Chapter 1 — Developing New Products and Managing the Product

Life Cycle

New Product Development Process

Ways to Obtain New Products
— Customer complaints
— Customer surveys
— Acquisitions
— New product development
— Original products
— Product improvements
— Product modifications
— New brands from the firm's own research and development
— Ex: Apple modificates iPhone 15 to develop iPhone 16.

1) Idea Generation
— Idea generation is the systematic search for new product ideas. There are internal (company's
own research, management & staff and intrepreneurial programs) and external sources
(distributors, suppliers and outside design firms) for product ideas.
— Facebook uses hackathons for their employees to make them generate ideas.
— Crowdsourcing involves inviting broad communities of people into the new product
innovation process.
— Turkish Airlines gifts miles to anyone that gives a good idea that can improve their
services.

2) Idea Screening
— Identify good ideas and drop ideas by using R-W-W screening framework:
— Is it real?
— Can we win?
— Is it worth doing?

3) Concept Development and Testing

— Product idea is an idea for a possible product that the company can see itself offering to the
market.
— Product concept is a more detailed version of product idea.
— Product image is the way consumers perceive an actual or potential product.
— Concept testing refers to testing new product concepts with groups of target consumers.

4) Marketing Strategy Development

— Marketing strategy development is designing an initial marketing strategy for a new product
based on the product concept.
— It consists of (1) target market description, (2) value proposition and (3) marketing mix.
— Ex: A TOGG car is aimed to be sold to the people who likes Turkish nationality, environmental-
friendly driving and affords its price tag.
5) Business Analysis
— Business analysis is a review of the sales, costs, and profit projections for a new product to
find out whether these factors satisfy the company's objectives.

6) Product Development
— Product development is developing the product concept into a physical product to ensure
that the product idea can be turned into a workable market offering.

7) Test Marketing
— Test marketing is the stage of new product development in which the product and its
proposed marketing program are tested in realistic market settings.

— When test marketing is likely, a new product with a large investment gets released.
Uncertainty about the product's future success occurs.
— When test marketing is unlikely, companies tend to directly copy their comptetitors' products
with a reliatevely lower cost (than a new product) which brings relatively higher confidence to
the management team.

8) Commercialization
— Commercialization involves introducing a new procuct into the market.

Successful Product Development

— Customer-centered new product development focuses on finding new ways to solve
customer problems and creating more customer-satisfying experiences.
— Team-based new product development involves various company departments working
closely together, overlapping the steps in the product development process to save time and
increase effectiveness.
— Systematic new product development creates an innovation-oriented company culture that
yields a large number of new product ideas.

Product Life-Cycle Strategies

— The things that we use every day are mostly in their maturity period.
Introduction Stage
— Slow sales growth
— Little or no profit
— High distribution and promotion expenses

Growth Stage
— Sales increase
— New competitors enter the market
— Profits increase
— Economies of scale
— Consumer education
— Lowering prices to attract more buyers

Maturity Stage
— Slowdown in sales
— Increase in supply chain
— Substitute products
— High competiton
— Increased promotion and R&D to support sales

Modification strategies
— Modify the product
— Modify the market
— Modify the marketing mix

Decline Stage
Three strategies to choose
— Maintain the product
— Harvest the product
— Drop the product

Chapter 2 — Pricing: Understanding and Capturing Customer

Value
— Price is the amount of money charged for a product or service.

Major Pricing Strategies

Customer Value-Based Pricing
— Value-based pricing uses the buyers' perceptions of value rather then the cost.

— Good-value pricing is offering just the right combination of quality and good service at a fair
price.
— Everyday low pricing (EDLP) involves charging a constant everyday low price with few or no
temporary price discounts. (Ex: A-101, Wal-Mart)
— High-low pricing involves charging higher prices on an everyday basis but running frequent
promotions to lower prices on selected items. (Ex: Migros)
— Value-added pricing attaches value added featuers and services to differentiate a
company's offers and thus their higher prices.

— Cost-based pricing sets prices based on the costs for producing, distributing and selling the
product plus a fair rate of return for effort and risk.
— Fixed costs include costs such as rent, heat, interest and salaries.
— Variable costs include costs such as raw materials and packaging.
— Total cost is the sum of the fixed costs and the variable costs.

— Automobile manufactureres merge to lower the fixed costs to get advantage as shown on the
graph above.
— Cost-plus pricing adds a standard markup to the cost of the products. This minimized the
competition and makes sellers certain about costs. However, this approach may lead to an
ignorance of demand and competitor prices.
— Break-even pricing (target return pricing) is setting price to break even on costs or to make
a target return.
— Competition-based pricing is setting prices based on competitors' strategies, costs, prices
and market offerings. (Ex: Biddings)

Other Conisderations Affecting Price Decisions

— Target costing starts with an ideal selling price based on consumer value considerations and
then target cost that will ensure that the price is met.
— To understand the relationship between price and demand for a product, an elasticity
analysis can be made. The higher the price, the lower the demand.c
— Companies want to set themselves somewhere between monopolistic competiton and
oligopolistics competition.
— Pure competition is where demand price equals supply price which is very rare. (Ex: Wheat)
Chapter 3 — Pricing Strategies: Additional Considerations

New Pricing Strategies

— Market-skimming pricing strategy setes high initial prices to skim revenue layers from the
market.
— Product quality and image must support the price.
— Buyers must want the product at the price.

— Market-penetration pricing involves setting a low price for a new product in order to attract
a large number of buyers and a large market share. (Ex: Amazon Prime Video's penetration
pricing)

Product Mix Pricing Strategies

— Product line pricing takes into account the cost differences between products in the line,
customer evaluations of their features and competitors' prices. (Ex: Apple's iPhone line-up)
— Optional product pricing takes innto account optional or accessory products along with the
main product. (Ex: Silicon case and AirPods)
— Captive product pricing sets prices of products that must be used along with the main
product. (Ex: Nintendo makes a small profit on the console itself but makes higher margin on the
games inside.)
— By-product pricing sets a price for by-products in order to make the main product's price
more comptetitive. (Ex: Extra pieces of papers while printing are also sold with the product.)
— Product bundle pricing combines several products at a reduced price. (Ex: McDonald's
menu)

Price Adjustment Strategies

— Discount pricing reduces prices on purchases during a stated period of time or of larger
quantities.
— Allowances discount list prices by providing promotional money in return for an agreement to
feature the manufacturer's products in some way.
— Segmented pricing involves selling a product or service at two or more prices for several
segmentations: customer, product form, location and time. (Ex: Istanbulkart discount)
—In psychological pricing, the price says something about the product. High prices mean
something different to the customers.
—In promotional pricing, the products are sold below the list price, sometimes even below the
cost, in short-term as a limited-time offer to attract customers.
—In geographical pricing, the prices differ in different parts of the country or world. (Ex: Free on
Board pricing, zone pricing, basing-point pricing)
—On contrary, in uniform-delivered pricing, the price is standard in all the markets for a
product.
— Dynamic pricing meets the characteristics and needs of individual customers and situations.
(Ex: Plane prices with respect to the dates)
— International pricing involves adjusting prices continually to meet the characteristics and
needs of individual customers and situations (Ex: Apple once made a discount on iPhones
specifically for China.)
Price Changes
— Price cuts occur due to:
— Excess capability
— Increased market share
— This situation may be seen reasonable if new models are available or current products are not
selling well or in a case of quality issues.

— Price increases occur due to:

— Cost inflation
— Increased demand
— Lack of supply
— Buyers can see this reasonable if the product is hot or they may think that the company is
greed.

Responding to Pricing Changes

— Reduce price to match competition
— Maintain price but raise the perceived value through communications
— Improve quality and increase price
— Launch a lower-price “fighting” brand

Public Policy and Pricing

Pricing within Channel Levels
— Price fixing legislation requires sellers to set prices without talking to competitors.
— Predatory pricing legislation prohibits selling below cost with the intention of punishing a
competitor or gaining higher long-term profits by putting competitors out of business.

Pricing across Channel Levels

— Price discrimination is allowed if the seller (1) can prove that costs differ for different retailers
or (2) manufactures different qualites of the same product for different retailers.
— Retail (or resale) price maintenance is when a manufacturer requieres a dealer to charge a
specific retail price for its product which is against the law.
— Deceptive pricing occurs when a seller states prices that are not available to consumers in
order to show a false price reference. (Ex: reduced volume/amount for same price)
Chapter 4 — Marketing Channels: Delivering Customer Value

Supply Chains and Value Delivery

— Upstream partners are firms that supply raw materials, components, parts, information,
finances and expertise needed to create a product or service.
— Downstream partners include the marketing channels or distribution channels.
— Value delivery network is composed of the company, suppliers, distributors and customers
who partner with each other to improve the performance of the entire system.

— Supply chain make and sell view includes the firm's raw materials, productive inputs and
factory capacity.
— Demand chain sense and report view suggests that planning starts with the needs of the
target customer. (Ex: T-shirt's colour and size combinations to produce)

The Nature and Importance of Marketing Channels

— Marketing (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. It is
40% of the total cost in some sectors. (Ex: Importers that sell the products to the other retailers)

How Channel Members Add Value

— They transform the assortment of products into assortments wanted by customers.
— They bridge the major time, place and possession gaps that seperate goods and services
from users. (Ex: The fish are grouped into their species sizes for the customer.)

— Information
— Promotion
— Contact
— Matching (Use of services from different companies when buying like getting an insurance
and a financing program when buying a car)
— Negotiation
— Physical distribution
— Financing
— Risk taking
Number of Channel Levels
— Channel level is a layer of intermediaries that performs some work in bringing the product
and its ownership to the final buyer.

— Direct marketing channel is a marketing channel that has no intermediary levels.

— Indirect marketing channel is a marketing channel containing one or more intemediary
levels.

Channel Behaviour and Organization

— Marketing channels includes firms that partner for their common good with each member
with their own role.
— Channel conflict occurs when there is a disagreement between channels.

Vertical Marketing System

— Conventional distribution systems consist of one or more independent produceres,
wholesalers and retailers, each one seeking to maximing its own profit.
— Vertical marketing systems (VMSs) provide channel leadership where members act as a
unified system.

— Corporate vertical marketing systems combine successive stages of production and

distribution under single ownership.
— Contractual vertical marketing systems consist of independent firms at different levels of
production and distribution who join together through contracts. Franchiser is a contractual
vertical marketing system in which a channel member links several stages in the process.
— Adminstered vertical marketing systems coordinate successive stages and distribution
through the size and power of one of the parties.

Horizantal Marketing System

— Horizantal marketing system is a channel arrangement in which two or more companies at
one level join together to follow a new marketing opportunity.
 Comparison of Conventional Distribution System
Channel with Vertical Marketing System

Multichannel Distribution Systems

— Multichannel distribution systems are systems in which a single firm sets up two or more
marketing channels to reach one or more customer segments.

— Disintermediation is the cutting out of marketing channel intemediaries by producers or the

displacement of traditional reselleres by intermediaries.

Channel Design Decisions

— Marketing channel design includes creating effective marketing channels by analyzing
customer needs, setting channel objectives, identifying major channel alternatives and
evaluating those alternatives.
Analyzing Consumer Needs
— Find out what target consumers want from the channel
— Identify market segments (different markets may response differently)
— Determine the best channels to use (cost efficiency is the key)
— Minimize the cost of meeting customer service requirements

Responsibilities of Channel Members

— A producer and the intermediaries need to agree on (1) price policies, (2) conditions of sale,
(3) territory rights and (4) specific services.
— Long-term commitments should be followed when adopting something new.

— Exclusive distribution is when the producer gives only a limited number of dealers the
exclusive right to distribute its products in their territories.
— Exclusive dealing is when the seller requires that the exclusive distribution sellers not handle
competitor's products.
— Exclusive territorial agreements are where producer or seller limit territory.
— Tying agreements are agreements where the dealer must take most or all of the line.

Marketing Logistics and Supply Chain Management

— Marketing logistics involces planning, implementing and controlling the physical flow of
goods, services and related information from points of origin to points of consumption to meet
consuer requierments.

Major Logistics Functions

— Warehousing
— Inventory management
— Transportation
— Logistics information management
Chapter 5 — Retailing and Wholesaling

Retailing
— Retailing includes all the activities in selling products or services directly to final consumers
for their personal use. Retailers are business whose sales come primarily from retailing.
— Shopper marketing focuses the entire marketing process on turning shoppers into buyers
as they approac the point of sale.
— Omni-channel retailing creates a seamless cross-channel buying experience that integrates
in-store, online and mobile shopping that creates a single shopping experience. The key to
omni-channel retailing is to integrate channels for a seamless buying experience.

Types of Retailers
Amount of Service Classifications
— Self-service (Increasing with technology) (Ex: Grocery stores)
— Limited service (Ex: Zara)
— Full service (Ex: Apple)

Product Line Classifications

— Specialty stores (limited selection of products)
— Department stores (wide-range categories such as clothes and foods)
— Convenience stores (close to consumer)
— Superstores (high variety, ex: Carrefour)
— Category killers (ex: Bauhaus)

Organizational Approach
— Corporate chains are two or more outlets that are commonly owned and controlled. (Ex.
Macy's, CVS)
— Voluntary chains are wholesale-sponsored groups of independent retailers that engage in
group buying and common merchandising. (Ex: IGA, Western Auto, True Value)
— Retailer cooperatives are a group of independent retailers that band together to set up a
joint-owned, central wholesale operation and conduct joint merchandising and promotion
efforts. (Ex: Ace Hardware, Associated Grocers)
— Franchisers are contractual associations between a manufacturer, wholesaler or service
organization (franchisor) and independent business people (franchisees) who buy the right to
own and operate one or more units in the franchise system.

Retailer Marketing Decisions

— Segmentation targeting, differentiation and positioning involve the definition and profile of
the market so the other retail marketing decisions can be made. (Product assortment, services
mix, store atmosphere, etc.)

— Price policy must fit the target market and positioning, product and service assortment,
competition and economic factors.
— Promotion decision includes factors such as advertising, personal selling, sales promotion,
public relations and direct marketing.

— Central business districts are located in cities and include department and specialty stores,
banks and movie theaters.
— A shopping center is a group of retail businesses planned, developed, owned and managed
as a unit.

Retailing Trend and Developments

— Retail convergence involves the merging of consumers, producers, prices and retailers that
creates greater competition for retailers and greater difficulty differentiating offerings.
— Megaretailers are empowered by their superiror information systems, high buying power and
their large selection of products. Some of them even expands to other geographies.
— Retail technologies provide better forecasting techniques, inventory control, electronic
ordering, access to information.
— Green retailing targets keeping the operations without harming the environment.

Wholesaling
— Wholesaling includes all activities involed in selling goods and services to those buying for
resale or business use.
— Wholesalers are able to help the manufacturers by reaching many small customers at a low
cost.
— Buying and assortment building involves the selection of items and building of assortments
needed by customers.
— Bulk breaking involves the wholesaler buying in large quantities and breaking into smaller lots
for customers.
— Warehousing involves the wholesaler holding inventory which reduces the customers'
inventory cost and risk.
— Risk bearing involves the wholesaler absorbing risk by taking title and bearing the cost of
theft, damage, spoilage and obsolescence.
— Market information involves the wholesaler providing information to suppliers and customers
about competitors, new products and price developments.
— Management services and advice involves wholesalers helping retailers train their sales
clerks, improve store layouts and set up accounting and inventory control systems.

Types of Wholesalers
— Merchant wholesalers (they buy and sell)
— Brokers and agents (they negotiate without owning)
— Manufacturers' and retailers' branches and offices (they generally do not work with other
independent wholesalers)
Chapter 6 — Engaging Consumers and Communicating Customer
Value: Integrated Marketing Communication Strategy

The Promotional Mix

— The promotion mix is the specific blend of promotion tools that the company uses to
persuasively communicate customer value and build customer relationships.
— Advertising is any paid form of nonpersonal presentation and promotion of ideas by an
identified sponsor. (Ex: broadcast, print, online, mobile, outdoor)
— Sales promotion is a short-term incentive to encourage the purchase or sale of a product or
service. (Ex. discounts, coupons, displays, demonstrations, events)
— Personal selling is the personal interaction by the firm's sales force for the purpose of
engaging customers, making sales and building customer relationships. This is the most
expensive form of communication. (Ex: sales presentations, trade shows (B2B), incentive
programs)
— Public relations involves building good relations with the company's various publics by
obtaining favourable publicity, building up a good corporate image and handling or heading off
unfavourable rumours, storiers and events. (Ex: news updates, stories, sponsorships, events,
webpages)
— Direct and digital marketing involves engaging directly with carefully targeted individual
consumers and customer communities to both obtain an immediate response and build lasting
customer relationships.
Steps in Developing Effective Marketing Communication
Identifying the Target Audience
— What will be said
— How it will be said
— When it will be said
— Where it will be said
— Who will say it

Communication Objectives
— Awareness
— Appeal
— Ask
— Act
— Advocacy

— Rational appeal relates to the audience's self-interest.

— Emotional appeal is an attempt to stir up positive of negative emotions to motivate a
purchase.
— Moral appeal is directed to an audience's sense of what is right and proper

— Personal communication involves two or more people communicating directly with each
other.
— Buzz marketing involves cultivating opinion leaders and getting them to spread information
about a product or service to others in their communities.
— Word-of-mouth influence strongly influences consuder decisions. (Ex: family members,
friends, etc.)

— Nonpersonal communication channels are media that carry messages without personal
contact or feedback, including major media, atmospheres, and events.
— The message’s impact depends on how the target audience views the communicator. (Ex:
athletes, entertainers, health-care providers)
— Collecting feedback involves the communicator understanding the effect on the target
audience by measuring behaviour resulting from the content. (Ex: eye tracking technology at a
market)

Setting the Total Promotion Budget and Mix

— The affordable method sets the promotion budget at the level management thinks the
company can afford.
— The percentage-of-sales method sets the promotion budget at a certain percentage of
current of forecasted sales or as a percentage of the unit sales price.
— The competitive-parity method sets the promotion budget to match competitors' outlays.
— The objective-and-task method develops the promotion budget by specific promotion
objectives and hte costs of tasks needed to achieve these objectives.
Shaping the Overall Promotional Mix
— Advertising can reach masses of geographically dispersed buyers at a low cost per
exposure and it enables the seller to repeat a message many times.
— Personal selling is the most effective method at certain stages of the buying process,
particularly in building buyers' preferences, convictions, actions and developing customer
relationships.
— Sales promotion includes coupons, contests, cents-off deals and premiums that attract
customer attention and offer strong incentives to purchase.
— Public relations is a very believable form of promotion that includes news stories, features,
sponsorships, and events.
— Direct and digital marketing is an immediate, customized, and interactive promotional tool
that includes direct mail, catalogs, telephone marketing, online, mobile, and social media.

Socially Responsible Marketing Communication

— Communicate openly and honestly with consumers and resellers
— Avoid deceptive or false advertising
— Avoid bait-and-switch advertising
— Conform to all federal, state and local regulations

— Follow rules of "fair competition"

— Do not offer bribes
— Do not attempt to obtain competitors' trade secrets
— Do not disparage competitors or their products
Chapter 7 — Advertising and Public Relations
— Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods or
services by an identified sponsor.

Setting Advertising Objectives

— An advertising objective is a specific communication task to be accomplised with a specific
target audience during a specific time.
— Comparative advertising is the practice of advertisement where a brand compares itself to
its rival.

— Primary demand is the demand of a category of a product while secondary/selective

demand is the demand of an individual product. (Ex: Poultry vs. Banvit)

— Informative advertising is used when introducing a new product category to build primary
demand.
— Communicating customer value, building a brand and company image, suggesting new
uses for a product, informing the market of a price of design change, correcting false
impressions

— Persuasive advertising is important with increased competition to build selective demand.

— Building brand preference, encouraging switching to a brand, changing customer
perceptions of product, creating customer engagement, building brand community

— Reminder advertising is important with mature products to help maintain customer

relationships and keep customers thinking about the product. (Ex: Generic Coca-Cola
advertisements)
— Maintaining customer relationships, reminding customers that the product may be needed
in the near future, reminding consumers where to buy the product

Developing Advertising Strategy

— Advertising strategy is about (1) creating advertising messages and (2) selecting the right
advertising media

Creating the Advertising Message and Brand Content

— Brand integrations/entertainment involves making the brand an inseperable part of some
form of entertainment or content.
— Native advertising looks like other natural content surrounding it on a web or social media
platform. (Ex: An iMac that appears on a movie scene)

— Customer benefits should be identified well and the message should be matched with the
company's positioning for a successful strategy.
— A successful message should be meaningful, believable and distinctive.
— Attention getting words (such as "cheapest" or "fastest") can also be considered.
Selecting Advertising Media
Major Steps in Media Selection
— Determining reach, frequency, impact and engagement
— Choosing among major media types
— Selecting specific media vehicles
— Choosing media timing

Profiles of Major Media Types

— Factors like impact, effectiveness and cost should be decided as well.

— The planner must also consider whether the advertisement will run seasonally or not.

Evaluating Advertising Effectiveness and Return on Advertising Investment

— Communicationg effects indicate whether the ad and media are communicating well and
can be tested before or after the ad runs.
— Sales and profit effects compare past sales and profits with past expenditures.
— The digital environment is more effective to measure the customer sentiment and to analyze
the data.

Public Relations
— Public relations consists of activities designed to engage the company's various publics and
build good relations with them.
— Press relations/agency involves the creation and placing of newsworthy information to
attract attention to a person, product or service.
— Product publicity involves publicizing specific products.
— Public affairs involves building and maintaining national or local community relations.
— Lobbying involves building and maintaining relations with legislators and government officials
to influence legislation and regulation.
— Investor relations involves maintaining relationships with shareholders and others in the
financial community.
— Development involves public relations with donors or members of nonprofit organizations to
gain financial or volunteer support.
The Role and Impact of PR
— It costs less comparing to the advertising.
— It has stronger impact on public awareness than advertising.
— It has power to engage customers and make them part of the brand story.

Chapter 8 — Sustainable Marketing: Social Responsibility and

Ethics
— Sustainable marketing is socially and environmentally responsible marketing that meets the
present needs of consumers and businesses while also preserving or enchancing the ability or
future generations to meet their needs.

Social Criticisms of Marketing

High Prices
— Price are too high due to high costs of distribution, advertising, promotion and excessive
mark-ups.
— Consumers do not understand the cost of doing business most of the time.
— Advertising informs buyers of availability and merits of a brand.

Deceptive Practices
— Companies use deceptive practices that lead customers to believe they will get more value
than they actually do.
— There are three kinds of deceptive practices:
— Deceptive pricing
— Deceptive promotion
— Deceptive packaging
— Legislations and regulations should be made to protect the customers.

High-Pressure Selling
— Salespeople use high-pressure selling that persuades people to buy goods they had no
intention of buying.
— Most selling involves buying long-term relationships with valued customers. High-pressure or
deceptive selling can damage these relationships.
Harmful/Unsafe Products
— Product with poor quality can provide little benefit and can be harmful.
— Good marketers realize that there is no value in marketing harmful products.

Planned Obsolescence
— Producers cause their products to become obsolete.
— Planned obsolescense is the result of a competitive market.

Cultural Pollution
— Marketing and advertising can create cultural pollution.
— Marketing and advertising are planned to reach only a target audience and consumers that
have alternatives.

Pathways to Sustainable Marketing

— Consumerism is the organized movement of citizens and government agencies to improve
the rights and power of buyers in relation to sellers. It can also be described as high
consumption culture.
— Buyers have the right to (1) not buy a product that is on sale, (2) expect the product to be on
sale and (3) expect the product to perform as claimed.

The Rise of Environmentalism

— Environmentalism is an organized movement of concerned citizens, businesses and
government agencies to protect and improve people's living environment.
— Environmental sustainability involves earning profits while helping to save the planet.
— Carbon footprint is a term that captures the total negative CO2 emissions impact associated
with a product or service.

— Pollution prevention involves not just cleaning up waste but also eliminating or minimizing
waste before it is created.
— Pollution stewardship involves minimizing the pollution from production and all
environmental impact throughout the full product life cycle.

Building a Sustainable Marketing Organization

— Consumer-centric marketing: A company should view and organize its marketing activities
from the customer's point of view to sense, serve and satisfy customer needs, noew and in the
future.
— Consumer value-building marketing: A company should put most of its resources into long-
term customer value-building marketing investments.

Bonus Terminology
— Pleasing products are the products that offer immediate satisfaction or enjoyment but may
have low long-term benefits or even negative consequences. (Ex: Sugary snacks)
— Salutary products are prodcut that provide long-term benefits but may lack immediate
appeal or pleasure. (Ex: Insurance)
— Deficient products are the products lack both immediate appeal and long-term benefits. (Ex:
Cigarettes)
— Desirable products are the products that combine both immediate satisfaction and long-
term benefits. (Ex: Eco-friendly reusable water bottle)
Chapter 9 — Digital Marketing

Understanding Digital Marketing

— Digital marketing is the use of technology based platforms to engage directly with carefully
targeted individual consumers, consumer communities and businesses. It serves as a complete
business model.

Benefits of Digital Marketing

— Convenience (low-cost and efficient)
— Buyers benefit from increased price competition
— Brand engagement and community
— Interactive and immediate (real-time)
— Flexible
— Builds customer relationships
— Links brands to important moments and trending events

Preparing for a Digital Marketing Campaign

— Digital consumer personas are detailed, nuanced and tangible representations of
prototypical consumer to be targeted by the digital campaign.
— With online and mobile media, marketers can quickly manipulate treatments across customer
group with readily measurable results. (Ex: A/B testing)

Employing Digital Channels in an Omni-Channel Marketing

— Online marketing is marketing via internet using company websites, online ads &
promotions, email, online videos and blogs.
— Marketing websites engage customers to move them closer to a direct purchase or other
marketing outcome.
— Branded community websites present brand content that engages consumers and creates
customer community around a brand.
— Online display adds are digital adds that appear anywhere on an internet or mobile user’s
screen and are often related to the information being reviewed.
— Search-related advertising includes text and images based ads and links that appear atop
or alongside search engine results on sites such as Google and Yahoo.
— Email marketing involves sending highly targeted, highly personalized, relationship-building
marketing messages that are delivered by email. Spam mails are unwanted commercial emails.
— Online video marketing is posting digital video content on brand websites or social media.
— Viral marketing is the digital version of word-of-mouth marketing where videos, ads and
other contents that are so infectious that customers will seek them out and pass them along to
friends.
— Blogs are online journals where people and companies post their thoughts and other content
usually related to narrowly defined topic.
— Mobile marketing delivers messages, promotions and other contents to on-the-go
consumers through mobile devices.
Social Media Marketing
Advantages of Social Media
— Targeted and personal
— Interactive
— Immediate and timely
— Cost effective
— Engagement and social sharing capabilities

Social Media Platforms

— Image and video platforms
— Messaging platforms
— Blogs/Microblogs
— Wikis
— Reviews and rating platforms
— Live-streaming platforms
— Metaverse platforms

Social Media Challenges

— User controlled
— Brands need to earn the right to be there
— Even a seemingly harmless social media campaign can backfire

Creating an Integrated Omni-Channel Strategy

— Omni-channel marketing creates a seamless channel buying experience that integrates in-
store, online and mobile shopping.

Public Policy Issues in Digital Marketing

— Irritation includes annoying and offending customers.
— Unfairness includes taking unfair advantage of impulsive or less-sophisticated buyers.
— Deception includes heat merchants who design mailers and write copy designed to mislead
consumers.
— Fraud includes identity theft and financial scams.
— Consumer privacy involves concerns that marketers may have too much information and
use it to take unfair advantage.
Chapter 10 — Personal Selling and Sales Promotion

Personal Selling
— Personal selling is the use interpersonal part of the promotion mix. Knowledge on products,
customers and competitors is essential for success.
— Salespeople are an effective link between the company and its customers to produce
customer value and company profit by representing the company to customers and customers
to the company.

Managing the Sales Force

Designing Sales Force Strategy and Structure
— In territorial sales force structure, each salesperson is assigned an exclusive geographic
area and sells the company’s full line of products and services to all customer in that territory.
— In product sales force structure, each salesperson sells along product lines which requires
deep product knowledge.
— In customer sales force structure, each salesperson sells along customer or industry lines.

Sales Force Size

— Workload approach to salesforce size refers to grouping accounts into different classes to
determine the number of salespeople needed.
— Outside sales force (field sales force) are salespeople who travel to call on customers in the
field.
— Inside sales force are salespeople who conduct business from interactions or visits from
prospective buyers.
— Team selling involves using teams of people from sales, marketing, engineering, finance,
technical support and even upper management to service large and complex accounts.

— Supervising salespeople aims to help salespeople work smart by doing the right things in
the right ways.
— Sales reports, call reports and expense reports are helpful to evaluate the performance.
— Organizational climate, sales quotas and positive incentives can be used to improve the
performance of the salespeople.
— Sales quotas are standards stating the amount salespeople should sell and how sales should
be divided among the company’s products.

— Social selling is the use of technological devices to engage customers, build stronger
customer relationships and augment sales performance. This technique makes salespeople’s
work more productive and effective.
The Personal Selling Process
— Prospecting identifies qualified potential customers through referrals from customers,
suppliers, dealers and the Internet.
— Preapproach is the process of learning as much as possible about a prospect who is
involved in the buying, and the characteristics and styles of the buyers.
— Approach is the process where the salesperson meets and greets the buyer and gets the
relationship off to a good start and involves the salespersons’ appearance, opening lines and
follow-up remarks.
— Presentation is when the salesperson tells the product story to the buyer by presenting the
benefits of the product and showing how the product solves the customers’ problems.
— Handling objections is the process where salespeople resolve problems that are logical,
psychological or unspoken.
— Closing is the process where salespeople should recognize signals from the buyer to ask for
an order and finalize the sale.
— Follow-up is the last step in which the salesperson follows up after the sale to ensure
customer satisfaction and repeat business.

— Personal selling is transaction-oriented to close a specific sale with a specific customer.

— The long-term goal of personal selling is to develop a mutually profitable relationship.

Sales Promotion
— Sales promotion refers to the short-term incentives to encourage purchases or sales of a
product or service now.

Rapid Growth of Sales Promotion

— Product managers are under pressure to increase current sales.
— Companies face more competition.
— Competing brands offer less differentiation.
— Advertising efficiency has declined due to rising costs, clutter and legal constraints.
— Consumers have become more deal-oriented.

Sales Promotion Objectives

— Consumer promotions
— Trade promotions
— Business promotions
— Sales force promotions
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
message that are given as gifts to consumers.
— 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 such as
cash, trips, or goods by luck or through extra effort.
— Contests require an entry by a consumer.
— Sweepstakes require consumers to submit their names for a drawing.
— Games present consumers with something that may or may not help them win a prize.
— Event marketing (or event sponsorship) is creating a brand-marketing event or serving as a
sole or participating sponsor of events created by others.

Major Tools for Trade Promotions

— Discount
— Allowance
— Free goods
— Specialty advertising

Major Sales Promotion Tools for Busines Customers

— Conventions and trade shows are effective to reach many customers not reacher with the
regular sales force.
— Sales contests are effective in motivating salespeople or dealers to increase performance
over a given period.