English marketing in the show business a case study about lady gaga s career

STATE UNIVERSITY OF SANTA CRUZ
ANA PAULA PIRES
MARKETING IN THE SHOW BUSINESS: a case study about Lady Gaga’s
career
ILHÉUS – BAHIA - BRAZIL
2012

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ANA PAULA PIRES
MARKETING IN THE SHOW BUSINESS: a case study about Lady Gaga’s
career
Monograph presented to the State University of
Santa Cruz to obtain a Bachelor's degree in
Business Administration.
Concentration area: Marketing in the Show
Business
Tutor: Márcio Antônio Leal Costa
ILHÉUS – BAHIA – BRAZIL
2012

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DEDICATION
To all those who believe in their dreams and try to achieve them through knowledge.

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THANKS
Thanks, first, to my family which always supported me in my studies and made it
possible for the things go right. I highlight my gratitude, especially for them for giving me
support for the realization of a dream that was to see Lady Gaga’s concert in Rio de Janeiro in
November 2012.
I thank to God, to Lady Gaga (obviously!), to Isis, Osiris, Horus, Ra, Cleopatra and all
the entities in which I believe and that perhaps they were with me at some point in my life
force or printing protecting me from adversity.
I thank my tutor: the teacher Márcio Antônio Costa Leal, for not letting me give up of
my work. I think the person that I have most to thank is he, beyond the support of the
monograph, he taught me not to give up my dreams and do not stop believing in them by what
other people might say or think. I will not forget this ever.
I am grateful to my colleagues who have become friends of the heart, Daianne,
Camilla and Marianna for all the support, partnership, friendship and strength during the
course.
I thank the great friends Julia and Marina (AL's) for the friends shoulders, by the
outpourings and by the faithful friendship. Marina I must thank twice and Marcely too,
because they introduced Lady Gaga to me at the end of 2009 contributed thus to the
transformation that Lady Gaga has caused in my life.
Thanks to the support of the teacher Rozilton Ribeiro, always willing to help me and
feed my dreams.
I thank all those who helped me, guided me, gave me strength and ideas to develop my
thesis, and of course, to Amy, by the omnipresence and petulance.
Finally, I thank all who doubted of my work, who made a point of playing a "cold
shower" in this route. Without you my work would not have been the same, and it was also
for you that I made a point to push myself to finish it.
THANK YOU!

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“We can be strong! We can be strong, out on this lonely run on the road to love!
We can be strong! We can be strong, follow that unicorn on the road to love!”
Lady Gaga

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MARKETING IN THE SHOW BUSINESS: a case study about Lady Gaga’s career
ABSTRACT
With the advent of the Information Revolution, it has been possible to identify new forms of
relationships between producers and consumers of music. The ease of storing and distribution
of this product ends up weakening the complex structure of the music industry, which has
been trying to re-adapt to the current market and seek to develop new strategies to consolidate
itself in the market. In this sense, the celebrity industry - a sector responsible for making
strangers into well-known – usually makes use of the marketing theories and principles to
build artistic careers. The singer Lady Gaga is currently one of the best known names when
international pop music is discussed, she is known for her controversial statements and
extravagant costumes, acts that ranks herself as a brand recognized worldwide. This study
aimed to identify the main marketing actions used in the career of this singer responding to
the initial problem on the ephemerality of relationships that has been increasingly influenced
by virtual media. The methodology used in this study was the bibliographical research in
which the Internet was indispensable part for the conclusion of this academic work, especially
regarding the collection of information about the trajectory of the singer, which can be
classified as a case study. It also used the inductive method and the research is characterized
as applied and explanatory. Thus, it was possible to identify that the singer uses strategies that
have a strong theoretical foundation in the field of administration, such as customer
relationships, market segmentation, portfolio strategies, competitive strategies and
positioning.
Keywords: Lady Gaga, revolution information, marketing, relationship.

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SUMMARY
Abstract............................................................................................................................. 5
CHAPTER I
1. INTRODUCTION.............................................................................................................. 9
CHAPTER II
2. MARKETING................................................................................................................... 16
2.1 Marketing Environment............................................................................................. 18
2.2 Strategic Marketing.................................................................................................... 20
2.3 Strategies...................................................................................................................... 22
2.4 Tactical Marketing...................................................................................................... 25
2.5 Positioning.................................................................................................................... 29
2.6 Market Segmentation................................................................................................. 30
2.7 Online Marketing........................................................................................................ 31
CHAPTER III
3. MARKETING IN THE SHOW BUSINESS: THE SEARCH FOR HIGH
VISIBILITY……………………………………………………………………………. 35
3.1 Celebrity Industry....................................................................................................... 36
3.2 Preparation of a celebrity........................................................................................... 38

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3.2.1 Transformation techniques................................................................................ 39
3.2.2 Dissemination of the celebrity image............................................................... 41
3.2.3 The importance of Public Relations to the celebrity......................................... 41
CHAPTER IV
4. CONSUMER BEHAVIOR.............................................................................................. 43
4.1 Factors that influences the buying decision of the consumer................................. 43
4.2 Consumers Generations............................................................................................. 48
4.2.1 The Baby Boomers Generation.......................................................................... 48
4.2.2 Generation X...................................................................................................... 49
4.2.3 Generation Y...................................................................................................... 50
4.2.4 Generation Z....................................................................................................... 51
4.2.5 Generation α (alpha)........................................................................................... 52
4.3 On-line Consumer Behavior....................................................................................... 52
CHAPTER V
5. ARTISTIC JOURNEY OF THE SINGER LADY GAGA.......................................... 55
5.1 Analysis of the artistic journey of the singer Lady Gaga....................................... 55
5.1.1 Origin of the character “Lady Gaga”................................................................ 56
5.1.2 Albums.............................................................................................................. 57
5.1.3 Relationship in the social networks of Facebook and Twitter......................... 58

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5.1.4 The social network: LittleMonsters.com........................................................... 59
5.1.5 Launch of Lady Gaga Fame Collection…........................................................ 60
5.1.6 Merchandising................................................................................................... 61
5.1.7 New partnerships................................................................................................ 62
5.1.8 Born This Way Foundation e social actions...................................................... 63
5.1.9 Publicity…......................................................................................................... 65
5.1.10 Haus Of Gaga.................................................................................................. 67
CHAPTER VI
6 RESULTS AND DISCUSSION...………………………………………….................. 68
6.1. Stages of the transformation of the singer Lady Gaga.........……....……… 68
6.2 Target audience and customer relationship: building a competitive
advantage ........................................................................................................ 70
6.3 Portfolio strategies identified in the career of the singer Lady Gaga: vector
of geographic growth, sinergy of activities and strategic flexibility............ 72
6.4 Market opportunity, competitive strategy and positioning........................... 74
7 FINAL REMARKS………………………………………………..…………………... 76
REFERENCES………………………………………………………………………… 79
ANEXO I………………………………………………………………………………... 90
ANEXO II……………………………………………………………………………….. 91
ANEXO III……………………………………………………………………………… 92

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CHAPTER I
1 INTRODUCTION
The music industry moves budgets billionaires in the world economy. Consecrated
artists of the pop genre like Madonna and Michael Jackson were the big icon of the most part
of Generation X in the ‘70s and ‘80s, and their music still enchant the more recent
generations. Currently, when international pop music is discussed, Lady Gaga is one of the
most cited names. She is known for her extravagant outfits and her controversial statements,
and today the singer stands out as one of the world’s most profitable artists.
With the advent of the Information Revolution it’s possible to identify new ways of
relationship between producers and consumers of music. The existence of online platforms
and distributors of digital music require a reassessment by the music industry in its marketing
strategies. It’s necessary not only know the new market environment by analyzing its features,
but also understand its transformation and understand the difficulties.
Among the news from the virtual world, the internet made possible that cultural
production and commercialization become decentralized. Through this communication
channel the products can be shared quickly reaching a very large audience.
However, this accessibility has generated negatives effects for the group of companies
specialized in recording and distributing media noise. With direct access to the consumer's
electronic media, the music industry is losing power in the strategic function of production
and distribution.
According to IFPI's annual report (2011) - The International Federation of the
Phonographic Industry - there was a decrease of 8.4% in total sales of recorded music
between the years 2009 and 2010, 17.4 billion to 15.7 billion dollars. The physical format
sales also decreased 14.2% globally, totaling 12.2 billion dollars in 2009 to 10.4 billion in
2010. Physical sales lose ground not only for digital media that are available for sale as well
as piracy. However, even according to the report, digital sales increased about 5%, accounting

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for $ 4.6 billion in 2009 and 4.8 billion in 2010. Tentatively, digital sales are growing, but this
segment represents only a slice of the total income of the music industry.
Aligned to changing habits and customs of the consumer, which were promoted by the
advent of the digital era, Lady Gaga is positioned as a highly competitive product in the music
industry. Her songs are on the top list of international music of the world and her record in
number of sales heats the music market pointing to a new trend.
Not restricted only to show business, Lady Gaga expands its business and she is
recognized not only as a singer and music product, bus her name and image resembling a
brand. Large companies have sought partnership with the singer to achieve a degree of
visibility that otherwise would not be possible or as effective as. The singer, in this sense, has
been trying to develop herself as product exploring new segments and conducting marketing
actions that reflects in its positioning in front of the consumer market.
It’s not right think in the man as being exclusively mechanical, focused on meeting
physical needs only. The man has desires that are satisfied in different ways and who have
very subjective character. In this sense, the cultural productions as entertainment services
have the potential to transform the psychological state of the individual, because they are
intangible and cannot be measured.
Brazil is known worldwide for its Brazilian Pop Music (MPB), with works by Chico
Buarque, Gilberto Gil, Caetano Veloso and Elis Regina as flagships abroad. Beside it, Tom
Jobim and Joao Gilberto are the international expoents with the “Bossa Nova”, maybe more
known abroad than the national market.
Result of the cultural and social diversity of Brazil, it’s possible identifies in the
country a variety of musical genres throughout the territory, which remains mostly local and
regionalized. However, currently, it has noticed a reorganization in the national music scene,
where bands before regionalized become known throughout the country. Singers like Ivete
Sangalo, Claudia Leitte and the recent successes of bands hinterland, of the gender “Sertanejo
Universitário”, now acquire a larger space in the Brazilian musical culture.
It’s possible still follow the rise of new artistic profile in the international market
including Ivete Sangalo, Daniela Mercury and recent successes “sertanejos” represented by
Michel Teló and Luan Santana.

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In terms of internationalization of Brazilian culture and emphasizing the music scene
Bahia, Ivete Sangalo stands out by burning a DVD on American soil in 2010. In the career of
singer Ivete Sangalo is possible to identify the levels by which passed: local, regional,
national and international.
The music scene Bahia, substantially represented by the city of Salvador, is divided in
mostly between Axé-Music and Pagode. Both of them have a wide range of artists vying for
space with each other and their musics bring controversial subjects within the compositions.
The songs of Pagode are heavily criticized by their sexual content and explicit dances that in
theory, vulgarize the woman’s figure. It is noteworthy that, the Bahian music scene is great
exporter of talent, both national and international and it’s not restricted to the aforementioned
genres. The rock, for example, has a large representation in Salvador, artists with careers
already established in Brazil as Pitty and Marcelo Nova were originated in Salvador.
Numerous artists remain unknown by the “big” public. A lack of planning on their
careers determines the end of many bands that arise but they cannot remain on the market.
Thus, in a broader context, noting the attention that Lady Gaga brings to herself and her
career, it has been fostered the scientific curiosity to examine the relationship between the
"product" Lady Gaga and the strategic actions of marketing used by the artist.
Considering this cultural and economic context, this research is justified by its
potential to become a resource for many artists with claims of projection for new frontiers as
social, cultural and geographical, which will find in this material technical and vocational
allowance for planning their careers. The applicability of the research can also be directed to
other segments of culture, entertainment, fashion in general, politics and sport.
Considering the academic dimension, it is justified to serve as a starting point for new
and deeper studies. Both the Administration area as the Social Communication have vast field
of exploration for research directed towards creation, management of careers and business
strategies aimed at show business. The continuity of this initiative will set a valuable
inclusion of academia in a society extremely musician, tending to generate profitable results.
It is necessary highlight the personal and professional interest of the researcher in
studies in the field of show business. Besides the researcher be passionate consumer of
products from the world of international pop music, she has a strong interest in conducting
researches in this area of knowledge so promising in the business world and underexplored in

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academia. Moreover, the theme of the proposed work will serve as masters or specialization
after graduation.
During the last century, the world has gone for constant changes due to the
Information Revolution. High-end devices and social networks, for example, has caused
considerable changes in the profile of consumers and in the way of relating to the world
outside and inside, demanding by organizations a different position in the environment in
which they operate.
At the end of the second millennium of the Christian era, many events of historical
significance have transformed the social landscape of human life. A technological
revolution concentrated in information technology began to reshape the material
base of society at a rapid pace (CASTELLS: 1999, p.39).
The advent of digital technologies has enabled the development of new trends in
communication and social skills, remodeling interpersonal relationships, decisively
influencing transactions, trade relations of individuals and organizations around the world and
in their own way to transmit knowledge. Opens space for high-end devices, such as laptops,
tablets, smartphones and digital TVs that connect an individual anywhere in the world to
network. The facility provided by these devices also reflects in the changing habits and
customs of individuals, requesting that they adapt to new standards.
In this context, cyberculture, a contemporary culture heavily characterized by digital
technologies, just framing the new creations and manifestations of individuals in a virtual
space, known as cyberspace. In the cyberspace is common terminology such as download,
that is nothing more than the transfer of data between computers, and mp3, a standard digital
audio file. Understanding these concepts and their functionality are paramount to understand
the latest social trends.
Santini (2005, apud LIMA and SANTINI, 2009 p.54) argue that,
[…] communication, art and culture suffer deep reorganization with the arise of new
digital technologies. The machines and the electronic media production, storage and
spreading induced profound changes in the way to produce and in what is produced.
The music in the digital age is experiencing a major reorganization of the creation
and dissemination practices. There is a change in the use and dissemination of
musical language.
This new reality transfers to the consumer the power to choose the product that it
really want, and for the artist, to express itself in according of its true artistic essence and its
segment chosen. This restructuring of roles in the entertainment industry has diminished the

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hegemonic power of record companies and it has created opportunities never before
experienced, of independent market actions that result in the rise and success of artists.
The present work brings as problem understand technically, by the market perspective,
how did happen the consolidation of the career of the singer Lady Gaga. This is an artist of
international pop music scene, whose rates of sales grow every day in unison with her image
faced with the world. Considering the constant contemporary technological changes that
restructure the dynamics of the music industry, is questioned: 1 – Aiming an artistic
projection, which are the marketing actions more adequate for the new social context
characterized by cybernetic interchange without borders? 2 – How the marketing strategies
contributed for that singer reached high levels of sales and visibility, establishing her career
where almost everything became ephemeral?
The research has as general target analyze the marketing strategies used in the building
of the positioning, consolidation and development of the career of the singer Lady Gaga. To
do so, set up three specific objectives: 1 - identify proposals tactical and strategic marketing
directed to show business; 2 - characterize the trajectory of the career of singer Lady Gaga,
and 3 - analyze the marketing actions employed in the career of singer Lady Gaga.
The main target of research is to clarify questions, seeking to explain and understand
phenomena from a series of questions followed, for such purpose, rules that systematize the
study (Oliveira, 2001). Considering the methodological aspects necessary for this research, it
was established show business as a study area and by the particularity of the scope, set up as a
case study of the career of singer Lady Gaga.
As for the purpose, it will be an applied research, which according to Marconi and
Lakatos (2002, p.20), this research is "[...] characterized by their practical interest, in other
words, the results are applied or used immediately in the solution of problems that occur in
the reality". Accordingly, it is intended that this work can be a source of guidance for
emerging artists with careers, who may plan their careers, considering their individual
contexts, based on the marketing strategies implemented by the singer Lady Gaga.
Where: method is "[...] a set of means and processes used during the search for truth,
to ensure their reach" (BIRTH, 2002, p.17); it includes rules that systematize the form of
production, can explain how a target was achieved and enabling its reproduction by different
subjects (OLIVEIRA, 2001), for this research was used the inductive method, that’s in

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according to Andrade (1999, p.113) "the particular findings lead to theories and general
laws"; assumed in this research, by observation of facts that already happened in the singer's
career, it can possible relate them to theories about the discipline of marketing and design
them as relevant actions to other artists.
Regarding methodologies for achieving the first specific target, it was performed the
literature search, analyzing the theoretical proposals of Marketing for actions related to
management career. For Gil (2002, p. 44), "the literature is developed based on material
already prepared, consisting mainly of books and scientific articles." Supplementing this
thought, Oliveira (2001, p.119) argues that "the literature search has as its finality know the
different forms of scientific contributions that was done on a particular subject or
phenomenon."
In this work was prioritized the literature search in materials – books magazines,
newspapers, videos, articles and academic papers, monographs and dissertations - which
focus on the discipline of Traditional Marketing and the Marketing directed to show
business, as well as materials that characterize the trajectory of the singer Lady Gaga. In
addition to the printed material, the Internet was configured as a fundamental tool for the
development of research in function of the wide availability of work in the virtual world.
Thus, from printed and digital material, it was possible met relevant information for
completing the survey.
For answer the second specific target it was performed a case study. Gil (1995) argues
that the case study is characterized by the deep study of one or a few objects, enabling the
wide and detailed knowledge of the objects in question. Besides that, the case study is based
on the idea that the analyzing of a unity of the particular universe enable the comprehension
of its generality, or, at least, the establishment of the basis for investigation. As a case study,
the population was the artist, Lady Gaga, so it wasn’t necessary to separate a sample to the
analysis process.
Concerning to the third specific objective, starting point was the response of the
second specific objective, and theses information were analyzed, classified and interpreted,
correlating them with the proposals of marketing strategic actions. By seek to understand the
causes of the success of the artist, this work appears as explanatory research. This research is
characterized by requiring a more careful work, since in addition to record, analyze and
interpret facts or phenomena, this research seeks to know the causes of the facts or
phenomena (ANDRADE, 1999).

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The research is structured in six chapters. In Chapters II, III and IV are exposed the
proposed strategic and tactical of marketing directed to the show business, as established in
the first specific objective, which embody the theoretical framework of this study. The
Chapter V consists of the characterization of the trajectory of the career of singer Lady Gaga,
that sought using a chronological order, respond to the second specific objective. Finally, in
Chapter VI are contained the analyzes and discussions related to the marketing activities
employed in the career of singer Lady Gaga, as proposed in the third specific objective of this
research, and respond to the work problematic. Finalizing the research, presents the final
considerations of the author.

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CHAPTER II
2 MARKETING
According to Kotler (1986) marketing is a set of human activities that has as its
objectives facilitate and consummate exchange relations. Do not come to the concept of
marketing at random. Although it is a subject that has gained notoriety recently, marketing
can be considered one of the oldest professions in the world. Its roots go from the beginning
of the simplistic exchange relations to advanced monetary marketing techniques current.
Thus, it can be said that the definitions of marketing and its complexities vary with the
economic stage of society.
To Hooley et al. (2005), after examining 25 definitions of marketing, the American
Marketing Association, proposed a universal concept of marketing, in which: “Marketing is
the process of planning, executing the conception, the price, the planning and the distribution
of ideas, goods and services to create exchange that satisfy individual and organizational
objectives” (HOOLEY, p.5, 2005).
In this sense, it is possible identify two instances of marketing: the strategic marketing,
represented by the marketing management and the general appearance of marketing; and the
tactical marketing, in which is found the marketing mix, known as the 4P’s of Marketing.
Kotler (2010, p.18) still adds that “Marketing is the activity, set of institutions and
processes to create, communicate, deliver and exchange offerings that have value to the
consumers, clients, partners and society in general”.
In the latter concept, to use the term “society”, the author highlights the current
concern of marketing in not only satisfy the needs of their customers and achieve
organizational objectives, as well as the cultural implications of globalization, removing it, in

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this way, of the mechanical aspect and starting to have concerns with the whole as their
actions reflect directly on society.
Currently, marketing seeks to engage their customers in the process of product
development and communications. In this sense, the new name of marketing proposed by
Kotler (2010), marketing 3.0, it understands the organizations as concerned with the
environment where they live and therefore they are interested in turning it so that there are
benefits and positive changes for customers, for the organization and society in general.
Marketing 3.0 is a business model based on values, and in this case, it considers that
collaboration is one of the main pillars to change the world.
With the changes occurred in the global scenario, driven primarily by globalization,
individuals have felt a greater need to become global citizens rather than just local. Aiming to
mitigate the paradoxes resulting from these transformations people "try to connect with each
other" (KOTLER, 2010, p.15). Thus, even the principles of the competition in economy have
been changed. Today, companies compete to be recognized as "conducive to continuity,
connection and direction" (KOTLER, 2010, p.15), and issues such as poverty, environmental
sustainability, community responsibility and social purpose are on the agendas of consumers
and organizations that are concerned with social development.
In other words, marketing is responsible for everything that influence in the
commercialization of a good or product, since its conception until the consummation of the
change made. Thus, the primary function of marketing is to make the organization stops to
look only to you and pass to worry about the external environment.
To "look out" it is said that marketing is a customer orientation, since its main
objective is to identify needs and desires, from then on, plan and produce products and
services. Accordingly, Kotler (1986, p.43) argues that "The marketing concept is a customer
orientation, with the rear integrated marketing and intended to produce customer satisfaction
as the key to the fulfillment of organizational objectives".
In relation to integrated marketing, it happens when all departments of the
organization work together to serve the interests of consumers (KOTLER, 1998). Thus, only
after the customer satisfaction - expectations and aspirations matched after purchasing any
good or service - the organization will achieve organizational objectives and grow. Drucker
(1993) also defends marketing as an orientation for the customer, understanding the business

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as seen from the perspective of its final result, that is, viewpoint of the customer. Thus, both
Kotler as Drucker emphasizes that success in business is not determined by the producer, but
by the consumer.
For Hooley et al. (2005), the main role of marketing is to identify and communicate
the wishes and needs of customers throughout the organization, determining the competitive
positioning to match customer needs with the ability of the company and conduct all relevant
organizational resources to achieve customer satisfaction.
In this sense, the history of marketing directs to a concept of programmatic planning
product, pricing, promotion and distribution in order to meet, in a responsible way and
satisfying the interests of customers, organizations and society in general.
2.1 Marketing Environment
It can possible to consider that marketing is as a function of the company focused
mainly on macro-environment. The macro-environment is comprises of variables in which
organizations have no control, and for this reason, they can be viewed as threats or
opportunities.
A threat can be defined as a specific disorder in the environment or as an unfavorable
trend that in the absence of action by the organization may result in your termination.
Generally, organizations with more rigid structures are the most feel the consequences of
environmental change, because they have resistance to change them organizational culture.
For organizations more flexible, adapt to environmental changes is to regard them not as
threats, but as opportunities. In this case, an opportunity is characterized as a set of favorable
environmental conditions (KOTLER, 1986).
The macro-environment of marketing is set by four environments: economic,
technological, socio-cultural and political-legal. They may also be known as PEST analysis
on the basis of the initial settings (HOOLEY, 2005).

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The economic environment is related with the form of distribution and use of
resources in society. According with Certo (2010), this environment is composed of indices
such as GDP, inflation, employment rates, interest rates, taxes and incomes consumer
spending, public debts, profits in the economic sector, balance of payments and sectorial
productivity.
The technological environment relates to the technological changes that insert new
techniques of production of goods and services, also including procedures and new
equipment. Technological innovations influence directly in the efficiency of organizations. To
Kotler (1986), the technological environment can be seen as both wonder and horror as it all
depends on the positioning of organizations in relation to new technologies. Also according to
the author, only companies that accompany technological change as a major environmental
forces will hold the best market share.
The political-legal environment comprises the elements related to government
decisions and legislation adopted, the latter involving rules and laws that must be followed by
the whole society. As an example may be cited the laws as the Law of Consumer Protection,
Antitrust Law and the attitude of the government face of industries. Marketing decisions should
be taken according to the laws in force (CERTO, 2010).
Also according to the author, the socio-cultural environment encompasses the
characteristics of the society in which the organization operates. In it, issues such as beliefs,
customs, lifestyle and age are of utmost importance to the company. Understanding the cultural
environment is a key factor for the development of strategies both to strengthen its image as
establish the reputation of an organization.
Besides the macro-environment is possible to identify two other environments that
influence the organization, the operating environment and the internal environment (CERTO,
2010), also known, according to Kotler (1986) as market environment and organizational
environment, and yet, according with Hooley (2005), such as competitive environment. This,
summarizing the operating environment / market environment, and internal / organizational in
only one environment.
In the first, still considered as external level to the organization, are embedded
variables that have specific and relatively immediate impact in organizations, being composed
mainly of customers, hand labor, competition, supplier and international issue (CERTO,
2010).

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Porter (1980) cited by Hooley (2005) points out that there are five forces competitive
environment that influence the level of competition in business strategic units, known as the
Five Forces Model, they are: rivalry among existing firms, threat of new entrants, threat of
substitutes, bargaining power of suppliers and bargaining power of buyers.
In relation to the internal or organizational environment Certo (2010) argues that they
are variables that are inserted within the organization and have immediate implication in its
administration. Similar to the existence of threats and opportunities in the macro-
environment, in the internal environment is possible to identify strengths and weaknesses. The
latter, for finding within the organization are easier to be identified and controlled, unlike
what happens in the operating environment and macro-environment (HOOLEY, 2005). In the
internal environment are inserted organizational aspects, aspects of marketing, financial,
personnel and production.
2.2 Strategic Marketing
According to Carvalho (unknown date), strategic marketing appears as a set of actions
that aims to create a competitive advantage for the organization so that its market
performance is unique and keep the domain of certain segments on market.
Hooley et al. (2005) argue that strategic marketing is a process of analyzing the global
organization that aims to position it on the market that is constantly changing. It is from
strategic marketing that is possible define the organization's strategies, based on the deep
comprehension of the market and implying, of course, in organizational change in order to
adapt to the transformations.
As described by Kotler (1998), through market-oriented for market, organizations can
choose from five different concepts how to conduct their business and adopt strategies
according to their positioning. They are: focus on the production, product focus, focus on
selling, focus on marketing and focus on societal marketing.
When the company has focused on the production, their efforts are directed toward
high production efficiency and wide distribution. Thus, it is postulated that customers give
preference to products that are widely available and low price. The challenge for an

21
organization that adopts this approach focuses on the aspect of generating low costs and
reconcile the demand - which can be overwhelming - with the offer or the capacity of the
organization.
In organizations that have focus on product, managers direct their energy into
creating superior products and improving them over time. Thus, customers give preference to
products with quality and performance differentiated and innovative features. However, some
companies end up having what could be called marketing myopia, in which many of the
products offered can be good in the eyes of the manager, but bad for customers, since it does
not meet your needs or desires.
Organizations with focus on sales believe that consumers, if left them alone, will not
consume their products. Therefore, efforts should be directed to the persuasion of customers,
so that they are willing to purchase, adopting an aggressive selling and promotion. In this
approach there is little research regarding what the customer wants and much advertising for
what the organization want to sell.
Organizations with focus on marketing challenge the three previous approaches by
focusing their efforts from outside to inside. The marketing concept presupposes a customer
orientation, being essential the discovery and understanding of their wants and needs, to
launch products and services to market. Also, having a focus on marketing also implies that
organizational objectives will only be achieved if the satisfaction offered to the customer is
more effective than competitors.
Having customer orientation, however, may have dangers as well as any other
marketing strategic posture. Companies should meet the needs and desires of their customers,
combining their skills and capabilities to satisfy the market. The risks of entering in a market
in function of having identified an opportunity from the needs of the customers are very large
if the company's capabilities do not support its requirements (HOOLEY et al., 2005).
An important difference between having a focus on sales and marketing is that the
first focuses its efforts emphasizing the needs of the seller, relating to the volume of sales.
The second focuses its efforts emphasizing the needs of the buyer.
Finally, organizations with a focus on societal marketing (KOTLER, 1998), also
known as Marketing 3.0 (KOTLER, 2010), emphasize that besides being essential to discover

22
the needs and wants of their customers in order to satisfy them more effectively than its
competitors, it is necessary to do all this while preserving or increasing the well-being of
consumers and society in general.
Marketing 3.0, in this case, can be understood as a tendency for current
organizations, since its focus goes beyond just the relationship of organizations with their
customers. Marketing 3.0 considers all agents that are affected by globalization, starting to
worry also with the reduction of the social impacts, economic, environmental and
technological society (KOTLER, 2010).
Thus, strategic marketing identifies an ideal posture according to the layout of the
market and directs strategies trying to achieve the organizational objectives. To do so, the
strategic marketing uses the tactical marketing and the types of decisions available to stand on
the market. Decisions can be: product decisions, pricing decisions, promotion decisions and
point (distribution) decisions that will be described later.
2.3 Strategies
The strategies are characterized by forming a set of rules or guidelines of decision that
serve to mark the development of an organization. Strategies should provide direction and
focus towards solving problems and creating new opportunities, through the achievement of
goals and objectives (ANSOFF, 1990).
Within the sets of rules, as the author argues, business strategies drive the behavior of
the organization from the analysis of environments, mainly external, defining what product or
technology development, for whom and where to sell and how to sell in order to overcome the
competitors in terms of good results.
The strategies describe ways to achieve objectives, and for this reason, are seen as the
means to reach the ends. They are able to reorient the advancement of organizations,
providing them consistent, then to improve and become more competitive.
In this context, it is possible identify different types of strategies, such as portfolio
strategies and competitive strategies. Ansoff (1990, p.102) states that "the portfolio strategies

23
specifies the combinations of business strategic areas in which the company will seek to
achieve their objectives".
Portfolio strategies are formed by four components, the geographic growth vector that
defines the direction of the future business of the company and its scope. It has four branches
and can be characterized as a strategy of market penetration, product development, market
development and diversification; the competitive advantage, in which companies focus on
activities that they develop in the best way; the synergy between the activities of the
organization, where the overall coordination becomes a priority; and, strategic flexibility,
which cares with flexibility in relation to the changes, which can be external - diversifying the
geographical reach of needs met and technologies - or internal departments which act in an
integrated manner using resources and skills that are easily transferable among strategic
business areas.
Regarding geographic growth vector, it is noteworthy, according to Ansoff (1990),
that in the strategy of market penetration, the company already has products and markets, but
search by massive inserting of its products increase their participation in the market.
Regarding the strategies of developing markets, is seeking new missions for the organization's
products. In the strategy of product development, new products are created to take the place of
existing, being designed through market research, for example. And lastly, the diversification
strategy consists in the complete modification of both products as the missions of the
company.
The diversification strategy can be of three types: concentric, horizontal and
conglomerate. In concentric diversification, the new business area has a close connection with
the previous business area, using the commercial and productive base existing. In general,
appears as the inclusion of new products in new markets, from the use of technological
synergies of current product lines (SOUZA and BRAGA, 2007).
Souza and Braga (2007) state that horizontal diversification is the creation of new
products or in exploring new markets from the marketing synergy of products from the main
business area. In conglomerate diversification, the new business area has little or no relation
to the business area before. Furthermore, there is no exploration of any synergy, commercial
or technological (NASCIMENTO, 2004).

24
Moreover, the portfolio strategies can be incremental or discontinuous. When they are
incremental, they cause a distancing logical and relatively small from earlier portfolio, while
the discontinuous changes mean an expansion of the organization in the contrary direction to
the logic of the historical development of the company (ANSOFF, 1990).
The portfolio strategies, in this sense, appears as a strategy that seeks to optimize the
competitiveness of a company, whether the improvement in products already in the market by
adopting specific action plans, either by designing new products and hence the expansion and
total modification of market performance.
Chaves et al. (2009) argue that the strategies proposed by Igor Ansoff became known
by the generic strategies of Ansoff, though the author has not used these terms.
On the other hand, it can possible identify the competitive strategies that link paths to
each business strategic area which could lead the company to success. The main competitive
strategies, according to Ansoff (1990), are: the strategy of maximizing market share, which
prevailed during the first half of the twentieth century, in which the products were produced
on a large scale and were standardized, providing enterprises as competitive differential the
production at low cost and sale cost less than or equal to that of competitors; the growth
strategy, heavily used in the second half of the twentieth century, symbolized the change of
consumer behavior when the consumer passed to searching for differentiated products,
requiring that companies diversify their products to meet your desires; in the market
differentiation (or image) strategy, companies have realized that people not only wanted to
purchase products which were differentiated according to their personal characteristics and
would enable them to highlight or social status, but they realized that the product had image
and, from advanced techniques of advertising and promotion, aroused interest desires in
people, and later consumption, so they started to work in these issues; and finally, the
differentiation of products and services strategy consisting in enabling a different
performance of the products or services of the company in contrast to the products offered by
their competitors.
Furthermore, Michael Porter identifies three generic types of strategies that guide the
behavior of the organization: the total cost leadership, differentiation and focus (KOTLER,
1998).

25
In the total costs leadership, the organization seeks to specialize in reducing their costs
of production and distribution, with prices lower than their competitors and thus obtaining
greater market share. In differentiation strategy, the company should seek advantage in an
area that is important to the consumer, considering that it is valued by the majority of the
market. However, the company can lead in terms of quality, service, technology etc., but the
company should be aware that it cannot possible be a leader in all areas. In focus strategy, the
organization seeks to define smaller segments to act, instead of wanting to satisfy a broad
market. Thus, the company needs to know its market and position itself in terms of cost
leadership or seeking to provide differentiation to the target audience, as expounded Kotler
(1998).
2.4 Tactical Marketing
The tactical marketing acts as a support for the strategic marketing in direction of
detailing the marketing actions. "[...] one marketing mix is the combination of strategic tools
used to create value for customers and achieve organizational objectives" (Churchill &
PETER, 2000, p.20).
Thus, the main instrument of tactical marketing is the marketing mix, consisting of 4
tools of action that the company uses to interact with the market, they are: product, price,
promotion and point. The marketing mix is also known as the marketing mix or the 4 P's of
Marketing that were originally suggested by E. Jerome McCarthy, and served as the basis for
the classification and comprehension of the main elements of the marketing program of a
company (KOTLER, 1986).
To enter into a market is essential to define a product and establish parameters for how
to put the company in the competitive environment. Thus, should be considered their
attributes, their position relative to its competition and existing products (KOTLER, 1986).
Considered the cornerstone of the marketing program, according to Kotler (2000,
p.416), a product is "something that can be offered to a market to satisfy a need or desire". A
product may consist of three components: good (s) physical (s), the service (s) and idea (s).
However, the products are more than just tangible packages, customers understand that

26
products are benefits packages, and in this case, the success of a product is not entirely related
to its tangible attributes, but the perception of value for their consumers.
As highlighted by Kotler (1996), the products can be classified as durable goods,
nondurable goods and services. Durable goods are tangible products on which survive many
uses. The non-durable goods correspond to tangible assets that are depleted in one or a few
uses. The services, "[...] are activities, benefits or satisfactions that are offered for sale"
(KOTLER, 1986, p.146), and the services has four main characteristics: intangibility,
inseparability, variability and perishability.
Another classification of consumer goods can be sustained not by the characteristics of
the product, but the buying habits of consumers, they are: convenience goods, goods of
comparable and goods of special use. The first are goods that consumers usually buy
frequently and in a prompt manner without considerable efforts in terms of comparison and
buying. The comparable goods are those in which the consumer performs a process of
selection and purchase, comparing products in terms of suitability, quality, price and style.
Finally, there are still goods of special use that have unique features or exclusive branding, for
which a significant group of buyers is willing to commit more effort to purchase (KOTLER,
1986).
In the process of product development should be considered three levels: core product,
tangible product and augmented product. On the first level is the product in the way that the
customer acquires, is the product in fact, having the form of a packaged service to satisfy
customers. On the second level are considered product attributes such as level of quality,
features, style, brand and packaging. At the third level, it considers the additional services that
accompany the product and generate consumer benefits in the acquisition and its maintenance.
“Products are the set of attributes, functions and benefits that customers buy.
Primarily, they may consist of tangible attributes (physical) or intangible, such as
those associated with services, or a combination of tangible and intangible”
(GRIFFIN, 2001, p. 228).
According to Kotler (1986, 1998), considered as one of the fundamentals variables of
marketing, that can influence the potential sales of a product, pricing decisions tend to impact
quite significantly on the performance of an organization. However, among the elements of
the marketing mix, the variable “price” differs from the others by generating revenue, not
costs.

27
Also according to the author (1986), the pricing should be consistent with the
objective of pricing policy of the organization. Thus, prices can be supported by five different
objectives: market penetration goal, setting prices for “cream” of market or skimming price
goal, purpose of ready cash recovery goal, satisfaction goal and product line promoting goal
(KOTLER, 1986).
The decisions point and distribution strategies are intended to define how a product
can be available to the target market (KOTLER, 1998). According to Coughlan et al. (2002,
p.20) a marketing channel "is a set of interdependent organizations involved in the process of
providing a product or service for use or consumption." Accordingly, Kotler (1986) identifies
four stages to the marketing channel, they are: the stage 0, which is direct marketing in which
there are no middlemen; the stage 1, where there is a sales intermediary, usually a retailer; the
stage 2, which contains two intermediate almost always a wholesaler and a retailer; and
finally the third stage, where it is possible to identify three intermediaries. Also according to
Kotler (1986), the importance and advantage of adopting intermediaries in the distribution
process is based on the fact that reducing the responsibilities of producer and their costs to
deliver their products to consumers.
To Kotler (1986), the promotion decisions cover all forms of communication from the
company to try to reach consumers. Although many people confuse promotion decisions with
the concept and function of marketing, Kotler (1986, p.854) emphasizes that, "the promotion
covers all the instruments of the marketing mix whose main role is persuasive
communication". Thus, although the product, and the price point are also considered
promotional factors, they do not have persuasive character as promotion decisions. Therefore,
even according to the author, the promotion compound consists of four elements: advertising,
personal selling, publicity and sales promotion.
The advertising, to Kotler (1986, p.855), is characterized as "any paid form of
impersonal presentation and promotion of ideas, goods or services by an identified sponsor."
Also according to the author, advertising can make use of various media such as radio,
television, newspaper and outdoors. In addition, depending on its purpose, advertising is
subdivided in four types: institutional advertising, when the advertising want to fix the name
of the company in the long-term; brand advertising, when the objective is to develop long
term brand; classified advertisement when it is intended to disseminate information about
sales, services, or company events; and advertising sales, when the company want to
announce a special sale. Thus, the advertisement appears as a tool to promote a good concept
and image of the company, brand and products.

28
The personal sales appear as "oral presentation in a dialogue with one or more
prospective purchasers for the purpose of making a sale" (KOTLER, 1986, p. 855),
characterized then by direct, immediate and interplay contact, i between two or more people.
The personal sales aims to negotiate a product showing its features and benefits arousing
interest in the consumer to complete a sale and establish reasons for other sales the future.
Among the main advantages of personal sales are the personal confrontation, cultivating
relationships and getting quick answers coming from the consumer (KOTLER, 1986).
The publicity such remember Kotler (1986, p.855), is characterized as follows:
[…] an impersonal stimulation of demand for a product, service or business, by
planting commercially significant news through a published medium or obtaining
favorable presentation on the radio, television or stage that is not funded by the
sponsor.
Thus, it can be said that publicity is a type of “free” advertising, because the seller, in
this case, does not pay to receive the disclosure. It is important to note a basic difference
between publicity and advertising, in which the first is characterized by its informative
character, and the second for its persuasive character (KOTLER, 1986).
To Kotler (1999), the customer can even resist an ad about a new brand in a medium
of communication, however, the costumer will hardly fail to act when there is the possibility
of winning something as a gift or an offering of two products by a price of one. The role of
sales promotion, in this sense, is influence consumer behavior.
According to Kotler (1986, p.855), sales promotion consists of "[...] marketing
activities that don’t be personal sale, advertising and publicity, such as shows, concerts and
exhibitions, demonstrations and various non-recurring sales efforts outside the ordinary
routine”.
The sales promotion sets up as an indispensable tool for the promotion compound,
since it aims to boost sales through direct actions among consumers, intermediaries and
internal business public such as sales force. Some of the main tools of sales promotion are:
samples, promotional discounts, prizes, contest, purchase discounts, contests sales forces, and
another ways (KOTLER, 1986).
However, Cobra (1997) also points two other elements to the promotion compound,
the merchandising and the public relations. For Cobra, merchandising:
Comprises a set of tactical operations conducted at the point of sale, to place on the
market the right product or service, in the right quantity, at the right price at the right
time, with the appropriate visual impact and correct exposure. It involves packaging,
displays, pricing techniques and special offers (COBRA, 1997, p.444).

29
Also according to the author, public relations are characterized as:
[...] A process of information, knowledge and education with social order using
techniques in order to achieve the good will and cooperation of people with whom
an entity is or what it depends. (COBRA, 1997, p.444)
In this sense, it is possible say that the development of an effective communication
strategy should consider all elements of the promotion compound exploring their potential as
well as the capacity of the entire marketing mix, balancing all decisions of the marketing mix.
2.5 Positioning
The competitive positioning is a fundamental tool for developing marketing strategies.
To Kotler (1997), cited by Hooley et al. (2005), "[...] the positioning is the act of creating the
company image and offers, so that these can occupy a competitive position and that be
significant and unique in the minds of target customers." Thus, the positioning is related to the
perception customer for the products, services, brands and competitors of the organization.
Hooley et al. (2005) argue that there are six main dimensions of differentiation
inherent for definition of a competitive positioning. According to the authors, organizations
can differentiate themselves from their competitors in terms of price, technical quality (or
level of technology), service, customization, differentiation of benefits and innovation.
Positioning by price implies in control of costs and the assumption that the prices of
the organization should be lower than the competitors. The positioning by technical quality
relates to the means for developing a product, such as technology, and adapting the term
"quality" to the eye of the customer. Thus, seeks to offer a product that is attractive to the
consumer, implying the need to know it, understand it, and the market in which it is inserted,
and defines ways to satisfy it (HOOLEY et al., 2005).
The positioning by innovation, according to the authors, is related to the continuous
transformations in society that are able to redesign the course of action, brought mainly in
function of the technological revolution. Although companies seek ways through product
improvement, the trend is that without innovation or insertion of new products on the market
and / or new processes, the company will have difficulties of maintaining itself in the market.

30
Similarly, the success key factors for organizations include skills in developing new products
with the technical and creative skills.
As evidenced by Hooley et al. (2005), based on meeting the specific needs of the
target market, positioning by service seeks to provide superior or better service to satisfy your
audience. This positioning uses strategies for understanding the market in which it operates,
for creation of links and relationships with their customers and monitor customer satisfaction
about the products offered.
In positioning by differentiation of benefits, organizations seek to map out which
benefits different segments want and then direct their efforts to meet the desires of the public.
Finally, the customized positioning, also known as one to one marketing, aims to develop
differentiated products or services according to individual customer wishes. The privilegies
for this position are focused on combining expertise from outside to inside with skills from
inside to outside, that is, identify what the customer wants and develop relationships with the
costumer, coupled with the flexible production process (HOOLEY et al., 2005).
2.6 Market Segmentation
As evidenced Ansarah (1999, p. 16),
Companies can adopt two lines of marketing strategies when they are addressing to
the market: the diffusion and segmentation. The diffusion consists of placing a
product on the market without worrying about the differences between consumers,
and the segmentation starts with a reverse premise, because it sees the demand as
heterogeneous, focusing marketing efforts in certain market share.
Hooley et al. (2005), determine that the market segmentation is configured as the
mapping of the differences of the clients that can be identified in relation to their
characteristics, behavior and needs. Thus, it is possible to oppose the concepts of positioning
and segmentation, since the first focuses on how the customers perceive the alternatives on
the market, while the second is aimed at how marketers identify the customer groups.
The basis for market segmentation, as pointed Kotler (1986) can be divided into four
classes: geographic variables, demographic, psychographic and consumer behavior. However,
segmentation techniques can be different depending on the market that is being analyzed and

31
the segmentation techniques can be modified,. if not created new ways for such activity in
order to discover new market opportunities.
In the geographical segmentation, organizations seek areas in which they have
differentiation and can operate with relative advantage in the market. In demographic
segmentation, are searched for information about age, gender, income, generation, occupation
and social class of people. In psychological segmentation, are examined psychological factors
that may affect consumers in the purchase decision such as lifestyle or personality (KOTLER,
1986, 1998).
"In behavioral segmentation, buyers are divided into groups, taking as a basis their
knowledge, attitude, use or response to a product" (KOTLER, 1998, p. 235).
2.7 Online Marketing
The advent of internet improved the marketing techniques and allowed that the market
became globalized. Bridging physical barriers by using virtual networks, the information
access and the multiplication of the information came to be facilitated. Thus, the Web made it
possible for a potential client, located anywhere in the world, know a new product, a new
company or a new brand just accessing a machine able to connect to the network (BRUNER
et. al., 2001).
It is possible observe, according to the authors, that the main value of the Internet is
the interactivity and, in this sense, they argue:
The Web offers more opportunities than most other media, in which a company can
only talk to their customers. Online means engaging with them, listen to them and
learn from them through attributes of feedback, as online group discussions and
surveys preferences and evaluations of customer service by email. (BRUNER et. al.,
2001, p. 52)
The management of online marketing brings positive results for the organization,
which are mainly related to the solidification of the brand, market research and publishing
content. Therefore, it’s related not only to the means of promotion via the internet as well as
site management, from its creation to its stabilization in the virtual space and customizing
emails while marketing tasks performed by electronic mail (BRUNER et. al., 2001 .)

32
According to Bruner et. al. (2001, p.239): "the starting point for any public relations
strategy, as well as all aspects of marketing, is to know your audience". It is essential,
therefore, to determine who your audience is and what the media are your costumers more
attentive.
It has been as a maxim in the world of advertising that something is only news as it is
new. Among the main issues for generating news, plus all informative character, there is the
ability of a material has to counter any tendency or cause some surprise, because the press is
looking more controversial. Also, take political stances and promote actions that promote
public welfare are part of news topics that will attract public attention (BRUNER et. al.,
2001).
For the authors, the online advertising is an important tool to develop free promotional
strategies training audience. The online business initiatives thereby potentiate building a
brand, using interactivity to create brand awareness and get direct response of the audience.
Developing any type of advertising should consider the strategic thinking of an
organization avoiding inadequate information and that isn’t part of the organizational profile.
Therefore, it is required a lot of care before launching promotional strategies, especially when
these commercial initiatives host in the virtual world that, in turn, is characterized by being
dynamic and unstable (BRUNER et. al., 2001).
The online marketing can serve as a basis for improving other areas that are essential
to the development of organizations such as the relationship with the client. Accordingly, in
Gordon (1999) cited by Toledo et al. (2004) relationships are the main goods of an
organization because they enabling the company has long-term earnings and its risk is
reduced, in addition to exploring new and different ways to maximize profits and incomes.
Vavra (1993) cited by Toledo et al. (2004) argues that relationship marketing can be
understood as a post-marketing, its main function is to satisfy consumers constantly and
function as reinforcement to individuals regarding subsequent stimuli for new purchases. The
authors also emphasize that the buying process only becomes complete when the customer
relationship is solidified, thereby attracting new clients only as an intermediate step in this
process.
Among the essential actions, Toledo et al. (2004) point out that for a relationship
management becomes effective, the organization must have a database and information.

33
Databases enable the company know your customer and set new strategies based on the
information obtained. In addition, the authors emphasize that interactivity is also an essential
element to be administered in relationship marketing, because what guarantees new sales is
the contact with consumers. Thus, customer services condense in forms of assistance or levels
of interactivity that the company can offer them, mainly exploring contacts via phone, mail
and internet.
This strategy of effective contact with the customer becomes a competitive advantage
for organizations, because for Matilla (2001) apud Slongo and Liberali (2004, p.15), "frequent
consumers may be less sensitive in relation of prices than those transactional". Furthermore,
the authors argue that the relationship with the client when built on trust and commitment, just
inducing cooperative behavior. Moreover, one long-term relationship can trigger on two
factors: the dependency and mutual trust between the participants of the action.
In this direction, social networking has been a fundamental tool for the development of
relationships between producers and consumers. To Teles (2010, p.78):
Social networks are environments that focus on bringing people together, called
members, once registered, can expose your profile data, such as personal photos,
texts, messages and videos, and interact with other members, creating lists of friends
and communities.
The increase of market competitive edge has forced organizations to look for new
ways to attract buyers. Among the available tools, social networking has been an efficient
field regarding customer relationship, which enables the consolidation of the relationship. In
this case, these relations have offered to companies a competitive advantage because it allows
the consumer to express their opinions and perceptions, providing a kind of constant feedback
regarding their experiences (BALDAN et al., 2011).
For the authors, organizations that do not adapt to the new ways of marketing - which
gained power with the development of the Internet - may lose space and market share, noting
that no effective interaction with your customers can be a major cause of negative results.
Not unlike the traditional model of marketing, also in virtual marketing, especially on
social networks, it is necessary that the companies know their customers and direct their
efforts in order to satisfy them better than their competitors. The electronic media allow that
be created relationships with customers and thus, can be possible follow changes in their

34
behavior that has occurred so quickly. For Baldan, et al. (2011, p.3), "it is necessary,
therefore, to strengthen brotherhood between the customer and the organization and especially
hear it".
Regarding the relationship marketing, Kotler and Armstrong (2008, p.10), define it as
"the overall process of building and maintaining profitable relationships with customers
delivering them superior value and satisfaction. It handles all aspects of acquiring,
maintaining and developing customers".
The relationship marketing has been a differential for organizations. In its premises the
company's role is to pay attention in what the customer wants, what the customer says and
how this is expressed. Also, do what the client feels important part in product development
has been essential, because is often that costumers offering ideas and suggestions that are
valuable to companies. When costumers realize that they are getting attention from the
organization, this may influence their buying decision, since the costumers will prioritize
those companies which offer to them better recognize, value, quality and respect (BALDAN
et al., 2011).
Cristine (2010) argues that many companies seek to develop social networks like
Facebook, Twitter, Orkut, among others, and that in a survey conducted by Fortune magazine,
34 of the world's largest companies use Twitter, thus demonstrating the potential of these new
forms of social interaction network.
However, although the use of these tools has the potential to maximize benefits, it can
also carry risks if poorly controlled, or, similarly allowing free expression of the consumer in
terms of suggestions, questions, cheers or information channel is also an open channel for
complaints (CRISTINE, 2010).
Thus, social networking has enabled to companies a form of competitive advantage as
they create and strengthen brotherhood with customers. The affinity between company and
user must be worked continuously, so that the exchange of information between both allows
an improvement of the company in relation to its products and relationships and an
improvement regarding the customers that feeling part of the company and can become
faithful to organizations.

35
CHAPTER III
3 MARKETING IN THE SHOW BUSINESS: THE SEARCH FOR HIGH
VISIBILITY
For Schmitt et al. (2004, p.14):
[...] Show business begins with the entertainment. It is no news today customers
want to be entertained. Every part of our culture – the news, education, sports, food
– increasingly targets this desire. […] Show business creates experiences that are
fun. It does so by appealing to fantasy, humor or drama. Show business can be use
high technology or old-style razzle-dazzle to create an experience that can be
surprising, playful, thrilling, or sexy.
The word “entertainment” comes from English entertainment, which according to
Oxford (2012), corresponds to the action to provide amusement or pleasure, characterized as
an event, performance or activity designed to entertain others.
Entertainment is transforming agent, able to awaken the senses and touch the human
feelings. Entertaining can be seen [...] as an alternative that causes sensations,
stimulates discoveries, is good for the soul and the heart (AOKI, 2008, p. 9).
The ways to provide pleasure through art are varied and also complex if analyzed in
all its breadth. The show business, in this case, covers all areas for providing entertainment to
others, involving not only the direct agents, largely represented by creative agents as artists,
composers and musicians, but also including indirect agents represented by entrepreneurs,
producers and distributors. Furthermore, it must be consider the structural part of show
business, a system that supports the relationship between direct and indirect agents of
entertainment, which is composed by the great world of film, television, theater and music
(WIKIPEDIA, 2012).

36
The evolution of the marketing concept parallel to the economic stage of society
enabled the branch of its concept making it adaptable to different types of products. The
massification of cultural industry, for example, generated in large part in function of the
advent of the Industrial Revolution, opened space to the emergence of cultural marketing that
has as main objective to promote and stimulate the consumption of cultural products through
advertising campaigns. The art became a commodity and, based on capitalist principles, has
also become susceptible to marketing (BIZZOCCHI, 2002).
The entertainment works more with the desire than the needs and because it, acts as an
activator of the market process. Thus, the desire is an important merchandising tool since it is
not always motivated by a current need, but for an additional benefit (LEAL, 2004). Although
the marketing be focused on the development of products and services, it range has spread to
other dimensions, being directed to any process that involves marketing image and
positioning, as organizations, places, causes and mainly people (LEAL, OLIVEIRA 2007).
When dealing with an artist, the personal and artistic marketing make-up essential to
building a career. The ability that an artist has to arouse fascination in others is only possible
when a person gathers characteristics that differentiate it from other, such talent, personality
and charisma. These characteristics are heavily worked by marketing in order to achieve high
visibility in the market (LEAL, OLIVEIRA, 2007).
In certain cases, the search for visibility is industrialized and there is a team that is
responsible for build of artists, configuring it as a systematic and careful process (REIN,
STOLLER and KOTLER, 1999).
The marketing in show business has increasingly sought by loyalty from costumers
assuming a bilateral relationship between producer (artist) and consumer (fan). In this sense,
the artist's fan expects the same respect, attention and understanding that it spends with the
artist, and when it doesn’t happen, the tendency is that another product (artist) be sought by
the consumer to meet their needs (LEAL, OLIVEIRA, 2007).
3.1 Celebrity Industry
The celebrity industry has omnipresent character, it is in everywhere, but not always is
seen in its true form. Following the line of industry concept, this, unlike the traditional and

37
more known as the manufacturing, does not transform materials into products, but has as its
mainly objective transforming unknown people into well-known people (REIN, KOTLER
and STOLLER, 1999).
However, although little is known about this industry that moves billions across the
world economy, it is essential to understand the extent of this industry. The celebrity industry
involves at least eight "sub-industries", which play support services in the construction of a
celebrity. In Table 1 is shown a schematic of this industry.
Table 1. Structure of the Celebrity Industry.
Source: Rein et al., 1999, p.35.
Although broad and complex, this structure has been increasingly sophisticated as
accompanies technological advances and their uses. The internet, for example, can easily be
embedded in the telecommunications industry and give more power in the development of the
activities.
This grouping of industries acts together and in a coordinated way in order to produce
and promote celebrities. Activities range from finding compromises to their clients -
celebrities - through management of personal and professional life, by broadcasting the entire
contents which involves celebrity, oversight to legal issues such as contracts, image
management, to fitness and professional, how to behave, what to wear and mainly what

38
speaking in public. All these actions aim to develop the image of the celebrity and consolidate
it in this huge market that moves billions worldwide (REIN et al., 1999).
The authors emphasize that this segment is very promising in market scenario. Modern
society has been strongly influenced by standards and values exposed by the media,
describing itself as a society that worships names and brands. Thus, the need for create people
with high visibility becomes a reality to the celebrity industry, or even a market opportunity.
The products offered to consumers fill spaces in their lives, often assisting them in building
their identities, acting as figures able to represent them, models and even referrals.
The above statement is based on the analysis theory of consumer behavior, which
among other things, consider social factors as influencing decision making. In this case, the
reference groups that people are inserted can change their consumption decision, in function
that consumers internalize values from their coexistence in certain groups (KOTLER, 1998).
3.2 Preparation of a celebrity
Treat people as products has been a subject generating controversy because building a
"roadmap" to be followed by celebrities may imply falsehood and illusion. Furthermore, in
function of celebrities be human people, they are fallible and cannot be consistent all the time.
However, although the discussion, the celebrity industry incorporates techniques directed to
the development of traditional products for construct "human products" (REIN et al. 1999).
The authors argue that aspirants celebrities can be molded or constructed according to
the market demand and business segments, passing by a complex process of transformation.
In this sense, the candidate to celebrity must be flexible to be modified and fulfill the
expectations of the audience. Furthermore, it should imply that this planning process does not
exist, masking the marketing strategies arguing that its success is the result solely of variables
such as luck, charisma, talent, attitude, time etc.. And in this case, there are many devices that
the celebrity industry uses to cover the complex structure that it creates and sustains an artist,
and to remain "invisible" to the audience.
However, even in this path of making a celebrity, the authors highlight that an aspirant
to become highly visible, it first must want to be a celebrity. This thought can be corroborated

39
by classic thinker political thinker Machiavelli (2008), "The Prince", talking about power, the
author emphasizes that the prince undoubtedly should wish omnipotence, in other words, the
prince should wish the power.
The construction of a celebrity does not occur at random. When a product is inserted
on the market, the industry conducts market analyzes, to define positions that are in
accordance with demand. The successful candidates should enhance their relationship with
customers, which in this case are understood as their fans, and to follow a set of strategies to
achieve their goal of getting high visibility and stay on top (REIN et al., 1999).
Furthermore, the authors admit that this industry conducts intensive use of dramatic
reality while the drama has the ability to engage the audience with celebrity. Crises with drugs
and diseases, adversities, overwhelming talent, attempts to show the celebrity as a simple
person and having a deep character and references that were the guidance for the individual,
are part of this roadmap that aim commercial exploitation while connecting to more intense
fans to celebrities. In this sense, as more specialized teams are responsible for creating these
stories, "most seductive and persuasive dramatic reality becomes" (REIN et al., 1999, p. 117)
and therefore, greater will be the link between producer and consumer .
3.2.1 Transformation techniques
The construction of a celebrity encompasses a set of techniques and strategies for
marketing and communication activities for the product development in the long term (REIN
et al., 1999).
The authors define four phases for the transformation of the artist. The first phase is
the concept generation, in which the aspirant celebrity and its support staff should "select or
invent a distinct combination of factors that will differentiate the aspirant from the others"
(REIN et al., 1999, p.157). It is necessary at this stage has a marketing orientation, in other
words, the aspirant must seek to adapt to the wishes of demand and be flexible to become,
requiring features such as elasticity of personality. The concept generation phase is further
divided into three sub-steps: the definition of the target market, selecting the appropriate type
to play and character development.

40
In sub-stage of market definition analyzes the size of the audience (demand), the
requirements of marketing and resource availability. In selecting the type must be chosen a
social type with which the aspirant will be presented to the audience. These types are varied,
can be cited as examples the kinds heroic, seductive and naive, to which Jung cited by Rein
et. al. (1999) are understood as archetypes that the aspirant need to personify them. In this
case, it is necessary to choose the most suitable type for demand and verify the ability to
represent it. In sub-stage character development, there is the creation of a character to embody
the type chosen, as the authors point out.
To complete this stage, the authors identify the regeneration of the concept, which
basically involves a return to the concept generation steps: defining new market, choose a new
type and develop a new character.
The second phase is the concept test. This phase involves the presentation of the
product to the audience that should be small and controlled so that can be possible check the
levels of acceptance or the public reaction (REIN et al., 1999).
The third phase is the refinement of concept. After aspirant test an effective concept is
needed to refine it. For this, the production team seeks to bring together features in the
aspirant that makes it in a consistent product performing a kind of project design. The authors
point seven areas that must be carefully crafted to ensure the refinement of the aspirant, which
are: signs and symbols, name, appearance (face, hair, height and clothing), voice (tone,
accent, diction), movement (gestures and walk), conduct and stuff. Analyzed these factors
should be a monitoring or periodic check on how the image of the celebrity is transmitted to
the audience, always seeking to improve or refine it even more to the audience (REIN et al.,
1999).
The fourth phase is the realization of the concept. At this phase the aspirant should
perform an internal transformation incorporating the necessary features to its own personality.
To make real this change within itself and internalize certain behaviors and values, aspirants
can be oriented in four ways: by modifying the conduct, which is a process of behavioral
change based on the method of punishments and rewards; by transformation with mentor in
which the aspirant emulates its mentor or a the aspirant has a model to be mirrored; by
processing occasional, in which the aspirant is exposed to certain situations which will guide
the development of its own image; and, by transformation based on staging in which the
aspirant lives under a new character (REIN et al., 1999).

41
3.2.2 Dissemination of the celebrity image
For that the aspirants reach the effective diffusion image they must use the distribution
channels that are commonly represented by television, fairs, nightclubs, movies, internet and
others. The distribution channels are used to bring the image of the celebrity to the audience.
In this case, the authors identify four ways in which an aspirant can reach it: formal
presentations, management presentations, mentions and product endorsements.
However, these channels can be replaced considering three factors: new presentation
channels are created, which mostly become possible in function of advances in technology;
the economic factor, people opting to use distribution channels that are in according to their
economic conditions; and the changing preferences of the demand.
The mass media is the distribution channel that is more efficient. However, once
released by the mass media, the aspirant should be aware of its power, which may one day
exalt it and put it on a throne, and moments later overthrow it. Hence the need for the aspirant
going through a transformation process whose goal is to prepare for the world of fame (REIN
et al, 1999).
The aspirant who uses effective means of distribution has its image in the media for
longer, causing what some authors call "share of mind", which to Kotler (1998) corresponds
to participate or brand recall in the minds of consumers.
3.2.3 The importance of Public Relations to the celebrity
Advertising is a set of techniques that has as main objective to control the distribution
of the image of a celebrity determining a balance between exposure and protection. To do so
it can create stories and different situations in order to capture the attention of its audience. It
is characterized by being a non-paid distribution image. In addition, controls the content of
the articles or news reports about certain celebrity (REIN et al., 1999).
According to the authors, among the functions of advertising are: organizing press
conferences, preparing packages for the press, write speeches, coordinate major events,

42
implement the marketing plan, plan and execute advertising scripts, manage special projects
etc.
To Rein et al. (1999, p.234) "Public Relations carves images highlighting partly the
salable factors of a name" protecting factors that threaten the image of the celebrity.
Moreover, "[...] clarify conflicting stories and potentially dangerous" (REIN et al., 1999,
p.236), and function as an organ tuning aimed soften or mask the slips committed by
celebrities.
To support the process of disclosure or build the process of promoting a celebrity, the
PR team determines six steps to follow: determine the needs of demand, selecting the right
story, recognize the opportunity (when it releases), position (where), to insert or put on the
market, a sector and means of communication, and finally, the action, which is to choose the
correct vehicle launch.

43
CHAPTER IV
4 CONSUMER BEHAVIOR
As the market expands surpassing national boundaries and becoming more complex,
the theory analysis of consumer behavior has as main objective to understand the mechanisms
activators of purchase on individuals, groups and organizations also, when they have to
purchase of goods or services to satisfy their wants and needs (KOTLER, 1998).
4.1 Factors that influences the buying decision of the consumer
Wrapped in a web of elements that influence the purchasing decisions of individuals
are the cultural factors, social factors, personal factors and psychological factors, which will
be described below.
In cultural factors are included culture, subculture and social class of consumers,
which are characterized as essential to understand its behavior (KOTLER, 1998). The culture
can be understood as a set of beliefs, values and customs learned that aims to direct the
behavior of members of a given society. In it are embedded languages, knowledge, laws,
religions, music, food habits, art, technology, types of work, goods etc., which form the
"personality" of society (SCHIFFMAN & KANUK, 2000). Thus, during growth, a child is
influenced by its family life and the basic institutions of which it is part and ends up
absorbing a set of values, perceptions, preferences and behaviors (KOTLER, 1998).
Subcultures are configured as smaller divisions of culture, which consider specific
features for its members by providing identification and socialization peculiar to them, as in

44
the case of religious groups, ethnic, racial, regional and economic groups. Thus, there are
different strategies for different nationalities, for example, targeted marketing to latinos or
african-american (KOTLER, 1998; SCHIFFMAN & KANUK, 2000).
Social classes are ways of society's grouping whose members share values, interests,
and similar behaviors. To Kotler (1998, p.163) “social classes reflect not only income but also
other indicators such as occupation, educational level, and residential area”. These may show
preferences for brands or products in certain areas, such as clothing and automobiles. Also,
show distinct interest in relation to the media. The higher classes prefer books and magazines
while the lower prefer television. The language in this sense, becomes a differentiator
between classes, requiring of companies a distinct positioning in these terms in order to win
the customer with messages carefully constructed to their publics (KOTLER, 1998).
Synthesized, cultural factors are defined by a set of values, beliefs and customs shared
in society that affect the decision making of individuals. These are the ones that influence
more broadly and deeply in consumer behavior, as internalize values that are essential for the
construction of their identities.
Among the social factors, reference groups, family and roles and social positions also
influence consumer behavior. To Schiffman and Kanuk (2000, p.229) "a reference group is
any person or group that serves as a point of comparison (or reference) for an individual in the
formation of values, attitudes and behavior both general and specific". Groups that influence
in a direct manner on a person are called affinity groups. Within these groups are identified
primary groups, which are included family, friends, coworkers and neighbors, characterized
by continuous interaction and informal manner; and the secondary groups, marked by formal
contact and interaction less frequent (KOTLER, 1998).
These groups influence the purchase decision as the coexistence exposes individuals to
different behaviors and lifestyles from their own. In addition, people can also be influenced
by groups that are not part of, but would like to integrate them, called aspiration groups, or
groups of dissociation, which have values or behaviors that are rejected by individuals as
point out Kotler (1998).
Thus, the author highlight that the task of companies is to identify the reference groups
and, in addition, identify the opinion leaders of these groups. An opinion leader is the one
responsible for the transmission of information about products or brands, and has the power

45
of influence within the group to which it belongs. While more individuals identify and
estimate the groups in which they are inserted, more their decisions are shaped by them.
The family is the most influential reference group on consumer purchasing behavior.
There are two types of family, family of guidance, formed by parents and responsible for
"guidance in terms of religion, political and economic sense, personal ambition, self-worth
and love" (KOTLER, p. 167, 1998).
The author argues that the second type is the family of procreation, consisting of
husband, wife and children. Buy decisions of certain products are not always taken by a single
component. This change can happen in terms of roles and social classes present in each
country. In general, decisions are made by the actors that have higher affinity or experience
with certain product category, for example, clothing, food and varieties decisions are often
taken by women. The decision can be shared when it comes to more expensive products.
Being a social animal, the authors argue that the man is characterized by participation
and interaction during its life in different group as family, clubs and organizations, behaving
differently in each situations that it experiences. To Kotler (1998), the roles are characterized
as activities that are expected that a person performing. For example, one person may be a
child, parent, and sales manager. Also according to the author (1998, p. 168) "each role means
a social position", and exemplifies citing a Supreme Court that has a higher status than a sales
manager. Accordingly, individuals seek for products that represent their role and status in
society.
Personal factors are inserted: age and stage of life cycle, occupation, economic
situation, lifestyle, personality and self-esteem. Age influences the purchase decision as the
individual grows up and starts to consume different types of products in the course of its life.
The goods acquired during the phase in which the individual is a child are different when it is
an adult or senior (KOTLER, 1998).
The stage of the life cycle of which the individual is a part, also influences the
purchase decision, and in this case can be identified at least nine stages through which a
person can go through, exposed according to Kotler (1998, p.169): single, composed by an
young who does not live with the family; honeymooners, where are the young, though
childless; full nest I, couples with children under 6 years of age; full nest II, couples with
children above 6 years of age; full nest III, mature couples with dependent children yet; empty

46
nest I, mature couples with children living away from home and the head of the family
working; empty nest II, mature couples with children living away from home and the chief
family retired; lone survivor, working; and, the lone survivor, retired.
Many businesses choose specific stages of the life cycle to direct their efforts,
however, with the change of the structure of traditional families, organizations began to be
interested also in residence for single, gay and the multiple residents (Kotler, 1998).
Schiffman and Kanuk (2000), identify these elements as embedded in the life cycles of
nontraditional families, which lists, among others, the unmarried couples formed by both
heterosexual and homosexual, and divorced people.
Organizations also seek to know the occupation of their consumers. A worker will
have a tendency to buy certain types of products, while a president of a company will be
predisposed to acquire different types of chosen by the worker, and in this case, the company
may, design their products for certain occupational groups (KOTLER, 1998).
The economic condition as the author points out, also influences the purchasing
decisions of consumers. In it, are willing to disposable income for the individual, debts, credit
conditions, savings, among others.
The personality and the self-concept of each individual will also influence on its
purchase decision. For personality, Schiffman and Kanuk (2000, p.81) define as "inner
psychological characteristics that both determine and reflect how a person responds to its
environment". To Kotler (1998, p.172), personality is represented by "traits, confidence,
dominance, autonomy, deference, sociability, defensibility and adaptability". While the self-
concept, even in the author's view, refers to what the individual thinks of itself, so, the
consumer will search for products that best fit of its characteristics.
Another factor is the lifestyle, which comprises a set of activities, interests and
opinions that reflecting a pattern or a way of life characteristic of individuals. Some studies
systematized lifestyle into categories, however, these segmentation models are not universal
because vary with each society. In addition, the styles vary as well as accompanying changes
in consumption patterns (KOTLER, 1998).
An example of lifestyles classification consists in 9 categories, divided into three
focuses: those whose consumption are geared to the inner self, represented by the integrated,
the socially conscious, the experimenters and the "I-am-I"; the oriented to the outside where

47
are inserted the emulators and directors; and, finally, those are geared to the needs, including
the belonging, the supporters and the survivors (FINOTTI, 2004).
Finally, purchasing decisions are also influenced by psychological factors such as
motivation, perception, learning, and beliefs and attitudes. Schiffman and Kanuk (2000, p.60)
define motivation as "the internal driving force of individuals that impels them to the action".
For the authors, this force is stimulated as the individual is faced with a state of tension
caused by the non-satisfaction of a need. The needs, according to Kotler (1998), can be
physiological when derived from tension psychological states such as hunger and thirst, and
psychological needs that arise as the individual is in a state of psychological tension as the
need for esteem or possession. In general, the tension state is appeased only when there is the
satisfaction of the need.
Some theories about motivation deserve mention when trying to explain consumer
behavior, such as Freud's theory of motivation, according to him, what drives purchasing
decisions is the unconscious, and therefore psychological forces may be unknown even by the
consumer; motivation theory of Maslow, which postulates that human needs are prioritized in
order of importance, so as the individual satisfy an important need, then leave for the
satisfaction of another. In Maslow's pyramid are physiological needs, safety, social, esteem
and self-realization. Finally, there is the motivation theory of Herzberg, which includes the
theory of two factors, where supports the existence of unsatisfactory and satisfactory factors,
where the unsatisfactory factors are those that cause dissatisfaction, such as the absence of a
warranty product, and the satisfactory factors are those which cause satisfaction as the ease of
use of a product (KOTLER, 1998).
Perception is another factor that influences on consumer choices. For the author,
perception is how the individual selects, organizes and interprets the information it receives
from the world to stand on it, having, thus, an interaction between the characteristics of the
environment in which it meets with its own characteristics, what characterizes the perception
as a subjective factor, because it varies from person to person.
Finally, the beliefs and attitudes complete the psychological factors that influence the
purchasing behavior of the consumer. The belief, according to Kotler (1998, p.176), "is a
descriptive thought that a person holds about something". Beliefs can be justified by faith,
opinion or knowledge. Regarding to the attitude, Kotler (1998, p.176) argues that is "the

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