© Kevin W. Fitzgerald, 2012Marketing and Society Social.docx

© Kevin W. Fitzgerald, 2012
Marketing and Society:
Social Responsibility
and Marketing Ethics
Week 8 Notes MKT 220
Charter Oak State College
Principles of Marketing
Kevin W. Fitzgerald, 2012
Notes based on
Marketing, an Introduction
by Gary Armstrong & Philip Kotler
Introduction
Responsible marketers discover what
consumers want and respond with the right
products, priced to give good value to buyers
and profit to the producer. A marketing
system should sense, serve and satisfy
consumer needs and improve the quality of
consumers’ lives. In working to meet
consumer needs, marketers may take some

actions that are not to everyone’s liking or
benefit. Marketing managers should be award
of the main criticism of marketing.
This Week’s Objectives…
At the end of this week you should be able to:
1. Identify the major social criticisms of marketing
2. Define consumerism and environmentalism and explain how
they affect marketing strategies.
3. Describe the principles of socially responsible marketing
4. Explain the role of ethics in marketing.
Social Criticisms of Marketing
Prices
-Pressure Selling

What is a Consumerism?
“Consumerism is an organized
movement of citizens and
government agencies to improve the
rights and power of buyers in relation
to sellers.”
-Gary Armstrong &
Philip Kotler
Rights of the Consumer
Movement
•The right to introduce any product in any size and style,

provided it is not hazardous to personal health or safety, or if
it is, to include proper warnings and controls.
•The right to charge any price for the product, provided no
discrimination exits among similar kinds of buyers.
•The right to spend any amount to promote the product,
provided it is not defined as unfair competition.
•The right to use any product message, provided it is not
misleading or dishonest in content or execution.
•The right to use any buying incentive schemes, provided
they are not unfair or misleading.
Rights of the Consumer
Movement, cont.
•The right not to buy a product that is offered for sale
•The right to expect the product to be safe.
•The right to expect the product to perform as claimed.
•The right to be well informed about important aspects of the
product.

•The right to be protected against questionable products and
marketing practices.
•The right to influence products and marketing practices in
ways that will improve the “quality of life”.
The Environmental
Sustainability Grid
New Environmental Technology
Is the environmental performance
of our products limited by our
existing technological base?
Is there a potential to realize
major improvements through new
technology?
T
o
m
o
r
r
o

w
ExternalInternal
T
o
d
a
y
Sustainability Vision
Does our corporate vision direct us
towards the solution of social and
environmental problems?
Does our vision guide the
development of new technologies,
markets, products and processes?
Pollution Prevention
Where are the most significant
waste and emission streams from
our current operation?
Can we lower costs and risks by
eliminating waste at the source or
by using it as useful input?
Product Stewardship

What are the implications for
product design and development if
we assume responsibility for a
products entire life cycle?
Can we add value or lower costs
while simultaneously reducing the
impact of our products?
Example: Recycling
their Happy Meals.
To better serve the
environment, McDonalds
uses recyclable paper
products in their Happy
Meals and to wrap their
products.
Ronald McDonald can be
seen running and exercising
in new ads, to show the
importance of staying
healthy.

What is Enlightened Marketing?
“Enlightened Marketing is a
marketing philosophy holding that a
companies marketing should support
the best long-run performance of the
marketing system.”
-Gary Armstrong &
Philip Kotler
Enlightened Marketing
-Oriented Marketing
-of-mission Marketing

Societal Classification of Products
Desirable
Products
Deficient
Products
Salutary
Products
Pleasing
Products
H
ig
h
HighLow
L
o
w
IMMEDIATE SATISFACTION
L
O

N
G
-
R
U
N
C
O
N
S
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M
E
R
B
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N
E
F
I
T
Fitzgerald Fun Fact

One of the best Public
Relations campaigns of all
time was during the Tylenol
poisoning disaster. Instead
of trying to cover it up, or
point blame, they
immediately took
responsibility and held a
press conference to tell
everyone what was
happening. They gained
back public trust and
continued as an industry
leader.
Key Terms
•Consumerism
•Consumer-oriented
Marketing
•Deficient Products
•Desirable Products

•Enlightened Marketing
•Environmental Sustainability
•Environmentalism
•Innovative Marketing
•Pleasing Products
•Salutary Products
•Sense-of-mission Marketing
•Societal Marketing
•Value Marketing
Relevant Websites
http://planetfeedback.com
http://www.ama.org/about/ama/ethcode.asp
http://e-businessethics.com/links/codes.htm

http://www.business-ethics.org
http://www.cebcglobal.org
http://cbpa.louisville.edu/mer/ethics_websites.htm
http://planetfeedback.com/
http://www.ama.org/about/ama/ethcode.asp
http://e-businessethics.com/links/codes.htm
http://www.business-ethics.org/
http://www.cebcglobal.org/
http://cbpa.louisville.edu/mer/ethics_websites.htm
Direct and On-line
Marketing
Notes based on

Introduction
Mass marketers have typically tried to reach millions
of buyers with a single product and a standard
message communicated via the mass media.
Consequently, most mass-marketing communications
were one-way communications directed at consumers
rater than two-way communications with consumers.
Today, many companies are turning to direct
marketing in an effort to reach carefully targeted
customers more efficiently and to build stronger,
more personal, one-to-one relationships with them.
On-line marketing involves online channels and
electronic commerce and is usually conducted
through interactive online computer systems, which
electronically link consumers with sellers.
1. Discuss the benefits of Direct Marketing to customers and
companies and the trends fueling rapid growth.
2. Define a customer database and outline the ways companies

use databases in direct marketing.
3. Identify the major forms of direct marketing.
4. Compare the two types of online marketing channels and
explain the effects on the internet and electronic commerce.
5. Discuss the public policy and ethical issues facing direct
marketers.
What is Direct Marketing?
“Direct Marketing is direct
communications with carefully
targeted individual consumers to
obtain an immediate response.”
-Gary Armstrong &
Philip Kotler
Mass Marketing vs. One-to-one
Mass Marketing

•Average Customer
•Customer Anonymity
•Standard Product
•Mass Production
•Mass Distribution
•Mass Advertising
•Mass Promotion
•One-way Message
•Economics of Scale
•Share of Market
•All Customers
•Customer Satisfaction
One-to-one Marketing
•Individual Customers
•Customer Profile
•Customized Market Offering
•Customized Production
•Individual Message

•Individualized Incentives
•Two-way Messages
•Economies of Scope
•Share of Customers
•Profitable Customers
• Customer Retention
Benefits of Direct Marketing
Seller Benefits
imed campaigns
messages
competition to see

Consumer Benefits
convenient and “fun”
easier
products
What is a Customer Database?
“A Customer Database is an
organized collection of
comprehensive data about individual
consumers or prospects, including
geographic, demographic,
psychographic and behavioral data.”
-Gary Armstrong &
Philip Kotler

Purpose of Database Marketing
receive a particular offer
vating customer purchases
Forms of Direct Marketing
Customers
and
Prospects
Face-to-
face selling
Direct-mail
Marketing
Catalog
Marketing

On-line
Marketing
Kiosk
Marketing
Telemarketing
Direct-
response
Television
Marketing
Conducting Online Marketing
•Corporate Website
•Marketing Website
-line
Web Communities
-Mailing and Webcasting

Online Marketing Benefits
Online Benefits to Consumers
•Convenience
•Information
•Fewer Hassles
Online Benefits to Marketers
•Quick Adjustments to Market Conditions
•Lower Costs
•Relationship building
•Audience Size
Challenges of Online Marketing
Buying

psychographics
ecurity
Integrated Direct Mail Campaign
Paid ad with a
response channel
Direct Mail
Outbound
marketing
Continuing
Communications
Face-to-face
sales call
Example: Direct Mail Campaign

customer promotional literature. This is
called a Direct Mail Campaign.
Repetition and
creativity can be
used to stand out
in a customers
mind. This type of
campaign is usually
more effective than
an one-time
mailing because it
stands out in their
mind.
Key Terms
•Catalog Marketing
•Commercial On-line Services
•Corporate Web Site
•Customer Database
•Direct Marketing

•Direct-mail Marketing
•Direct-response Television
Marketing
•Electronic Commerce
•Integrated Direct Marketing
•Internet
•Marketing Web Site
•On-line Ads
•On-line Marketing
•Telemarketing
•Webcasting
•World Wide Web
The Global
Marketplace

Notes based on
Introduction
Companies today can no longer afford to pay
attention only to their domestic market,
regardless of its size. Many industries are global
industries, and firms that operate globally achieve
lower costs and higher brand awareness. At the
same time, global marketing is risky because of
variable exchange rates, unstable governments,
protectionist tariffs and trade barriers, and
several other factors. Given the potential gains
and risks of international marketing, companies
need a systematic way to make their international
marketing decisions.
1. Discuss how the international trade system and the

economic, political, legal, and cultural environments affect a
company’s international marketing decisions.
2. Describe three key approaches to entering international
markets.
3. Explain how companies adapt their marketing mix for
international markets.
4. Identify the three major forms of international marketing
organizations.
Major International Marketing
Decisions
Looking at the global
marketing
environment
Deciding whether to go
international
Deciding which
markets to enter
Deciding on the global
marketing program
Deciding how to enter

the market
Deciding on the global
marketing organization
Example: International Marketing
The Walt Disney Company
has marketing their theme
parks all over the World.
International Environments

•Subsistence economies
•Raw material exporting economies
•Industrializing economies
•Industrial economies
-Legal Environment
Indicators of Market Potential
Demographic Characteristics
•Size of population
•Rate of population growth
•Degree of urbanization
•Population density
•Age structure and composition of the
population

Geographic characteristics
•Physical size of a country
•Topographical characteristics
•Climate conditions
Economic Factors
•GNP per capita
•Income distribution
•Rate of growth of GPN
•Ratio of investment to GNP
Technological Factors
•Level of technological skill
•Existing production technology
•Existing consumption technology
•Education levels
Sociocultural Factors
•Dominant values
•Lifestyle patterns
•Ethnic groups

•Linguistic fragmentation
National Goals and Plans
•Industry priorities
•Infrastructure investment plans
Market-entry Strategy
Amount of commitment, risk, control and profit potential
Exporting
Indirect
Direct
Join Venturing
Licensing
Contract manufacturing
Management contracting
Joint ownership
Direct Investment

Assembly facilities
Manufacturing facilities
Example: Language Blunders
problems for marketers.
Coca-Cola – “Coke adds life”
translated into Japanese read
“Coke brings your ancestors back
from the dead.”
Ford – Their Fiera truck meant
“ugly old woman” in Spanish
Chevy – Their Nova truck meant
“it doesn’t go” in Spanish.
KFC – “Finger lickin’ good”
translated into Chinese read “eat
your fingers off”.
Five International Product and
Promotional Strategies

Product
adaptation
Communication
adaptation
Straight
extension
Dual
adaptation
D
o
n
o
t
c
h
a
n
g
e
p
r
o
m

o
t
io
n
Adapt
product
Do not change
product
A
d
a
p
t
P
r
o
m
o
t
io
n
Product
P
r

o
m
o
t
io
n
Product
Invention
Develop new
product
Whole-channel Concept for
International Marketing
Seller
Seller’s international
marketing
headquarters
Channels
between
nations

Final buyers
Channels
within foreign
nations
Fitzgerald Fun Fact
The Internet is international and has no boundaries. Each
Country has
their own domain name category (in addition to the universal
.com
domain) so they can market regionally, as well as
internationally.
.us United States
.au Australia
.ca Canada
.de Germany
.fi Finland

.fr France
.jp Japan
.sw Sweden
.uk United Kingdom
(and many more…)
Key Terms
•Adapted Marketing Mix
•Communication Adaptation
•Contract Manufacturing
•Countertrade
•Direct Investment
•Economic Community
•Embargo
•Exchange Controls
•Exporting

•Global Firm
•Joint Ownershop
•Joint Venturing
•Licensing
•Management Contracting
•Nontariff Trade Barriers
•Product Adaptation Product
Invention
•Quota
•Standardized Marketing Mix
•Straight Product Extension
•Tariff
•Whole-channel View
Relevant Websites
http://www.odci.gov/cia/publications/factbook/index.html

-it
http://www.itools.com/research-it
http://www.xe.net/cuu
http://www.knowthis.com/internl/intrnatl.htm
http://www.ifaa.com
http://www.ica-ad.com
http://www.iaaglobal.org
http://europa.eu.int/en/comm/spc.html
http://www.odci.gov/cia/publications/factbook/index.html
http://www.itools.com/research-it
http://www.xe.net/cuu
http://www.knowthis.com/internl/intrnatl.htm
http://www.ifaa.com/
http://www.ica-ad.com/
http://www.iaaglobal.org/
http://europa.eu.int/en/comm/spc.html
Distribution Channels
and Logistic

Management
Notes based on
Introduction
Marketing channel decisions are among the most
important decisions that management faces. A
company’s channel decisions directly affect every
other marketing decision. Each channel system
creates a different level of revenues and costs and
reaches a different segment of target consumers.
Management must make channel decisions
carefully, incorporating today’s need with
tomorrow’s likely selling environment. Some
companies pay too little attention to their
distribution channels, but others have used
imaginative distribution systems to gain
competitive advantage.

1. Explain why companies use distribution channels and
discuss the functions these channels perform.
2. Discuss how channel members interact and how they
organize to perform the work of the channel.
3. Identify the major channel alternatives open to a company.
4. Explain how companies select, motivate and evaluate
channels.
5. Discuss the nature and importance of physical distribution
and integrated logistics management.
What is a Distribution Channel?
“A distribution channel is a set of
interdependent organizations
involved in the process of making a
product or service available for use or
consumption by the consumer or

business.”
-Gary Armstrong &
Philip Kotler
Distribution Channel Functions
Consumer Channel Map

0-level channel
1-level channel
2-level channel
3-level channel
Manufacturing
Manufacturing
Manufacturing
Manufacturing Wholesaler
Wholesaler
Jobber Retailer
Retailer
Retailer Consumer
Consumer
Consumer
Consumer
Channel Behavior & Organization

Channel Behavior
Convention Distribution Channel
vs. Vertical Market Systems
Manufacturer Manufacturer
Wholesaler
W
h
o
le
s
a
le
r
Retailer Retailer

Consumer Consumer
Conventional Marketing Channel Vertical Marketing Channel
Hybrid Marketing System
Producer
Distributor
Retailer
Dealer
Consumer
Segment 1
Consumer
Segment 2
Business
Segment 1
Business
Segment 2

Example: Distribution
Stop ‘n Shop.
People’s Bank and Dunkin’
Donuts realized that Stop ‘n
Shop had a captive
audience. They built their
distribution/service centers
inside the supermarket
chain’s giving users “one
stop shopping” while
maximizing their own
distribution channels.
Channel Design Decisions
onsumer Service Needs
Channels

Channel Management Decisions
Selecting
Training
Motivating
Evaluating
F
e
e
d
b
a
c
k
What is Marketing Logistics?
“Marketing Logistics (or Physical
Distribution) is the planning,
implementation and controlling the

physical flow of materials, final goods
and related information from points
of origin to points of consumption to
meet a customers requirements at a
profit.”
-Gary Armstrong &
Philip Kotler
Major Logistic Functions
Fitzgerald Fun Fact
-Cola’s bottling plant, the real profit maker
While the cola syrup was the

primary product of Coca-
Cola in the beginning, they
began to diversify with their
related products. Now, the
Coca-Cola bottling plant is
more profitable than the
actual cola syrup sales.
Integrated Logistic Management
Partnerships
-Party Logistics
Key Terms
•Administered VMS
•Channel Conflict
•Channel Level

•Contractual VMS
•Conventional Distribution
Channel
•Corporate VMS
•Direct Marketing Channel
•Distribution Center
•Distribution Channel
•Exclusive Distribution
•Franchise Organization
•Horizontal Marketing System
•Hybrid Marketing Channel
•Indirect Marketing Channel
•Integrated Logistics
Management
•Intensive Distribution
•Intermodal Transportation
•Physical Distribution
•Selective Distribution
•Third-party Logistics Provider

•Vertical Marketing System
(VMS)
Relevant Websites
http://www.mcdonalds.com
icken
http://www.kfc.com
http://www.nike.com
http://www.ford.com
http://www.ups.com
http://www.mcdonalds.com/
http://www.kfc.com/
http://www.nike.com/
http://www.ford.com/
http://www.ups.com/
Retailing and

Wholesaling
Notes based on
Introduction
Retailing and wholesaling consists of many
organizations bringing goods and services from
the point of production to the point of use.
Retailing includes all activities involved in selling
goods or services directly to final consumers for
their personal, nonbusiness use. Wholesaling
includes all the activities involved in selling
goods or services to hose who are buying for the
purpose of resale or business use.
Although most retailing is conducted in retail
stores, in recent years, nonstore retailing has
increased enormously. Wholesalers, too, have
experienced recent environmental changes,
most notably mounting competitive pressures.

1. Explain the roles of retailers and wholesalers in the
distribution channel.
2. Describe the major types of retailers and give examples of
each.
3. Identify the major types of wholesalers and give examples
of each.
4. Explain the marketing decisions facing retailing and
wholesaling.
What is Retailing?
“Retailing is all the activities
involved in selling goods or services
directly to final consumer’s for their
personal, non-business use.”
-Gary Armstrong &
Philip Kotler

Product Line Retailers
Example: Retailers
-Mart
The giants of retailing are
Home Depot and Wal-Mart.
Because of their size, they

are able to buy items in bulk
and get the lowest prices
around. Since their cost is so
much less than the “mom &
pop” businesses, they are
able to sell the products at a
lower price. Due to their size,
they also have a larger
selection than smaller stores.
Relative Price Retailers
nt Stores
-Price Stores
-Price Retailers
Non-Store Retailing

-to-Door Selling
Fitzgerald Fun Fact
The Roman Empire developed the
first vending machine. It was a
Holy Water dispenser inside one of
their temples. You would drop a
coin into the top of the machine.
The weight of the coin would
press down on a lever, which
would open a small valve,
dispensing the water. Eventually,
the coin would slide off the lever
and the valve would close,
shutting off the Holy Water.
Retail Marketing Decisions
Retail

Strategy
Target Market
Retail Store
Positioning
Retailer
Marketing Mix
Product &
Service
Assortment
Prices
Promotions
Place (location)
The Future of Retailing
-Cycles
-store Retailing

-retailers
Example: Retailing
Many believe that
Airports are the malls of
the future. Customers
arrive early (before their
flight) and, once they
pass through security,
they are unable to leave.
People traveling tend to
have disposable income/
extra spending money
and they are trapped in
the airports with nothing
to do but shop.

What is Wholesaling?
“Wholesaling is all the activities
involved in selling goods and services
to those buying for resale or business
use.”
-Gary Armstrong &
Philip Kotler
Wholesale Marketing Decisions
Wholesaler
Strategy
Target Market
Service
Positioning
Wholesaler
Marketing Mix
Product &
Service
Assortment
Prices

Promotions
Place (location)
Types of Wholesalers
Key Terms
•Agent
•Automatic Vending
•Broker
•Category Killer

•Chain Stores
•Convenience Store
•Department Store
•Direct Marketing
•Discount Store
•Door-to-door Retailing
•Factory Outlets
•Franchise
•Independent off-price
Retailer
•Manufacturers’ Sales
Branches and Offices
•Merchant Wholesaler
•Off-price Retailer
•Retailers
•Retailing
•Shopping Center
•Specialty Store
•Supermarkets

•Warehouse Club
•Wheel of Retailing Concepts
•Wholesaler
•Wholesaling
Relevant Websites
http://www.the-dma.org/indexshtml
http://www.mediacentral.com/direct
http://www.dmnews.com
ing Resources
http://www.direct-marketing.com
http://www.dmworld.com
http://www.infoguru.com

http://www.the-dma.org/indexshtml
http://www.mediacentral.com/direct
http://www.dmnews.com/
http://www.direct-marketing.com/
http://www.dmworld.com/
http://www.infoguru.com/
Integrated Marketing
Communications:
Advertising and
Public Relations
Notes based on
Introduction
Modern marketing calls for more than just
developing a good product, pricing it attractively,
and making it available to target customers.

Companies also must communicate with current and
prospective customers to inform them about
product benefits and carefully position products in
consumers minds. To do this, they must use
integrated marketing communications strategies.
Advertising – the use of paid media by a seller to
inform, persuade and remind about its products or
organizations – is a strong promotional tool. Public
Relations involves building good relations with the
company’s various publics.
1. Discuss the process and advantages of integrated marketing
communications.
2. Define the 5 promotional tools and discuss the factors that
must be considered in shaping the overall promotional mix.
3. Describe and discuss the major decisions involved in
developing an advertising program.
4. Explain how companies use PR to communicate with their
public.

Marketing Communications Mix
– any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an identified
sponsor
- personal presentation by the firms sales
force for the purpose of making sales and building customer
relationships
– short-term incentives to encourage the
purchase or sale of product or service
– Building good relations with the
company’s various publics by obtaining favorable publicity,
building up a good corporate image, and handling or heading
off unfavorable rumors, stories and events.
– Direct communications with carefully
targeted individual consumers to obtain an immediate
response – the use of mail, telephone, fax, e-mail and other
nonpersonal tools to communicated directly with specific
consumers or to solicit a direct response.
What is Integrated Marketing
Communications?

“Integrated Marketing Communications
is the concept under which a company
carefully integrates and coordinates its
many communication channels to deliver a
clear, consistent and compelling message
about the organization and its products.”
-Gary Armstrong &
Philip Kotler
Communications
Advertising Personal
Selling
Sales
Promotion
Public
Relations
Direct
Marketing
Carefully blended mix
of promotional tools
creates consistent,

clear and compelling
company and
promotional
messages
Push Strategy vs. Pull Strategy
Producer Retailers &
Wholesalers
Consumers
Consumer Retailers &
Wholesalers
Producer
(a) Push Strategy
(b) Pull Strategy
Producer
marketing
activities
(personal
selling, trade,
promotion)
Reseller
marketing

activities
(personal selling,
advertising,
sales promotion)
Demand Demand
Producer marketing activities (consumer advertising,
sales promotion, other)
Example: Relationships
carve out a new niche in the automobile
market, focusing on the Pull Strategy.
They didn’t haggle. They sent
birthday cards to the car’s
owner on the anniversary of
their purchase of a Saturn.
They would invite all Saturn
owners to come to a big picnic
on at the headquarters. By
interacting with their
customers on a personal level,
they hoped to use relationship
marketing to build their brand
and get consumers to ASK for
a Saturn.

Major Decisions in Advertising
Objectives Setting
Budget Decisions
Message Decisions
Campaign Evaluation
Media Decisions
Profiles of Major Media Types
Newspapers
Advantages: Flexibility, timeliness, good local market coverage,
broad
acceptability, high believability
Limitations: Short life, poor reproduction quality, small pass-
along
audience

Television
Advantages: Good mass-market coverage, low cost per
exposure,
combines sight, sound and motion, appealing to the senses
Limitations: High absolute cost, high clutter, fleeting exposure,
less
audience selectivity
Direct Mail
Advantages: High audience selectivity, flexibility, no ad
competition within
the same medium, allows personalization
Limitations: Relatively high cost per exposure, “junk mail”
image
Profiles of Major Media Types cont.
Radio
Advantages: Mass use; high geographic and demographic
selectivity; low
cost
Limitations: Audio only; fleeting exposure; lower attention;
non-

standardized rates; fragmented audiences
Magazines
Advantages: High geographic and demographic selectivity;
credibility and
prestige; high-quality reproduction; long life; good pass-
along readership
Limitations: Long ad purchase lead time; waste circulation
Outdoor
Advantages: Flexibility; high repeat exposure; low cost; low
message
competition
Limitations: Little audience selectivity; creative limitations
Advertising Agencies
specialize in creative, media, research or
business (account planning).
commission system because it no longer
accurately reflects the services performed

few of the services that can be provided by
the agency, so diversification efforts have
been limited.
Example: Advertising
whole new worlds to sell their products
Green Giant
Agencies created campaigns
in which consumers would
visit these new, wondrous
lands and discover exciting
tastes, allowing them to
escape the boredom of
everyday foods.
Major Public Relation Tools

Fitzgerald Fun Fact
In the 1898 World’s Fair in
Chicago a small brewery
named Pabst won the grand
prize for the best beer – the
blue ribbon.
Ever since then Pabst’ Blue

Ribbon has used that
testimonial to sell its most
popular beer.
Key Terms
•Advertising
•Advertising Agency
•Advertising Objective
•Affordable Method
•Competitive-parity Method
•Direct Marketing
•Integrated Marketing
Communications
•Marketing Communications
Mix
•Objective-and-task Method
•Percentage-of-sales Method
•Personal Selling

•Public Relations
•Pull Strategy
•Push Strategy
•Sales Promotion
Relevant Websites
wswire
http://www.prnewswire.com
http://www.aapor.org
http://www.prsa.org
http://www.onlinewbc.org/DOCS/market/adv_vs_pr.html
http://www.onlinewbc.org/DOCS/market/mk_adv_medium.html
http://www.aaaa.org
s (ANA)
http://www.ana.net

http://www.ponlinernewswire.com/
http://www.aapor.org/
http://www.prsa.org/
http://www.onlinewbc.org/DOCS/market/adv_vs_pr.html
http://www.onlinewbc.org/DOCS/market/mk_adv_medium.html
http://www.aaaa.org/
http://www.ana.net/
Communications:
Personal Selling and
Sales Promotion
Notes based on
Introduction

Personal selling and sales promotion are two
additional tools for communicating with and
persuading current and prospective customers.
Selling is one of the world’s oldest professions and
people who do the selling are called by a variety of
names. Regardless of their titles, members of the
sales force play a key role in modern marketing
organizations.
To be successful in personal selling, a company must
fist build and then manage an effective sales force.
Sales promotion consist of short-term incentives to
encourage purchase of sales of a product or service.
Whereas advertising and personal selling offer
reasons to buy a product or service, sales promotion
offers a reason to buy now.
1. Discuss the role of a company’s sales people in creating
value for customers and building customer relationships.
2. Identify and explain the 6 major sales force management
steps.
3. Discuss the personal selling process, distinguishing between
transaction-oriented marketing and relationship marketing.

4. Explain how sales promotion campaigns are developed and
implemented.
What is a Salesperson?
“A Salesperson is an individual acting
for a company by performing one or
more of the following activities:
prospecting, communicating, services
and information gathering.”
-Gary Armstrong &
Philip Kotler
Fitzgerald Fun Fact
Broadway play about a sales department,
demonstrates the stereotypical cut-throat
nature of sales.
The prizes in a new office contest:
1st prize – A new car

2nd prize – A set of steak knives
3rd prize – Your fired
Sales Force Management
Decisions
Designing sales force
strategy and structure
Recruiting and
selecting salespeople
Training Salespeople
Supervising
salespeople
Compensating
salespeople
Evaluating
salespeople
Some Traits of Good Sales people

-Confidence
Example: Sales & Marketing
The Walt Disney Company
knows how important it is to
know your audience. It is said
that every up-and-coming
executive must put on the
Mickey Mouse outfit and walk
around the theme parks for a
day so they will understand
what Mickey Mouse really
means to parents and
children.

How Salespeople Spend
Their Time
Companies look
for ways to
increase the
amount of time
salespeople
spend selling.
Telephone
Selling
25.1%
Administrative
Tasks 16%
Waiting/
Travel
17.4%
Face-to-
face
28.8%
Service
Calls
12.7%

What is the Selling Process?
“The Selling Process is the steps that
the salesperson follows when selling,
which include prospecting and qualifying,
pre-approach, approach, presentation
and demonstrations, handling objections,
closing and follow-up.”
-Gary Armstrong &
Philip Kotler
Major Steps in Effective Selling
Prospecting and
qualifying
Pre-approach
Approach
Handling objections
Presentation and

demonstration
Closing
Follow-up
Major Sales Promotion Tools
Consumer
Promotion Tools
tronage rewards
-of-purchase
displays
games

Trade Promotion
Tools
advertising items
Business Promotion
Tools
shows
Key Terms
•Advertising Specialty
•Allowance
•Approach
•Cash Refund Offer
•Closing

•Contests, Sweepstakes, Games
•Coupon
•Customer Sales Fore Structure
•Discount
•Follow-up
•Handling Objections
•Telemarketing
•Territorial Sales Force Structure
•Workload Approach
•Inside Sales Force
•Outside Sales Force
•Patronage Reward
•Point-of-purchase Promotion
•Pre-approach
•Premium
•Presentation
•Price Pack
•Product Sales Force Structure

•Prospecting
•Relationship Marketing
•Sales Force Management
•Sales Promotion
•Sales Person
•Sample
•Selling Process
•Team Selling
Relevant Websites
http://www.promomagazine.com
America (PMAA)
http://www.pmaalink.org
http://www.ppa.org
http://www.creativemag.com

http://www.popmag.com
-of-Purchase Advertising Institute (POPAI)
http://www.popai.org
http://www.entrepreneurmag.com
http://www.edithroman.com/index.html
http://www.knowthis.com/selling/sales.htm
http://www.promomagazine.com/
http://www.pmaalink.org/
http://www.ppa.org/
http://www.creativemag.com/
http://www.popmag.com/
http://www.popai.org/
http://www.entrepreneurmag.com/
http://www.edithroman.com/index.html
http://www.knowthis.com/selling/sales.htm
New Product
Development and
Product Life-Cycle
Strategies

Notes based on
Introduction
Every product has a life-cycle marked by a
changing set of problems and opportunities.
A company’s current products face limited life
spans and must be replaced by newer products.
But new products can fail – the risks of
innovation are as great as the rewards. The key
to successful innovation lies in a total-company
effort, strong planning, and a systematic new
product development process.
Companies find and develop new product ides
from a variety of sources, both internally and
externally, to augment their current products in
the “decline” stage of the life-cycle.

1. Explain how companies find and develop new-product ideas.
2. List and define the steps in the new-product development.
3. Describe the stages of the product life-cycle.
4. Describe how marketing strategies change during the
products life cycle.
Product Development Strategy
Week 5 Notes MKT 20
Idea Generation
Idea Screening
Concept Development
and Testing
Marketing Strategy
Business Analysis

Product
Development
Test Marketing
Commercialization
Fitzgerald Fun Fact
-Cola has introduced many lines of products,
so they can capture more market share.
Every inch of shelf
space that Coke has is
one less inch their
competitor has, so the
more products they
introduce (as long as
they don’t cannibalize
their main brand) are a
benefit.
Speeding Up Product
Development

– One company works
to complete its stage before
moving the product to the next
company
imultaneous – Various
companies work closely together to
save time and increase
effectiveness
Sales & Profit Life Cycle
Introduction Growth Maturity Decline
Time
S
a
le
s
&
P
r
o
fi
t

s
(
$
)
Product Life Cycle Stages
Example: Product Life Cycle
Intro Growth Maturity Decline

Multimedia iPod DVDs VCRs
Phones
Key Terms
•Business Analysis
•Commercialization
•Concept Testing
•Decline Stage
•Fad
•Fashion
•Growth Stage
•Idea Generation
•Idea Screening
•Introduction Stage
•Marketing Strategy
Development
•Maturity Stage

•New-product Development
•Product Concept
•Product Development
•Product Life Cycle (PLC)
•Sequential Product
Development
•Simultaneous Product
Development
•Style
•Test Marketing
Relevant Websites
See how the large company’s introduce new products and
deal with product life-cycle changes.
http://www.bicpromo.com
http://www.disney.com

http://www.kelloggs.com
http://www.intel.com
-Packard
http://www.hp.com
http://www.ge.com
http://www.mgmua.com
http://www.bicpromo.com/
http://www.disney.com/
http://www.kelloggs.com/
http://www.intel.com/
http://www.hp.com/
http://www.ge.com/
http://www.mgmua.com/
Pricing Products:
Pricing Considerations
and Strategies

Notes based on
Introduction
Price can be defined as the sum of the values
that consumers exchange for the benefits of
having and using the product or service. It is
the only marketing-mix element that produces
revenue; all other elements represent costs.
Even so, many companies are not good at
handling pricing. Pricing decisions are subject
to an incredibly complex array of
environmental and competitive forces. Both
external and internal factors influence pricing
decisions and a proper equilibrium must be
maintained between the two.

1. Identify & explain the external & internal factors affecting a
firms pricing decisions.
2. Contrast the three general approaches to setting prices.
3. Describe the major strategies for pricing imitation and new
products.
4. Explain how companies find a set of prices that maximize
the profits from the total product mix.
5. Discuss how companies adjust their prices to take into
account different types of customers and situations.
6. Discuss the key issues relating to initiating and responding
to price changes.
What is Price?
“Price is the amount of money
charged for a product or service, or
the sum of the values that consumers
exchange for the benefits of having
or using the product or service.”
-Gary Armstrong &
Philip Kotler

Factors Affecting Price Decisions
Internal
Factors:
Marketing
Objectives
Marketing-Mix
Strategy
Costs
Organizational
Considerations
Pricing
Decisions
External
Factors:
Nature of the
Market & Demand
Competition
Other
Environmental
Factors
(Economy, Reseller,

Government)
Demand Curves
Price
P1
P2
Q1 Q2
Quality, Demand per period
Example: Tiered Pricing
Movie Theater’s use a
“tiered pricing” structure
to even out their seats.
By charging
demographics (Adult,
Child & Senior Citizen)

different pricing and
different prices at
different times (regular
and matinee) they can
maximize their show
times, even out their
demand cycle and make
a profit at each showing.
Different Types of Marketing
What is a Price Elasticity?
“Price Elasticity is how responsive
demand will be to a change in price.
If demand hardly changes with a

small change in price, we say
demand is inelastic. If demand
changes greatly, we say the demand
is elastic.”
-Gary Armstrong &
Philip Kotler
Price Considerations
Competitor’s
prices and
other factors
Low Price
No possible profit
at this end
High Price
No possible
demand at this
end
Customers’
perception of
value

Price
Costs
Breakeven Chart
C
o
s
t
i
n
D
o
ll
a
r
s
(
t
h
o
u

s
a
n
d
s
)
1,200
1,000
800
600
400
200
10 20 30 40 50 60 70
Sales Volume in Units (thousands)
Total Revenue
Total Cost
Fixed Cost
Break Even Point
Target Profit

Fitzgerald Fun Fact
It takes a short video clip that can
be processed and downloaded onto
a CD-ROM. The “shell” of the
camera will then be reused by CVS.
The technology to develop was
expensive, but CVS is pricing it
lower than their break-even cost.
They are losing money on the first
purchases, and CVS will not see a
profit until the 2nd or 3rd use. They
are hoping the concept will catch
on and the disposable video
camera will be used many times.
Cost-based pricing vs.
Value-based pricing
Product Cost Price Value Customer
Customers Value Price Cost Product

(a) Cost-Based
(b) Value-Based
Price – Quality Strategies
Good-Value
Strategy
Premium
Strategy
Overcharging
Strategy
Economy
Strategy
Price
Higher Lower
P
r
o
d
u
c
t

Q
u
a
li
t
y
L
o
w
e
r
H
ig
h
e
r
Product-Mix Pricing Strategy
-Line Pricing
-Product Pricing
-Product Pricing

Price-Adjustment Strategies
Key Terms
•Allowance
•Break-even Pricing
•Byproduct Pricing

•Captive-product Pricing
•Competition-based Pricing
•Cost-plus Pricing
•Discount
•Market-penetration Pricing
•Market-skimming Pricing
•Optional-product Pricing
•Price
•Price Elasticity
•Product-bundle Pricing
•Product-line Pricing
•Promotional Pricing
•Psychological Pricing
•Reference Prices
•Segmented Pricing
•Target Costing
•Value Pricing
•Value-based Pricing

Relevant Websites
http://www.innovationworks.org/resources/library/be.html
http://wwwinnovationworks.org/resources/library/pricing.html
http://www.mra-net.org
http://www.surveys.com
http://www.gallup.com
http://www.idc.com
http://ww.jdpower.com
http://www.innovationworks.org/resources/library/be.html
http://wwwinnovationworks.org/resources/library/pricing.html
http://www.mra-net.org/
http://www.surveys.com/
http://www.gallup.com/
http://www.idc.com/
http://ww.jdpower.com/

Product and Service
Strategy
Notes based on
Introduction
A product is more than a simple set of tangible
features. Many marketing offers consist of
combinations of both tangible goods and services,
ranging from pure tangible goods at one extreme
to pure service at the other.
Each product or service offered to customers can
be viewed on three levels: (1) the core product
consists of the core problem-solving benefit that
consumers seek when they buy a product; (2) the

actual product exits around the core and includes
the quality level, features, design, brand name and
packaging; (3) the augmented product is the
actual product plus the various services and
benefits offered with it, such as a warranty, free
delivery, installation and maintenance.
1. Define product and the major classifications of products or
services.
2. Describe the roles of product and service brands, packaging,
labeling and product support services.
3. Explain the decisions companies make when developing
product lines and mixes.
4. Identify the four characteristics that affect the marketing of
a service.
5. Discuss the additional marketing considerations for services.
What is a Product?

“A product is anything that can be
offered to a market for attention,
acquisition, use or consumption that
might satisfy a want or need.”
-Gary Armstrong &
Philip Kotler
What is a Service?
“A Service is any activity or benefit
that once party can offer to another
that is essentially intangible and does
not result in the ownership of
anything.”
-Gary Armstrong &
Philip Kotler
Levels of Products

Core benefit
or service
Packaging
FeaturesBrand
Name
Quality
Level
Design
Installation
Warranty
After
Sale
Service
Delivery
and
Credit
Augmented Product
Actual Product
Core Product

Product Classification
pecialty Products
•Organizations
•Persons
•Places
•Ideals
Product Attributes

Product Decisions
Product
Attributes
Branding Packaging Labeling
Product
Support
Services
What is a Brand?
“A Brand is a name, term, sign,
symbol or design (or a combination
of these) intended to identify the
goods or services of one seller or
group of sellers and to differentiate
them from those of competitors.”
-Gary Armstrong &
Philip Kotler

Example: Brand Extensions
brand extensions and marketing.
After Star Wars was
released, action figures sold
so well that many products
were created to capitalize on
the brand name and images.
This is one of the first times
in history when marketing
was used to promote a
movie.
Star Wars creator, George
Lucas, knew the power of
marketing and branding.
Brand Decisions
Brand Name

Selection
Selection
Protection
Brand
Sponsor
Manufacture's
Brand
Private Brand
Licensed Brand
Co-branding
Brand
Strategy
New Brands
Line Extension
Brand Extension
Multibrands
Brand Strategies

Brand
Extension
Multibrands
Line
Extension
New Brands
E
x
is
t
in
g
NewExisting
N
e
w
Product Category
B
r
a
n
d
N

a
m
e
Example: Packaging
The popular story is that
Kentucky Fried Chicken saw
a growing trend away from
fried food. They attempted
to eliminate that negative
unhealthy impression by
changing their name from
Kentucky Fried Chicken to
KFC on all their promotional
materials and packaging.
They wanted to brand
themselves as the healthy
choice for chicken.
Service Characteristics

Intangibility
Services cannot
be seen, tasted,
felt, heard or
smelled before
purchase
Variability
Quality of service
depends on who
provides them and
when, where and
how
Inseparability
Services cannot be
separated from their
providers
Perishability

Services cannot
be stored for later
Services
Kevin W. Fitzgerald 2005
Designing the Business Portfolio
Company
CustomerEmployees
External
Marketing
Internal
Marketing
Interactive
Marketing
Fitzgerald Fun Fact

– Marketers created a
campaign around emotions to increase sales.
As they danced to Marvin
Gaye’s “Heard it through
the grape vine”, customers
became captivated by the
raisins.
The campaign was VERY
successful and raisin sales
dramatically increased.
Key Terms
•Brand
•Brand Equity
•Brand Extension
•Co-Branding
•Consumer Product
•Convenience Product
•Industrial Product

•Interactive Marketing
•Internal Marketing
•Line Extension
•Packaging
•Private Brand
•Product
•Product Line
•Product Mix
•Product Quality
•Service
•Service Inseparability
•Service Intangibility
•Service Perishability
•Service Variability
•Service – Profit Chain
•Shopping Product
•Slotting Fees
•Social Marketing

•Specialty Product
•Unsought Product
Relevant Websites
Solution
s
http://www.adsolutions.com
http://www.apt.com
omotion
http://www.salespromotion.com
http://www.interpromo.com

http://www.promotions.com
http://www.storepoint.com
-Pak Coupons
http://www.valpak.com
http://www.adsolutions.com/
http://www.apt.com/
http://www.salespromotion.com/
http://www.interpromo.com/
http://www.promotions.com/
http://www.storepoint.com/
http://www.valpak.com/
Consumer and
Business Buying
Behavior

Notes based on
Introduction
Consumer and business buyers vary greatly in their
characteristics and circumstances. Understanding
consumer and business buying behavior is one of
the biggest challenges marketers face.
The consumer market consists of all the individuals

and households who buy or acquire goods and
services for personal consumption.
The business market comprises all organizations
that buy goods and services for use in the
production of other products and services or for
the purpose of reselling or renting them to others
at a profit.
1. Understand the consumer market and the major factors that
influence consumer buying behavior.
2. Identify and discuss the stages in the buyer decision.
3. Describe the adoption and diffusion process for new

products
4. Define the business market and identify the major factors
that influence business buying behavior.
5. List and define the steps in the business buying behavior.
Consumer Markets and
Consumer Buyer Behavior
Consumer Behavior
•Culture
•Social
•Personal

•Psychological
•Buyer
•Need Recognition
•Information Search
•Evaluation of Alternatives
•Purchase Decision
•Post-purchase Decision
Products)
Borders

Factors Influencing
Consumer Behavior
Cultural
Culture
Sub-culture
Social Class
Social
Reference
Group
Family
Roles & status
Personal

Age &
Lifestyle
Occupation
Economic
Lifestyle
Personality
Psychology
Motivation
Perception
Learning
Belief &
Attitude
Buyer

Maslow’s Hierarchy of Needs
Psychological Needs
(food, water, shelter)
Safety Needs
(security, protection)
Social Needs
(sense of belonging, love)
Esteem Needs
(self-esteem, recognition)
Self-
Actualization
(self-development
and realization)

5
1
2
3
4
Example: Loyalty
that follow them around.
Brand loyalty in Krispy
Kreme is very high. There

are groups that attend every
store opening and
newsletters that talk about
the latest Krispy Kreme
news. These grass roots
campaigns use customers to
spread brand awareness,
not marketers like in most
company’s.
Consumer Decision Process
Need
Recognition
Information
Search
Evaluation of
Alternatives

Post-purchase
Behavior
Purchase
Decision
Buyer Decision for New Products
tion Process
•Awareness
•Interest
•Evaluation

•Trial
•Adoption
Characteristics
•Relative Advantage
•Compatibility
•Complexity
•Divisibility
•Communicability

Model of Business Buyer
Behavior
The Environment
Market
Stimuli
Product
Price
Placement
Promotion
Other
Stimuli
Economy
Technology

Political
Culture
Competitive
The Buying Organization
Organizational Influences
The Buying Center
Interpersonal and
Individual
Influences
Buying
Decision
Process
Buyer Response
Product or Service
Choice
Supplier Choice

Order Quantity
Delivery Terms
and Times
Service Times
Payment
Major Business Behavior
Buying Influences
Environmental
Economic
Development
Supply
Conditions

Technological
Change
Political and
Regulatory
Development
Competitive
Developments
Cultural and
Customs
Organizational
Objectives
Policies
Procedures
Organizational
Structure

Systems
Interpersonal
Authority
Status
Empathy
Persuasiveness
Individual
Age
Income
Education
Job Position
Personality
Risk Attitude

Buyer
Example: Loyalty
Barbie has changed her look
many times over the years
to keep in-tune with girls’
current trends. Most
customers buy several dolls
and set’s of clothing
(although, only one Ken).

Performance
Review
Order-Routine
Specification
Supplier
Selection
Proposal
Solicitation
Supply
Watch
Product
Specification
Consumer Buying Process
General Need

Description
Problem
Recognition
Key Terms
•Adoption Process
•Attitude
•Belief
•Business Buyer Behavior
•Buying Center

•Cognitive Dissonance
•Consumer Buyer
Behavior
•Consumer Market
•Culture
•Derived Demand
•Groups
•Learning
•Lifestyle
•Modified Rebuy
•Motive (or Drive)
•New Product
•New Task

•Opinion Leaders
•Perception
•Social Class
•Straight Rebuy
•Subculture
•Systems Selling
•Value Analysis
Relevant Websites
http://www.census.gov

http://www.usdata.com
http://www.forrester.com
http://www.demographics.com
ng
http://www.napco.com/tm/tmcover.html
http://www.awool.com
http://www.targetweb.com
http://www.arfsite.org
ion (MRA)
http://www.mra-net.org

http://www.census.gov/
http://www.usdata.com/
http://www.forrester.com/
http://www.demographics.com/
http://www.napco.com/tm/tmcover.html
http://www.awool.com/
http://www.targetweb.com/
http://www.arfsite.org/
http://www.mra-net.org/
Market Segmentation,
Targeting and
Positioning for
Competitive Advantage

Notes based on
Introduction
Marketers realize that they cannot appeal to all
consumers in their markets – or at least not to all
consumers the same way. The day’s of mass
marketing (one type of marketing approach for all
consumers) are over! Consumers are too numerous
and too varied in their needs and buying practices.
Instead, today’s marketers practice target
marketing – identifying unique consumer
marketing segments which they target with
different messages, prices, distribution,
advertising, etc. The right products are tailored to
reach each market more efficiently.

1. Define the 3 stages of target marketing: marketing
segmentation, market targeting and market positioning.
2. List and discuss the major levels of marketing segmentation
and bases for segmenting consumer and business markets.
3. Explain how companies identify attractive market segments
and chose a market coverage strategy.
4. Discuss how companies position their products for maximum
competitive advantage in the marketplace.

Target Marketing
– Dividing a
market into distinct groups of buyers
with different needs, Characteristics or
behaviors
– Evaluate each
market segments attractiveness
– Setting the
competitive positioning for the product
and creating a detailed marketing plan
Market Environment

Marketing
Position
Marketing
Target
Marketing
Segmentation
6. Develop marketing mix
for each segment
5. Develop positioning for
each target segment
4. Select the target
segments
3. Develop measures of
segment attractiveness
2. Develop profiles of
resulting segments

1. Identify bases for market
segmentation
Marketing Segmentation
Mass
Market
Segment
Market
Niche
Market Micromarketing
No
Segmentation
Complete
Segmentation

Levels of Marketing Segmentation
t Marketing

Fitzgerald Fun Fact
happens when you don’t segment your market.
By 1924 over half of the world’s
cars were Ford Model T’s.
Reputedly, Henry Ford said, “You
can have it in any color, as long as
it’s black.” General Motors realized
consumers wanted to be
individuals. They created the
Chevrolet in many styles (sedan,
roadster and truck) and offered
them in a wide variety of colors, thanks to Du Pont’s colorful
paint. GM’s President said, “A car for every purse and
purpose.”
GM’s market segmentation won out and in 1927
Ford ceased production on the Model T.

Consumer Marketing
Segmentation

Example: Segmentation
ams Dog food uses a dual approach to
market segmentation
The dog food itself is
segmented by the pet’s age
(puppy, adult, active adult
and mature). Each formula
targets a different age and
need. The dog food also
targets the behavioral and
psychographic segments of
the pet’s owners, who want
to buy the best brand of
food for their dog.
Requirements for Effective
Segmentation

le
Market Coverage Strategies
(a) Undifferentiated Marketing
(b) Differentiated Marketing

(c) Concentrated Marketing
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Segment 1
Segment 2

Segment 3
Segment 1
Segment 2
Segment 3
Company
Marketing
Mix
Positioning Strategies
ferentiation

Example: Positioning
In the May ’97 issue of Sports
Illustrated for Kids, Chevy ran a 2-
page spread advertising their Chevy
Ventura. They showed kids watching
video’s in the back-seat of the
minivan.
They were targeting the
children (or what they called
the “backseat consumer”) as
potential decision makers/

influencers in the car-buying
process.
USP (Unique Selling Proposition)
Pick an attribute and become “Number one”
in it:

Communicate the USP to the
consumers
Example: USP
differentiates themselves from their
competition and stand-out to consumers.
Domino’s Delivers. Pizza delivered in 30
minutes or less or it’s free.
Guaranteed Overnight Delivery. When it
absolutely, positively has to be there overnight.
Constant span, virus and internet protection

and security. It’s better with the Butterfly.
Key Terms
•Age & Life-Cycle
Segmentation
•Behavioral Segmentation
•Benefit Segmentation
•Competitive Advantage
•Concentrated Marketing
•Demographic Segmentation
•Differentiated Marketing

•Gender Segmentation
•Geographic Segmentation
•Income Segmentation
•Individual Marketing
•Intermarket Segmentation
•Local Marketing Market
•Market Positioning
•Market Segmentation
Market Targeting
Micromarketing
•Niche Marketing Occasion
Segmentation
•Product Position
•Psychographic Segmentation

•Segment Marketing Target
Market
•Undifferentiated Marketing
Relevant Websites
http://www.future.sri.com/VALS/presurvey.shtml
tion information
http://www.dssresearch.com/library/segment/understanding.asp
http://www.usadata.com
http://www.cheskin.com/think/articles/teempaper.html

http://www.demographics.com
http://www.marketingtools.com
http://www.americanbusinesspress.com
http://www.ama.org
http://www.brandweek.com
http://www.future.sri.com/VALS/presurvey.shtml
http://www.dssresearch.com/library/segment/understanding.asp
http://www.usadata.com/
http://www.cheskin.com/think/articles/teempaper.html
http://www.demographics.com/
http://www.marketingtools.com/
http://www.americanbusinesspress.com/
http://www.ama.org/
http://www.brandweek.com/

The Global Marketing
Environment
Notes based on
Introduction

Companies must constantly watch and adapt to the
marketing environment in order to seek
opportunities and ward off threats. The marketing
environment comprises all the actors and forces
influencing the companies ability to transact
business effectively with its target market.
A microenvironment consists of other actors close
to the company that combine to form the
company’s value delivery system or which affect its
ability to serve its customers. The
macroenviromnet consists lf larger societal forces
that affect the entire microenviroment.
1. Describe the environmental forces that affect the companies

ability to serve its customers.
2. Explain how changes in the demographic and economic
environments affect marketing decisions.
3. Identify the major trends in the firm’s natural and
technological environments.
4. Explain the key changes in the political and cultural
environments.
5. Discuss how companies can react to the marketing
environment.
Market Environment
The Marketing Environment
Macroenvironment Microenvironment

The Micro Environment
•Resellers
•Physical distribution Firms
•Marketing Service Agencies
•Financial Intermediaries
•Financial
•Media

•Government
•Citizen-action
•Local
Internal Environment
Company
Example: Distribution
-Cola distributes its products to many
countries around the world.

While the product itself
remains the same,
packaging, marketing and
distribution are all affected
by international expansion
and delivery.
Types of Consumer Markets
Reseller
Markets
Company
Types of Publics

Company
The Macro Environment
Natural

Macroeconomic Forces
Company
Example: Economic Forces
The Marriott corporation
targets various economic
levels with different types
of hotels.

High end-
Middle-
Economy-
Key Terms
•Baby Boom
•Cultural Environment
•Demography
•Economic Environment
•Engel’s Laws
•Environmental

Management Prospective
•Macroenvironment
•Marketing Environment
•Marketing Intermediaries
•Microenvironment
•Natural Environment
•Political Environment
•Public
•Technological Environment
Relevant Websites

http://www.ftc.gov
Division (NAD)
http://bbb.org/advertising
http://www.bbb.org/advertising/narb.html
uropean Commission for Advertising/Consumer Law
http://eurpoa.eu.int/en/comm/spc/spc.html
http://ww.fda.gov
http://ww.epse.gov
http://www.ftc.gov/
http://bbb.org/advertising
http://www.bbb.org/advertising/narb.html
http://eurpoa.eu.int/en/comm/spc/spc.html
http://ww.fda.gov/

http://ww.epse.gov/
Marketing Research
and Information
Systems
Notes based on
Introduction

In today’s complex and rapidly changing
environment, marketing managers need more and
better information to make effective and timely
decisions. This greater need for information has
been matched by the explosion of information
technologies for supplying information. Using
today’s new technologies, companies can now
handle great quantities of information, sometimes
even too much.
Yet marketers often complain that they lack
enough of the right kind of information or have an
excess of the wrong kind. In response, many
companies are now studying their managers’
information needs and designing information
systems to satisfy those needs.

1. Explain the importance of information to the company.
2. Define the marketing information system and define its
parts.
3. Outline the steps in the market research process.
4. Compare the advantage and disadvantage of various
methods of collecting information.
5. Discuss the special issues some marketing researchers face,
including public policy and ethical issues.
Marketing Information Systems

•Internal Data
•Marketing Intelligence
•Marketing Research
•Information Analysis
Marketing Research Process
Defining the
problem and
research

objectives
Developing
the research
plan for
collecting
information
Implementing
the research
plan, collecting
and analyzing
the data
Interpreting
and reporting
the data

Example: Research
– New Coke!
The quintessential market research disaster,
focus groups picked new coke over old
coke, but no one asked if they would BUY
the new coke over the old coke.
The researchers forgot to incorporate brand
familiarity and thus created a huge disaster.
Soon after they introduced new coke, and
eliminated old coke, complaints and
protests occurred. The eventually brought
back coke, now called Coke Classic, but
they have never truly recovered the market
share they lost.

Market Research Process
Objectives
•Exploration Research
•Descriptive Research
•Casual Research
Research Plan

formation
Example: Gathering Data
Every day, when you use a
supermarket “discount card” and have
your products scanned in to the
register, marketers are conducting
research on your buying habits.
If they see you always buy toothpaste
and milk, they will give you coupons
for milk the next time you buy

toothpaste.
Or if they see most
people buy cereal with
milk, but you don’t,
next time you will get
coupons for cereal.
Other Market Research
Considerations
-profits

Fitzgerald Fun Fact
– more than meets the eye.
A focus group was invited in to
a market research project to
rate some upcoming
commercials. They were given
free drinks and snacks to eat
while they were working.
Unknown to them, the real
research was on the snacks, not
the TV shows. This eliminated
the unconscious observation
bias that might taint a research
project.
Key Terms

•Casual Research
Descriptive Research
•Experimental Research
•Exploratory Research
•Focus Group
Interviewing
•Internal Databases
•Marketing Information
Systems (MIS)
•Marketing Intelligence
•Marketing Research
•On-line Databases
•On-line (Internet) Marketing

Research
•Observational Research
•Primary Data
•Sample
•Secondary Data
•Single-source Data Systems
•Survey Research
Relevant Websites
http://www.acnielsen.com

http://www.knowthis.com/research/marketingresearch.htm
http://www.marketresearch.com
http://www.decisionanalyst.com
http://www.researchinfo.com
http://www.hoovers.com
ron’s Online
http://www.barrons.com
http://somark.thomasregister.com
http://www.dbisna.com/dbis/dnbhome.htm
http://www.acnielsen.com/

http://www.knowthis.com/research/marketingresearch.htm
http://www.marketresearch.com/
http://www.decisionanalyst.com/
http://www.researchinfo.com/
http://www.hoovers.com/
http://www.barrons.com/
http://somark.thomasregister.com/
http://www.dbisna.com/dbis/dnbhome.htmSlide Number 1Slide
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Marketing in a
Changing World:
Creating Customer
Value and Satisfaction

Notes based on
Introduction
Many people think of marketing as only selling or
advertising. But marketing combines many
activities – marketing research, product
development, distribution, pricing, advertising,
personal selling and others – designed to sense,
serve and satisfy consumer needs while meeting

the organizations goals.
Marketing seeks to attract new customers by
promising superior value and to keep current
customers by delivering satisfaction. Marketing
operates within a dynamic global environment.
Rapid changes can quickly make yesterday’s
winning strategies obsolete – so marketers
constantly face new challenges and opportunities.
1. Define what marketing is and discuss its core concepts.
2. Explain the relationship between customer value,

satisfaction and quality.
3. Define marketing management and understand how
markets manage demand and build profitable customer
relationships.
4. Compare the 5 marketing management philosophies.
5. Analyze the major challenges facing marketers heading into
the next century.
What is Marketing?
“Marketing is a societal process by
which individuals and groups obtain
what they need and want through
creating, offering and freely
exchanging products and services of
value with others.”

-Philip Kotler
Core Marketing Concepts
Exchange transactions
and relationships
Core
Marketing
Concepts
Example: Marketing

The Walt Disney company is a master at marketing.
They use their brand to cross sell all their products.
Their theme parks sell toys and movies, the movies sell
toys and trips to the theme parks and the toys do the
same. They use every medium, from RadioDisney to
ABC broadcasting, in their marketing efforts.
Core Concepts of Marketing
Target Markets and Segmentation
Needs, Wants, and Demands
Product or Offering
Value and Satisfaction

Exchange and Transaction
Relationship and Networks
Marketing Channels
Supply Chain
Competition
Marketing Environment
Consumer Motivation
ds – state of felt deprivation
for basic items such as food,
clothing and complex needs such
as for belonging
– form that a human needs

to take as shaped by culture and
individual personality.
– human wants backed
by buying power.
Satisfying A Consumers
Needs and Wants
– anything that
can be offered to a market
for attention, acquisition,
use or consumption which
might satisfy a need or
want.
(examples: persons, places,
organizations, activities and
ideas)

– activities or
benefits offered for sales
that are essentially
intangible and don’t result
in the ownership of
anything.
(examples: banking, airline,
hotels, accountants)
– ways of thinking
about things.
(examples: concepts,
memberships, belonging)
How Customers Obtain
Products and Services
– act of obtaining a desired
object from someone by offering

something in return
– trade of value between
parties. Usually involves money and a
response.
– building long-term
relationships with consumers,
distributors, dealers and suppliers.
Marketing Forces
Suppliers
Company
(Marketer)

Competitors
Marketing
Intermediaries
End-User
Market
Environment
The Four “P”s
Marketing
Mix
Product
Price
Place

Promotion
Customer
Cost
Customer

© Kevin W. Fitzgerald, 2012Marketing and Society Social.docx

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