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Elementary Marketing




Assessment Methods


Continuous Assessment       (40%):

Participation           5%

Assignment           15% (Tentative Mid Nov - Group Project)

Test                       20% (Tentative Early Nov) 


Final Examination                   (60%)


Lecture Outline





Chapters Required



Topic 1   Marketing in a Changing World


Chapter 1 – Managing Profitable Customer Relationship

Chapter 2 – Company and Marketing Strategy: Partnering to Build Customer Relationship


Topic 2   The Marketing Environment


Chapter 3 – Marketing Environment


Topic 3   Consumer & Organizational Buying Behavior


Chapter 5 – Customer and Business Buying Behavior


Topic 4   Market Segmentation,

Targeting and Positioning for Competitive



Chapter 6 – Segmentation,

Targeting and Positioning:

Building the Right

Relationship with the Right



Topic 5   Market Research & Information System


Chapter 4 – Managing Marketing Information


Topic 6   Product Concepts


Chapter 7 – Product, Services and Branding Strategy



Topic 7   Developing and Managing Products


Chapter 8 – New Product Development and Product Life Cycle Strategies


Test Week




Topic 8   Pricing Strategy


Chapter 9 – Pricing Considerations and Strategies


Topic 9   Distribution Strategy


Chapter 10 – Marketing Channels and Supply Chain Management

Chapter 11 – Retailing and Wholesaling


Topic 10  Integrated Marketing Communication Strategy


Chapter 12 – IMC: Advertising, Sales Promotion and Public Relations

Chapter 13 – IMC: Personal Selling and Direct Marketing


Topic 11  Promotional Mix


-- Ditto ---


Topic 12  Marketing Management Process


Chapter 14 – Marketing in the Digital Age


Topic 13  Global Marketing


Chapter 15 – The Global Marketplace








Philip Kotler & Gary Armstrong, Marketing: An Introduction, Pearson, Prentice-Hall, 7th Edition, International Edition.


Useful Link: Google Toolbar (文字翻譯器: 將英文網頁翻譯成繁體中文)



Chapter (9-16)

Websites (Examples for Marketing Concepts)

9. Pricing Considerations & Strategies


Pricing Strategy –(Marketing teacher)


Typical Examples of Pricing Method


n          Priceline (Buyer-driven Pricing Method) – Name Your Own Price with Time-Sensitive/ Perishable Products (e.g. Air Ticket or Hotel).


What is Price?

The sum of all the values that consumer exchange for the benefits of having or using the product or service.


Dynamic Pricing- Charting different prices depending on individual customers and situations.


Factors to Consider When Setting Prices


Internal Factors Affecting Price Decisions


(1)  Marketing Objectives


-          Select the Target Market (e.g. High Income Group for Toyota)

-          Positioning Carefully

-          Decide the Marketing Strategy


General Objectives – Survival, Current Profit Maximization, Market Share Leadership and Product Quality Leadership


Low Price – Keep loyalty and prevent others from entry


(2)  Marketing Mix Strategy

Coordinated with product design, distribution and promotion decision to form a consistent and effective marketing program


Target Costing – “Can we sell it for that? “by determining the cost first before designing the new product.


Non-price positioning – try to use other marketing mix to create non-price positions (e.g. Sony builds more value into its customer electronics products and charges a higher price than many competitors


n          Build on quality, promotion, distribution when price is not a critical factors among 4Ps



(3)  Costs


Fixed Costs Costs that do not vary with production and sales level (e.g. Machinery)


Variable Costs – Costs that vary with the level of production (e.g. Labor)


Total Cost = Fixed Costs + Variable Costs


(4)  Organizational Considerations


Who will set the price?


Large Companies – Pricing by Divisional or Product Line Managers


Industrial Markets – By Negotiation with Salespeople


External Factors Affecting Pricing Decisions


(1)  The Market and Demand


Pricing in Different Types of Markets


Pure Competition


Monopolistic Competition (e.g. FMCG in Wellcome Supermarket)


Oligopolistic Competiton (e.g. Petrol Station in Hong Kong – Caltex)


Pure Monopoly – Towngas and China Light Power Group


Consumer Perceptions of Price and Value


Buyer-oriented pricing – involves understanding how much value consumer place on the benefits they receive from the product and setting the price that fits this value.


Analyzing the Price-Demand Relationships

Demand Curve – Negative Relationship between


Price and Quantity Demanded


Price Elasticity – Responsibility of Quantity demanded

with regard to a change in Price Level


(2)  Competitors’Costs, Prices and Offers


Ability of Driving competitors out of the market by cost, prices and offers


(3)  Other External Factors


Economic conditions






Social Concerns


General Pricing Approaches


Cost-Based Pricing – Adding a standard markup to the cost of the product

e.g. 50% markup on cost


Cost-Plus Pricing


Break-Even Pricing or Target Profit Pricing


Value-Based Pricing


Pricing based on the perceived value of the customers on the product


Value-added Marketing


Competition-Based Pricing


- Setting price based on the prices that competitors charge for similar products


New Product Pricing Strategies


Market-Skimming Pricing (e.g HDTV – High Definition TV)


Setting a high price for a new product to skim maximum revenue layer by layer from the segments willing to pay the high price.


Market-Penetration Pricing (e.g. Other Discount Stores)


Setting a low price for a new product in order to attract a large number of buyers and a large market share.


First – the market must be highly price sensitive so that a low price produces more market growth


Second – Production and Distribution Costs must fall as sales volume increases


Finally – low price can keep out competition


Product Mix Pricing Strategies


Product Line Pricing - Different Models of Printers from HP.


Optional Product Pricing – Charger or portable CD burner  for Notebook


Captive Product Pricing – Blades for a razor / Film for a camera


By-Product Pricing – Eible Oil with Detergents, Beef with Leather


Product Bundling Pricing – Microsoft Office – Word, Excel, PowerPoint and Access.


Price-Adjustment Strategies


Discount And Allowance Pricing – special price reduction during a period of time


Segmented Pricing – Different segment with different pricing, not because of the cost reasons


Psychological Pricing – e.g. $99.9


Promotional Pricing – Price Reduction during the Promotion


Geographic Pricing – e.g. Asian Edition for Book (Zone Pricing)


International Pricing


Price Changes


Initiating Price Changes –


Price Cuts or Increases


Responding to Price Changes


Buyer Reactions to Price Changes


Competitor Reaction to Price Changes


Responding to Price Changes


Public Policy and Pricing


Pricing Within Channel Levels


Pricing Across Channel Levels


10. Marketing Channels & Supply Chain Management


Supply Chain and the Value Delivery Network


The value delivery network is made up of company, suppliers, distributors and ultimately consumers who partner with each other to improve the performance of entire system.


New revolution in distribution : Dell Computer and Amazon by Web


The Nature and Importance of Marketing Channels


How Channel Members Add Value


-          By Information

-          By Promotion

-          By Contact

-          By Matching

-          By Negotiation

-          By Physical Distribution

-          By Financing

-          By Risk Taking


Number of Channel Levels


-          Direct Marketing Channel – No intermediary level (e.g. Avon and Amway)

-          Indirect Marketing Channel – With intermediaries


Channel Behavior and Organization


Channel Behavior


-          Channel Conflict – by Horizontal and Vertical Channel Conflict


Vertical Marketing Systems


-          Corporate Marketing System – integrate successive stages of production and distribution under single ownership (e.g. G2000 and Giordano)


-          Contractual Marketing System – in which a channel member, called a franchiser, links several stages in the production-distribution process (e.g. Franchising Organization – e.g. Coca Cola and McDonald’s and Burger King)


-          Administrated Marketing System – leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members (e.g. Wellcome Supermarket or P&G)


Horizontal Marketing Systems


-          in which two or more companies at one level join together to follow a new marketing opportunity (e.g. Bank of China in Hong Kong)


Multi-Channel Distribution Systems


-          in which a single firm sets up two or more marketing channels to reach one or more customer segments (e.g Bank – ATM, Online website, Telephone and retail outlets, IKEA – Online/Off line Catalogue, retail outlets and Sales forces)


Changing Channel Organization


-          Disintermediation – the replacement of traditional resellers from a marketing channel by radical new types of intermediaries (e.g. Dell Computer)


Channel Design Decisions


Analyzing Consumer Needs (e.g. discount retailing, FedEx and perishable products)


Setting Channel Objectives


Identifying Major Alternatives


-          Intensive Distribution – stocking the product as may as outlets as possible (e.g. FMCG)

-          Exclusive Distribution (1 only)– giving a limited number of dealers the exclusive rights to distribute the company’s product in their territories

-          Selective Distribution (more than 1) – the use of more than one, but fewer than all, of the intermediaries who are willing to carry the companies; products (e.g. electrical appliances or luxury products)


Evaluating the Major Alternatives


-          Economic Criteria

-          Control Criteria

-          Adaptive Criteria


Designing International Distribution Channels


-          Evaluation over China and Japan Markets Vs Western World


Channel Management Decisions


Selecting Channel Members


Managing and Motivating Channel Members


-          Partnership Relationship Management

-          e.g. Amazon (e.g. Associate Alliance) or GE (e.g. Customer Net)

-          CRM System by most companies


Evaluating Channel Members


-          By sales quotes

-          By average inventory level

-          By Customer delivery time

-          By treatment of damaged and lost goods

-          Cooperation in company promotion and training program

-          Services to Customers


Public Policy and Distribution Decisions


Exclusive Dealing – e.g. exclusive territorial agreement


Marketing Logistics and Supply Chain Management


Nature and Importance of Marketing Logistics


-          Outbound Logistics (e.g. moving products from the factory to resellers and ultimately to customers)

-          Inbound Logistics (e.g. moving products and materials from suppliers to factory)

-          Reverse Logistics (e.g moving broken, unwanted or excess products returned by customers or resellers)


Goals of the Logistics System


-          can both maximize customer service and minimize distribution costs


Major Logistics Functions


-          Warehousing (e.g. Distribution from supermarket)

-          Inventory Management (e.g Just-in-time Management)

-          Transportation (e.g. modes of transportation – road, railways, air and sea transport)


Integrated Logistics Management


-          Cross Functional Teamwork Inside the Company (e.g. across different functions within the organization)

-          Building Logistics Partnership (e.g Wal-Mart)

-          Third Party Logistics – an independent logistics partner that perform any or all of the functions required to get its clients’ product to market

11. Retailing & Wholesaling



Types of Retailers

Retailer Marketing Decisions

The Future of Retailing




Types of Wholesalers

Wholesaler Marketing Decisions

Trends in Wholesaling


12. Integrated Marketing Communications: Advertising, Sales, Promotion and Public Relations

Marketing Communications Mix


Integrated Marketing Communications

The Changing Communications Environment

The Need for Integrated Marketing Communications


A View of Communication Process


Setting the Overall Communication Mix



Setting Advertising Objectives

Setting the Advertising Budget

Developing Advertising Strategy

Evaluating Advertising

Other Advertising Considerations


Sales Promotion

Rapid Growth of Sales Promotion

Sales Promotion Objectives

Major Sales Promotion Tools

Developing the Sales Promotion Program


Public Relations

The Role and Impact of Public Relations

Major Public Relations Tools


13. Integrated Marketing Communications : Personal Selling and Direct Marketing


Personal Selling

The Nature of Personal Selling

The Role of the Sales Force


Managing the Sales Forces

Designing Sales Forces Strategy and Structure

Recruiting and Selecting Salespeople

Training Salespeople

Compensating Salespeople

Supervising Salespeople

Evaluating Salespeople


Personal Selling Process

Steps in the Selling Process

Personal Selling and Customer Relationship Management


Direct Marketing

The New Direct-Marketing Model

Benefits and Growth of Direct Marketing

Customer Databases and Direct Marketing

Forms of Direct Marketing

Integrated Direct Marketing

Public Policy and Ethical Issues in Direct Marketing


14 Marketing in Digital Age

Major Forces Shaping the Digital Age

Digitalization and Connectivity

Internet Explosion

New Types of Intermediaries

Customization and Customerization


Marketing Strategy in the Digital Age



E-Marketing in the Digital Age

Benefits to Buyers

Benefits to Sellers


E-Marketing Domains

B2C (Business to Consumer)

B2B (Business to Business)

C2C (Consumer to Consumer)

C2B (Consumer to Business)


Conducting E-Commerce

Click-Only Versus Click-and-Mortar E-Marketers

Setting Up an E-Marketing Presence


The Promise and Challenges of E-Commerce

The Continuing Promise of E-Commerce

The Web’s Darker Side


15. The Global Marketplace

Global Marketing in the Twenty-First Century


Looking at the Global Marketing Environment

The International Trade System

Economic Environment

Political-Legal Environment

Cultural Environment


Deciding Which Markets to Enter


Deciding How to Enter the Market


Joint Venture

Direct Investment


Deciding on the Global Marketing Program




Distribution Channels


Deciding on the Global Marketing Organization


16. Marketing and Society: Social Responsibility and Marketing Ethics

Social Criticisms of Marketing

Marketing’s Impact on Individual Consumers

Marketing’s Impact on Society as a Whole

Marketing’s Impact on Other Businesses


Citizen and Public Actions to Regulate Marketing



Public Actions to Regulate Marketing


Business Actions Towards Socially Responsible Marketing

Enlightened Marketing

Marketing Ethics