Introd to-

Chapter 3 Objectives
The Marketing Environment
 Describe the environmental forces that affect the
company's ability to serve its customers.
 Explain how changes in the demographic and
economic environment affect marketing decisions.
 Identify the major trends in the firm's natural and
technological environments.
 Explain the key changes in the political and
cultural environment.
 Discuss how companies can react to the
marketing environment.

Microenvironment:
internal forces
Company
Suppliers
Marketing
Intermediaries
Customers
Publics
Competitors
Company

The Company
Top
management
Finance
R & D Purchasing
Manufacturing
Accounting
Marketing

Macroenvironment:
external forces
Demographic
Economic
Natura
l
Technological
Political
Cultural
Company

Demographics
Family
Population Shift
Education
Increasing Diversity

Demographics:
Changing Age Structure in Canada
Median age up from 25 to 38 in 30
years
Long-term slowing of birth rate (1.55)
Increasing life expectancy
“Baby dearth” of the 70’s
Population bulge due to baby boom
Growth rates vary for different age
groups

Demographics
BOOMERS
 40 plus age now 45% bigger than 18-30 group
 …will be 60% bigger by 2010
 1989 40+ became biggest adult segment in history
 Control 50%+ of discretionary spending
 Control 75% of nation’s wealth
 About to inherit largest intergenerational wealth
transfer in history

Demographic Environment:
Increasing Diversity
 Ethnicity:
Ethnic purchasing power
$300 billion
Growing market size
Avoid stereotyping
Use native languages
Choose ethnic media
 Sexual orientations
 Disabilities

Economics
Changes in Income
More Work = Less Leisure
people are time starved
Changing Consumer Spending
Patterns

Consumer Confidence
Consumer confidence fell to its
lowest level since October 1983.
Conference Board, Feb. 2003

Consumer Confidence
Consumer confidence tanked in
February and has been
rebounding since.
Decima Research, 2003

Natural Environment
Shortages of Raw Materials
Increased Pollution
Increased Government Intervention
e.g. Environmental Protection Act

Technological Environment
Fast pace of technological change
High R&D Budgets

Political Environment
Legislation regulating business
increased legislation
increased emphasis on ethics and
socially responsible actions

Cultural Environment
Persistence of cultural values
Shifts in cultural values
Subcultures

Marketing and Society
Identify the major social criticisms of
marketing.
Define consumerism and
environmentalism and explain how they
affect marketing strategies.
 Describe the principles of socially
responsible marketing.
Explain the role of ethics in marketing.

Social Criticisms of Marketing
Marketing’s Impact on Consumers
High Prices * Deceptive Practices * High-Pressure Selling
Shoddy Products * Planned Obsolescence * Poor Service

Social Criticisms of Marketing
Marketing’s Impact on Society
False Wants/Too Much Materialism * Too Few Social Goods
Cultural Pollution * Too Much Political Power

Consumerism
 The right to safety
 Right to be informed
 The right to choose
 The right to be heard
 The right to redress
against damage
 The right to consumer
education
Consumer’s Association of Canada Fundamental Rights

Marketing Research and Information Systems
 Explain the importance of information to the
company.
 Define the marketing information system and
discuss its parts.
 Outline the four steps in the marketing research
process.
 Compare the advantages and disadvantages of
various methods of collecting information.
 Discuss the special issues some marketing
researchers face.

Measuring & Forecasting Demand
1. As marketing manager for Cat's Pride cat litter,
you have seen sales jump 50 percent in the last
year after years of relatively stable sales.
Explain how you will forecast sales for the
coming year.
2. What are some leading indicators that might
help you predict sales of diapers, cars, and
hamburgers. Can you describe a general
procedure for finding leading indicators or
product sales?

The Importance of Information
Research Needs
Marketing
Environment
Customer
Needs and Wants
Strategic
Decision Making
Competitors

Should you do Research?
NO if:
being done before financial analysis complete
a way to avoid making a decision
results are not going to change your plans
cheaper to try idea than conduct research
YES if:
data will be useful in a very specific way
you can get the information you need to make
decisions
you can’t afford to make an uniformed decision
you must convince others of something you already
know

Market Research Process
Define
problem
and
research
objectives
Develop
plan
to
collect
data
Implement
collect
and
analyze
data
Interpret
and
report
findings
4-2

Step 1: defining the problem
& research objectives
Exploratory research
preliminary information
helps better define problem
Descriptive research
expand understanding of factors
Causal research
test cause and effect hypothesis

Step 2: developing the plan for
collecting information
Determine Specific Information Needs,
e.g.
 Target customer characteristics
 Patterns of product use (which day-
part?)
 Demand factors
 Response of marketing channels
 Customer reactions
 Projected sales

Gathering Secondary Data
 internal sources
 government sources
 books and periodicals
 commercial data services
 international data
 on-line databases and the internet
 syndicated research studies

Gathering Primary Data
Research Approaches
Observational
Survey: phone, mail, in-person
Experimental

Primary Data Collection
Contact Methods: strengths & weaknesses
Mail Questionnaire
Telephone Interview
Personal Interview
Large volume, Low cost
Honest answers, Slow,
Not very flexible
Fast, Controlled sample,
Flexible, Higher Response,
More expensive, Bias
Very flexible, Fast,
Very expensive, Bias

Step 3: implementing the
research plan
Plan is put into action
most expensive part of the process so:
1) important to watch for interviewer bias
2) accuracy

Step 4: interpreting and
reporting findings
Present important findings
Company ultimately must decide on
correct interpretation and how to
proceed

Difficulties in Asking Questions of
Consumers
Do they really know whether they are
likely to buy a particular product?
Even if they know the answer, will they
tell you?
Will their actual purchase behaviour
mirror their stated interests/intentions?

Consumer Markets and Consumer Buying
Behaviour
Define the consumer market and construct
a simple model of consumer buyer
behaviour.
Name the four major factors that influence
consumer buyer behaviour.
List and understand the stages in the buyer
decision process.
Describe the adoption and diffusion process
for new products.

Factors Affecting
Consumer Behaviour
Cultural
Culture
Sub-
culture
Social
class
Social
Reference
groups
Family
Roles
and
status
Personal
Age and
life-cycle
Occupation
Economic
situation
Lifestyle
Personality
and
self-concept
Psycho-
logical
Motivation
Perception
Learning
Beliefs and
attitudes

Cultural Factors
Culture
Social Class
Sub-culture

Social Factors
Groups
reference groups
aspirational
groups
Family
Roles & Status

Personal Factors
Age & Lifecycle Stage
Occupation
Economic situation
Personality & Self-
Concept
Lifestyle

Psychological Factors
Motivation
Perception
Learning
Beliefs & Attitudes
Physiological needs
Safety
needs
Esteem needs
Self-Actualtization
Social
needs

VALS2
Lifestyle Classification
Achievers
Strivers
Actualizers
Strugglers
Experiencers
Makers
Fulfilleds
Believers
Abundant Resources
Minimal Resources
Principle
Oriented
Status
Oriented
Action
Oriented

Buyer Decision Process
Need
recognition
Purchase
decision
Evaluation of
alternatives
Post-Purchase
behaviour
Information
search

Types of Buying Behaviour
Complex
buying
behaviour
Variety-
seeking
behaviour
Dissonance
reducing
behaviour
Habitual
buying
behaviour
Low involvement
High involvement
Significant
differences
between brands
Few differences
between brands

Adopter Categorization:
relative time of adoption
Time of adoption of innovations
2.5%
Innovators
34%
Early
majority
34%
Late
majority
Early
adopter
s
13.5%
16%
Laggards

Business Markets and Business Buying
Behaviour
Define the business market and explain
how business markets differ from consumer
markets.
Identify the major factors that influence
business buyer behaviour.
List and define the steps in the business
buying-decision process.
Compare the institutional and government
markets and explain how institutional and
government buyers make buying decisions.

Characteristics of
Business Markets
Differences
Between
Business
and
Consumer
Markets
Market Structure
and Demand
Nature of the
Buying Unit
Types of Decisions &
the Decision Process
Other Characteristics

Characteristics of
Business Markets
Differences
Between
Business
and
Consumer
Markets
Market Structure
and Demand
1. Fewer but larger buyers
2. More geographically
concentrated
3. Demand is more inelastic
4. Demand is derived
5. Demand fluctuates quickly

Characteristics of
Business Markets
Differences
Between
Business
and
Consumer
Markets
Nature of the
Buying Unit
1. Involves more buyers
2. More professional
purchasing procedures

Characteristics of
Business Markets
Differences
Between
Business
and
Consumer
Markets
Types of Decisions &
the Decision Process
1. More complex
2. More formal
3. Buyer-seller relationships
more dependent, long-term
relationships

Characteristics of
Business Markets
Differences
Between
Business
and
Consumer
Markets
Other Characteristics
1. Buy direct v.s. via retailer
2. Practice reciprocity
3. Often lease v.s. purchase

Business Buying Influences
Level of
primary demand
Economic
outlook
Cost of money
Supply
conditions
Rate of techno-
logical change
Political,
regulatory
developments
Competitive
developments
Objectives
Policies
Procedures
Organizational
structure
Systems
Authority
Status
Empathy
Persuasive-
ness
Age
Education
Occupation
Personality
Risk attitudes
Environmental
Interpersonal
Organizational
Individual

Business Buying Process
1. Problem Recognition
2. General Need Description
3. Product Specification
4. Supplier Search
5. Proposal Solicitation
6. Supplier Selection
7. Order Routine Specification
8. Performance Review

Institutions & Government
Institutional Markets
Government Markets
Low Budgets
Captive
Patrons
Centralized
Buying
Submitted
Bids
Public
Review
Outside
Publics
Non-economic
Criteria

Segmentation, Targeting, Positioning
Define the three steps of target marketing:
segmentation, targeting, positioning.
List and discuss the major levels of market
segmentation and the bases for segmenting
consumer and business markets.
Explain how companies identify attractive
market segments and choose a market-
coverage strategy.
Explain how companies can position their
products for maximum competitive

Steps in Market Segmentation,
Targeting, and Positioning
Market segmentation
1. Identify bases for
segmenting the market
2. Develop profiles of
resulting segments
Market targeting
3. Develop measures of
segment attractiveness
4. Select the target
segment(s)
Market positioning
6. Develop marketing mix
for each target segment
5. Develop positioning
for each target segment

Segmenting: 4 bases
Geographic
Demographic
Psychographic
Behaviouristic

Segmenting:
geographic base
 Divide market into
separate geographic
units
 Nations, regions
provinces, cities,
neighbourhoods,
etc.
 Develop appropriate
marketing programs

Segmenting: demographic base
 Most popular
method
 Divide market into
groups based on:
 age
sex
family size & lifecycle
income & occupation
education
religion
ethnic background

Demographics - age
 14% of population over
65
 90% of 50+ are debt free
 48% of all luxury cars
sold are purchased by
50+ group
 50+ age group controls
80% of Canada’s
personal wealth up have
2/3 of disposable income
25% of population

Segmenting:
psychographic base
 Social class
determines choice of
home, car, clothes,
leisure habits, etc.
 Lifestyle
reflected in purchases
e.g. couch potatoes,
sports enthusiasts, or
symphony lovers
 Personality
express who they are

Segmenting:
behavioural base
Divide market into groups based on:
 Occasions
 User Status
 Usage Rate
 Loyalty Status
 Benefits sought

Requirements for
effective segmentation
Requirements
for Effective
Segmentation
Measurability
Substantiality
Actionability
Accessibility

Requirements for
effective segmentation
Measurability - size, purchasing power,
profiles of segments
Accessibility - effectively reach and serve
Substantiality - segments are large or
profitable enough to serve
Actionability - effective programs can be
designed to attract segments

Market Targeting:
evaluating market segments
Segment size and
growth
Structural
attractiveness
Company
objectives and
resources

Company marketing mix Market
Undifferentiated marketing
Company marketing mix 1
Segment 1
Segment 3
Segment 2
Differentiated marketing
Segment 1
Segment 3
Segment 2
Company marketing mix
Concentrated marketing
Selecting Market Segments

Positioning
Defined by
consumers on
important attributes
Place in mind
relative to competing
products
Position happens -
planned or not

Positioning Strategy:
choosing and implementing
Communicate and
deliver chosen position
Select the right
competitive advantage
Identify possible
competitive advantage
Select an overall
positioning strategy

Positioning
G
Against a
Competitor
Usage
Occasions
Away from
Competitors
Product
Attributes
Product
Class
Benefits
Offered
Users
B
D
C
G
F
A
E

Positioning Statement
For (target customer)
Who (statement of need or
opportunity)
The (product name) is a (product
category)
That (statement of key benefit)
Unlike (primary competitive
alternative)
Our product (statement of primary

Product Strategies
Define product and the major classifications
of products and services.
Describe the roles of product and service
branding, packaging, labelling, and product
support services.
Explain the decisions companies make
when developing product lines and mixes.
 Identify the four characteristics of a service.
 Discuss the additional marketing
considerations that services require.

Levels of Product
Core
benefit
or
service
Augmented product
Installation
After-
Sale
service
Delivery
and
credit
Warranty
Brand
name
Quality
level Design
Features
Packaging
Core product
Actual product
8-1

Product Classifications:
consumer products
Types of
Consumer
Products
Convenience
products
Shopping
products
Specialty
products
Unsought
products

Product Decisions
Branding
Product
attributes
Packaging
Product
Support
services
Labelling

Product Attributes
Quality
Features
Sizes
Design

Product Support Services
Services that augment the actual product
e.g. 1-800 support for software program
e.g. web/Internet technical support

Branding
 Name, term, sign,
symbol or design or a
combination intended
to identify goods or
services of a seller or
group to differentiate
them from
competitors

Brand Name Selection:
desirable qualities
 Suggest benefits
and qualities
 Easy to pronounce
recognize &
remember
 Distinctive
 Translated easily
 Capable of
registration & legal
protection
Craftsman

Major Branding Decisions
To brand or
not to brand
• Brand
• No brand
Brand name
selection
Brand sponsor
Brand strategy
Brand
repositioning
• Selection
• Protection
• Manufacturer’s brand
• Private brand
• Licensed brand
• Co-branding
• New brands
• Line extensions
• Brand extensions
• Multibrands
• Brand repositioning
• No brand repositioning
Figure 8- 3

Value of Branding
 Helps consumers
shop more
efficiently
 Aids repeat
purchase
 Suggests quality
of product
 Creates store
loyalty
 Gives legal
protection
 Helps in
segmenting
markets
 Symbol of ongoing
promise
Buyer’s viewpoint Seller’s viewpoint

Packaging/Labelling
 What should the
package do for the
product?
identify, describe,
and promote
 Elements support
position & strategy
 Environmental
issues?

New Product Development and Life Cycle
Strategies
Explain how companies find and develop
new product ideas.
List and define the steps in the new-product
development process.
Describe the stages of the product life
cycle.
Describe how marketing strategies evolve
during the product’s life cycle.

New Product Development Process:
Idea generation
Idea screening
Concept
Development
& testing
Marketing
strategy
9-1

Marketing Strategy Development
Part one
Target market
Planned product positioning
Sales, market share and profit goals (short term)
Part two
Outline price, distribution and first year marketing budget
Part three
Planned long-run sales
Profit goals
Marketing mix strategy

New Product Development Process:
Idea generation
Idea screening
Concept
Development
& testing
Marketing
strategy
Business
analysis
Product
development
Commercialization
Test marketing
9-1

Why do new products fail?
 Overestimated
market or target
market is too small
 Poor design
 Poor product quality
 Incorrect
positioning
 Error in pricing
 Poor marketing
communication

Product Life-Cycle Strategies
Profits
Sales
Development Introduction
Growth
Maturity
Decline
Sales
Profit
($)
Loss
($)
9-2

New Product Life Cycle Strategies
Introduction
Market
Skimming
Market
Penetration

Growth
New
Features
Improve
Quality
Add
Channels
New
Segments

Maturity
Product
Modification
Market
Modification
Modify
Marketing Mix

Decline
Maintain Harvest Drop

Pricing Strategies
Identify and define the internal factors
affecting a firm’s pricing decisions.
Identify and define the external factors
affecting pricing decisions.
Contrast the three general approaches to
setting prices.
Describe the major strategies for pricing
new products.
Discuss the key issues related to price
changes.

Factors Affecting Pricing
Internal factors
• Marketing
objectives
• Marketing-mix
strategy
• Costs
• Organizational
considerations
External factors
• Nature of the
market & demand
• Competition
• Other environmental
factors (economy,
resellers,
government)
Pricing
decisions

Internal Factors
Internal factors
• Marketing
objectives
• Marketing-mix
strategy
• Costs
• Organizational
considerations
Pricing
decisions

External Factors
External factors
• Types of markets
• Price-demand
relationship
• Competition
• Other environmental
factors (economy,
resellers,
government)
Pricing
decisions

Demand Curves
P’2
P’1
Q1
Q2
P1
P2
Q’1
Q’2
Quantity demanded
per period
Inelastic demand
Quantity demanded
per period
Elastic demand
Price

General Pricing Approaches
1. Cost-Based Approaches
Cost-Plus Break-Even Target Profit
Pricing Analysis Pricing

2. Value-Based Approaches
Perceived Value Pricing

2. Value-Based Approaches
Going-Rate Pricing Sealed-Bid Pricing
3. Competition-Based Approaches

New Product Pricing Strategies
 setting a high price to
maximize revenue
 makes sense when:
product quality and image
supports a higher price
costs of producing a small
volume are not too high to
cancel the advantage of
charging more
company has a patent or
technological advantage
Market Skimming

 Setting a low price to attract a large number
of buyers and gain a dominant market
share
 makes sense when:
market is highly price sensitive (low price
stimulates sales and market growth)
production costs must fall as volume increases
low price must be an effective entry barrier for
competitors
New Product Pricing Strategies
Market Penetration

Product-Mix
Pricing
Strategies
Product Line Pricing
$49.99
$89.99
$129.99
$149.99
$189.99

Product-Mix
Pricing
Strategies
Captive Product Pricing

Product-Mix
Pricing
Strategies
Captive Product Pricing
Product Bundle Pricing

Price
Adjustment
Strategies
Discount & Allowance Pricing
International Pricing
Segmented Pricing
Psychological Pricing
Promotional Pricing
Geographical Pricing

Distribution Channels and Logistics
Management
Explain why companies use distribution
channels and explain the functions that
these channels perform.
Discuss how channel members interact and
organize to perform the work of the
channel.
Identify the major channel alternatives.
Discuss the nature and importance of
physical distribution
Analyze integrated logistics management.

Retailing and Wholesaling
Explain the roles of retailers and
wholesalers in the distribution channel.
Describe the major types of retailers and
give examples of each.
Identify the major types of wholesalers and
give examples of each.
Explain the marketing decisions facing
retailers and wholesalers.

Distribution (Place)
Good distribution is critical to the
marketing success of products
Three main types of channels:
Direct
Indirect
Hybrid

Consumer Marketing Channels
Manu-
facturer
Direct
Whole-
saler
Retailer
Retailer
Consumer
Manu-
facturer
Manu-
facturer
Manu-
facturer Jobber
Whole-
saler
Consumer
Consumer
Consumer
Retailer
Indirect
Indirect
Indirect

Hybrid Marketing Channel
Consumer
segment 1
Business
segment 1
Consumer
segment 2
Business
segment 2
Retailers
Dealers
Distributors
Producer
Catalogues, telephone
Sales force

Distribution Channel Functions
 Information: gathering and distributing
marketing research
 Promotion
 Contact: finding and communicating with
prospective buyers
 Matching offers to buyer’s needs
 Negotiation
 Physical distribution, financing, risk taking

Why Use Marketing Intermediaries?
An intermediary reduces the number of channel transactions
# of contacts without a distributor
M x C = 3 x 3 = 9
# of contacts with a distributor
M x C = 3+ 3 =6

Franchise
organizations
Administered
VMS
Retailer
cooperatives
Wholesaler-sponsored
voluntary
chains
Contractual
VMS
Corporate
VMS
Manufacturer-
sponsored
retailer
franchise
Manufacturer-
sponsored
wholesaler
franchise
Service-firm-
sponsored
franchise
Figure 12-4
Vertical Marketing Systems (VMS)

Major Logistics Functions
Nature of Distribution
Order Processing
Warehousing
Transportation
Inventory

Integrated Marketing Communication Strategy
Name and define the five tools of the
promotion mix.
Discuss the processes and advantages
of integrated marketing
communications.
Outline the steps in developing effective
marketing communication.
Explain the methods for setting the
promotion budget and factors that affect
the design of the promotion mix.

Promotion Mix
Advertising
Direct
Marketing
Personal Selling
Public Relations
Sales Promotion
Promotion
Mix

Marketing Communications Mix
Advertising
paid placement of a message in the
media
non-personal presentation and
promotion of ideas, goods, or services
identified sponsor

Sales Promotion
short-term incentives
to encourage the sale of a product or
service

Personal Selling
personal presentation by a firm’s
sales force
for the purpose of making sales and
building customer relationships

Public Relations
free placement of a message in the
media
on-going process of building good
relations with the company’s various
publics by:
 obtaining favourable publicity
 building a good corporate image
 handling stories or events
 heading off unfavorable rumours

Direct Marketing
direct communications with carefully
targeted individual consumers
to obtain an immediate response
using mail, telephone, fax, e-mail and
other non-personal tools

1. Identify the target audience
Steps in Developing
Effective Communication

2. Determine the desired response
Steps in Developing

Buyer-Readiness Stages
Awareness Knowledge Liking
Purchase
Conviction
Preference

3. Design a message
Steps in Developing

Designing a message
Message Content
rational - emotional - moral appeal?
Message Structure
open vs. conclusion?
one side or two sides?
Message Format
words - images - colour - sounds -
expressions?

3. Design a message
4. Choose the media
Steps in Developing

Choosing media
Personal channels
 face to face, phone, email, mail
 allows personal contact and feedback
Non-personal channels
 major media e.g. print, radio, tv, etc.
 no personal contact or feedback
 Opinion leaders key to reaching
others

Choosing Advertising Media
1. Reach
# of people in your target market reached
2. Frequency
how often people in your target market
see your promotions
3. Impact

3. Design a message
4. Choose the media
5. Select the message source
Steps in Developing

Selecting the message source
 Credible sources more
persuasive
 Credible people, e.g.
doctors, dentists, health-
care providers
 Celebrity endorsers

3. Design a message
4. Choose the media
5. Select the message source
6. Collect feedback
Steps in Developing

Setting the Promotion Budget
Affordable method
Percent of sales
Competitive parity
Objective and task

Advertising, Sales Promotion and Public
Relations
Define the roles of advertising, sales
promotion, and public relations in the
promotion mix.
Describe the major decisions involved in
developing an advertising program.
Explain how sales promotion campaigns
are developed and implemented.
Explain how companies use public relations
to communicate with their publics.

Promotion Tools
The
Nature
of Each
Promotion
Tool
Advertising
Legitimate Public
Repetition Expensive

Promotion Tools
The
Nature
of Each
Promotion
Tool
Advertising
Legitimate Public
Personal Selling
Effective Costly
Two Way Relationships

Promotion Tools
The
Nature
of Each
Promotion
Tool
Advertising
Legitimate Public
Personal Selling
Effective Costly
Sales Promotion
Timing Incentive
Short Term

Promotion Tools
The
Nature
of Each
Promotion
Tool
Advertising
Legitimate Public
Personal Selling
Effective Costly
Sales Promotion
Timing Incentive
Short Term
Public Relations
Credibility
Under Used

Campaign evaluation
Communication
impact
Sales impact
Message decisions
Message strategy
Message execution
Budget decisions
Affordable approach
Percent of sales
Competitive parity
Objective and task
Objectives setting
Communication
objectives
Sales
objectives
Media decisions
Reach, frequency, impact
Major media types
Specific media vehicles
Media timing
Figure 15-1
Major Advertising Decisions

Stage in
Product
Life Cycle
Push or Pull
Setting the Promotion Mix
Factors in Setting the Promotion Mix
Type of Market
Buyer
Readiness

Relative importance Relative importance
Advertising
Sales promotion
Personal selling
Public Rel.
Personal selling
Sales promotion
Advertising
Public Rel.
Consumer Goods Industrial Goods
Type of Market

Push versus Pull Strategy
Retailers and
Wholesalers
Consumers
Consumers
Retailers and
Wholesalers
Producer
Producer
Producer
marketing activities
Reseller
marketing activities
Push strategy
Pull strategy
Producer marketing activities
Demand Demand

Personal Selling
Discuss the role of a company’s
salespeople in creating value for customers
and building customer relationships.
Explain how companies design sales force
strategy and structure.
Explain how companies recruit, select, and
train salespeople.
Describe how companies compensate and
supervise salespeople and how they
evaluate sales-force effectiveness.

Steps in Effective Selling
Prospecting
and
qualifying
Pre-approach Approach
Presentation
and
demonstration
Follow-up
Closing
Handling
objections

Direct and Online Marketing
 Discuss the benefits of direct marketing to
customers and companies and the trends fuelling
its rapid growth.
 Define a customer database and list the four ways
that companies use databases in direct
marketing.
 Identify the major forms of direct marketing.
 Compare the two types of online marketing
channels and explain the effect of the Internet on
e-commerce.
 Identify the benefits of online marketing to
consumers and marketers and the four ways that

What is Direct Marketing?
 Communications
with carefully
targeted individual
consumers to obtain
an immediate
response
Cultivate relationships
Often one-to-one
interactive
Precise targeting
More effective results

Customers
and
prospects
Face-to-face
selling
Tele-
marketing
Direct
mail
Kiosk
Online
Direct
Response
TV
Catalogue
Forms of Direct Marketing
Figure 17-1

Product Strategies
 Define product and the major classifications
of products and services.
 Describe the roles of product and service
branding, packaging, labelling, and product
support services.
 Explain the decisions companies make when
developing product lines and mixes.
Identify the four characteristics of a service.
Discuss the additional marketing
considerations that services require.

Marketing is the process
of helping others value your
service.

Services are Different
SERVICES
Intangible
services cannot be seen,
tasted, felt, heard or
smelled before purchase

SERVICES
Inseparable
services cannot be
separated from their
providers

SERVICES
Variability
(Inconsistency)
quality of services
depends
on who provides them
and
when, where and how

Moments of Truth
Execs
Front Line Employees
Middle
Management
customers

SERVICES
Perishability
(Inventory)
services cannot be stored
for later sale or use

SERVICES
Intangible
services cannot be seen,
tasted, felt, heard or
smelled before purchase
Variable
quality of services
depends
on who provides them
and
when, where and how
Inseparable
services cannot be
separated from their
providers
Perishable
services cannot be stored
for later sale or use

Service-Profit Chain
Which is most important?
customers
stockholders
employees

The Global Marketplace
Discuss how the international trade system,
economic, politico-legal, and cultural
environments affect a company’s
international marketing decisions.
Describe three key approaches to entering
international markets.
Explain how companies adapt their
marketing mixes for international markets.
Identify the three major forms of
international marketing organization.

Deciding
Whether to go
international
Deciding
which markets
to enter
Looking at the
global marketing
environment
Deciding on the
global marketing
program
Deciding on the
global marketing
organization
Deciding how
to enter the
market
Major Decisions in
International Marketing

Global Marketing Environment
International Trade System
 Tariffs
 Quotas
 Embargos
 Exchange controls
 Non-tariff trade barriers

Economic Environment
 Income distribution
 Industrial structure:
- subsistence economies
- raw-material exporting
economies
- industrializing economies
- industrial economies

Politico-Legal & Ethical
Environment
 Attitude toward foreign businesses
 Extent of government bureaucracy
 Political stability
 Monetary regulations
 Countertrade
Compensation
Counterpurchase

Cultural Environment
 Language, customs
 Folkways, norms, taboos
 Business norms & behaviour
e.g. Personal distance
e.g. Meeting and greeting

Market Entry Strategies
Exporting
Direct
Indirect
Joint venturing
Licensing
Contract manufacturing
Management contracting
Joint ownership
Direct investment
Assembly facilities
Manufacturing
facilities
Amount of commitment, risk, control, and profit potential

Develop new
product
Communication
adaptation
Dual
adaptation
Product
invention
Straight
extension
Product
adaptation
Adapt
product
Don’t change
product
Don’t
Change
promotion
Adapt
promotion
Product
Promotion
International Product &
Promotion Strategies

Global Marketing Organization
Methods of Organizing
International Marketing Operations
Export
Department
International
Division
Global
Organization

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