Advertising Messages and Marketing Communication© 2013.docx

Advertising Messages
and Marketing
Communication
© 2013 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
11
11. 1
website, in whole or in part. 11.
Marketing Framework
2
Advertising
• Advertising
• Primary means to communicate with

customers
• It can be difficult to measure advertising’s
effectiveness
• Need to determine the goal
• Most advertising cannot achieve multiple
goals
3
Advertising
• Integrated Marketing Communications
• Maintain message's holistic nature across
all media choices
• e.g., TV ads, press releases, billboard, pop-
up ads, sponsored events, post-cards, etc.
4

Why is Advertising Important?
• Advertising
• Facilitates customers’ awareness and
knowledge by providing information
• Attempts to persuade potential customers
that the brand is superior
• Has both short-term and long-term effects
• Is expected to generate sales but it is hard
to “prove”
• Advertising effects are cumulative
5
Goals of Advertising
• Various goal models exist
• AIDA: Attention, Interest, Desire, Action
• e.g., an infomercial is designed to
– Capture your attention
– Keep you interested enough to continue
watching it

– Make you desire the product
– Get you to act by picking up the phone and
ordering the product
» Getting consumers to act is not simple; even
for simple products
6
• Advertising should influence
• Cognition: awareness and knowledge
• Affect: attitudes and associations
• Behavior: actions
7

• Advertising goals and product lifecycle
stages
• Introduction: awareness and information
• Growth: enhance positive attitudes
• Maturity: remind consumers
• Decline: reductions in ad spending
8
Designing Cognitive Ads
• Cognitive ads
• Engage the consumer’s brain
• One-sided: Express product’s benefits
– e.g., “The fastest smartphone”
• Two-sided: Express pros and cons
– Usually stand out more and are considered
more objective
– e.g., Ads for pharmaceuticals usually state
the benefits as well as the side effects
9

• Noncomparative ad
• One brand is
mentioned and its
features, attributes,
image, etc. are
conveyed
10
Comparative ad
• Brand and
competitive brand
are mentioned
• Usually not done by
market leaders
• e.g., Coke may not

mention Pepsi, but
Pepsi mentioned
Coke in its “Pepsi
Challenge”
11
• Product demonstration ads
• Vivid & make consumers' expectations clear
12
• Drama ads
• A problem is depicted and the brand is
featured as the solution
• Dramas are more memorable than a listing
of features

13
Designing Emotional Ads
• Humor ads
• May break through
clutter & be buzz-
worthy
• Usually not cost
efficient
• May remember joke
not product
• May insult viewer
• May “wear out”
14
• Fear ads

• Use negative
emotions
• For a fear appeal to
be effective, the ad
must provide a
solution to reduce
the consumer’s fear
15
• Subliminal ads
• Shown fast enough that viewers cannot
point to the ad
• Thought to affect the subconscious
• Considered unethical and have never been
shown to work
16

• Image ads
• Are more abstract;
used to convey an
image
• Great for
positioning
17
• Endorsement ads
• Have a brand
spokesperson
• e.g., Celebrities,
experts, regular
people, etc.
18

• Endorsement ads
• Celebrity: positive association for
spokesperson transfers to brand
• Can be risky: e.g., Tiger Woods
• Experts: gives credibility to the product
because the expert knows more than us
• Regular people: gives credibility; they are
like us and may not be getting paid
19
How Endorsements Work
• Elaboration Likelihood Model
• Central route
• Ad’s argument persuades
• Occurs when customers are highly involved
with brand and motivated to process the ad
• Peripheral route

• Ad’s peripheral cues persuade not argue
– Attractiveness or credibility of endorser, style of ad, etc.
• Occurs when customers are not involved with
brand and not motivated to process
20
How Endorsements Works
• Source credibility
• Consumer interprets message as the most
important piece of information, but also
processes the credibility of the source
• e.g., Michael Jordan selling Rayovac
batteries or athletic shoes?
• Sleeper effect
• Source conveys information, but over time
consumers forget the source
21

Evaluating Advertising
• Cognitive ads (awareness & knowledge)
1.Day after recall tests (DAR)
• Ask random samples of households
– “Which brands did you see last night?”
2.Recognition tests
• When can’t remember any more ads, ask
– “Do you remember seeing X ad?”
• Mere exposure
• Sheer familiarity from repeated exposure
may enhance viewer’s favorability
22
• Affective ads (image and preference)
1.Concept testing
• 3-4 focus groups of 8-10 screened
participants are shown the ideas of the ad

• Ads are usually in preliminary development
• Consumers’ responses to ad, brand, etc. are
evaluated
23
• Affective ads
2.Copy testing
• Large random samples of consumers view a
TV program and ads; after 30 minutes,
consumers take survey
• Ad evaluation items
– Stimulation (curious, enthusiastic, etc.)
– Information (useful, credible, etc.)
– Negative emotion (irritation, etc.)
– Transformation (enjoyment, satisfied feeling, etc.)
– Identification (felt involved with it, etc.)
24

• Affective ads
3.Attitudes
• Attitudes toward the ad (Aad) and
• Attitudes toward the brand (Abrand)
– Having positive attitudes on both is important
• Marketers believe
25
• Affective ads
4.Dial procedures are utilized to capture
ineffective sections of ads
• Participants turn the dial as they view the ad
– left (“I hate this”) to right (“I love it”)
26

Evaluating Advertising Questions
1. Which firm above has a problem with
• Satisfaction?
• Awareness?
2. Which brand would you most want to be
associated with?
27
Managerial Recap
• Set goals in order to evaluate ads
• Classes of ad messages
• Rational or cognitive ads
• One- and two-side arguments, comparative
and noncomparative ads, product
demonstrations and dramas
• Emotional ads
• Humorous and fear-inducing appeals, image,

and endorsements
28
Managerial Recap
• Advertising is tested via
• Concept and copy testing
• Memory tests (recall and recognition)
• Attitudinal tests, and
• Behavioral measures
29
Brands
7
7. 1

What Is a Brand?
• Brand
• Portfolio of qualities associated with a name
• Brands immediately invoke certain images
• Brands have value beyond the benefits of the
product
2
Brand Associations
• Marketers control some brand
associations
• Product shape & packaging
• Logos, symbols & colors
• Jingles & slogans
• Spokespeople, etc.
• Marketers should control what they can

• Marketers do not control all associations
• Personal memories about brands, etc.
3
Brand Name
• A brand starts with a name
• Some names immediately convey
information
• e.g., Geek Squad
• Some names suggest their benefits
• e.g., Optical4less
• Some names are those of their founder
• e.g., Trump
• Marketers should choose brand names
that convey brand information
4

Brand Names, Logos and Color
• Brand name meaning is built over time
through communications with customers
• Brand names and logos are a shorthand
way to communicate with customers
• This is who we are & what we look like
• Brand colors and fonts visually engage
customers
• e.g., The New York Times and Google
5
Brand Name and Logos
• Some logos combine a brand name with
a symbol meant to suggest the brand’s
value proposition
6

Discussion Question
1. Should a brand name be adapted over
time?
2. If so when and why?
7
Why Brand?
• Customer Benefits of Branding
• Brands identify company ownership
• Brands allow for predictable quality; thus,
decreasing risk
• Brands make customer decision making
easier
• Brands serve as status symbols
8

Why Brand?
• Company Benefits of Branding
• Brands induce loyalty - increasing repeat
purchasing
• Brands allow for premium prices
• Brands allow a single firm to pursue multiple
targets
9
Hierarchy of Brand Associations
1. Concrete product attributes: 40 mpg
2. Abstract product benefits: Save money
3. Abstract emotional benefits: Feel good
• Attributes are easy to communicate and
easy for competitors to copy
• Benefits are abstract; harder to create and
communicate, but more meaningful
10

Brands Serve Social Functions
• Brands helps customers achieve their
ideal self
• e.g., Teenagers are “cool” due to Nike shoes
• Brands become the focal point of
bonding through brand communities
• e.g., Harley-Davidson
11
Brand Personalities
• Brand can have a distinct personality
• Personalities capture
1. Specific information about the brand
2. Holistic perceptions about the brand
12

Experiencing Brands
• Consumers experience brands
• Affectively, intellectually and behaviorally
13
Brand Communities
• Brand communities
• Customers who connect with like-minded
customers
• They have extreme attachments to brands
• e.g., iPhone, Lego, Harley-Davidson
• Marketers should try to build & capitalize
on these communities
14

Branding Strategies
• Umbrella approach
• Attaching the same brand name to products
• Subsequent product introductions are easier
for the customer to understand and accept
• Higher initial awareness levels
• Builds stronger brand associations
• Stronger financial outcomes
– e.g., Disney movies, parks, clothing, etc.
15
Branding Strategies
• House of brands approach
• Introducing a new brand name for every
product line
• Any problems with one brand should not

influence the other brands
• Brand images do not need to be consistent
which allows for targeting multiple segments
• Requires more advertising expense
– e.g., Procter & Gamble had 80 major brands
16
Brand Extensions
• Brand extensions
• Leverages the brand’s good name to get
customers to buy something new
• Line extensions
• Increase depth - new product within a line
– e.g., Dannon regular, low cal, vanilla, etc.
• Product category extensions
• Increase breadth - new product line
– e.g., Arm & Hammer toothpaste, deodorant,
kitty litter, etc.
17

Co-branding
• Co-branding
• Two companies form a joint venture to
create a product from both companies
– e.g., Kevlar Body Armor vests
• Ingredient branding
• Form of co-branding in which one company
adds value to a host product
• One company dominates over the other
– e.g., Brembo brakes are in Aston Martins
18
Co-branding
• Co-branding works well when a company
is introducing a new product attribute
• e.g., Adding cough medicine to candy

• Self-branding
• Branding own ingredient to differentiate its
quality from competitors
• Works better when tweaking a minor
attribute
• e.g., Tide’s “EverFresh” scent
19
Global Brands
• Global brand
• 30% of the revenues from other countries
• Global strategies
• Glocalization
• Different names in different countries
– “Manufacturer globally, brand locally”
• Global brands
• Same brand in all countries
• More advantageous
– e.g., Amazon.co.uk
20

Store Brands
• Private label brands
• Good for price sensitive markets
• Can be more of a “me-too” product offering
• Or can be premium private label
– e.g., Costco’s “Kirkland Signature”
• Retailer can offer decent quality for lower
prices due to reduced advertising costs
• Manufacturers are launching 2nd labels to
compete with store brands
21
Brand Equity
• Brand Equity
• The worth of a brand

• Measurement approaches
• Determining the price premium of brand
• “How much are you willing to pay for gas at Shell?” vs.
• “How much are you willing to pay at a local station?”
• Comparing branded and unbranded
• “How much do you like this $799 Sony flat screen with
screen-within-a-screen?” vs.
• “How much do you like this $799 unknown brand flat
screen sharing the same features?”
22
Brand Equity
• Measurement approaches, cont.
• Interbrand: assess the value of a firm,
subtract its physical and financial assets
• Brand contribution index varies by product
category: high for cologne, lower for retailers
23

Top Brands
24
Managerial Recap
• Brands are promises to customers; they
include names, logos, colors and fonts
• Brands signal information to customers
about predictability
• Anticipated reliability and expected quality
• Brands can command higher prices
because they offset risk
25
Managerial Recap

• Brand associations are cognitive and
emotional
• Companies can employ umbrella
branding or house of brand strategies
• Brand valuation is the measure of the
worth of brand
26
Integrated Marketing
Communications and
Media Choices
12
12. 1
Marketing Framework
2

What Media Decisions Are Made?
1. How much to spend
2. When to schedule the ads
3. Which media to use
3
How Much to Spend
1.Percentage of sales
• Percentage is determined by prior years’
sales or industry norms
• Percentage is then adjusted depending
upon this year’s goals
2.Competitive parity
• Determine what competitors are spending

• Information is tracked by 3rd parties
• In various industries, there is proportionality
between ad spending and their incomes
4
How Much to Spend
3.Strategic advertising goal
• Set a strategic goal(s) (awareness, attitude
change, etc.) and then work backwards to
determine how much should be spent to
reach the goal
• Advertising is viewed as an investment
which will return sales and profits
• Need to understand reach and frequency
5
How Much to Spend

• Reach
• The share of your target that has seen your ad at least
once
• Frequency
• The average number of times target saw the ad (within set
duration)
• GRP (Gross Rating Points):
• GRP=Reach X Frequency
• Ad reached 25% of target an average of 3 times - the ad
delivered 75 GRPs
6
How Much to Spend
• For reach, the goal is to expose as many
of the target customers as possible
• Find the most cost efficient media
• For frequency, it depends on the goal
• Awareness and memory-a few exposures
• Persuasion may take more
• Readily understood ads wear-out quickly

7
When to Schedule
• It costs more to get higher ratings
• However, the relationship is not perfect
8
When to Schedule: Concept in Action
• Example
• NCIS: 17.5 million TVs
• NCIS: $440,000 per 30 seconds
• McDonald’s meal contribution: $0.50
• $440,000/0.50 = 880,000 meals/breakeven
• 17.5 million viewers are exposed; thus,
McDonald’s needs 5% to purchase
• 880,000 / 17.5 million = 5%
• The question is…Is this reasonable?

9
When to Schedule
• Continuous: regularity in ad exposure
• Occasional: pop up from time to time
• Seasonal: infrequent and focused on the
preterm season for the product
• e.g., School supplies in August, etc.
10
Which Media
• The choice of media outlet is difficult
because…
• There are more media outlets
• e.g., More television stations, more radio
stations via XM, the Internet, etc.

• Audiences are fragmented across the many
media and use technology to zip past ads
11
Which Media
• Integrated Marketing Communication
• When advertising across media
• Consider the company’s overarching strategy
• Ensure a consistent message
– All communications
» e.g., Trade advertising, personal selling, direct
marketing, product placements, etc.
– As well as other marketing mix elements
» e.g., Product design, pricing, channels, etc.
• Play to each media’s strength
12

Which Media
13
Which Media
• Media comparisons
• TV ads
• Most expensive; yield the largest reach; yield
a broad not targeted reach; cable allows for
some targeting; frequency is expensive
• Magazines
• Have broad appeal or can be targeted
• Radio and newspapers
• Purchased nationally, but can be purchased
for local markets
14

Which Media
• Billboards are relatively inexpensive; good
for local coverage
• Radio, newspapers, and magazines are less
expensive than TV, but they also deliver
smaller audiences
• Magazines require long lead times for
production; have good reproduction quality
15
Which Media
• Newspapers and magazines are
nonintrusive; viewers can ignore ads
• Online and direct mail can be customized
• Online ads are inexpensive and can be
targeted; Internet penetration isn’t 100%
• Direct mail is relatively inexpensive and

targeted; not efficient (junk mail)
16
Which Media
17
Personal Selling
• Personal Selling
• Is an essential communication vehicle
• Accounts for 14 million jobs
– Over 10% of workforce
• Is especially important for expensive,
complicated products
18

Designing a Sales Force
• Questions to consider…
1. How many sales people do I need?
• More with an aggressive launch or to protect
territories
2. Where do I deploy them?
3. How do I compensate them?
• Salary and commission
– Consider the competition
19
Designing a Sales Force
• Pull strategies
• Direct promotional efforts to consumers
• Rely on advertising and sales promotions
• Push relies more on personal selling
• Direct promotional efforts to channel

• Rely on trade allowances: price reductions to
intermediaries for allocating space, etc.
– May be passed on to retailer’s salespeople as
cash, training and product demonstrations, free
merchandise, conventions, etc.
20
Public Relations
• Public relations
• Convey a positive image and educate a
constituency about the company
• Generate goodwill on behalf of the company
• Constituencies include
• Customers, suppliers, stockholders,
government, employees, general community
21

Public Relations
• PR people
• Issue press kits
• e.g., Press releases for “newsworthy”
occurrences
(e.g., product launch), company information,
bios, history, etc.
• Maintain company information on website
• Arrange events
• e.g., Speaking engagements, sponsorships,
philanthropy, etc.
• Handle negative publicity and encourage
positive publicity
22
Public Relations
• Publicity
• Is a “free” communication tool
• Can be negative or positive because
companies cannot directly control it
• Has the appearance of objectivity

• PR can issue press releases, but there is
no guarantee that they will be picked up
23
Product Placement
• Product placement
• Products are integrated into shows
• More subtle than ads
• e.g., Toyota Prius being driven on “Bones”
• Consumers can’t “zip” past them
24
Event Sponsorship
• Event sponsorship
• Occur in sports, cultural or artistic endeavors
• Brands draw from event’s positive valence

and high positive energy
• e.g., sponsoring NASCAR racing
• Not clear if it is cost-effective
25
Sales Promotion
• Sales promotions
• Activate purchase interest and influence
short-term sales
• e.g., Coupons, rebates, promotional pricing,
loyalty programs, trials, contests, etc.
• Are good for enticing customers to switch
26
Promotional Choice Depends on Goals
• When determining which promotional

method to choose, consider….
• The target audience
• The company’s goals
• e.g., Awareness, information, preferences,
purchase trial, repeat purchase, etc.
27
Assessing Media Effectiveness
• If goal is awareness, reach matters
• Measure viewership, readership, circulation
numbers, traffic indices, etc.
• If goal is attitudinal, use surveys
• It can be difficult to assess ROMI
because customers may not remember
where they saw the ad
28

• Considerations
• Increasing ad budget relative to competition
doesn’t increase sales in general
• Qualitative differences, such as better ad
copy, can increase the likelihood
• Ads that evoke positive and not negative
feelings have been related to sales
• Some believe that ad budgets are more
impactful when not spent on current
customers
29
• Online advertising
• Track click-thru rates, downloads, inquiries,
purchases, returns, etc. & compare with cost
per click, per download, per acquisition, etc.
• Online ad cost is low, but effectiveness is not
great

30
Managerial Recap
• Decisions about expenditure and timing
are integral to promotional campaigns
• Marketers must integrate marketing
communications
• The effectiveness of advertising is
measured using long-term and short-
term measures
31
Pricing
9
9. 1

Marketing Framework
2
Price
• Price obtains value back from customers
• Marketers set optimal pricing
• Pricing…
• Is influenced by company cost, competitive
pricing and customers’ willingness to pay
• Usually can be easily tweaked
• May vary across segments & lifecycle
• Sends signals to the market
• Influences your profitability
3

Pricing: Supply and Demand
• Demand tends to decrease as price
increases
4
Simple Pricing Strategies
5
Pricing and Profitability
• Profit (π)
= (price x demand) – (fixed costs) – (variable costs x demand)
= [(price – variable costs)] x demand – (fixed costs)
• Profit (per unit sold) increases as price

increases;
• However demand decreases when price
increases
• Need to find a happy medium
6
Pricing and Elasticity
• Elasticity
• How much does demand (units sold)
increase (or decrease) with a price change?
• e.g., If decrease price, does volume increase
cover lost revenue?
• Inelastic: demand barely changes
• Elastic: demand changes
7

Factors That Drive Demand
• Demand increases if
• Customer’s desire for the brand increases
• Perceptions of product’s benefits and brand
images increase
• Competitive products are poor or priced
higher
• There are few good substitutes
8
Price Sensitivity
• Price-sensitivity is greater when
• Customers
– Don’t care much about the purchase
– Don’t have strong preferences
– Don’t have strong brand loyalty
– Have limited income
• The item is a luxury rather than a necessity

• There are many substitutes
• The purchase is large relative to income
• It is easy to compare prices
9
Low Prices
• Two considerations:
• You need to cover your costs
• Compute a variety of breakevens
– Number of units needed make money
• You need to determine if you want to have a
constant low price strategy (Walmart) or a
fluctuating one (Kohl’s)
10
Covering Costs

• Firms need to cover costs
• Costs set the minimum floor on pricing
• Cost-plus pricing: (unit cost) / (1-X%)
• Where X% is the intended return
• If fixed costs are high relative to variable,
maximize volume
• If variable costs are high relative to
variable, maximize per unit margins
11
Breakeven Analysis
• Breakeven
• Number of units to sell to cover costs
BE = (fixed costs) / [(price – variable costs)]
12
Concept in Action: Breakeven for Good

13
Concept in Action: Breakeven for Service
14
Concept in Action: Breakeven for Service
15
High Prices & Price Sensitivity
• How much would sales drop off in the
face of a price increase?
• Good brands have low price sensitivity

• Consider price sensitivity
% change in sales
• Use existing PS estimate OR
• Develop PS estimates using scanner data,
survey data and/or conjoint analysis
16
1
12
P
Price Sensitivity and Survey Methods
• Conduct a survey to assess willingness to
pay (WTP)
• $25.00 definitely would not buy 1 2 3 4 5 6 7 definitely
would buy
• $35.00 definitely would not buy 1 2 3 4 5 6 7 definitely
would buy

• Conduct price studies
• Surveys are identical except pricing
• A may have higher price than B, B than C, etc.
• Each customer fills out his assigned survey
17
Price Sensitivity and Conjoint Analysis
• Show product combinations with price;
ask “Which do you most prefer?” “Next?”
• Two segments are represented below
• Left segment want the brand and will pay more
• Right segment gives up brand for lower price
18
Pricing Question

• Given the figures, explain the difference
between Google and RIM.
19
Units or Revenue; Volume or Profits
• Profit = revenue – expense
• Revenue = price x quantity sold
• To maximize profits, find a price where
any further increase in price would lead
to a large falloff in quantity sold
• Profit Maximization: marginal revenue
equals marginal cost
20
Marginal Revenue and Marginal Cost
• Marginal revenue = marginal cost at $1.00
21

Systematic Biases in Pricing
• No pricing model is perfect
• Every model has error
• There are systematic biases in pricing
• Price serves as a quality cue; higher
price may be more appealing
• However, studies demonstrate that there is
no correlation between price and quality for
most product categories
22
• Absolute vs. relative numbers
• Absolute: $15 off of a $199 item and $15 off
of a $49 item is the same in absolute terms
• Relative: $15 of $199 is 8% while $15 of $49

is 31%
• Framing
• A $499 trip is the same as a $599 trip with a
$100 discount at booking
• However, the $599 trip seems like a better
deal because of the higher starting price
23
• Price discount and mood
• Temporary price discounts make customers
think they are smart shoppers
• They experience feelings of happiness, pride,
optimism, confidence, etc.
• Prices ending in 99
• Prices like $4.99 or $49.99 tend to be more
attractive than $5 or $50
• People read left to righ; thus, the 4 is
processed first and leaves an impression

24
• Mental accounting
• People categorize & budget purchases
• People pay less attention to future
– e.g., Vacation money is “different than” food
money
• Compromise effect
• The inner/middle choice between two
extremes is attractive
• People assume that if a company charges
more, it must be providing more
25

• Referent pricing
• People compare price to some referent,
either an externally available price or an
internally stored price
• External
– “MSRP is $49.99, now available for $35.99!”
– “Our price $34.99, compare at $45.00!”
• Internal
– Relevant memory
– Inferences about store, etc.
26
Discussion Questions
• Discuss the pricing biases at work in the
following examples:
1. A house builder has three price points on
kitchen cabinets,
2. A price tag that reads “was $299 now only
$199,” and
3. A toy package that reads, “This toy is not
only fun but also educational.”

27
Price Discrimination
• Segment discrimination is not illegal
• Different segments value different things
• Customers might be annoyed to learn
that others paid a lower price
28
Quantity Discounts/Yield Management
• Quantity Discounts: the more purchased,
the more saved
• Yield Management: Using price and
scheduling to manage demand
• e.g., Movies during the day for less money
•Need to manage perceptions of fairness

29
Two Part Pricing
• Charge a fixed and variable usage fee
• Price two parts separately
30
Product Lifecycle Pricing
• Introduction stage
• Penetration pricing: seek market share
• Price low to stimulate sales, encourage trial,
and trigger word of mouth
• Skimming pricing: seek profit
• Price high initially, then lower to make
product more accessible

• Adjust price in various stages; usually
end with lower prices in decline stage
31
Price Fluctuations
• Temporary cuts may be negative
• Competitors can imitate; thus, impact may
be negated while also squeezing margins
• Price drops attract disloyal customers
• Customers may “stock up”
• May negatively affect brand image
• Coupons are only relevant to clippers
– Redemption rate is only about 1%
• Effective at encouraging new/old customers
to try old/new products
32

Game Theory
• Game theory is used to estimate likely
results of price cuts and competitive
response
• Marketers need to think about the broader
market and competitive responses not just
their own decisions
• Mutual cooperation can yield even better
outcomes than both parties acting selfishly
33
Auctions
• Price is negotiated by buyer and seller
• Bidders compete to buy item
• Sealed or open bid
• Reservation price: estimate of customers
willingness to pay
• If the price is higher than reservation, don’t
buy; if it is lower, then buy

• English auctions: Bids start low & increase
• Dutch auctions: Bids start high & decrease
34
Value
• Value
• An assessment of what the customer gets
compared with what the customer gives up
• Benefits/Cost
• It is usually not a good idea to compete on
price
• Find benefits your customers want and
charge for them
35
Managerial Recap

• Pricing strategies are basically: low,
medium, or high
• Company and its costs can dictate the
lower-bound price
• Customers’ willingness to pay marks the
upper-bound, and
• In the middle, price is tweaked up or down
relative to competitors’ prices
36
Managerial Recap
• Pricing can be used to
• Shape a brand’s positioning and
• Attract/repel different targets
• There are economic and psychological
elements to pricing
37
Products: Goods and

Services
6
6. 1
Marketing Framework
2
1. Is Arnold Schwarzenegger a product?
2. What is a product?
3

Products
• A product can be either a good or a
service
• It is the most essential decision in the
4Ps because it is what the consumer is
receiving in the exchange
4
Marketing Exchange
• Exchange
• The company offers something (product)
• The product can be designed to be more or
less attractive
– e.g., Increase/decrease quality, service, etc.
• The customer offers something in return
(payment)
• Customer can be more or less attractive

– e.g., High/low loyalty, high/low maintenance,
spreads positive word-of-mouth, etc.
5
Marketing Exchange
• Marketers need to
1. Determine what the customers want in
order to increase the likelihood of
exchange
2. Determine what the company can
profitably offer
• The goal is to create mutually beneficial
exchanges which result in long-term
customer relationships
6

Goods vs. Services
• Goods and services differ in terms of
• Intangibility
• Search, Experience, Credence
• Perishability
• Variability
7
Goods vs. Services: Intangibility
• Intangibility:
• Extent to which you have something concrete
• Pure goods: e.g., Paper, phones, etc.
• Pure services: e.g., Massage, babysitting, etc.
• Hybrids: e.g., Restaurants
• Experience marketing
• Consumers are buying the experience
• e.g., “What happens in Vegas stays in Vegas”
8

Goods vs. Services: Qualities
• Search Qualities
• May be evaluated prior to purchase
• Experience Qualities
• Need trial/consumption before evaluation
• Credence Qualities
• Difficult to judge even post-consumption
9
Goods vs. Services: Qualities
• Goods are dominated by search and
experience qualities
• Services are dominated by experience
and credence qualities
• Professional service providers are beginning
to understand the value of marketing

• e.g., Sending quality signals to customers,
choosing locations, designing appealing
atmospheres, etc.
10
Goods vs. Services: Perishability
• Perishability
• Services are simultaneously produced and
consumed; thus,
1.Services cannot be stored; goods can
• Marketers need to even out demand
2.Services cannot be separated from the
provider; goods can
• Customer/service provider interaction
becomes part of the service
11

Goods vs. Services: Variability
• Variability
• Good are made by machines, services are
usually people intensive
• Services change across customers and
across time
• Marketers need to
• Try to reduce bad variability
– e.g., Errors in the system
• Try to improve good variability
– e.g., Customization
12
Discussion Question
• What steps can marketers take to reduce
bad variability?
13

Core vs. Value-Added
• Core is essential to the product offering
• Value-added is supplemental
• Can use to differentiate & improve satisfaction
• Can use to identify competition
14
• Core elements are expected by
customers
• If core elements are substandard,
dissatisfaction can be triggered
• e.g., Hampton Inn needs a bed and
bathroom because it is expected
• Marketers can compete/differentiate on

value-addeds
• e.g., Hampton Inn serves complimentary, hot
breakfasts
15
• Core businesses may change as
industries and firms change
• e.g., Victoria’s Secret was 70% apparel but is
now 70% beauty and fragrance
• It is key to continually ask
• What business are we really in?
• Who are our true competitors?
16
Competition through Customers’ Eyes

• Define competition broadly
• e.g., Theaters compete with other theaters as
well as other forms of entertainment
17
Product Lines: Breadth and Depth
• Product mix
• A company’s product lines
• Breadth
• Number of product lines
• e.g., Frigidaire sells refrigerators, washers,
dryers, ranges, etc.
• Depth
• Number of products in a line
• e.g., Frigidaire has top-mount, side-by-side
refrigerators, etc. and many variations
18

Product Line Strategies
• Product line managers can prune or
supplement existing lines
19
Managerial Recap
• Products are goods and services
• Products are the central offering in the
marketing exchange
• Goods and services share similarities
and differences
• Services are relatively more intangible,
inseparable, perishable and variable
20

Managerial Recap
• A firm’s market offering is comprised of
the “core” and the “value-addeds”
• Consider competition broadly
• Competition can evolve over time
21
Products: Goods and ServicesMarketing FrameworkDiscussion
QuestionsProductsMarketing ExchangeMarketing
ExchangeGoods vs. ServicesGoods vs. Services:
IntangibilityGoods vs. Services: QualitiesGoods vs. Services:
QualitiesGoods vs. Services: PerishabilityGoods vs. Services:
VariabilityDiscussion QuestionCore vs. Value-Added Core vs.
Value-Added Core vs. Value-Added Competition through
Customers’ EyesProduct Lines: Breadth and DepthProduct Line
StrategiesManagerial RecapManagerial Recap
New Products
8
8. 1

Marketing Framework
2
Why Improve Products?
• For corporate pride
• To be consistent with innovative image
• To better attract/satisfy customers
• To stave off competition
• Because the macroenvironment changes
• Consumer tastes, natural resources,
demographics, cultural changes, etc.
3

Approaches to Developing New Products
• Top Down (inside-out)
1. Idea generation
2. Design and development
3. Commercialization
• Customer feedback is sought later in the
process; marketing supports product launch
• Works well in industries where internal R&D
teams have expertise end-customers lack
• Bottom Up (outside-in or co-creation)
• Customer & company co-create products
4
New Product Development Process
5

New Product Development Process
• The NPD process is not entirely linear
• It is important to continually revisit prior
decisions and change when necessary
• e.g., A “good” decision in stage 2 may not be
a “good” decision in later stages
• Marketing is involved throughout process
• Idea generation, refinement, marketing mix
decisions, etc.
6
Idea Creation
7

Idea Creation; Market Potential
1. Idea generation
• “No idea’s a bad idea; let’s get everything up
on the white board”
• Firms may allocate time for employees to
work on pet projects
• e.g., The idea is to drink your vitamins
instead of taking a pill
8
2. In-house winnowing & refinement
• Screen ideas for plausibility using
• Internal experts’ knowledge
• Marketers’ target knowledge
• Management’s firm knowledge
• Feasibility assessments & business
analyses are somewhat fuzzy at this stage
9

• In-house winnowing & refinement, cont.
• Consider the following:
• Who is the target segment & what is size?
• Who are competitors?
• Which of our products might we cannibalize?
• Do we have channels already in place?
• Does the product fit the firm?
– e.g., Vitamin drinks could be targeted to
mothers with kids (Ovaltine) or health
conscious adults (Ensure)
10
Concept Testing, Design & Development

3. Obtain feedback on plausible ideas
• Use marketing research to
• Save a company from a bad idea
• Yield information to tweak idea
• Encourage pursuit of good idea
• Research may include focus groups, online
surveys, etc.
• Conjoint analysis may also be used to
determine trade-offs
11
• Focus groups
• 2-3 groups (per segment) of 8-10 customers
• Usually last 1.5 - 2 hours
• Participants give feedback on product
concepts (verbal descriptions & visual cues)
• e.g.,
– How do you feel about kids drinking vitamins?

– How do you feel about flavored drinks?
– What do you think of this aluminum can
design? Plastic bottle design?
12
4. The results of the research is utilized to
develop a prototype
• Usually only one prototype is developed at
a time-not multiple
• If the prototype is not successful, another
prototype is developed
13
Testing
• Try product in market on a small scale
before an expensive full-scale roll-out

• Area test markets:
• Product is made available and ads are run in
a few randomly selected metropolitan areas
• Sales are observed and compared to sales in
control markets
• Not as commonly used any more because
– They are expensive, tip-off competition and
sampled areas may have own “flavors”
14
Launch
• Forecast sales
• If not promising, abort launch
• If promising, launch
• Forecasts are important to
• Accounting and finance for budgeting
• Sales for setting sales goals
• Product and logistics for planning
equipment, storage, transportation, etc.

15
Launch
• Forecasting
• Goal is to estimate sales potential ($SP) not
sales
1. Determine market potential (MP)
• How many units might be sold
– Start with secondary data
» e.g., census, sales for similar products, etc.
16
Launch
• Forecasting, cont.
2. Estimate the purchase intention (PI)
• Likelihood target will buy the product

• Use recent marketing research
– e.g., Assume research suggests PI = 0.7
• Note: Customers usually overstate PI;
estimate ¾ downward P = ¾ (.7)= .525
17
Launch
• Forecasting, cont.
3. Determine the price (Pr)
• Remember economics; PI may increase as
Pr decreases
• Forecasting equation: $SP = MP x PI x Pr
• Remember this number is not profit; it is
maximum sales
18

Launch
• Timing
• Process of developing new products can be
relatively quick or slow
• e.g., New pharmaceuticals take years
• Causes of delay
• Internal
• External
– e.g., Patents, copyrights, regulatory
approvals, etc.
19
Product Life Cycle
• Describes the evolution/ duration of a
product in the marketplace
• Phases have predictable sales & profits
as well as optimal marketing actions
20

Product Lifecycle
• Market introduction
• Low sales
– e.g., 3-D printers
• Heavy promotional spending on awareness
• Pricing strategies
– Penetration: low price; discourages future
competition
– Skimming: high price; encourages future
competition; recoup R&D costs
• Limited distribution
21
Product Lifecycle
• Market growth
• Sales & profits increase and competitors

enter and kill each other off or specialize
– e.g., Smartphones
• Product needs competitive advantage
• Promotion focuses on product’s superiority
• Distribution coverage is greater
• Price may be increased
22
Product Lifecycle
• Market maturity
• Industry sales are strong but begin to level
off; competition is fierce with weaker firms
leaving; profits decline
– e.g., Refrigerators
• Promotion focuses on product’s superiority
and as a reminder to buy
• Product line may be extended and new
benefits may be added
• Price usually falls due to competition

23
Product Lifecycle
• Market decline
• Sales and profit decline; new products
replace older generations
– e.g., Correction fluid
• Product may be
– Divested: sell - do early to get best price
– Harvested: reduce support
– Rejuvenate: refurbish with new benefits
24
Diffusion of Innovation
• A normal curve is utilized to partition
customers into groups to show how new

products spread through the marketplace
25
• Innovators: first 3-5%
• Like to try new products; willing to take risks
• Early adopters: next 10-15%
• Even more influential as opinion leaders
• Not considered zealots
• Early majority: next 34%
• More risk averse
• Waiting to hear about favorable experiences
26
• Late majority next 34%
• Even more cautious
• Often older and more conservative

• Rely on consistent messages received via
word of mouth
• Laggards or non-adopters next 5-15%
• Most risk averse
• Skeptical of new products
• Stereotypically lower in income
27
New Product Acceptance
• Acceptance of new products tends to be
higher when:
• New product’s relative advantage is clear
• New product is compatible with customers’
lifestyles
• New product is not overly complex
• New product is easily tried or sampled
28

New Product Willingness
• Companies vary in their willingness to
pursue new products
• From Innovator to reactors
• Market pioneers have difficulty with
“really new” products but may have
advantages in “incrementally new”
products because there is less risk
• Early followers have approximately the
same survival risks
29
Growth Strategies
30

Growth Strategies
• Market penetration
• Sell same products to current markets
• New ways to use, better pricing, etc.
• e.g., Convince your salad dressing users to
start putting salad dressing on sandwiches
• Market development
• Sell existing products to new markets
• Move global, pursue older segment, etc.
• May need to change image, channels, etc.
• e.g., Begin selling iPods in Nigeria
31
Growth Strategies
• Product development
• Sell new products to current markets
• Introduce extensions or new variations
• e.g., Begin selling pens to the market that is
currently buying paper from you
• Diversification
• Pursue new markets with new products
• More difficult to pursue due to lack of

experience in product and market
• e.g., A faucet manufacturer begins pursuing
the golf ball market
32
Trends to Watch
• Aging of population
• Hispanic population growth
• Growth in affluence
• Concern for environment and social
responsibility
• Internet usage
• Role of China in global economy as well
as other growing economies
33
Managerial Recap

• New products are crucial to growth
• New product development process
• Idea generation to market potential, to
concept testing, design and development,
then beta-testing, and ultimately the launch
34
Managerial Recap
• Products evolve through a life cycle
• Introduction, growth, maturity, and decline
• Each stage is recognizable by its sales &
profitability and carries 4P recommendations
• Models can be used to forecast sales
• Marketers should study important trends
35
Channels of Distribution
and Logistics

10
10. 1
Marketing Framework
2
Place
• The market realigns discrepancies
between buyers and sellers
• Sellers have large quantities; Buyers want a few
• Breaking bulk
• Making goods available in smaller batches

3
Distribution Channels
• Distribution channel
• A network of firms which provides sellers a
means of infusing the marketplace with their
goods, and buyers a means of purchasing
those goods
• The goal is to do this efficiently and profitably
• Channel members include
• Manufacturers, wholesalers, retailers,
consumers, etc.
4
Functions of a Channel
• Customer-oriented

• Product-oriented
• Marketing-centric
• Logistics
• Coordinating flow of products and
information throughout channel
5
Channel Tension
• All channel functions must be done by
someone, the question is…
• What is the most effective and efficient way
to distribute the product?
• Tension in channels can be created by
each channel member
• Does member provide more benefit than they
cost?
– The make or buy decision
6

Channel Questions
7
• Which of these is more efficient? Why?
Channels and Supply Chains
• Supply chain
• Upstream partners
• Channel members
• Downstream partners
8
How to Design Channels

• Intensive distribution: widely distributed
• Drugstores, supermarkets, discount stores,
convenience stores, etc.
• Usually for simple, inexpensive, easily
transported products
• e.g., Snack food, shampoo, newspapers, etc.
• Pull strategy: promote directly to end
consumers to pull through channel
9
• Selective distribution: limited distribution
• Usually for complex and/or expensive
products that require assistance
• e.g., Most cars, computers, appliances, etc.
• Push strategy: promote to distribution
partners to push goods to consumer
• Manufacturer has more control due to fewer
relationships to manage

10
• Exclusive distribution: extremely selective
• e.g., Ferraris, Rolex, etc.
• Manufacturers have the most control
• May become monopolistic
11
• How much distribution?
• Design needs to be consistent with other
marketing elements
• Wide distribution
– Usually goes with heavy promotion, lower
prices, average or lower-quality products

• Exclusive distribution
– Usually goes with less promotion, higher
prices and higher-quality products
12
• Pull strategy
• Incentives are offered to consumers to pull
products through the channel
• Advertise to consumers
• Offer price and/or quantity discounts
• Offer inexpensive trials or free samples
• Offer coupons and/or rebates
• Offer financing
• Offer loyalty programs/points
13

• Push strategy
• Incentives are offered to distribution
partners to push products through the
channel
• Advertise to partners (and consumers)
• Offer incentives to sales force
• Offer price and/or quantity discounts
• Offer financing
• Offer allowances for marketing activities
14
Power and Conflict in Channels
• Conflict arises in distribution channels
• e.g., Retailers don’t stock all of manufacturers
SKUs, disagreements on pricing, etc.
• Power is usually defined by size
• Having power can be effective
• However, exerting power over distribution
partners can lead to resentment and further
lack of cooperation
– e.g., Walmart threatens to stop selling your

product unless you agree to concessions
15
Power and Conflict in Channels
• Ways to resolve conflict
• Enhance communication to build trust
• Exchange personnel to better understand
members’ perspectives
• Mediation
• Negotiate through a third party that
determines the two parties’ utility functions
• Arbitration
• The third party makes a binding decision for
the two parties
16

Integration
• Remember…all of the functions within a
channel need to be completed
• The question is, “Who should complete
them?”
• Make decision
– Complete functions yourself
• Buy decision
– Outsource functions
17
Integration
• Vertical integration
• Moving backward or forward in a channel
• Forward integration
• Moving forward in a distribution channel
– e.g., Frigidaire purchases Sears or opens its
own retail stores
• Backward integration
• Moving backward in a distribution channel
– e.g., Sears offers its private label, Kenmore

18
Integration
• Private label benefits
• Private labels
• Give retailer negotiating power with
manufacturers
• Have better margins
• Help differentiate retailer from other retailers
– e.g., Great Value oatmeal is only at Walmart
19
Retailing & Retail Classifications
• Retailers have been gaining power and
momentum over the past 10-20 years

• Retailers are classified by ownership,
level of service and product assortment
• Management’s level of ownership
• Independent retailers
• Branded store chains
• Franchises
20
Retailing Classifications
• Level of service provided
• Full service: e.g., Nordstrom’s
• Limited service: e.g., K-mart
• Service level is usually related to price points
• Product assortment carried
• Specialty: carry depth not much breadth
– e.g., Toy stores
• General merchandise: carry breadth but not
much depth
– e.g., Department stores

21
Retailing Employees
• Retail employees are important
• Retailers should hire selectively, train well
and pair fairly
• Dissatisfied employees can lead to
dissatisfied customers and employee
turnover
• Employee turnover leads to “new” associates
who further cause customer dissatisfaction
22
Retailing Operations
• Operations are important
• Retailers should flowchart their operations

• Front-stage
– Elements customers see
• Back-stage
– Elements customers do not see
» Must be run efficiently to support front-stage
• The goal is to create effective and efficient
processes
23
Retailing Location
• Location is important
•Determine appropriate success factors for
your specific business; analyze locations to
pick ideal sites
•e.g., Population densities, income and social
class distributions, median ages, household
composition, etc.
24

Retailing Growth Strategies
• Provide additional services
• Target additional segments
• Open multiple stores
• Expand internationally
• e.g., Exporting, joint ventures, direct foreign
investment, license agreements, etc.
• Global outsourcing
• e.g., India & technology, China &
manufacturing, etc.
25
Franchising
• Franchising
• Unique format of multi-site expansion
• Company can retain some control without
complete ownership or capital expenditure
• Types of franchising
• Product franchising

• e.g., Ford dealers, Coca-Cola bottlers, etc.
• Business format franchising
• e.g., McDonald’s, Holiday Inn, etc
26
E-Commerce
• The Internet is an important channel
• Online retail sales are about $175 billion,
growing about 10% a year
• Still only 10% of total retail sales
• Customers are younger & more affluent
• U.S. dominates but not by much
27
Catalog Sales
• Top 10 catalogers are B2B companies
• e.g., Dell, Staples, etc.

• 80 of the top 100 catalogers continue to
see sales growth
• Internet is well-suited for a search while
catalogs still dominate browsing
• Catalogs often complement not compete
with Internet
28
Sales Force
• Utilized extensively with a push strategy
• Important with undifferentiated products
• Sales force compensation
• Usually salary plus bonuses
• Tie compensation to performance evaluation
• Sales force evaluation factors
• e.g., Sales (by segment, product, etc.); time
with clients; expertise; days worked; etc.

29
Sales Force
• Sales force size
• Estimate Workload
• 100,000 stores
• 12 visits each per year for 30 minutes
• 50 weeks per year x 40 hours a week = 2,000
hours
• 500 of these hours will be spent on travel and
administrative duties
• (100,000 accounts x 12 visits per year x 0.5
hour) / 1,500 hours = 400 salespeople
30
Integrated Marketing Channels

• As the number of channels proliferates,
increasing care must be taken to
coordinate and integrate across them
• Companies must understand customer
behavior in order to design effective
distribution channels and to allocate
resources across channel options
• Know your customer!
31
Managerial Recap
• Distribution channels are the link from
the manufacturer to the customer
• Numerous thoughtful decisions must be
made in designing channels
32

Managerial Recap
• Channel entities are independent yet
interdependent organizations; thus,
conflicts may arise
• Conflicts are best addressed by
employing good communication and
trust, revenue sharing, or greater vertical
integration
33
Channels of Distribution and LogisticsMarketing
FrameworkPlaceDistribution ChannelsFunctions of a
ChannelChannel TensionChannel QuestionsChannels and Supply
ChainsHow to Design ChannelsHow to Design ChannelsHow to
Design ChannelsHow to Design ChannelsHow to Design
ChannelsHow to Design ChannelsPower and Conflict in
ChannelsPower and Conflict in
ChannelsIntegrationIntegrationIntegrationRetailing & Retail
ClassificationsRetailing ClassificationsRetailing
EmployeesRetailing OperationsRetailing LocationRetailing
Growth Strategies FranchisingE-CommerceCatalog SalesSales
ForceSales ForceIntegrated Marketing ChannelsManagerial
RecapManagerial Recap
Positioning

5
5. 1
What is Positioning?
• Positioning
• Who your brand or company is in the
marketplace, vis-à-vis the competition, and in
the eyes of the customer
• It has physical and perceptual elements
• STP = Segment, Target and Position
2
1. Describe the positioning for the
following:
• Stanford

• Your local community college
• Gonzaga
• Ohio State University
2. How does a firm obtain its position?
3
What Determines Positioning?
• Positioning is determined by the
marketing mix
• Product offered
• Pricing charged
• Distribution implemented, and
• Message communicated
4

Positioning Via Perceptual Maps
• Perceptual maps show graphical
depictions of where brands are, and
where their competitors are, in the minds
of their customers
• Brands close together are seen as similar
• Brands farther apart are viewed as different
5
Positioning Questions
1.Which brands are most interchangeable?
2.Which brand competes more with Prius?
3.Which brand(s) is attractive to segment 1?
4.What market opportunity exists?
• Is this opportunity a reasonable offering?
6

1.How would you compare Rome/Nassau?
2.The firm implemented a promotional
campaign highlighting how reasonably
priced Maui is. Was it successful?
3.Which segment offers an opportunity?
7
• A gym is rated on various qualities and
the importance of the qualities
1. Which quality is most important?
2. What is the club doing well/not well?
3. What one thing would you invest in?
8

Maps for Competitive Analysis
• Competitive health clubs are rated
• However, map is limited to two dimensions
• Price and satisfaction with # of machines
9
Maps for Competitive Analysis
• Utilize a bar chart to show more than two
dimensions
10
The Positioning Matrix
• Companies usually can’t be great at
everything due to limited resources
• Can a firm realistically hold the lowest price,

highest quality position?
• Marketers need to determine the “best”
position for the firm
11
Quality and Price Align
• Optimal matches:
• High-End & Value
• Suboptimal matches:
• Overpriced: customers stop buying; firms drop
price, increase quality or leave market
• Good value: firms increase price or lower quality
12
Promotion & Distribution Align

• Optimal matches
• Mass and Niche
• Suboptimal matches
• Hard to get: Why promote heavily if consumers
can’t find the product?
• Under-advertised: If a brand has an exclusive
image, why distribute it everywhere?
13
Optimal Matches
• 16 combinations can be reduced to two
14
Examples of Brands in 4 Ps Matrix
• In the real world, many brands occupy the natural matches;
however, some brands appear in the suboptimal combinations

• Have good reasons for moving from natural matches
15
Writing a Positioning Statement
• Positioning statement
• Succinctly communicates parameters of a
position
• Consider
• Your target market
• Your unique selling proposition (USP)
– If a “real” attribute difference does not exist,
create a “perceived” image difference
• e.g., For customers who want {target}, our
brand is the best at {USP}.
16

• Answer the following questions:
1. Who are you trying to persuade?
2. Who are you competing with?
• e.g., Who are your competitors, what is
your major product category, etc.?
3. How are you better?
• e.g., What makes you unique, what are
your points of difference, do you have any
benefit that dominate competitors, etc.?
17
• Make sure your statement is succinct
• Prioritize your brand benefits and choose
the most important, compelling differentiator
– Think about what benefits the customer
• Examples:
• Timex: “Takes a licking and keeps on ticking”
(product quality)

• Burger King: “Have it your way”
(customizability)
18
Managerial Recap
• Positioning is important
• Positioning is seen through the eyes of
the customer
• Perceptual maps help facilitate an
understanding of position
• Positioning is achieved via the marketing
mix
19
Managerial Recap
• The positioning matrix demonstrates that

certain marketing mix combinations are
more optimal than others
• Positioning statements guide marketing
strategies and tactical actions
• They should indicate the target, a
competitive frame of reference, and a
unique selling proposition
20
website, in whole or in part. 1. © 2013 Cengage Learning. All
Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 1
Why Is Marketing
Important?
1
1. 2

Discussion Question
• Do the following statements adequately
define marketing? Why or why not?
• “Marketing is sales and advertising.”
• “Marketers make people buy stuff they don’t
need and can’t afford.”
• “Marketers are the people who call you
while you’re trying to eat dinner.”
3
• What is the definition of marketing?
• What can be marketed?
4

Marketing Defined
• Marketing is defined as an exchange
between a firm and its customers.
5
What We Can Market
6
Orientations
• Product/Production Orientation
• Focus on building products that you like
• Sales Orientation
• Focus on convincing the customer that your
product works best for them

• Customer Orientation
• Focus on figuring out what customers want
THEN design the product around them
7
• Which orientation do you think would
mostly likely lead to an exchange?
• Who do you think is responsible for
marketing?
8
Who is Responsible for Marketing?
• Marketing and Customer Satisfaction is
Everyone’s Responsibility

• Marketing should permeate the firm
• Accounting/Finance
• Sales
• Research and Development
9
Measuring Marketing Success
• Chief Marketing Officers (CMO) should
quantify results when possible
• Sometimes the effectiveness of
marketing programs is easy to quantify
• Did the coupon promotion lift sales?
– Measure the percentage sales increase, etc.
• Did the direct mail campaign increase web
usage?
– Measure the number of web visits, etc.
10

Advertising Messages and Marketing Communication© 2013.docx

Recommended

Recommended

More Related Content

Similar to Advertising Messages and Marketing Communication© 2013.docx

Similar to Advertising Messages and Marketing Communication© 2013.docx (15)

More from nettletondevon

More from nettletondevon (20)

Recently uploaded

Recently uploaded (20)

Advertising Messages and Marketing Communication© 2013.docx