MARTIN de TOURS SCHOOL OF MANAGEMENT DEPARTMENT OF MARKETING LESSON PLAN MKT 2280 PRINCIPLES OF MARKETING

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1 MARTIN de TOURS SCHOOL OF MANAGEMENT DEPARTMENT OF MARKETING LESSON PLAN MKT 2280 PRINCIPLES OF MARKETING

2 MKT2280 PRINCIPLES OF MARKETING LESSON PLAN COURSE DESCRIPTION A study of the principles and problems involved in the transfer of goods and services from the producer to the consumer, consumers buying motives, product policies, distribution policies, price policies, sales promotion policies, and the improvement of marketing efficiency. COURSE OBJECTIVES To familiarize students with marketing concepts, strategies, and problems To enhance students command of business language with an emphasis on marketing terminology To improve students capacity to identify current marketing activities engaged by organizations EXAMINATION STRUCTURE Pop-up Quizzes in Lecture Class (2x2.5%) 5% Quizzes in Discussion Class (2x5%) 10% Assignment and Presentation 10% Term Project 10% Midterm Examination 25% Comprehensive Final Examination 40% Total 100%

3 LESSON PLAN Part 1: The Nature and Scope of Marketing

4 Lesson 1: The Field of Marketing (Textbook Chapter 1) Time Allocation: 3 hrs Learning objectives CHAPTER 1 To enable students to: Understand the definition and importance of marketing Gain insight into the basic elements of the marketing concept Describe the components of a company s marketing program Brief contents What is Marketing? Marketing consists of activities performed by both individuals and organizations aimed at facilitating and expediting satisfying exchange relationships Exchange: The transfer of goods, services and ideas in return for something of value Evolution of Marketing Marketing has evolved three successive stages of development: Production-orientation stage: The period of mass production following industrialization Sales-orientation stage: The period when competitive forces and the desire for high sales volume led business to emphasize selling and the salesperson in its strategy Market-orientation stage: The current period, in which product and aggressive selling no longer enough. Customer needs must be identified and satisfied Teaching/ Learning Strategies Lecture Teaching Aids/ Materials PowerPoint presentation Evaluation Questioning and Answering in Class Quiz and Exams The Marketing Concept The philosophy that an organization should try to provide products that satisfy customers needs through a coordinated set of activities that also allows the organization to achieve its goals Customer satisfaction: Results when an exchange meets the needs and expectations of the buyer A company s Marketing Program Market segments: Can be either consumers or organizations that share similar wants, buying preferences or product use behaviors Target market: Refers to market

5 segments in which a firm creates and directs a marketing program that specifically fits the needs and preferences of that group Positioning: The process of creating an image for a product in the minds of target customers Marketing Mix: consists of 4 Ps that an organization can control in order to facilitate satisfying exchange Product: Includes a range of activities focusing on new product development to packaging and branding Price: Relates to activities associated with establishing pricing policies and determining product prices Promotion: Involves communicating to a target market about the benefits on offer Place: Relates to how products are made available to the target market. Includes decisions on appropriate distribution channel Importance of Marketing Important to businesses and the Economy: Marketing activities help to sell an organization s products in order to survive and grow. Profits are essential to economic growth because to hire more employees, attract more capital and buy more raw materials. Marketing activities are used in many organization: Both profits and not-for-profit organizations engage in marketing activities in order for them to survive and grow in this ever increasing competition Creating Utility: Utility is the wantsatisfying power of a product and it comes in many forms. Much of product s utility is created through marketing.

6 Lesson 2: The Dynamic Marketing Environment (Textbook Chapter 2) Time Allocation: 1.5 hrs Learning objectives Brief contents Teaching/ Learning Strategies Teaching Aids/ Materials Evaluation To enable students to: To learn the method of environmental scanning and its importance to marketing decisions. To identify the major components of external and internal operating environment of marketing and how marketing decisions are affected by each of them. What is environmental monitoring? It is the process of: 1. Gathering information regarding a company s external environment 2. Analyzing it and 3. Forecasting the impact of whatever trends the analysis suggests. What are environmental forces? External Macroenvironment: uncontrollable forces that affect all firms in the market. These forces include: 1. Demographics: refers to the characteristics of population, including such factors as size, distribution, and growth. 2. Economic conditions: major significant economic concepts (e.g. stages of business cycle, inflation, interest rate, etc.) will be discussed to analyze market s purchasing power and affordability for a product. 3. Competition: three types of competition will be identified and analyzed. These include brand competition, substitute product and generic competition. 4. Social and Cultural forces: key current and changes in social and cultural forces in a particular market will be identified and discussed to analyze their impact on a firm s marketing. 5. Political and legal forces: political and legal issues (law and regulations) that may manipulate a firm s marketing operation will be analyzed. 6. Technology: the changes in and impact of different technology will Lecture PowerPoint presentation Questioning and Answering in Class Quiz and Exams

7 be discussed as it has a tremendous impact on our lifestyles, consumption patters, and economic well-being. External Microenvironment: Three additional environment forces that are external to an organization and affect its marketing activities. 1. Market: It can be defined as a group of people or organizations with needs, purchasing powers and the willingness to buy a product. Thus its characteristics, potential and behavior need to be mentioned in order to be profitable and socially responsible 2. Supplier 3. Marketing intermediaries: independent business organizations that directly aid in the flow of goods and services between a marketing organization and its markets. Also, the value chain needs to be formed and monitored. Organization s Internal Environment: controllable forces that are internal to the firm including a firm s marketing and non marketing resources and activities.

8 Lesson 3: Strategic Marketing Planning (Textbook Chapter 20) Time allocation: 3 hrs Learning Objectives To enable the students to: Understand and explain the nature and scope of planning and how it fits within the management process Describe the similarities and differences between mission, objectives, strategies, and tactics. Brief Contents 1. Planning Planning, implementation, and evaluation are the three steps to the management process and therefore a primary issue in marketing decision making. In strategic planning, marketers match an organization s resources with its market opportunities over the long run. The essential planning concepts are mission, objectives and goals, strategies, and tactics, that comprise of the aims of the organization and details on how to achieve these aims in an increasingly specific procedure Teaching/ Learning Strategies Lecture Teaching Aids/ Materials PowerPoint presentation or transparencies for overhead projector Evaluation Questioning and Answering Questions in Class Quiz and Exams To describe the steps comprising strategic marketing planning. Cite purpose and contents of an annual marketing plan Use various business models in marketing decision making 2. Strategic Marketing Planning Is comprised of three major levels of planning beginning with a corporate plan called the Strategic company plan, the marketing department long term plan called the Strategic Marketing Plan, and the marketing department short term planned termed the Annual Marketing Plan 3. Annual Marketing Planning Contains specific strategies and tactics to be implemented throughout one year of marketing management 4. Selected planning Models Strategic business units or SBUs Product-Market Growth Matrix BCG Matrix

9 LESSON PLAN Part 2: Identifying and Selecting Markets

10 Lesson 4: Consumer Markets and Buying Behavior (Textbook Chapter 4) Time Allocation: 3 hours Learning Brief Contents Objectives To enable students to Understand the consumer markets and importance of consumer behavior Explain consumer buyingdecision process. Explain some of the important influences on consumer buyingdecision Recognize-e the outcomes of consumers' decision to purchase or not to purchase and how they affect marketing success 1. The Consumer Markets The consumer market consists of over million ultimate consumers who buy goods and services for their own personal or household use. Marketers must understand consumer behavior to develop successful strategies. Furthermore, awareness of emerging trends in the consumer marketplace is essential for quick recognition of and response to problems and opportunities with sound marketing strategies. Demographics: The vital statistics that describe a population. They are useful to marketers because they are related to behavior and they are relatively easy to gather. Demographics frequently used to describe consumers are age, gender, family life cycle, income, ethnicity, and other characteristics such as education, occupation, religion, and nationality. Consumer behavior: Describes the mental and physical activities that people engage in when they select, purchase, use, and dispose of products and services purchased to satisfy needs and desires. 2. Consumer Decision making: The Consumer Buying-Decision Process: The stages in the buyingdecision process are need recognition, identification of alternatives, evaluation of alternatives, purchase and related decisions, and postpurchase behavior. High- and Low-Involvement Decisions: Involvement represents the level of importance or interest generated by a product or a decision. Consumers with high involvement will likely go through the entire decision-making stages while low involvement decision includes fewer stages. Loyalty: Exists when a consumer is sufficiently satisfied with a particular brand or retailer that he or she buys that brand or from that retailer when need arises without considering other alternatives. Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams

11 Impulse buying: A form of lowinvolvement decision-making; purchases made with little or no advance planning. 3. Factors influencing Consumer Buying- Decision: Information and Purchase Decision: There are two sources of buying information--commercial and social environment. The commercial information environment consists of all marketing organizations and individuals that attempt to communicate with consumers. The social commercial information environment is comprised of family, friends, and acquaintances who directly or indirectly provide information about products. Social influences: Social forces are composed of culture, subculture, social class, reference groups, family, and households. Psychological Factors: Psychological forces that impact buying decisions are motivation, perception, learning, personality, and attitudes. Situational Influences: A temporary force, associated with the immediate purchase environment, that affects behavior. 4. Consumer Behavior Outcomes: Consumer Learning: Learning may result from experience and knowledge gained through advertisement and marketing communications. Consumer Satisfaction and Dissatisfaction: Feelings of satisfaction and dissatisfaction occur when product performance exceeds or falls short of expectations. Dissatisfaction may lead to consumer complaints and loss of future business while satisfaction is a dominant cause of customer loyalty.

12 Lesson 5: Business Markets and Buying Behavior (Textbook Chapter 5) Time Allocation: 3 hours Learning Brief Contents Objectives To enable students to Understand the nature and scope of the business market Explain the characteristics of business markets Define the buying process in business markets 1. Nature and Scope of the Business Market: The business market consists of organizations that buy goods and services to produce other goods and services, to resell to other business users or consumers, or to conduct the organization's operation. Components of the Business Market: Besides manufacturing, the business market includes agriculture, reseller, government, services, nonbusiness business (nonprofit), and international market. Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams Define the factors that influences on business buying decision 2. Characteristics of Business Market Demand: Demand Is Derived: The demand for a business product is derived from the demand for the consumer products in which that business product is used. Demand Is Inelastic: The demand for a product responds very little to changes in its price. Demand Is Widely Fluctuating: Market demand for most classes of business goods fluctuates considerably more than the demand for consumer products. Buyers Are Well Informed: Business buyers are better informed about what they are buying than ultimate consumers because (1) There are relatively few alternatives for a business buyer to consider; (2) In most business situations a buyer has only few firms that offer the particular combination of product features and service desired; and (3) In business buying the cost of a mistake is high.

13 3. Buying-Decision Process in Business: The Buying process: The buying-decision process in business markets may involve as many as five stages: need recognition, identification of alternatives, evaluation of alternatives, purchase decision, and postpurchase behavior. 4. Factors influencing Business Buying-Decision: Buying Motive of Business Users: Business buying motives are the needs that direct the purchasing behavior of business users. They fall into two broad categories: organizational and personal (self-interest) motives. Types of Buying Situations: Business buying decisions can be classified into one of three categories, differentiated by complexity: (1) new-task buying, first-time purchase of a major product; most difficult and complex; (2) straight rebuy, a routine, low-involvement purchase; minimal effort required; and (3) modified rebuy, in between the first two terms of time and information required as well as number of alternatives considered. Multiple Buying Influences-The Buying center: A buying center consists of all the individuals or groups involved in the process of making a decision to purchase. They may come from different departments and levels within the organization and may play one or more roles: user, influencer, decider, gatekeeper, or buyer. Buyer-Seller Relationship: Developing a buyer-seller relationship stems from recognizing the importance of the customer's supply chain and the benefits of developing loyalty. Relationships require commitment and are built on trust and sharing information. Buying Practices of Business

14 Users: In the business market, direct purchases are common, purchases are quite infrequently, and order sizes are large. The negotiation period is long and reciprocity arrangements sometimes exist. The demand for service is greater and the dependability of supple is more critical. Finally, leasing is quite common in business marketing.

15 Lesson 6: Market Segmentation, Targeting, and Positioning (Textbook Chapter 6) Time Allocation: 1.5 hours Learning Brief Contents Objectives To enable students to Define and explain market segmentation and target markets Understand the criteria used for evaluating the success of a segmentation strategy Understand the alternative bases for segmenting consumer and business markets Define three target-market strategies 1. An overview of Market Segmentation and Target Markets: Market segmentation is among the most popular and important topics in the entire field of marketing. It is consistent with the marketing concept and enhances a firm's ability to understand its core customers or who its core customers will be in the future. Market: A market consists of people or organizations with needs to satisfy, money to spend, and the willingness to spend it. Market Segments: Groups of customers with different wants, buying preferences, or productuse behavior. Target Market: A specific market segment for which the seller designs a particular marketing mix. Market Segmentation: A process of dividing the total market for a good or service into several smaller, internally homogeneous groups. Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams Define and explain what is position, positioning, and steps in positioning strategy 2. Criteria for Effective Segmentation: Measurability: The extent to which the size and purchasing power of segments can be defied. Accessibility: The degree to which firms can efficiently reach intended target segments by existing middlemen, advertising media, and the company's sales force with a minimum of cost and waste effort. Substantial: The segments must be large enough to be potentially profitable. 3. Segmenting Consumer and Business Markets: Ultimate Consumers and

16 Business Users--the First Cut: The sole criterion for this first cut at segmenting a market is the customer's reason for buying. Ultimate consumers buy goods or services for their own personal or household use while business users buy goods or services to use in their organizations, to resell, or to make other products. Segmentation Bases for Consumer Markets: There are four bases for segmenting consumer markets: geographic (region, city size, urban-rural, and climate), demographic (income, age, gender, family life cycle, social class, education, occupation, and ethnic background), psychographic (personality and life-style), and behavioral (benefits desired and usage rate). Segmentation Bases for Business Markets: The business market may be segmented on the basis of customer location (region and location), customer type (industry, size, organization structure, and purchase criteria), and transaction condition (buying situation, usage rate, purchasing procedure, order size, and service requirement). 4. Target-Market Strategies: Aggregation Strategy: An organization treats its total market as a single segment and develop a single marketing mix to reach as many of those customers as possible. Single-Segment Strategy: Involves selecting one homogenous segment from the set of market segments to be the firm's target market. One marketing mix is developed to reach this single segment. Multiple-Segment Strategy: Entails selecting two or more segments and developing a separate marketing mix to reach each segment.

17 5. Positioning: Once segments have been selected and targeted, the firm must position its products and services in the minds of its customers. Position: The way a firm's product, brand, or organization is viewed relative to the competition by current and prospective customers. Positioning: A firm's use of all elements at its disposal to create and maintain in the minds of a target market a particular image relative to competing products. Steps in a Positioning Strategy: Three steps in positioning are (1) selecting the positioning concept, (2) designing the feature to convey the position, and (3) coordinating the marketing mix to consistently communicate the desired position. Repositioning: Refers to recreating an identity or creating a new identity when the firm's position has eroded.

18 Lesson 7: Marketing Research and Market Information (Textbook Chapter 7) Time Allocation: 1.5 hours Learning Brief Contents Objectives To enable students to Explain what marketing research is, the need for it, and the variety of forms it takes Explain the way to conduct a marketing research project Understand the competitive intelligence 1. The Marketing Research Function: What is Marketing Research: A marketing research is the development, interpretation, and communication of decision-oriented information be used in all phases (planning, implementing, and evaluation) of the marketing process. Uses of Marketing Research: Marketing research helps managers to (1) identify and adequately describe markets and market segments; (2) to determine the marketing mix elements; (3) to gauge competition how it may affect a firm's strategy; and (4) to determine customer expectations and how well they are being satisfied. Scope of Marketing Research Activities: Three tools used in research are syndicated services, marketing information system, and decision support system. Syndicated services are scheduled reports that are produced and sold by research firms. Marketing information system (MkIS) is an ongoing, organized procedure to generate, analyze, disseminate, store, and retrieve information for use in making marketing decision. Decision support system (DSS) is a computer-based procedure that allows a manager to directly interact with data using various methods of analysis to integrate, analyze, and interpret information. Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams 2. Marketing Research Projects: Marketing Research Procedure: A marketing research project is undertaken to help resolve a specific marketing problem. The problem must first be clearly defined. Then a researcher conducts a situation

19 analysis and an informal investigation. If a formal investigation is needed, the researcher decides which secondary and primary sources of information to use and how to gather it. The research project is completed when data are analyzed and the results reported to the users or firm management. Follow-up provides information for improving future research. Select Sources of Information: There are two sources of information: primary and secondary data. Secondary data are available data, already gathered for some other purpose. Primary data are new data gathered specifically for the project at hand. Select a Primary Data-Gathering Method: There are three widely used methods of gathering primary data: observation, survey, or experimentation Observation method involves collecting data by observing the action of a person. Survey method consists of gathering data by interviewing people. Surveys can be conducted in person, or by telephone, by mail, or via the Internet. Experimental method is using data gathered to determine the results of changing one variable in a situation while holding all others constant. These include laboratory experiments, field experiment, and test marketing. Plan the Sample: There are two popular sample techniques: random sample and convenience samples. A random sample is selecting in such a way that every member of the universe has an equal chance of being included while convenience sample is determined by ease of access. 3. Competitive Intelligence: Competitive intelligence is the process of gathering and analyzing available public information about the activities and plans of competitors. The data used to study competitors come from various sources such as data bases created and sold by research firms, government reports, employees, observation, and the Internet.

20 LESSON PLAN Part 3: Product

21 Lesson 8: Product Planning and Development (Textbook Chapter 8) Time Allocation: 3 hrs Learning Brief Contents Objectives To enable the students to: Understand and explain the first two commandment s in marketing know thy customer, and know thy product, along with Type of products. To describe what constitutes a new product & its strategies. 1. Meaning of Product A set of tangible and intangible attributes, which stresses that customers are buying want satisfaction. Classification of products: a. Consumer products (intended for personal consumption by households) Convenience, shopping, Specialty and unsought Product. b. Business products (intended for resale, for use in producing other products, or for providing services in an organization). Raw materials, fabricating parts & materials, Installations, Accessory equipment and operating supplies. Teaching/ Learning Strategies Lecture Teaching Aids/ Materials PowerPoint presentation or transparencies for overhead projector Evaluation Questioning and Answering Questions in Class Quiz and Exams What constitutes a new Product. Innovative: truly unique, significantly different from existing product in form and imitative (new to a particular company but not market eg. new version of autos). There are 6 stages in new product development: ideas generation, screening of ideas, business analysis, prototype development, market test and commercialization.

22 Lesson 9: Product Mix Strategies (Textbook Chapter 9) Time Allocation: 3 hrs Learning Brief Contents Objectives To enable the students to: Discuss how to manage a company s assortment of products effectively and the concept of product life cycle and managing the product as it moves through lifecycle. How to manage company s product assortment. First: select strategies regarding its product mix: - Position in relation to competitor. - Position in relation to product class/attribute. Promote the product as having attractive attribute such as environmental friendly. - Position in relation by price and quality. Second: whether to expand the product mix by adding items to the line and/or introducing new lines. Teaching Learning Strategies Lecture Teaching Aids/ Materials PowerPoint presentation or transparencies for overhead projector Evaluation Questioning and Answering Questions in Class Quiz and Exams Product life cycle: reflects total sales volume for a generic product category. Four stages: Introduction: product is launched into the market in a full-scale marketing program. Growth: market acceptance stage, sales & profits rise. Maturity: Intense price competition. Decline: profit is low/none. Planned obsolescence a controversial product strategy, built around concepts of style (distinctive manner of presentation in any art, product, or endeavor e.g. in automobiles sedans, station wagons), fashion (any style that is popularly accepted), and the fashion cycle (series of buying waves as a particular style is accepted in one group then another group, till it falls out of fashion).

23 Lesson 10: Branding and Packaging (Textbook Chapter 10) Time Allocation: 1.5 hrs Learning Brief Contents Objectives Understand the strategies and Importance of branding and packaging and the marketing opportunities associated with it.. Strategies and Importance of branding, packaging and labeling Effective product management involves developing and then monitoring various product features like: brand, packaging, labeling, design, color, quality, warranty and Postsale services. Brand mean of identifying and differentiating products of an organization. Aid shoppers in moving quickly through a supermarket etc., Reduces price comparisons, can be easily recognized when displayed in a store or included in advertising. Teaching/ Learning Strategies Lectures Teaching Aids/ Materials PowerPoint presentation or transparencies for overhead projector Evaluation Questions and Answering in Class Quiz and Exams Manufacturers must decide whether to brand their products or sell under middlemen s brand. Middlemen must decide whether to carry producers brand alone or to establish their own brands as well. Packaging: all activities of designing and producing the container or wrapper for the product. Strategies: Family Packaging or Multiple Packaging: uses similar packages for all products or packages with common and clearly noticeable feature. Eg. Head and Shoulder. Multiple Packaging: practice of placing several units of same product in one container. Labeling Par of the product that carries information about the product and the seller. Types of labels Brand Label: brand alone applied to

24 product or package. Descriptive label: gives objective information about the products use, care. Performance etc., Grade label: identifies the product s judged quality with letter, number or word. Eg. Canned peaches are grade labeled A, B and C.

25 LESSON PLAN Part 4: Pricing

26 Lesson 11: Price Determination (Textbook Chapter 12 and Appendix A) Learning Objectives To enable students to Understand the meaning of price and its significance in the economy, to customers, and to individual firms Identify major pricing objectives Study the key factors that influence price Understand different types of costs incurred in marketing a product and their use in determining prices The four major methods of determining prices The concept of applying mathematica l tools to pricing Brief Contents 1. Meaning of Price: Price is : amount of money or other items of utility needed to acquire a product. Includes the price of the specific good or service that is the object of the transaction, several supplementary services, and any want-satisfying benefits provided by the product. Pricing Objectives: Profit oriented goals including Achieve a target return and Profit maximization, Sales oriented goals such as Increase sales volume and maintain or increase market share, and Status Quo goals. Factors that influence prices: Expected demand, Competitive reactions, Other marketing mix elements, and Cost of a product Importance of Price to the economy, customers who want value, and individual firms who make money from prices. 2. Pricing Methods Cost Plus Pricing Break Even Analysis Marginal Analysis Prices based on market alone: Pricing above, below, and to meet competition. 4. Marketing Math Price Elasticity of Demand: the responsiveness of quantity demanded to price changes Markups are the difference between the selling price o an item and its cost, used by middlemen to determine the selling price of the product they are reselling. Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparenci es for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams

27 Lesson 12: Pricing Strategies (Textbook Chapter 13) Time Allocation: 3 hrs Learning Brief Contents Objectives To enable students to Understand various pricing strategies including the difference between price competition and nonprice competition Understand market entry strategies 1. Price vs. Nonprice Competition Companies regularly offer their products at lower prices accompanied by few services in price competition whereas they try to stabilize prices and use other marketing mix elements to attract shoppers in nonprice competition. Value pricing is gaining in popularity where the ratio of benefits to prices is considered and it is perceived that customers will buy a product as long as they feel the product maximizes benefits in relation to price. Building brand equity is a major factor in determining the success of nonprice competition. Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams Understand other pricing issues such as discounts and allowances, geographic pricing strategies, special pricing strategies 2.Market Entry Strategies Market skimming strategy means to set a high initial price for new products to realize numerous benefits including quick profits and payoffs of coasts and the perception of quality in customers minds. Market penetration strategy is setting a low initial price in order to capture a large portion of the market share through rapidly increasing sales. 3.Discounts, Allowances, and Special Pricing Strategies Quantity discounts, trade discounts, cash discounts, rebates, price customization, seasonal discount, and promotional allowances One price strategy: flat rate pricing and single price strategy Variable price strategy Price lining, odd pricing, leader pricing, high-low pricing, everyday-low pricing, and resale price maintenance 4. Geographic Pricing strategies : the consideration of costs of shipping goods to the buyer Point of production pricing, uniform delivered pricing, zone delivered pricing, freight-absorptions pricing

28 LESSON PLAN Part 5: Distribution

29 Lesson 13: Channels of Distribution (Textbook Chapter 14) Time Allocation: 3 hrs Learning Brief Contents Objectives To enable students to Explain the nature and importance of middlemen in the distribution channel Explain the sequence of decisions involved in designing a channel; the major channels for goods and services Understand the specific channels issues such as vertical marketing systems, conflict and control within channels, and legal consideratio ns in channels. 1. The Importance of Middlemen: What are middlemen: A middleman is a business firm that renders services related directly to the sale and/ore purchase of a product as it flows from producer to consumer. There are two types of middlemen, merchant middlemen and agent middlemen. Middlemen perform activities to serve both producers (as sales specialists) and customers (as purchasing agents) What is a distribution channel: A channel of distribution consists of the set of people and firms involved in the transfer of title to a product as it moves from producer to ultimate or business user. Designing distribution channels: There are four steps involved: specify the role of distribution in the marketing mix, select the type of channel (direct vs. indirect distribution), determine the intensity of distribution, and choose specific channel members. 2. Vertical Marketing systems: Corporate VMS: Coordination and control is maintained through common ownerships among the various channel members. Contractual VMS: Coordination and control is maintained through contractual VMS among channel members Administered VMS: Coordination and Control is maintained through economic power of one of the c channel members 3. Channel Conflict and Legal Considerations: Horizontal and Vertical conflict Channel power and channel control Tying contracts, exclusive dealing, refusal to deal, and exclusive-territory policy Channel relationships and partnerships Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams

30 Lesson 14: Retailing (Textbook Chapter 15) Time allocation: 3 hrs Learning Brief Contents Objectives To enable students to Explain the nature and importance of retailing Explain the types of retailers classified by form of ownership, marketing strategies, and physical facilities Understand the types of nonstore retailers 1. The Nature and Importance of Retailing: Nature: Retailers are firms engaged primarily in the sale of goods and services to ultimate consumers. Importance: Retailers perform major functions for both producers and wholesalers and ultimate consumers. 2. Retailers classified by physical facilities: size. Location, layout, design Shopping centers, regional centers, and power centers 3. Retailers classified by ownership: Corporate chains, independent stores, and contractual vertical marketing systems (retailer cooperatives, wholesaler sponsored voluntary chains, and franchise systems) 4.Retailers classified by marketing strategies such as product assortment, price, and services rendered Department stores, discount stores, limited-line stores, supermarkets, convenience stores, warehouse clubs Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams 5. Nonstore retailing is using means other than physical stores and shops to sell goods to ultimate consumers Online retailing, direct selling, telemarketing, direct marketing, and automatic vending

31 Lesson 15: Wholesaling and Physical Distribution Time Allocation: 3 hrs Learning Brief Contents Objectives To enable students to Explain the nature and importance of wholesalers Explain the role of wholesalers and he three categories of wholesaling middlemen Understand the nature and purpose of physical distribution and the systems approach The five subsystems within physical distribution 1. WHolesalers: Wholesalers: Wholesaling middlemen are firms engaged primarily in the sale of goods and services to business users. Importance of wholesalers: Provide distribution activities to aid both producers and retailers. Types of wholesalers: Merchant wholesalers including full service wholesalers, truck jobbers, and drop shippers Agent wholesaling middlemen including manufacturers agents and brokers] Manufactures sales facilities including branches and offices 2. Physical Distribution: What it is: All activities involved in moving the right amount of the right products to the right place t the right time A systems approach: Supply chain management represents a total system perspective of distribution combining distribution channels and physical distribution Benefits: Improved customer service, reduced distribution costs, creation of time and place utilities, stable prices, influence over channel decisions, and controlled shipping costs Tasks: order processing, inventory control, inventory location and warehousing, materials handling, and transportation Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams

32 Lesson Plan Part 6: Promotion

33 Lesson 16: Integrated Marketing Communications (Textbook Chapter 17) Time allocation: 1.5 hrs Learning Brief Contents Objectives To enable students to Understand the role of promotion and the different forms it can take Explain the concept of integrated marketing communications and how it relates to promotion I. The role of promotion in marketing. Promotion and marketing The roles of promotion are to inform, persuade, and remind current and prospective customers and other audiences about a company and its products. II. Promotion methods. Personal selling, Advertising, Sales promotion, Public relations Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams Understand the key considerations of a promotion mix and alternative promotion budgeting methods III. Integrated marketing communications (IMC) a strategic business process used to plan, develop, execute, and evaluate coordinated communication with an organization s publics. An audience perspective anticipating when a target audience will be exposed to company, product, or brand information and utilizing multiple promotion methods in a coordinated way to communicate the appropriate message. IMC elements. 1. An awareness of the target audience s information sources, media habits, preferences. 2. An understanding of what the audience knows and believes that relates to the desired response.

34 3. The use of multiple promotional tools, each having specific objectives, but all linked to a common goal. 4. Coordination of all promotional tools to create a continuous flow of information adapted to an audience s information needs. Implementing IMC - IMC embraces the entire promotional program. Evaluating IMC processes and results; most effective when measures are taken before and after; typical promotion objectives for evaluation: 1. Company or brand awareness. 2. Product or brand interest. 3. Purchase-related action. IV. The communication process and promotion. Communication the verbal or nonverbal transmission of information between someone wanting to express an idea and someone else expected or expecting to get the idea. Four elements of communication a message, a message source, a communication channel, and a receiver. Elements of the communication process: Encoding the message, Message channel, Decoding the message, Message as received,

35 Response to message, Feedback to sender. V. Determining the promotional mix an organization s combination of personal selling, advertising, sales promotion, and public relations. Target audience - Push and Pull strategies. Promotion objectives determined by which stage of the hierarchy of effects the target is found. Awareness, Knowledge, Liking, Preference, Conviction, Purchase Nature of the product. Unit value, Degree of customization, Presale and postsale service Stage in the product life cycle early and late in the PLC, advertising is used to create awareness and to remind, respectively; in the middle stages of the PLC, more personal selling may be necessary to offset competition. Funds available amount of money available for promotion is the ultimate determinant of the promotion mix. VI. The promotion budget. Promotional budgets are difficult to determine since: 1. Management may lack standards for determining how much to spend altogether and how much to spend on specific activities. 2. It is difficult to assess the results of

36 promotional expenditures. Percentage of sales method budget is determined as a percentage of past or anticipated sales. All-available-funds method usually employed by new companies who have only limited funds to devote to promotion; a different method is used after a few years. Follow-competition method the firm matches the promotional expenditures of competitors on some proportional level. Task or objective method firm decides what objectives the promotional program should achieve and the tasks necessary to do so, and then determines the expenditures required

37 Lesson 17: Personal Selling (Textbook Chapter 18) Time allocation: 1.5 hrs Learning Brief Contents Objectives To enable students to Understand the role of personal selling in the promotional program and when a firm is likely to utilize personal selling Explain the forms of personal selling and the variety of selling jobs as well as the personal selling process Understand the key development s in how personal selling is performed I. The nature of personal selling. Personal selling the personal communication of information to persuade someone to buy something. Types of personal selling. 1. Inside selling 2. Outside selling The professional sales person sales stereotypes of high pressure, false friendship, glibness, and price-cutting order chasers are largely outdated; women II. Changing patterns in personal selling. Selling centers or team selling a group of people representing various departments in an organization (sales, finance, R&D, etc.) who participate in the selling process; expensive and used only when there is potential for high profits and sales volume. Systems selling selling a total package of related goods and services to solve a customer s problems; a major step beyond selling individual products separately. Global sales teams responsible for all sales to accounts anywhere in the world; located in offices or distribution centers in foreign locations near important customers. Relationship selling involves developing mutually beneficial relationships built on trust Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams

38 with selected (usually large) customers over time; trust is developed through: Telemarketing the innovative use of telecommunications equipment and systems in selling. Internet selling most sales of these types are not considered personal; however, the impersonal nature speeds up purchasing and reduces frequency of errors; used for both consumer and business-to-business markets. Sales-force automation equipping sales people with laptops, cell phones, fax machines, and pagers to give them access to databases, the Internet, e- mail and other information and communication tools. Implementing sales-force automation involves several challenges: III. The personal selling process. Prospecting an application of market segmentation. Pre-approach to individual prospects learning all possible about prospects, consumer or business their buying processes, preferences, needs, habits, etc. Presenting the sales message. 1. Attract attention The approach. 2. Hold interest and arouse desire 3. Meet objections and close the sale. 4. Postsale services selling does not end when the order is taken.

39 After-sale service is also needed. IV. Strategic sales-force management. Planning, implementation, evaluation. Sales managers. V. Staffing and operating a sales force. Recruitment and selection. 1. Determining hiring specifications. 2. Recruiting applicants. 3. Matching applicants with hiring specifications. Assimilating new sales people integrating new persons into the company family; often overlooked, which may lead to discouragement and turnover. Training a sales force needed for both new as well as experienced sales personnel. Motivating a sales force a high degree of motivation is required to be in sales; management must determine which incentives are motivational for which people under what circumstances. 1. Financial incentives 2. Non-financial rewards 3. Sales meetings and contests. Compensating a sales force. 1. Straight salary. 2. Straight commission. 3. Combination plan Supervising a sales force helps ensure policies are being carried out, creates two- way communication between management and sales people, but may be difficult due to the nature of the sales job; field

40 observation may overcome this. VI. Evaluating a sales person s performance provides the necessary information to offer rewards or make constructive proposals, make effective training programs, determine salary decisions. Quantitative measures specific and objective. Qualitative Measures based on and limited by the subjective judgment of evaluators (i.e., knowledge of product, time management, quality of reports, customer relations, and personal appearance).

41 Lesson 18: Advertising, Sales Promotion, and Public Relations (Textbook Chapter 19) Time allocation: 1.5 hrs Learning Brief Contents Objectives To enable students to Understand the nature and scope of advertising, sales promotion, and public relations Explain the characteristi cs of the major types of mass communicati ng tools: how are advertising campaigns developed and advertising media selected; and the alternative ways to advertise Understand how sales promotion and public relations are managed to maximize their effectivenes s I. Nature and scope of advertising. Advertising consists of all the activities involved in presenting through the media a nonpersonal, sponsor-identified, paid-for message about a product or organization. Types of advertising. 1. The target: consumer or business. 2. The type of demand: primary or selective. The message: product or institutional. 1. Product advertising Directaction advertising and Indirect-action advertising 2. Institutional advertising focuses on a business to capture favorable attitudes and goodwill. 3. The source: commercial or social - Word-of-mouth and On the Internet. II. Developing an advertising campaign all the tasks involved in transforming a theme into a coordinated advertising program to accomplish specific goals for a product or brand. Defining objectives. Establishing a budget. 1. Cooperative advertising promotes products of two or more firms that share the advertising cost. Creating a message Attention and Influence Selecting media. 1. Successive levels of decision making. 2. Factors influencing Teaching/ Learning Strategies Lecture Teaching Aids/ Materials Powerpoint presentation or transparencies for overhead projector Evaluation Questioning and answering questions in class. Quiz and Exams

42 media choice. 3. Media characteristics. a. Television. b. Newspapers. c. Direct mail. d. Radio. e. Yellow pages. f. Magazines. g. Out-of-home advertising. h. Interactive media. Evaluating the advertising effort. 1. Difficulty of evaluation. 2. Methods used to measure effectiveness - Direct tests and Indirect tests. III. Organizing for advertising. Internal departments may provide all or some of the necessary advertising functions and tasks, or may provide overall direction to outside agencies. Advertising agencies independent companies that render specialized services in advertising and marketing; spreads costs over many accounts and may offer a wide range of marketing services in addition to advertising services. Inside department and outside agencies combination approach. IV. Sales promotion demandstimulating devices designed to supplement advertising and facilitate personal selling; examples include coupons, displays, premiums, trades shows, etc.; may be conducted by producers or middlemen, while targets may be middlemen, end users, or the sales force. Nature and scope of sales promotion.

43 1. Two categories of sales promotion. a. Trade promotion. b. Consumer promotions. 2. Factors determining the use of sales promotion. a. Objectives and results are short-term. b. Competitors are employing sales promotions. c. Buyers expectations. d. Retail salesmanship quality is low. 3. Determining objectives and strategies stimulate demand, improve middlemen or sales force performance, supplement and facilitate forms of promotion. 4. Determining budgets sales promotions must have their own separate budgets. 5. Directing the sales promotion effort may be done internally or externally. a. Promotional services agencies b. Promotional marketing agency 6. Selecting the appropriate techniques is influenced by the nature of target audience, the nature of the product, the cost of the device, and current economic conditions. a. Sampling b. Couponing c. Sponsorships and events marketing d. Trade shows e. Product placements V. Public Relations designed to build or maintain a favorable image