visit
• Phone call
• Letter
The Personal Selling Process
Steps in the Personal Selling Process
Approach is the process where the
salesperson meets and greets the
buyer and gets the relationship off to
a good start and involves the
salesperso ’s:
• Appearance
• Opening lines
• Follow-up remarks
The Personal Selling Process
Steps in the Personal Selling Process
• Opening lines should be positive, build
goodwill, and be followed by key
questions to learn about the
usto er’s eeds or sho i g a display
or sa ple to attra t the uyer’s
attention and curiosity
• The most important attribute is for the
salesperson to: listen
The Personal Selling Process
Steps in the Personal Selling Process
Presentation is when the salesperson tells
the product story to the buyer,
presenting customer benefits and
showing how the product solves the
usto er’s pro le s
• Need-satisfaction approach: Buyers want
solutions and salespeople should listen and
respond with the right products and services
to solve customer problems
The Personal Selling Process
Steps in the Personal Selling Process
Bad Traits
Good traits
Pushy
Late
Good
listeners
Empathetic
Deceitful
Disorganized
Honest
Dependable
Thorough
Follow-up
types
Unprepared
The Personal Selling Process
Steps in the Personal Selling Process
Handling objections is
the process where
salespeople resolve
problems that are
logical,
psychological, or
unspoken
The Personal Selling Process
Steps in the Personal Selling Process
Closing is the process where salespeople should
recognize signals from the buyer—including
physical actions, comments, and questions—
to close the sale
The Personal Selling Process
Steps in the Personal Selling Process
Follow-up is the last step in which the
salesperson follows up after the sale to ensure
customer satisfaction and repeat business
The Personal Selling Process
Personal Selling and Managing Customer Relationships
Personal selling is transaction-oriented to
close a specific sale with a specific
customer
• The long-term goal is to develop a
mutually profitable relationship
Sales Promotion
Sales promotion refers to the short-term
incentives to encourage purchases or sales
of a product or service:
– Consumer promotions
– Trade promotions
– Sales force promotions
Sales Promotion
Major Sales Promotion Tools
Samples
Coupons
Cash refunds
Price packs
Premiums
Advertising
specialties
Patronage
rewards
Point-ofpurchase
displays
Demonstrations
Contests
Sweepstakes
Games
Sales Promotion
Major Sales Promotion Tools
Consumer Promotion Tools
Samples offer a trial amount of a product
Coupons are certificates that give buyers a
saving when they purchase specified
products
Cash refunds are similar to coupons except
that the price reduction occurs after the
purchase
Price packs offer consumers savings off the
regular price of a product
Sales Promotion
Major Sales Promotion Tools
Consumer Promotion Tools
Premiums are goods offered either for free or
at a low price
Advertising specialties are useful articles
i pri ted ith the ad ertiser’s a e, logo,
or message that are given as gifts to
consumers
Point-of-purchase promotions include
displays and demonstrations that take place
at the point of sales
Sales Promotion
Major Sales Promotion Tools
Consumer Promotion Tools
Contests, sweepstakes, and games give
consumers the chance to win something—
such as cash, trips, or goods—by luck or
through extra effort
• Contests require an entry by a consumer
• Sweepstakes require consumers to submit their
names for a drawing
• Games present consumers with something that
may or may not help them win a prize
• Event marketing
Sales Promotion
Major Sales Promotion Tools
Trade Promotion Tools
Discount
Allowance
Free goods
Specialty
advertising
Chapter Seventeen
Direct and Online Marketing:
Building Direct Customer
Relationships
Forms of Direct Marketing
Personal selling direct marketing
Direct-mail direct marketing
Catalog direct marketing
Telephone marketing
Direct-response television marketing
Kiosk marketing
Digital direct marketing
Online marketing
Forms of Direct Marketing
Direct-mail marketing involves an offer,
announcement, reminder, or other item
to a person at a particular address
• Personalized
• Easy-to-measure results
• Costs more than mass media
• Provides better results than mass media
Forms of Direct Marketing
Catalog direct marketing involves
printed and Web-based catalogs
Benefits of Web-based
catalogs
Challenges of Web-based
catalogs
• Lower cost than printed
catalogs
• Unlimited amount of
merchandise
• Real-time
merchandising
• Interactive content
• Promotional features
• Require marketing
• Difficulties in attracting
new customers
Forms of Direct Marketing
Telephone direct marketing involves
using the telephone to sell directly to
consumers and business customers
• Outbound telephone marketing sells
directly to consumers and businesses
• Inbound telephone marketing uses
toll-free numbers to receive orders
from television and print ads, direct
mail, and catalogs
Forms of Direct Marketing
Direct-response television
Direct-response television (DRTV)
marketing involves 60- to 120-second
advertisements that describe products or
give customers a toll-free number or Web
site to purchase and 30-minute
infomercials such as home shopping
channels
• Less expensive than other forms of
promotion and easier to track results
Forms of Direct Marketing
• Kiosk marketing
• Digital direct
marketing
technologies
– Mobile phone
marketing
– Podcasts
– Vodcasts
– Interactive TV
Forms of Direct Marketing
• Mobile phone marketing includes:
– Ring-tone giveaways
– Mobile games
– Ad-supported content
– Contests and sweepstakes
Forms of Direct Marketing
Podcasts and vodcast involve the downloading
of audio and video files via the Internet to a
handheld device such as a PDA or iPod and
liste i g to the at the o su er’s
convenience
Interactive TV (ITV) lets viewers interact with
television programming and advertising using
their remote controls and provides marketers
with an interactive and involving means to
reach targeted audiences
Online Marketing
Online Marketing Domains
Business to
consumer
(B2C)
Business to
business (B2B)
Consumer to
consumer
(C2C)
Consumer to
business (C2B)
Online Marketing
Online Marketing Domains
Business to consumer (B2C) involves
selling goods and services online to
final consumers
Business to business (B2B) involves
selling goods and services, providing
information online to businesses, and
building customer relationships
Online Marketing
Online Marketing Domains
Consumer to consumer (C2C) occurs on the
Web between interested parties over a
wide range of products and subjects
Blogs
– Offer fresh, original, and inexpensive ways to
reach fragmented audiences
– Difficult to control
Online Marketing
Online Marketing Domains
Consumer to business (C2B) involves consumers
communicating with companies to send
suggestions and questions via company Web
sites
Online Marketing
Setting Up an Online Presence
• Creating a Web site requires designing an
attractive site and developing ways to get
consumers to visit the site, remain on the
site, and return to the site
Online Marketing
Setting Up an Online Presence
Types of sites
• Corporate
Web site
• Marketing
Web site
Online Marketing
Setting Up an Online Presence
Corporate Web site is designed to build
customer goodwill and to supplement
other channels, rather than to sell the
o pa y’s produ ts dire tly to:
• Provide information
• Create excitement
• Build relationships
Online Marketing
Setting Up an Online Presence
Marketing Web site is designed to engage
consumers in interaction that will move them
closer to a direct purchase or other marketing
outcome
Online Marketing
Designing Effective Web Sites
To attract visitors, companies must:
• Promote an offline promotion and
online links
• Create value and excitement
• Constantly update the site
• Make the site useful
Online Marketing
Designing Effective Web Sites
The Seven C’s
Context
Customization
Content
Communication
Commerce
Community
Connection
Online Marketing
Placing Ads and Promotions Online
• Forms of online advertising
– Display ads
– Search-related
ads
– Online classifieds
Online Marketing
Placing Ads and Promotions Online
• Banners are banner-shaped ads found on a
Web site
• Interstitials are ads that appear between screen
changes
• Pop-ups are ads that suddenly appear in a new
window in front of the window being viewed
• Rich media ads incorporate animation, video,
sound, and interactivity
Online Marketing
Placing Ads and Promotions Online
Search-related ads are ads in which textbased ads and links appear alongside
search engine results on sites such as
Google and Yahoo! and are effective in
linking consumers to other forms of
online promotion
Online Marketing
Placing Ads and Promotions Online
Content sponsorships provide companies with name
exposure through the sponsorship of special content
such as news or financial information
Viral marketing is the Internet version of word-ofmouth marketing and involves the creation of a Web
site, e-mail message, or other marketing event that
customers pass along to friends
Online Marketing
Creating or Participating in Social Networks (Web Communities)
• Social Networks (Web
communities) allow members to
congregate online and exchange
views on issues of common
interest
– Facebook