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Elementary Marketing

  

ELEMENTARY MARKETING

 

Assessment Methods

 

Continuous Assessment       (40%):

Participation           5%

Assignment           15% (Group Project)

Test                       20%  

 

Final Examination                   (60%)

 

(Assessment Outline is subject to review. Please refer to the latest information from the Module Leader)

 

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 /8th Edition , International Edition.

 

(To be confirmed during the class)

 

Useful Link

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


勝在營銷」電視特輯

 

MarketingTeacher  (Lesson Store)

 

LearnMarketing

 


 

Chapter (1-4)

Websites (Examples for Marketing Concepts)

 1 Marketing: Managing Profitable Customer Relationship

  1. Customer Value
  2. Marketing Concept (Old Vs New)
  3. Amazon.com (Customer Relationship)
  4. HK Bank Personal Financial Services (Customer Relationship)
  5. Consumer Equity (Customer - an Asset towards Company)
  6. Maslow's Theory of Needs
  7. P&G HK (Product)
  8. 社 Hong Thai Travel Services Ltd (Services)
  9. Bloomberg.com (Information)
  10. 7-Eleven HK (Marketing Myopia)
  11. Fairwood (Value and Satisfaction)
  12. eBay香港 (Market - Exchange and Transaction)
  13. Lee Kum Kee - (as a Company {Marketer} in a Modern Marketing System)
  14. U2 Fashion (Segmentation and Target Marketing)
  15. Saving Deposit - HK (Demand Management and Demarketing)
  16. Nokia Hong Kong (Value Proposition)
  17. Marketing Concept (Old Vs New)
  18. Walt Disney HK (Societal Marketing Concept)
  19. HK Jockey Club - Charity (Societal Marketing Concept)
  20. SaSa.Com (a Discussion of Marketing Mix)
  21. FedEx (Customer Relationship Management - Customer Perceived Value)
  22. Haomama – Lam Soon (Customer Relationship Mgt)
  23. FedEx (Basic Relationship Vs Full Partnership)
  24. Yahoo.com (Partner Relationship Marketing - Inside)
  25. WalMart, ParK'N Shop and L&Fung (Partner Relationship Marketing - Outside)
  26. Personal Banking Services - HK Bank (Customer Lifetime Value)
  27. Services of HK Baptist Hospital (Customer Lifetime Value)
  28. Services of Sanatorium & Hospital (Customer Lifetime Value)
  29. Consumer Equity (Customer - an Asset towards Company)
  30. Services of HK Baptist Hospital (A Discussion of Customer Relationship Groups)
  31. Amazon.com ("Click and Mortar" Company)
  32. E-bayPayPal ("Click" Company)
  33. Li&Fung (B2B Company)
  34. McDonald's (Globalization + Ethics /Social Responsibility + Marketing Relationship)
  35. Epsilon (A CRM Technology Company)
  36. CafeDirect (Fair Trade Organization)

2 Company and Marketing Strategy :Partnership to Build Customer Relationship

  1. Pricerite (Steps in Strategic Planning)
  2. P&G HK Ltd (Strategic Business Unit - SBU)
  3. WalMart - Always Low Prices (Mission of the Company)
  4. Panasonic Hong Kong (A Discussion on Portfolio Analysis and BCG Model)
  5. Starbucks Worldwide (A Discussion over Product/Market Expansion Grid)
  6. Li&Fung Ltd (Value Delivery Network - Value Chain, Distributors, Suppliers and Customers)
  7. Sau Sang Tong (A Discussion on Market Segmentation, Target Marketing and Marketing Positioning) 
  8. Delifrance (A Discussion on Market Segmentation, Target Marketing and Marketing Positioning)
  9. KFC (A Discussion on Market Segmentation, Target Marketing and Market Positioning)

 

 

 3 The Marketing Environment

Know Your Market (Business.gov.hk)

Start Your Business (Business.gov.hk)

Invest in Hong Kong

Diagram for Marketing Environment

  

A.         Microenviroment

 

1.          The Company - Mission, Objectives, Broad Strategies and Policie

l         Top Management

l         Finance, Research & Development (R&D)

l       Purchasing, Operations

l        Accounting

 McDonald's (Fast Food)

     Lam Soon Group (FMCG)

     IKEA HK (Furniture)

(A Discussion over the Actors in the Environment)

 

2.            Suppliers

 o        Value Delivery System
(Li&Fung Trading Ltd) - Global Trader
 (Park'N Shop)
Supermarket
 (7-Eleven) - Convenience Store

3.            Marketing Intermediaries

          Resellers 
Getz Brothers & Co (HK) Ltd

         Physical Distribution Firm

 Li&Fung Trading Ltd - Trading    Company

Kerry Logistics - Physical Logistics Solutions 

(Park'N Shop) - Supermarket 

(7-Eleven) - Convenience Store

          Marketing Services Agencies

AC Nielsen HK - Research Hse
Dun & BradStreet HK - Research Hse
HK 4A's - Advertising Agencies
TVB Advertiser's Sites

          Financial Intermediaries

BOC - Corporate Banking Services

4.          Customers

 n          Consumer Markets  - St Honore Cake Shop

n          Business Markets - IBM

n          Reseller Markets -   Li&Fung

n          International Markets - Coke

 5.   Competitors

 Direct Competitors (Coke Vs Pepsi Coke)Indirect Competitors (Coke Vs Watsons Water

6.          Publics

  Financial Publics

 Finance Your Business
BOC HK - Corporate Business
HKEx – Stock
Morgan Stanley - Investment House

          Media Publics

 TV - TVB and ATV
Newspaper - Apple Daily
Magazines - ATNEXT
Super Size Me - Impact on Fast Food BusinessDisney - The Mouse Betrayed

(Discussion over Impact on

Walt Disney)

 

         Government Publics

 Intellectual Property Department

Business License

Inland Revenue Department

Fire Services Department

Consumer Council

Food and Environmental Hygiene Department

Related Government Departments

 

         Citizen-action Publics

 Green Power HK

          Local Publics

 DSS School in Hong Kong - Community Relationships

          General Publics

          Internal Publics

 B.         Macroenviroment

PEST Analysis VS SWOT Analysis

 

1.         Demographic Forces

 

Size, Density, Location, Age, Gender, Race, Occupation and Other Statistics

 

Population (Census and Statistics)

 

2.         Economic Forces

 

Change in Income
Change in Consumer Spending Patterns

 

Economics Situtation (Census & Stat)

 

3.         Natural Forces

 

Shortage of raw materials
Increased pollution
Increased Government Intervention

 

Electrical Power - CLP Group

Oil Supply - Caltex

Water Suplies Department

Land - MidLand Group

 

4.         Technological Forces

 

HK Sci & Tech Parks Corporation

HK Productivity Council

HK CyberPort

Tradelink

EPC Global HK - RFID   

 

5.         Political Forces

 

Increasing Legislation

Changing Government Agency Enforcement

Emphasis on Ethics and Socially Responsible Actions

 

Labour Department

Equal Opportunities Commission Environmental Protection Department

 

6.          Cultural Forces

 

Persistence of Cultural Values

Shifts in Secondary Cultural Values

 

General Holiday for HK 2005

 

MidAutumn Festival

Lunar Chinese New Year

Christmas

Halloween

Valentine's Day

 

World Fact Book - Hong Kong

 

Hong Kong in Figures

 

HK Year Book

 

Concepts of Marketing Research

 

4 Managing Marketing Information

 

1.          Assessing Marketing Information Needs

 

n          An Review over Information Available or Required from the Marketing Environment – Microenvironment and Macroenvironment with the use of Marketing Information System (MIS) – (e.g. MarketPilot MIS System)

 

n          Microenvironment

 

u        The Company – Sales Record, Accounting Report  (e.g. Annual Report of McDonald’s) and etc

u        Suppliers – Delivery Report, RFID and ERP System

u        Marketing Intermediaries – Attitude Report and Advertising Awareness Report from Advertising Agencies (e.g. 4As)

u        Customers – by Consumer Survey (e.g AC Nielsen) – e.g. Taste Test for Food Industries

u        Competitors – by Competitor Analysis and Observation (e.g Dun & Bradstreet, Double Click)

 

n           Macroenvironment

 

u        Demographic Environment – from the Census and Statistics Dept

u        Economic Environment – From the Census and Statistic Dept, Hong Kong Year Report and Financial institutions (e.g. Standard & Poor’s) and Statistic Information about HK

u        Natural Environment – Oil Price Fluctuation (e.g. Oil Price from Bloomberg.com)

u        Technological Environment – Related News

u        Political Environment – Related News

u        Cultural Environment – Related News

 

A Discussion over the Information Needs (MIS) and its limitations for

l          Park’N Shop

l          Proctor & Gamble Products

l          Johnson & Johnson

l          Dell Computer

 

2.          Developing Marketing Information

 

n          Internal Data – for Company, Suppliers and Marketing Intermediaries

n          Marketing Intelligence – for Competitors and Macroenviroment (e.g. Spy Strategies {Dumpster Diving} – Unilever Vs P&G Case), Competitors’ Annual Report for Listed Companies, Trade Show Exhibits (e.g HKCEC), Business Publications (e.g. HKTDC Industry Report), Press Release, Advertisement and WebPages

n          Marketing Research – for Consumer and Competitors

u        (1) Developing the Research Plan

u        (2) Gathering Secondary Data

u        (3) Primary Data Collection

 

l          Research Approaches

n          Observational Approaches (e.g. Traffic Flow at Shopping Centre)

n          Survey Research (e.g. Survey on knowledge, attitudes, preference and buying behaviors.)

n          Single Source Date Systems (e.g. tracking information on Control Situation)

n          Experimental Research (e.g. Pilot Shop with Price Cut – Cause-and-Effect Relationships)

 

l          Contact Methods

 

n          By Mail

n          By Telephone Interviewing

n          By Personal – Individual or Focus Group

n          By Online

 

l          Sampling Plan

 

n          Probability Sampling

u        Simple Random Sampling

u        Stratified Random Sample

u        Cluster Sample

n          Non-Probability Sampling

u        Convenience Sampling

u        Judgment Sample

u        Quota Sampling

 

l          Research Instruments

 

n          Questionnaires –

u        Closed Ended and Open-Ended Qs

u        Wording of the Questions

n          Mechanical Instruments

u        Customer Responses – Supermarket Scanner or People Meter

 

u        Implementing the Research Plan – Collecting, Processing and analyzing the information.

u        Interpreting and Reporting the Findings 

 

3.          Analyzing Marketing Information

 

To capture customer information at every touch points By Customer Relationship Management (CRM – from Siebel):

n          Customer Purchases

n          Sales Forces Contacts

n          Service and Support calls

n          Website Visits

n          Satisfaction Survey

n          Credit and Payment Interactions

n          Market Research Studies

 

To create data warehouses for data mining (e.g. Amazon.com, FedEx CRM System)

e.g. (QR Code and its generator for Card membership)

 

4.          Distributing and Using Marketing Information

 

By Intranet (knowledge Sharing) e.g. (Software by Intranet.Com)

 

5.          Other Marketing Considerations

 

l          Market Research in Small Business and Non-Profit Organization

n          By Observation

n          By Informal Survey using Convenience Samples

n          By Simple Experiments

n          By Secondary Data

 

l          International Marketing Research

n          Related Difficulties -

u        Cultural Differences

u        Translation of Questionnaires

u        Differences in Attitude Across Borders

 

l          Public Policy and Ethics in Marketing Research

n          Intrusion on Consumer Privacy (e.g. Double Click, Gmail and Google Toolbar and Desktop Search)

n          Misuse of Research Findings (PCO)

 

 

OTHER USEFUL INFO FOR MIS

Critical Case of Taste Test for Coca Cola

 

Diet Coke Vs Original Coke (An example of Taste Test)

 

Concepts for Marketing Research

(Source: Marketing Teacher)

 

 

Introduction to Marketing Research

Primary Marketing Research

Secondary Marketing Research

 

Information about Concept on Marketing Research

 

Research House: AC Nielsen

A.C.Nielsen Corporation

A.C.Nielsen Corporation (HK) – Site Map (Overview of A.C.Nielsen Services)

 

Synovate - Global Marketing Research Company

 

Cimigo

 

Software for Research Analysis

SPSS

SASSoftware and Solutions (for Data Integration and Analysis)

 

Source of External Data

 

Primary Data by Research

Survey Method

 

Secondary Data by External Search

 

Official Sources

Census and Statistics Department

Trade Development Council

Hong Kong Yearbook

HK Government Publications

HK Fact Sheet

Hong Kong Headline News (Business and Finance) (from gov.hk)

 

Commercial Sources

Market Research.com

D&B (Dun & Bradstreet) Hong Kong
Double Click

America Chamber of Commerce (America Market)

Competitors’ Annual Reports – Coke and Pepsico

UMI ProQuest

Dow Jones

Thomas Dialog

Local Financial News – Yahoo! Finance HK

 

 

Internal Data

 

Software Package for Tracking Internal Data

Microsoft CRM Demo

Siebel CRM Services for Customer Relationship Mgt

SAP ERP for Enterprise Resources Mgt

OracleData Warehouse and Data Mining for Amazon.com

 

Internal Database Management: IBM DB2 Everywhere

 

 

Mystery Shoppers - International Services Access

 

Miscellaneous

 

Mechanical Devices

Galvanometer

People Meter


 

 

 

 

Chapter (5-8)

Websites (Examples for Marketing Concepts)

 5 – Consumer and Business Buyer Behavior

Consumer Market and Consumer Buyer Behavior

 

A Marketing Battle over Brain

Consumer Buying Behavior from Marketing Teachers

  

(1) Model of Consumer Behavior

 

(1) What to buy - Product/ Services

(2) Where to buy - Place  

(3) How to buy - Decision Making Processes

(4) When to buy - Time 

(5) Why they buy - Reasons behind the Behaviour

 

Marketing Stimuli

4 Ps (Product, Price, Place and Promotion

 

Other Stimuli

Macroeconomic forces (Refer to the Foces in Chapter 3 - Marketing Environment

 

Stimuli have effects on the buyer’s black box – turned into a set of observable buyer response 

 

For Example,

(A) product choice - Soft Drink 

(B) brand choice - Vitasoy 

(C) dealer choice - 7-Eleven 

(D) purchase timing - After physical exercise 

(E) and purchase amount - 1 Bottle only

              

                                 Cultural Factors

    • Culture - Moon Cake (Hong Kong Chinese), Individualism (American Culture)
    • Sub-culture - Telephone Card for Long Distance Call (Pilipino in Hong Kong), Local website with English, Complicated and Simplified Version, Fad for Korean Culture, Hakka Chinese.  
    • Social Class- Occupation (e.g. doctor, accountant and blue-collar worker) , Income, Education (University Credit Card for local graduates) , Wealth (e.g. millionaire) and Other Variables

                                 Social Factors

         (1) Aspiration Group (Soccer Star) 

         (2) Membership Group (Singer's Fan Club); (3)

         Reference Group (Soccer Star - Aspirational Group) ->

         Opinion Leaders/Early Adopters (Hi-Tech Product - Digital Camera).

 

Family – Husband (e.g. Private Car), Wife (e.g. Home Decoration) and Children (e.g. Toy)

    • Roles and Status - Family, Clubs (e.g. Mountaineering Club) and
    • Organizations (e.g. Professional Bodies - Lawyers and Accountants)

 

                                 Personal Factors

o        Age & Life Cycle Stage - Family Life Cycles

    • Occupation - Professional, Blue-Collar (e.g.  Cheap Work Clothes) and White Collar (e.g. Business Suit)
    • Economic Situation - Income Saving and Spending Power (e.g. Income-sensitive Goods or not)
    • Lifestyle - AIO Dimensions (A = activities --> work, hobbies, shopping, sports, social issues, business, products,,, I = Interests --> food, fashion, family, recreation,,, O= Opinion --> social issues or personality)
    • Personality and Self-Concept -> leads to consistent responses to marketing stimuli

 

  • Psychological Factors

 

    • Motivation (Drive) - Ideals, Achievement and Self-expression (by motivation research to probe hidden and subconscious motivations)
    • Perception – the process by which people select, organize and interpret information to form a meaningful picture of the world
    • Learning – describes the change in an individual’s behavior arising from experience
    • Beliefs and Attitudes – Through do and learning, people form beliefs and attitudes

 (2) Buyer Decision Process

(A discussion on the Search for Lunch Venue after this Lecture) 

    1. Need Recognition (might jump direct to Step 3)
    2. Information Search – personal sources, commercial sources, public sources and experiential sources
    3. Evaluation of Alternatives
    4. Purchase Decision – affected by purchase intention, attitude of others and unexpected situational factors

New Product Adoption Process

Consumer Adoption Process for New Product

 Business Markets and Business

 Buyer  Behaviors

 Business Markets

 Characteristics of Business Markets

 Market Structure and Demand

 Nature of Buying Unit

 Types of Decisions and The Decision Process

 Business Buyer Behavior

 Major Types of Buying Situations

 Participants in the Business Buying Process

 Major Influences on Business Buyers

 The Business Buying Process

 Business Buying on the Internet

 

6 – Segmentation, Targeting and Positioning

(A) Segmentation

 

P&G Hong Kong

P&G USA

Lam SoonEdible Oil and Detergent

Unilever China

Vitasoy (Product Range)

Golden Resources - Rice HK 

Lee Kum Kee Sauce

Nescafe China  and Nestle Nespresso

Mattel and Kid II - Toys

Santa Fe Transport - Migration Professional Service

 

 

(Segmentation, Targeting and Positioning)

 

Segmenting – (From Marketing Teacher)

 

(1) Segmentation Variables for Individuals

 Identify the Bases for Segmenting the Market

  1. Geographic Segmentation – Book (Asian Edition)
  2. Demographic Segmentation
  3. Psychographic Segmentation
  4. Behavioral Segmentation
  5. Benefit Segmentation
  6. Using Multiple Segmentation Bases

(2) Segmenting Business Markets

Geographically

Demographically

Benefit Sought

User Status

Usage Rate

Loyalty Status

Operating Characteristics

Purchasing Approaches

Situational Factors

Personal Characteristics

 

(3) Segmenting International Markets

Geographical Locations

Economic Factors

Political and Legal factors

(B) Target Marketing

Evaluating Market Segments


1.          Segment Size and Growth

2.          Segment Structural Attractiveness – by Five Forces Analysis – Michael Porter

3.          Company Objectives and Resources – Conglomerates Vs SMEs in Hong Kong

 

Selecting Target Segments

 

Targeting (from Marketing Teacher)

 

1.          Undifferentiated Marketing (Mass Marketing) - Coke

2.          Differentiated Marketing (Segmented Marketing) G2000 Ladies and Men and Crocodile Men, Ladies and Kids

3.          Concentrated Marketing (Niche Marketing)Haagan Daz Premium Ice Cream or specialty shop – teddy bear shop

4.          Micromarketing

A.        Local Marketing – Localized Promotional Leaflets by Wellcome and Manning

B.        Individual Marketing  (One-to-One Marketing) - e.g. Amazon.com Or Dell.com  or  Wedding Services or Tailor

 

Choosing a Target Marketing Strategy

      u Company Resources

      u Product Variability

      u Product Life Cycle Stage

 Socially Responsible Target Marketing

 

e.g. Alcohol, Cigarettes and Magazines/Movies for Adult

 

Positioning for Competitive Advantage,  Positioning Maps and Choosing a Positioning Strategy

 

“The place the product occupies in consumers’ minds relative to competing products”

 

Positioning – From Marketing Teachers

 

Volvo Car (HK) - Positioning Strategy

 

Fancl House (Less is More) - a non-preservative cosmestics and food supplement products

 

Kumfs (The Galleria) - Shoes for Womens' Shoes deisgned for comfort and style.

 

SSP(HK) - A specialist in Catering for Ariport Terminal

 

Identifying Possible Competitive Advantage

 Differentiation on Product, Service, Channels, People and Image

 Choosing the Right Competitive Advantages

 How Many Differences to Promote?

 Which Differences to Promote?

Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable

 Selecting an Overall Positioning Strategy

 Value Proposition

A.        More for More

B.        More for the Same

C.        Same for Less

D.        Less for Much Less

E.         More for Less

 Developing a Positioning Statement

 Communicating and Delivering the Chosen Position

 

 

7. Product

What is a Product?

 

Product (e.g. Fast Moving Consumer Product)

P&G and Unilever (pure-tangible good)

 

 

Unique Product :

kopi luwak (The world rarest coffee)

 

 Services

Prudential Insurance Ltd (pure-services)

Movies – U&A Cinema

 

Good-and-Service Combinations

Dell Computer (with Warranty, Installation and Delivery) 

 

Good and Services Provide Experiences to Customers

 

Product and Service Classifications

Discussion over the Dell /IBM Computer/ Sony for the Levels of Product and Services

 

Core Benefit – What is the buyer really buying for Computer? (Problem-Solving)

Actual Benefit – Brand Name, Features, Design, Packaging and Quality Level

Augmented Product – Delivery and Credit, Installation, Warranty and After-Sales Service

 

Product and Service Classifications

 

Consumer Products

u        Convenience Product – Goods at Supermarket (e.g. Wellcome and Park’N Shop

u        Shopping Product – furniture (e.g. IKEA) and clothing (e.g. G2000 / Esprit)

u        Specialty Product – e.g. stamp shop

u        Unsought Product – Innovative Products (e.g. IT and Digital Products – HK Golden/ e-zone / HK PC Market Magazine)

 

 Industrial Product

u        Materials and Parts – Intel (e.g. CPU for Computer)

u        Capital items – for printing – Heidelberg Printing Machine), - for photocopying – Xerox Printing Machine

u        Supplies– operating services (e.g. Lubricants, coal, paper and pencils)

u        Business Services – maintenance, repair service and business advisory services

 

 Organizations, Persons, Places and Ideas – Other Marketing Offerings

Activities undertaken to create, maintain or change the attitudes and behavior of target customers towards

 

Organization

(e.g. Corporate Image Advertising – IBM On-Demand business solutions)

 

Persons

Particular people (e.g. Lawyers and Accountants)

 

Places

Particular Place (e.g. Hong Kong – Live it! Love it!)

 

Ideas

Particular Ideas (e.g. Social Marketing – environmental campaign – Friends of Earth HK)

 

 PRODUCT AND SERVICE DECISIONS

 

Individual Product and Service Decisions

 

Product and Service Attributes

 

Product Quality – TQM (Total Quality Management) (Q Mark)

 

Product Features – (e.g. Digital Camera – Canon or Mobile

Phone – Samsung)

 

Product Style and Design (e.g. Apple I Mac or iPod+iTunes)

 

Branding

Sunkist Orange

Dole pineapple

Chiquita banana

 

Hong Kong as a Brand - An Asia's World City

 

Packaging

Colgate toothpaste

 

Labeling

HK labeling Law – Contents and Ingredients (e.g. Energy Efficiency Labelling Scheme for Air-conditioners)

 

Product Line Decisions and Product Mix Decisions

 

An Overview over Some of Consumer Products

u        Electronic Appliances (e.g. Panasonic, Sharp and Sony)

u        FMCG (P&G , Unilever, J&J, Lam Soon, Vitasoy and Lee Kum Kee Sauce Oil, Nissin Noodle)

 

Points to consider about the Product Line

 

u        Product Line – a group of product that they are closely related

u        Product Line Length – the number of items in the product line

 

n          Product line stretching – e.g. downwards or upwards by class level – Private Car (e.g. Toyota)

n          Product Line Filling – e.g. Adding more items with the present range of the line (e.g. shampoo series of P&G HK)

 

Points to consider about the Product Mix

 

u        Product Mix (or Product Assortment) – consists of all the product lines and items that a particular seller offers for sale (e.g. Avon’s Product Mix – beauty products, wellness products, jewelry and accessories, gifts and “inspirational” products (inspiring gifts, books, music and home accents)

 

u        Product Mix Dimensions –

 

n          Width – the number of different product lines the company carries

n          Length – the total number of items that company carries within its products

n          Depth – refers to the number of versions offered for each product in the line

n          Consistency – refers to how closely related the various product lines are in end use

 

Branding Strategy: Building Strong Brands

 

 Brand Equity

Definition - The positive differential effect that knowing the brand name has on customer response to the product and service.

 

A measure of brand equity is the extent to which customers are willing to pay more for the brand.

 

Strong Brand = Valuable Assets (e.g. Coca Cola, IBM, General Electric, Intel, Microsoft, Nokia, Disney, McDonald’s and Mercedes)

 

Building Strong Brands

Brand Positioning – in the minds of customers

u        By product attributes (e.g. P&G Head and Shoulders - dandruff-free hair.)

u        By benefits {e.g. Volvo (Safety), Hallmark (caring), FedEx (Guaranteed Overnight Delivery) and Nike (Performance)}

u        Beliefs and Values – (e.g. Starbuck – refreshing and relaxing)

 

Brand Name Selection

u        Related to benefits and qualities (e.g. 快潔 cleaning products)

u        Easy to pronounce, recognize and remember(e.g. 有骨氣 Chinese Restaurant)

u        Distinctive (e.g Toy”R” us)

u        Extendable (e.g. Yahoo! Finance and Shopping)

u        Translated to other languages

u        Capable of registration and legal protection (e.g. Lenovo Against Legend)

 

Brand Sponsorship

u        Manufacturer’s Brand (e.g. IBM)

u        Store Brand and Distributor’s Brand (e.g No Frills or First Choice)

u        Licensed Brand

u        Co-Brand

 

Brand Development

u        Line Extension (e.g. Nissin Noodle in different favours)

u        Brand Extension (e.g Knife Peanut Oil , Corn Oil and Sunflower Seed Oil)

u        Multi-brands (e.g. P&G Shampoo Series)

u        New Brands

 

Relevant Organization:

Hong Kong Brand Development

Council

 

Managing Brands

u        Brand Experience by Brand Managers for better Customers’ Positioning towards the Brands – contact and touch points

 

e.g. Hong Kong as a Brand

       - Nation Brand Index

 

(Simon Anholt - a specialist in brand mgt

 for countries, cities and regions) 

 

Service Marketing

 

 Nature and Characteristics of a Service

Intangibility

Inseparability

Variability

Pershishability

 

Marketing Strategies for Service Firms

 

The Service-Profit Chain

u        Internal Service Quality

u        Satisfied and Productive Service Employees

u        Greater Service Value

u        Satisfied and loyal Customers

u        Healthy Service Profits and Growth

 

Internal Marketing Vs Interactive Marketing

  Refers to the Textbook

 

Managing Service Differentiation

e.g. Airway Business (e.g Cathay Pacific Airways, Singapore Airlines and Dragon air)

e.g. Delivery Service (e.g. HK Post Office Vs FedEx)

 

Managing Service Quality

 

Managing Service Productivity

 

Additional Product Considerations

 

Product Decisions and Social Responsibility

 

International Product and Services Marketing

 

Hong Kong Brands and Products Expo Fair (工展會)

 

8. New Product Development & Product Life Cycle Strategies

New Product Development Strategy

 By R&D Development

 Vanilla Coke/Diet Coke (Coca Cola)
Instant Camera (Polaroid) versus Digital Camera (Canon
)
AXE Detergents for Fruits (Lam Soon)

 Acquisition

 Hotmail & MSN by Microsoft!

    Idea Generation

Internal Sources –
From Employees (e.g.
3M Idea Program)

External Sources –
From Customers, Competitors, Distributors and Suppliers and Others

     Idea Screening

To spot good ideas and drop poor ones As Soon As Possible.

     Concept Development and Testing

     Product Idea – an idea for a possible product that the company can see itself offered to the market.

 Product Concept – is a detailed version of the idea stated in the meaningful consumer terms

 Product Image – the way consumer perceive an actual or potential product.

 Concept development & Concept Testing

(e.g. Car – Electric Car – Gemcar under DaimlerChrysler - Concept Test)

       Marketing Strategy Development

     Marketing Strategy Statement

 u        Describe the target market, plan the product positioning and the sales, market share and profit goals for the first few years

 u        Outlines the product’s planned price, distribution and marketing budget for the first year

 u        Describes the planned long-run sales, profit goals and marketing mix strategy.

 Business Analysis

   A review of the sales, costs and profit projections for a new product to find out whether these factors satisfy the company’s objectives.

    Product Development

     R&D Department – develops the product concept into a physical product in order to ensure that the product idea can be turned into a workable product

(e.g. Nike Sport Shoes , Gillette’s Shavers and P&G Consumer Products)

 Importance of Product Portfolio – Boston Matrix (Source: Marketing Teacher)

 Test Marketing

     e.g. Breakfast Meal at KFC Restaurant (HK)

(Testing the product and the entire marketing program – positioning strategy, advertising, distribution, pricing, branding and packaging and budget levels)

 Commercialization

      Introduction of a new product into the market

  Organization for New Product Development

      u        Sequential Product Development

u        Simultaneous (or Team-based) Product Development

 Product Life Cycle Strategies

 

Style, Fashion and Fad (Refer to the Textbook p.280)

 PLC: (Source: Marketing Teacher) –

    • Introduction Stage – the stage in which the new product is first distributed and made available for purchase

1.                  To build up awareness

2.                  To attract distributors and customers

    • Growth Stage – the stage in which a product’s sales start climbing quickly.

1.                  Enhance the Marketing Mix

2.                  trade-off between high market share and high current profit

    • Maturity Stage – the stage in which sales growth slows or levels off

1.                  Modifying the market

2.                  Modifying the product

3.                  Modifying the marketing mix

    • Decline Stage – the stage in which a product’s sales decline.

1.                  To maintain

2.                  To harvest

                              3.                  To drop

 

Trusted Brand of Asia (Reader's Digest)

 

Corporate Reputation (Reputation Institute)

 

 

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)  CompetitorsCosts, 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 McDonalds 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 companys 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

 

DFS Galleria (a international travel retailer)

 

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

 

Webcast Promotion (by Logitech)

 

JC Decaux HK (Outdoor Advertising)

 

Production House - Xebecmedia Ltd.

 

AdmanGo - Ad Media Info

 

 

 

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 Webs Darker Side

 

Live Suppoprt (Remote Support System) by Experticity - (e.g. remote pharmacist at some chain drug store)

 

 

 

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

 

Pan Pearl River Delta Development Information Net (Source HKU)

 

16. Marketing and Society: Social Responsibility and Marketing Ethics

Social Criticisms of Marketing

Marketings Impact on Individual Consumers

Marketings Impact on Society as a Whole

Marketings 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

 

 

Supplementary Info

(a) E-Marketing 

IonGlogal - a website marketing consultant (IonGlobal BLOG - Globalization)

 

E-bay hk  (on line auction market) plus Paypal hk (online payment solutions)

 

Trade-link (e-commerce solutions consultant)

 

Alibaba.com (e-commerce - online import and export marketplace)

 

Alex (Global Top Web Sites)