UNIT 6: Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

What are the segmentation variables?

Market segmentation requires dividing a market into smaller segments with distinct needs, characteristics,
or behaviors that might require separate marketing strategies or mixes. Through market segmentation,
companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently
and effectively with products and services that match their unique needs
Major Segmentation Variables for Consumer Market

GEOGRAPHIC SEGMENTATION:
Dividing a market into different geographical units such as nations, states, regions, countries, cities,
neighborhoods or climate.
McDonalds: divides its market into geographic segments, for example, different countries, states, regions
and cities. McDonalds sells burgers and targets local markets with customized menus. Instead of using
beef, in India McDonald's burgers are made from chicken due to religious beliefs.
DEMOGRAPHIC SEGMENTATION:
Study of the population, age, gender, life stage, generation, income. In demographic segmentation, we
divide the market on variables such as age, family size, etc. One reason demographic variables are so
Popular with marketers is that they’re often associated with consumer needs and wants. Here are a few
demographic variables:
1.Age and life-cycle stage
2. Life stage: defines a person’s major concern (divorce, having a child, buying a new house)
3. Gender: men and women have different attitudes and behave differently
4. Income
5. Race, culture and religion
6. Generation:
- Baby Boomers
- Generation X
- Millennials
- Generation Z
- Generation Alpha
PSYCHOGRAPHIC SEGMENTATION
Psychographics is the science of using psychology and demographics to better understand consumers.
Psychographic segmentation divides buyers into different segments based on lifestyle, values or personality
characteristics. For example Veganism has become an increasingly popular lifestyle form for more and
more people.
BEHAVIORAL SEGMENTATION
Dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses
to a product. Many marketers believe that behavior variables are the best starting point for building market
segments. It considers:
Occasions:Diving the market into segments where people get the idea to buy…mothers day fathers
day, christmas…etc
Use status:into non-users, ex-users, first time users and regular users of a product reinforce the
retain regular users
Loyalty:How loyal you are from the brand
Attitude:Enthusiastic, positive, indifferent, negative and hostile, workers in a political campaign use
voter attitude to determine how much time to spend with what they vote
Benefits sought:A powerful segmentation grouping buyers according to their different benefits that
they will seek from the product
★ Example Fitbit:for sporty people or sport watch…etc
What are the targeting strategies?

After evaluating different segments, the company must decide which and how many segments it will target.
A target market consists of a set of buyers who share common needs or characteristics that a company
decides to serve. Market targeting can be carried out at several different levels.
Undifferentiated marketing
A market-coverage strategy in which a firm decides to ignore market segment differences and go after the
whole market with one offer. The company designs a product and a marketing program that will appeal to
the largest number of buyers.
Differentiated (segmented) marketing
A market-coverage strategy in which a firm targets several market segments and designs separate offers
for each. The goal is to achieve higher sales and a stronger position. By offering product and marketing
variations to segments, companies hope for higher sales and a stron-ger position within each market
segment.
Concentrated or Niche marketing
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.
Niching lets smaller companies focus their limited resources on serving niches that may be overlooked by
larger competitors. Amazon began by selling books online but now sells anything and everything as the
nation’s largest online emporium.
Micromarketing
Is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and
locations. Differentiated and concentrated marketers tailor their offers and marketing programs to meet the
needs of various market segments and niches. At the same time, however, they do not customize their
offers to each individual customer.
Local Marketing.
Involves tailoring brands and promotions to the needs and wants of local customers. Advances in
communications technology have given rise to new high-tech versions of location-based marketing.
Individual marketing
Has also been labeled one-to-one marketing, mass customization, and markets-of-one marketing. Today,
new technologies are permitting many companies to return to customized marketing.

How can we differentiate a product?

Beyond deciding which segments of the market it will target, the company must decide on a value
proposition. How it will create differentiated value for targeted segments and what positions it wants to
occupy in those segments. Differentiation is what makes your product different what gives you a competitive
advantage and once you got that you make the positioning what the company's offering and image to
occupy a distinctive place in the minds of the target market,
The differentiation and positioning task consist of 3 steps:
- Identifying a set of possible differentiations that create competitive advantage
- Choosing advantages on which to build a positioning
- Selecting an overall positioning strategy
What are the positioning strategies?
1) Identifying a set of possible differentiations that create competitive advantage
Competitive advantage: An advantage over competitors gained by offering greater customer value either by
having lower prices, or providing more benefits that justify higher prices. Firms can differentiate in terms of:
- Product differentiation: brands can be differentiated on features, performance, or style and design.
- Channel differentiation: Firms that practice channel differentiation gain competitive advantage
through the way they design their channel’s coverage, expertise and performance.
- People differentiation: requires that a company selects its customer-contact people carefully and
trains them well.
- Image differentiation: Symbols, such as the McDonald’s golden arches, the colorful Google logo,
the Twitter bird, can provide strong company or brand recognition and image differentiation.
- Service differentiation: Beyond differentiating its physical product, a firm can also differentiate the
services that accompany the product.

2) Choosing advantages on which to build a position

Which Differences to Promote: Not all brand differences are meaningful or worthwhile, and each difference
has the potential to create company costs as well as customer benefits. A difference is worth establishing to
the extent that it satisfies the following criteria:
- Important: The difference delivers a highly valued benefit to target buyers.
- Distinctive: Competitors don't offer the difference, or the company can offer a more distinctive way.
- Superior: The difference is superior to other ways that customers might obtain the same benefit.
- Communicable: The difference is communicable and visible to buyers.
- Preemptive: Competitors cannot easily copy the difference.
- Affordable: Buyers can afford to pay for the difference.
- Profitable: The company can introduce the difference profitably.

3) Selecting an overall positioning strategy.

Value proposition is the full mix of benefits upon which a brand is positioned and differentiated. It is the
answer to the customer’s question ‘Why should I buy your brand?’ BMW’s ‘ultimate driving
machine/designed for driving pleasure’ value proposition hinges on performance but also includes luxury
and styling, all for a price that is higher than average but seems fair for this mix of benefits.
UNIT 7: Products, Services and Brands: Building Customer Value

PRODUCT CONCEPT
A product is anything that can be offered to a market for attention, acquisition, use, or consumption that
might satisfy a want or need. Broadly defined, products also include services, events, persons, places,
organizations, and ideas or a mixture of these.
Services are a form of product that consists of an activity, benefit, or satisfaction offered for sale; it is
intangible and does not result in ownership of anything.

Give two reasons why you think Experiences are so important?

Millennials started the experience method due to them being the first ones to share the experiences on
social media. You can relate to them and you can share them. Helping to the promotion anything linked to
emotion or feelings helps in the promotion of the product

WHAT IS MARKETED
PLACES: Cities, states, regions, and whole nations compete to attract tourists, residents, factories, and
company headquarters.
PROPERTIES: Are intangible rights of ownership to either real property (real estate) or financial property
(stocks and bonds). They are bought and sold, and these exchanges require marketing.
ORGANIZATIONS: Museums, performing arts organizations, corporations, and nonprofits all use marketing
to boost their public image and compete for audiences and funds.
INFORMATION: Is essentially what books, schools, and universities produce, market and distribute at a
price to parents, students, and communities.
IDEAS Every market offering includes a basic idea. Products and services are platforms for delivering some
idea or benefit.

PRODUCT LEVELS
Product planners need to think about products and services on three levels. Each level adds more customer
value. The most basic level is the core customer value: People who buy an iPad are buying much more
than a tablet computer. They are buying entertainment, self-expression, productivity, and connectivity—a
mobile and personal window to the world. At the second level, product planners must turn the core benefit
into an actual product. They need to develop product and service features, a design, a quality level, a brand
name, and packaging. Finally, product planners must build an augmented product around the core benefit
and actual product by offering additional consumer services and benefits
- Example Hotels`s Product Levels
Core benefit-rest
Actual product-room
Augmented product-flowers, wifi connection…etc
Describe the decisions companies make regarding their individual products…

1) INDIVIDUAL PRODUCT AND SERVICE DECISIONS

1. Product attributes: Developing a product or service involves defining the benefits that it will offer. These
benefits are communicated and delivered by product attributes such as:
- Quality: Refers to the characteristics of a product or service that bear on its ability to satisfy stated
or implied customer needs. Quality affects product or service performance.
- Features: Competitive tool for differentiating a product from competitors’ products. A stripped-down
model, one without any extras, is the starting point.
- Style and Design: Style describes the appearance of the product. Design contributes to a product’s
usefulness as well as to its looks.
2. Branding: Brand names help consumers identify products. Brands also say something about product
quality and consistency, the image of the company is very important. Branding also provides legal
protection for unique product features that otherwise might be copied by competitors.
3. Packaging: First impressions make all the difference, especially in a fast-paced age when everyone is
just too busy to take a step back to wait and see. Distinctive packaging may even become an important part
of a brand’s identity. Packaging also is a very important promotional medium.
4. Labeling and Logos: The label identifies the product or brand. It might also describe several things
about the product – who made it, where it was made, when it was made, its contents, how it is to be used
and how to use it safely. In addition, the label might help to promote the brand and engage customers.
5. Product support services: Augment actual products. A company’s offer usually includes some support
services. Support services are an important part of the customer’s overall brand experience.

2) Product Line Decisions

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. The major product line decision involves product line length – the number of items in the product
line. A company can expand its product line in two ways:
- Line filling involves adding more items within the present range of the line (for extra profits,
satisfying dealers,to keep out competitors). The company should ensure that new items are
noticeably different from existing ones.
- Line stretching occurs when a company lengthens its product line beyond its current range. The
company can stretch its line downward, upward, or both ways.
3) Product Mix
Product mix consists of all the product lines and items that an organization has to offer customers. An
organization with several product lines has a product mix.
A Product line is a group of an organization’s products that are closely related

A company’s product mix has four important dimensions:

width, length, depth and consistency

A company can increase its business in several ways.

It can add new product lines, widening its product mix.
A company can lengthen its existing product lines to
become a more full-line company.
It can add more versions of each product and thus
deepen its product mix. It can pursue more product line
consistency, or less, depending on whether it wants to
have a strong reputation in a field or in several fields.
From time to time, a company may also have to
streamline its product mix to pare out marginally
performing lines and to regain its focus

Identify the four characteristics that affect the marketing of services and the
additional marketing considerations that services require.

SERVICES MARKETING
Marketing Strategies for Service Firms: Just like manufacturing businesses, good service firms use
marketing to position themselves strongly in chosen target markets.
- Internal marketing means that the service firm must orient and motivate its customer-contact
employees and supporting service employees to work as a team to provide customer satisfaction.
Marketers must get everyone in the organization to be customer centered.
- Interactive marketing means that service quality depends heavily on the quality of the buyer-seller
interaction during the service encounter. In services marketing, service quality depends on both the
service deliverer and the quality of delivery.
Service Profit Chain: The chain that links service firm profits with employee and customer satisfaction.
Happy employees lead to happy customers. This chain consists of five links:
1. Internal service quality. Superior employee selection and training, a quality work environment and
strong support for those dealing with customers.
2. Satisfied and productive service employees. More satisfied, loyal and hardworking employees.
3. Greater service value. More effective and efficient customer value creation, engagement and service
delivery.
4. Satisfied and loyal customers. Satisfied customers who remain loyal, make repeat purchases and
refer other customers.
5. Healthy service profits and growth. Superior service firm performance. For example, at Four
Seasons Hotels and Resorts
★ Example: Four Seasons Hotels and Resorts pays their employees well, orients them carefully, gives
rewards treating employees as its most important guest from the maids to the managers they
receive free stays at the resorts 6 free nights per year that's the secret to Four Seasons success

Discuss branding strategy the decisions companies make in building and managing
their brands.

Brands are more than just names and symbols. They are a key element in the company’s relationships with
consumers. Brands represent consumers’ perceptions and feelings about a product and its performance.
- Brand equity is the differential effect that knowing the brand name has on customer response to the
product and its marketing. It’s a measure of the brand’s ability to capture consumer preference and
loyalty. A brand has positive brand equity when consumers react more favorably to it than to a
generic or unbranded version of the same product. A powerful brand has high brand equity.
- Brand value is the total financial value of a brand. High brand equity provides a company with many
competitive advantages: A powerful brand enjoys a high level of consumer brand awareness and
loyalty and forms the basis for building strong and profitable customer relationships.
Brand equity refers to the importance of a brand in the customer's eyes, while brand value is the financial
significance the brand carries. Both brand equity and brand value are estimates of how much a brand is
worth.

MAJOR BRAND STRATEGY DECISIONS: BUILDING STRONG BRANDS

1. Brand positioning: Customers are more interested in what the attributes will do for them, a brand
can be better positioned by associating its name with a desirable benefit. They are positioned on
strong beliefs and values, engaging customers on a deep, emotional level.
2. Brand Name Selection: A good name can add greatly to a product’s success. Desirable qualities
for a brand name include the following:
- Suggest benefits and qualities
- Easy to pronounce,recognize and remember
- Distinctive
- Extendable
- Translate for the global economy
- Capable of registration and legal protection
3. Brand Sponsorship:
- Store brands(Generic brand)-well known generic everyone knows them so cheap prices due to low
advertising
- National brands-normal brands
- Licensing-Use names and symbols created by other companies or well-known movie characters or
celebrities for a fee
- Co-branding-When two established brand names of different companies, used to have a channel ad
open up to more channels
 4. Brand Development Strategies
- Line extension- Adding an existing brand name product from the existing brand category (coca
cola different cola drinks)
- Brand extension- Existing brand name with new product category (dove different products same
brand)
- Multi branding- New brand existing products

What is a new product?

New product refers to the development of an original product, product improvements, product modifications
and new brands developed from the firm’s own research and development.
New product development starts with idea generation and the systematic search for new product ideas.
Major sources of new product ideas include internal sources and external sources such as customers,
competitors, distributors and suppliers, and others.
- Crowdsourcing (idea generation) Inviting broad communities of people, customers, employees,
independent scientists and researchers, and even the public at large, into the new product
innovation process.
- Customer-centered new product development focuses on finding new ways to solve customer
problems and create more customer-satisfying experiences.
- Team-based new product development: Instead of passing the new product from department to
department, the company assembles a team of people from various departments that stays with the
new product from start to finish.
- Systematic new product development: a company can install an innovation management system
to collect, review, evaluate, and manage new product ideas
-
Product Life Cycle (PLC):

the course that a

product’s sales and
profits take over its
lifetime.
The course that a
product`s sales and
profits take over its time,
which is marked by a
changing set of
problems and
opportunities and it
requires different tactics
and strategies
UNIT 8: Understanding and Capturing Customer Value
What do shoppers want and value most when buying online
Price, free shipping, shipping time

3 Factors that affect prices nowadays: what influences it the most?

● Economy-Severe recession 2008 with slow recovery…COVID for example

➔ Negative economic growth-falling incomes and rising unemployment
➔ Consumer are more sensitive to prices, the threat of unemployment makes consumers more
reluctant to spend
➔ Companies suffer a fall in demand and unsold goods creating incentives to cut prices and
offer discounts to bring revenue
➔ The effect on pricing strategies will depend on the type of good

● Rapid technological advances

➔ Get instant vendor price comparison
➔ Check prices at the point of purchase
➔ Monitor customer behaviour and tailor offers
➔ Give customers access to special prices
➔ Negotiate prices online or even in person

● New attitudes and values to consumption

➔ Sharing an experience
➔ Sharing economy
➔ Renting, borrowing and sharing are valid options to many

PRICING STRATEGIES: Three major pricing strategies:

CUSTOMER VALUE-BASED PRICING: Pricing decisions, like other marketing mix decisions, must start
with customer value. When customers buy a product, they exchange something of value (the price) to get
something of value (the benefits of having or using the product). There are 2 types of Customer Value
Based Pricing:

- Value-added pricing: attaches value-added features, quality and services to differentiate the
companies offers and thus their higher prices.
- Good-value pricing: is offering just the right combination of quality and good service at a fair price.
This pricing method involves introducing less expensive versions of established, brand name
products or new lower-price lines. It also involves redesigning existing brands to offer more quality
for a given price or the same quality for less.

COST-BASED PRICING : Involves setting prices based on the costs of producing, distributing, and selling
the product plus a fair rate of return for effort and risk. The key is to manage the spread between costs and
prices, how much the company makes for the customer value it delivers. A company’s costs take two forms:

1. Fixed costs: are the costs that do not vary with production or sales
2. Variable costs: vary directly with the level of production
3. Total costs: are the sum of the fixed and variable costs for any given level of production.

COMPETITION-BASED PRICING: Is setting prices based on competitors’ strategies, costs, prices, and
market offerings. This pricing method focuses on information from the market rather than production costs
or product's perceived value.
Describe the major strategies for pricing new products
MARKET-SKIMMING PRICING

Many companies that invent new products set high initial prices to skim revenues layer by layer from the
market. Setting a high price to skim maximum revenues from the segments willing to pay the high price.

1. Product quality and image must support the price. Buyers must want the product at the price.
2. The costs of producing a smaller volume cannot be so high that they cancel the advantage of
charging more.
3. Competitors should not be able to enter the market easily and undercut the high price.

MARKET-PENETRATION PRICING

Setting a low price for a new product in order to attract a large number of buyers and a large market share.
The high sales volume results in falling costs, allowing companies to cut their prices even further. Several
conditions must be met for this low-price strategy to work.

1. The market must be highly price sensitive so that a low price produces more market growth.
2. Production and distribution costs must decrease as sales volume increases.
3. The low price must help keep out the competition, and the penetration price must maintain its
low-price position. Otherwise, the price advantage may be only temporary.

What if there is a product mix? What pricing strategy would you use
The strategy for setting a product’s price often has to be changed when the product is part of a product mix.
In this case, the firm looks for a set of prices that maximizes its profits on the total product mix.

- Product line pricing: Setting prices across an entire product line. It takes into account the cost
differences between products in the line, customer evaluations, and competitors’ prices.
- Optional product pricing: Pricing these options is a sticky problem. Companies must decide which
items to include in the base price and which to offer as options.
- Captive product pricing sets prices of products that must be used with the main product.
Producers of the main products often price them low and set high mark-ups on the supplies.
- By-product pricing. Setting a price for by-products to help offset the costs of disposing of them and
help make the main product’s price more competitive.
- Product bundle pricing combines several products at a reduced price. Pricing bundles of products
sold together. For example, fast-food restaurants bundle a burger, fries and a soft drink at a ‘combo’.

PRICE ADJUSTMENT
- Discount and allowance pricing: reducing prices to reward customer responses such as volume
purchases, paying early or promoting a product.
- Segmented pricing: adjusting prices to allow for differences in customers, products, or locations.
- Psychological pricing: adjusting prices for psychological effect
- Promotional pricing: temporarily reducing prices to spur short-run sales
- Geographical pricing: adjusting prices to account for the geographic location of customers
- Dynamic pricing: adjusting prices continually to meet the characteristics and needs of individual
customers and situations. Prevalent online where the Internet introduces a new age of fluid pricing
- International pricing: adjusting prices for international markets. Companies can either set a
uniform worldwide Price or adjust prices to reflect local market conditions and cost considerations.

RESPONDING TO PRICE CHANGES

This figure shows the ways a company might assess and respond to a competitor’s price cut.

- Reduce its price to match the competitor’s price.

- Maintain its price but raise the perceived value of its offer.
- Improve quality and increase price, moving its brand into a higher price–value position.
- Launch a low-price fighter brand—adding a lower-price item to the line or creating a separate
lower-price brand.
UNIT 9: Marketing Channels
Marketing channel or 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. Channel decisions are
important since they can affect every other marketing decision and they can lead to competitive advantage.

RETAILING: Any organization selling to final consumers is doing retailing. It doesn’t matter how the goods
or services are sold or where. Retailing is a fast-moving, challenging industry.

WHOLESALING: Includes all the activities selling goods or services to those who buy for resale or
business use. It excludes manufacturers, farmers, and retailers. Wholesalers pay less attention to
atmosphere and location, because they are dealing with business customers rather than final consumers.

VALUE DELIVERY NETWORK: A network composed of the company, suppliers, distributors, and,
ultimately, customers who partner with each other to improve the performance of the entire system in
delivering customer value. Individual companies and brands don’t compete; their entire Value Delivery
Networks do!

Discuss how channel members interact and how they organize to perform the work of the channel
CHANNEL BEHAVIOUR: Marketing channels consist of firms that have partnered for their common good
with each member playing a specialized role. Each channel member depends on the others. They often
disagree on who should do what and for what rewards. Such disagreements over goals, roles and rewards
generate channel conflict.
CHANNEL CONFLICT: Disagreements among marketing channel members on goals, roles, and rewards.
We can differentiate among:
1. Vertical conflict occurs between different levels of the same channel. McDonalds
2. Horizontal conflict occurs among firms at the same level of the channel. NH Hotels

CHANNEL ORGANISATION
VERTICAL MARKETING SYSTEM
A channel structure in which producers, wholesalers, and retailers act as a unified system. One channel
member owns the others, has contracts with them, or has so much power that they must all cooperate. The
VMS can be dominated by the producer, the wholesaler or the retailer. There are 3 types of VMS
- Corporate VMS is where one member of the distribution channel owns all of the others and
combines successive stages of production and distribution under single ownership.
- Contractual VMS consist of independent firms at different levels of production and distribution who
join together through contracts, to obtain more economies or sales impact than each could achieve
alone.
- Administered VMS leadership is assumed not through common ownership or contractual ties but
through the size and power of one or a few dominant channel members, which coordinate
successive stages of production and distribution.
HORIZONTAL MARKETING SYSTEM
Is a channel arrangement in which two or more companies at one level join together to follow a new
marketing opportunity. By working together, companies can combine their financial, production or marketing
resources to accomplish more than any one company could alone.
MULTICHANNEL DISTRIBUTION SYSTEMS
Are systems in which a single firm sets up two or more marketing channels to reach one or more customer
segments.
Advantages:
- Expansion of sales and marketing coverage.
- Tailor-made products and services for the specific needs of customer segments
Disadvantages:
- Harder to control
- Generates conflict
DISINTERMEDIATION
Changes in technology and the explosive growth of direct and online marketing are having a profound
impact on the nature and design of marketing channels. One major trend is toward disintermediation.
Occurs when product or service producers cut out marketing channel intermediaries or when radically new
types of channel intermediaries displace traditional ones… in short words taking away intermediaries.

CHANNEL DESIGN DECISIONS

Designing a marketing channel system involves analyzing customer needs, establishing channel objectives,
identifying major channel alternatives and evaluating major channel alternatives.
Analyzing Consumer Needs
- Find out what target consumers want from the channel
- Identify market segments
- Determine the best channels to use
- Minimize the cost of meeting customer service requirements
Setting Channel Objectives
- Determine targeted levels of customer service (which ones to serve and how)
- Balance consumer needs against costs and customer price preferences
Identifying and Evaluating Channel Alternatives
A channel alternative is described by three elements: the types of available business intermediaries, the
number of intermediaries needed, and the terms and responsibilities of each channel member
- TYPES OF INTERMEDIARIES refers to channel members available to carry out channel work (sell
directly to end consumers or through retailers...)
- .NUMBER OF INTERMEDIARIES TO USE
● Intensive distribution: Common raw material and convenience product manufacturers
choose this distribution strategy, storing products in as many retail locations as they can.
● Exclusive distribution: Some producers purposely limit the number of intermediaries, in
which the producer gives only a limited number of dealers the exclusive right to distribute its
products in their territories.
● Selective distribution: The use of more than one but fewer than all of the intermediaries
who are willing to carry a company’s products.
- RESPONSIBILITIES OF EACH CHANNEL MEMBER:
● Economic criteria: a company compares the likely sales, costs, and profitability of different
channel alternatives.
● Control issues: Using intermediaries usually means giving them some control over the
marketing of the product, and some intermediaries take more control than others.
● Adaptability criteria: Channels often involve long-term commitments, yet the company
wants to keep the channel flexible so that it can adapt to environmental changes
UNIT 10: Integrated Marketing Communication Strategy
Introduction
Be part of the community be involved in a shared experience

PROMOTION MIX-PROMOTIONAL MIX (Marketing communications Mix)

A company's Promotion Mix consists of a specific blend of promotion tools that the company uses to
persuasively communicate customer value and build customer relationships. The five major promotion tools
are defined as follows:
- Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods or services
by an identified sponsor. Advertising includes broadcast, print, outdoor, and other forms.
- Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.
(Discounts, coupons, displays, demonstrations)
- Personal selling: Personal customer interactions by the firm’s sales force for the purpose of
engaging customers, making sales and building customer relationships (Sales presentations, trade
shows, incentive programs).
- Public relations (PR): Building good relations with the company’s various publics by obtaining
favorable publicity, building up a good corporate image, and handling or heading off unfavorable
rumors, stories and events. (press releases, sponsorships, events and Web pages)
- Direct and digital marketing: Engaging directly with carefully targeted individual consumers and
customer communities to both obtain an immediate response and build lasting customer
relationships (Catalogs, Online and social media, Mobile marketing).
In this unit we will focus on the nature of each promotion tool since they all have unique characteristics and
costs. Marketers must understand these characteristics in shaping the promotion mix.

How has it landscaped the way we promote

Is done by engaging people and creating a community that engages a lot more than normal ads nowadays
is about creating interesting and engaging content for the people being unique and creative. Not being
obvious about the brand

★ Example IKEA FRAKTA having their IKEA bag being similar almost identical to the new bag of
Balenciaga
★ Example of bad communication Dove and its racism ad or Dolce and Gabbana with its racism
towards China

INTEGRATED MARKETING COMMUNICATIONS

The explosive developments in communications technology and changes in customer communication
strategies have had a dramatic impact on marketing communications. Advertisers have now added a broad
selection of more-specialized and highly targeted media and content. As they adopt richer but more
fragmented media and promotion mixes to reach their diverse markets, they risk confusing consumers. To
prevent this, companies have adopted the concept of integrated marketing communications (IMC). Guided
by an overall IMC strategy, the company works out the roles that the various promotional tools and
marketing content will play and the extent to which each will be used.
Several major factors are changing the face of today’s marketing communications.
- Consumers are changing
- Marketing strategies are changing
- Advances in digital technology
- Content marketing
The Need For Integrated Marketing Communications
Integrated marketing communications (IMC) involves carefully integrating and coordinating the company’s
many communications channels to deliver a clear, consistent, and compelling message about the
organization and its products.
Shaping the overall promotion mix
The concept of integrated marketing communications suggests that the company must blend the promotion
tools carefully into a coordinated promotion mix.

PROMOTION MIX STRATEGIES

Marketers can choose from two basic promotion mix strategies: push promotion or pull promotion or a
combination of the two.
A push strategy involves “pushing” the product through marketing channels to final consumers. The
producer directs its marketing activities toward channel members to induce them to carry the product and
promote it to final consumers. A push strategy uses the manufacturer’s sales force, trade promotion money,
or other means to induce intermediaries to carry, promote, and sell the product to the end user. A push
strategy is particularly appropriate when there is low brand loyalty in a category. Using a pull strategy, the
producer directs its marketing activities toward final consumers to induce them to buy the product. If the pull
strategy is effective, consumers will then demand the brand from retailers, who will in turn demand it from
the producer. In a pull strategy the manufacturer uses advertising, promotion, and other forms of
communication to persuade consumers to demand the product from intermediaries, thus inducing the
intermediaries to order it. Pull strategy is particularly appropriate when there is high brand loyalty and high
involvement in the category, when consumers are able to perceive differences between brands, and when
they choose the brand before they go to the store. In a pull marketing strategy, the goal is to make a
consumer actively seek a product and get retailers to stock the product due to direct consumer demand.

COMMUNICATION PROCESS
The communication process involves nine elements: two major parties, two communication tools, four
communication functions, and noise. To communicate effectively, marketers must identify the target
audience, determine communication objectives, construct a message, select media,, and divide the
promotion budget among the major tools. Companies can pursue a push or pull promotional strategy.

Define the role of Advertising in the promotion mix

It can reach masses of geographically dispersed buyers at a low cost per exposure and it enables the seller
to repeat a message many times. For companies that want to reach a mass audience, TV is the place to be,
but it is very expensive. What’s more, a popular TV ad’s reach can be extended through online and social
media.

- Advertising's public nature makes consumers view advertised products as more legitimate.
- It says something positive about the seller’s size, popularity and success.
- It can generate quick sales
- Advertising is also very expressive (visuals, print, sound and color).
- Can be used to build up a long-term image for a product.
SETTING THE ADVERTISING OBJECTIVES

SETTING THE ADVERTISING BUDGET

- Stage in product life cycle

- Market share
- Competition

ADVERTISING STRATEGY
CREATING ADVERTISING MESSAGES
Good advertising messages and content are especially important in today’s costly and cluttered advertising
environment. Today’s consumers can choose what they watch and don’t watch. Increasingly, they are
choosing not to watch ads. The advertiser must turn the big idea into an actual ad execution that will
capture the target market’s attention and interest.
SELECTING ADVERTISING MEDIA
The major media types are television; digital, mobile and social media; newspapers; direct mail; magazines;
radio; and outdoor. Media planners want to choose a mix of media that will effectively and efficiently present
the advertising message to target customers.

Define the role of public relations in the promotion mix.

Public relations (PR) involves building good relations with the company’s various publics by obtaining
favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors,
stories, and events. It is used to promote products, people, places, ideas, activities, organizations, and even
nations. Companies use PR to engage and build good relationships with consumers, investors, the media,
and their communities.
PR may include any or all of the following functions:
- Press relations or press agency.
- Product and brand publicity.
- Public affairs
- Lobbying.
- Investor relations.
- Development.
Define the force of Personal Selling in the promotion mix.
Personal selling: Personal presentations by the firm’s sales force for the purpose of engaging customers,
making sales and building customer relationships.
Salesperson: An individual who represents a company to customers by performing one or more of the
following activities: communicating, selling, servicing, information gathering and relationship building
As an element of the promotion mix, the sales force is very effective in achieving certain marketing
objectives and carrying out such activities as prospecting, communicating, selling and servicing, and
information gathering. But with companies becoming more market oriented, a customer focused sales force
also works to produce both customer satisfaction and company profit. The sales force plays a key role in
engaging customers and developing and managing profitable customer relationships.

SALES PROMOTION: consists of short-term incentives to encourage the purchase or sales of a product
or service. Whereas advertising offers reasons to buy a product or service, sales promotion offers reasons
to buy now. Major Sales Promotion Tools
Samples offer a trial amount of a product.
Coupons are certificates that give buyers a saving when they purchase specified products.
Rebates are similar to coupons except that the price reduction occurs after the purchase.
Price packs offer consumers savings off the regular price of a product.
Premiums are goods offered either for free or at a low price.
Advertising specialties are useful articles imprinted with the advertiser’s name, logo, or a message
Point-of-purchase promotions include displays and demonstrations that take place at the point of sale.
Contests, sweepstakes, and games give consumers the chance to win something
Event marketing or event sponsorship is creating a brand-marketing event or serving

Define direct and digital marketing and discuss their rapid growth and benefits
to customers and companies
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.
Direct marketing has undergone a dramatic transformation due to the rapid advances in digital technologies
and Internet. They give buyers anywhere, anytime access to an almost unlimited assortment of products
and buying information, allowing buyers to create exactly the configuration of information, products, or
services they desire and then order them on the spot.