CHAPTER 1 MARKETING: MANAGING PROFITABLE CUSTOMER RELATIONSHIPS 1. WHAT IS MARKETING Marketing is managing profitable customer relationships.

The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction. Marketing Process: a. Create Value and Build Relationship, a. nderstanding the market place and customer needs and wants, b. !esigning a customer"driven marketing strategy, c. #reparing an integrated marketing plan and program, d. Building customer relationships, b. Capture Value from Customers in Return. 2. UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS 5 Core Customer and Marketplace Concept: a. $eeds, %ants and !emands, & need food, but & want Big Mac, with buying power !emand. b. Marketing 'fferings (#roduct, )ervices, *+periences,, $eeds, wants and demands are fulfilled via Marketing 'fferings. Product Myopia Too focus on specific product than its benefits e+periences. c. Value and )atisfaction, Customers will form e+pectations on value and satisfaction and buy accordingly. d. *+changes and Relationships, Marketing occurs when people decide to satisfy needs and wants through e+change relationships. .oal Retain customers and grow their business with the company. e. Markets, &n modern marketing system, each party will add value for the ne+t level hence relationships must be managed and developed. 3. DESIGNING A CUSTOMER-DRIVEN MARKETING STRATEGY

The marketing manager/s aim is to find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer value. To design a winning marketing strategy, the marketing manager must answer 0 important 1uestions2 a. %hat/s our target market3 (%hat customers to serve3, By Market )egmentation and Target Marketing. b. %hat/s our value proposition3 (4ow to serve best3, 4ow the company will differentiate and position itself in the marketplace3 5 Concepts for Marketing Strategy: a. #roduction Concept2 &mproving production - distribution efficiency. 5eads to Marketing Myopia. b. #roduct Concept2 6ocus on continuous product improvements. c. )elling Concept2 6ocus on creating sales transaction. &$)&!*"' T d. Marketing Concept2 !epend on knowing the needs and wants of target markets and delivering desired satisfaction. ' T)&!*"&$ Customer-Driving Marketing2 understand customer needs better than themselves. e. )ocietal Marketing Concept2 !eliver value in a way that maintains or improves both the customer/s and the society/s well being 4. PREPARING AN INTEGRATED MARKETING PLAN AND PROGRAM To deliver intended value to target customers via Marketing Mi+. Marketing Mix: 4P2 #roduct, #rice, #lace and #romotion. 5. BUILDING CUSTOMER RELATIONSHIPS Customer Relationship Management (CRM,2 By delivering superior customer value and satisfaction. Relations ip !uilding !locks2 Customer #erceived Value and )atisfaction( via #erceived #erformance2 !eliver more than e+pected7promised,.

Customer Relations ip "evels and #ools: 5ow margin customers!evelop Basic Relationships, 4igh marginCreate 6ull partnership. Club Marketing #rogramMemberships with special benefits and create community with financial and social benefits. C anging $ature of Customer Relations ips2 a. Relating with more carefully selected customers, (via )elective Relationship Management, b. Relating for the long term, (via Retaining Customers c. Relating directly. ()ell products outside the store, via phone, mail orders, online, Partner Relations ip Management2 &nside and 'utside the 6irm. . CAPTURING VALUE FROM CUSTOMERS &n the form of current and future sales, market shares and profits. %utcome of Customer &alue: a. Customer 5oyalty and Retention, b. )hare of Market and Customer, c. Customer *1uity2 Total combined customer lifetime values of all of the company/s customers. Via Building the Right Relationships with the Right Customers. )trangers (5ow, )hort,, Barnacles (5ow, 5ong,, Butterflies (4igh, )hort,, True 6riends(4igh, 5ong,. !. THE NEW MARKETING LANDSCAPE 4 Ma'or Developments: a. The $ew !igital 8ge, Booming in computer, telecommunication, information and others has created e+citing new ways to learn about and track customers and to create products and services tailored to individual customer needs. b. Rapid .lobali9ation, Marketers are connected globally with customers and partners hence increases global competition. c. The Call for More *thics and )ocial Responsibility, d. The .rowth in $on 6or #rofit Marketing, Marketing has become a ma:or part of strategies in colleges, hospitals, museums, 9oos and churches. CHAPTER 2 COMPANY AND MARKETING STRATEGY: PARTNERING TO BUILD CUSTOMER RELATIONSHIPS

1.

COMPANYWIDE STRATEGIC PLANNING: DEFINING MARKETING"S ROLE

Strategic Planning2 The process of developing and maintaining strategic fit between the organi9ation/s goals and capabilities and its changing marketing opportunities. Steps in Strategic Planning: a. !efining a Market"'riented Mission, Clear and )M8RT )atisfying basic customer needs. b. )etting Company 'b:ectives and .oals, c. !esigning the Business #ortfolio, The collection of businesses and products that make up a company must fit the company/s strengths and weaknesses to opportunities in the environment. 0 )teps2 8naly9e current portfolio and )hape future portfolio. .rowth )hare Matri+2 )tars, Cash Cows, ;uestion Marks, or !ogs. (6or evaluating company/s )B , #roduct7Market *+pansion .rid2 Market #enetration, #roduct !evelopment, Market !evelopment, !iversification. (6or identifying company growth opportunities, d. #lanning Marketing and other 6unctional )trategies. 2. PLANNING MARKETING: PARTNERING TO BUILD CUSTOMER RELATIONSHIPS

Marketing(s key roles in Strategic Planning: a. Marketing provides a guiding philosophy (Marketing Concept, Building profitable relationships. b. Marketing provides inputs to strategic planners by helping to identify attractive market opportunities and by assessing the firm/s potential to take advantage of them. #artnering with 'ther Company !epartment and with 'thers in the Marketing )ystem. 3. MARKETING STRATEGY AND MARKETING MI#

Customer Driven Marketing Strategy: a. Market )egmentation, via .eographic, !emographic, #sychographic, or Behavior 6actors.

b. Market Targeting, c. Market !ifferentiation and #ositioning. 4. MANAGING THE MARKETING EFFORT

Managing the marketing process re1uires the < marketing management functions2 a. Marketing 8nalysis, via )%'T T'%) b. Marketing #lanning,(!eciding on Marketing )trategies, c. Marketing &mplementation, (#lan to 8ction, d. Marketing Control. (Measuring and Corrective 8ction, CHAPTER 3 THE MARKETING ENVIRONMENT Marketing environment2 The actors and forces outside marketing that $%%&'( )$*+&(,-. )$-$.&)&-("/ $0,1,(2 (3 04,15 $-5 )$,-($,/4''&//%41 *&1$(,3-/6,7/ with target customers. Collecting information via Marketing Research and Marketing &ntelligence. M,'*3&-8,*3-)&-(: The actors close to the company that affect its ability to serve its customers = the company, suppliers, marketing intermediaries, customer markets, competitors and public. M$'*3&-8,*3-)&-(: The larger societal forces that affect the microenvironment = demographic, economic, natural, technological, political, and cultural forces. 1. THE COMPANY"S MICROENVIRONMENT 8ctors in microenvironment2 $. T6& C3)7$-22 Top management, finance, R-!, purchasing, operations and accounting 0. S4771,&*/2 a. #rovide resources, b. )upply 8vailability, c. >ey &nput #rice Trends, '. M$*+&(,-. I-(&*)&5,$*,&/: a. #romote, sell, distribute product to final buyers, b. Resellers, #hysical distribution firms, marketing service agencies, financial intermediaries, d. C4/(3)&*/ ? Customer Markets2 a. Consumer markets2 individuals7households b. Business markets2 for production c. Reseller markets2 to resell at a profit

d. .overnment markets2 for public service e. &nternational markets2 for international business &. C3)7&(,(3*/ a. .reater value - satisfaction than competitors b. .ain strategic advantage via market positioning %. P401,'/ a. 6inancial publics2 bank, investment houses, stockholders b. Media publics2 newspaper, maga9ines, radio, TV c. .overnment publics d. Citi9en action publics2 consumer organi9ations, environmental groups e. 5ocal publics2 neighborhood - community organi9ations f. .eneral publics g. &nternal publics2 workers, managers, volunteers board of directors 2. THE COMPANY"S MACROENVIRONMENT $. D&)3.*$76,' %3*'&/ a. &t involves people and people make up markets b. 4uman populations in terms of si9e, density, location, age, gender, race, occupation, etc '. T*&-5/: i. Changing age structure of the population ii. Better educated and professional population iii. &ncreasing diversity d. Changing 8ge )tructure2 i. Baby Boomers2 @A million people born during the baby boom following %orld %ar 0 and lasting until early BCDEs ii. .eneration F2 <? million people born between BCD? and BC@D iii. .eneration G2 @0 million children of the baby boomers, born between BC@@ and BCC< 0. E'3-3),' %3*'&/ a. 6actors that affect consumer buying power and spending patterns b. )ubsistence economies2 consume most of their own agricultural and industrial output c. &ndustrial economies2 constitute rich markets for many different kinds of goods 5. T*&-5/: i. Changes in &ncome ii. Changing Consumer )pending #atterns '. N$(4*$1 %3*'&/ $. T*&-5/:

i. )hortage of raw materials ii. &ncreased population iii. &ncreased government intervention in natural resource management 5. T&'6-313.,'$1 %3*'&/ a. Create new markets and opportunities &. P31,(,'$1 %3*'&/ a. 5aws, government agencies, pressure groups 0. T*&-5/: i. 5egislation regulating business B. &ncreased legislation 0. Changing government agency enforcement ii. &ncreased emphasis on ethics and socially responsible actions B. )ocially responsible behavior 0. Cause related marketing %. C41(4*$1 %3*'&/ a. #ersistence of cultural values b. )hifts in secondary cultural values i. #eople view of themselves ii. #eople view of others iii. #eople view of organi9ations iv. #eople view of society v. #eople view of nature vi. #eople view of the universe 3. RESPONDING TO THE MARKET ENVIRONMENT Marketing management can not always control environmental forces. &n many cases, it must settle for simply watching and reacting to the environment. 'r they can take proactive stance, working to change the environment rather than simply reacting to it. %henever possible, companies should try to be proactive rather than reactive. CHAPTER 4 MANAGING MARKETING INFORMATION 1. E971$,- (6& ,)73*($-'& 3% ,-%3*)$(,3- (3 (6& '3)7$-2 $-5 ,(/ 4-5&*/($-5,-. 3% (6& )$*+&(71$'&. The marketing process starts with a complete understanding of the market place and consumer needs and wants. Thus the company needs sound information in order to produce superior value and satisfaction for customers. The company also re1uires information on competitors, resellers and other actors and forces in the marketplace. &ncreasingly, marketers are viewing information not only as an input

for making better decisions but also as an important strategic asset and marketing tool. 2. D&%,-& (6& )$*+&(,-. ,-%3*)$(,3- /2/(&) $-5 5,/'4// ,(/ 7$*(/. M&) consists of people, e1uipment, and procedures to gather, sort, analy9e, evaluate and distribute needed, timely, and accurate information to marketing decision makers. 8 well"designed information system begins and ends with users. M&) first assess information needs. &t primarily serves the company/s marketing and other managers, but it may also provide information to e+ternal partners. M&) develops information from internal database, marketing intelligence activities and marketing research, &nternal database provide information on the company/s own operations and departments. Marketing intelligence activities supply everyday information about competitors and developments in the e+ternal marketing environment. Market research consists of collecting information relevant to a specific marketing problem. M&) then distributes information gathered from these sources to the right managers in the right form and at the right time.

3. O4(1,-& (6& /(&7/ ,- (6& )$*+&(,-. *&/&$*'6 7*3'&//. !efining the problem and setting the research ob:ectives, o *+ploratory research2 help define problems and suggest hypotheses, o !escriptive research2 better describe marketing problems, o Causal research2 test hypotheses about cause"and"effect relationship. !eveloping a research plan for collecting data from primary and secondary sources, &mplementing the market research plan by gathering, processing and analy9ing the information, &nterpreting and reporting the findings.

Both internal and e+ternal secondary data sources often provide information more 1uickly and at a lower cost than primary data source and they can sometimes yield information that a company cannot

collect by itself. 4owever, needed information might not e+ist in secondary sources. Researchers must ensure that secondary information is 8ccurate, Relevant, Current and &mpartial. #rimary data collection method = 'bservational, )urvey and *+perimental. #rimary research contact method = Mail, Telephone, #ersonal &nterview and online. 4. E971$,- 63: '3)7$-,&/ $-$12;& $-5 5,/(*,04(& )$*+&(,-. ,-%3*)$(,3-. &nformation gathered in the internal databases and through marketing intelligence and market research usually re1uires more analysis. This may include advanced statistical analysis or the application of analytical models that will help marketers make better decisions. To analy9e individual customer data, companies use CRM = Customer Relationship Management. Marketing information has no value until it is used to make better marketing decisions. Thus it must be made available by providing regular updates and reports, making non routine information available for special situation and on the spot decisions. Many firms use company intranets and e+tranets to facilitate this process. 5. D,/'4// (6& /7&',$1 ,//4&/ /3)& )$*+&(,-. *&/&$*'6&*/ %$'&< ,-'145,-. 7401,' 731,'2 $-5 &(6,'/ ,//4&/. )ome marketers face special marketing research situations, such as those conducting research in small business, nonprofit, or international situations. Marketing research can be conducted effectively with limited budgets. &nternational marketing researchers follow the same steps as domestic researchers but often face more and different problems. 8ll organi9ations need to respond responsibly to ma:or public policy and ethical issues surrounding marketing research, including issues of intrusions on consumer privacy and misuse of research findings. CHAPTER 5 CONSUMER MARKETS AND CONSUMER BUYER BEHAVIOR 1. D&%,-& (6& '3-/4)&* )$*+&( $-5 '3-/(*4'( $ /,)71& )35&1 3% '3-/4)&* 042&* 0&6$8,3*. The consumer market consists of all the individuals and households who buy or ac1uire goods and services for personal consumption. The

simplest model of consumer buyer behavior is the stimulus"response model. 8ccording to this model, marketing stimuli (<#s, and other ma:or forces (economic, technological, political, cultural, enter the consumer/s black bo+ and produce certain responses. 'nce in the black bo+, these inputs produce observable buyer responses such as product choice, brand choice, purchase timing and purchase amount. 2. N$)& (6& 4 )$=3* %$'(3*/ (6$( ,-%14&-'& '3-/4)&* 042&* 0&6$8,3*. Consumer behavior is influenced by < key sets of buyer characteristics2 Cultural, )ocial, #ersonal, and #sychological. 8lthough many of these factors cannot be influenced by the marketer, they can be useful in identifying interested buyers and in shaping products and appeal to serve consumer needs better. Cultural2 basic values, perceptions, preferences, and behaviors that a person learns from family and other important institutions. o Culture o )ubculture2 a group of people with shared value systems based on common life e+periences and situations. o )ocial Class )ocial2 reference groups, family and roles - status strongly affect product and brand choices. #ersonal2 8ge, life cycle stage, occupation, economic circumstances, lifestyle, personality will influence buying decisions. #sychological2 Motivation, #erception, 5earning and Beliefs 8ttitudes. 3. L,/( $-5 5&%,-& (6& )$=3* (27&/ 3% 042,-. 5&',/,3- 0&6$8,3* $-5 /($.&/ ,- (6& 042&* 5&',/,3- 7*3'&//. Buying behavior may vary greatly across different types of products and buying decisions. Consumers undertake comple+ buying behavior when they are highly involved in a purchase and perceive significant differences among brands. !issonance reducing behavior occurs when consumers are higher involved but see little difference among brands. 4abitual buying behavior occurs under conditions of low involvement and little significant brand difference. &n situations characteri9ed by low involvement but significant perceived brand differences, consumers engage in variety seeking buying behavior.

%hen making a purchase, the buyer goes through a decision process consisting of need recognition, information search, evaluation of alternatives, purchase decision and post purchase behavior. The marketer/s :ob is to understand the buyer behavior at each stage and the influences that are operating. 4. D&/'*,0& (6& $537(,3- $-5 5,%%4/,3- 7*3'&// %3* -&: 7*354'(/. The product adoption process is comprised of ? stages2 8wareness, &nterest, *valuation, Trial and 8doption. &nitially, the consumer must become aware of the new product. 8wareness leads to interest, and the consumer seeks information about the new product. 'nce information has been gathered, the consumer enters the evaluation stage and considers buying the new product. $e+t in the trial stage, the consumer tries the product on a small scale to improve the estimate of its value. &f the consumer is satisfied with the product, he or she enters the adoption stage, deciding to use the new product fully and regularly. %ith regard to the diffusion of new products, consumers respond at different rates, depending on the consumer/s characteristics and the product/s characteristics. Consumer may be innovators, early adopters, early ma:ority, late ma:ority or laggards. &nnovators are willing to try risky new ideas. *arly adopters accept new ideas early but carefully = 'pinion 5eaders. *arly ma:ority decide deliberately to try new ideas, doing so before the average person does. 5ate ma:ority try an innovation only after a ma:ority of people have adopted it. 5aggards adopt an innovation only after it has become a tradition itself. Manufacturers try to bring their new products to the attention of potential early adopters especially those who are opinion leaders. CHAPTER BUSINESS MARKETS AND BUSINESS BUYER BEHAVIOR 1. D&%,-& (6& 04/,-&// )$*+&( $-5 &971$,- 63: 04/,-&// )$*+&(/ 5,%%&* %*3) '3-/4)&* )$*+&(. Business buyer behavior refers to buying behavior of the organi9ations that buy goods and services for use in the production of other products

and services that are sold, rented, or supplied to others. &t also includes the behavior of retailing and wholesaling firms that ac1uire goods for the purpose of reselling or renting them to others at a profit. 8s compared to consumer markets, business markets usually have fewer, larger buyers who are more geographically concentrated. Business demand is derived, largely inelastic, and more fluctuating. More buyers are usually involved in the business buying decision process, and business buyers are better trained and more professional than are consumer buyers. &n general, general purchasing decisions are more comple+, and the buying process is more formal than consumer buying. 2. I5&-(,%2 (6& )$=3*/ (6$( ,-%14&-'& 04/,-&// 042&* 0&6$8,3*. Business buyers make decisions that vary with the H types of buying decisions2 )traight rebuys, Modified rebuys, and $ews tasks. )traight rebuy2 buyer routinely reorders something without any modification, Modified rebuy2 buyer modifies product specifications, prices, terms, or suppliers, $ew task2 buyer purchases a product or service for the first time. The decision making unit of a buying organi9ation = the buying center = can consist of many different roles. The business marketer needs to know the following2 %ho are the ma:or buying center participants3 &n what decisions do they e+ercise influence and to what degree3 %hat evaluation criteria does each decision participant use3 The business marketer also needs to understand the ma:or environmental, organi9ational, interpersonal, and individual influences on the buying process. Ma:or influences on business buyer behavior2 *nvironmental factors, 'rgani9ational factors, &nterpersonal factors, &ndividual factors. 3. L,/( $-5 5&%,-& (6& /(&7/ ,- 04/,-&// 042,-. 5&',/,37*3'&//. The business buying decision process itself can be 1uite involved, with A basic stages2 #roblem recognition2 recogni9e a problem7need that can be met by ac1uiring a good or a service, .eneral need description2 describes the general characteristics 1uantity of a needed item,

#roduct specification2 decides on and specifies the best technical product characteristics for a needed item, )upplier search2 tries to find the best vendors, #roposal solicitation2 invites 1ualified suppliers to submit proposals, )upplier selection2 reviews proposals and selects a supplier, 'rder routine specification2 writes the final order with the chosen supplier, #erformance review2 assesses the performance of the supplier.

Buyers who face a new task buying situation usually go through all stages of the buying process. Buyers making modified or straight rebuys may skip some of the stages. Companies must manage the overall customer relationship, which often includes many different buying decisions in various stages of the buying decision process. Recent advances in information technology have given birth to e" procurement by which business buyers are purchasing all kinds of products and services online. The internet gives business buyers access to new suppliers, lower purchasing costs, and hastens order processing and delivery. 4owever, e"procurement can also erode customer"supplier relationships and create potential security problems. )till, business marketers are increasingly connecting with customers online to share marketing information, sell products and services, provide customer support services, and maintain ongoing customer relationships. 4. C3)7$*& (6& ,-/(,(4(,3-$1 $-5 .38&*-)&-( )$*+&(/ $-5 &971$,- 63: ,-/(,(4(,3-$1 $-5 .38&*-)&-( 042&*/ )$+& (6&,* 042,-. 5&',/,3-/. The institutional market consists of schools, hospitals, prisons, and other institutions that provide goods and services to people in their care. These markets are characteri9ed by low budgets and captive patrons. The government market, which is vast, consists of government units = federal, state, and local = that purchase or rent goods and services for carrying out the main functions of government. .overnment buyers purchase products and services for defense, education, public welfare, and other public needs. .overnment buying practices are highly speciali9ed and specified, with opening bidding or negotiated contracts characteri9ing most of the buying. .overnment buyers operate under the watchful eye of Congress and many private watchdog groups. 4ence, they tend to re1uire more forms and

signatures to respond more slowly and deliberately when placing orders. CHAPTER ! CUSTOMER-DRIVEN MARKETING STRATEGY: CREATING VALUE FOR TARGET CUSTOMERS 1. D&%,-& (6& )$=3* /(&7/ ,- 5&/,.-,-. $ '4/(3)&*-5*,8&)$*+&(,-. /(*$(&.2: )$*+&( /&.)&-($(,3-< ($*.&(,-.< 5,%%&*&-(,$(,3-< $-5 73/,(,3-,-.. Customer"driven marketing strategy begins with selecting which customers to serve and deciding on a value proposition that best serves the targeted customers. The < steps2 Market segmentation2 dividing a market into distinct groups of buyers with different needs, characteristics or behaviors who might re1uire separate products7marketing mi+es. Market targeting2 evaluates each market segment/s attractiveness and selects one or more segments to serve. !ifferentiation2 differentiating the market offering to create superior customer value. #ositioning2 positioning the market offering in the minds of target customers. 2. L,/( $-5 5,/'4// (6& )$=3* 0$/&/ %3* /&.)&-(,-. '3-/4)&* $-5 04/,-&// )$*+&(/. There is no single way to segment a market. Therefore, the marketer tries different variables to see which give the best segmentation opportunities. 6or consumer marketing, the ma:or segmentation variables are2 .eographic2 divided into different geographic units such as nations, regions, states, cities, etc. !emographic2 age, gender, family si9e, family life cycle, income, occupation, education, religion, race, generation and nationality. #sychographic2 social class, lifestyle, personality characteristics. Behavior2 consumer/s knowledge, attitudes, uses, or responses to a product. Business marketers use many of the same variables to segment their markets. But business markets also can be segmented by business consumer demographics, operating characteristics, purchasing approaches, situational factors and personal characteristics. The effectiveness of segmentation analysis depends on finding segments that are2 Measureable2 The si9e, purchasing power and profiles can be measured,

8ccessible2 can be effectively reached and served, )ubstantial2 profitable enough, !ifferentiable2 distinguishable and respond differently to different marketing mi+ elements and programs, 8ctionable2 can be designed for attracting and serving the segments.

3. E971$,- 63: '3)7$-,&/ ,5&-(,%2 $((*$'(,8& )$*+&( /&.)&-(/ $-5 '633/& $ )$*+&( ($*.&(,-. /(*$(&.2. To target the best market segments, the company first evaluates each segment/s si9e and growth characteristics, structural attractiveness, and compatibility with company ob:ectives and resources. &t then chooses one of the < market targeting strategies = ranging from very broad to very narrow targeting. The seller can ignore segment differences and target broadly using ndifferentiated (or Mass, Marketing. This involves mass producing, mass distributing and mass promoting about the same product in about the same way to all consumers. !ifferentiated Marketing2 developing different market offers for several segments. Concentrated Marketing ($iche Marketing,2 focusing on only one or a few market segments. Micro marketing2 tailoring products and marketing programs to suit the tastes of specific individuals and locations. o 5ocal marketing o &ndividual marketing. %hich targeting strategy is best depends on company resources, product variability, product life cycle stage, market variability and competitive marketing strategies. 4. D,/'4// 63: '3)7$-,&/ 5,%%&*&-(,$(& $-5 73/,(,3- (6&,* 7*354'(/ %3* )$9,)4) '3)7&(,(,8& $58$-($.& ,- (6& )$*+&(71$'&. 'nce a company has decided which segments to enter, it must decide on its differentiation and positioning strategy. The differentiation and positioning task consists of H steps2 &dentifying a set of possible differentiations that create competitive advantage and choosing advantages upon which to build a position, o #roduct differentiation, o )ervices differentiation, o Channel differentiation,

o &mage differentiation, o #eople differentiation. Choosing the right competitive advantages, )electing an overall positioning strategy. The brand/s full positioning is called its Value #roposition = the full mi+ of benefits upon which the brand is positioned. &n general, companies can choose from one of the five winning value propositions upon which to position their products2 More for more2 more benefits more price More for the same2 more benefits same price The same for less2 )ame benefits less price 5ess for much less2 5ess benefits less price More for less2 more benefit less price Company and brand positioning are summari9ed in positioning statements that state the target segment and need, positioning concept, and specific points of difference. The company must then effectively communicate and deliver the chosen position to the market. CHAPTER 1 PERSONAL SELLING AND SALES PROMOTION

1. D,/'4//,-. (6& *31& 3% $ '3)7$-2"/ /$1&/7&371& ,- '*&$(,-. 8$14& %3* '4/(3)&*/ $-5 04,15,-. '4/(3)&* *&1$(,3-/6,7/. Most companies use salespeople, and many companies assign them an important role in the marketing mi+. 6or companies selling business products, the firm/s salespeople work directly with customers. 'ften, the sales force is the customer/s only direct contact with the company and therefore maybe viewed by customers as representing the company itself. &n contrast, for consumer product companies that sell through intermediaries, consumers usually do not meet salespeople or even know about them. The sales force works behind the scenes, dealing with wholesalers and retailers to obtain their support and helping them become effective in selling the firm/s products. 8s an element of the promotion mi+, the sales force is very effective in achieving certain marketing ob:ectives and carrying out such activities as prospecting, communicating, selling and servicing, and information gathering. But with companies becoming more market oriented, a customer"focused sales force also works to produce both customer satisfaction and company profit. The sales force plays a key role in developing and managing profitable customer relationships. 2. I5&-(,%2 $-5 &971$,- (6& /,9 )$=3* /$1&/ %3*'& )$-$.&)&-( /(&7/.

4igh sales force costs necessitate an effective sales management process consisting of D steps2 !esigning sales force strategy and structure2 address strategy issues. o Territorial sales force structure, o #roduct sales force structure, o Customer sales force structure, o Comple+ sales force structure Recruiting and selecting2 reduce high costs of hiring wrong people. Training, Compensating2 to reward, motivate and direct salespeople, )upervising2 continuous encouragement, *valuating salespeople and sales force performance. 3. D,/'4// (6& 7&*/3-$1 /&11,-. 7*3'&//< 5,/(,-.4,/6,-. 0&(:&&(*$-/$'(,3--3*,&-(&5 )$*+&(,-. $-5 *&1$(,3-/6,7 )$*+&(,-.. The art of selling involves a @ step selling process2 #rospecting and ;ualifying2 identifies 1ualified potential customers, #reapproach2 learns as much as possible about a prospective customer, 8pproach2 meets the customer for the first time, #resentation and !emonstration2 tell the product story to buyer and highlight customer benefits, 4andling 'b:ections2 seeks out, clarifies and overcomes customer ob:ections to buying, Closing2 asks the customer for an order, 6ollow p2 to ensure customer satisfaction and repeat business. These steps help marketers close a specific sale and as such are transaction oriented. 4owever, a seller/s dealings with customers should be guided by the larger concept of relationship marketing. The company/s sales force should help to orchestrate a whole"company to develop profitable long"term relationships with key customers based on superior customer value and satisfaction. 4. E971$,- 63: /$1&/ 7*3)3(,3- '$)7$,.-/ $*& 5&8&137&5 $-5 ,)71&)&-(&5. )ales promotion campaigns call for setting sales promotions ob:ectives, selecting tools, and developing and implementing the sales promotion program by using2

Consumer promotion tools2 coupons, cash refund offers, price packs, premiums, advertising specialties, etc, Trade promotion tools2 discounts, allowances, free goods, push money, Business promotion tools2 conventions, trade shows, sales contests. 8s well as deciding on such things as si9e of incentive, the conditions for participation, how to promote and distribute the promotion package, and the length of promotion. 8fter this process is completed, the company evaluates its sales promotion results. CHAPTER 1> CREATING COMPETITIVE ADVANTAGE 1. D,/'4// (6& -&&5 (3 4-5&*/($-5 '3)7&(,(3*/ $/ :&11 $/ '4/(3)&*/ (6*34.6 '3)7&(,(3* $-$12/,/. &n order to prepare an effective marketing strategy, a company must consider its competitors as well as its customers. Building profitable customer relationships re1uires satisfying target consumer needs better than competitors do. 8 company must continuously analy9e competitors and develop competitive marketing strategies that position it effectively against competitors and give it the strongest possible competitive advantage. Competitor analysis first involves identifying the company/s ma:or competitors, using both an industry"based and a market"based analysis. The company then gathers information on competitors/ ob:ectives, strategies, strengths, and weaknesses, and reaction patterns. %ith this information in hand, it can select competitors to attack or avoid. Competitive intelligence must be collected, interpreted, and distributed continuously. Company marketing managers should be able to obtain full and reliable information about any competitor affecting their decision. 2. E971$,- (6& %4-5$)&-($1/ 3% '3)7&(,(,8& )$*+&(,-. /(*$(&.,&/ 0$/&5 3- '*&$(,-. 8$14& %3* '4/(3)&*/. 8pproaches to marketing strategy and practice often pass through H stages2 *ntrepreneurial marketing 6ormulated marketing &ntrepreneurial marketing Michael #orter/s < basic competitive positioning strategies2 'verall cost leadership

!ifferentiation 6ocus Middle of the roaders

Value !iscipline = for delivering superior customer value2 'perational *+cellence Customer &ntimacy #roduct 5eadership %hich competitive marketing strategy makes the most sense depends on the company/s industry and on whether it is a market leader, challenger, follower or nicher. 8 market leader must mount strategies to e+pand the total market, protect market share, and e+pand market share. 8 market challenger is a firm that tries aggressively to e+pand its market share by attacking the leader, other runner"up companies or smaller firms in the industry either in direct or indirect attack strategies. 8 market follower is a runner up firm that chooses not to rock the boat, usually fear that it stands to lose more than it might gain. But the follower is not without a strategy and seeks to use its particular skills to gain market growth. 8 market nicher is a smaller firm that is unlikely to attract the attention of larger firms. Market nichers often become specialists in some end use, customer si9e, specific customer, geographic area, or service. 3. I114/(*$(& (6& -&&5 %3* 0$1$-',-. '4/(3)&* $-5 '3)7&(,(3* 3*,&-($(,3- ,- 0&'3),-. $ (*412 )$*+&(-'&-(&*&5 3*.$-,;$(,3-. 8 competitive orientation is important in today/s markets, but companies should not overdo their focus on competitors. Companies are more likely to be hurt by emerging consumer needs and new competitors than by e+isting competitors. Market"centered companies that balance consumer and competitor considerations are practicing a true market orientation. CHAPTER > PRODUCT< SERVICES< AND BRANDING STRATEGY 1. D&%,-& 7*354'( $-5 (6& )$=3* '1$//,%,'$(,3-/ 3% 7*354'(/ $-5 /&*8,'&/. Broadly defined, product is anything that can be offered to a market for attention, ac1uisition, use or consumption that might satisfy a want

or a need. #roducts include physical ob:ects but also services, events, persons, places, organi9ations, ideas or mi+es of these activities. )ervices are products that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible, such as banking, hotel, ta+ preparation, and home"repair services. #roducts and services fall into 0 broad classes based on the types of customers that use them. Consumer products = those bought by final consumers" are usually classified according to consumer shopping habits (convenient products, specialty products, and unsought products,. &ndustrial products = purchased for further processing or for the use in conducting a business = include materials and parts, capital items, and supplies and services. 'ther marketable entities = such as organi9ations, persons, places, and ideas = can also be thought of as products. 2. D&/'*,0& (6& 5&',/,3-/ '3)7$-,&/ )$+& *&.$*5,-. (6&,* ,-5,8,54$1 7*354'(/ $-5 /&*8,'&/< 7*354'( 1,-&/ $-5 7*354'( ),9&/. &ndividual product decisions involve product attributes, branding, packaging, labeling, and product support services. #roduct attribute decisions involve product 1uality, features, and style and design. Branding decisions include selecting a brand name and developing a brand strategy. #ackaging provides many key benefits such as protection, economy, convenience, and promotion. &t often includes designing labels which identify, describe and possibly promote the product. Companies also develop product support services that enhance customer service and satisfaction and safeguard against competitors. Most companies produce a product line rather than a single product. 8 product line is a group of products that are related in function, customer"purchase needs, or distribution channels. 5ine stretching involves e+tending a line downward, upward, or in both directions to occupy a gap that might otherwise be filed by competitor. &n contrast, line filling involves adding items within the present range of line. 8ll product lines and items offered to customers by a particular seller make up the product mi+. This mi+ can be described by < dimensions2

width, length, depth and consistency. These dimensions are the tools for developing the company/s product strategy. 3. D,/'4// 0*$-5,-. /(*$(&.2 ? (6& 5&',/,3-/ '3)7$-,&/ )$+& ,- 04,15,-. $-5 )$-$.,-. (6&,* 0*$-5/. )ome analysts see brands as the ma:or enduring asset of a company. Brands are more than :ust names and symbols = they embody everything that the product or service means to customers. Brand e1uity is the positive differential effect that knowing the brand name has on customer response to the product or service. 8 brand with strong brand e1uity is a very valuable asset. &n building brands, companies need to make decisions about2 Brand positioning, Brand name selection, Brand sponsorship, Brand development. The most powerful brand positioning builds around strong consumer beliefs and values. Brand name selection involves finding the best brand name based on a careful review of product benefits, the target market, and proposed marketing strategies. 8 manufacturer has < brand sponsorship options2 5aunch a manufacturer/s brand7national brand, )ell to resellers who use a private brand, Market licensed brands, Ioin forces with another company to co"brand a product. 8 company also has < choices when it comes to developing brands2 introduce 5ine e+tensions, Brand e+tensions, Multi brands or $ew brands. Companies must build and manage their brands carefully. The brand/s positioning must be continuously communicated to consumers. 8dvertising can help. 4owever, brands are not maintained by advertising but by the brand e+perience. Customers come to know a brand through a wide range of contacts and interactions. The company must put as much care into managing these touch points as it does into producing its ads. Thus, managing a company/s brand assets can no longer be left only to brand managers. )ome companies are now setting up brand asset management teams to manage their ma:or brands. 6inally companies must periodically audit their brands/ strengths and weaknesses. &n some cases, brands may need to be repositioned because of changing customer preferences or new competitors.

4. I5&-(,%2 4 '6$*$'(&*,/(,'/ (6$( $%%&'( (6& )$*+&(,-. 3% $ /&*8,'& $-5 (6& $55,(,3-$1 )$*+&(,-. '3-/,5&*$(,3-/ (6$( /&*8,'&/ *&@4,*&. )ervices are characteri9ed by < characteristics2 &ntangible, &nseparable, Variable, #erishable. *ach characteristic poses problems and marketing re1uirements. Marketers work to find ways to make the service more tangible, to increase the productivity of providers who are inseparable from their products, to standardi9e the 1uality in the face of variability, and to improve demand movements and supply capacities in the face of service perishability. .ood service companies focus attention on both customers and employees. They understand the service"profit chain, which links service firm profits with employee and customer satisfaction. )ervices marketing strategy calls not only for e+ternal marketing but also for internal marketing to motivate employees and interactive marketing to create service delivery skills among service providers. To succeed, service marketers must create competitive differentiation, offer high service 1uality, and find ways to increase service productivity. CHAPTER A NEW-PRODUCT DEVELOPMENT AND PRODUCT LIFECYCLE STRATEGIES 1. E971$,- 63: '3)7$-,&/ %,-5 $-5 5&8&137 -&:-7*354'( ,5&$/. Companies find and develop new"product ideas from a variety of sources. Many new"product ideas stem from internal sources. Companies conduct formal research and development, pick the brains of their employees, and brainstorm at e+ecutive meetings. 'ther ideas come from e+ternal sources. By conducting surveys and focus groups and analy9ing customer 1uestion and complaints, companies can generate new"product ideas that will meet specific consumer needs. Companies track competitors/ offerings and inspect new products, dismantling them, analy9ing their performance, and deciding whether to introduce a similar or improved product. !istributors and suppliers are close to the

market and can pass along information about consumer problems and new"product possibilities. 2. L,/( $-5 5&%,-& (6& /(&7/ ,- (6& -&:-7*354'( 5&8&137)&-( 7*3'&// $-5 (6& )$=3* '3-/,5&*$(,3-/ ,- )$-$.,-. (6,/ 7*3'&//. The new"product development process consists of A se1uential stages2 &dea generation &dea screening2 reduces the number of ideas based on the company/s own criteria, #roduct concept development2 a detailed version of the new" product idea is stated in meaningful consumer terms. Concept testing2 new"product concepts are tested with a group of target customers to determine whether the concepts have strong consumer appeal, Marketing strategy development2 an initial marketing strategy for the new product is developed from the product concept, Business analysis2 a review of the sales, costs and profit pro:ections for a new product is conducted to determine whether the new product is likely to satisfy the company/s ob:ectives. #roduct development2 to ensure that the product idea can be turned into a workable product, Test marketing2 tested in more realistic market settings, o )tandard test markets o Controlled test markets o )imulated test markets Commerciali9ation $ew"product development involves more than :ust going through a set of steps. Companies must take a systematic, holistic approach to managing this process. )uccessful new"product development re1uires a customer"centered, team"based, systematic effort. 3. D&/'*,0& (6& /($.&/ 3% (6& 7*354'( 1,%& '2'1&. *ach product has a life cycle marked by a changing set of problems and opportunities. The sales of the typical product follow an )"shaped curve made up of the ? stages2 #roduct development stage2 finds and develops a new"product idea, o Customer"centered new product development2 finding new ways to solve customer problems and create more customer"satisfying e+periences,

o Team"based new product development2 various companies work closely together to save time and increase effectiveness, o )ystematic new product development &ntroduction stage2 slow growth and low profits, .rowth stage2 rapid sales growth and increasing profits, Maturity stage2 sales growth slows and profits stabili9e, !ecline stage2 sales and profits dwindle. The company/s task during this stage is to recogni9e the decline and to decide whether it should maintain, harvest, or drop the product.

4. D&/'*,0& 63: )$*+&(,-. /(*$(&.,&/ '6$-.& 54*,-. (6& 7*354'("/ 1,%& '2'1&. &n the introduction stage, the company must choose a launch strategy consistent with its intended product positioning. Mush money is needed to attract distributors and build their inventories and to inform consumers of the new product and achieve trial. &n growth stage, companies continue to educate potential consumers and distributors, &n addition, the company works to stay ahead of the competition and sustain rapid growth by improving product 1uality, adding new product features and models, entering new market segments and distribution channels, shifting advertising from building product awareness to building product conviction and purchase, and lowering prices at the right time to attract new buyers. &n maturity stage, companies continue to invest in maturing products and consider modifying the market, product and the marketing mi+. o %hen modifying the market, the company attempts to increase the consumption of the current product. o %hen modifying the product, the company changes come of the product/s characteristics = such as 1uality, features, or style = to attract new users or inspire more usage. o %hen modifying the marketing mi+, the company works to improve sales by changing one or more of the marketing" mi+ elements. 'nce the company recogni9es that a product has entered the decline stage, management must decide whether to2 o Maintain the brand without change, hoping that competitors will drop out of the marketJ

o 4arvest the product, reducing costs and trying to maintain salesJ or o !rop the product, selling it to another firm or li1uidating it at salvage value. 5. D,/'4// 2 $55,(,3-$1 7*354'( ,//4&/: S3',$112 *&/73-/,01& 7*354'( 5&',/,3-/ $-5 ,-(&*-$(,3-$1 7*354'( $-5 /&*8,'&/ )$*+&(,-.. Marketers must consider 0 additional product issues2 )ocial responsibility2 includes public policy issues and regulations involving ac1uiring or dropping products, patent protection, product 1uality and safety, and product warranties. &nternational product and services marketing2 decide how much to standardi9e or adapt their offerings for world markets. CHAPTER 1B PRICING PRODUCTS: UNDERSTANDING AND CAPTURING CUSTOMER VALUE 1. A-/:&* (6& @4&/(,3- CW6$( ,/ 7*,'&DE $-5 5,/'4// 3% 7*,'& ,- (35$2"/ %$/(-'6$-.,-. &-8,*3-)&-(. #rice can be defined narrowly as the amount of money charged for a product or service. 'r it can be defined more broadly as the sum of the values that consumers e+change for the benefits of having and using the product or service. The pricing challenge is to find the price that will let the company make a fair profit by getting paid for customer value it creates. !espite the increasing role of non price factors in the modern marketing process, price remains an important element in the marketing mi+. &t is the only marketing mi+ element that produces revenueJ all other elements represent costs. #rice is also one of the most fle+ible elements that can be raised and lowered 1uickly. *ven so, many companies are not good at handling pricing = pricing decisions and price competition are ma:or problems for many marketing e+ecutives. #ricing problems often arise because managers are too 1uick to reduce prices, prices are too cost oriented rather than customer value oriented or prices are not consistent with the rest of the marketing mi+. 2. D,/'4// (6& ,)73*($-'& 3% 4-5&*/($-5,-. '4/(3)&* 8$14& 7&*'&7(,3-/ :6&- /&((,-. 7*,'&/.

.ood pricing begins with a complete understanding of the value that a product or service creates for customers and setting a price that captures the value. Customer perceptions of the product/s value set the ceiling for prices. &f customers perceive that the price is greater than the product/s value, they will not buy the product. Value"based pricing uses buyers/ perceptions of value, not the seller/s cost, as the key to pricing. Companies can pursue either 0 types of value"based pricing. .ood value pricing2 involves offering :ust the right combination of 1uality and good service at a fair price. Value"added pricing2 involves attaching value"added features and services to differentiate the company/s offers and support charging higher prices. 3. D,/'4// (6& ,)73*($-'& 3% '3)7$-2 $-5 7*354'( '3/(/ ,/&((,-. 7*,'&/. The price the company charges will fall somewhere between one that is too high to produce any demand and one that is too low to produce a profit. %hereas customer perceptions of value set the ceiling for prices, company and product costs set the floor. &f the company prices the product below its costs, its profits will suffer. Cost"based pricing involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk. Costs are an important consideration in setting prices. 4owever, cost" based pricing is product driven rather than customer driven. The company designs what it considers to be a good product and sets a price that covers costs plus a target profit. &f the profit turns out to be too high the company must settle for lower markups or lower sales, both resulting in disappointing profits. The company must watch its costs carefully. &f it costs the company more than it cots competitors to produce and sell its product, the company must charge a higher price or make less profit, putting it at a competitive disadvantage. Total costs are the sum of the fi+ed and variable costs for any given level of production. Management wants to charge a price that will at least cover the total costs at a given level of production. To price wisely, management also needs to know how it costs vary with different levels of production and accumulated production e+perience. Cost"based pricing approaches include cost"plus pricing and break" even pricing (or target profit pricing,. 4. I5&-(,%2 $-5 5&%,-& (6& 3(6&* ,)73*($-( &9(&*-$1 $-5 ,-(&*-$1 %$'(3*/ $%%&'(,-. $ %,*)"/ 7*,',-. 5&',/,3-/.

'ther internal factors that influence pricing decisions include the company/s overall marketing strategy, ob:ectives, mi+ and organi9ation for pricing. #rice is only one element of the company/s broader marketing strategy. &f the company has selected its target market and positioning it carefully, than its marketing mi+ strategy, including price, will be fairly straightforward. )ome companies position their products on price and then tailor other marketing mi+ decisions to the prices they want to charge. 'ther companies deemphasi9e price and use other marketing mi+ tools to create non price position. Common pricing ob:ectives might include survival, current profit ma+imi9ation, market share leadership, or customer retention and relationship building. #rice decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective marketing program. 6inally, in order to coordinate pricing goals and decisions, management must decide who within the organi9ation is responsible for setting price. 'ther e+ternal factors include the nature of the market and demand, competitors/ strategies and prices, and environmental factors such as the economy, reseller needs, and government actions. The seller/s pricing freedom varies with different types of markets. ltimately, the customer decides whether the company has set the right price. The customer weighs the price against the perceived values of using the product = if the price e+ceeds the sum of values, consumers will not buy. )o the company must understand concepts such as demand curves and price elasticity. Consumers also compare a product/s price to the prices of competitors/ products. 8 company therefore must learn the customer value and prices of competitors/ offers. CHAPTER 11 PRICING PRODUCTS: PRICING STRATEGIES 1. D&/'*,0& (6& )$=3* /(*$(&.,&/ %3* 7*,',-. ,),($(,8& $-5 -&: 7*354'(/. #ricing is a dynamic process. Companies design a pricing structure that covers all their products. They change this structure over time and ad:ust it to account for different customers and situations. #ricing strategies usually change as a product passes through its life cycle. The company can decide on one of several price"1uality strategies for introducing an imitative product, including premium pricing, economic pricing, good value or overcharging. &n pricing innovative new products, it can use market"skimming pricing by initially setting high prices to skim the ma+imum amount of revenue from various segments of the market.

'r it can use market penetrating pricing to by setting a low initial price to penetrate the market deeply and win a large market share.

2. E971$,- 63: '3)7$-,&/ %,-5 $ /&( 3% 7*,'&/ (6$( )$9,),;&/ (6& 7*3%,(/ %*3) (6& (3($1 7*354'( ),9. %hen the product is a part of product mi+, the firm searches for a set of prices that will ma+imi9e the profits from the total mi+. &n product line pricing, the company decides on price steps for the entire set of products it offers. 'ptional products = optional or accessory products included with the main product, Captive products = re1uired for use of the main product, By"products = waste or residual products produced when making the main product, #roduct bundles = combinations of products at a reduced price. 3. D,/'4// 63: '3)7$-,&/ $5=4/( (6&,* 7*,'&/ (3 ($+& ,-(3 $''34-( 5,%%&*&-( (27&/ 3% '4/(3)&*/ $-5 /,(4$(,3-/. Companies apply a variety of price"ad:ustment strategies to account for differences in consumer segments and situations2 !iscount and allowance pricing )egmented pricing = sells a product at 0 or more prices to accommodate different customers, product forms, locations or times, #sychological pricing #romotional pricing = offers discounts or temporarily sells a product below list price as a special event, sometimes even selling below cost as a loss leader, .eographical pricing2 to price to distant customers = 6'B pricing, uniform"delivered pricing, 9one pricing, basing"point pricing, freight absorption pricing, !ynamic pricing2 ad:usting prices continually to meet the characteristics and needs of individual customers and situations, &nternational pricing = ad:usts its price to meet different conditions and e+pectations in different world markets. 4. D,/'4// (6& +&2 ,//4&/ *&1$(&5 (3 ,-,(,$(,-. $-5 *&/73-5,-. (3 7*,'& '6$-.&/. %hen a firm considers initiating a price change, it must consider customers/ and competitors/ reactions. There are different implications

to initiating price cuts and initiating price increases. Buyer reactions to price changes are influenced by the meaning customers see in the price change. Competitors/ reactions flow from a set of reaction policy or a fresh analysis of each situation. There are also many factors to consider in responding to a competitor/s price changes. The company that faces a price change initiated by a competitor must try to understand the competitor/s intent as well as the likely duration and impact the change. &f a swift reaction is desirable, the firm should preplan its reactions to different possible price actions by competitors. %hen facing a competitor/s price change, the company might sit tight, reduce its own price, raise perceived 1uality, improve 1uality and raise price, or launch a fighting brand. CHAPTER 12 MARKETING CHANNELS AND SUPPLY CHAIN MANAGEMENT 1. E971$,- :62 '3)7$-,&/ 4/& )$*+&(,-. '6$--&1/ $-5 5,/'4// (6& %4-'(,3-/ (6&/& '6$--&1/ 7&*%3*). To bring their products to a market. Marketing channel2 a set of interdependent organi9ations involved in the process of making a product or service available for use or consumption by the consumer or business user. Through their contacts, e+perience, speciali9ation, and scale of operation, intermediaries usually offer the firm more than it can achieve on its own. >ey functions of marketing channels2 &nformation2 gathering and distributing marketing research and intelligence information about marketing environment, #romotion2 persuasive communications about an offer, Contact2 finding and communicating with prospective buyers, Matching2 fitting the offer to buyer/s needs, $egotiation2 reaching an agreement of the offer, #hysical distribution2 transporting the goods, 6inancing2 using funds to cover the costs, Risk taking2 assuming the risks. Channel level2 direct and indirect marketing channel. 2. D,/'4// 63: '6$--&1 )&)0&*/ ,-(&*$'( $-5 63: (6&2 3*.$-,;& (3 7&*%3*) (6& :3*+ 3% (6& '6$--&1.

The channel will be most effective when each member is assigned the tasks it can do best. &deally, because the success of individual channel members depends on overall channel success, all channel firms should work together smoothly. They should understand and accept their roles, coordinate their goals and activities, and cooperate to attain overall channel goals. By cooperating, they can more effectively sense, serve, and satisfy the target market. &n a large company, the formal organi9ation structure assigns roles and provides needed leadership. But in a distribution channel made up of independent firms, leadership and power are not formally set. Traditionally, distribution channels have lacked the leadership needed to assign roles and manage conflict. &n recent years, however, new types of channel organi9ations have appeared that provide stronger leadership and improved performance. 3. I5&-(,%2 (6& )$=3* '6$--&1 $1(&*-$(,8&/ 37&- (3 $ '3)7$-2. Marketing channels face continuous and sometimes dramatic change. The H most important trends are the growth of Vertical, 4ori9ontal and Multichannel marketing systems. These trends affect channel cooperation, conflict, and competition. Channel design begins with assessing customer channel service needs and company channel ob:ectives and constraints. The company then identifies the ma:or alternatives in terms of the type of intermediaries, the number of intermediaries and the channel responsibilities of each. *ach channel alternative must be evaluated according to economic, control, and adaptive criteria. Channel management calls for selecting 1ualified intermediaries and motivating them. &ndividual channel members must be evaluated regularly. 4. E971$,- 63: '3)7$-,&/ /&1&'(< )3(,8$(&< $-5 &8$14$(& '6$--&1 )&)0&*/. The company should evaluate each channel member/s 1ualifications and select those who best fit its channel ob:ectives. 'nce selected, channel members must be continuously motivated to do their best. The company should work to forge long"term partnerships with their channel partners to create a marketing system that meets the needs of both the manufacturer and the partners. &t must also regularly check channel member performance against established performance standards, rewarding intermediaries who are performing well and assisting or replacing weaker ones. 5. D,/'4// (6& -$(4*& $-5 ,)73*($-'& 3% )$*+&(,-. 13.,/(,'/ $-5 ,-(&.*$(&5 /47712 '6$,- )$-$.&)&-(.

Marketing logistics (physical distribution, is an area of potentially high cost savings and improved customer satisfaction. &t addresses not only outbound distribution but also inbound distribution and reverse distribution. That is involves entire supply chain management = managing value"added flows between suppliers, the company, resellers, and final users. $o logistic system can both ma+imi9e customer service and minimi9e distribution costs. &nstead, the goal of logistics management is to provide a targeted level of service at the least cost. The ma:or functions include order processing, warehousing, inventory management, and transportation. The integrated supply chain management concept recogni9es that improved logistics re1uires teamwork in the form of close working relationships across functional areas inside the company and across various organi9ations in the supply chain. Today, some companies are outsourcing their logistics functions to third party logistics (H#5, providers to save costs, increase efficiency and gain faster and more effective access to global markets. CHANNEL 13 RETAILING AND WHOLESALING 1. E971$,- (6& *31&/ 3% *&($,1&*/ $-5 :631&/$1&*/ ,- (6& 5,/(*,04(,3- '6$--&1. Retailing includes all activities involved in selling goods or services directly to final customers for their personal, non business use. %holesaling includes all activities involved in selling goods or services to those who are buying for the purpose of resale or for business use. %holesalers perform many functions including selling and promoting, buying and assortment building, bulk breaking, warehousing, transporting, financing, risk bearing, supplying market information, and providing management services and advice. 2. D&/'*,0& (6& )$=3* (27&/ 3% *&($,1&*/ $-5 .,8& &9$)71&/ 3% &$'6. )tore retailers can be classified by2 The amount of service they provide2 self"service, limited service, full service, #roduct line sold2 specialty stores, department stores, supermarkets, convenience stores, superstores and service businesses, Relative prices2 discount stores and off price retailers.

Today, many retailers are banding together in corporate and contractual retail organi9ations2 corporate chains, voluntary chains and retailer cooperatives, franchise organi9ations and merchandising conglomerates. 3. D&/'*,0& (6& )$=3* (27&/ 3% :631&/$1&*/ $-5 .,8& &9$)71&/ 3% &$'6. Merchant wholesalers = take possession of the goods. o 6ull service wholesalers2 wholesale merchants, industrial distributors, o 5imited service wholesalers2 cash and carry wholesalers, truck wholesalers, mail"order wholesalers, Brokers and agents = do not take possession of the goods. Manufacturers/ sales branches and offices

4. E971$,- (6& )$*+&(,-. 5&',/,3-/ %$',-. *&($,1&*/ $-5 :631&/$1&*/. *ach retailer must make decisions about its target markets and positioning, product assortment and services, price, promotion, and place. Retailers need to choose target markets carefully and position themselves strongly. Today, wholesaling is holding its own in the economy. #rogressive wholesalers are adapting their services to the needs of target customers and are seeking cost"reducing methods of doing business. 6aced with slow growth in their domestic markets and developments, many large wholesalers are also now going global. CHAPTER 14 COMMUNICATING CUSTOMER VALUE: INTEGRATED MARKETING COMMUNICATIONS STRATEGY 1. D,/'4// (6& 7*3'&// $-5 $58$-($.&/ 3% ,-(&.*$(&5 )$*+&(,-. '3))4-,'$(,3-/ ,- '3))4-,'$(,-. '4/(3)&* 8$14&. Recent shifts toward targeted or one"to"one marketing, coupled with advances in information and communication technology, have had a dramatic impact on marketing communications. 8s marketing communicators adopt richer but more fragmented media and promotion mi+es to reach their diverse markets, they risk creating a communications hodgepodge for consumers. To prevent this, more companies are adopting the concept of integrated marketing communications (&MC,. .uided by an overall &MC strategy, the company works out the roles that the various promotional tools will play and the e+tent to which each will be used. &t carefully

coordinates the promotional activities and the timing of when ma:or campaigns take place. 6inally, to help implement its integrated marketing strategy, the company appoints a marketing communications director who has overall responsibility for the company/s communications efforts. 2. D&%,-& (6& 5 7*3)3(,3- (331/ $-5 5,/'4// %$'(3*/ (6$( )4/( 0& '3-/,5&*&5 ,- /6$7,-. (6& 38&*$11 7*3)3(,3- ),9. Marketing communications mi+2 8dvertising #ersonal selling )ales promotion #ublic relations !irect marketing tools 3. O4(1,-& (6& /(&7/ ,- 5&8&137,-. &%%&'(,8& )$*+&(,-. '3))4-,'$(,3-/. &dentifying the target audience !etermining the communication ob:ectives o 8wareness o >nowledge o 5iking o #reference o Conviction o #urchase !esigning a message Choosing media o #ersonal communication channels o $on personal communication channels )electing the message source Collecting feedback

4. E971$,- (6& )&(635/ %3* /&((,-. (6& 7*3)3(,3- 045.&( $-5 %$'(3*/ (6$( $%%&'( (6& 5&/,.- 3% (6& 7*3)3(,3- ),9. The company must decide how much to spend for promotion. The most popular approaches are to spend what the company can afford to use a percentage of sales, to base promotion on competitors/ spending, or to base it on an analysis and costing of the communication ob:ectives and tasks.

The company divides the promotion budget among the ma:or tools to create the promotion mi+. Companies can pursue a push or pull promotional strategy or combination of the two. The best specific blend of promotion tools depends on the type of product7market, the buyer/s readiness stage, and the product life cycle stage. #eople at all levels of the organi9ation must be aware of the many legal and ethical issues surrounding marketing communications. Companies must communicate openly, honestly, and agreeably with their customers and resellers. CHAPTER 15 ADVERTISING AND PUBLIC RELATIONS 1. D&%,-& (6& *31& 3% $58&*(,/,-. ,- (6& 7*3)3(,3- ),9. 8dvertising to inform, persuade and remind buyers about its products or organi9ations and for communicating the value that marketers create for their customers. 8lso to promote their causes to various target publics. #ublic relations = gaining favorable publicity and creating a favorable company image = is the least used of the ma:or promotion tools, although it has great potential for building consumer awareness and preference. 2. D&/'*,0& (6& )$=3* 5&',/,3-/ ,-8318&5 ,- 5&8&137,-. $$58&*(,/,-. 7*3.*$). 8dvertising decision making involves decisions about the advertising ob:ectives, the budget, the message, the media and finally the evaluation of results. 'b:ectives2 8dvertisers should set clear target, task and timing ob:ectives whether the aim is to inform, persuade or remind buyers. 8dvertising/s goal is to move consumers through the buyer"readiness stages or to move people to immediate action. )ome focus on building or strengthening long"term customer relationships. Budget2 8dvertising budget can be based on sales, on competitors/ spending, or on the ob:ectives and tasks of the advertising program. 8dvertising strategy consists of 0 ma:or elements2 Creating advertising messages and )electing advertising media.

6inally, evaluation calls for evaluating the communication and sales effects of advertising before, during and after the advertising is placed.

'ther important issues2 'rgani9ing for advertising and dealing with comple+ities of international advertising. 3. D&%,-& (6& *31& 3% 7401,' *&1$(,3-/ ,- (6& 7*3)3(,3- ),9. .aining favorable publicity Creating a favorable company image Building customer awareness and preference #romoting products, people, places, ideas, organi9ations or nations, Building good relationships with customers, investors, media and community, Brand building role at lower cost than advertising.

4. E971$,- 63: '3)7$-,&/ 4/& 7401,' *&1$(,3-/ (3 '3))4-,'$(& :,(6 (6&,* 7401,'/. By setting #R ob:ectives, choosing #R messages and vehicles, implementing the #R plan and evaluating #R results. To accomplish these goals, #R professionals use several tools such as news, speeches, and special events, or preparing written, audiovisual, and corporate identity materials and contributing money and time to public service activities. Bu99 marketing is a form of public relations that gets consumers themselves to spread word"of"mouth information about the company and its brands. CHAPTER 1! DIRECT AND ONLINE MARKETING: BUILDING DIRECT CUSTOMER RELATIONSHIPS 1. D&%,-& 5,*&'( )$*+&(,-. $-5 5,/'4// ,(/ 0&-&%,(/ (3 '4/(3)&*/ $-5 '3)7$-,&/. !irect marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. sing detailed databases, direct marketers tailor their offers and communications to the needs of narrowly defined segments or even individual buyers.

6or buyers, direct marketing is convenient, easy to use, and private. &t gives buyers ready access to wealth of products and information, at home and around the globe. !irect marketing is also immediate and interactive, allowing buyers to create e+actly the configuration of information products or services they desire then order them on the spot. 6or seller, direct marketing is a powerful tool for building customer relationshipsJ it can tailor offers to individual needs and promote these offers through personali9ed communications. &t also offers them a low cost, efficient alternative for reaching their markets. 2. I5&-(,%2 $-5 5,/'4// (6& )$=3* %3*)/ 3% 5,*&'( )$*+&(,-.. #ersonal selling !irect mail marketing Catalog marketing Telephone marketing !irect response television marketing >iosk marketing 'nline marketing

3. E971$,- 63: '3)7$-,&/ 6$8& *&/73-5&5 (3 (6& I-(&*-&( $-5 3(6&* 73:&*%41 -&: (&'6-313.,&/ :,(6 3-1,-& )$*+&(,-.. 'nline marketing is the fastest growing form of direct marketing. The internet enables consumers and companies to access and share huge amounts of information. &t creates value for customers and builds customers relationships. 4. D,/'4// 63: '3)7$-,&/ .3 $034( '3-54'(,-. 3-1,-& )$*+&(,-. (3 7*3%,($012 5&1,8&* )3*& 8$14& (3 '4/(3)&*/. Creating a website #lacing ads and promotions online )etting up and participating in web communities sing online e"mails

Types of online marketers2 Click only versus click and mortar marketers Click only companies Click and mortar companies

5. O8&*8,&: (6& 7401,' 731,'2 $-5 &(6,'$1 ,//4&/ 7*&/&-(&5 02 5,*&'( )$*+&(,-.. The aggressive and sometimes shady tactics of a few direct marketers can bother or harm consumers, giving the entire industry a black eye. 8buses range from simple e+cesses that irritate consumers to instances of unfair practices or even outright deception and fraud. The direct marketing industry has also faced growing concerns about invasion of privacy and internet security issues. CHAPTER 1A THE GLOBAL MARKET PLACE 1. D,/'4// 63: (6& ,-(&*-$(,3-$1 (*$5& /2/(&) $-5 (6& &'3-3),'< 731,(,'$1-1&.$1< $-5 '41(4*$1 &-8,*3-)&-(/ $%%&'( $ '3)7$-2"/ ,-(&*-$(,3-$1 )$*+&(,-. 5&',/,3-/. To decide whether it wants to go abroad and consider the potential risks and benefits, deciding on the volume of international sales it wants, how many countries it wants to market in, and which specific markets it wants to enter. This decision calls for weighing the probable rate of return on investment against the level of risk. 2. D&/'*,0& 3 +&2 $77*3$'6&/ (3 &-(&*,-. ,-(&*-$(,3-$1 )$*+&(/. *+porting, Ioint venturing2 :oining with foreign companies to produce or market a product or service, !irect investment or licensing2 by contracting with a licensee in the foreign market.

3. E971$,- 63: '3)7$-,&/ $5$7( (6&,* )$*+&(,-. ),9&/ %3* ,-(&*-$(,3-$1 )$*+&(/. 8dapted marketing mi+2 ad:usts the marketing mi+ to each target market, )tandardi9ed marketing mi+

4. I5&-(,%2 (6& 3 )$=3* %3*)/ 3% ,-(&*-$(,3-$1 )$*+&(,-. 3*.$-,;$(,3-. *+port department &nternational division .lobal organi9ation

CHAPTER 2B MARKETING ETHICS AND SOCIAL RESPONSIBILITY 1. I5&-(,%2 (6& )$=3* /3',$1 '*,(,',/) 3% )$*+&(,-.. &mpact on individual consumer2 high prices, deceptive prices, high"pressure selling, unsafe products, poor services, &mpact on society2 creating false wants and too much materialism, too few social goods, cultural pollution, political power, &mpact on other businesses2 harming competitors, reducing competition, unfair competitive marketing practices.

2. D&%,-& '3-/4)&*,/) $-5 &-8,*3-)&-($1,/) $-5 &971$,- 63: (6&2 $%%&'( )$*+&(,-. /(*$(&.,&/. Consumerism intended to strengthen the rights and power of consumers relative to sellers. 8lert marketers view it as an opportunity to serve consumers better by providing more consumer information, education and protection. *nvironmentalism minimi9es the harm done to the environment and 1uality of life by marketing practices. Companies now are adopting policies of environmental sustainability = developing strategies that both sustain the environment and produce profits for the company. 3. D&/'*,0& (6& 7*,-',71&/ 3% /3',$112 *&/73-/,01& )$*+&(,-.. *nlightened marketing2 support the best long"run performance of the marketing system2 Consumer"oriented marketing Customer value marketing &nnovative marketing )ense of mission marketing )ocietal marketing