LESSON 1: CỐ LÊN

I. Definition of Marketing
What is Marketing?
o Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large (American Marketing Association, 2017)
o Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements
profitably (Chartered Institute of Marketing, 2015) .
o Marketing is the process by which companies engage customers, build strong customer relationship, and create
customer value in order to capture value from customers in return (Kotler & Armstrong., 2018, p.5)
Above the line (ATL) vs Below the line (BTL)
BTL (Below The Line)
Channels: Trade marketing, Sampling, Road show, Event, Direct mail
Metrics: ROI, Cost per lead, New customer
Both lead to the Consumer

II. The Marketing Process

The Five Steps:
o Understand the Marketplace & Customers
o Design a customer-value driven MKT Strategy
o Prepare an Integrated MKT Plan
o Build and Manage Profitable Customer Relationship
o Capture Values from Customers
The Marketing Process
The process reflects all the main responsibilities of the marketing function
A simple model of the marketing process (Kotler & Armstrong, 2021). Create value for customers and build customer
relationships:
o Understand the marketplace and customer needs and wants.
o Design a customer value-driven marketing strategy.
o Construct an integrated marketing program that delivers superior value.
o Engage customers, build profitable relationships, and create customer delight.
Capture value from customers in return:
Capture value from customers to create profits and customer equity.
First 4 steps:
o Understand consumers.
o Create customer value.
o Build strong customer relationships.
Final step:
o Reap the rewards of capturing value from consumers in the form of sales, profits and long-term customer equity.
o This five-step process forms the marketing framework for the rest of the chapter and the remainder of the text.
o By creating value for customers, marketers capture value from customers in return.

2.1. Understand the marketplace & customers

Identify the five core marketplace concepts:
o Needs, Wants & Demand
o Market Offerings
o Value & Satisfaction
o Exchanges & Relationships
o Markets
NEEDS:
Needs are states of felt deprivation.
o Human needs include: basic physical needs (food, water, warmth, rest); safety needs (security, safety); social needs for
belonging, affection, fun, and relaxation (intimate relationships, friends); esteem needs for prestige, recognition, and
fame (prestige and feeling of accomplishment); and individual needs for knowledge and self-expression (achieving one's
full potential, including creative activities).
WANTS:
o Are the form human needs take as they are shaped by culture and individual personality.
DEMANDS:
o People have almost unlimited wants but limited resources.
o They choose products that produce the most satisfaction for their money.
o When backed by buying power, wants become demand.
o Psychological needs: Belongingness and love needs, Esteem needs.
o Self-fulfillment needs: Self-actualization.
Companies go to great lengths to learn about and understand customer needs, wants, and demands.
 o They conduct consumer research, analyze mountains of customer data, and observe customers as they shop and interact,
offline and online.
o People at all levels of the company—including top management—stay close to customers.
MARKET OFFERINGS:
o Some combination of tangible products, services, information, or experiences that are offered to the market to satisfy
a need or want.
MARKETING MYOPIA:
The mistake of paying more attention to the specific products than to the benefits and experiences produced by these products.
Value & Satisfaction:
o Customers form expectations about the value and satisfaction of market offerings.
o Satisfied customers buy again.
o Dissatisfied customers switch to competitors.
EXCHANGE:
Is the act of obtaining a desired object from someone by offering something in return.
RELATIONSHIPS:
Marketing consists of actions taken to create, maintain and grow desirable exchange relationships with target markets 91:
attracting new customers and retaining customers grow the business.
MARKETS:
o A market is a set of actual and potential buyers of a product.
o These buyers share a particular need or want that can be satisfied through exchange relationships.
o Marketing means managing markets to bring about profitable customer relationships.
o Although we normally think of marketing as being carried out by sellers, buyers also carry out marketing.
o Consumers market when they: Search for products , Interact with companies to obtain information , Make purchases.

2.2. Design a customer value-driven Marketing Strategy

o Marketing management is the art and science of choosing target markets and building profitable relationships with
them.
o The marketing manager's aim is to find, attract, keep, and grow target customers by creating, delivering, and
communicating superior customer value.
o To design a winning marketing strategy, the marketing manager must answer 02 important questions:
1. What customers will we serve (what's our target market)?
o By dividing the market into segments of customers (market segmentation) and selecting which segments it will go after
(target marketing).
2. How can we serve these customers best (what's our value proposition)?
o A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.
o Value propositions differentiate one brand from another.
o They answer the customer's question, "Why should I buy your brand rather than a competitor's?"
o Companies must design strong value propositions that give them the greatest advantage in their target markets.
Marketing Management Orientations
o Over time 5 alternative concepts have developed under which organizations design and carry out their marketing
strategies. This is also the development of marketing though time.
The 5 Concepts:
o Production Concept: The idea that consumers will favor products that are available and highly affordable focus on
improving production and distribution efficiency.
o Product Concept: The idea that consumers will favor products that offer the most quality, performance, and features
devote energy to making continuous product improvements.
o Selling Concept: The idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-
scale selling and promotion effort.
o Marketing Concept: A philosophy in which achieving organizational goals depends on knowing the needs and wants of
target markets and delivering the desired satisfactions better than competitors do.
o Societal Marketing Concept: The idea that a company's marketing decisions should consider consumers' wants, the
company's requirements, consumers' long-run interests, and society's long-run interests.

Marketing Management Orientations:

Selling and Marketing Concepts Contrasted (Kotler & Armstrong, 2021)
Feature The Selling Concept The Marketing Concept
Starting point Factory Market
Focus Existing products Customer needs
Means Selling and promoting Integrated marketing
Ends Profits through sales volume Profits through customer satisfaction
o The selling concept takes an inside-out view that focuses on existing products and heavy selling. The aim is to sell what
the company makes rather than making what the customer wants.
o The marketing concept takes an outside-in view that focuses on satisfying customer needs as a path to profits.
Example: Southwest Airlines's colorful founder puts it, "We don't have a marketing department; we have a customer department".
o Societal marketing: The company's marketing decisions should consider consumers' wants, the company's requirements,
consumers' long-run interests, and society's long-run interests.
o Three Considerations Underlying the Societal Marketing Concept (Kotler & Armstrong, 2021)
1. Society (Human welfare)
2. Consumers (Want satisfaction)
3. Company (Profits)

2.3. Prepare an Integrated Marketing Plan

o Integrated marketing program: a comprehensive plan that communicates and delivers the intended value to chosen
customers.
o The marketing mix: set of tools the firm uses to implement its marketing strategy.
o It includes the 4Ps: product, price, promotion, and place 151; and the extended 3Ps: Process, People and Physical
Evidence.
o The 7 Ps listed are: PHYSICAL EVIDENCE, PROMOTION, PROCESS, PEOPLE, PRODUCT, PLACE, PRICE

2.4. Build & Manage Profitable Customer Relationship

o The first three steps in the marketing process lead up to the fourth and most important step: building and managing
profitable customer relationships.
o Customer relationship management (CRM): The overall process of building and maintaining profitable customer
relationships by delivering superior customer value and satisfaction155. It deals with all aspects of acquiring, engaging,
and growing customers.

Relationship Building Blocks

o Customer-perceived value: the customer's evaluation of the difference between all the benefits and all the costs of a
marketing offer relative to those of competing offers.
o Customer satisfaction: The extent to which perceived performance matches a buyer's expectations. Customer
satisfaction depends on the product's performance relative to a buyer's expectations.
[Image showing a diagram of Satisfaction vs. Dissatisfaction based on Expected Level and Performance]
o Performance above the Expected level leads to SATISFACTION
o Performance below the Expected level leads to DISSATISFACTION.
o Relationship marketing tools: TMB's loyalty program personalizes and strengthens the customer's brand experience,
including a customized dashboard for managing points, rewards, and games
2.5. Capture Value from Customers
o It highlights the importance of not only acquiring customers but also keeping and growing them
o Customer Lifetime Value (LTV): is the value of the entire stream of purchases that the customer would make over a
lifetime of patronage
o Implication: Losing a customer means losing more than a single sale
o A company can lose money on a specific transaction but still benefit from a long-term relationship.

Happy customers:
o Return to buy more goods and services
o Help market the business with positive reviews or word of mouth
o Engage with the brand
o An extended model of the marketing process (Kotler & Armstrong., 2021)

* Create value for customers and build customer relationships:

[Link] the marketplace and customer needs and wants:
Research customers and the marketplace
Manage marketing information and customer data
[Link] a customer value-driven marketing strategy:
Select customers to serve: market segmentation and targeting
Decide on a value proposition: differentiation and positioning
[Link] an integrated marketing program that delivers superior value:
Product and service design: build strong brands
Pricing: create real value
Distribution: manage demand and supply chains
Promotion: communicate the value proposition192.
[Link] customers, build profitable relationships, and create customer delight:
Customer relationship management: build engagement and strong relationships with chosen customers
Partner relationship management: build strong relationships with marketing partners
Capture value from customers in return:
5. Capture value from customers to create profits and customer equity:
* Create satisfied, loyal customers
* Capture customer lifetime value
* Increase share of market and share of customer
o Underlying activities: Harness marketing technology , Manage global markets , Ensure environmental and social
responsibility

III. The role of Marketing Department in an organization

3.1. Company-wide Strategic Planning
o At the corporate level, the company starts the strategic-planning process by defining its overall purpose and mission
o The mission is then turned into detailed supporting objectives that guide the whole company.
o Headquarters decides what portfolio of business and products is best for the company and how much support to give
each one.
o Each business and product develops detailed marketing and other departmental plans supporting the company-wide
plan.
o Like the marketing strategy, the broader company strategy must be customer focused.

Steps in Strategic Planning (Kotler & Armstrong, 2021):

o Corporate level: Defining the company mission , Setting company objectives and goals , Designing the business
portfolio.
o Business unit, product, and market level: Planning marketing and other functional strategies.
Company-wide strategic planning guides marketing strategy and planning.

3.2. Planning Marketing & other Functional strategies

o The company's strategic plan establishes what kinds of businesses the company will operate and its objectives for each.
Then, more detailed planning takes place within each business unit.
o Major functional departments in each business unit—marketing, finance, accounting, purchasing, operations,
information systems, human resources, and others—must work together to accomplish strategic objectives.

3.3. Marketing's relationship with other functions

o Marketing can be seen as the customer's champion within the organization.
o One of its key roles is to help other parts of the organization to understand the importance of the customer to its success
—or even survival.
o Although marketing plays a leading role, it alone cannot produce engagement and superior value for customers
o The Marketing Dept needs to partner with other departments within the company/SBU, with other suppliers, distributors,
and customers to create a value chain.
o Value chain: a series of departments that carry out value creating activities to design, produce, market, deliver, and
support a firm's products.
Marketing has both an external (customer-facing) and an internal (staff- and stakeholder-related) element to it.
o It's important to understand the external environment of the organisation (including wide trends and changes and factors
closer to home, such as customer requirements and competitor offers).
o To ensure the long-term survival and growth of the organisation, it's equally important to communicate these elements to
internal groups in order to help to develop a market orientation and guide the organisation in meeting customer
expectations.

Marketing as an interface (Brassington & Pettitt, 2012)

* Customers: Current product needs, Future product needs, Price, Information needs, Product availability
o Intermediaries: Quantity, Demand, Price, Sales support, Logistics, Timing
o Competition: Current products, Future products, Target markets, Communication strategy, Distribution, Suppliers
o Suppliers: Specifications, Quality, Quantity, Logistics, Price
o Marketing environment: Sociocultural change, Technological change, Economic/competitive change, Political/legal
change, Ethical and ecological considerations
o Our Organization (Internal Departments): Production, R&D, Finance, HRM, MARKETING

How different departments of Walmart help it deliver this promise to its customers?
The purchasing department's skill in developing the needed suppliers and buying from them at low cost.
Walmart's information technology department must provide fast and accurate information about which products are selling in
each store244.
The megaretailer's digital research and development group must apply the latest technologies to its web and mobile sites.
Its operations people must provide effective, low-cost merchandise handling and develop effective delivery options

Lecture 3: Consumer Market & Buyer Behavior

I. What is Consumer Behavior?

o Consumer buyer behavior: the buying behavior of final consumers, individuals and households, who buy goods and
services for personal consumption.
o Consumer market: all of the personal consumption of final consumers.
o It considers the many reasons—personal, situational, psychological, and social—why people shop for products, buy and use
them, sometimes becoming loyal customers, and then dispose of them.
o Companies spend billions studying consumer behaviors.

Data is collected in many ways:

II. Model of Consumer Behavior

Model of Consumer Behavior

o The marketplace is an internationally competitive marketplace under globalization.

o To win this battle, enterprises invest in research:
 What customers want to buy
 Which locations they prefer
 Which amenities are important to them
 How they buy
 Why they buy
o A company that understands how consumers will respond to different product features, prices, and advertising appeals has a
great advantage over its competitors.

Model of Buyer Behavior (Kotler & Armstrong, 2021)

o The challenge is understanding how the stimuli are changed into responses inside the consumer's black box.
o The environment:
 Marketing stimuli: Product, Price, Place, Promotion.
 Other: Economic, Technological, Social, Cultural.
o Buyer's black box:
 Buyer's characteristics
 Buyer's decision process
o Buyer responses:
 Buying attitudes and preferences
 Purchase behavior: what the buyer buys, when, where, and how much
 Brand engagements and relationships

2.1. Environmental Stimuli

 The buying process starts with two main types of stimuli: Marketing stimuli (Product, Price, Place, Promotion) and Other
stimuli (Economic, Technological, Social, Cultural).
 These stimuli enter the consumer's Buyer's black box (Buyer's characteristics and Buyer's decision process).
 This black box then produces Buyer responses (Buying attitudes and preferences, Purchase behavior, and Brand
engagements and relationships).

The key is having THE RIGHT PRODUCT IN THE RIGHT PLACE AT THE RIGHT TIME.

Environmental stimuli influencing buying can include:

o STORE LOCATION
o PHYSICAL FACTORS
o CROWDING
o SOCIAL SITUATION
o TIME
o REASON FOR PURCHASE
o MOOD

2.2. Consumer Black Box

 The consumer's black box consists of the Buyer's characteristics and the Buyer's decision process.
 This "black box" is where the environmental and marketing stimuli are processed into buyer responses.

2.3. Consumer Responses

  Consumer responses include:
o Buying attitudes and preferences
o Purchase behavior: what the buyer buys, when, where, and how much
o Brand engagements and relationships
 These responses are the observable outcomes of the stimuli and the internal black box processes.

III. Characteristics Affecting Consumer Behavior

 Influences on Consumer Behavior

 Our buying decisions are affected by an incredibly complex combination of external and internal influences.
 Consumer purchases are strongly influenced by cultural, social, personal, and psychological characteristics.
 These factors mostly cannot be controlled by the marketer, but they must be taken into account.
 Factors influencing Consumer Behavior (Kotler & Armstrong, 2021)
o Cultural: Culture, Subculture, Social class.
o Social: Reference groups, Family, Roles and status.
o Personal: Age and life-cycle stage, Occupation, Economic circumstances, Lifestyle, Personality and self-concept.
o Psychological: Motivation, Perception, Learning, Beliefs and attitudes.
o Buyer

3.1. Cultural Influences

o Culture is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other
important institutions.
o Culture is the broadest influence on consumers.
o It is expressed through tangible items such as food, architecture, clothing, and art.
o Marketers continuously try to identify cultural shifts in order to devise new products and services that might find a receptive
market.

3.1. Cultural Influences | Sub-Culture

o Subcultures are groups of people with shared value systems based on common lif4e experiences and situations.
o Subcultures include nationalities, religions, racial groups, and geographic regions.
o Many subcultures make up important market segments, and marketers often design products and marketing programs tailored
to their needs.

3.1. Cultural Influences | Social Classes

o Social classes are relatively permanent and ordered divisions in a society whose members share similar values, interests, and
behaviors.
o Social class can be measured as a combination of occupation, source of income, education, wealth, and other variables.
o Members of a social class show distinct product and brand preferences in areas like food, travel, and leisure activity.
o Advertisers must compose copy and dialogue that will be familiar to the social class being targeted due to language
differences between social classes.
 Six-Category Social-Class Schema (Schiffman, L.G. et al, 2012)
o Upper Uppers
o Lower Upper
o Upper Middles
o Lower-Middle
o Upper Lowers
o Lower Lowers

3.1. Cultural Influences | Social Classes - Social-Class Profile (Schiffman, L.G., et al., 2012)

o THE UPPER-UPPER CLASS - COUNTRY CLUB ESTABLISHMENT: Small number of well-established families.
Accustomed to wealth, so do not spend money conspicuously.
o THE LOWER-UPPER CLASS - NEW WEALTH: Represent new money. Conspicuous users of their new wealth.
o THE UPPER-MIDDLE CLASS - ACHIEVING PROFESSIONALS: Career-oriented young successful professionals and
managers. Have a keen interest in obtaining the 'better things in life'. Consumption is often conspicuous.
o THE LOWER-MIDDLE CLASS - FAITHFUL FOLLOWERS: Primarily non-managerial white-collar workers and
highly paid blue-collar workers. Prefer a neat and clean appearance and tend to avoid faddish or highly styled clothing.
o THE UPPER-LOWER CLASS - SECURITY-MINDED MAJORITY: The largest social-class segment. Strive for
security. Interested in items that enhance their leisure time (e.g., television sets, fishing equipment).
o THE LOWER-LOWER CLASS - ROCK BOTTOM: Poorly educated, unskilled labourers. Tend to live a day-to-day
existence.

3.2. Social Influences | Groups

o Reference Group: Serve as direct (face-to-face) or indirect points of comparison or reference in forming a person's attitudes or
behavior.
o Membership Group: Groups to which the person belongs that have a direct influence.
 Primary groups: family, friends, neighbors, and coworkers.
 Secondary groups: religious groups, professional associations, and trade unions (more formal and have
less regular interaction).
o Aspirational Group: A group to which a person wishes to belong.
o The importance of group influence tends to be strongest when the product is visible to others whom the buyer respects.

Purchases of products that are used privately are not greatly affected by group influence.

o REFERENCE GROUPS: Groups a consumer identifies with and may want to join (e.g., Movie idols and professional
athletes).
o OPINION LEADERS: People with expertise in certain areas (e.g., Trusted publicly known figures).
o Word-of-mouth: The personal words and recommendations of trusted friends, associates, and other consumers tend to be
more credible than those coming from commercial sources. 92% of consumers trust recommendations from family and
friends above any form of advertising.
o Opinion leaders: people within a reference group who, because of special skills, knowledge, personality, or other
characteristics, exert social influence on others (KOLs, Influencers, Leading adopters).
o Influencer Marketing: Involves enlisting established influencers or creating new influencers to spread the word about a
company's brands.

3.2. Social Influences | Family

o The family is the most important consumer buying organization in society.

o The wife traditionally was the main purchasing agent for the family, but this has changed recently due to mothers working
outside the home and husbands being more willing to do the purchasing.

3.2. Social Influences | Social Role & Status

o A role consists of the activities that a person is expected to perform according to the persons around him or her. Common
roles include son/daughter, wife/husband, and manager/worker.
o Each role influences buying behavior.
o Each role carries a status reflecting the general esteem given to it by society. People often choose products that show their
status in society.
o Example: Businesspeople will behave according to the role they are in and act differently during a business meal compared to
when they are enjoying a casual dining experience with friends.

3.3. Personal Influences | Occupation

o A person's occupation affects the goods and services bought. E.g., blue-collar workers buy more rugged work clothes, while
executives buy more business suits.
o Marketers try to identify the occupational groups that have an above-average interest in their products and services.
o A company can specialize in making products needed by a given occupational group.

3.3. Personal Influences | Economic Situation

o A person's economic situation will affect his or her store and product choices.
o Marketers watch trends in spending, personal income, savings, and interest rates.
o In today's value conscious times, most companies have taken steps to create more customer value by redesigning,
repositioning, and repricing their products and services.

3.3. Personal Influences | Age & Life Stage

o Different life-stage groups exhibit different buying behaviors (e.g., tastes in food, clothes, furniture, and recreation).
o Buying is also shaped by the family life cycle—the stages through which families might pass as they mature over time.
o Life-stage changes usually result from demographics and life-changing events (e.g., marriage, having children, retirement).
o Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans
for each stage.

3.3. Personal Influences | Lifestyle

o A lifestyle is a person's pattern of living as expressed in his or her activities, interests, and opinions.
o It involves measuring consumers' major AIO dimensions—activities, interests, and opinions.
o Lifestyle captures something more than the person's social class or personality; it profiles a person's whole pattern of acting
and interacting in the world.

3.3. Personal Influences | Personality & Self-concept

o Personality: a person's distinguishing psychological characteristics that lead to relatively consistent and enduring responses
to the environment. This is useful in establishing brand image and suggesting the type of people to show in an advertisement.
o Self-concept: self-image, the complex mental pictures people have of themselves. People's possessions contribute to and
reflect their identities—that is, "we are what we consume".
 Brand Personality Framework (Schiffman, L.G., et al., 2012):
o Sincerity: Down-to-earth, Honest, Wholesome, Cheerful.
o Excitement: Daring, Spirited, Imaginative, Up-to-date.
o Competence: Reliable, Intelligent, Successful.
o Sophistication: Upper class, Charming.
o Ruggedness: Outdoorsy, Tough.

3.4. Psychological Influences | Motivation

o A person has many needs at any given time, both biological and psychological.
o A need becomes a motive when it is aroused to a sufficient level of intensity.
o According to Maslow's Hierarchy of Needs, human needs are arranged in a hierarchy. Needs include: Physiological needs
(hunger, thirst), Safety needs (security, protection), Social needs (sense of belonging, love), Esteem needs (self-esteem,
recognition, status), and Self-actualization needs (self-development and realization).

3.4. Psychological Influences | Perception

o Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the
world.
o People can emerge with different perceptions of the same object because of three perceptual processes:
 Selective Attention: the tendency for people to screen out most of the stimuli they are exposed to
everyday. People are more likely to notice stimuli that relate to a current need or that they anticipate.
 Selective Distortion: the tendency to twist information into personal meanings and interpret
information in a way that will fit our preconceptions. Marketers can't do much about this.
 Selective Retention: the tendency for people to retain information that supports their attitudes and
beliefs, and forget much of what they learn otherwise. Marketers use drama and repetition in sending
messages to the target market.

3.4. Psychological Influences | Beliefs & Attitudes

o Through doing and learning, people acquire beliefs and attitudes that influence their buying behavior.
o A belief: a descriptive thought that a person has about something based on knowledge, opinion, or faith. Marketers are
interested in beliefs because they make up product and brand images that affect buying behavior.
o Attitude: describes a person's relatively consistent evaluations, feelings, and tendencies toward an object or idea. Attitudes
are difficult to change.

IV. Types of Buying Decision Behavior

Types of Buying Decision Behavior

 Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-
expressive.
 Four Types of Buying Behavior (Kotler & Armstrong, 2021)
o High Involvement & Significant brand differences Complex Buying Behavior: Consumer has much to learn about the product
attributes, models, and accessories.
o High Involvement & Few brand differences Dissonance-Reducing Buying Behavior: Consumers are highly involved but see
little difference among brands they may respond primarily to a good price or purchase convenience.
o Low Involvement & Significant brand differences Variety-Seeking Buying Behavior: Consumers often do a lot of brand
switching for the sake of variety rather than due to dissatisfaction. Marketers encourage this by offering lower prices,
coupons, or free samples.
o Low Involvement & Few brand differences Habitual Buying Behavior: Consumers have low involvement with most low-cost,
frequently purchased products.

V. The Buyer Decision Process

5.1. The buyer decision process

o Stages: Need Recognition Information Search Evaluation of alternatives Purchase decision Post-purchase behavior.
o This model emphasizes that the buying process starts long before and continues long after the actual purchase.
o Marketers should focus on the entire buying process rather than just the purchase decision.
o In more routine purchases, consumers skip or reverse some of these stages (e.g., Search and evaluate info automatic response
loop).

5.1. The Buyer Decision Process: Need Recognition

o The consumer decision process begins when consumers recognize they have an unsatisfied need and would like to go from
their actual, needy state to a different, desired state.
o The greater the discrepancy between these two states, the greater the need recognition will be.
o The need can be triggered by internal stimuli or by external stimuli.
o Marketers must determine the factors and situations that trigger consumer problem recognition.
o Marketers should research consumers to find out:
 What kinds of needs or problems led them to purchase an item
 What brought these needs about
 How they led consumers to choose this particular product

5.1. The Buyer Decision Process: Need Recognition

o Consumer needs can be classified as functional, psychological, or both.

 Functional needs: pertain to the performance of a product or service.
 Psychological needs: pertain to the personal gratification consumers associate with a product and/or
service.

5.1. The Buyer Decision Process: Information Search

o An aroused consumer may or may not search for more information.

o How much searching a consumer does will depend on: the strength of the drive, the amount of initial information, the ease of
obtaining more information, the value placed on additional information, and the satisfaction one gets from searching.
o Information can be obtained from several sources:
 Personal Sources: Family, friends, neighbors, acquaintances.
 Public sources: Restaurant reviews, editorials in the travel section, consumer-rating organizations.
 Commercial sources: Advertising, salespeople, dealers, packaging, displays.
 The Internet: The company's Web site and comments from previous guests.

5.1. The Buyer Decision Process: Information Search

 Preferred sources of information (Vietnam Consumer Survey, 2019)

o Overall, the Vietnamese consumer appears to have a relatively balanced communication channel mix.

5.1. The Buyer Decision Process: Evaluation of Alternatives

 Consumers evaluate alternatives by comparing product attributes, importance, brand image, utility function, and attitudes.
o Product attributes: Consumers vary on which attributes they consider relevant, typically focusing on those connected with
their needs.
o Importance: Consumers attach different degrees of importance to each attribute.
o Brand Image: Consumers develop a set of beliefs about where each brand stands on each attribute.
o Attitudes: Consumers form attitudes toward different brands through some evaluation procedure.
 5.1. The Buyer Decision Process: Purchase Decision

 The consumer buys the most preferred brand, but 02 factors can come between the purchase intention and the purchase
decision:

1. Attitudes of others: The more intense the other person's attitude and the closer that person is to the decision
maker, the more influence the other person will have.
2. Unexpected situational factors: Unexpected situations (e.g., a sudden price increase or the loss of a job) may
arise to change the purchase intention.

5.1. The Buyer Decision Process: Post-purchase Behavior

 Satisfaction or dissatisfaction with a product/service is determined by the relationship between Customer Expectations
and Perceived Product/Service Performance.
 Sellers must faithfully represent the product's performance so that buyers are satisfied, as expectations are based on past
experiences and messages from various sources (sellers, friends, etc.).
 Post-purchase may result in cognitive dissonance—discomfort caused by post-purchase conflict. Consumers may take
steps to reduce dissonance, such as returning the product, complaining, asking for a refund, or writing bad reviews.

5.2. The Customer Journey

o Customer journey: The sum of the ongoing experiences consumers have with a brand that affect their buying behavior,
engagement, and brand advocacy over time.
o Marketers focus not just on what customers do across the stages and touch points but also on understanding and shaping the
evolving customer experience.
o Marketers must dig deeper to learn the "whys" of customer paths and mine consumer data to gain insights into the customer
journey.

5.3. The Buyer Decision Process for New Products

o A new product: a good, service, or idea that is perceived by some potential customers as new.
o The adoption process: the mental process through which an individual passes from first learning about an innovation to final
adoption (decision to become a regular user).

Consumers go through five stages in the process of adopting a new product:

1. Awareness: The consumer becomes aware of the new product but lacks information about it.
2. Interest: The consumer seeks information about the new product.
3. Evaluation: The consumer considers whether trying the new product makes sense.
4. Trial: The consumer tries the new product on a small scale to improve their estimate of its value.
5. Adoption: The consumer decides to make full and regular use of the new product.

5.3. The Buyer Decision Process for New Products

 The model suggests that marketers should think about how to help consumers move through these stages.
 If consumers are tentative about buying, a company might offer sales prices or special promotions to help them over the
decision hump.

5.3. The Buyer Decision Process for New Products: Individual Differences in Innovativeness

 New product marketers often target innovators and early adopters, who in turn influence later adopters.
 Adopter Categories Based on Relative Time of Adoption of Innovations (Kotler & Armstrong, 2021)

5.3. The Buyer Decision Process for New Products: Influence of Product Characteristics on Rate of Adoption

 Five characteristics are especially important in influencing an innovation's rate of adoption.

o Relative Advantage: The degree to which the innovation appears superior to existing products.
o Compatibility: The degree to which the innovation fits the values and experiences of potential consumers.
o Complexity: The degree to which the innovation is difficult to understand or use.
o Divisibility: The degree to which the innovation may be tried on a limited basis (Trial ability).
o Communicability: The degree to which the results of using the innovation can be observed or described to others.
 Conclusions

o Consumer behavior looks at the many reasons why people buy things and later dispose of them.
o Consumers go through distinct buying phases: realizing the need, searching for information, evaluating alternatives, choosing
and purchasing, using and evaluating after purchase, and disposing of the product.
o A consumer's level of involvement is how interested they are in buying and consuming a product.

 Low-involvement products are usually inexpensive and low risk.

 High-involvement products carry a high risk if they fail, are complex, or have high price tags.
 Limited-involvement products fall in between

Lesson 7+8:

1.1. What is a Product?

 Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or
want.
 Goods are Tangible.
o Services are Intangible.
 Services are a form of product that consists of activities, benefits, or satisfactions and that is essentially intangible and does
not result in the ownership of anything.

1.1. What is a Product?

 Products, Services, and Experiences

 Products and services are becoming more commoditized.
 Companies are moving to a new level in creating value for their customers by creating and managing customer experiences
with their brands or company.

1.2. Levels of Products

 Product planners need to think about products and services on 03 levels, with each level adding more customer value.

1. Core customer value (the most basic level): addresses the question, "What is the buyer really buying?".
o Example: People buying a Harley-Davidson are buying the Harley experience: freedom, independence, power,
and authenticity.
2. Actual Product: turns the core benefit into an actual product. It includes product and service features, a design, a quality
level, a brand name, and packaging.
3. Augmented product: offers additional consumer services and benefits. This level includes elements like Delivery and
credit, After-sale service, Product support, and Warranty.

There are 02 main classifications of products: consumer products and industrial products.

o Consumer products: A product bought by final consumers for personal consumption.

o Industrial products: A product bought by individuals and organizations for further processing or for use in
conducting a business.

1.3. Types of Product | Consumer Product

 Marketing Considerations
o Convenience Product
o Shopping Product
o Specialty Product
o Unsought Product
 Customer buying behaviour
o Convenience Product: Frequent purchase; little planning, little comparison or shopping effort; low customer
involvement
 o Shopping Product: Less frequent purchase; much planning and shopping effort; comparison of brands on price,
quality, and style
o Specialty Product: Strong brand preference and loyalty; special purchase effort; little comparison of brands;
low price sensitivity
o Unsought Product: Consumer either does not know about or knows about but does not normally think of
buying
 Price
o Convenience Product: Low price
o Shopping Product: Higher price
o Specialty Product: Highest price
o Unsought Product: Varies
 Distribution
o Convenience Product: Widespread distribution; convenient locations
o Shopping Product: Selective distribution in fewer outlets
o Specialty Product: Exclusive distribution in only one or a few outlets per market area
o Unsought Product: Varies
 Promotion
o Convenience Product: Mass promotion by the producer
o Shopping Product: Advertising and personal selling by both the producer and resellers
o Specialty Product: More carefully targeted promotion by both the producer and resellers
o Unsought Product: Aggressive advertising and personal selling by the producer and resellers

1.3. Types of Product | Industrial Product

 Industrial products & services are those products purchased for further processing or for use in conducting a business.
 03 groups of industrial products and services:
o Materials and parts: include raw materials (farm products, natural products) as well as manufactured materials
and parts (component materials like iron, component parts like small castings).
o Capital items: aid in the buyer's production or operations, including installations (buildings, fixed equipment)
and accessory equipment (factory & office equipment).
o Supplies and services: include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance
items (paint, nails, brooms).

II. Product & Service Decisions

 Product and service decisions are made at three levels:

1. Individual Product Decisions.

2. Product Line Decisions.
3. Product Mix Decisions.

2.1. Individual Product Decisions

 Individual product decisions involve five steps:

1. Product attributes
2. Branding
3. Packaging
4. Labeling and logos
5. Product support services

2.1. Individual Product Decisions | Product Attributes

 Companies develop, communicate, and deliver benefits by focusing on three product and service attributes:
o Product Quality: affects product or service performance and is closely linked to customer value and
satisfaction.
o Product Features: a product can be offered with varying features, which are a competitive tool for
differentiating the company's product from competitors' products.
o Product Style & Design:
 Style describes the appearance of the product.
 Design contributes to a product's usefulness as well as to its looks.
 2.1. Individual Product Decisions | Product Attributes: Product Quality

 Product quality refers to the characteristics of a product or service that bear on its ability to satisfy stated or implied
customer needs.
 It includes two components:
o Performance quality: the product's ability to perform its functions.
o Conformance quality: freedom from defects and consistency in delivering a targeted level of performance.

2.1. Individual Product Decisions | Product Attributes: Product Features

 Product Features are a competitive tool for differentiating the company's product from competitors' products.
 Features are assessed based on their value to the customer versus the cost to the company.
 The company should periodically survey buyers to ask:
o How do you like the product?
o Which specific features of the product do you like most?
o Which features could we add to improve the product?

2.1. Individual Product Decisions | Product Attributes: Product Style & Design

 Style describes the appearance of the product.

o Styles can be eye-catching, but a sensational style does not necessarily make the product perform better.
 Design is a larger concept than style and goes to the very heart of a product.
o Design contributes to a product's usefulness as well as to its looks.

2.1. Individual Product Decisions | Branding

 Brand is the name, term, sign, or design or a combination of these, that identifies the maker or seller of a product or
service.
 Brand names offer several benefits to the seller:
o They help consumers identify products that might benefit them.
o They say something about product quality and consistency.
o They become the basis on which a whole story can be built about a product.
o They provide legal protection for unique product features.
o They help the seller to segment markets.

2.1. Individual Product Decisions | Packaging

 Packaging involves designing and producing the container or wrapper for a product.
 Packaging functions include:
o Protecting the product.
o Making it easy for consumers to handle and store the product.
o Playing an important role in communicating brand personality.

2.1. Individual Product Decisions | Labelling & Logo

 Labels and logos range from simple tags attached to products to complex graphics that are part of the packaging.
 They support the brand's positioning and add personality to the brand.
 The label performs several functions:
o Identifies the product or brand.
o Describes the product (who made it, when, contents, usage, safety).
o Promotes the brand and engages customers.
o Customers often become strongly attached to logos as symbols of the brands they represent.

2.1. Individual Product Decisions | Labelling & Logo

 Logos must be redesigned from time to time to keep them contemporary and meet the needs of new digital devices and
interactive platforms.
 Companies must be careful when changing important brand symbols, as customers often form strong connections to the
visual representations of their brands and may react strongly to changes.

2.1. Individual Product Decisions | Product Support Services

  Customer service is an important element of product strategy.
 A company's offer usually includes product support services, which can be a minor or major part of the total offering.
 Support services are an important part of the customer's overall brand experience, they keep customers happy and build
lasting relationships after the sale.

2.2. Product Line Decision

 Product line is a group of products that are closely related because they function in a similar manner, are sold to the same
customer groups, are marketed through the same types of outlets, or fall within given price ranges.
 Product line length is the number of items in the product line.

2.2. Product Line Decision: Expand Product Line Length

A company can expand its product line length in 2 ways:

1. Product line filling involves adding more items within the present range of the line.
2. Product line stretching occurs when a company lengthens its product line beyond its current range.
o Companies at the upper end of the market can stretch their lines downward.
o Companies at the lower end of the market can stretch their product lines upward.
o Companies in the middle range can stretch their lines in both directions.

2.3. Product Mix Decision

 Product mix/portfolio consists of all the product lines and items that a particular seller offers for sale.
 A company's product mix has 4 dimensions:
o Product mix width: the number of different product lines the company carries.
o Product mix length: the total number of items the company carries within its product lines.
o Product mix depth: the number of versions offered of each product in the line.
o Product mix consistency: how closely related the various product lines are in end use, production requirements,
distribution channels, or some other way.

2.3. Product Mix Decision

The company can increase its business in 04 ways:

1. Increase width by adding new product lines.

2. Increase length by lengthening its existing product lines.
3. Increase depth by adding more versions of each product.
4. Pursue more or less product line consistency depending on whether it wants a strong reputation in a single field or several
fields.

III. Product Life-Cycle

3.1. Product Life Cycle (PLC)

 After launching a new product, management wants that product to enjoy a long and happy life, earning a decent profit to
cover all the effort and risk.
 Management is aware that each product will have a life cycle, although its exact shape and length are not known in
advance.

Product Life Cycle is the way products go through stages from development to death. The cycle has 05 distinct stages.

o Some products die quickly; others stay in the mature stage for a long time.

The 5 Stages: Product development, Introduction, Growth, Maturity, Decline.

Product Life Cycle Stages

 Product Development: begins when the company finds and develops a new-product idea. Sales are zero and investment
costs mount.
 Introduction: a period of slow sales growth as the product is introduced in the market.
o Characteristics: Low sales, High cost per customer, Negative profit, A few competitors. Main customers are
innovators. Profits are nonexistent due to heavy expenses.
 Growth: a period of rapid market acceptance and increasing profits.
 o Characteristics: Rapidly rising sales, Rising profit, Low cost per customer, Growing number of competitors.
Main customers are early adopters.
 Maturity: a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers.
o Characteristics: Peak sales, Low cost per customer, High profit. Main customers are middle majority.
Competitors stabilize and begin to decline. Profits level off or decline because of increased marketing outlays to
defend against competition.
 Decline: the period when sales fall off and profits drop.
o Characteristics: Declining sales, Declining profits, Declining number of competitors. Main customers are
laggards.

3.3. Strategies for Product Life Cycle Stages

 Marketing objectives
o Introduction: Create product engagement and trial
o Growth: Maximize market share
o Maturity: Maximize profit while defending market share
o Decline: Reduce expenditure and milk the brand
 Product
o Introduction: Offer a basic product
o Growth: Offer product extensions, service, and warranty
o Maturity: Diversify brand and models
o Decline: Phase out weak items
 Price
o Introduction: Use cost-plus
o Growth: Price to penetrate market
o Maturity: Price to match or beat competitors
o Decline: Cut price
 Distribution
o Introduction: Build selective distribution
o Growth: Build intensive distribution
o Maturity: Build more intensive distribution
o Decline: Go selective: phase out unprofitable outlets
 Advertising
o Introduction: Build product awareness among early adopters and dealers
o Growth: Build engagement and interest in the mass market
o Maturity: Stress brand differences and benefits
o Decline: Reduce to level needed to retain hardcore loyals
 Sales promotion
o Introduction: Use heavy sales promotion to entice trial
o Growth: Reduce to take advantage of heavy consumer demand
o Maturity: Increase to encourage brand switching
o Decline: Reduce to minimal level

IV. Branding Strategy: Building Strong Brands

4.1. Brand

 A Brand represents the consumer's perceptions and feelings about a product and its performance.
 It is the company's promise to deliver a specific set of features, benefits, services, experiences consistently to the buyers.

4.2. Building Strong Brands

 Brands are powerful assets that must be carefully developed and managed. Building strong brands involves many
challenging decisions.
 Major Brand Strategy Decisions (Kotler & Armstrong, 2021)
o Brand positioning:
o Brand name selection:
o Brand sponsorship:
o Brand development:

4.2. Building Strong Brands | Brand Positioning

Marketers need to position their brands clearly in target customers' minds. They can position brands at any of three levels:

1. Attributes (lowest level): position the brand on product attributes.

2. Benefits (middle level): better position by associating the name with a desirable benefit.
3. Beliefs and Values (highest level): the strongest brands go beyond attribute or benefit positioning and are positioned on
strong beliefs and values, engaging customers on a deep, emotional level.

4.2. Building Strong Brands | Brand Sponsorship

There are four brand sponsorship options:

o National/Manufacturers' Brand: Manufacturer sells their output under their own brand names.
o Store/Private Brand: Retailer or wholesaler creates their own store brands/private brands.
o Licensing: Companies license names or symbols previously created by other manufacturers, celebrities, or characters
from popular media.
o Co-branding: Occurs when two established brand names of different companies are used on the same product.

4.2. Building Strong Brands | Brand Development

A company has 04 choices when it comes to developing brands:

1. Line Extensions: Company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an
existing product category. (Existing Brand Name, Existing Product Category).
2. Brand Extensions: Extends a current brand name to new or modified products in a new category. (Existing Brand Name,
New Product Category).
3. Multi-branding: Markets many different brands in an existing product category or introduces additional brands in the
same category. (New Brand Name, Existing Product Category).
4. New Brands: May create a new brand name when a company enters a new product category for which none of its
current brand names is appropriate. (New Brand Name, New Product Category).

V. Service Marketing

5.1. What is Service?

 Service: Acts, efforts, or performances exchanged from producer to user without ownership rights.

5.2. Service Characteristics

 Although services are "products" in a general sense, they have special characteristics and marketing needs. The biggest
differences come from the fact that services are essentially intangible and are created through direct interactions with
customers.
 A company must consider four special service characteristics when designing marketing programs:

1. Intangibility: Services cannot be seen, tasted, felt, heard, or smelled before purchase.
2. Inseparability: Services cannot be separated from their providers.
3. Variability: Quality of services depends on who provides them and when, where, and how.
4. Perishability: Services cannot be stored for later sale or use.

5.2. Service Characteristics: What should Service Marketers do?

 INTANGIBILITY: Provide prospective customers with evidence that helps them evaluate the service (Tangiblize
service).
 INSEPARABILITY: All touch points with customers should be well managed to create a satisfied experience.
Hospitality and travel organizations have to train customers just as they train employees manage both employees &
customers.
 VARIABILITY: Reduce Variability & Create Consistency.
o Consistency: customers receive the expected product without unwanted surprises. Example: Shrimp scampi will
taste the same way it tasted two weeks ago.
 PERISHABILITY: Be careful to maintain a brand's image while at the same time trying to reduce unsold inventory.

5.3. Service Profit Chain

  Successful service companies focus their attention on both their customers and their employees.
 They understand the service profit chain, which links service firm profits with employee and customer satisfaction.
 The chain steps:

1. INTERNAL SERVICE QUALITY (superior employee selection and training, a quality work environment, and strong
support)
2. PRODUCTIVE EMPLOYEES (more satisfied, loyal, and hardworking employees)
3. GREATER SERVICE VALUE (more effective and efficient customer value creation and service delivery)
4. SATISFIED LOYAL CUSTOMERS (satisfied customers who remain loyal, repeat purchase, and refer other customers)
5. HEALTHY SERVICE GROWTH AND PROFIT (superior service firm performance).

5.4. Three Types of Marketing in Service Business

 Service marketing requires more than just traditional external marketing using the 4Ps.
 Three Types of Marketing:

1. External marketing (Company Customers): traditional marketing efforts (Product, Price, Place, Promotion).
2. Internal marketing (Company Employees): involves effectively training and motivating its customer-contact
employees and all supporting service people to work as a team to provide customer satisfaction. Everyone in the
company practices marketing, not just the Marketing department.
3. Interactive marketing (Employees Customers): perceived service quality depends heavily on the quality of the buyer-
seller interaction during the service encounter. Service quality depends on both technical quality (e.g., quality of food)
and functional quality (e.g., service provided in the restaurant). Service employees have to master interactive marketing
skills or functions.

Lesson 10: Marketing Channel: Delivering Customer Value

What is a Marketing Channel?
[Link] Chain
A supply chain is a network between a company and its suppliers to produce and distribute a specific product
+ It represents the steps it takes to get the product or service to the customer
+ Upstream partners are firms that supply raw materials, components, parts, information, finances, and expertise
+ Downstream partners include the marketing channels or distribution channels that look toward the customer, such as retailers
and wholesalers (intermediaries)

[Link] Chains and Value Delivery Networks

The Supply chain ("make and sell" view) includes the firm's raw materials, productive inputs, and factory capacity
The Demand chain ("sense and respond" view) suggests that planning starts with the needs of the target customer
A Value delivery network is composed of the company, suppliers, distributors, and ultimately, customers who partner to improve
the performance of the entire system

[Link] Channel/ Marketing Channel

A Marketing channel (distribution channel) is a set of interdependent organizations that help make a product or service available
for use or consumption by the consumer or business user

[Link] Nature & Importance of Marketing Channels

[Link] Channel Members Add Value
Intermediaries make buying easier for consumers
They transform the assortment of products into assortments wanted by consumers
They bridge the major time, place, and possession gaps that separate goods and services from users
Key Functions performed by channel members:
Information: Gathering and distributing marketing research and intelligence information
Promotion: Developing and spreading persuasive communications about an offer
Contact: Finding and communicating with prospective buyers
Matching: Shaping and fitting the offer to the buyer's needs, including manufacturing, grading, assembling, and packaging
Negotiation: Reaching an agreement on price and other terms of the offer
Physical distribution: Transporting and storing goods
Financing: Acquiring and using funds to cover the costs of the channel work
Risk taking: Assuming the risks of carrying out the channel work

[Link] Levels
A Channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final
buyer
The number of intermediary levels indicates the length of a channel
A Direct marketing channel has no intermediary levels(e.g., GEICO, Quicken Loans
An Indirect marketing channel contains one or more intermediary levels(e.g., most purchased items, from toothpaste to cars ).

Types of Marketing Channels

Consumer Marketing Channels (A): Producer Consumer (Channel 1); Producer Retailer Consumer (Channel 2); Producer
Wholesaler Retailer Consumer (Channel 3).
Business Marketing Channels (B): Producer $\to$ Business customer (Channel 1); Producer $\to$ Business distributor $\to$
Business customer (Channel 2); Producer $\to$ Manufacturer's representatives or sales branch $\to$ Business distributor $\to$
Business customer (Channel 3)
Flows connecting channel members: Physical flow of products, Flow of ownership, Payment flow, Information flow, and
Promotion flow.

[Link] Behavior and Organization

[Link] Behavior
Each channel member is interdependent and plays a specialized role
Channel conflict is disagreement among channel members over goals, roles, and rewards
Horizontal conflict: Occurs among firms at the same channel level
Vertical conflict: Conflict between different levels of the same channel; this is more common

[Link] Organization
Conventional Distribution Channel: Consists of independent producers, wholesalers, and retailers. Each seeks to maximize its
own profit, possibly at the expense of the system. It lacks the leadership and power to assign roles and manage conflict.
Vertical Marketing System (VMS): Producers, wholesalers, and retailers act as a unified system. One member owns the others,
has contracts, or has so much power that cooperation is mandatory.
Corporate VMSs: Combine successive stages of production and distribution under single ownership. (E.g., Luxottica owning
brands and retail chains; Kroger owning manufacturing plants ).
Contractual VMSs: Independent firms at different levels join through contracts.
Franchise organization: A franchisor links several stages in the production-distribution process.
Types include Manufacturer-sponsored retailer, Manufacturer-sponsored wholesaler, and Service-firm-sponsored retailer
franchise systems.
Administered VMSs: Coordinates stages through the size and power of one of the parties. (E.g., Walmart's dominant power over
suppliers like Clorox).
Horizontal Marketing System: Two or more companies at one level join together to pursue a new marketing opportunity,
combining resources. (E.g., Target partnering with CVS Health to run stores-within-stores ).
Multichannel Distribution System (Hybrid Marketing Channels): A single firm sets up two or more marketing channels to
reach one or more customer segments. These systems increase sales and market coverage but are hard to control and prone to
conflict.

3.3. Changing Channel Organization

Disintermediation is the cutting out of marketing channel intermediaries by producers or the displacement of traditional resellers
by new intermediaries. (E.g., Toys"R"Us falling victim to big discounters like Walmart and online merchants like Amazon ).

[Link] Design Decisions

Designing effective marketing channels involves four steps:
1. Analyzing Consumer Needs : Find out what target consumers want from the channel ; determine the best channels to
use ; and minimize the cost of meeting customer service requirements.
2. Setting Channel Objectives : Determine targeted levels of customer service ; balance consumer needs against costs and
customer price preferences. Objectives are influenced by the nature of the company, its products, competitors, and the
environment.
3. Identifying Major Channel Alternatives:
 Number of Marketing Intermediaries:
+ Exclusive Distribution: Giving a limited number of dealers the exclusive right to distribute the products (e.g., luxury brands)
+ Selective Distribution: Using more than one but fewer than all intermediaries willing to carry the products (e.g., consumer
electronics, furniture).
+ Intensive Distribution: Stocking the product in as many outlets as possible (e.g., convenience products, common raw
materials).
 Responsibilities of Channel Members : Producers and intermediaries must agree on price policies, conditions of
sale , territory rights , and specific services.
4. Evaluating Major Channel Alternatives:
Economic criteria: Compare likely sales, costs, and profitability.
Control issues: Evaluate how much control over the marketing the company must give up.
Adaptability criteria: Keep the channel flexible to adapt to environmental changes.

V. Marketing Logistics & Supply Chain Management

[Link] Logistics
Marketing logistics (physical distribution) involves planning, implementing, and controlling the physical flow of goods,
services, and related information from points of origin to points of consumption to meet consumer requirements at a profit.
It includes:
Outbound distribution: Moving products from the factory to resellers and consumers.
Inbound distribution: Moving products and materials from suppliers to the factory.
Reverse distribution: Moving broken, unwanted, or excess products returned by consumers or resellers.

[Link] Functions
The goal is to provide a targeted level of customer service at the least cost to maximize profits. The major functions are:
+ Warehousing:
 Storage warehouses store goods for moderate to long periods
 Distribution centers are large, highly automated warehouses designed to move goods rather than just store them,
receiving goods, filling orders efficiently, and delivering quickly.
+ Inventory Management : Firms must balance the costs of carrying larger inventories against resulting sales and profits. Just-
in-time (JIT) logistics systems involve carrying only small inventories, often enough for a few days of operations.
+ Transportation : The choice of carriers affects pricing, delivery performance, and the condition of goods upon arrival. The five
main modes are truck, rail, water, pipeline, and air, plus the Internet for digital products.
+ Information Management : Channel partners share information for better joint logistics decisions.
 Electronic data interchange (EDI) is the computerized exchange of data between organizations.
 Vendor-managed inventory (VMI) systems (or continuous inventory replenishment systems) allow the customer to
share real-time data on sales and inventory with the supplier, who then takes full responsibility for managing inventories
and deliveries

Lesson 11:Retailing & Wholesaling

I. Retailing
1. Retailing: All the activities involved in selling goods or services directly to final consumers for their personal, nonbusiness
use.
Retailer: A business whose sales come primarily from retailing.
A business whose sales come primarily from retailing.

1.2. Types of Retailers

• The most important types of retail stores are described in below table
• They can be classified in terms of the amount of service they offer, the breadth and depth of their product lines, the relative
prices they charge, and how they are organized.

1.2. Types of Retailers | Amount of Service

Self-Service
• Serve customers who are willing to perform their own locate-compare-select process to save time or money.
• Basis of all discount operations (supermarkets, Target, Kohl’s)
Limited Service
• Provide more sales assistance; more operating costs → higher prices.
Full Service
• Assist customers in every phase.
• High-end specialty stores (Tiffany, Williams-Sonoma), first-class department stores (Nordstrom, Neiman Marcus)

1.2. Types of Retailers | Product Line

Retailers classified by length/breadth of product assortments:
• Specialty stores – narrow line, deep assortment
• Department stores – wide variety
• Supermarkets – low-cost, high-volume grocery
• Convenience stores – limited high-turnover goods
• Superstores – larger than supermarkets, more variety
• Category killers – giant specialty stores
Examples included: Phuong Nam Bookstore, WinMart, etc.

1.2. Types of Retailers | Relative Prices

Discount stores
• Sell standard merchandise at lower prices by accepting lower margins and high volume
• Examples: Walmart, Target
Off-Price Retailers
• Buy at less-than-wholesale, sell below retail
Types:
[Link] off-price retailer
2. Factory outlet
3. Warehouse club (membership fees)
1.2. Types of Retailers | Organizational Approach
Major types: Corporate chains, voluntary chains, retailer cooperatives, franchise organizations.
II. Retail Marketing Decisions
Retailer Marketing Strategies (Kotler & Armstrong, 2021)
Retailers seek new strategies to attract/keep customers.
2.1. Retail Strategy
• Retailers must segment, target, differentiate, and position themselves.
• Strong targeting + positioning → competitive advantage.
Example: Lush Fresh Handmade Cosmetics.
2.2. Retail Marketing Mix
Retailers must decide product assortment, services mix, store atmosphere.
Experiential retailing (e.g., adidas flagship store)
2.2. Price Decision
• Price must match target market & positioning.
• Two main choices:
– high markup + low volume
– low markup + high volume
Example: TJ Maxx everyday discount pricing.
2.2. Promotion Decision
Retailers use: advertising, personal selling, sales promotion, PR, direct & digital marketing.
Digital platforms: websites, social media, mobile.
2.2. Place Decision
• Location is critical. Example: Apple stores in high-end malls.

III. Wholesaling
Wholesaling: All the activities in selling goods/services to those buying for resale or business use.
Wholesalers buy from producers and sell to retailers, industrial users, other wholesalers.
3.1. Types of Wholesalers
• Merchant wholesalers
• Brokers & agents
• Manufacturers’ & retailers’ branches and offices.
3.2. Wholesaler Marketing Strategies
As shown in the file graphics (unchanged).

IV. Retailing Trends & Developments

Key trends:
• Tighter consumer spending
• New retail forms, shorter life cycles, retail convergence
• Rise of mega-retailers
• Growth of online, mobile, social media retailing
• Need for omnichannel retailing
• Growing retail technology
• Green retailing
• Global expansion
1. Tighter Consumer Spending
• Post-recession consumers demand value
• Retailers must adjust strategies
Example: Home Depot changed slogan to “More saving. More doing.”
Current Retail Market Environment
• New retail forms → pop-up stores
• Online flash sales
• Retail price convergence
• Competition increases
• Differentiation becomes harder
Gen Z Shopping Demands
Speed – Convenience – Safety
Especially increased after the pandemic.
Retail Technology

• AR / VR Examples:
• Amazon Go – cashier-less stores – Target beacon system
• Beacon technology – North Face VR
• Data analytics for retailing – Marriott VR
– Amazon Go app system
Green Retailing
 Why? How?
• Legal regulations • Green operations
• Customer expectations • Eco-friendly products
• Sustainability trends • Customer responsibility programs
• Partnership sustainability

Multichannel Retailing
Includes:
• Online stores
• Physical stores
• Marketplaces
• Catalogs
Data Analytics – “New Science of Retailing”
Uses customer data to:
• Forecast behavior
• Personalize messages
• Manage inventory & pricing
Example: McDonald’s predictive analytics for drive-through, menu recommendations, inventory.
Lecture12:Integrated Marketing Communication
I. The Promotion Mix
The Promotion Mix
The Promotion mix / Marketing communications mix is the specific blend of promotion tools that the company uses to
persuasively communicate customer value and build customer relationships.
05 major promotion tools:
• Advertising
• Sales promotion
• Personal selling
• Public Relation (PR)
• Direct and Digital Marketing

Advertising Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified
sponsor.
• Broadcast
• Print
• Online
• Mobile
• Outdoor

Sales Sales promotion is a short-term incentive to encourage the purchase or sale of a product or service.
Promotion • Discounts
• Coupons
• Displays
• Demonstrations

Personal Personal selling is the personal interaction by the firm’s sales force for the purpose of making sales and engaging
Selling customers, building customer relationships.
• Sales presentations
• Trade shows
• Incentive programs

Public Public relations involves building good relations with the company’s various publics by obtaining favorable publicity,
Relations building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.
• Press releases
• Sponsorships
• Events
• Webpages

Direct & Direct and digital marketing involves engaging directly with carefully targeted individual consumers and customer
Digital communities to both obtain an immediate response and build lasting relationships.
Marketing • Direct mail
• Catalogs
• Online and social media
• Mobile marketing
II. Integrated Marketing Communications (IMC)
2.1. Changing Communications Landscape
Several major factors are changing today's marketing communications:
• Consumers are changing
• Marketing strategies are changing
• Advances in digital technology
The new marketing communications model shifts budgets toward online, social, and mobile media.
2.2. The New Marketing Communications Model
Integrated marketing communications (IMC) involves carefully integrating and coordinating the company’s many
communications channels to deliver a clear, consistent, and compelling message.
Each customer touch point delivers a message — good, bad, or indifferent.

III. The Communication Process

Integrated marketing communications involves:
• Identifying the target audience
• Shaping a coordinated promotional program
• Managing customer engagement
• Personalizing communication
Elements in the Communication Process
• Sender
• Encoding
• Message
• Media
• Decoding
• Receiver
• Response
• Feedback
• Noise
Examples from Coca-Cola included in the lecture.
IV. Steps in Developing Effective Marketing Communication
Steps:
1 Identify Target Audience
2 Determine Communication Objectives
3 Design a Message
4 Choose Communication Channels & Media
5 Select Message Source
6 Collect Feedback
4.1. Identify Target Audience
Audience affects:
• What is said
• How it is said
• When it is said
• Where it is said
• Who says it
4.2. Determine Communication Objectives
Objectives guided by the Five As:
Awareness → Appeal → Ask → Act → Advocacy
4.3. Design Message
Decide:
• What to say (content)
• How to say it (structure & format)
Message Content:
• Rational appeals
• Emotional appeals
• Moral appeals
Message Structure:
• To draw conclusion or not
• Argument order
• One-sided vs two-sided argument
Message Format:
• Print ads: pictures, headlines, layout
• Radio: words, sounds, voices
• TV/personal: facial expressions, gestures, dress
• Packaging: color, texture, scent, shape
4.4. Choose Media / Communication Channels
Two types:
 Personal communication channels Non-personal communication channels
• Face-to-face • Major media (print, broadcast, display, online)
• Phone • Atmospheres
• Mail/email • Events
• Text/chat
• Opinion leaders (buzz marketing)

4.5. Select Message Source

Impact depends on credibility.
Sources include:
• Celebrities (athletes, entertainers)
• Professionals (health-care providers)
4.6. Collect Feedback
Measure responses and behavioral results.
Case Example: H&M Unwraps the Magic of Christmas 2022
Campaign details, videos, press releases, outdoor calendar, actors included (all kept as in file).
Multiple provided links appear repeatedly in the original PDF, preserved exactly.
V. Shaping Promotion Mix
Nature of Each Promotional Tool
Advertising – mass reach, low cost per exposure
Personal selling – most effective for building relationships
Sales promotion – incentives to buy now
Public relations – believable promotion (news, sponsorships)
Direct & digital marketing – immediate, customized, interactive
Push vs Pull Strategy
Push Strategy Pull Strategy
• Directs marketing to channel members • Directs marketing to consumers to create demand

VI. Personal Selling & Sales Promotion

6.1. Personal Selling
• Personal presentations to make sales and build relationships
• Effective in complex selling
• Salespeople can adjust offers to customer needs
6.2. Sales Promotion
Short-term incentives to encourage purchase.
Sales Promotion Objectives
Consumer promotions – encourage short-term buying
Trade promotions – get retailers to carry/promote product
Business promotions – generate leads, reward customers
Sales force promotions – support new products, encourage sign-ups

Major Sales Promotion Tools

Consumer Promotions

Trade Promotions

Business Promotions

Lesson 13:

 1.1. Advertising
o Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or services by an
identified sponsor.
o Although advertising is used mostly by business firms, a wide range of not-for-profit organizations,
professionals, and social agencies also use advertising to promote their causes to various target publics.
o Types of advertising media:
 Broadcast
 Print
 Online
 Mobile
 Outdoor
  [Link] | Major Advertising Decisions

Marketing management must make 04 important decisions when developing an advertising program.

[Link] | Major Advertising Decisions

Decision 1: Setting Advertising Objectives
o An Advertising objective is a specific communication task to be accomplished with a specific target audience during a
specific period of time.
o Advertising objectives can be classified by their primary purpose—to inform, persuade, or remind.

Possible Advertising Objectives (Kotler & Armstrong., 2021)

o Informative Advertising
 Communicating customer value
 Building a brand and company image
 Telling the market about a new product
 Explaining how a product works
 Suggesting new uses for a product
 Informing the market of a price change
 Describing available services and support
 Correcting false impressions
o Persuasive Advertising
 Building brand preference
 Encouraging switching to a brand
 Changing customer perceptions of product value
 Persuading customers to purchase now
 Creating customer engagement
 Building brand community
o Reminder Advertising
 Maintaining customer relationships
 Reminding consumers that the product may be needed in the near future
 Reminding consumers where to buy the product
 Keeping the brand in a customer's mind during off-seasons

Decision 2: Setting Advertising Budget

Factors to consider when setting the advertising budget:

o Stage in the product life cycle: New products typically need relatively large advertising budgets to build
awareness and to gain consumer trial. In contrast, mature brands usually require lower budgets as a ratio to
sales.
o Market share and consumer base: Brands in a market with many competitors and high advertising clutter
must be advertised more heavily to be noticed above the marketplace noise.
o Product differentiation: Undifferentiated brands—those that closely resemble other brands in their product
class (soft drinks, laundry detergents)—may require heavy advertising to set them apart.

 Decision 3: Developing Advertising Strategy

o Advertising strategy: The strategy by which the company accomplishes its advertising objectives.
o It consists of 02 major elements: creating advertising messages and selecting advertising media.
 Creating the Advertising Message and Brand Content
o Developing Message & Content Strategy:
 Identifying customer benefits that can be used as content appeals -> Ideally, the message strategy will
follow directly from the company's broader positioning and customer value-creation strategies.
o Develop a compelling creative concept—or big idea—that will bring the message strategy to life in a
distinctive and memorable way.
o The creative concept may emerge as a visualization, a phrase, or a combination of the two.

o Execute the message: find the best approach, style, tone, words, and format for executing the message.

 Decision 3: Developing Advertising Strategy

o A good Unique Selling Point (USP) succinctly communicates the most important unique attributes of the
product or service and thereby becomes a snapshot of the entire campaign.
  Selecting Advertising Media
o The major steps: (1) determining reach, frequency, impact, and engagement; (2) choosing among major
media types; (3) selecting specific media vehicles; and (4) choosing media timing.
o Media planners want to choose a mix of media that will effectively and efficiently present the advertising
message to target customers.-> consider each medium's impact, message effectiveness, and cost.
o Each type of media has its advantages and its limitations.

Medium Advantages Limitations

High geographic and demographic selectivity; credibility and

Long ad purchase lead time; high cost; no
Magazines prestige; high-quality reproduction; long life and good pass-along
guarantee of position
readership
Audio only; fleeting exposure; low attention
Good local acceptance; high geographic and demographic
Radio ("the half-heard" medium); fragmented
selectivity; low cost
audiences
Flexibility; high repeat exposure; low cost; good positional
Outdoor Little audience selectivity; creative limitations
selectivity

 Decision 4: Evaluating Advertising Effectiveness

o Advertisers should regularly evaluate 02 types of advertising results:
 The communication effects: it tells whether the ads and media are communicating the ad message well.
 Individual ads can be tested before or after they are run.
 Before an ad is placed: show it to consumers, ask how they like it, and measure message recall or attitude changes.
 After an ad is run: measure how the ad affected consumer recall or product awareness, engagement, knowledge, and
preference.
 Sales and profit effects: are often much harder to measure because they are affected by many factors other than
advertising—such as product features, price, and availability.
 One way to measure is to compare past sales and profits with past advertising expenditures. 1
 Another way is through experiments (e.g., testing the effects of different advertising spending levels on advertising in
different market areas and measuring the resulting sales and profit differences).

1.2. Public Relations

o Public Relations (PR) consists of activities designed to engage the company's various publics and build good
relations with them.
o PR functions may include:
 Press relations or press agency. Creating and placing newsworthy information in the media to attract
attention to a person, product, or service.
 Product and brand publicity. Publicizing specific products and brands.
 Public affairs. Building and maintaining national or local community relationships. 184
 Lobbying. Building and maintaining relationships with legislators and government officials to
influence legislation and regulation.
 Investor relations. Maintaining relationships with shareholders and others in the financial community.
 Development. Working with donors or members of nonprofit organizations to gain financial or
volunteer support.

 1.2. Public Relations

 Some popular tools of PR:

 1.2. Public Relations | Role & Impact

o PR has the power to engage consumers and make a brand part of their lives and conversations.
o PR can have a strong impact at a much lower cost than advertising can. Interesting brand stories, events, videos,
or other content can be picked up by different media or shared virally by consumers, giving it the same impact
as or even greater impact than advertising that would cost millions of dollars.
o PR can be a powerful brand building tool. Especially in this digital age, the lines between advertising, PR, and
other content are becoming more and more blurred.

2.1. Direct and Digital Marketing

o Direct and digital marketing involve engaging directly with carefully targeted individual consumers and
customer communities to both obtain an immediate response and build lasting customer relationships.
 o Companies use direct marketing to tailor their offers and content to the needs and interests of narrowly defined
segments or individual buyers.
o In this way, they build customer engagement, brand community, brand advocacy, and sales.

2.2 Forms of Direct and Digital Marketing.

Digital and social media marketing: Using digital marketing tools such as websites, social media, mobile apps and
ads, online video, email, and blogs that engage consumers anywhere, anytime via their digital devices.

2.3. Online Marketing

Online marketing refers to marketing via the internet using company websites, online advertising and promotions, email
marketing, online video, and blogs.

 Online Marketing Elements:

o Marketing website: a website that engages customers and moves them closer to a direct purchase or other
marketing outcome.
o Brand community website: A website that presents brand content that engages consumers and creates
customer community around a brand.
o Online advertising: Advertising that appears while consumers are browsing online, including display ads and
search-related ads.
o Email marketing: Sending highly targeted, highly personalized, relationship-building marketing messages via
email.
o Blogs: Online forums where people and companies post their thoughts and other content, usually related to
narrowly defined topics.

2.4. Social Media Marketing

o Social media: Independent and commercial online social networks where people congregate to socialize and
share messages, opinions, pictures, videos, and other content.
o Large, general-interest social media networks: most brands—large and small—have set up shop on a host of
social media sites - Facebook, Instagram, etc.
o Niche and interest-based social media have also emerged: cater to the needs of smaller communities of like-
minded people, making them ideal vehicles for marketers who want to target special-interest groups.
o There's at least one social media network for just about every interest, hobby, or group.

o Most large companies are now designing full-scale social media efforts that blend with and support other
elements of a brand's marketing content strategy and tactics.
o Companies that use social media successfully are integrating a broad range of diverse media to create brand-
related social sharing, engagement, and customer community.

2.5. Mobile Marketing

o Mobile marketing features marketing messages, promotions, and other marketing content delivered to on-the-
go consumers through their mobile devices.
o Marketers use mobile marketing to engage customers anywhere, anytime during the buying and relationship
building processes.
o The widespread adoption of mobile devices and the surge in mobile web traffic have made mobile marketing a
must for every brand.
 TripAdvisor Example:
o TripAdvisor's mobile app—"your ultimate travel companion"—gives users as-they-travel access to crowd-
sourced information about hotels, restaurants, places to go, and things to see worldwide.
o And booking options are always just a tap away.

Promotion tools throughout Customer Journey

Group Discussion : Discuss in group: on your product

1. Design the Media Plan:

o Key Communication Message throughout the launching campaign

o Touch points with your target customers (draw customer journey map)
 o Selected Promotion Tools, channels, sources

2. Prepare IMC Action Plan & Budget

Lesson 14: The Extended Marketing Mix

 Traditionally, the Marketing mix was known as the 4Ps - Product, Price, Place and Promotion.
 As marketing became a more sophisticated discipline, a fifth 'P' was added - People.
 More recently, two further 'P's were added - Process and Physical evidence.
 These were originally formulated for the service industry, but they are just as important in other sectors.
 They help any organiZations to offer enhanced customer service, which is increasingly important in making a product
stand out in a crowded marketplace.

I. People

1.1. Importance of Service Personnel

 What are the roles of Service personnel?

o Help maintain firm's positioning. They are:
 A core part of the product
 The service firm
 The brand
o Frontline is an important driver of customer loyalty:
 Anticipate customer needs
 Customize service delivery
 Build personalized relationships
o Key driver of productivity of frontline operation
o Generate sales, cross-sales and up-sales

1.2. Frontline work is difficult & stressful

 Service jobs are boundary-spanning positions: service employees link the inside of the organization to the outside
world by operating at the boundary of the company (called boundary spanners)35.
 This often leads to role stress from the multiple roles they have to perform
 3 main causes of role stress:
o Organization vs. Client: Dilemma whether to follow company rules or to satisfy customer demands
o Person vs. Role: Conflicts between what jobs require and the employee's own personality and beliefs
o Client vs. Client: Conflicts between customers that demand service staff intervention, e.g., smoking in non-smoking
sections, jumping queues, talking on a cell phone in a movie theater

Emotional Labor

o Emotional labor arises when a discrepancy exists between the way front-line employees actually feel and the emotions that
management requires them to show in front of customers.
o Employees are expected to have a cheerful disposition and to be genial, compassionate, sincere, or even self-effacing.
o There are situations where employees are required to suppress their true feelings in order to conform to customer
expectations.

1.3. The Service Talent Cycle for Service Firms

The cycle aims for Service Excellence and Productivity

 Leadership that:
o Fosters a strong service culture and climate with a passion for service and productivity.
o Drives values that inspire, energize, and guide service employees and leads by example.
o Focuses the entire organization on supporting the service frontline52.

1.3. The Service Talent Cycle

 Hire the right people

o Be the Preferred Employer
o Select the right people: There is no perfect employee.
  Different jobs are best filled by people with different skills, styles or personalities.
 Hire candidates that fit the firm's core values and culture.
 Focus on recruiting naturally warm personalities for customer-contact jobs.

 Enable your people

Service employees need to learn:

o Organizational culture, purpose and strategy

o Interpersonal and technical skills
o Product/service knowledge
 Employees need to be kept informed about new policies, changes in service features, and new quality initiatives.
 Nurtures team spirit and support common corporate goals across national frontiers.
 Complement training:
o Ensures efficient and satisfactory service delivery.
o Achieves productive and harmonious working relationships.
o Builds employee trust, respect, and loyalty through internal marketing.
 Motivate & Energize your people

Use the full range of available rewards effectively, including:

o Job content:
 People are motivated and satisfied knowing they are doing a good job.
o Feedback and recognition:
 People derive a sense of identity and belonging to an organization from feedback and recognition.
o Goal achievement:
 Specific, difficult but attainable and accepted goals are strong motivators.

 II. Process

2.1. What is Process?

 From the customer's perspective, service are experiences.

 From the organization's perspective, services are processes that have to be designed and managed to create the desired
customer experience.
 Process describes the method and sequence in which service operating systems work and specify how they link together
to create the value proposition promised to customers

2.2. The Importance of Process

 Many customers no longer simply buy a product or service - they invest in an entire experience that starts from the
moment they discover your company and lasts through to purchase and beyond.
 The process of delivering the product or service, and the behavior of those who deliver it, are crucial to customer
satisfaction.
 A user-friendly internet experience, waiting times, the information given to customers and the helpfulness of staff are
vital to keep customers happy.
 Customers are not interested in the detail of how your business runs, just that the system works.
 However, they may want reassurance they are buying from a reputable or 'authentic' supplier.
 Ensure that your systems are designed for the customer's benefit, not the company's convenience.
 Many unhappy customers will go elsewhere and tell their friends not to use your company - just because of the poor
process.
 The value of a good first impression:
o Identify where most customers initially come into contact with your company—whether online or offline—and
ensure the process there, from encounter to purchase, is seamless.

2.3. Flowcharting service delivery

 Flowcharting is a technique for displaying the nature and sequence of the different steps involved when a customer
"flows" through the service process.
 By flowcharting the sequence of encounters (also called a customer journey) customers have with a service
organization, valuable insights can be gained into the nature of an existing service.

III. Physical Evidence

3.1. What is Physical Evidence?

 Service environments (also called services capes) relate to the style and appearance of the physical surroundings and
other experiential elements encountered by customers at service delivery sites. Physical environment:
o Provides tangible evidence of a firm's image and service quality.
o Facilitates the physical process of service delivery.

3.2. Purpose of service environments

 04 core purposes service environments fulfil:

1. Shape Customers' Experiences and Behaviors
2. Differentiate, and Position, and Strengthen the Brand
3. Be a Core Component of the Value Proposition
4. Facilitate the Service Encounter and Enhance Productivity

3.3. Dimensions of the Service Environment

 Spatial Layout and Functionality

o Spatial layout:
 Floorplan
 Size and shape of furnishings, counters, machinery, equipment, and how they are arranged
o Functionality: ability of those items to make the performance of the service easier.
 Signs, Symbols and Artifacts

Explicit or implicit signals to:

o Communicate the firm's image.

o Help consumers find their way.
o Let them know the service script
 The challenge is to design such that these guide the customer through the service delivery process.

Ambient Conditions

Characteristics of the environment pertaining to our 5 senses

o Scents
o Lighting and color schemes
o Sounds such as noise and music
o Size and shapes
o Air quality and temperature
 Marketers should understand what the customer wants from the buying experience and what atmospheric variables will
fortify the beliefs and emotional reaction the buyers are seeking or, in some cases, escaping
 The proposed atmosphere should compete effectively in a crowded market

Ambient Conditions | Scent

 The presence of scent can have a strong impact on mood, feelings, and evaluations, and on purchase intentions and in-store
behaviors.

Ambient Conditions | Colors

 Colors have a strong impact on people's feelings.

 Warm colors encourage fast decision-making and are best suited for low-involvement product/service purchase decisions or
impulse buying
 Cool colors are favored when consumers need time to make high-involvement purchase decisions.
 Bright and warm colors are usually used in environments with children to provide an attractive and cheery effect.

Ambient Conditions | Sounds & Music

 Atmosphere can affect purchase behavior in at least 04 ways:

1. Atmosphere may serve as an attention-creating medium
2. Atmosphere may serve as a message-creating medium to potential customers
 3. Atmosphere may serve as an effect-creating medium. Colors, sounds, and textures directly arouse visceral
reactions that stimulate the purchase of a product.
4. Environment can be a mood-creating medium.

IV. The Marketing Plan

4.1. Marketing Planning

 Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic
objectives
 A detailed marketing plan is needed for each business, product, or brand.
 Components of a Marketing Plan:

4.2. Marketing Plan Components

 Executive Summary: Presents a brief summary of the main goals and recommendations of the plan for management
review, helping top management find the plan's major points quickly.

 Marketing Situation
o Describes the target market and the company's position in it, including information about the market, product
performance, competition, and distribution.
o This section includes the following:
 A market description that defines the market and major segments and then reviews customer needs
and factors in the marketing environment that may affect customer purchasing.
 A product review that shows sales, prices, and gross margins of the major products in the product line.
 A review of competition that identifies major competitors and assesses their market positions and
strategies for product quality, pricing, distribution, and promotion
 A review of distribution that evaluates recent sales trends and other developments in major
distribution channels.

 Threats & Opportunities: Assesses major threats and opportunities that the product might face, helping management to
anticipate important positive or negative developments that might have an impact on the firm and its strategies.
 Objectives & Issues: States the marketing objectives that the company would like to attain during the plan's term and
discusses key issues that will affect their attainment

GOAL SETTING

o SPECIFIC
o MEASURABLE
o ATTAINABLE
o RELEVANT
o TIME-BOUND

 Marketing Strategy
o Marketing strategy is the logic by which the company hopes to achieve profitable relationships
o Elements:
 Market Segmentation
 Market Targeting
 Market Positioning
 Marketing Mix Strategy

o Marketing strategy involves two key questions: Which customers will we serve (segmentation and targeting)?
and How will we create value for them (differentiation and positioning)?
o Then the company designs a marketing program—the four Ps—that delivers the intended value to targeted
consumers.
o At its core, marketing is all about creating customer value and profitable customer relationships.

Managing Marketing strategy & Marketing mix

 Action program/ plan

o Spells out how marketing strategies will be turned into specific action programs:
 What will be done?
 When will it be done?
  Who will do it?
 How much will it cost?
 Budget

o Details a supporting marketing budget that is essentially a projected profit-and-loss statement.

o It shows expected revenues and expected costs of production, distribution, and marketing. The difference is the
projected profit.
o The budget becomes the basis for materials buying, production scheduling, personnel planning, and marketing
operations.

 Controls
o Outlines the controls that will be used to monitor progress, allow management to review implementation results,
and spot products that are not meeting their goals.
o It includes measures of return on marketing investment.