Levels of Product and Services
Core benefits represent what the buyer is really buying.
Actual product represents the design, brand name, and packaging that delivers the core benefit to the customer.
Augmented product represents additional services or benefits of the actual product.
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, …
Shopping products
Consumer products and services that the customer compares carefully on suitability, quality, price, and style
Furniture, Cars, Appliances, …
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, …
Unsought products
Consumer products that the consumer does not know about or knows about but does not normally consider buying
Life insurance, Funeral services, Blood donations, …
Industrial products
Products purchased for further processing or for use in conducting a business.
Industrial products Classification
*Materials and parts* : include raw and manufactured materials and parts usually sold directly to industrial users
Price and service are the major marketing factors, branding and advertising tend to be less important

Capital items : are industrial products that aid in the buyer’s production or operations
Including installations and accessory equipment

Supplies and services : include operating supplies, repair and maintenance items, and business services
Usually supplied under contract

Organization marketing
consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization.
Person marketing
activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people.
Place marketing
consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places.
Social marketing
is the use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well-being and that of society.
Product Quality Level
is the level of quality that supports the product’s positioning
Product Conformance Quality
is the product’s freedom from defects and consistency in delivering a targeted level of performance
Product Features
Are a competitive tool for differentiating a product from competitors’ products
Are assessed based on the value to the customer versus the cost to the company
describes the appearance of the product
contributes to a product’s usefulness as well as to its looks
is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service
involves designing and producing the container or wrapper for a product
identify the product or brand, describe attributes, and provide promotion
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 line-length
is the number of items in the product line
Product line
stretching is when a company lengthens its product line beyond its current range.
Product line filling
occurs when companies add more items within the present range of the line.
Downward product line stretching
is used by companies at the upper end of the market to plug a market hole or respond
Upward product line stretching
is by companies at the lower end of the market to add prestige to their current products.
Combination line stretching
is used by companies in the middle range of the market to achieve both goals of upward and downward line stretching.
Product mix
consists of all the products and items that a particular seller offers for sale
Product mix width
is the number of different product lines the company carries.
Product mix length
is the total number of items the company carries within its product lines.
Product mix depth
is the number of versions offered of each product in the line.
is how closely the various product lines are in end use, production requirements, or distribution channels.
refers to the fact that services cannot be seen, tasted, felt, heard, or smelled before they are purchased.
refers to the fact that services cannot be separated from their providers.
refers to the fact that service quality depends on who provides the services as well as when, where, and how they are provided.
refers to the fact that services cannot be stored for later sale or use.
Service-profit chain
links service firm profits with employee and customer satisfaction :
Internal service quality
Satisfied and productive service employees
Greater service value
Satisfied and loyal customers
Healthy service profits and growth
Internal marketing
means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction. Internal marketing must precede external marketing.
Interactive marketing
means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter :
Service differentiation
Service quality
Service productivity
Managing service differentiation creates ?
A competitive advantage from the offer, delivery, and image of the service:
Offer can include distinctive features
Delivery can include more able and reliable customer contact people, environment, or process
Image can include symbols and branding
Managing service quality provides ?
A competitive advantage by delivering consistently higher quality than its competitors.
Service quality always varies depending on interactions between employees and customers.
Managing service productivity refers to ?
the cost side of marketing strategies for service firms :
Employee recruiting, hiring, and training strategies
Service quantity and quality strategies
Brand equity
The differential effect that knowing the brand name has on customer response to the product or its marketing.
Brand strategy decisions include ?
Product attributes
Product benefits
Product beliefs and values
Name 6 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
Name 4 Brand Sponsorship
1. Manufacturer’s brand
2. Private brand
3. Licensed brand
4. Co-brand
refers to the buying of a whole company, a patent, or a license to produce someone else’s product.
New product development
refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development.
Idea generation
is the systematic search for new-product ideas
Sources of new-product ideas: Internal sources
refer to the company’s own formal research and development, management and staff, and entrepreneurial programs
Sources of new-product ideas: External sources
refer to sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms
Inviting broad communities of people — customers, employees, independent scientists and researchers, and even the public at large—into the new-product innovation process.
Idea screening
Identify good ideas and drop poor ideas. R-W-W Screening Framework:
Is it real?
Can we win?
Is it worth doing?
Concept development and testing
Product idea is an idea for a possible product that the company can see itself offering to the market
Product concept is a detailed version of the idea stated in meaningful consumer terms
Product image is the way consumers perceive an actual or potential product
Concept testing refers to testing new-product concepts with groups of target consumers
Marketing strategy development
refers to the initial marketing strategy for introducing the product to the market. Marketing strategy statement includes:
Description of the target market
Value proposition
Sales and profit goals
Business analysis
involves a review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives.
Product Development
Involves the creation and testing of one or more physical versions by the R&D or engineering departments. It requires an increase in investment. It shows whether the product idea can be turned into a workable product.
Test marketing
is the stage at which the product and marketing program are introduced into more realistic marketing settings. It provides the marketer with experience in testing the product and entire marketing program before full introduction.
Standard test markets
are small representative markets where the firm conducts a full marketing campaign and uses store audits, consumer and distributor surveys, and other measures to gauge product performance. Results are used to forecast national sales and profits, discover product problems, and fine-tune the marketing program.
Controlled test markets
are panels of stores that have agreed to carry new products for a fee. In general they are less expensive than standard test market, faster than standard test markets, but competitors gain access to the new product.
Simulated test markets
are events where the firm will create a shopping environment and note how many consumers buy the new product and competing products. Provides measure of trial and the effectiveness of promotion. Researchers can interview consumers.
is the introduction of the new product :
When to launch (it has to do with some seasonality if you are on the fashion market, vary from product to product)
Where to launch
New-Product Development Process
1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy development
5. Business analysis
6. Product Development
7. Test marketing
8. Commercialization
New-product development should be :
Customer centered
Customer-centered new product development
new ways to solve customer problems and create more customer satisfying experiences.
Sequential new-product development:
Company departments work closely together individually to complete each stage of the process before passing it along to the next department or stage.
Increased control in risky or complex projects but may be slow.
Team-based new-product development:
Company departments work closely together in cross- functional teams, overlapping in the product-development process to save time and increase effectiveness.
Systematic new-product development:
innovative development approach that collects, reviews, evaluates, and manages new-product ideas :
Creates an innovation-oriented culture
Yields a large number of new-product ideas
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
is a basic and distinctive mode of expression.
is a currently accepted popular style in a given field.
are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
Product Life-Cycle Stages:
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service. (Price is the only element in the marketing mix that produces revenue; all other elements represent costs)
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
Value-based pricing
uses the buyers’ perceptions of value, not the sellers cost, as the key to pricing. Price is considered before the marketing program is set. It’s customer driven
Market space
environment of the product or service you offer
Good-value pricing
offers the right combination of quality and good service at a fair price.
Everyday low pricing (EDLP)
charging a constant everyday low price with few or no temporary price discounts.
High-low pricing
charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.
Value-added pricing
attaches value-added features and services to differentiate offers, support higher prices, and build pricing power
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. It’s product driven & adds a standard markup to the cost of the product.
Fixed costs
are the costs that do not vary with production or sales level
Rent, Heat, Interest, Executive salaries
Variable costs
are the costs that vary with the level of production
Total costs
are the sum of the fixed and variable costs for any given level of production
Experience Curve / Learning curve
is when average cost falls as production increases because fixed costs are spread over more units
Break-even pricing
is the price at which total costs are equal to total revenue and there is no profit
Target profit pricing
is the price at which the firm will break even or make the profit it’s seeking
Competition-based pricing
Setting prices based on competitors’ strategies, costs, prices, and market offerings.
Consumers will base their judgments of a product’s value on the prices that competitors charge for similar products.
Target costing
starts with an ideal selling price based on consumer value considerations and then targets costs that will ensure that the price is met
Pure competition
Many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities. No single buyer or seller has much effect on the going market price.
Marketing research, product development, pricing, advertising, and sales promotion play little or no role. Sellers don’t spend much time on marketing strategy.
Monopolistic competition
Many buyers and sellers who trade over a range of prices rather than a single market price.
A range of prices occurs because sellers can differentiate their offers to buyers. Many competitors, each firm is less affected by competitors pricing strategies than in oligopolistic markets.
Oligopolistic competition
Few large sellers. Each seller is alert and responsive to competitors pricing strategies and marketing moves.
Pure monopoly
the market is dominated by one seller.
The seller may be a government monopoly (the U.S. Postal Service), a private regulated monopoly (a power company), or a private unregulated monopoly.
companies that sell some products at “loss”. The point is to get the customer into the store (attracting him with these low prices), and then he will buy other products that are higher priced.
Demand curve
The number of units the market will buy in a given period at different prices.
Elastic demand
The demand changes a lot for a small change in price.
Inelastic demand
The demand hardly changes when there is a small change in price.
𝐏𝐫𝐢𝐜𝐞 𝐞𝐥𝐚𝐬𝐭𝐢𝐜𝐢𝐭𝐲 𝐨𝐟 𝐝𝐞𝐦𝐚𝐧𝐝
% 𝐜𝐡𝐚𝐧𝐠𝐞 𝐢𝐧 𝐪𝐮𝐚𝐧𝐭𝐢𝐭𝐲 𝐝𝐞𝐦𝐚𝐧𝐝/% 𝐜𝐡𝐚𝐧𝐠𝐞 𝐢𝐧 𝐩𝐫𝐢𝐜𝐞
Market-skimming pricing
a strategy with high initial prices to “skim” revenue layers from the market
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
Product line pricing
takes into account the cost differences between products in the line, customer evaluation of their features, and competitors’ prices
Optional-product pricing
takes into account optional or accessory products along with the main product
Captive-product pricing
involves products that must be used along with the main product
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.
Product bundle pricing
combines several products at a reduced price (for ex: happy meal)
Discount and allowance pricing
reduces prices to reward customer responses such as paying early or promoting the product
are either cash discount for paying promptly, quantity discount for buying in large volume, or functional (trade) discount for selling, storing, distribution, and record keeping.
include trade-in allowance for turning in an old item when buying a new one and promotional allowance to reward dealers for participating in advertising or sales support programs.
Segmented pricing
is used when a company sells a product at two or more prices even though the difference is not based on cost
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
Promotional pricing
when prices are temporarily priced below list price or cost to increase demand
Loss leaders
products sold below cost to attract customers in the hope they will buy other items at normal markups.
Special event pricing
used to attract customers during certain seasons or periods.
Cash rebates
given to consumers who buy products within a specified time.
Low-interest financing
Longer warrantees and Free maintenance: lower the consumer’s “total price.”
Risks of promotional pricing
1. Used too frequently, and copies by competitors can create “deal-prone” customers who will wait for promotions and avoid buying at regular price
2. Creates price wars
Geographical pricing
used for customers in different parts of the country or the world
FOB-origin (free on board)
that the goods are delivered to the carrier and the title and responsibility passes to the customer
Uniformed-delivered pricing
the company charges the same price plus freight to all customers, regardless of location
Zone pricing
means that the company sets up two or more zones where customers within a given zone pay a single total price
Basing-point pricing
sellers select a given city as a “_______” and charges all customers the freight cost associated from that city to the customer location, regardless of the city from which the goods are actually shipped
Freight-absorption pricing
the seller absorbs all or part of the actual freight charge as an incentive to attract business in competitive markets
Dynamic pricing
when prices are adjusted continually to meet the characteristics and needs of the individual customer and situations (ex: price of flights tickets changing according to the number of tickets sold…)
International pricing
is when prices are set in a specific country based on country-specific factors: Economic conditions, Competitive conditions, Laws and regulations, Infrastructure, Company marketing objective
Price fixing
Sellers must set prices without talking to competitors -*Public Policy*
Predatory pricing
Selling below cost with the intention of punishing a competitor or gaining higher long-term profits by putting competitors out of business
Robinson-Patman Act prevents ?
unfair price discrimination by ensuring that the seller offer the same price terms to customers at a given level of trade.
Price discrimination is allowed if ?:
1. the seller can prove that costs differ when selling to different retailers
2. the seller manufactures different qualities of the same product for different retailers
Retail (or resale) price maintenance
is when a manufacturer requires a dealer to charge a specific retail price for its products
Deceptive pricing
when a seller states prices or price savings that mislead consumers or are not actually available (difficult to get) to consumers
Upstream partners
raw material suppliers, components, parts, information, finances, and expertise to create a product or service.
Downstream partners
marketing channels or distribution channels that look toward the customer.
Outlet store
At first it was stores where the excess inventory or the “lost” orders was proposed to sale and was then cheaper. Now the name “_____” is overused and is actually another channel of sales, and is not even cheaper.
Department store
A standalone retail – A brand in itself. Different from a Mall where the stores are independent.
Supply chain
“make and sell” view includes the firm’s raw materials, productive inputs, and factory capacity.
Demand chain
“sense and respond” view suggests that planning starts with the needs of the target customer, and the firm responds to these needs by organizing a chain of resources and activities with the goal of creating customer value.
Value delivery network
the firm’s suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system
Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange.
Developing and spreading persuasive communications about an offer.
Finding and communicating with prospective buyers.
Shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging.
Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.
Physical distribution
Transporting and storing goods.
Acquiring and using funds to cover the costs of the channel work.
Risk taking
Assuming the risks of carrying out the channel work.
Marketing channel
firms that have partnered for their common good with each member playing a specialized role
Channel conflict
to disagreement over goals, roles, and rewards by channel members
Horizontal conflict
conflict among members at the same channel level
Vertical conflict
conflict between different levels of the same channel
Conventional distribution systems
One or more independent producers, wholesalers, and retailers. Each seeks to maximize its own profits, and there is little control over the other members and no formal means for assigning roles and resolving conflict.
Vertical marketing systems (VMSs)
provide channel leadership and consist of producers, wholesalers and retailers acting as a unified system.
Corporate vertical marketing system
integrates successive stages of production and distribution under single ownership (ex : Zara).
Contractual vertical marketing system
of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone. The most common form is the franchise organization.
Franchise organization
links several stages in the production distribution process
Manufacturer-sponsored retailer franchise system
Manufacturer-sponsored wholesaler franchise system
Service firm-sponsored retailer franchise system
Administered vertical marketing system
A few dominant channel members without common ownership. Leadership comes from size and power.
Horizontal marketing systems
when two or more companies at one level join together to follow a new marketing opportunity. Companies combine financial, production, or marketing resources to accomplish more than any one company could alone.
Multichannel Distribution systems
(aka Hybrid marketing channels) When a single firm sets up two or more marketing channels to reach one or more customer segments
when product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones
Types of intermediaries
channel members available to carry out channel work. Examples include the company sales force, manufacturer’s agency, and industrial distributors.
Exclusive distribution
when the seller allows only certain outlets to carry its products
Exclusive dealing
is when the seller requires that the sellers not handle competitor’s products
Exclusive territorial
agreements are where producer or seller limit territory
Tying agreements
are agreements where the dealer must take most or all of the line
Marketing logistics
Planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit.
Outbound distribution
moving products from the factory to resellers and consumers.
Inbound distribution
moving products and materials from suppliers to the factory.
Reverse distribution
moving broken, unwanted, or excess products returned by consumers or resellers.
Supply chain management
the process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
affects the pricing of products, delivery performance, and condition of the goods when they arrive
Logistics information management
the management of the flow of information, including customer orders, billing, inventory levels, and customer data :
EDI (electronic data interchange)
VMI (vendor-managed inventory)
Integrated logistics management
the recognition that providing customer service and trimming distribution costs requires teamwork internally and externally
Third-party logistics
the outsourcing of logistics functions to third-party logistics providers (3PLs). It offers the following:
Provide logistics functions more efficiently
Provide logistics functions at lower cost
Allow the company to focus on its core business
Are more knowledgeable of complex logistics
all the activities in selling products or services directly to final consumers for their personal, non-business use
are businesses whose sales come primarily from retailing
Specialty Stores Carry
a narrow product line with a deep assortment such as apparel stores, sporting-goods stores, furniture stores, florists and bookstores, a clothing store.
Limited Line store
a single-line store, ex. men’s clothing.
Department Stores
Carry several product lines – typically clothing, home furnishings, and household goods – with each line operated as a separate department managed by specialist buyers or merchandisers.
A relatively large, low-cost, low-margin, high-volume, self-service operation designed to serve the consumer’s total needs for grocery and household products.
Convenience Stores
Relatively small stores located near residential areas, open long hours seven days a week, and carrying a limited line of high-turnover convenience products at slightly higher prices.
Discount Stores
Carry standard merchandise sold at lower prices with lower margins and higher volumes.
Off-price retailers
Seller of merchandise bought at less-than-regular wholesale prices and sold at less than retail, often leftover goods, overruns, and irregulars obtained at reduced prices from manufacturers or other retailers.
(Include factory outlets owned and operated by manufacturers; independent off-price retailers owned and run by entrepreneurs or by divisions or larger retail corporations; and warehouse (or wholesale) clubs selling a limited selection of brand-name groceries)
Very large stores traditionally aimed at meeting consumers’ total needs for routinely purchased food and nonfood items. Includes supercenters, combined supermarket and discount stores, and category killers.
Self-service retailers
serve customers who are willing to perform their own locate-compare-select process to save money. They include: Wal-Mart and Supermarkets.
Limited service retailers
provide more sales assistance because they carry more shopping goods about which customers need more information. Examples include Sears and JC Penney.
Full-service retailers
assist customers in every phase of the shopping process, resulting in higher costs that are passed on to the customer as higher prices. Includes department stores and specialty stores
Corporate Chains
are two or more outlets that are commonly owned and controlled- Size allows them to buy in large quantities at lower prices and gain promotional economies
Voluntary chains
wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising
Retailer cooperatives
a group of independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effort
Franchise organizations
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
Central business districts
located in cities and include department and specialty stores, banks, and movie theaters
Shopping center
a group of retail businesses planned, developed, owned, and managed as a unit, can be Regional, Community, Neighborhood, Power center, Lifestyle centers.
Retail convergence
the merging of consumers, producers, prices, and retailers, creating greater competition for retailers and greater difficulty differentiating offerings
all activities involved in selling goods and services to those buying for resale or business use.
Selling and promoting
the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost
Buying assortment building
the selection of items and building of assortments needed by their customers, saving the customers work
Bulk breaking
the wholesaler buying in larger quantity and breaking into smaller lots for its customers
the wholesaler holding inventory, reducing its customers’ inventory cost and risk
the wholesaler providing quick delivery due to its proximity to the buyer
the wholesaler providing credit and financing suppliers by ordering earlier and paying on time
Risk bearing
the wholesaler absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence
Market information
the wholesaler providing information to suppliers and customers about competitors, new products, and price developments
Management services and advice
wholesalers helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems
Name Three Types of Wholesalers
Merchant wholesalers
Agents and Brokers
Manufacturer’s sales branches and offices
Merchant wholesalers
the largest group of _______ include:
Full-service _______ who provide a full set of services
Limited service ________ who provide few services and specialized functions
bring buyers and sellers together and assist in negotiations
represent buyers or sellers
Manufacturers’ sales branches and offices
a form of wholesaling by sellers or buyers themselves rather than through independent wholesalers
The Promotion mix
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.
any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor
Broadcast, Print, Internet, Outdoor
Sales promotion
the short-term incentive to encourage the purchase or sale of a product or service
Discounts, Coupons, Displays, Demonstrations
Public relations
building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events (the advantage of that is that it should be free)
Press releases, Sponsorships, Special events, Web pages
Personal selling (person to person sale)
personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships
Sales presentations, Trade shows, Incentive programs
Direct marketing
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
Educational advertising
introduction of a new product with explanations about why it is good
Reminder advertising
reminding a target consumer of a product or service
Entertaining advertising
entertainment linked to the product (can go viral)
Informative advertising
used heavily when introducing a new-product category. In this case, the objective is to build primary demand.
Persuasive advertising
When the company’s objective is to build selective demand. Becomes more important as competition increases.
Comparative advertising (or attack advertising)
When a company directly or indirectly compares its brand with one or more other brands.
the process of putting thought into symbolic form.
the set of symbols the sender transmits.
the communications channels through which the message moves from sender to receiver.
the process by which the receiver assigns meaning to the symbols.
the party receiving the message sent by another party.
the reaction of the receiver after being exposed to the message.
the part of the receiver’s response communicated back to the sender
the unplanned static or distortion during the communication process, which results in the receiver’s getting a different message than the one the sender sent.
Integrated marketing communications
the integration by the company of its communication channels to deliver a clear, consistent, and compelling (really engages you) message about the organization and its brands.
AIDA Model
Get *Attention* ! Hold *Interest* ! Arouse *Desire* ! Obtain *Action*
Personal communication
two or more people communicating directly with each other. Face to face, Phone, Mail, E-mail, Internet chat.
Message content (3)
an appeal or theme that will produce the desired response
Rational appeal – relates to the audience’s self-interest
Emotional appeal – is an attempt to stir up positive or negative emotions to motivate a purchase
Moral appeal – is directed at the audience’s sense of right and proper
Opinion leaders
people within a reference group who, because of their special skills, knowledge, personality, or other characteristics, exerts social influence on others
Buzz marketing
cultivating opinion leaders and getting them to spread information about a product or service to others in their communities
Non-personal communication
A media that carry messages without personal contact or feedback, including major media, atmospheres, and events that affect the buyer directly
Major media
A media including print, broadcast, display, and online media
designed environments that create or reinforce the buyer’s leanings toward buying a product (important to reinforce the message you want to give, your position.)
Collecting Feedback
Involves the communicator understanding the effect on the target audience by measuring behavior resulting from the behavior
Personal selling
the most effective method at certain stages of the buying process, particularly in building buyers’ preferences, convictions, actions, and developing customer relationships
Sales promotion
Coupons, contests, cents-off deals, and premiums that attract consumer attention and offer strong incentives to purchase, and can be used to dramatize product offers and to boost sagging sales
Public relations
a very believable form of promotion that includes news stories, features, sponsorships, and events
Direct marketing
a non-public, immediate, customized, and interactive promotional tool that includes direct mail, catalogs, telemarketing, and online marketing
Push strategy
pushing the product to the consumers by inducing channel members to carry the product and promote it to final consumers.
Pull strategy
when the producer directs its marketing activities toward final consumers to induce them to buy the product and create demand from channel members.
An advertising objective
a specific communication task to be accomplished with a specific target audience during a specific time
Advertising strategy
______ is used by a company to accomplish its advertising objectives and consists of creating advertising messages & Selecting advertising media
Message strategy
the general message that will be communicated to consumers
Creative concept
the idea that will bring the message strategy to life and guide specific appeals to be used in an advertising campaign Characteristics of the appeals include: Meaningful – Believable – Distinctive
Message execution
when the advertiser turns the big idea into an actual ad execution that will capture the target market’s attention and interest
a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time
a measure of how many times the average person in the target market is exposed to the message
the qualitative value of a message exposure through a given medium
Selecting media vehicles
Decisions presenting the media effectively and efficiently to the target customer and must consider the message’s: Impact, Effectiveness, Cost
focus on the message on selected market segments
Return on advertising investment
The net return on advertising investment divided by the costs of the advertising investment : Net return/Costs
Communication effects
whether the ad and media are communicating the ad message well and should be tested before or after the ad runs
Sales and profit effects
compare past sales and profits with past expenditures or through experiments
Press relations (PR) or Press agency
the creation and placing of newsworthy information to attract attention to a person, product, or service
Product publicity
publicizing specific products
Public affairs
building and maintaining national or local community relations
building and maintaining relations with legislators and government officials to influence legislation and regulation
Investor relations
maintaining relationships with shareholders and others in the financial community
public relations with donors or members of nonprofit organizations to gain financial or volunteer support
Customer database
an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data.
Forms of direct marketing
Direct-mail marketing
Catalog Direct marketing
Telephone direct
Direct-response television (DRTV) marketing
Podcasts and vodcasts
Interactive TV (ITV)
Direct-mail marketing
sending an offer, an announcement, a reminder, or any other item to a person at a particular address
Catalog Direct marketing
printed and Web-based catalogs
Telephone direct marketing
using the telephone to sell directly to consumers and business customers
Direct-response television (DRTV) marketing
1-2min ads that describe products or give customers a toll-free number or a Web site to purchase. Also a 30-minute infomercials such as home shopping channels
Podcasts and vodcasts
Downloading of audio and video files via the Internet to a mobile device and listening to them at the consumer’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
Business to consumer (B2C)
selling goods and services online to final consumers
Business to business (B2B)
selling goods and services, providing information online to businesses, and building customer relationships
Consumer to consumer (C2C)
Interested parties providing information via the web over a wide range of products and subjects
Consumer to business (C2B)
consumers communicating with companies to send suggestions and questions via company Web sites
Corporate Web site
website designed to build customer goodwill and to supplement other channels, rather than to sell the company’s products directly to:
Provide information
Create excitement
Build relationships
Marketing Web site
website designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome
The Seven C’s
1. *Context* is the site’s layout.
2. *Content* is the site’s pictures, sound, and video.
3. *Community* is the site’s means to enable user-to-user communication.
4. *Customization* is the site’s ability to tailor itself to different users or to allow users to personalize the site.
5. *Communication* is the way the site enables user-to-user, user-to-site, or two-way communication.
6. *Connection* is the degree that the site is lined to other sites.
7. *Commerce* is the site’s capabilities to enable commercial transactions.
banner-shaped ads found on a Web site
ads that appear between screen changes
ads that suddenly appear in a new window in front of the window being viewed
Rich media ads
ads with animation, video, sound, and interactivity
Search-related ads
Ads in which text-based ads and links appear alongside search engine results and are effective in linking consumers to other forms of online promotion
Content sponsorships
Provide companies with name exposure through the sponsorship of special content such as news or financial information
Viral marketing
the Internet version of word-of-mouth marketing and involves the creation of a Web site, e-mail message, or other marketing event that customers pass along to friends
annoying and offending customers
taking unfair advantage of impulsive or less-sophisticated buyers
“heat merchants” who design mailers and write copy designed to mislead consumers
identity theft and financial scams

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