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Elementary Marketing

  

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

 

Week

Topic

 

Chapters Required

 

1

Topic 1   Marketing in a Changing World

 

Chapter 1 – Managing Profitable Customer Relationship

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

2

Topic 2   The Marketing Environment

 

Chapter 3 – Marketing Environment

3

Topic 3   Consumer & Organizational Buying Behavior

 

Chapter 5 – Customer and Business Buying Behavior

4

Topic 4   Market Segmentation,

Targeting and Positioning for Competitive

Advantage

 

Chapter 6 – Segmentation,

Targeting and Positioning:

Building the Right

Relationship with the Right

Customers

5

Topic 5   Market Research & Information System

 

Chapter 4 – Managing Marketing Information

6

Topic 6   Product Concepts

 

Chapter 7 – Product, Services and Branding Strategy

 

7

Topic 7   Developing and Managing Products

 

Chapter 8 – New Product Development and Product Life Cycle Strategies

8

Test Week

 

 

9

Topic 8   Pricing Strategy

 

Chapter 9 – Pricing Considerations and Strategies

10

Topic 9   Distribution Strategy

 

Chapter 10 – Marketing Channels and Supply Chain Management

Chapter 11 – Retailing and Wholesaling

11

Topic 10  Integrated Marketing Communication Strategy

 

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

Chapter 13 – IMC: Personal Selling and Direct Marketing

12

Topic 11  Promotional Mix

 

-- Ditto ---

13

Topic 12  Marketing Management Process

 

Chapter 14 – Marketing in the Digital Age

14

Topic 13  Global Marketing

 

Chapter 15 – The Global Marketplace

15

Revision

 

 

 

Textbook

 

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

 

Resellers

 

Government

 

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

Retailing

 

Types of Retailers

Retailer Marketing Decisions

The Future of Retailing

 

Wholesaling

 

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

 

Advertising

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-Business

E-Commerce

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

Exporting

Joint Venture

Direct Investment

 

Deciding on the Global Marketing Program

Product

Promotion

Price

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

Consumerism

Environmentism

Public Actions to Regulate Marketing

 

Business Actions Towards Socially Responsible Marketing

Enlightened Marketing

Marketing Ethics