MARKETING REVISION

TOPIC 1: MARKETING OVERVIEW

1. Marketing: a social and managerial process by which individuals and groups obtain what they need and
want through creating and exchanging products and values with others
2. Comsumers’ needs, wants, and demands:
a. Need: a state of felt deprivation. They include basic physical, social and individual needs.
Ex: people need clothing, food and knowledge
b. Want: the form taken by a human need as shaped by culture and individual personality.
Ex: people need food but want a hamburger
c. Demand: human wants that are backed by buying power.
Ex: money
3. Core marketing concepts:
a. Product: anything that can be offered to a market to satisfy a need or want. It includes experiences,
person, places, and ideas…
Ex: Disneyland is an experience
b. Services: activity or benefit offered for sales that is essentially intangible and does not result in the
ownership of anything. Ex: banking, hotel.
c. Customer value: in the difference between the values the customer gains owning and using a product and
the cost of obtaining the product.
Ex: FedEx gain a number of benefits. The most obvious are fast and reliable package delivery.
Using FedEx, customer also may receive some status, image values. When deciding whether to send a
package via FedEx, customer will weigh these and other value against the money, effort and psychic of
using the service

d. Customer satisfaction: depends on the product’s perceived performance in delivering value relative to a
buyer’s expectation.
Ex: products’ performance < customer’s expectation => buyer dissatisfied
Products’ performance = customer’s expectation => buyer satisfied
Products’ performance > customer’s expectation => buyer delight

Total quality management:

o Impact on product or service performance.
o Linked customer value and satisfaction.
o Involves improving the quality of products, services and business processes

4. Marketing management:
a. Marketing management: involves managing demand that involves managing customer relationships
b. Demand management: finding and develop demand
c. Profitable customer relationship: attracting new customer and maintain relationship with current
customer.

5. Evolution of marketing philosophies:

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 a. Production concept: try to improve product and distribution efficiency. It is suitable when demand >
supply and cost of production is too high
b. Product concept: try to improve the product such as quality and performance not focuses on
customer’s need.
c. Selling concept: short term sell, run promotion do not look at the product
d. Marketing concept: find out what customer’s needs
e. Social concept: take care charity and communication

TOPIC 2: MARKETING PLANNING

1. Strategies planning: is the process of developing and maintaining strategies fit between goals,
capabilities and changing marketing opportunities
2. Steps in strategic planning:
a. Step 1: defining the company mission
o Who we are?
o What we do?
It should be realistic and specific and fit the market environment and motivating
b. Step 2: defining company objectives and goals
o What is to be accomplished?
o Time in which to accomplish it?
o Quantified when possible?
c. Step 3: designing the business portfolio: collection of business and products that make up the
company
o Analyze the current business portfolio or SBU
o Decide which SBU’s should receive more, less or no investment
o Developing growth strategies for adding new products or business to portfolio
Ex: LG in Vn: LG electronic
LG chemical
LG homecare
 LG has 3 strategies business units in Vn
d. Step 4: develop growth strategies: using product/market expansion grid

3. Designing the Business portfolio: is the collection of businesses and products that make up the
company
Ex: LG Vietnam has LG chemical, LG homecare, LG electronic => LG has 3 SBU’s in
Vietnam (SBU: strategic business units)

4. Analyzing current SBU’s:

Relative market share

High Low
High Stars Question marks
High growth & share High growth, low share
Profit potential Build into Stars or phase out
Market
May need heavy investment to Require cash to hold market
growth rate
grow share
Low Cash Cows Dogs

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 Low growth, high share Low growth & share
Established, successful SBU’s Low profit potential
Produce cash

The problem of using BCG growth-share matrix:

Time consuming, costly to implementing => be difficult to define SBU’s measure market share/growth =>
focus on current business, not future planning => not expansion.

5. Product/market expansion grid: a portfolio- planning tool for identifying company growth
opportunities through market penetration, product development, market development and diversification

Exist products New products

Exists
market Market penetration Product/service
development

Exists Market development Diversification

market

o Market penetration: making more sales to current customers without changing its products
Ex: Tiger beer: make promotion -> increase sell in same market to attract customer consume more beer
o Market development: identify and develop new market for its current products
Ex: they will sell beer to highland
o Product development: offering modified or new product to current market
Ex: P/S milk toothpaste: new product of P/S toothpaste
o Diversification: (buy a new business) start up or buy business outside current products and markets
Ex: Kinh Do sell bakery -> now sell ice-cream (buy Wall ice-cream)
How marketing play the role in the strategic planning:
o Provide a guiding philosophy
o Provide inputs to strategic planners
o Design strategies

6. Marketing process:
1. Analyzing marketing opportunities
2. Selecting target markets
3. Developing the marketing mix
4. Managing the market effort

7. How to selecting target market?

a. Market segmentation: determining distinct group of buyers (segments) with different needs,
characteristics or behavior.
b. Market targeting: evaluating each segment’s attractiveness and selecting one
or more segment to enter
c. Market positioning: arranging for a product to occupy a clear, distinctive and
desirable place relative to completing products in the minds of target consumers

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8. How to develop marketing mix?
Marketing mix: the set of controlling, tactical marketing tools- 4Ps
4Ps: Place, promotion, price and product
7 Ps: product & services, price, people, process, physical evidence, placement. Promotion.

9. How to managing market effort:

Planning -> implementation -> control
a. Market strategy: the market logic by which the business unit hopes to archive its marketing objectives
b. Market implementation: the process that turns marketing strategies and plans into marketing actions in
order to accomplish strategic marketing objectives
c. Marketing control: the process of measuring and evaluating the result of market strategies and plans and
taking corrective action to ensure that objectives are archived
A major tool for strategic control is marketing audit: a comprehensive, systematic independent and
periodic examination of a company’s environment, objectives, strategies to determine problem areas and
opportunities and to recommend a plan of action to improve the company’s marketing performance

TOPIC 3: THE MARKETING ENVIRONMENT

1. Marketing environment: consist of the affect marketing management’s ability to develop and maintain
successful transaction with the target customers. The marketing environment offers both opportunities and
threats
It includes:
Macro environment: larger societal forces that affect the microenvironment. Ex: cultural forces and
economic forces
Microenvironment: forces close to the company that affects its ability to serve its customer. Ex:
supplier, customer market, competitors
Actors in microenvironment:
Suppliers -> company and competitors -> marketing intermediaries -> customers
Ex: Farmers Company -> Vinamilk and Dutchlady -> supper market -> customers
Marketing intermediaries: firms that help the company to promote sell and distribute its goods to
final buyers

2. Types of customer markets:

a. Consumer markets: households, individuals that buy goods and services for personal consumption
b. Business market: buy goods and services for future process or use in their production process
c. Reseller market: buy goods and services to get profit
d. International market: consists of buyers in other countries, consumers…

3. Types of publics:
a. Financial publics: influences on the company’s funds. Ex: bank, investment house, stockholders
b. Media publics: newspaper, journalist, TV
c. Gov. publics: lawyers
d. Citizen-action publics: communicate with customer. Ex: club
e. General publics: population
f. Internal publics: workers and managers
4. The company’s macro environment

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a. Demographic: studies population in terms of size density location, age, gender, race, occupation and other
statistic
b. Economic: factor that affects consumer purchasing power and spending pattern. Ex: income
c. Natural: natural resources needed as inputs by markets or that are affected by marketing activities. Ex:
shortage of RM, increase population and increase Gov. Intervention
d. Technological: forces that create new technologies in turn creating new product and market opportunities.
Ex: mobile phone -> network service
e. Political: laws, Gov. agencies and pressure group that influence and limit organizations and individuals in
a given society. Ex: law of investment, WTO
f. Cultural: institutions and other forces that affect on a society’s basic values, perception, preferences and
behaviors. Ex: fashion and food.

5. Responding the marketing environment

Environment management perspective: taking a proactive approach to managing the microenvironment and
the macro environment by taking aggressive actions to affect the publics and forces in the marketing
environment. Ex: hiring lobbyist and press lawsuits and file complaints.

TOPIC 4: MARKETING RESEARCH

1. MIS: consists of people, equipment and procedures to gather, sort, analyze, evaluate and distribute
needed timely and accurate information to marketing decision markers.
Ex: MIS: finance, HR, marketing, employees, customers, suppliers, media
The MIS help managers to:
o assess information needs
o develop needed information
o distribute information
Marketers can obtain the needed information from internal data, marketing intelligence and marketing
research.

2.
a. Internal data: electronic collection of information obtained from data sources within the company.
Problems of using internal data: incompletes and wrong form of marketing decisions
Ex: Accounting, finance, supplier, customers, database

b. Marketing intelligence: the systematic collection and analysis of publicly available information about
competitors and developments in the marketing environment.
It is used for improve strategic decision making assess and track competitor’s action and provide
early warning of opportunities and threats.
Ex: technological, website, newspaper, sales person and advertising.

c. Marketing research: the systematic design, collection analysis and reporting of data relevant to a specific
marketing situation facing an organization.
Marketing research can helps marketers assess market potential and market share, understand customer’s
satisfaction and purchase behavior…

d. The marketing research process:

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Defining the problem and research objectives -> develop the research plan for collection information ->
implementing the research plan -> collecting and analyzing the data -> interpreting and reporting the
findings.

3. Marketing research project:

1. Step 1: Defining the problem and research objectives
A marketing research project might have one of three types of objectives:
a. Exploratory research: marketing research to gather preliminary information that will help define problems
and suggest hypotheses
b. Descriptive research: marketing research to better describe marketing problems situations, or markets
such as the market potential for a product or the demographic and attitudes of customers.
c. Causal research: it tests hypotheses about the cause and effect relationship

2. Step 2: develop research plan

o Determine the exact information needed
o Develop a plan for gather it efficiently
o Presenting the written plan to management
To meet the manager’s information needs, the research plan can call for gathering secondary data and
primary data or both.
a. Secondary data: information already exists somewhere having been collected for another purpose. Ex:
magazines and newspapers
b. Primary data: information collected fir specific purpose at hand. Ex: Interview, doing surveys

3. Step 3: implementing the research plan

Most expensive and subject error
Collecting data
Processing data -> research plan
Analyzing data

4. Step 4: interpreting and reporting findings

Interpret the data -> draw conclusion -> report management

TOPIC 5: CONSUMER AND BUSINESS BUYER BEHAVIOR

1. Consumer buyer behavior: the buying behavior of final consumers-individuals and households-who buy
goods and services for personal consumption.
a. Consumer market: all individual and households who buy or acquire goods and service for personal
consumption
b. Model of consumer buyer behavior:
Marketing and other stimuli
4Ps & Economic
Technological impact on > Buyer’s Black box impact on > Buyer’s responses
Political
Cultural
c. Factors influencing consumer behavior:
Cultural Social Personal Psychological
Culture Reference groups Age and life cycle Motivation

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Subculture Family stage Perception
Social class Roles and status Occupation Learning
Lifestyle Beliefs and attitudes
Personality and self-
concept

In culture:
Culture: is the most basic cause of a person’s wants and behavior
Subculture: each culture contains smaller subculture. Subculture is a group of people with share value
systems and based on common life experiences and situations. Ex: Asian American consumers and
mature consumer
Social class: relative permanent and ordered division whose members share similar values interest and
behaviors
In social factors:
Opinion leader: person within a reference group who because of special skills, knowledge personality or
other characteristics, exerts influence on others
In personal factors:
Lifestyle: a person’s pattern of living as expressed in his or her activities, interests and opinions
In psychological factors:
Motive: a need that sufficiently pressing to directly the person to seek satisfaction of the need
Perception: the process by which people select, organize and interpret information to form a meaningful
picture of the world.
Learning: changes in an individual’s behavior arising from experience. Learning occurs through the
interplay of drives, stimuli, cues, responses and reinforcement.
A drive is a strong internal stimulus that calls for action.
Cues: are minor stimuli that determine when, where and how the person response.
Belief: a description thought that a person holds about something
Attitudes: a person’s consistently favorable or unfavorable evaluations, feelings and tendencies towards
and object or ideas. Attitudes are difficult to change.

2. Buyer decision process

Need recognition (buy goods-cars) -> information search (search about prices of cars) -> evaluation
of alternative (evaluate prices of different brand names) -> purchase decision -> post purchase behavior
(complaint)
Step 1: need recognition
Classified: + internal stimuli- the person’s normal needs: hunger, thirst, sex
+ External stimuli: when internal stimuli are high enough -> external stimuli
Step 2: information search
Depends on + personal resources (family, friends, neighbor and acquaintances) most effective source of
information
+ Commercial resources (advertising, salesperson, dealers) receive the most information from
these sources
+ Publics resources (mess media, consume rating organization)
+ Experiential sources (handing the product, examining the product, using product)
Step 3: Evaluation of alternatives
Step 4: purchase decision
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 Step 5: post purchase behavior: show relationship between consumer’s expectation and product’s
perceived performance
Almost of major purchase result in cognitive dissonance is means buyers feel discomfort caused by
post purchase conflict. Person feel confuse about the brand they that choose is the best or not

3. The buyer decision process for new products (adoption process)

a. Adoption process: the mental process through which an individual passes from first hearing about an
innovation of final adoption
Stages in the adoption process:
Awareness: the consumer becomes aware of the new product but lacks information about it
Interest: the consumer seeks information about it
Evaluation: the consumer considers whether trying new product makes sense
Trial: the consumer tries the new product on a small scale to improve his or her estimate if its value
Adoption: the consumer decides to make full and regular use of the new product.

4. Major types of buying situations:

a. Straight re-buy: a business-buying situation in which the buyer routinely reorders something without any
modifications
b. Modified re-buy: a business situation in which the buyer wants to modify product specifications, prices,
terms or suppliers
c. New task: a business situation in which the buyer purchases a product or service for the first time
Buying center: all the individuals and units that participate in the business buying-decision process.

5. Major influences on business buyer behavior:

Environment Organization Interpersonal Individuals
Economic development Objectives Authority Age
Supply conditions Policies Status Income
Technological charge Procedures Empathy Education
Political and regulatory Organizational Persuasiveness Job position
development structure Personality
Competitive development Systems Risk attitudes
Culture and customs

6. Comparing business and consumer buying process:

Buying step Industry Consumer
1. Need or problem recognition Anticipates Reacts
2. General need description Extensive Limited
3. Product specification Precise/ technical Benefits
4. Information/ suppler research Extensive Limited
5. Proposal solicitation Formal Verbal
6. Supplier selection Extensive Limited analysis
7. Order-routine specification Calculated re-order Not routines
8. Post-purchase performance review Extensive Little comparison
comparison and
benchmarking

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7. Value analysis: an approach to cost reduction, in which components are studied carefully to determine if
they can be redesigned, standardized or made by less costly methods of production.

TOPIC 6: market segmentation, targeting and positioning

1. Steps in market segmentation

Market segmentation -> market targeting -> market positioning
Market segmentation: divide market into small groups of buyers base needs characteristics or behaviors
that might require separate products or marketing mix.
Step 1: market segmentation
2. Level of market segmentation:
Dividing markets into smaller segments that can be reached more efficiently and effectively with
products and services that match their unique needs.
a. Mass market: same product to all consumers (no segment).
Ex: coca-cola
b. Segment marketing: different products to one or more segments (some segment). Ex: Marriott.
c. Niche marketing: different products to subgroups within segments (more segmentation).
Ex: Nike products shoes for everybody, not special shoes for special disease people
d. Micro market: products to suit the tastes of individuals and locations (complete segmentation).

3. Segmenting consumer markets:

a. Demographic segmentation: dividing a market into groups based on demographic such as age, sex, family
size, family life cycle, occupation, education, religion, race and nationality. Ex: NinoMax
Age and life cycle segmentation: dividing a market into different age, life cycle groups
Gender segmentation: dividing a market into different group based on sex.
Income segmentation: dividing a market into different income groups.
b. Geographic segmentation: dividing a market into different geographic units such as nations, states,
regions, countries, cities or neighborhoods.
c. Behavioral segmentation: dividing a market into group based on consumer knowledge, attitudes, use or
response to a product. It looks at usage rate: non user, loyal user and non-loyal user.
Ex: Heneken: strong drinker (loyal user) weak drinker (non-loyal user) and don’t drink (non-user) =>
have different target.
d. Psychographics segmentation: dividing a market into different groups based on social class, lifecycle, or
personality characteristics.
Ex: fashion, car.
4. Occasion segmentation: dividing a market into groups according to occasion when buyers get the idea to
buy, actually make their purchase or use the purchased item.
5. Benefit segmentation: dividing a market into groups according to the different benefits that consumers
seek from the product.
6. Segmentation business markets:
Business marketers use many of same consumer variables and plus:
o Operating characteristics such as: technology, user status, non-user status and customer capabilities
o Purchasing approaches: how do they buy such as centralized or decentralized or finance or
marketing
o Situational factors: urgency situation
o Personality characteristics: loyalty to suppliers

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7. Segmentation international market:
a. International segmentation: forming segments of consumers who have similar needs and buying behavior
even though they are located in different countries.
b. Factors used segment international markets:
o Geographic location
o Economic factors
o Political and legal factors
o Cultural factors
8. Effective segmentation:
o Measurable: how big purchasing power profiles of segments can be measured
o Accessible: segments can be effectively reached and served
o Substantial: segments and large profitable enough serve
o Differential: segments are actually distinguishable and response differently to different marketing
mix elements and programs.
o Actionable: programs can be designed for attracting and serving the segment.

Step 2: Market targeting

9. Market targeting: the process of evaluating each segment’s attractiveness and selecting one or more
segments to enter
Evaluating market segments:
o Segment size and growth
Analyze current segment sales, growth rates and expected profitability for various segments.
o Segment structural attractiveness
Consider effects of: competitors, availability of substitute products and the power of buyers and suppliers.
o Company objectives an d resources
Examine company skills and resources needed to succeed in the segments.
Offer superior value and gain advantages over competitors.

10. Selecting market segments

After evaluating different segments, the company must decide which and how many segment to
serve.
a. Target market: a set of buyers sharing common needs or characteristics that the company decides
to serve.
There are 3 market-coverage strategies that the company can choose one of three.
b. Undifferentiated marketing: a market coverage strategy in which a firm decides to ignore market
segment differences and go after the whole market with one offer.

Company Market
marketing mix

c. Differentiated marketing: a market coverage strategy in which a firm decides to target several
market segments and designs separate offers for each.

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 Company marketing Segment 1
mix 1

Company marketing Segment 2

mix 2

Company marketing Segment 3

mix 3

Ex: Nike offers athletic shoes for many kinds of sports such as running, fencing, and aerobics baseball…
d. Concentrated marketing: a marketing coverage strategy in which a firm goes after a large share of
one or a few sub-market.

Segment 1

Company Segment 1
marketing mix
Segment 1

Factors that effect strategy decision:

o Competitor’s strategies
o Company resources
o Product variability
o Stage of life cycle
o Market variability.

Step 3: Marketing positioning

11. Marketing positioning: arranging for a product to occupy a clear, distinctive and desirable place
relative to completing products in the minds of target consumers.
12. Product position: the way that product is defined by consumers on important attributes- the place that
product occupied in the customer’s minds relative to completing products.
To choosing a positioning strategy:
Identifying possible competitive advantages -> choosing right competitive advantages ->communicating
and delivering the chosen poison
Competitive advantage: extent that a company can position itself as providing superior value to
selected target market.
The key to winning and keeping customer is to understand their needs and buying processing better than
competitors do and deliver more value.
13. Factors to identify possible competitive advantages
o Product differentiation such as features, performance
o Service differentiation: delivery, customer training service
o People differentiation: hiring, training

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 o Image differentiation: symbols, characters
The marketers want to position their brands on the key benefits that they offer relative to competing brands.
The full positioning of a brand is called the brand’s value proposition.
Communicating and delivering the chosen position:
o Company must take strong steps to deliver and communicate the desired position to target
consumers
o All the company’s marketing mix must support the positioning strategy
o Positioning strategy must be monitored and adapt over time to match changes in consumer needs and
competitor’s strategies.

TOPIC 7: PRODUCTS
1. What is a product?
A product is anything that can be offered to a market for attention, acquisition, use, or consumption
and that might satisfy a want or need.
It includes physical goods (cars, books, shoes, etc), services, persons, places, organizations, and
ideas.

2. What is a service?
A service is a form of product that consist of activities, benefits, or satisfactions offered for sale that
are essentially intangible and do not result in the ownership of anything.
It includes banking, hotels, tax preparation, and home repair services.

3. Product level:
a. Core product: benefits and services
b. Actual product: Styling, features, packaging, brand name, quality and others attributes that
combine to deliver core product benefits.
c. Augmented product: includes warranty, after sale service, installation, delivery and credit and
built around the core and actual products.

4. Product classification:
1. Consumer products: products bought by final consumers for personal consumption
a.Convenience products:
o Buy frequently & immediately
o Low priced
o Mass advertising
o Many purchase locations
E.g. candy, newspaper
b. Shopping products:
o Buy less frequently
o Higher price
o Fewer purchase locations
o Comparison shop
E.g. Clothing, cars, furniture
c. Specialty products:
o Special purchase efforts
o High price
o Unique characteristics
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 o Brand identification
o Few purchase locations
E.g. Rolex car
d. Unsought products:
o New innovations
o Products consumers don’t want to think about
o Require much advertising & personal selling
E.g. life insurance, blood donation

2. Industrial products: goods bought by individuals and organizations for further processing
or for use in conducting a business
a. Materials and parts: industrial goods that enter the manufacturer’s product completely
includes:
o Raw materials: includes farm products (wheat, corn, vegetables, fruit, etc) and
natural products (fish, iron, timber, etc).
o Manufactured materials and parts: includes components materials (iron, yarn,
wires, cement,) and component parts (small motors, and castings)

b. Capital items: Industrial products that aid on buyer’s production and operations
includes:
o Installation: building (factories, offices) and fixed equipment (lifts, computer)
o Accessory equipment: factory equipment and tools (hand tools, lift trucks) and
office equipment (desks, word processors)

c. Supplies and services: that do not enter the finished product at all

5. Individual product decisions:

1. Product attributes:
a. Product quality: ability of a product to perform its function, it includes the product’s overall
durability, reliability, and other valued attributes.
b. Product features: differentiates the product from competitors’ products
c. Product style and design: creating a product that is attractive, easy, safe, and inexpensive to
use and service.

2. Branding:
4 brand strategies:
Product category
Existing New
Line extension Brand extension
Existing
Brand name
New Multi-brands New brands

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 a. Line extension: a company introduces additional items in a given product category under
the same brand name, such as new flavor, forms, colors, or package size.
E.g. in the past, Coke appeared under small bottle of classic
Today, Coke has regular and diet, bottle or can
b. Brand extension: a new or modified product launched under an already successful brand
name.
c. Multi-brands: a strategy under which a seller develops two or more brands in the same
product category.
E.g. Seiko uses different brand names for it higher-priced watches (Seiko LaSalle) and
lower-priced watches (Pulsar) to protect its mainstream Seiko brand.
d. New brands: a company might create a new brand when it enters a new product category
for which none of company’s current brand names are appropriate. Or the company might
believe that the power of its existing brand name is waning and a new brand is needed.

6. Product line decisions:

Product Line Length

Number of items in the product line

Stretching Filling
Lengthen beyond current range Lengthen within current range

Downward
Both
directions
Upward
E.g.
* Honda motorbikes
Dylan, @, Spacy, Super dream, Future, Wave, Wave Alpha

Upward Downward
 Dylan 1, 2, 3, 4, …
 @ 1,2,3, … => called filling

7. Product mix decisions:

a. Width: number of different product lines
E.g. if put more product lines (width) => have larger product mix
Less narrow

b. Length: total number of items the company carries within product lines
E.g. Unilever: Omo
Viso => put more brands =>more length
Add XYZ XYZ
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 c. Depth: number of versions offered of each product in line
E.g. Omo version 1
Version 2 => put more versions => more depth
Version 3
Version 4 (add versions)
Ex:
Beauty care (SBU)
LG Chemical (SBU)
Electronic (SBU) washing machines (product line)
Air-condition
Mobil-phone brand 1
Brand 2 =>length
Brand 3

8. New product development strategy: 7 ways

1. Acquired companies: buy a company
2. Acquired patents: buy a patent
3. Acquired licenses: buy licenses such as cosmetic product
4. Original products: ex: Edison has light invention/ Play station game
5. Product improvement: from Rejoice -> create New Rejoice
6. Product modification: change market.
Ex: perfume in the past: plastic bottle, but now: glass bottle
7. New brands: ex: past: Wave -> now: Wave Alpha

9. New product development process:

1. Idea generation: the systematic search for new product ideas. Everyone in company can give
ideas about product everyday
2. Idea screening: helps spot good ideas and drop ones as soon as possible. Look at the market
side/ potential; consumers give their ideas to new product managers

3. Concept development and testing:

Develop new product ideas into alternative detailed product concepts
-> Test the new-product concepts with groups or target customers
-> Product image is the way consumers perceive an actual or potential product
Ex: BMW wants to introduce Minicar
 Develop new concepts (small car, economical cars)
 Show the target customers
4. Marketing strategy: has 3 parts
Part 1: describes target market, planned product positioning, sales, market share, and profit
goals
Part 2: outlines product’s planned price, distribution, and marketing budget for the first year
Part 3: describes long-run in sales, profit goals, and marketing mix strategy
5. Business analysis: look at the cost, cash flow, profitable, etc
6. Product development: answer step 5. If profitable market -> develop
product. If no -> eliminate product concepts
7. Test marketing: allows the marketers get experiences with marketing
the product, find potential problems. 3 major types of test marketing:
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 Standard: produce sample product, select some potential market (Saigon, big city, etc)
Controlled: focus on specific market (metro, coop mark)
Simulated:
8. Commercialization: introducing the new product into the market
When is the right time to introduce product?
Where to launch a new product?
Ex: Sell beer in wedding season, or Tet holiday

10. Product life cycle:

1. Product development: begins when the company finds and develops a new product idea.
2. Introduction: slow sales growth, the product is being introduced in the market.
3. Growth: rapid market acceptance and increase profits
4. Maturity: slowdown in sales growth
5. Decline: sales fall and profits drop

TOPIC 8: PRICING

1. Price: the exchange value of a good or service in the market place. Price is the only element in the
marketing mix that produces revenues; all others represent cost.

2. Pricing objectives:
Profit
Volume: if high price + low volume => lost
Competitive: look at competitors’ price
Relationship: keep relationship with customers: buy more-> discount

3. Factors affecting price decisions:

Internal factors External factors

o Marketing objectives o Nature of the market and
o Marketing mix strategy
Pricing demand
o Cost decisions o Competition
o Organizational o Other environmental factors
considerations
1. Internal factors:
a.Marketing objectives:
Survival: low prices to cover variable costs and some fixed costs to stay in business. Ex: S-
phone, Viettel, City-phone (low price)
Current profit maximization: choose the price that produces the maximum current profit
Market share leadership: low as possible prices to become the market share leader. Ex:
Sapuwa mineral
Product quality leadership: high prices to cover higher performance quality and R&D. Ex:
Toyota, Omo

b. Marketing mix: 4Ps

Price effects to Product design, Distribution, Promotion, Non-price positions
c. Cost: Fixed cost (office cost, salary) and Variable cost (raw materials)
d. Organizational considerations: structure of company

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 2. External factors:
a. Market and demand:
Market:
Pure competition: a market in which many buyers and sellers who has little effect on the price
Monopolistic: a market in which many buyers and sellers who trade over a range of prices such
as Vietnam car market, or gas market
Oligopolistic: few sellers who are sensitive to each other’s pricing/ marketing strategies such as
restaurant
Pure monopoly: there is single seller in market.
Demand:
- A demand curve is a curve that shows the number of units the market will buy in a given
time period at different prices that might be charged.
- Price elasticity refers to how responsive demand will be to a change in price
Price elasticity of demand = % change in quantity demanded/% change in price
b. Competition:
A consumer considers to the price and value against of comparable products made by other
companies.
The company needs to learn the price and quality of each competitor’s offer. Ex: Nokia can send
out comparison shoppers to price and compare Ericsson, Samsung ->get competitors’ price list.
c. Other environment factors: economic condition, resellers, government

4. Four general pricing approaches:

1. Cost-based pricing: look at input and output cost, estimate total cost of unit (product -> cost
->price ->value ->customers)
Unit cost = variable cost + fixed cost/ unit sales
Mark-up price (includes profit) = unit cost / (1- desired return on sales)
Breakeven volume = fixed cost/ (mark-up price –unit variable cost)
Ex:
A unit cost = $3. We want to get 25% profit. What is total cost of a unit?
Mark-up price = 3/ (1-0.25) = $4

2. Value-based pricing: setting price based on buyer’s value perceptions of value rather than on
the seller’s cost.
(Consumer -> value -> price -> cost ->product)
Ex: a customer wants a Japanese sushi may pay:
$5.50 at a supermarket
$7.00 at food hall
$9.50 in restaurant
$22.00 at an international hotel
3. Competition-based pricing: look at the price of competing products. It includes cost
(economic-value pricing), going-rate pricing (company sets prices based on what competitors
are charging), and sealed-bid (company sets price based on want they think competitors will
charge)
4. Relationship pricing: includes special relationship, enrichment, shared risks and rewards

5. New product pricing strategies:

Market skimming Market Penetration
Definition - Setting high price for new product to - Setting low price for new
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 skim maximum revenues from target product to penetrate the
market market quickly and
- Results in fewer, but more profitable deeply
sales - Attract large number of
- Ex: Game: play station1 (over last 6 buyers and market share
years): high price to recover and develop - Ex: S-fone, Viettel
market
Intent Capture “cream”, less price-sensitive buyers Sell whole market at one
price, no “elite” markets
Focus High profit margin, sacrifice volume High volume
Sacrifice profit margin
Result Invite competitors, short term profits for Keep competitors out
reinvestment achieve economics of scale

6. Product mix pricing strategies:

1. Product line pricing: setting price steps between product line items
Ex: if companies have product line target low price => decide low price for product
2. Captive- product pricing: pricing products that mist be used with the main product
Ex: You buy camera, you have to buy buttery =>buttery is captive-product
3. Product-bundle pricing: pricing bundles of products sold together
Ex: Double Rich shampoo +shower sold into a package (increase sale volume, and cheaper than
by separated product)
4. Optional-product pricing: pricing optional products sold with main products
Ex: buy a pack for mobile-phone =>pack is optional product b/c you can buy it or not, it not
effect to main product (mobile-phone)
5. By-product pricing: pricing low-value by-products to get rid of them
Ex: in the zoo, sell Zoo-Doo (fan chuong), it’s a kind of fertilizer
=> Zoo-doo is by-product

7. Price-adjustment strategies I:
1. Discount:
a.Cash: only apply for retailers, distributors. If you pay by cash, you get cash discount
b. Quantity: if you buy large amount of goods, you get discount
c. Seasonal: discount on special seasons such as Christmas, New year
d. Functional: only given to retailers. Omo not sell to end-users, sell to supermarket
e.Allowances: only for distributors, ads allowances.
Ex: supermarket allows Omo, Clear a certain ads, if they want to ad more, they have to pay
for supermarket

2. Psychological: $19.99 is psychological pricing ( #19.99 ~ $20, but it not let $20)
3. Segmented:
a. Customer: in hotel, if you are tourists -> pay cheaper
Business -> pay expensive
b. Product form:
c. Location: Jean trousers in Zen Plaza more expensive than in market
d. Time: in coffee shop, price in the morning is cheaper than in the evening

8. Price adjustment strategies II:

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 a. Promotional pricing: temporarily pricing products below the list price, and sometimes
even below cost, to increase short run sales.
Ex: supermarkets often price a few products as loss leaders to attract customers.
Sellers also use special event pricing in certain seasons to draw customers
b. Value pricing: offering just the right combination of quality and good service at a fair
price.
c. Geographical pricing: adjusting prices to account for the geographical location of
customers. There are 5 strategies: FOB-origin pricing, uniform delivered pricing, Zone-
pricing, basing-point pricing, and freight absorption.
d. International pricing: adjusting prices for international markets. Price depends on cost,
consumers, economic conditions, competitive situations & other factors.

9. Price changes initiating price:

a. Price cuts: b/c excess capacities, falling market share, dominate market, through lower
cost.
b. Price increases: cost inflation, over demand: company can’t supply all customer’s needs

TOPIC 9: MARKETING CHANNELS AND SUPPLY CHAIN MANAGEMENT

1. Marketing channels:
a.Definition: a set of interdependent organizations involved in the process of making a product or
service available for use or consumption by the consumer or business user.
b. Physical distribution: marketing channels (distribution channels). Physical distribution start when
we finish products and deliver products to supermarkets.

2. Distribution channel functions:

1. Information: gathering and distribution marketing research
2. Promotion: developing and spreading persuasive communications about an offer
3. Contact: finding and communicating with prospective buyers
4. Matching: shaping and fitting the offer to the buyer’s needs
5. Negotiation: reaching an agreement on price and other terms of the offer
6. Physical distribution: transporting and storing goods
7. Financing: acquiring and using funds to cover the cost of the channel work
8. Risk tasking: assuming the risks of carrying out the channel work
Ex: Petro Company has a lot of negotiation with many suppliers. Petro Company is reseller and
they get profits
Ex: An Internet marketer seeks ways to identify and contact its market: apply information,
contact, promotion, and matching

3. Channel organization:
a. Channel Behavior & Organization
The channel will be most effective when:
 Each member is assigned tasks it can do best.
 All members cooperate to attain overall channel goals and satisfy the target market.
When this doesn’t happen, conflict occurs:
Horizontal Conflict occurs among firms at the same level of the channel, i.e retailer to
retailer.

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 Vertical Conflict occurs between different levels of the same channel, i.e. wholesaler to
retailer.
Each channel member’s role must be specified and conflict must be managed.

b.
Conventional marketing channel Vertical marketing system
Manufacturer Manufacturer
Wholesaler
Wholesaler Retailer

Retailer

Consumer Consumer

c. Types of vertical marketing systems: (VMS)

Corporate VMS: common ownership at different levels of the channel
Ex: Duc Phat bakery: they own store, make the cakes and sell cakes
Contractual VMS: contractual agreements among channel members, sign contract
Ex: System Union in Sydney sign contract with TRG
Administered VMS: leadership is assumed by one or a few dominant members, don’t need sign
contract
Ex: Viso sells products to supermarket -> the power will be decided by power selling

4. Innovations in marketing systems:

a. Horizontal marketing system: two or more companies at one channel level join together to follow
a new marketing opportunity.
Ex: ATM & supermarket
b. Hybrid marketing system: a single firm sets up two or more marketing channels to reach one or
more customer segments.
Ex: retailers, catalogs, sales force

5. Number of marketing intermediaries:

a. Intensive distribution: stocking the product in as many outlets as possible, for low risk item,
make product available everywhere
Ex: shampoo, toothpaste
b. Exclusive distribution: giving a limited number of dealers the exclusive right to distribute the
company’s products in their territories, middle-risk.
Ex: motorbikes b/c you can select
c. Selective distribution: the use of more than one but less than all the intermediaries who are
willing to carry the company’s products, for every luxury items
Ex: car, diamond

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 6. Marketing logistics and supply chain management:
- Involves getting the right product to the right customers in the right place at the right time.
- Marketing logistics addresses:
Outbound distribution
Inbound distribution
Reserve distribution
Entire supply chain management

7. Goals of the logistics system:

Higher distribution costs
Higher customers service levels

Goal: to provide a target level of

customer service at the least cost
Maximize profits, not sales

Lower distribution costs

Lower customers service levels

8.Major logistics functions:

1. Cost minimize cost of attaining logistics objectives
2. Order processing received, processed, and shipped
3. Warehousing storage distribution automated
4. Inventory when to order how much to order just-in-time
5. Transportation rail, truck, water, pipeline, air, inter-modal

TOPIC 10: PROMOTION

1. Integrated marketing communication: (IMC)

Forces affecting communications: diversity, ethics, technology, relationships, and global markets. It
includes:
IMC objectives: provide information, stimulate demand, communicate value, close sale, and
build relationships
Communication process: sender, message, media, receiver, and feedback
IMC plan: target, objectives & mix, budget, implementation, and evaluation

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 2. Marketing communication mix (promotion mix)
Advertising
Direct marketing
Personal selling
Public relations
Sales promotion

3. Communication process:
Sender -> encoding->media (message)->decoding->receiver->response

Feedback

Sellers need to know what audiences wish to reach and response desired
Sellers must be good at encoding messages that target audience can decode
Sellers must send messages through media that reach target audiences
Sellers must develop feedback channels to access audiences’ response to messages

4. Steps in developing effective communication:

Step 1: identifying the target audience
Step 2: determining the communication objectives:
Awareness: if you are new company, you must provide customers awareness
Knowledge: provide knowledge, information to customers
Linking: know what customers like
Preference: know which they prefer (customers not buy yet)
Conviction: persuade customers believe in your product
Purchase: customers will buy products
Step 3: designing a message: attention, interest, desire, and action
Message content: rational appeals, emotional appeals, and moral appeals
Message structure: draw conclusions, argument type, and argument order
Message format: headline, illustration, copy, color
Step 4: Choosing media: radio, newspaper, TV
Word of mouth Opinion leaders

Personal media

Non-personal Events
Major media

Atmospheres
Step 5: selecting the message source
Step 6: collecting feedback

5. Total promotion budget: (advertising budget)

a. Affordable: based on what the company can afford
b. Percentage of sales: based on a certain percentages of current or forecasted sales. If products
are more popular, they do sale forecast and calculate total revenue promotion

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 c. Competitive-parity: based on the competitor’s promotion budget. Follow competitors: if
competitors ads 2 mins ->you follow to ads 2 mins
d. Objectives-and- task: based on determining objectives and tasks, then estimating costs.
Company must understand audience and objectives, in each objectives, you should
understand the task

6. Relative importance of marketing tools:

a.Consumer markets: advertising->sales promotion->direct &online ->personal selling-
>public relations
b. B2B markets: personal selling->direct &online->sale promotion ->advertising-
>public relations

7. Promotion mix strategies:

Strategy selected depends on types of product-market and product life-cycle stage
a.Pull strategy: spending a lot on advertising and consumer promotion to build up (pull) consumer
demand. Target consumers, using a lot of ads, sell promotion to build demand
demand
Demand
Manufacturer Retailer Consumer
Wholesaler
Marketing activities

b. Push strategy: using the sales force and trade promotion to push the product through the
channels. Attract retailers (I will give you discount if you by more, or in this season)
demand demand
Manufacturer Retailer Consumer
Wholesaler

Marketing activities

8. Advertising:
 Advertising is centuries old.
 U.S. advertisers spend in excess of $244 billion each year; worldwide spending exceeds $465
billion.
 Advertising is used by:
Business firms,
Nonprofit organizations,
Professionals, and
Social agencies.

9. Setting advertising objectives:

Advertising Objective: Specific Communication Task Accomplished with a Specific Target
Audience During a Specific Period of Time
Informative Advertising Inform Consumers or Build Primary Demand
i.e. DVD Players
Persuasive Advertising Build Selective Demand

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 i.e. Sony DVD Players
Comparative Advertising Compares One Brand to Another
i.e. Avis vs. Hertz
Reminder Advertising Keeps Consumers Thinking About a Product
i.e. Coca-Cola
10. Developing advertising strategy:
Selecting the advertising media advertising strategy consists of two major elements and companies are
realizing the benefits of planning these two elements jointly:
a. Creating the Advertising Messages:
 Develop a message focus on customer’s benefits
 Creative concept “big idea” visualization or phrase
 Advertising appeals meaningful, believable, and distinctive, there are 2 main advertising
appeals: informational/rational and emotional
 Message execution styles: testimonial evidence, scientific evidence, technical expertise,
personality symbol, musical, mood or image, fantasy, lifestyle, and slice of life
b. Selecting the advertising media:
 Deciding on reach, frequency, and impact
 Choosing among the major media types
Mass media: broadcast media, in-store media, outdoor media, and transit (ads on buses)
Interactive media: company website, rich media, banner ads
Direct marketing: letters, bill inserts, fax ads, phone & email
 Selecting specific media vehicles
 Deciding on media timing

11. Sales promotion:

Sales promotion offers short-term incentives to encourage purchase or sales of a product or service.
Offers reasons to buy now. (we can’t sale promotion to increase awareness, should use ads to
increase awareness)
a. Rapid growth of sales promotion:
 Sales promotion can take the form of consumer promotions; business promotions, trade promotions,
or sales force promotions.
 Rapid growth in the industry has been achieved because:
 Product managers are facing more pressure to increase their current sales,
 Companies face more competition,
 Advertising efficiency has declined,
 Consumers have become more deal oriented.
b. Sales promotion objectives:
 Consumer Promotions: increase short-term sales or help build long-term market share.
 Trade Promotions: get retailers to: carry new items and more inventory, advertise products, give
products more shelf space, and buy product ahead.
 Sales Force: getting more sales support.
 In general, sales promotion should focus on consumer relationship building.

12. Major consumer sales promotion tools:

Sample: Trial amount of a product Trial amount of a product
Coupons: Savings when purchasing specified products
Cash Refunds: Refund of part of the purchase price
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 Price Packs: Reduced prices marked on the label or package
Premiums: Goods offered free or low cost as an incentive to buy a product
Advertising Specialties: Articles imprinted with an advertiser’s name given as gifts
Patronage Rewards: Cash or other award offered for regular use of a product
Point-of-Purchase: Displays or Demonstrations at the Point of Purchase
Contest: Consumers Submit an Entry to be judged
Sweepstakes: Consumers Submit Their Names for a Drawing
Games: Consumers Receive Something Each Time They Buy That May Help Them Win a Prize
13. Major trade sales promotion tools:
a. Trade-promotion objectives:
Persuade retailers or wholesalers to carry a brand
Give a brand shelf space
Promote a brand in advertising
Push a brand to consumers
b. Trade-promotion tools:
Discounts
Allowances
Free goods
Push money
Specialty ad items

14. Major business sales promotion tools:

a. Business-promotion objectives:
Generate business leads
Stimulate purchases
Reward customers
Motivate salespeople
b. Business-promotion tools:
Conventions
Trade shows
Sales contests

15. Public relations:

Public Relations Involves Building Good Relations With the Company’s Various Publics by Obtaining
Favorable Publicity, Building Up a Good Corporate Image, and Handling or Heading Off Unfavorable
Rumors, Stories, and Events.
a. Major public relations functions:
Press relations or agentry
Product publicity: Sunsilk has free shampoo, Tiger responses for football
Public affairs
Lobbying
Investor relations
Development
b. Major public relations tools:
Website, news, speeches, special events, written materials, audiovisual materials, corporate
identify materials, public service activities.

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