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CHAPTER 1: BASIC CONCEPT OF MARKETING

1. Definition:
Marketing is
- Engaging customers
- Managing profitable relationships
- Create customer value → capture value in return
→ Attract new customers by superior value
→ Keep current customers by delivering satisfaction

2. Marketing process

Understand Design Construct Engage, Capture value

strategy integrated Build, Create
program delight
Understand the Design a Construct an Engage Capture
marketplace customer integrated customer, customer
and customer value-driven marketing Build value →
needs and marketing program that profitable create
wants strategy delivers relationship, profits and
superior value create customer
customer equity
delight

a. Understand

Needs Wants Demands

The form human need
Human wants
States of felt as they are shaped by
Definition being backed by
deprivation culture and individual
buying power
personality
Physical, Social, Cultural impact,
Key words Buying power
Individual needs individual personality

- Market offerings: combination of products, services, information,

experience offered to a market to satisfy a need/ want.
- Marketing myopia: focus on products more than underlying
customers needs.
- Value and satisfaction are key building blocks for customer
relationships.
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- Exchange: obtaining a desired objects from so by offering sth in return

→ Marketing = building exchange relationships with

audiences.

- Market is a set of actual and potential buyers of a product/ service.

- Main element in the marketing system.

b. Design
Marketing management: the art and science of choosing target markets and building
profitable relationships with them
→ Create, deliver superior customer value
→ Find, attract, keep, grow target customers
Segmentation → target market → Offer value proposition ( how to serve)

Concept Definition
Favour available and highly affordable products
Production
→ Focus: Improving production + distribution efficiency

Favour products ( most quality, performance, features)

Product
→ Focus: making continuous product improvement

‘Inside-out view’
- Not buy enough firm’s product
- Stimulated by large-scale selling & promotion effort
Selling

Marketing ‘Outside - in view’

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- Understanding needs & wants

- Delivering desired satisfaction > competitors

Societal
marketing
Deliver value that maintains consumers and society’s well
being, considering:
‘Purpose
- Consumer wants
driven
- Company’s requirements
marketing’
- Consumer’s long- term interest
- Society’s long-term interest
‘Marketing
3.0’

c. Constructing: via 4P (products) strategy or 7P ( services) strategy.

d. Engage, Build, Create
- Customer relationship management (CRM):
+ building and maintaining profitable relationships with customers by
delivering superior value and satisfaction.
+ Managing detailed information about individual
customers and carefully managing customer touch points
→ maximise loyalty.
→ Customer- perceived- value: customer’s evaluation of the difference between all
the benefits and all the costs of a marketing offer, in relation to those of competing
offers and superior customer satisfaction, which is the extent to which a product’s
perceived performance matches a buyer;s expectations.
- Customer relationships exist at multiple levels: basic relationships –
full partnerships → everything in between.
- Partner relationship management: working closely with other company
departments and outside the company to jointly bring greater customer value.
- Two-way customer relationship: customer have more power and control
- Customer-managed relationships: marketing relationships in which
customers, empowered by today's new digital tech, interact with companies
and with each other to shape their relationships with brands.
→ Consumer-generated marketing: brand exchanges created by consumers
themselves, by which consumers are playing an increasing role in shaping their
own brand experiences and those of other consumers.
e. Capture
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- Customer lifetime value: the value of the entire stream of purchase that
customers would make over a lifetime of patronage.
- Share of customer: the portion of the customer’s purchasing that a company
get in its product categories.
- Customer equity: the total combined customer lifetime values of all of the
company’s customers.
- Customer relationship groups:

- Butterflies → high profit potential

- True friends → Invest in a continuous relationship
- Barnacles: if they can't improve → get rid of
- Strangers → should not invest in.

CHAPTER 2: STRATEGIC MARKETING PARTNERS

1. Strategic planning
- The process of developing and maintaining a strategic fit between the
organization's goals and capabilities and its changing marketing opportunities.

- The base for long-term planning.

+ Mission statement: organization’s purpose.

+ Business portfolio: the collection of businesses and products that make
up the company.
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- Portfolio analysis: the process by which management evaluates the products

and business that make up the company
● Identify Strategic business units (SBUs): using Boston Consulting
Group (BCG) ( growth-share matrix)

Require cash, but

Question
Star Need investment can turn out to be
mark
unprofitable

Cash cow Producing cash Not very profitable Dog

● Determine in which units to build share, hold share, harvest the profits
or divest the SBU.
● Looking at the future business via
○ Product/ market expansion grid: a portfolio tool for identifying
company growth opportunities
■ Market penetration: increase sale of current products to
current market segments without changing the product.
■ Market development: identifying and developing new
market segments for current products.
■ Product development: offering modified/ new products
to current market segments.
■ Diversification: starting up/ acquiring business outside
the company’s current products and markets.
○ Downsizing product portfolio is vital when it is no longer
profitable.
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- Value chain: the series of internal departments that carry out value-creating
activities to design, produce, market, deliver and support the firm's products.
- Value delivery network: the network composed of the company, its suppliers,
distributors and customers who partner with each other to improve the
performance of the entire system.
2. Marketing strategy: (STDP): the marketing logic by which the company
hopes to create customer value and achieve profitable relationships.

Segmentation

→ Market
Geographic
segment: a
Demographic
group of
Behavioural
consumers
Psychological
Which customers will responding in a
we serve? similar way to a
given set of
marketing efforts.
Evaluate each market
segment;s attractiveness and
Targeting
select one or more segment to
enter
Arrange for a product to
occupy a clear distinctive,
Positioning desirable place relative to
competing products in the
How will we serve? minds of consumers.
Differentiate market offering
Differentiation to create superior customer
value.

3. Marketing process management.

Marketing analysis (SWOT analysis) → Choose right marketing

strategies → Marketing implementation → Marketing control

- Marketing implementation: turning marketing strategies and plans into

marketing actions to accomplish strategic marketing objectives
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- Marketing control: measuring and evaluating the results of the

marketing strategies and plans and taking corrective action to ensure that
the objectives are achieved

- Operating control: check the performance against the annual plan.

- Strategic control: look at the match between strategies and opportunities.

- The return on marketing investment (marketing ROI) is the net return from
a marketing investment divided by the costs of the marketing investment. The
marketing ROI measures the profits generated by investments in marketing
activities and can be a helpful tool, but is also difficult to measure.
- Measuring ROI in terms of
+ Standard performance: sales, market share
+ Customer relationship: customer satisfaction,
engagement, retention, equity. → More difficult to measure
but capture both current and future performance.

CHAPTER 3: THE MARKETING ENVIRONMENT

1. Microenvironment
● Company itself
● Subdivision/ Suppliers
● Intermediaries:
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○ Resellers: distribution channel firms

○ Physical distribution firms: stock good
○ Marketing service agencies: marketing research firms
○ Financial intermediaries: banks, credit companies
● Competitors
● Customers:
○ Consumers market
○ Business market
○ Reseller markets
○ Government markets
○ International markets
2. Macroenvironment
● Demography
● Economy
● Nature
● Politic
● Cultural

CHAPTER 4: CUSTOMER INSIGHTS

1. Definition:
● Customer insights are fresh understanding of customers and the
marketplace derived from marketing information that become the basis
for creating customer value and relationships.
○ Marketing information systems (MIS):
→ Assess information needs
→ Develop needed information
→ Analyze right information
→ Form customer insights
○ Internal database: electronic collections of consumer and
market information obtained from data sources within the
company network.
○ Competitive marketing intelligence: systematic collection and
analysis of publicly available information about consumers,
competitors and developments in the marketing environment.
○ Marketing research: systematic design, collection, analysis and
reporting of data relevant to a specific marketing situation
facing an organization.
■ Defining the problem and research objectives
■ Developing the research plan
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Sample: segment of population selected for marketing research to represent the

population as a whole
● Considerations:
Unit (Who)
Size ( How many)
Procedure (How should they be chosen)
● Probability samples: member has equal chance of being included.
Simple random
Stratified random
Cluster
● Non-Probability:
Convenience
Judgement
Quota
Instrument Types Definition Typical type

Commercial
Secondary
online
data
databases
Primary data Questionnaire Ethnographic
: email, phone, research:
online… Observe sending
relevant observers to
Observational
people, watch &
research
Mechanical actions, interact with
devices: help situations consumer in
monitor their natural
consumer environments
behaviours.
Asking people
questions
about their
Survey knowledge,
research attitudes,
preferences &
buying
behaviour
Experimental Select
research matched
groups of
subjects, give
them different
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treatments,
control related
factors, check
for differences
in group
responses.
Internet
survey, online
focus groups,
Online web-based
marketing experiments,
research track
consumer’s
behavios
online
Online focus
groups

■ Implementing
■ Interpreting and reporting
Customer relationship management (CRM): managing detailed information about
individual customers and carefully managing customer touch points to maximise
loyalty by using MIS.

CHAPTER 5: CONSUMER BUYER BEHAVIOUR

- Consumer buyer behaviour: buying behaviour of final consumers.
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→ consumer market: market including final consumers.

4 factors affecting consumer behaviour:

1. Cultural
- Subculture
- Social class
2. Social
- Group
- Word-of-mouth influence
- Opinion leader: a person within a reference group who, because of skills,
knowledge, personality,..., exerts social influence on others.
+ Buzz marketing → involve opinion leader to serve as
brand ambassadors
- Online social network
- Family
3. Personal
- Lifestyle: pattern of living
- Personality: unique psychological characteristics

5 Brand personality (the mix of human traits):

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- Sincerity
- Excitement
- Competence
- Sophistication
- Ruggedness
-
4. Psychological

4 major factors:
1. Motivation
- Motive is a need that is sufficiently pressing to direct a person
to seek satisfaction of the need → use maslow to find hidden
motivations
2. Perception
- The process by which people select, organise and interpret information to form
a meaningful picture of the world.
- Difference perception in same stimulus:
+ Selective attention
+ Selective distortion
+ Selective retention
3. Learning: from experience
- Drive: strong stimulus calling for action
- Cues: minus stimuli determining how a person respond
4. Belief: descriptive thought that a person hold about sth
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5. Attitude: person’s consistently favourable/ unfavourable evaluations, feelings,

tendencies toward an object/ idea.

Types of buying decisions behaviour

High customer Low customer

involvement involvement
Complex
(Pass through a learning
Significant perceived process, developing Variety seeking
differences beliefs and attitudes
→ purchase choice)

Habitual
Dissonance-reducing
Few perceived When consumers are highly (Advertising repetition
involved with an expensive, → brand familiarity
differences infrequent, risky purchase but
see little among brands → habitual)

5 stages buyer decision process

Cognitive dissonance is buyer discomfort caused by post-purchase conflict.

New product:

Innovators ( venturesome) → Early adopters (early but carefully) → Early

mainstream (deliberate) → Late mainstream (sceptical) → Lagging
adopters ( suspicious, traditional bound)

Awareness → Interest → Evaluation → Trial → Adoption

5 influences of innovation's rate of adoption

- Relative advantage: superiority
- Compatibility: fit values and experience of potential consumers
- Complexibility: difficult to use/ understand
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- Divisibility: degree to be tried on a limited basis

- Communicability: results of using the innovation can be observed or
described to others
- Others: initial and ongoing costs, risk and uncertainty, social approval

CHAPTER 6: BUSINESS MARKETS

Business buying process:

Determine which products/ services need → find → evaluate → choose among
alternative suppliers and brands.
-3 types:
+ Straight rebuy
+ Modified rebuy
+ New task
- Business demand = derived demand ( demand derived from final customers
demand)
→ More inelastic, less affected by short-term price changes.

- Business buyer’s decision: more professional, complex, formalized

- Buyers and sellers often work on long term relationships
- Supplier development: systematic development of networks of supplier-
partners to ensure an appropriate and dependable supply of products and
materials for use in making products or reselling them to others.
- Systems selling (Combo): buy a packaged solution to a problem from a
single seller → avoid all the separate decisions involved in a complex buying
situation.
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- Buying center: all individual and units playing role in decision making process
+ Users
+ Influencers
+ Buyers
+ Deciders
+ Gatekeepers
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E-procurement: purchasing through electronic connections between buyers and

sellers, usually online.
- Institutional market: institutions provide goods and services to people in their
care.
- Government market: units ( federal, state, local) purchase/ rent gifs and
services for carrying out main functions of government.

CHAPTER 7: CUSTOMER-DRIVEN STRATEGY

1. Segmentation:

For effective segmentation,

- Measurable: size, purchasing power, profile can be measured
- Accessible: can be reached and served
- Substantial: profitable enough to served
- Differentiable: conceptually distinguishable
- Actionable: effective program can be designed

2. Targeting

Undifferentiated ( mass) marketing Ignore segment differences

Whole market → one offer

Differentiated ( segmented) marketing Target several segments

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Each market → each offer

Concentrated (niche) marketing Large share → one/ a few

segments

- Micromarketing: tailoring products and mkt programmes to the need and

wants of specific individuals and local customer segments
+ Local marketing
+ Individual marketing = one-to-one marketing = customized marketing,
markets- of- one marketing
3. Differentiating and positioning
- Product position
- Perceptual positioning maps: consumer perceptions of brands vs competing
products
- Understanding customer needs → differentiating → competitive
advantage

- Unique selling proposition: promote only one benefit to the target market.
OR
- Promote more:
+ Important
+ Distinctive
+ Profitable
+ Affordable
+ Superior
+ Communicable
+ Not easily copied
Value proposition: the full positioning of a brand: full mix of benefits on which it is
positioned.
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- More for more: upscale products and higher prices.

- More for the same: used to attack competitors by offering quality at a
low price.
- The same for less: a good deal.
- Less for much less: a less optimal performance for a low price.
- More for less: ultimately winning, but difficult to actually achieve.

Positioning statement:

[your Brand] provides [ your offering that makes you better than competitors] for
[your customer] who [customer needs] because [ the reason why your customers
should believe you are better than competitors]

To [ target segment and needs], [our brand] is [concept] that [ pint of difference]
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CHAPTER 8: BUILDING CUSTOMER VALUE

(PRODUCT)
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High customer Low customer

involvement involvement
Complex
(Pass through a learning
Significant perceived process, developing Variety seeking
differences beliefs and attitudes
→ purchase choice)

Habitual
Dissonance-reducing
Few perceived When consumers are highly (Advertising repetition
involved with an expensive, → brand familiarity
differences infrequent, risky purchase but
see little among brands → habitual)

Process Market feature

Buyers are active
Learn model Learn → Feel → Do
participants
High involvement
JTD
Advertisements → provide information

Confused between 2
Dissonance / attribution
Do → Feel → Learn alternatives similar in
model
quality

Low- involvement model Learn → Do → Feel

Many competitors→
minimal
JTD Mass media is important
differentiations→ Low
involvement

3 Types of industrial product

- Material and parts
+ Raw materials
+ Manufactured
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- Capital items
+ Installation: Building & fixed equipment
+ Accessory: office equipment & portable factory equipment
- Supplies and service:
+ Operating supplies
+ Maintenance items
+ Maintenance & repair service
+ Business advisory services
- Organisation marketing: create, maintain, change attitude towards an
organization
- Person marketing: …particular people
- Place marketing: …place
- Idea marketing: all marketing is marketing of an idea → Social
marketing: using traditional tools/ concepts to encourage behaviors creating
individual and societal well-being.

Decisions regarding products and services are made at 3 levels:

1. Individual product and service decisions

Product attributes: quality + feature + style & design

2. Product line decisions
- Closely related
- Similar function
- Same customer groups
- Same place, same price
- Major decisions include
+ Line length: add more items within present range
+ Line stretching: lengthen beyond current range
3. Product mix (product portfolio) decisions
- Width: the number of different product lines
- Length: total number of items within the product lines
- Depth: number of versions
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The profit chain is the chain that links service firm profits with employee and
customer satisfaction. This chain consists of 5 links:
- Internal service quality
- Satisfied and productive service employees
- Greater service value
- Satisfied and loyal customers
- Healthy service profits and growth
- 3 types of service marketing:

3 tasks service marketers are facing

- Service differentiation: stand out from competitors
- Service quality: harder to define than product quality
- Service productivity: skillful employees, tech

Branding
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- Brand equity: differential effect that knowing the brand name has on
customer response to the product or its marketing.
- Brand value: total financial value of a brand.
- Build strong brand:

- Store brand (private brand): created and owned by a reseller of a product or

service
- Licensing: lending the brand name to other manufacturers
- Co branding: the practice of using the established brand name of two different
companies on the same product
- Line extensions: extending an existing brand name to new forms, colors… of
an existing category.
- Brand extension: extend current brand in the same category
- Multibrands: offering more than one brand in the same category
- New brands: when believed that the power of existing brands is fading.
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CHAPTER 9: THE PRODUCT LIFE CYCLE

- Marketing strategy development:

+ Describe the target market & value proposition
+ Outline budget
+ Describe long-term marketing mix strategy
- Business analysis:
+ Review of sale, profit, cost
+ Compare with company’s objectives
- Product development: develop concept into a physical product

Product life cycle (PLC): the course of product’s sales and profits over its lifetime
- Development: without sale
- Introduction: slow sales & profit growth
→ Initial strategy must be consistent with product positioning
- Growth: rapid acceptance
→ Trade-off between high market share & high current profit
- Maturity: sale grow slowly/ level off
→ increase consumption by finding new consumers → Modifying
market/ product
- Decline: sales fall, profit drops
→ Decide to maintain the brand
→ Reposition brand
→ Drop a product from the line
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The PLC concept can also be applied to styles, fashions and fads
- Style: distinctive and basis mode of expression
- Fashion: currently accepted/ popular style in a given field
- Fad: temporary period of unusually high sales driven by consumer enthusiasm
and immediate product or brand popularity.

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CHAPTER 10: PRICING STRATEGIES

- Price is the only element in the marketing mix that produces revenue, all
others are costs.
- Good pricing starts with customers and their perception of the value of the
product, based on the relationship between price and demand for the
product.

There are 3 major pricing strategies

1. Customer value- based pricing
- Good-value pricing: offer the right combination of quality and good service at
a fair price
- Value- added pricing: attach value added features and services to differentiate
a company’s offers and charging higher price
2. Cost based pricing
- Fixed cost:
- Variable costs: vary directly with the level of production and sale level

The experience curve ( learning curve) the drop in the average per unit production
costs that comes with accumulated production experience

The simplest pricing method: cost-plus pricing/ mark up pricing

Break even pricing ( target return pricing)

Target costing: pricing that starts with an ideal selling price and then targets costs
that ensure the price is met.

3. Competition based- pricing

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CHAPTER 11: PRICING CONSIDERATIONS

1. New product pricing
- Market skimming pricing: set a high price for a new product to skim
maximum revenues layer by layer from the segments willing to pay the high
price
→ more profits, less sales
- Market penetration: set a low price for a new product to attract a large number
of buyers and large market share
2. Product mix pricing
- Product line pricing: set different price step btw various products in a product
line based on:
+ Cost differences btw products
+ Customer evaluations of different features and competitor’s prices
- Optional product pricing: price of optional/ accessory products along with a
main product
- Captive product pricing: set a price for products that must be used along with
a main product
- By-product ( sth produced as a result of sth else) pricing: set price for by
products to make the main product’s price more competitive
- Product bundle pricing: combine several products and offering the bundle at a
reduced price
3. Price adjustments
- Discount and allowance: reducing price to reward customer responses:
volume purchase, paying early, promoting the product.
+ Trade-in allowance: price reduction if change the old one to new
+ Promotional allowance
- Segmented pricing: adjusting price to allow for differences in customers,
products, locations, times.
- Promotional pricing: temporarily reduce price to spur short term sales.
- Psychological pricing
- Geographical pricing:
+ FOB-origin pricing: customer pay shipping costs
+ Uniform delivered pricing: same price regardless of location
+ Zone pricing: within a zone, same total price, the more distant the zone,
the higher the price
+ Freight-absorption pricing: seller pay all freight costs
+ Base-point pricing: freeship in particular cities, same freight cost in
others.
- Dynamix pricing: adjust pricing continually
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- International pricing

4 response to price changes of competitors:

- Reduce price
- Maintain price, increase perceived value
- Improve quality and increase price
- Launch a low price fighter brand to compete

CHAPTER 12: MARKETING CHANNELS (PLACE)

- Upstream partners: firms that supply raw materials, components, parts,

information, finances, and expertise needed to create a product or service.
- Downstream partners: marketing channels, distribution channels that look
toward the customer, including retailers and wholesalers.
- Supply chain: ‘ make and sell’ view includes the firms’ raw materials,
productive inputs, factory capacity.
- Demand chain: ‘sense and respond’ view suggests that planning starts with
the needs of target customers.

Value delivery network:

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Company → suppliers → distributors → customers ( partner with each other

to improve the performance of the entire system)

- Marketing channel (distribution channel): a set of interdependent

organizations that help make a product or service available for use or
consumption by the consumer/ business user.

- How Channels members add value:

+ Transform assortment of products to assortments wanted by
consumers.
+ Bridge the major time, place, possession gap that separate products and
services from customers by
● Complete transaction:
○ Information
○ Promotion
○ Contact
○ Matching
○ Negotiation
● Fulfil the completed transaction:
○ Physical distribution
○ Financing
○ Risk taking

- Channel level: a layer of intermediaries that performs some work in bringing

the product and its ownership closer to the final buyer.
+ Direct marketing channel: has no intermediaries levels
+ Indirect marketing channel: has 1 or more intermediary levels.
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Channel conflict: Disagreements among marketing channel members on goals, roles,

and rewards - who should do what and for what rewards.
- Horizontal conflict
- Vertical conflict
Conventional distribution channel: a channel consisting of one or more
independent producers, wholesalers, retailers, each a separate business seeking to
maximize its own profits for the system as a whole

Vertical marketing system (VMS): a channel structure in which producers,

wholesalers, and retailers act as a unified system
- One single unified member owns the others ( corporate VMS)
- Contractual VMS: different levels join together through contracts
+ Franchise organization
- Administered VMS: coordinates through size and power of one of the parties
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Horizontal marketing system (HMS): a channel arrangement in which 2 or more

companies at one level join together to follow a new marketing opportunity.

Multichannel distribution system: single firm sets up two or more marketing

channels to reach one or more customer segments.
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Disintermediation: the cutting out of marketing channel intermediaries by product or

service producer or the displacement of traditional resellers by radical new types of
intermediaries.

Marketing channel design:

analysing customer needs → setting channel objectives → evaluating those
alternatives. → identify channel objectives

Customer value delivery network = consumer needs analysis

3 considerations when identifying channel objectives:

1. Types of intermediaries: corporate, contractual, administered
2. The number of marketing intermediaries
- Intensive distribution: as much as possible
- Exclusive distribution: limited number of dealers has the right to distribute
- Selective distribution: more than one but fewer than all
3. Responsibilities of the intermediaries
Others: economic criteria, control issues and adaptability criteria.

Marketing channel management:

Select → (Manage → Motivate )→

Evaluate
Partner relationship management

Marketing logistics ( physical distribution)

Logistic has 3 functions:
- Warehousing
- Stock management
- Transportation
Integrated logistic management emphasises teamwork, both inside and among all
the mkt channel organisations to maximise the entire distribution system.
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CHAPTER 13: RETAILING AND WHOLESALING

(PLACE)

1. Retailing: activities involved in selling goods, services directly to the final

consumer for their personal, non-business use.
- Shopper marketing: using in store promotions and advertising → extend
brand equity to the ‘last mile’ + encourage favourable hi-store purchase
decisions.
Retailer types:
- Service:
+ Self- service retailers
+ Limited service retailers
+ Full service retailer
- Product line:
+ Speciality store
+ Department store
+ Convenience stores
+ Superstore
+ Supermarkets
+ Category killer
+ Discount store
- Price:
+ Discount store
+ Off-price retailers
+ Factory outlet
+ Warehouse clubs
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Retailers must decide upon 3 major product variables:

- Product assortment
- Service mix
- Store atmosphere
5 promotion tools:
- Advertising
- Personal selling
- Sales promotion
- Public relations
- Direct marketing
Trends in retailing:
The wheel-of retailing concept: new types of retailers usually begin as low margin,
low price, low status operations but later evolve into higher priced, higher service
operations.
—----------------------
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Wholesaling: selling goods and services to those buying for resale or business use
- Industrial distributors: sell → manufacturers
# Wholesalers: Industrial distributors → manufacturers →
wholesalers → retailers
- Merchant wholesalers: independently owned wholesale business that take title
to merchandise it handles
+ Full service wholesalers
+ Limited service wholesalers
+ Wholesale merchant
+ Cash and carry wholesalers
+ Drop shipper
- Brokers: no titles, assist negotiation
- Agents: no titles, perform few functions, represents for cust or comp
+ Selling agents
+ Purchasing agents
- Manufacturer’s sales branches and offices

CHAPTER 14: COMMUNICATIONS STRATEGY

There are 5 major promotion tools

Advertising Sale promotion

Any paid form of non
personal presentation and Short term incentive to
Definition promotion of ideas, goods encourage the purchase or
or services by an sale
identified sponsor
Presents a reason to buy a Offers a short-term
Purpose
product intensive to purchase
Time Pretty long- lasting Limited time frame
Isn’t always to make a Strictly about moving
End goals sales, sometimes, it set the products and service,
foundation for future sale solely to make a sale
Indirect & direct appeal Indirect: type, features,... Direct: price, discount…
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broadcast, print, online, discounts, coupons,

Example mobile, outdoor, displays, demonstrations,
and events

Similarity Both focus on particular target customer

Advertising Public relations (PR)

Building good relations
with the company’s
Any paid form of non
various publics by
personal presentation or
obtaining favourable
Definition promotion of ideas, goods,
publicity, building brand
services by an identified
and handling of heading
sponsor.
off with rumours,
events…
Build a brand and communicate with target
Similarity
customers.
Paid media Owned media
Press release,
Broadcast, print, online,
Example sponsorships, events,
mobile, outdoor
webpages
Primarily targeted
Target size Wider net
audience
Generate sale, create
Goal & objective Build good reputation
foundation for future sale
Control Less control of message More control
Long-term goal of
building sustainable
short -term goal for
relationships and
particular campaign
meaningful information
about the brand.

Direct and digital

Personal selling
marketing
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Engaging directly with

Personal customer
carefully targeted individual
interaction by the firm’s sales
consumers and customer
force for the purpose of
Definition communities to both an
engaging customers, making
immediate response and
sales, building customer
build lasting customer
relationships.
relationships
Direct mail, catalogues,
online, social media, mobile
Sales presentations, tradeshow,
Example marketing
incentive programs

Integrated Marketing Communications (IMC): companies must carefully

coordinate all of these customer touch points to convey consistent, clear, compelling
company and brand messages.

Communication process:
Encode: put thought into symbolic form
Decode: interpret the message
Noise: unplanned static or distortion ( nhiễu, hiểu sai, missout message)
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6 steps to develop effective marketing communication (6-M MODEL)

1. Identify target audience

2. Determine communication objectives
Buyer-readiness stages:

→ Goal: move customers through the buying process ← Understand customer

needs and wants
3. Design the message
Based on AIDA model:

AIDA model:
Attention → Interest → Desire → Action

To decide
- Content ( What to say?)
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+ Rational: self-interest
+ Emotional: either positive/ negative feelings
+ Moral: right or wrong
- Structure ( How to say?)
+ Draw a conclusion or leave it to audience
+ Present strongest argument first or last
+ One-sided or two-sided argument
- Format ( How to say?): which color, illustration, headline, copy…

4. Choose communication channels:

- Personal communication channels: 2 or more people communicate directly
with each other: face to face, on the phone, via internet…
+ Word-of-mouth influence
+ Buzz marketing: spread information via opinion leader
- Non-personal communication channels: media that carry messages without
personal contact, feedback

5. Select message source

6. Collect feedback

4 methods to set total promotion budget:

1. Affordable method: based on company’s affordable ability
2. Percentage of sales method: based on current sales of company
3. Competitive- parity method: based on competitor’s outlay
4. Objective- and- task method: set objectives → determine tasks →
estimate cost.

Promotion mix

Promotion tools Advantages Disadvantages

Advertising -Reach masses of -Impersonal → lack of
geographically dispersed direct persuasiveness of
buyers at low cost per salespeople
exposure
-Sometimes costly
-Can repeat many time

-Build long term image

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-Trigger quick sales

Attract customer’s
Sales promotion short-lived
attention
Is the most effective in
certain stages of the
Personal selling buying process, esp in Costly
preference, conviction,
action
Underused, used as
Public relation (PR) Believable
afterthought
Less public →
Direct and digital
delivered to a certain Less public
marketing
person

Push strategy: → Advertising channel → Final consumer

=> personal selling

Pull strategy: Final consumer → advertising channel to buy

product
→ Advertising, sales promotion, direct and digital marketing.

CHAPTER 15: ADVERTISING AND PR

1. Objectives setting:
- Can be divided into 3 types based on primary purpose:
+ Inform: → New product
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+ Persuade: → compete with competitors

+ Remind: Mature products
2. Advertising message:
- Madison & Vine = Advertainment:
3. Return on advertising investment = net return on adv investment/ costs of
advertising investment
There are 2 types of advertising results:
- Communication effects
- Sales and profit effects

HOW ADVERTISING WORKS

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Process Market feature

Buyers are active
Learn model Learn → Feel → Do
participants
High involvement
JTD
Advertisements → provide information

Confused between 2
Dissonance / attribution
Do → Feel → Learn alternatives similar in
model
quality

Low- involvement model Learn → Feel → Do

Many competitors→
minimal
JTD Mass media is important
differentiations→ Low
involvement
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