Marketing and Online

Communication
Chapter Summaries and Study Guide

Johanna Pinn 1/29/18 International Communication

Table of Contents
Marketing and Online Communication ................................................................................................... 3
Learning Outcomes ............................................................................................................................. 3
Chapter 1: Marketing .......................................................................................................................... 5
Definition of Marketing: .................................................................................................................. 5
The five-step Marketing Process: .................................................................................................... 5
Marketing Concepts: ....................................................................................................................... 5
Market Offerings: ............................................................................................................................ 5
Marketing Myopia: .......................................................................................................................... 5
Marketing Management orientations: ............................................................................................ 5
Customer relationship management: ............................................................................................. 6
Abell model: .................................................................................................................................... 6
Chapter 2: Company and Marketing Strategy ..................................................................................... 7
Mission of a company: .................................................................................................................... 7
Vision of a company: ....................................................................................................................... 7
Strategic Marketing Plan: ................................................................................................................ 7
The Marketing Mix: ......................................................................................................................... 7
Marketing Strategy: ......................................................................................................................... 7
Developing Growth Strategies ........................................................................................................ 8
Chapter 3: Analyzing the Marketing Environment .............................................................................. 9
MICROENVIRONMENT..................................................................................................................... 9
MACROENVIRONMENT ................................................................................................................... 9
Chapter 5: Consumer Markets and Buying Behavior: ....................................................................... 10
Model of Buyer Behavior:.............................................................................................................. 10
Factors affecting consumer behavior: ........................................................................................... 10
Types of buying decision behavior: ............................................................................................... 11
The buyer decision process: .......................................................................................................... 11
Adoption process:.......................................................................................................................... 12
Chapter 7: Customer Value Driven Marketing Strategy .................................................................... 13
Market segmentation: ................................................................................................................... 13
Requirements for effective segmentation: ................................................................................... 13
Market targeting: .......................................................................................................................... 13
Choosing a differentiation and positioning strategy: .................................................................... 14
Chapter 8: Products, Services and Brands......................................................................................... 15
Chapter 9: Product Life Cycle ............................................................................................................ 18
Product Life Cycle Stages:.............................................................................................................. 18
 Chapter 10: Pricing ............................................................................................................................ 19
Definition of Price .......................................................................................................................... 19
Major pricing strategies................................................................................................................. 19
Chapter 11: Pricing Strategies ........................................................................................................... 20
Pricing Strategies: .......................................................................................................................... 20
Product Mix Pricing: ...................................................................................................................... 20
Price adjustment strategies: .......................................................................................................... 20
Chapter 12: Marketing Channels:...................................................................................................... 21
Value Delivery Network................................................................................................................. 21
Marketing Channel: ....................................................................................................................... 21
How Channel members add Value: ............................................................................................... 21
Vertical Marketing Systems (VMS): ............................................................................................... 21
Channel Design Decisions: ............................................................................................................. 21
Channel Management Decisions: .................................................................................................. 22
Marketing Logistics........................................................................................................................ 22
Supply Chain Management ........................................................................................................... 22
Major Logistic Functions:............................................................................................................... 22
Chapter 14: Engaging Customers and communicating Customer Value........................................... 23
The Promotion Mix ........................................................................................................................ 23
Integrated Marketing Communications ........................................................................................ 23
Steps in developing effective Marketing Communications:.......................................................... 23
Choosing communication channels:.............................................................................................. 23
Setting the total Promotion Budget and Mix ................................................................................ 24
Shaping the overall Promotion mix: .............................................................................................. 24
Chapter 17: Direct, Online, Social Media, and Mobile Marketing .................................................... 25
Direct and Digital marketing.......................................................................................................... 25
Forms of Digital and Direct Marketing: ......................................................................................... 25
Chapter 18: Creating Competitive Advantage: ................................................................................. 26
Competitive Advantage ................................................................................................................. 26
Competitor Analysis ...................................................................................................................... 26
Competitive positions: .................................................................................................................. 26
Six-step Content Marketing Strategy ................................................................................................ 28
Research ................................................................................................................................................ 29
General Summary .............................................................................................................................. 29
Learning Outcomes

Marketing and Online Communication

Learning Outcomes

Chapter 1: Marketing
Students understand that “marketing” is a complex concept, are aware of the definition of what
marketing is or could be compared to the product concept, production concept, selling and societal
concepts, can identify the difference between needs, wants, demand, market offering, recognise the
five steps in the marketing process and understand the complexity of engaging customers and customer
relationship management.
Students are able to describe the key features of the Abell model for mapping out the market
orientation of a company. (not discussed in Chapter 1 but discussed in the general lecture).
Chapter 2: Company and Marketing Strategy
Students know what mission and vision are, know how to recognize a market-oriented mission
statement and are able to explain why mission and vision are important for a company.
Students understand the product/market expansion grid and can apply each of its four growth
strategies to specific examples.
Chapter 3: Analysing the Marketing Environment
Students are able to categorise the micro- and macro- environment of a company based on Kotler et
al.
Students can analyse the macro- and micro- environment of a company or an organization.
Chapter 5: Consumer Markets and Buying Behaviour
Students understand what consumer behaviour is and know the four major factors affecting consumer
behaviour.
Students can identify and apply the four types of buying behaviour and the stages of the buyer decision
process.
Chapter 7: Customer Value-Driven Marketing Strategy
Students know what market segmentation, targeting, differentiation and positioning entail, what the
main bases/variables are for segmenting consumer markets (geographic, demographic, psychographic
and behavioural), what the market targeting strategies are (undifferentiated, differentiated,
concentrated(niche) and micromarketing), what the difference is between differentiation and
positioning.
Students know what positioning maps entail and what the main possible value propositions are
according to Kotler et al.
Chapter 18: Creating Competitive Advantage
Students know what competitor analysis is, and what the relation is between competitor analysis and
competitive advantage;
Chapter 8: Products, Services and Brands
Students know what the 3 levels of products and services are, what constitutes the consumer product
classifications (convenience, shopping, specialty, unsought products) what the characteristics of

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Learning Outcomes

services are (intangibility, variability, inseparability, perishability), and can analyse product and service
decisions (individual, product line and product mix decisions).
Students know the difference and can apply the different brand development strategies (line
extension, brand extension, multibrands, new brands).
Chapter 9: Product Life-Cycle
Students know the difference between the product life-cycle stages and can indicate how marketing
strategies change during the product life-cycle.
Chapter 14: Engaging Customers and Communicating Customer Value
Students know what the notion of integrated marketing communication entails, what constitutes the
promotion/marketing communication mix (advertising, sales promotion, personal selling, public
relations, direct and digital marketing), what the difference is between the promotion mix tools.
Students know what promotion mix strategies (push and pull strategy) and budgeting entail.
Students know and can apply the steps in developing effective marketing communication program
(identifying a target audience, determining comm. objectives, designing a message, choosing a
communication channel and media, selecting a message source, collecting feedback).
Chapter 17: Direct, Online, Social Media and Mobile Marketing
Students know what the topics direct marketing, online marketing, social media marketing and mobile
marketing entail.
Students know the difference between viral marketing, online advertising, spam, multichannel
marketing, and email marketing.
Content Strategy (not discussed by Kotler et al., but discussed in general lecture and seminars) based
on https://www.slideshare.net/stevenvanbelleghem/a-six-step-content-marketing-model
Students can describe and apply the different stages of content strategy to a real-life case.
Students know the difference between the 4 main content categories (competitive, focus, avoid, niche),
between the content conversion points, between owned media, earned media, and paid media.
Chapter 10: Pricing
Students know what price is, and are able to categorize the three major pricing strategies (customer
value-based pricing, cost-based pricing, competitive-based pricing) with the help of examples.
Chapter 11: Pricing Strategies
Students know what new product pricing strategies (market-skimming, market penetration) there are,
product mix strategies (product line pricing, optional-product pricing, captive-product pricing, by-
product pricing, product bundle pricing) there are, what price adjustment strategies there are, and
how to identify and recognize these pricing strategies in the daily life.
Chapter 12: Marketing Channels
Students know what value delivery network is, what constitutes the nature of marketing channels (how
channel members add value, number of channel levels, width), what the difference is between
conventional distribution channel, vertical marketing systems (corporate VMS, contractual VMS and
administered VMS), horizontal marketing system and multichannel distribution systems.

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Chapter 1: Marketing

Chapter 1: Marketing

Definition of Marketing:
Engaging customers
Managing profitable customer relationships
Deals with attracting and keeping customers
Enrich brand experience
“Marketing is the process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return.”

The five-step Marketing Process:

1. Understand the marketplace and the customer needs and wants
2. Design a customer value-driven marketing strategy
3. Construct an integrated marketing program that delivers superior value
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity

Marketing Concepts:
NEEDS: states of felt deprivation; physical, social and individual
WANTS: form human needs take when shaped by culture and personality
DEMANDS: human wants that are backed by buying power

Market Offerings: combination of products, services, information, or experiences offered to a market

to satisfy a need or want

Marketing Myopia: the mistake of paying more attention to the specific products a company offers
than to the benefits and experiences produced by these products

Marketing Management orientations:

PRODUCTION: available and highly affordable products; management should focus on improving
production and distribution efficiency
PRODUCT: products that offer the most in quality, performance and innovative features; management
should focus on continuous product improvements
SELLING: not enough products will be bought unless the firm takes a large-scale selling and promotion
effort
MARKETING: achieving organizational goals depends on knowing the needs and wants of the target
markets, delivering satisfaction better than competitors
Not make-and-sell, but sense-and-respond
Outside-in and customer-driven/customer-driving
SOCIETAL MARKETING: marketing decisions should satisfy consumers’ wants, the company’s
requirements, consumer’s long-run interests and society’s long-run interests (sustainable marketing)

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Chapter 1: Marketing

Customer relationship management:

- Customer-engagement Marketing: making the brand a meaningful part of consumers’
conversations and lives by fostering direct and continuous customer involvement in shaping
brand conversations, experiences, and community
- Customer-generated Marketing: brand exchanges created by consumers themselves – both
invited and uninvited – by which consumers are playing an increasing role in shaping their own
brand experience and those of others

Abell model:

- often applied to analyse a business’s scope of operation

- which technologies and products does a business operate in a market with?
- what kind of target group does it respond to

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Chapter 2: Company and Marketing Strategy

Chapter 2: Company and Marketing Strategy

Mission of a company:
- Organization’s purpose
- Focus on current business activities
- Market-oriented and defined in terms of customer needs
- Realists, specific, based on distinctive competencies, motivating

Vision of a company:
- Kind of company we are trying to become
- Future-oriented roadmap
- Spells out “where we are headed”

Strategic Marketing Plan:

1. DEFINING the company’s mission: A statement of the organization’s purpose – what it
wants to accomplish in the larger environment
2. SETTING company objectives and goals: Turn mission into detailed supporting objectives
for each level of management, include business and marketing
3. DESIGNING the business portfolio: The collection of businesses and products that make up
the company
4. PLANNING marketing and other functional plans: What kind of businesses the company
will operate and its objectives for each, marketing provides philosophy, inputs and
strategies
a. VALUE CHAIN: The series of internal departments that carry out value-creating
activities to design, produce, market deliver and support a firm’s products (only as
strong as the weakest link)
b. VALUE DELIVERY NETWORK: The network made up of the company, its suppliers,
its distributors, and its customers who partner with each other to improve the
performance of the entire system

The Marketing Mix:

Product Place Promotion Price Personnel

Marketing Strategy:
1. MARKET SEGMENTATION: Dividing a market into distinct groups of buyers who have different
needs, characteristics, or behaviors, and who might require separate programs of marketing
or separate products; a segment usually responds in a similar way to a given set of marketing
efforts
2. MARKET TARGETING: The process of evaluating each market segment’s attractiveness and
selecting one or more segments to enter; the segment in which it can profitably generate the
greatest value and sustain it over time
3. MARKET POSITIONING: Arranging for a product to occupy a clear, distinctive, and desirable
place relative to competing products in the minds of target consumers, distinguish them from
competing brands
4. MARKET DIFFERENTIATION: Actually differentiating the market offering to create superior
value

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Chapter 2: Company and Marketing Strategy

Developing Growth Strategies

Market Penetration involves making more sales to current customers without changing the
product
Market development involves identifying and developing new markets for the current products
Product development is offering modifier or new products to current markets
Diversification is where a company starts up or buys businesses outside of its current products
and markets

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Chapter 3: Analyzing the Marketing Environment

Chapter 3: Analyzing the Marketing Environment

MICROENVIRONMENT – actors close to the company, affect ability to serve

1. The company: Interrelated groups from the internal environment, other departments
(management, finance, HR, etc.)
2. Suppliers: Provide the resources needed by the company, marketing managers must watch
supply availability and costs
3. Marketing Intermediaries: Firms that help the company to promote, sell, and distribute its
goods to final buyers; resellers, physical distribution firms, marketing services agencies, and
financial intermediaries
4. Competitors: Marketers must gain strategic advantage by positioning their offerings strongly
against competitor’s offerings in the minds of consumers
5. Publics: Any group that has an actual or perceived interest in or impact on an organization’s
ability; financial, media, government, citizen-action, local, general, or internal
6. Customers: Most important actors, aim is to engage the target customers and create strong
relationships with them; consumer markets, business markets, reseller market, government
markets, international markets

MACROENVIRONMENT – larger societal forces, affect microenvironment

1. Demographic:
a. The changing age structure of a population (Baby Boomers, Generation X, Millennials,
Generation Z)
b. The changing family structure (change of ideals and composition)
c. Geographic shifts in population (migratory movements between or within countries,
continuous migration to the suburbs)
d. Better education (more high school and college degrees, ‘white-collar’ workforce)
e. Increasing diversity (different ethnic and racial makeups, diversity of society and
relationships, customers with disabilities)
2. Economic:
a. Changes in consumer spending (changes in spending habits after great recession, rise
of value marketing)
b. Income distribution (creation of a tiered market)
3. Natural:
a. Physical environment and natural resources are affected (weather or natural disasters,
environmental sustainability concerns)
4. Technological:
a. Forces that create new technologies, new product and market opportunities
5. Political and Social
a. Legislation (public policy to guide commerce)
b. Emphasis on ethics (encouraging of socially responsible behavior to protect long-run
interests, rise of cause-related marketing)
6. Cultural:
a. Institutions and other forces that affect society’s basic values, perceptions,
preferences and behaviors
b. Persistence of cultural values (secondary beliefs are more open to change, like changes
in pop culture, people’s self-perception

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Chapter 5: Consumer Markets and Buying Behavior:

Chapter 5: Consumer Markets and Buying Behavior:

Model of Buyer Behavior:

Factors affecting consumer behavior:

1. CULTURAL FORCES:
a. Culture: set of basic values, perceptions, wants and behaviors learned by a member of
society from family and other important institutions -> marketers try to predict
cultural shifts
b. Subculture: a group of people with shared value systems based on common life
experiences and situations
c. Social class: relatively permanent and ordered divisions in a society whose members
share similar values, interests, and behaviors
2. SOCIAL FORCES:
a. Groups and social networks: two or more people who interact to accomplish individual
or mutual goals
i. Word-of-mouth influence: the impact the personal words and
recommendations of trusted friends, family, associates and other consumers
on buying behaviors
ii. Opinion leader: a person within a reference group who, because of special
skills, knowledge, personality, or other characteristics, exerts social influence
on others
iii. Online social networks: online social communities (blogs, social networking
sites, and other online communities) where people socialize and exchange
information and opinions
b. Family: most important consumer buying organization in society with traditional
buying roles
c. Roles and status: a role consists of the activities people are expected to perform
according to the people around them; each role carries a status reflecting the general
esteem given to it by society
3. PERSONAL FORCES:
a. Age and Life-Cycle-Stage: change in buying behavior over the lifetime, marketers
develop appropriate strategies for each stage
b. Occupation: occupational groups have different buying interests, companies can
specialize in products for a specific occupation
c. Economic situation: trends in spending, personal income, savings and interest rates;
offering of lower-priced alternatives
d. Lifestyle: a person’s pattern of living as expressed in his or her activities, interests and
opinion; whole pattern of acting and interacting with the world
e. Personality and self-concept: the unique psychological characteristics that distinguish
a person or group; consumers are likely to choose brands with personalities that match
their own
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Chapter 5: Consumer Markets and Buying Behavior:

4. PSYCHOLOGICAL FACTORS:
a. Motivation: a need that is sufficiently pressing to direct the person to seek satisfaction
of the need (Maslow’s hierarchy of needs)
b. Perception: the process by which people select, organize, and interpret information to
form a meaningful picture of the world; selective attentions, distortion and retention
-> subliminal (unconscious) advertising
c. Learning: changes in an individual’s behavior arising from experience
d. Beliefs and Attitudes: a descriptive thought that a person holds about something -> a
person’s consistently favorable or unfavorable evaluations, feeling, and tendencies
toward an object or idea

Types of buying decision behavior:

COMPLEX: Consumer buying behavior in situations characterized by high consumer involvement in a

purchase and significant perceived differences among brands
DISSONANCE-REDUCING: Consumer buying behavior in situations characterized by high involvement
but few perceived differences among brands
HABITUAL: Consumer buying behavior in situations characterized by low consumer involvement and
few significant perceived brand differences
VARIETY-SEEKING: Consumer buying behavior characterized by low consumer involvement but
significant perceived brand differences

The buyer decision process:

1. NEED RECOGNITION: the customer recognizes a problem or a need, can be triggered by
external stimuli
2. INFORMATION SEARCH: the customer searches for more information through personal,
commercial, public and experiential sources
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Chapter 5: Consumer Markets and Buying Behavior:

3. EVALUATION OF ALTERNATIVES: information is used to evaluate alternative brands in the

choice set
4. PURCHASE DECISION: the customer buys the product from the most preferred brand
5. POSTPURCHASE BEHAVIOR: consumers take further action after purchase, based on their
satisfactions/dissatisfaction (cognitive dissonance)

Adoption process:
1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption
a. Innovators
b. Early adopters
c. Early mainstream
d. Late mainstream
e. Lagging adopters

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Chapter 7: Customer Value Driven Marketing Strategy

Chapter 7: Customer Value Driven Marketing Strategy

Market segmentation:
1. GEOGRAPHIC: dividing a market into different geographical units, such as nations, states,
regions, counties, cities, or even neighborhoods
2. DEMOGRAPHIC: dividing the market into segments based on variables such as age, life-cycle
stage, gender, income, occupation, education, ethnicity, and generations
3. PSYCHOGRAPHIC: dividing a market into segments based on social-class, lifestyle, or
personality characteristics
4. BEHAVIORAL: dividing a market into segments based on consumer knowledge, attitudes, use
of a product, or responses to a product
a. OCCASIONAL: segmentation according to occasions when buyers get the idea to buy,
actually make their purchase, or use the purchased item
b. BENEFICIAL: segmentation according to the different benefits the customer seeks
from the product
 Additional variables for business markets: operating characteristics, purchasing
approaches, situational factors and personal characteristics

Requirements for effective segmentation:

- Measurable: size, purchasing power, and profits can be measured
- Accessible: segments can be effectively reached and served
- Substantial: segments are large or profitable enough to serve
- Differentiable: segments are conceptually distinguishable and respond differently to different
marketing mix elements and programs
- Actionable: effective programs can be designed for attracting and serving the segments

Market targeting:
1. Undifferentiated (mass) marketing: a market-coverage strategy in which a firm decides to
ignore market segment differences and go after the whole market with one offer
2. Differentiated (segmented) marketing: a market-coverage strategy in which a firm decides to
target several market segments and design separate offers for each
3. Concentrated (niche) marketing: a market-coverage strategy in which a firm goes after a large
share of one or a few segments or niches
4. Micromarketing: tailoring products and marketing programs to the needs and wants of specific
individuals and local customer segments; it includes local marketing and individual marketing
a. Local marketing: tailoring brands and marketing to the needs and wants of local
customer segments – cities, neighborhoods, and even specific stores
b. Individual marketing: tailoring products and marketing programs to the needs and
preferences of individual customers

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Chapter 7: Customer Value Driven Marketing Strategy

Choosing a differentiation and positioning strategy:

1. Identifying possible value differences and competitive advantages; gained by offering and
2. delivering the best quality and service; product differentiation; services differentiation;
channel differentiation; people differentiation; image differentiation
3. Choosing the right competitive advantage: How many differences to promote? -> One unique
selling position (USP) per brand
a. Important: difference delivers a highly valuable benefit to target buyers
b. Distinctive: competitors do not offer the difference, or the company can offer it in a
more distinctive way
c. Superior: difference is superior to other ways that customers might obtain the same
benefit
d. Communicable: difference is communicable and visible to buyers
e. Preemptive: competitors cannot easily copy the difference
f. Affordable: buyers can afford to pay for the difference
g. Profitable: the company can introduce the difference profitably
4. Selecting an overall positioning strategy (value proposition): the full positioning of a brand –
the full mix of benefits on which it is positioned
a. More for more: providing the most upscale product or service and charging a higher
price to cover the higher costs
b. More for same: offer more service/atmosphere for the same price
c. Same for less: deep discounts on same products due to superior purchasing power and
lower-cost operations
d. Less for much less: products that offer less and therefore cost less, meeting
consumers’ lower performance or quality requirements at a much lower price
e. More for less: many companies claim to do this, very hard to sustain in the long run

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Chapter 8: Products, Services and Brands

Chapter 8: Products, Services and Brands

PRODUCT DEFINITION: anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need
SERVICE DEFINITION: an activity, benefit or satisfaction offered for sale that is essentially intangible
and does not result in the ownership of anything
Levels of Products and Services:

augmented product: additional

customer services and benefits
actual product: physical
manifestation of the core benefits
the company plans to deliver
core customer value: benefits and
satisfactions which the customer
seeks from the product, based on
customer problems

Product and Service Classifications:

1. Consumer product: a product bought by final consumers for personal consumption: further
classified on how customers buy them
a. Convenience product: a consumer product that customers usually buy frequently,
immediately, and with minimal comparison and buying effort
b. Sopping product: a consumer product that the customer, in the process of selecting
and purchasing, usually compares on such attributes as suitability, quality, price, and
style
c. Specialty product: a consumer product with unique characteristics or brand
identification for which a significant group of buyers is willing to make a special
purchase effort
d. Unsought product: a consumer product that the consumer either does not know about
or knows about but normally does not consider buying
2. Industrial product: a product bought by individuals and organizations for further processing or
for use in conducting a business
3. Organizations: Persons, places and Ideas: intangible market offerings, which are not products
or services; organizational marketing for non-profit organizations and corporate image
marketing for business; use of social marketing to improve individual and societal well-being

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Chapter 8: Products, Services and Brands

Product and Service Decisions:

1. Product and Service attributes
a. Product quality: the characteristics of a product or service that bear on its ability to
satisfy stated or implied customer needs; constant improvement
b. Product features: new features are an effective way to compete
c. Product style and design: style describes the appearance of a product, while design
contributes to a product’s usefulness ant its looks
2. Branding: a name, term, sign, symbol, or design, or a combination of these, that identifies the
products or services of one seller or group of sellers and differentiates them from those of
competitors
3. Packaging: the activities of designing and producing the container or wrapper for a product
4. Labeling: acts as an identification of the brand, describes several things about the product,
promotes the brand itself
5. Product support services: customer services to guarantee full satisfaction
6. Product line decisions: 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
 Determination of product line length through line filling or stretching (width or depth)

Characteristics of a Service:
- Intangibility: services cannot be seen, tasted, felt, heard or smelled before the purchase
- Variability: Quality of services depends on who provides them and when, how and where they
are provided
- Inseparability: services cannot be separated from their providers
- Perishability: services cannot be stored for later use or sale

Brand development strategies:

1. Brand equity and brand value
a. Equity: The differential effect that knowing the brand name has on customer response
to the product or its marketing
b. Value: The total financial value of a brand
2. Building strong brands
a. Positioning: based on product attributes, customer benefits or general beliefs and
values
b. Name selection: should suggest something about the product’s benefits and qualities;
should be easy to pronounce, recognize and remember; should be distinctive,
memorable, translate easily and be capable of legal registration and protection
c. Sponsorship:
i. National brand: selling output under the manufacturers name
ii. Store brand: a brand created and owned by a reseller of a product or a service
iii. Licensing: to license names or symbols created by other manufacturers
iv. Co-Branding: the practice of using the established brand names of two
different companions on the same product
d. Development:
i. Line extension: extending an existing brand name to new forms, colors, sizes,
ingredients, or flavors of an existing product category<
ii. Brand extension: extending an existing brand name to new product categories
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Chapter 8: Products, Services and Brands

iii. Multibrands: company markets many different brands in a given product

category, to capture greater market share
iv. New Brands: creating a separate brand with a new name
3. Managing Brands
a. Brands try to build brand experiences through extensive customer engagement
b. Employees must be well trained to be customer centered
c. Companies need to periodically audit brands’ strengths and weaknesses

17
Chapter 9: Product Life Cycle

Chapter 9: Product Life Cycle

Product Life Cycle Stages:

1. Product development begins when the company finds and develops a new product idea;
during product development, sales are zero and the company’s investment costs mount
2. Introduction is a period of slow sales growth as the products is introduced to the market;
profits are nonexistent in this stage, because of the heavy expenses of product introduction
3. Growth is a period of rapid market acceptance and increasing profits
4. Maturity is a period of slowdown in sales growth because the product has achieved acceptance
by most potential buyers; profits level off or decline because of increased marketing outlays
to defend the product against competition
5. Decline is the period when sales fall off and profits drop

 The product life cycle concept can also be applied to Styles (a basic and distinctive mode
of expression), fashions (a currently accepted or popular style in a given field), and fads (a
temporary period of unusually high sales).

18
Chapter 10: Pricing

Chapter 10: Pricing

Definition of Price: The amount of money charged for a product or a service, or the sum of the values
that customers exchange for the benefits of having or using the product or service

Major pricing strategies:

1. Customer value-based pricing: setting prices based on buyer’s perceptions of value, rather
than on the seller’s cost
a. Assess customer needs and value perceptions
b. Set target price to match customer perceived value
c. Determine costs that can be incurred
d. Design product to deliver desired value at price
2. Good-value pricing: Offering just the right combination of quality and good service at a fair
price
3. Value-added pricing: attaching value-added features and services to differentiate a company’s
offers and charging higher prices
4. Cost-based pricing: Setting Prices based on the costs of producing, distributing, and selling the
product plus a fair rate of return for effort and risk
a. Design a good product
b. Determine product costs
c. Set price based on costs
d. Convince buyers of product’s value
 Types of costs:
▪ Fixed costs: costs that do not vary with production or sales level)
▪ Variable costs: costs that vary directly with the level of production
▪ Total costs: the sum of the fixed and variable costs for any given level of
production
 Costs at different levels of production
▪ Average production cost decreases, if production amount increases
▪ At some point this becomes ineffective, so plant size must be increased
 Costs as a function of production experience:
▪ With higher volume, production becomes more efficient and gains
economies of scale (average cost decreases – experience curve)
5. Cost-plus pricing: Adding a standard markup to the cost of the product; ignores demand and
competitor pricing
6. Break-even pricing: Setting price to break even on the costs of making and marketing a
product, or setting the price to make a target return
7. Competition-based pricing: Setting prices based on competitor’s strategies, prices, costs, and
market offerings

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Chapter 11: Pricing Strategies

Chapter 11: Pricing Strategies

Pricing Strategies:
Market-skimming pricing: setting a high price for a new product to skim maximum revenues layer by
layer from the segments willing to pay the high price, the company makes fewer but more profitable
sales.
Market-penetration pricing: setting a low price for a new product to attract a large number of buyers
and a large market share.

Product Mix Pricing:

1. Product line pricing: setting the price steps between various products in a product line based
on cost differences between the products, customer evaluations of different features and
competitor’s prices.
2. Optional product pricing: the pricing of optional or accessory products along with a main
product.
3. Captive product pricing: setting a price for products that must be used along with a main
product.
4. By-product pricing: setting a price for by-products to make the main product’s price more
competitive.
5. Product bundle pricing: combining several products and offering the bundle at a reduced
price.

Price adjustment strategies:

1. Discount: a straight reduction in price on purchases during a stated period of time or of larger
quantities.
2. Allowance is promotional money paid by manufacturers to retailers in return for an agreement to
feature the manufacturer’s products in some way.
3. Segmented pricing: selling a product or service at two or more prices, where the difference in
prices is not based on costs.
4. Psychological pricing: pricing that considers the psychology of prices, not simply the economics,
the price says something about the product
5. Promotional pricing: temporarily pricing products below the list price, and sometimes even below
cost, to increase short-run sales
6. Geographical pricing: setting prices for customers located in different parts of the country or world
(uniform/zone/basing-point/freight-absorption)
7. Dynamic pricing means adjusting pricing continually to meet the characteristics and needs of
individual customers and situations.
8. International pricing: charging different pricing for customers in different countries.

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Chapter 12: Marketing Channels:

Chapter 12: Marketing Channels:

Value Delivery Network: composed of the company, suppliers, distributors and ultimately the
customers, who partner with each other to improve the performance of the entire system in
delivering customer value

Marketing Channel: a set of interdependent organizations that help make a product or service
available for use or consumption by the consumer or business user

How Channel members add Value:

1. Information: Gathering and distributing information about consumers, producers and other
factors and forces in the marketing environment needed for planning and aiding exchange
2. Promotion: Developing and spreading persuasive communications about an offer
3. Contact: Finding and engaging prospective buyers
4. Matching: Shaping offers to meet the buyer’s needs, including activities such as manufacturing,
grading, assembling and packaging
5. Negotiation: Reaching an agreement on price and other terms so that ownership or possession
can be transferred

Vertical Marketing Systems (VMS): a distribution channel in which producers, wholesalers and
retailers act as a unified system. One channel member owns the others, has contracts with them or
wields so much power that they all cooperate.

1. Corporate VMS is a vertical marketing system that combines successive stages of production
and distribution under single ownership. Channel leadership is accomplished through common
ownership.
2. Contractual VMS is a vertical marketing system in which independent firms at different levels
of production and distribution join together through contracts. The most common example of
a contractual VMS is the franchise organization: a contractual marketing system in which a
channel member (franchisor) links several stages in the production-distribution process. There
are also three types of franchises: manufacturer-sponsored retailer franchise systems,
manufacturer-sponsored wholesaler franchise systems and service-firm-sponsored retailer
franchise systems.
3. Administered VMS is a vertical marketing system that coordinates successive stages of
production and distribution through the size and power of one of the parties.

Horizontal marketing system: a channel arrangement in which two or more companies at one level
join together to follow a new marketing opportunity
Multi-channel distribution system: a distribution system in which a single firm sets up two or more
marketing channels to reach one or more customer segments

Channel Design Decisions:

1. Analyzing consumer needs: finding out what kind of value needs to be delivered; company
positioning
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Chapter 12: Marketing Channels:

2. Setting channel objectives: targeted level of customer service, decide which segments to serve,
minimize channel cost per segment
3. Identifying major alternatives:
a. Types of intermediaries: decide on types of channel members/resellers
b. Number of intermediaries: intensive vs. extensive distribution of products
c. Responsibilities of intermediaries: price policies, conditions of sale, territory rights
4. Evaluation major alternatives: economic criteria, control issues, adaptability
5. Designing international distribution channels: each country has its own distribution system ->
global marketers must adapt channel strategies

Channel Management Decisions:

1. Analyzing consumer needs: find suitable, qualified resellers for your product
2. Managing and motivating channel members: partner relationship management
3. Evaluating channel members: check channel member performance

Marketing Logistics: Planning, implementing, and controlling the physical flow of materials, final
goods, and related information from points of origin to points of consumption to meet customer
requirements at a profit

Supply Chain Management: managing upstream and downstream value-added flows of materials,
final goods, and related information among suppliers, the company, resellers and final consumers
(inbound and outbound logistics)

Major Logistic Functions:

1. Warehousing: storage of goods while they are waiting to be sold (distribution center)
2. Inventory Management: maintain the exactly right amount of inventory
3. Transportation: affects, pricing, delivery performance, and condition of goods when they
arrive, transportation can be multimodal or just-in-time
4. Logistics Information Management: improve joint logistics decisions through exchange of
information

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Chapter 14: Engaging Customers and communicating Customer Value

Chapter 14: Engaging Customers and communicating Customer Value

The Promotion Mix: a specific blend of tools that the company uses to persuasively communicate
customer value and build customer relationships (also marketing communications mix)
1. Advertising: any paid form of nonpersonal presentation and promotion of ides, goods, or
services by an identified sponsor
2. Sales Promotion: short-term incentives to encourage the purchase or sale of a product or a
service
3. Personal Selling: Personal customer interactions by the firm’s sales force for the purpose of
engaging customers, making sales, and building customer relationships
4. 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
5. Direct and Digital marketing: engaging directly with carefully targeted individual consumers
and customer communities to both obtain an immediate response and build lasting customer
relationships

Integrated Marketing Communications: carefully integrating and coordinating the company’s many
communication channels to deliver a clear, consistent, and compelling message about the organization
and its products (careful mix of promotion tools to avoid confusion)

Steps in developing effective Marketing Communications:

1. Identify target audience: current users, potential buyers, decision makers and influencers
2. Determine communication objectives: awareness, knowledge, liking, preference, conviction,
purchase
3. Designing a message:

a. Message content: rational/emotional appeal, concept of storytelling

b. Message structure: draw a conclusion or leave it to the audience; present strong
arguments first or last; present a one- or two-sided argument
c. Message format: distinctive design features of the message

Choosing communication channels:

1. Personal Communication Channels: channels through which two or more people communicate
directly with each other, including face to face, on the phone, via mail or e-mail, or through an
internet ‘chat’

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Chapter 14: Engaging Customers and communicating Customer Value

2. Word-of-mouth Influence: Personal communications about a product between target buyers

and neighbors, friends, family member and associates
3. Buzz Marketing: cultivating opinion leaders and getting them to spread information about a
product or service to others in their community
4. Nonpersonal Communication Channels: Media that carry messages without personal contact
or feedback, including major media, atmospheres, and events

Setting the total Promotion Budget and Mix

1. Affordable method: setting the promotion budget at the level management thinks the
company can afford (small businesses, low placement of promotion)
2. Percentage-of-sales method: setting the promotion budget at a certain percentage of current
or forecasted sales or as a percentage of the unit sales price (sales as cause for promotion)
3. Competitive-parity method: setting the promotion budget to match competitor’s outlays
(collective wisdom of the industry, prevent promotion wars)
4. Objective-and-task method: developing the promotion budget by (1) defining specific
promotion objectives, (2) determining the tasks needed to achieve these objectives, and (3)
estimating the costs of performing these tasks; the sum of these costs is the proposed
promotion budget

Shaping the overall Promotion mix:

- Advertising: can reach masses of geographically dispersed buyers at a low cost per exposure,
enables the seller to repeat a message many times
- Personal Selling: builds up buyer’s preferences, convictions, and actions
- Sales promotion: attract customer attention, engage consumers, offer strong incentives to
purchase
- Public Relations: highly believable, reaches prospects who avoid salespeople and advertising
- Direct and Digital Marketing: more targeted, immediate and personalized, direct marketing is
interactive

 Push strategy: a promotion strategy that calls for using the sales force and trade promotion
to push the product through the channel; the producer promotes the product through
channel members who in turn promote it to final customers
 Pull strategy: a promotion strategy that calls for spending a lot on consumer advertising
and promotion to induce final consumers to buy the product, creating a demand vacuum
that ‘pulls’ the product through the channel

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Chapter 17: Direct, Online, Social Media, and Mobile Marketing

Chapter 17: Direct, Online, Social Media, and Mobile Marketing

Direct and Digital marketing: engaging directly with carefully targeted individual consumers and
customer communities to both obtain an immediate response and building lasting customer
relationships

Forms of Digital and Direct Marketing:

1. Digital and Social Media Marketing: using digital marketing tools such as web sites, social
media, mobile apps and ads, online video, e-mail, and blogs that engage consumers anywhere,
anytime via their digital devices
2. Multichannel Marketing: marketing both through stores and other traditional offline channels
and through, digital, online social media, and mobile channels
3. Online marketing: marketing via the internet, using company web sites, online ads and
promotions, e-mail, online video, and blogs
4. Marketing Web Site: a web site that engages customers to move them closer to a direct
purchase or other marketing outcome
5. Branded Community Web Site: a web site that presents brand content that engages consumers
and creates customer community around a brand
6. Online Advertising: advertising that appears while consumers are browsing online, including
display ads, search-related ads, online classifieds, and other forms
7. E-Mail Marketing: sending highly targeted, highly personalized, relationship-building
marketing messages vie e-mail -> unsolicited=spam
8. Viral marketing: the digital version of word-of-mouth marketing: videos, ads, and other
marketing content that is so infectious that customers will seek it out or pass it along to friends
9. Blogs: online journals where people and companies post their thoughts and other content
usually related to narrowly defined topics
10. Social media: independent and commercial online communities where people congregate,
socialize and exchange views and information

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Chapter 18: Creating Competitive Advantage:

Chapter 18: Creating Competitive Advantage:

Competitive Advantage: an advantage over competitors gained by offering consumers greater value

Competitor Analysis:
1. Identifying competitors: identifying all competitors in the broadest sense from a business and
a market point of view
2. Assessing competitors
a. Determining competitors’ objectives: goals concerning current profitability, market
share growth, cash flow, technological leadership, service leadership
b. Identifying competitors’ strategies: a strategic group is a group of firms in an industry
following the same or a similar strategy in a given target market
c. Assessing competitors’ strengths and weaknesses: process of benchmarking;
comparing the company’s products and processes to those of competitors or leading
firms in other industries to identify best practices and find ways to improve quality and
performance
d. Estimating competitors’ reactions
3. Selecting competitors to attack and avoid
a. Strong or weak competitors: assessed with a customer value analysis; determining
what benefits target customers value and how they rate the relative value of various
competitors’ offers
b. Close or distant competitors: choosing competitors that resemble your organization
the most, rather than distant competitors
c. Good or bad competitors: companies can often benefit from their competitors; bad
competitors are the ones that break the industry rules
d. Finding uncontested market space: many companies seek unoccupied positions to
avoid direct competitors
4. Designing a competitive intelligence system: collection, interpretation, distribution and use of
competitor information
5.

Competitive positions:
1. Market leaders: The firm in an industry with the largest market share
a. Expanding local demand: developing new users, new uses or more usage of its
products
b. Protecting market share: protecting current business against competitor’s attacks,
prevent weaknesses
c. Expanding market shares: small market share increases can lead to huge sales
increases
2. Market challengers: A runner-up firm that is fighting hard to increase its market shares in an
industry
a. Full frontal attack: matching the competitor’s product, advertising, price, and
distribution efforts; attacking strengths rather than weaknesses
b. Indirect attack: attacking the competitor’s weaknesses or gaps in the market coverage;
often acquiring smaller competitors
3. Market follower: A runner-up firm that wants to hold its share in an industry without rocking
the boat
a. Following closely: learning from market leaders’ experience, copy and improve their
programs

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Chapter 18: Creating Competitive Advantage:

b. Following at a distance: keeping a distance to avoid retaliation, bring distinctive

advantages to the market
4. Market nicher: A firm that serves small segments that the other firms in an industry overlook
or ignore
a. Specialization in market, customer, product or marketing mix lines
b. Multiple niching for risk protection

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Six-step Content Marketing Strategy

Six-step Content Marketing Strategy

1. Topic Selection: conduct an internal and external analysis, to find out in which area your
company can offer unique content
a. To be avoided: unoriginal content, for which there is no demand
b. Competitive: content in which you are not unique, but the market is interested in,
competitors will share this kind of content
c. Niche: differentiates you in the market, but there is no high interest
d. Focus: there is market interest, but your competitors are not able to satisfy this
interest
2. Content conversion strategy: draw-up a touch-point plan, to ensure customer conversion, try
to have few steps to reach the business goal, include a clear call to action for your audience,
create a ‘google Strategy’ by using search engine optimization
3. Editorial content planning: matching content and touch-points, combination of owned and
paid media, not the same level of attention and intensity
a. Updates: combination of formal and informal content, send out regularly, keep tabs
on your company’s development, mainly on social media
b. Projects: long-term, related to a particular theme, works towards a particular
objective, primarily shared via online channels
c. Campaigns: shorter and more intense, supported with offline media, increased
awareness or announce important news
4. Create shareable content: develop different levels of content (talk about the sector,
employees, company, competitors, and the product); make the content easy to share (all
available in digital format, add ‘share’ buttons)
a. Main criteria for shareability: Simplicity, Surprise, Concrete, Credibility, Emotion,
Storytelling
5. Manage content conversation:
a. As a manager: observe reach of content sharing, sentiment of content, impact of
content
b. As a brand: facilitate the shareability of your content, conduct influencer management
c. As a peer: join the content conversation, be responsive and proactive
6. Measure success: carefully monitor your key performance indicators related to your business
objectives, marketing objectives and conversations

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General Summary

Research
General Summary

1. concept of big data, practical applications

• everything we do is increasingly leaving a digital trace (or data), which we (and

others) can use and analyze

• Activity Data (listening to music, reading an e-book)

• Conversation Data (having an online conversation of Facebook/Twitter etc.)

• Photo and Video Image Data (personal images, CCTV, YouTube)

• Sensor Data (GPS Trackers, fingerprint scans)

• Internet of Things Data (smart watches, traffic sensors)

• Volume, Velocity, Variety, Veracity

2. difference between validity and reliability

• reliability is when your measurement is consistent. It means if you are using a certain
kind of instrument for a test and the results on the subjects you are testing is the
same for the first and second try, then it is considered reliable

• validity is more on how strong the outcomes of the hypothesis are

• reliability is easier to determine, because validity has more analysis just to know how
valid a thing is

3. extensive analysis in Coosto

• Sentiment Analysis is the process of determining whether a piece of writing is

positive, negative or neutral

4. extract relevant information about the target group from online sources such as Facebook,
Google Adwords and Google Trends.

5. different applications of a pre-test, set up a simple pre-test independently

• a pre-test is where a questionnaire is tested on a (statistically) small sample of

respondents before a full-scale study, in order to identify any problems such as
unclear wording or the questionnaire taking too long to administer

• a pre-test can also be used to refer to an initial measurement (such as brand or

advertising awareness) before an experimental treatment is administered and
subsequent measurements are taken

6. importance of preliminary research and literature review

7. formulate a research question (open/closed)

8. name differences between qualitative research and quantitative research.

29
General Summary

9. concept of operationalization, convert abstract concepts into measurable variables.

10. different forms of data collections, including pro’s and con’s

30