Chapter 1 09/07/2013

Marketing is the activity for creating commnunicating and delivering

offerings that benefit its customers organization. Stakeholders and society
 Marktering seeks to
o Discover the needs and wants of prospective customers
o Satisfying them
 Exchange
o Trade of things of value between buyer and sellerso each is
better off after the trade
Four factors are needed for marketing to occur
 Two or more parties with unwanted needs
 A desire and ability on their part of be satisfied
 A way for the parties to communicate
 Something to exchange
Discovering customer needs is the first step to marketing

Marketing needs to satisfy both consumer needs and consumer wants

 A needs is a deprivation of something
 A want is a needs that is shaped by a persons knowledge culture
and personality
Market – people with both the desire and ability to buy a specific
offering
 Marketing doesn’t stop with the discovery of consumer needs
 An organization can meet all the needs of all people so it focuses
them into a target market and markets to them
The four P’s
 Product: a good/service/idea that meets the consumers needs
 Price: what the good is exchanged for
 Promotion: a means of communicating between the seller and
buyer
 Place: a means of getting the product to the consumer
 These are the marketing mix
o These are also called controllable factors
Customer Value proposition
 A cluster of benefits that an organization promises customers to
satisfy their needs
The Uncontrollable environmental forces
 Environmental forces – social economic technological competitive
and regulator forces
o These are treated as constraints nowadays
Customer relationships
 Customer value – firms trying to gain loyal customers by providing
unique value
o Unique combination of benefits received by targeted buyers
that includes the quality convenience on time delivery and
service at a specific price
o Firms must find ways to build long term customer relationship
 They do this by one of the three: best price, best
product, best service
 Relationship marketing – links the organization to its individual
customers employees suppliers and other partners for long term
benefit
 Marketing program – a plan that integrates the marketing mix to
provide a good service or idea to prospective buyers
Evolution of marketing
 marketing concept - is the idea that an organization should 1)
strive to satisfy the needs of consumers , and 2) while also trying to
achieve the organizations goals
 market orientation – getting info on customer needs, sharing that
info in the company and using it to create customer value
 Customer relationship management CRM – identifying prospective
buyers, understating them intimately, and developing favorable
long term perceptions of the organization and its offerings os that
buyers will choose them in the marketplace
o Foundation of this is customer experience which is the
internal response that customers have to all aspects of the
store and objects

Chapter 2 09/07/2013
Developing successful marketing and organization strategies

Kinds of organization
 Organization is a legal entity that consist of people who share a
common mission
o Develop offerings that create value for both the organization
and its customer
 Business firm - privately owned organization such as target, nike
and wolkswagen that serves its customers to earn a profit so that it
can survive
o Profit is the money left after a business firm’s total expenses
are subtracted from its total revenues
 Nonprofit organization is a nongovernmental organization
o Operational efficiency or client satisfaction

What is strategy
 - an organization’s long term course of action designed to deliver a
unique customer experience
Structure
 Corporate level – top management directs over all strategy for the
entire organization
o CEO is the highest
 Strategic business unit level – SBU
o Subsidiary division or unit of an organization that markets a
set of related orfferings to clearly defined group of customers
o GE and Johnson and Johnson
 Functional level -
o – where groups of specialists actually create value for the
organization
o most specific and focused
o
Chapter 4 09/07/2013
Ethics are the moral principles and values that govern the actions and
decisions of an individual or group
 Laws are the societys values and standards that are enforceable in
courts
 Lots of people don’t think business people have ethics
o 1. Increased pressure on businesspeople to make decisions in
a society characterized by diverse value systems
o 2. Lots of decisions are judged by the public
o 3. Expectations of ethical businesses has increased
o 4. Ethical business has in fact declined
culture refered to the set of values ideas and attitudes that are learned
and shared among the members of a group
 reflect laws and regulations that affect social and economic
behavior
 business culture – comprises the effective rules of the game , the
boundaries between competitive and unethical behacior into
busness dealing

 ethical exchanges should results with the buyer and seller both
better off
 09/07/2013
Service Marketing
 Ways to increase “real” – or authentic
 Customization, like iPods
 Having real people to talk to, not atm or machines
 Social media advertising nod videos
Services – intangible activities or benefits that an organization
provides to satisfy consumer needs in exchange for money (airline trips,
financial advice, car repair)
 3.35 trillion dollars are in services
 this value has increased snice 1990
o also a large export and on of few trade surpluses
o concierge services are popular
o Gaming companies like riot
The four I’s of service
 Intangibility
o Harder to evaluate since you cant touch object
o Marketers use tangible parts to market their ads.. like comfy
airline seats or credit card rewards
 Inconsistency
o Quality of service is inconsistent since it depends on the
people who perform them
 Inseparability
o There has to be a form of interaction between the performer
and the consumer
 Inventory
o Idle production capacity – when the service provider is
available but there is no demand for the service
 o Ex. Physician just sitting there collecting a high salary
 Can reduce hours to solve
 High inventory costs = airplanes and hospitals
 Low = hair salons, insurance companies dry cleaners
Service continuum
 - when it goes from product dominant to service dominant….
 So like best buy giving you product then coming to set up the
product for you

Classifying services
 Delivery by people or equipment – housing stuff, skilled labor by
people. Equipment can be electric utilities, movies, southwest
airlines self check in or online sotck trading
 Profit or nonprofit organizations – red cross, united way, salvation
army.
 Government sponsored – usps is one
How consumers purchase services
 The purchase process
o Services are difficult to evaluate
o Tangible goods have search properties of qualities and stlye
and color
o Services have experience qualities and credence – impossible
qualities to evaluate
 Assessing service quality
o Gap analysis – differences between expectations and
experiences are evaluated based of dimensions such as
reliability, tangibles, responsiveness, assurance, empathy
 Customer contact and relationship management
o Customer contact audit – flowchart of the points of interaction
between customer and service provider
  Serves the basis of developing relationships
 Each interaction can be improved by the service
provider to give a good service
o Relationship marketing
 Develop social bonds and create loyalty

Managing the marketing of services

7 P’s of service marketing
Product – Service
 Managers of both goods and services do similar things
 Com eup with a service that gives benefits desired by the consumer
 Brand name and logo are more important to services as the product
is intangible
 Like Hotels and Home has good branding
Price
 Chargers, fee, fares, rates, tuition are all the same
 Service marketing tries to minimize the effort required to purchase
and use the service
 Off peak pricing – consists of charging different prices during times
of the day or week
Place – distribution
 The service deliverer is a tangible part of the process and is really
important
 Having close and convient locations for services is important
Promotion
 Publicity is important and gives the name a strong indicator…
nonprofits do this in schools
 Promotion is used to show the benefits of buying a service
 PSA can work but not really
 Self promotions can work.. like self checks in for hotels
 Free trials of products
People
 Internal marketing – focus on its employees before it can have
success at its customers
 CEM – customer experience management 0 managing the neitre
customer expericen of the company
Chapter 13 09/07/2013
Price – the money or other considerations exchanged for the
ownership or use of a product or service
 Exchanging products or services is bartering
 Now a days there are a lot of extra fees that add onto the list price
that are harder to see
 Price equation – the equation for the final price; final price = list
price – (incentives +allowances) + extra fees
 Price is competed at a global level
 Value – perceived benefits/price
o Value pricing – increasing product and service while
maintaining or decrasing price
o Sometimes high price means better quality/benefits and this
its value
 Like homes
o This includes special sales like bogo’s and 70 off plus another
10 off
 Price in the marketing mix
o Profit equation
 Profit = total revenue – total cost
 =(unit price x quantity sold) – (fixed cost + variable
cost)
 6 steps to make profit
o 1. Identify pricing objectives and constraints
o 2. Estimate demand and revenue
o 3. Determine cost volume and profit
o 4. Select an approcimate price level
o 5. Set list or quoted price
o 6. Make special adjustments
Step 1 : pricing objectives
 - pricing objectives involved speficiying the role of price in an
organizations marketing and strategic plans. These are carried to
lower levels in the organization
o profit –return on investment, return on assets
 sales – incease sales revenue
 market share – ratio of firms sales In those of the industry
 unit volume – the quantity produced or sold as a pricing objective
o ususally goes down
Chapter 15 09/07/2013
Managing Marketing Channels ans supply Chains
 Stuff about callaway golf

Marketing Channel
 Consists of individuals and firms involved in the process of makinga
product or service available for use or comsumption by consumers
or industrialists
o Pipleline through which products flow through from source to
endpoint
 Intermediaries are seller to stores who resell items
 Brokers and car agents are intermediaries
Value is Created through intermediaries
 Important for 3 reasons
o 1. Transactional function – when they buy and sell products
or services. Performs the function of sharing risk with the
producer when it stocks merchandise for sales.
 Buying: purchasing products for reselling
 Selling: selling and promoting to potential customers
 Risk taking- assume business risk of ownership of
inventory
o 2. Logistical functions - gathering sorting and distributing
o 3. Facilitating function - making tansactions easier … like
opening a store credit card
 financing, grading, marketing information and research
 Marketing channels create value for customers through the 4
utilities.
o Time utility – having a product when you want it. (next
morning delivery)
o Place Utility – having the product where the customers want it
– gas stations have convenience goods
o Form utility – enhancing a product or service available to
make it more appealing – like easy storage or better
packaging
 o Possession utility – help buyers take possession of product
such as travel agencies and airline tickers

Marketing Channels for consumer products and services

 Direct channel – producer and consumers deal directly.. like schwan
foods
 Indirect channel is more common
o For low cost and low unit value items having a wholesaler is
better. Like mars.
 Marketing channels for business products and services –
o Direct channel – like ibm
 Firms that use this maintain their own salesforce and
perform all channel functions. This channel is employed
when buyers are large and well defined and sales effort
require lots of negotitations and products are of high
unit value
o Indirect channel
 Have intermediaries … can be producer -> industrial
distributor -> industrial user
 producer -> agent -> industrial user
 producer -> agent -> industrial distributor -> industrial
user
 Electronic marketing channels
o Using the internetz
o Dumb
Direct and indirect
 Direct marketing channels
o Allow consumers to buy products by interacting with various
media
o Direct marketing – mail order, catalong, telemarketing. Tv
buying. No face to face meeting with a salesperson
 Multichannel – blending different communication channels that work
well together.. such as eddie bauer for its catalog, website and rtail
store
 Dual distribution – using 2 or more types of channels for the same
basic product…GE sells appliance directly to home and aprartments, but also
uses sears and lowes to sell them
 Hallmark goods
Vertical marketing systems
 Corperate systems – forward integration is like a producer owning a
retail store – like apple
o Backward integration is like a retailer owning a manufacturing
operation.. like tiffany and co. and Kroger foods
 Contractual systems 0 integration of efforts on a contract to get
better benefits
o Wholesaler sponsored – develops contractual relationship with
small independent retailers
o Retailer sponspoered – small independent retailers form an
organization… like ace hardware and cooperatives
o Franchising
 Administrative marketing – influence of one channel member is
really big to have some control over the others

HOW TO CHOSE A CHANNEL

 Target market converage
o Intensive distribution – firm tries to place its products and
services in as many outlets as possible
 This is convenience products like food and candy
 Gas stations and vending machines
o Exclusive distribution – only one retailer in an area… this is
like Gucci and other high end products
o Selective distribution – lies in bewtween the two

 Buyer requirement – information, convenience, variety, and pre or
postsale services
 Profitability
 Managing Channel relationships
 Channel confluct arises when one channel member believes another
channel member is doing something that prevents him from
achieving a goal
o Vertical conflict – when a problem arises at 2 different levels
in the channel .. i.e retailer andproducer
 Disintermediation – when producer starts to sell directly
and ignores wholesalers
o Horizontal conflict – intermediaries of 2 different channels but
at the same level.. like target and kmart
 Ford and GM
 Channel captain leads this shit…
o Influence can be through rewards or identification
 This shit can be illegal… no shit

Logistics – involves those activites that focus on getting the right

amount of products to the right about of places at the right cost and time
 3 elements
o 1. Flow – how to move a product from source of raw
materials to consumption
o 2. Cost effective –
o 3. Customer service- needs to meet customer requiremnts
Supply chain
 The firms involved in performing actitives that are required to
create and deliver goods to consumers of indust users
 To create a marketing strat – understand the customer, then
understand the supply chain, and harmonize the two

Total logistics costs – includes the ecpenses associated with

transportation of maretial and inventory costs,
Chapter 16 09/07/2013
Retailing is all the activities of selling,renting and prociding products
and services to ultimate consumers for use
 Consumer utilities offered by retailing

Form of ownsership – retail outlets based on whether independent

retailers, corpertes, or contractual systems own the outlet
Level of service – which desgree serive is provided
Merchandise line – how many types of products a store carries

Independent retailer – owned by 1 person

Contractual systems are like grocers alliance that achieve cooperatives

Levels of service
 Self service – like warehouse clubs such as Costco
 Limited service – walmart and kmart
 Full service – car dealers and personal sylists of Nordstrom

Types of Merchandise
 Depth of line – lots of items that are related like sports authority or
victorias secret.. and best buy
 Breadth of line – lots of items
o Like macy’s
 Scrambled merchandising – several unrelated product lines I a
single store - like walgreens
 Hypermarket – offer everything under 1 roof like walmart
 Intertype competition – competition between private bakery and
hyperstore such as walmart

Nonstore retailing
 Automatic vending
o Food, cameras, phones, headphones
o Direct mail and cataglof
o TV shopping
o Telemarketing
o Direct selling
 Lots of direct selling
 1. More direction expansion oversees
 2. Reach to consumers who want one to one
service
Retailing strat
 Positioning a retail store – retail positioning matrix – based on the
breadth and the value added.
o Value added canbe location (7/11) product reliability, and
prestige
 Retailing mix
o Related to managing the store includes retail pricing, store
location, retail communication and merchandise
o Retail pricing
 Original markup is the first price offered. After sales its
called maintained markup
 Once sales of product decrease, a markdown may
happen
  Off price retailing- selling brand name marchanise
at lower than regular price
 Like Burlington coat factory
 Also like sam’s and Costco
 Also single price retailers – like dollar store
o Store location – where a store is located and how many
 Central business district – oldest retail setting
downtown… not a lot of parking
 Suburban population has grown at the expense of
the downtown shopping area
 Regional shopping centers – in the suburbs…regular
shopping malls
 Community shopping center
 One primary store and smaller outlets
 Strip malls
o Retail communication – the way in which the store is defined
in the minds of shoppers
 Shopper marketing – the use of displays coupons and
samples to attact individuals
 Merchandise – a final element of the retailing mix is the merchansie
o Bredth and depth of product line
o Category management – assigns a manager the responsibility
of selecting all products that the onsumers in a market
segment view as substititues for one another. So like a
manager is charge of deo gets like axe and old spice and
others
o Metrics to measure
 Transaction size per customer and number os
transaction per hour
 Inventory turnover, and sales per employee
 Popular: sales per square foot and same store sales
growth
The wheel of retailing
  - how new forms of retail outlets enter the market
o enter as low status and low margin stores
o then grow and slowly offr more
o then expand
 Retail life cycle – early growth is market share rising gradually tho
profits may be low due to startup costs
o Accelerated dev comes next which is nothhigh market share
and profit
o Battle for market share is fought before maturity and then
reatilers want to delay decline
 Multichannel retailing – utlize and integrate a combination of
traditional store formats and nonstore formats… i.e. barnes and
noble stores and their website
o Online retailng may cannibalize catalog sales, but online
retailing is less expenses so its ok
Merchant wholesalers – independely owned firms that take title to the
merchandise they handle
 General merchandise wholesalers- carry a broad assortment of
merchandise and perform all channel functions. This type of
wholesaler is most prevalent in hardware drug and clothing
industries
o Lots of breadth
o Not a lot of depth here
 Speciality merchandise
o No breadth but lots of depth
 Rack jobbers
o Furnish the racks and shelves that display merchandise
 Cash and carry wholesalers – sell only to buyers who call on them,
pay cash for merchandise and furnish their own transportation for
merchandise.
 Drop shippers and desk jobbers – sell goods that they don’t
physically handle or stock

Agents and broakers
 Mandugactuer’s agents – work for several producers and carry
noncompetitive complementary merchandise
o Act as a producers sales arm and are responsible for
transactional channel functions ( selling)
o Selling agents – represent a signle producer and are
responsible for the entire marketing function for that producer
 Used by small producers in textile apparel, food and
home furnishing
 Brookers
o Independent, whose prinicipal function is to bring buyers and
sellers together to make sales
 Used to sell fruits and vegtables and real estate
Chapter 17 09/07/2013
The communication process – conveying a message to others and it
requires 6 elements
 1. Source, 2 message, 3 a channel of communication, 4 a receiver,
5. Process of encoding, and 6. Decoding
o source can be the company or person with info the convey
o channel of commucation can be salesperson,, advertisments,
public relations tools
 Encoding – process of hacing the sender transform an idea into a
set of symbols
 Decoding – receiver taking in symbols and form and idea
 If the set of symbols doesn’t encode a message right it cant be
taken wrong or never taken at all
 Field of experience – a similar understanding nd knowledge they
apply to the message.. it is what the receiver and seller share
o So the sumbols line up right
 Response – is the impact the message had on the recievers
knowledge
o Feedback is the sender’s interpretation of the response
 Boise- extra factors that can distort a message
The promotional elements
 Advertising
o Is any paid form of nonpersonal communication about an
organization product service or idea
 Paid is important
 Strengths: effeicve for a lot of people
 Weak: high costs.. difficult to get feedback
 Personal selling
o Two way flow of communication between a buyer and seller
o Customized
 o Fees paid to salespeople as commission
o Strengths: immediate feedback, very persuasive, can select
audience and give complex info
o Weak: Really really expensive. And messages difer between
people
 Public relations
o Mass
o No direct payment to media
o Strengths: most credible source in the consumers mind
o Difficult to get media cooperation
 Sales promotion
o Mass
o Wide range of free
o Strenghs: effective at chaing behavior in short term and its
flexible
o Weak: easily abused and duplicated
 Direct marketing
o Customized
o Cost of communication through mail telephone or comp
o Strenghts: message can be prepared quickly and creates a
replationship with customer
o Weak: declining customer response