Topic 1. Connecting with customers.

• The cornerstone of a well-conceived marketing orientation is strong customer relationship

(customer experience and loyalty).
• Companies need to understand their customers and continuously find ways to stay
connected with them in order to be as helpful as possible.
• “Companies create value that comes from customers” (the current ones, and the ones they
will have in the future). Businesses succeed
by getting, keeping and growing customers.

Pricing the marketing offering.

What is a price?

• Price is an instrument to stimulate demand

• Price is a determinant factor of the firm’s LT profitability
• Fastest to change among the 4Ps
• The choice of a pricing strategy must respect two types of
coherence:
– Internal coherence: respecting constraints of costs &
profitability
– External coherence: taking into account market’s purchasing
power & price of competitors
Consumer psychology and pricing:

● Reference prices.

● Price-quality inferences.
● Price endings.
Step 2: Determining demand.
Step 4: Analyzing competitors’ costs, prices and offers

• Consider the nearest competitor’s price

• Evaluate value to customer for differentiated features
• Anticipate response from competition

Step 5: Selecting a pricing method.

● Mark-up pricing.
Topic 5. Communicating value: Non-personal marketing communications.

Micro-models of the communication process

Traditional marketing communications tools

Changes with the internet.

Steps in developing effective communications

Advertising.
Sales promotions

Impacts of promotions on sales

Anticipation effect → when you do not buy because you know there is going to be a
promotion in a small period of time.

Decay effect → periods in which customers do not buy because they already have stock of
this product.

Negative effect of promotion:

Change on reference price
Advertising vs. Sales Promotion

3. Events and experiences.

Includes sports, arts, entertainment and “good cause” events

as well as less formal activities that create novel brand
interactions with consumers
• Creating and sponsoring events
• Not only favoring sports events, but now using venues such as zoos or ice
shows, concerts, exhibitions, festivals
• Events designed to surprise the public and create buzz (guerrilla
marketing, street activities)

4. Public relations

Example: caixa forum.

Characteristics of the mix
TOPIC 6.
Advantages personal communication modes:

• Individualized presentation
• Direct feedback
• Co-creating customer-perceived value offerings with customers
Personal influence is especially effective:

• When products are expensive, risky or purchased infrequently

• When purchase suggests status or taste
Objectives

Direct marketing.

Use of consumer-directed channels to reach customers without using

marketing middlemen
• Direct Channels: catalogues, direct mail, telemarketing, email, websites, interactive TV
• Objectives: long-term relationships with customers (e.g., loyalty programs)
• Benefits:
a) Build a continuous relationship with individual customer
b) Consumers with little time appreciate free phone numbers, 24/7 available websites and
directly accessible customer service.

1.1. Direct mail

Sending an offer announcement, reminder or other item to an individual consumer

• Permits target market selectivity, personalization and flexibility.
• Direct mail can produce prospect leads (buyers), strengthen customer relationships, inform
and educate customers.
• Allows early testing and response measurement.
In constructing and effective direct mail campaign, marketers must decide on their
objectives, target markets and develop metrics to assess campaign results.

• Although cost per thousand people reached is higher than with mass media, the people
reached are better prospects.

1.2 Catalogue marketing.

Sending catalogues in print or online formats to (potential) customers.

Success depends on:
• Managing customer list carefully (no duplication or debts)
• Inventory control
• Quality merchandise (preventing high returns)

1.3 Telemarketing.

Use of telephone and call centres to attract prospects, sell to existing customers and provide
service by taking orders and answering questions.
• Advantages: Helps increasing revenue, reducing selling costs and improving customer
satisfaction.
• Disadvantages: Seen as intrusive (result: legislation in European countries regarding right
of consumers to refuse direct marketing telephone calls).
• Increasingly used in B2B marketing.

2. Personal selling.

Effective tool in the later stages of the buying process, particularly in B2B and services In
addition to selling, their role is:
• Create customer-perceived value service
• Operate as company ambassadors and consultants
 • Work closely with company marketing and production personnel
• Manage the retention of loyal customers and prospect for new ones
• Work with the full range of digital communication channels

It is usually the same person.

The six steps of selling.

1) Prospecting: identify and qualify potential customers

2) Pre-approach/Discovery: salesperson needs to learn as much as possible about potential
customer
3) Presentation and demonstration
4) Overcoming objections
5) Closing: ‘of deal’ (purchase)
6) Retention: re-purchase

Developments in Personal selling.

Sales force size.

Major steps in sales force management.

3. Interactive marketing.

Unique benefits: companies can send tailored messages that engage consumers that reflect
their interests and behavior.

Channels.

4. Word-of-mouth (WOM).

Very powerful.

Interpersonal communication of market offerings where the receiver regards the

communication as impartial, and can be online or offline.
• Credible and personal.
• Timely (occurs when potential customers are interested in making a purchase).
• Great impact (positive and negative).
• Opinion leaders can stimulate and trigger interest.
• One influential person tends to affect the buying attitudes of two other people, on
average.
Buzz/viral Marketing

Form of word-of-mouth that encourages consumers to pass on company developed

impressions. It can be created around a new product (funny videos, entertaining microsites,
games, special offers, interesting stories or images; passed around the online community)
• Special type of worth-of-mouth marketing
• Supply key influencers with samples
• Develop word-of-mouth referral channels
• Provide compelling content that customers want to share with others

5. Social media marketing.

Enables organisations to interact with customers and interested third parties. Helps building
relationships with customers (low-cost tools)
Objectives:
• Consumer engagement with a brand (perhaps at a deeper and broader level than even
before).
• Adding customer perceived value through communication platforms that enable people to
create and share message content through participating in social networking.

3 types of social platforms:

1. Online communities and forums: Interested consumers and companies can interact
to collectively develop customer perceived value offerings (e.g. Lego).
2. Blogs: Regularly updated online journals or diaries. Popular blogs are creating
influential opinion leaders.
3. Social platforms (Facebook, Twitter, Instagram, Tik Tok, Twitch): enable people to
network and have become an important force in both business to consumer (B2C)
and B2B marketing. Each platform offers different benefits to firms.

Advantages of Social Media Marketing

• Accessibility and Reach: of target group all across the world

• Internet use: consumers are spending an increasing amount of time accessing the internet
• Immediacy: immediate information sharing
• Builds relationships: build brand awareness, visibility and reputation
• Customer service: improvable through direct feedback.
• Costs of maintaining a social media presence are much less than for traditional advertising
• Website boost: social media can boost traffic to company websites.
• Tracking: performance is easy to measure.
• Technological advances: makes it easier for companies and organizations to interact with
customers and interested third parties.

Disadvantages of Social Media Marketing

• Acceptability: there are no written rules

• Distraction and procrastination: Browsing social media can feed procrastination and
become something people turn to in order to avoid certain tasks or responsibilities
• Information overload
• Online interaction substitution for offline interaction: use online interaction as a substitute
for face-to-face interaction
• Privacy issues
• Social peer pressure and cyber bullying
• Health: 14-24 year-olds are suffering from increased feelings of inadequacy and anxiety

Performance Metrics.

SOV → share of voice.

ToMA → top of mind.

NPS → net promoter score.

Inbound marketing.
IMC (Integrated Marketing Communications).

• Combine personal with non-personal communications

• Make it integral part of the organization

Topic 7. Delivering value: Distribution channels.

Distribution channel decisions are among the most critical decisions that management faces.

How to get the right products at the right time at the right place;from producer to
end-consumer.
Companies use intermediaries when they do not have the money or ability to provide these
services themselves, or when they can earn more by doing so.

Effective channel management calls for selecting intermediaries and training and motivating
them. The goal is to build a long-term partnership that will be profitable for all the channel
members.

Marketing/Commercial Distribution

• Often in markets, the physical and psychological distance between producers and
end-users need intermediaries to ensure an efficient match between segments of demand
and supply.
• Commercial distribution is the marketing tool that connects the key players in the exchange
process (production and consumption).

Distribution Channel.

An organized network (system) of agencies and institutions which, in combination, perform

all the functions required to link producers with end-users to accomplish the marketing task.
Goal of Commercial Distribution.

Minimizing the existing differences in place, time and production/consumption through these
functions:
• Transporting items from manufacturing place to point of sell/delivery
• Splitting and sorting products in the requested portions and conditions
• Storing products during the lapse between production and delivery
• Contacting diverse buyers
• Informing; collecting and disseminatinf information about needs
• Promoting through marketing communications
•Others functions: repair, maintenance, guarantees, financial credit, etc

Distribution Channel Organization.

Distribution Flows.

Benefits of Distribution Channel.

• Economies of scale:

Product grouping from several producers enables offer with lower logistic cost, and thus
selling price, than with sum of each individual producer. A pure efficiency gain.
• Better assortment (convenience):
– Consumers can buy in just one store products from multiple producers, allowing them to
save time and effort.
– Producers, even when producing a limited range of products, have access to stores with
diverse assortment + own selling points would not be feasible.

• Reduction of functional discrepancies:

The distributors, by storing and splitting the products, ensure a better match between
production and consumer demand (e.g., in size or timing)

• Better service: Due to improved proximity, better knowledge of the consumer and
associated needs

Consumer vs. Business Distribution Channels

Channel design alternatives.

Channel Design Alternatives

Parties in Distribution Channel

– Retailers
• Company that sells directly to the end consumer
• Their profit is the margin they charge between what they pay for the goods and the price
customers pay
– Wholesalers
• Company that buys products from producer, for later re-sale to a firm next in the channel.
Keeping products in stock at their own risk, therefore reducing the inventory cost from both
suppliers and retailers.
• Sell to other resellers (e.g., retailers)
• Purchase in large amounts from manufacturers and resell in smaller quantities to resellers
• Often buy from several manufacturers
– Agents
• Do not own the products, but negotiate sales for clients
• Compensated by commission on sales
• E.g., import/export agents, traders, brokers, manufactorer’s respresentative
– Facilitating agencies.
• Distribution tasks other than buying, selling and transferring title (“subcontractors”)
• Involved on an as-needed basis and they are compensated by comissions or fees paid for
the service.
• E.g., transportation, storage, advertising and market research agencies.

Types of retailers.