© 2012 McGraw-Hill Ryerson Ltd.Products and BrandsCh.docx

© 2012 McGraw-Hill Ryerson Ltd.
Products and Brands
Chapter
7
Learning Objectives
Distinguish between goods and services
Describe and apply the total product concept
Differentiate between products, product lines, and product
mixes
Indentify the ways consumer and business goods and services
are classified
Explain the elements of branding and how these can be
protected
Distinguish between the different types of brands that exist in
the market
Apply product and brand knowledge to ongoing marketing
strategies
*
Product Levels

*
LO 2
Product
*
LO 1
Product
Tangible attributesPhysical characteristics
Intangible attributesAttributes that can’t be touched
*
LO 1
Product
*
The essence of marketing lies in managing and developing
products that meet the needs of a target market
LO 1
Three Categories of Product
*

LO 1
ServicesDifferentiate from competitionAdd value
*
LO 1
Products
*
Pure Service
Pure Product
LO 1
e.g. “Hiring a housepainter”
?
?
The Uniqueness of Services
IntangibilityCan’t be touched, held or seen, so…Must
demonstrate the benefits of using the service
InconsistencyQuality is inconsistentDependent on service
provider
InseparabilityService provider cannot be separated from service
InventoryFluctuating demand; perishabilityResults in idle
production capacity
*
LO 1

Total Product Concept
*
LO 2
http://www.frederiksamuel.com
How do these advertisements communicate the CORE or
BENEFITS of these products?
*
http://www.frederiksamuel.com
*
1936
1955
Let’s see how the promotion of luggage has changed in the last
75 years.
Back in the mid-century … features were most often promoted.

What are the features here?
*
1965
1950’s
The 1960’s saw the rise in benefit-driven advertising.
What’s the core BENEFIT shown in this ad on the right?
*
By the 1990’s and 2000’s, core BENEFIT and SELF-
ACTUALIZATION was on the advertising radar.
*
Louis Vuitton
By the 2010’s, we see the product as a backdrop to a desired
lifestyle and its benefits.
*
Prada

*
Samsonite Black Label
Even though these Samsonite products have many exciting
technical features … you can see how the ads speak to
BENEFITS, not the features.
Where would a customer find out about the features?
*
Packaging and LabellingIntegrated part of productDifferentiates
from competitionReflects product positioning, brand equity, and
image.
*
LO 2
http://pzrservices.typepad.com/vintageadvertising/2010/03/vinta
ge-ad-for-tang-orange-drink.html
http://designkultur.wordpress.com/2010/05/15/food-
%C2%ABsushi-popper%C2%BB-space-station-good/
Can a Redesign Revive Tang's Once-Starry Brand?
*

Can a Redesign Revive Tang's Once-Starry Brand?
It was the unofficial drink of the Space Age. But stateside, it
lost its starry cachet over the years, hidden in the powdered-
drink aisle by the Kool-Aid Man and Crystal Light, its brand
recognition reduced to this: In 2006, terrorists plotted to blow
up a trans-Atlantic fight with homemade bombs made, in part,
of Tang.
Now, a private equity firm is considering acquiring Tang and
has hired Chicago-based Streng Design to give the juice a
radical makeover. Their concept rests on recapturing
consumers’ strongest association with the brand and infusing it
with a new sense of delight. Naturally, they’re going with a
space theme. And it is awesome.
The designers see Tang’s fundamental customer as parents in
their 20s and 30s -- the hip, design-minded sort who maybe
shop at Whole Foods and clean their sink with Method. “We
didn’t want to pander the way you do with Lucky Charms or
other sugary cereal, with the kid in the cart seeing the bright
box and saying, ‘Mom, mom! I want that!’” says Daniel Streng,
who co-founded Streng Design with his brother Christopher.
“We wanted large even blocks on the shelf and a simple
aesthetic that gives consumers immediate recognition and
comfort.”
Developed by William Mitchell (who also invented Pop Rocks)
in the 1950s for General Foods, Tang’s now owned by Kraft
Foods, which has more or less neglected the tart drink mix in
the United States over the past couple decades (though oddly
not abroad, but more on that later). Its amateurish packaging
has reflected as much; with giddy text thrown every which way,
it looked like it hadn’t been redesigned since the late 1980s.
Thankfully, that could change.

The new packaging is retro with a twist. It’s got a boot print
under the catchphrase “one giant leap,” as if the mix itself were
moon dust. (And the print is echoed on the lid.) The bright
orange canister is minimally adorned, and it's a rounded
rectangle instead of a tube for better visibility on the shelf. A
scoop inside is designed like a rover.
The imagery is repeated in single-serve packets made to
resemble Pixy Stix.
Tang, for the record, never made it to the moon. At least not to
Buzz Aldrin’s knowledge. But that’s not the point. The point is
that testing -- and there was loads of it, the client being a
private equity firm -- showed that people identify Tang with
outer space more than anything else. And since the moon
mission is the zenith of the American space program, it emerged
as the obvious choice for a logo -- which the product
desperately needed. (When asked to cite Tang’s existing mascot,
subjects’ answers varied wildly from polar bears, toucans, and
monkeys to flamingos and astronauts.)
It’s also worth noting that the selection of iconography is
obviously aimed at U.S. consumers. Tang is hugely popular in
second and third world countries, because it provides Vitamin C
at a low cost, something Kraft has deftly exploited. But to
appeal to the U.S. market, it needs a different and distinctly
American image.
The question now, is whether the private equity group, which
Streng declined to name, goes through with the deal. “We’ve
really identified a way to to take all these things we talk about
in design thinking, and we’ve illustrated to a business how that
provides value,” Streng says. “If they don’t end up acquiring
Tang, I’m happy to go back and do this for Kraft directly.”
[Images courtesy of Streng Design]
http://www.fastcodesign.com/1662413/can-a-redesign-revive-
tangs-once-starry-brand

http://en.wikipedia.org/wiki/Tang_(drink)
*
*
*
*

*
*
Think of how Packaging adds value
*
Managing Products
Often groups of products that are closely related are managed
together
*
LO 3

Managing Products
Product line is part of product mix
*
LO 3
Managing Products
*
Width
Depth
Product Mix
LO 3
Managing Products
*
LO 2
Classification of Products
*
LO 4
Consumer Products
Business Products

Consumer Products
*
Convenience Products
Shopping Products
Specialty Products
Unsought Products
** The classification of a good is dependent on the consumer
LO 4
Consumer Products and the related strategy
*
LO 4
Branding
BrandName, associated brand marks
Brand equityBrand plus marketing efforts
that results in consumer loyalty
*
LO 5
™
Brand Equity
Achieved through marketing investment
Important to protect brand equity:PatentsCopyrightsTrademarks
*
LO 5

©
®
Brand Loyalty
*
Brand
Loyalty
LO 5
Brand
Brand choice is influenced by brand personalityPepsi =
youthful, excitingDr. Pepper = nonconforming, unique and fun!
Brand Name should: Suggest the product benefitsMemorable,
distinctive, and positiveFit the company or product imageHave
no legal or regulatory restrictionsSimple
*
LO 5
Remember spelling, secondary meanings & pronunciation
around the world
Miele
Hyundai
FNAC
Renault
CocaCola
sappi

Pschitt
Gratte
Krapp’s
Federal Express
Enteron
Pequod
Ishibashi
M-Brace
Sony
Silver Mist
YKK
*
Important for direct Internet searches
Sappi – is a brand name for fine paper
CocaCola – spells phonetically in other alphabets for many
languages
Pschitt – Italian soda
Krapp’s – Norwegian toilet paper
Federal Express – changed to FedEx due to latin negative
connotation with “los federales”
Enteron – became Enron after they realized “enteron” was the
medical name for “entrails”
Pequod – boat in Moby Dick; then suggested Starbos, the name
of an old mining camp on Mt Rainier; then owners suggested
Starbucks, the first mate on the Pequod
Ishibashi – translated into English as Stonebridge tires
Sony – trade on prefix “son” root of sound in many languages
and easy to pronouce brand
Silver Mist – was to be the name of a car, until mist = manure
in German
Nike – greek goddess of victory

Gratte
Pequod
*
The Concise and Correct Explanation of the Starbucks Naming
Myth
What was the inspiration for the naming of Starbucks Coffee? If
you look almost anywhere on the web, you will find statements
that explain Moby Dick was the founder's favorite novel, and in
it was a coffee-loving First Mate named Starbuck. Having
recently read Moby Dick, I knew this couldn't be correct: the
First Mate in Moby Dick is named Starbuck, but he is not a
(known) coffee lover. When I heard Susan Stamberg perpetuate
the myth on NPR, I knew it was time to take action.
So I searched the Starbucks web site, expecting to find the true
and official explanation. Surprisingly, there was nothing of the
sort. So I emailed Starbucks, asking for the explanation. They
did write back, but the response I received was incomplete.
However, it cited the book "Pour Your Heart into It : How
Starbucks Built a Company One Cup at a Time", by Howard
Schultz, who became Starbucks sole owner when he bought out
the three Starbucks founders, in 1987. That gave me the idea to
consult the book myself. Herewith, then, is my concise
explanation, gleaned from Schultz' book.
Moby Dick was indeed a book beloved of one of the Starbucks
founders. He proposed naming the company Pequod, after the
ship. "Pee-quod" was nixed by his partners, and they cast about
for a name with some local flavor (local to Seattle,
Washington). They came upon the name Starbo, from an old
mining camp on Mt. Rainier, and liked it. Then the Moby Dick
fan drew a phonetic connection between "Starbo" and the novel-
-the Pequod's First Mate named Starbuck. And Starbucks it was.
So it is not so hard to imagine how the urban legend might have
evolved. Known fact: the name of the company came from the
name of a mate in Moby Dick. Dim recollection from high

school: one of the mates in Moby Dick had an uncommon
passion for a substance of oral fixation (Stubb, not Starbuck;
for his pipe, not for coffee). Voila, the brain connects up a
plausible, internally consistent explanation; better than the
original, except that it isn't correct (1). Like many urban
legends, this one contains an element of truth. Unlike many, it
seems to me that it probably arose from an innocent "false
memory" (2), rather than a more deliberate perversion of fact.
Some classically difficult English words for an international
market (l, r, gh, ei, homonyms, etc.)
*
Ought – a killer
Silent “k” – distinctively English
ie vs ei
L’s and R’s – inversed in asian languages
“ou” in French = oo … Loud = lewd
Nova was renamed “Caribe” for hispanic market
Tough to spell into domain searches
Types of Brands
*
LO 6Manufacturer’s BrandJohnson & JohnsonPrivate Label
BrandLife BrandGeneric BrandDollar store brand

Types of Brands
*
LO 6Individual BrandYOPFamily BrandCREST
A Practical Look at Marketing Products & Brands
Marketers have a plan but…Must understand marketing
dynamicsBe able to assess the impactBe able to adjust plans
accordinglyConstantly changing process
Requires:
Analytical skills
Creativity
Strategic understanding of the brand
Strategic understanding of the competition
*
LO 7
*
*
Let’s see how the promotion of luggage has changed in the last
75 years.
Back in the mid-century … features were most often promoted.
What are the features here?
*
The 1960’s saw the rise in benefit-driven advertising.
What’s the core BENEFIT shown in this ad on the right?
*

By the 1990’s and 2000’s, core BENEFIT and SELF-
ACTUALIZATION was on the advertising radar.
*
*
*
Even though these Samsonite products have many exciting
technical features … you can see how the ads speak to
BENEFITS, not the features.
Where would a customer find out about the features?
*
*
*
*
*
*
*
*
*
Important for direct Internet searches
Sappi – is a brand name for fine paper
CocaCola – spells phonetically in other alphabets for many
languages
Pschitt – Italian soda
Krapp’s – Norwegian toilet paper
Federal Express – changed to FedEx due to latin negative

connotation with “los federales”
Enteron – became Enron after they realized “enteron” was the
medical name for “entrails”
Pequod – boat in Moby Dick; then suggested Starbos, the name
of an old mining camp on Mt Rainier; then owners suggested
Starbucks, the first mate on the Pequod
Ishibashi – translated into English as Stonebridge tires
Sony – trade on prefix “son” root of sound in many languages
and easy to pronouce brand
Silver Mist – was to be the name of a car, until mist = manure
in German
Nike – greek goddess of victory
*
The Concise and Correct Explanation of the Starbucks Naming
Myth
What was the inspiration for the naming of Starbucks Coffee? If
you look almost anywhere on the web, you will find statements
that explain Moby Dick was the founder's favorite novel, and in
it was a coffee-loving First Mate named Starbuck. Having
recently read Moby Dick, I knew this couldn't be correct: the
First Mate in Moby Dick is named Starbuck, but he is not a
(known) coffee lover. When I heard Susan Stamberg perpetuate
the myth on NPR, I knew it was time to take action.
So I searched the Starbucks web site, expecting to find the true
and official explanation. Surprisingly, there was nothing of the
sort. So I emailed Starbucks, asking for the explanation. They
did write back, but the response I received was incomplete.
However, it cited the book "Pour Your Heart into It : How
Starbucks Built a Company One Cup at a Time", by Howard
Schultz, who became Starbucks sole owner when he bought out
the three Starbucks founders, in 1987. That gave me the idea to
consult the book myself. Herewith, then, is my concise
explanation, gleaned from Schultz' book.
Moby Dick was indeed a book beloved of one of the Starbucks
founders. He proposed naming the company Pequod, after the

ship. "Pee-quod" was nixed by his partners, and they cast about
for a name with some local flavor (local to Seattle,
Washington). They came upon the name Starbo, from an old
mining camp on Mt. Rainier, and liked it. Then the Moby Dick
fan drew a phonetic connection between "Starbo" and the novel-
-the Pequod's First Mate named Starbuck. And Starbucks it was.
So it is not so hard to imagine how the urban legend might have
evolved. Known fact: the name of the company came from the
name of a mate in Moby Dick. Dim recollection from high
school: one of the mates in Moby Dick had an uncommon
passion for a substance of oral fixation (Stubb, not Starbuck;
for his pipe, not for coffee). Voila, the brain connects up a
plausible, internally consistent explanation; better than the
original, except that it isn't correct (1). Like many urban
legends, this one contains an element of truth. Unlike many, it
seems to me that it probably arose from an innocent "false
memory" (2), rather than a more deliberate perversion of fact.
*
Ought – a killer
Silent “k” – distinctively English
ie vs ei
L’s and R’s – inversed in asian languages
“ou” in French = oo … Loud = lewd
Nova was renamed “Caribe” for hispanic market
Tough to spell into domain searches
Consumer Behaviour
Chapter
3

Copyright 2009, McGraw-Hill Ryerson
*
Learning ObjectivesDescribe the stages in the consumer
decision processDistinguish among three variations of the
consumer decision process: routine, limited, and extended
problem solvingDescribe how situational influences affect the
consumer purchase decision processExplain how psychological
influences affect consumer behaviour, particularly consumer
purchase decision processesIdentify major socio-cultural
influences on consumer behaviour and their effects on purchase
decisionsDiscuss the importance of culture and subculture in
determining consumer behaviour
*
Influences on Consumers’ Purchase Decisions
*
Consumer Purchase Decision Process
What lies behind the purchase
*
LO 1

Problem Recognition
Realization that a big enough difference exists between:
What one has, and
*What one would like to have
LO 1
Information Search
*
LO 1
Marketer-Dominated Sources
Personal Sources
Public Sources
Internal
External
Alternative Evaluation
Evaluative criteriaObjective attributesSubjective attributes
Marketers try to identify the evaluative criteria and include
them in the marketing mix to create customer value
*
LO 1

Purchase Decision
Three DecisionsThe chosen brandFrom whomWhen
*
LO 1
Technology has had an effect on all stages of the Consumer
Purchase Decision Process
Post-Purchase DecisionConsumers’ comparison of purchase to
expectationsImportant to be sensitive to consumers’
consumption behaviourResolving customer issues can avoid
their complaints on the internet and in social mediaGood
customer support/help availableHelp them avoid cognitive
dissonance
*
LO 1
Post-Purchase Decision
*
thers

LO 1
Involvement & Problem-Solving Variation
*
LO 2
Influences Level of
Purchase Involvement
Level of Personal?
Social?
Economic?
Problem-Solving Variations
*
LO 2
Influences on the Consumer Purchase Decision Process
*
LO 3
The Purchase Decision Process
Women: “How do most young men in this class decide to buy a

new pair of dress shoes?”
Men: “How do most young women in this class decide to buy a
new pair of dress shoes?”
In-class exercise:
Men vs. women
Map out the decision-making process of the opposite sex for
dress shoes.
Discuss process, results, accuracy.
*
Psychological Influences on Consumer Behaviour
*
LO 4
Motivation
Values, Beliefs, Attitudes
Lifestyle
Personality
Learning
Perception
Psychological Influences
Motivation
Motivation is the energizing force that stimulates behaviour to
satisfy a need.
*

LO 4
Motivation
*
LO 4
Maslow’s Hierarchy of Needs (tweaked)
Source: http://markarayner.com/blog/archives/3616
Many different models of human motivation.
There have been criticisms of Maslow, saying it’s too Western
and individualistic:
http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs
Still lots of supporters.
Students will study other models in their 4 years at MRU.
*
Personality
Personality characteristics are often revealed in self-
concept:The way people see themselvesThey way they believe
others see themMen are becoming more concerned with body
image and grooming
*
LO 4

PerceptionSelective perceptionSelective exposureSelective
comprehensionSelective retention
*
Helps to create a meaningful picture of the world
LO 4
PerceptionPerception creates perceived riskPerceived risk
affects information searchMarketers can reduce perceived risk
*
LO 4
LearningLearning is a continual process for
consumersBehaviours evolve as a response to repeated
experience and reasoningFor example:
which sources to use for information
which evaluative criteria to use
how to make purchase decisions
*
LO 4
Behavioural LearningDeveloping automatic responses from
repeated exposure to a situationFour variables:
A drive

A cue
A response
Reinforcement
*
red can
LO 4
Behavioural Learning
*
Hungry
Billboard
“Tastes great!”
Buy a burger
LO 4
*
“I feel sick!”
LO 4
*

iPod®
iPhone®
iTouch®
Stimulus Generalization
Launch new products with common
brand names
LO 4
*
Stimulus Discrimination
Automobiles
Consumers’ ability to perceive differences between similar
products
High-involvement purchase
LO 4
Cognitive LearningLearning through thinking, reasoning, and
mental problem-solving
*
LO 4
Brand LoyaltyPositive reinforcement repeatedly creates habit
*
LO 4

Values, Beliefs and Attitudes
*
Personal values
Beliefs
Favourable or unfavourable attitudes
LO 4
Attitude ChangeChanging beliefs about the extent to which a
brand has certain attributesChanging the perceived importance
of attributesAdding new attributes to the product
*
LO 4
Lifestyle
*
Activities, interests, and opinions
LO 4

*
LO 4
Sociocultural Influences on Consumer Behaviour
*
Personal
Socio-cultural Influences
Culture
Family
Subculture
Reference groups
LO 5
Personal Influence
Purchases are often influenced by:Opinion leadersWord of
mouth
*
LO 5
Opinion Leadership
The challenge:Identify the opinion leadersReach the opinion
leadersInfluence the opinion leaders
*
LO 5

Word of MouthBuzz marketingViral marketing
*
LO 5
Reference Groups
*
Membership Groups
Dissociative Groups
Aspiration Groups
Reference Groups
LO 5
Reference Groups and Opinion Leaders
People act differently in groups than they do on their
ownReference groupConformity (group pressure)Sex roles
Opinion leadersPeer influencers & the Internet
Who do you ask for advice before making a purchase or
decision?
Which websites do you visit for which kinds of products?
Do celebrities influence your decisions?
*

Family InfluencesConsumer socializationFamily
lifecycleFamily decision-making
*
LO 5
SubcultureThe most prominent subcultures are often racial or
ethnic
*
LO 6
CanadaA nation of many faces, as ethnic groups continue their
many unique traditions, languages, and values
*
LO 6
Canadian SubcultureFrench-Canadian: 30% of
populationChinese-Canadian: 3.5% of population
*
Very different consumer behaviour which may result in ethnic-
specific marketing programs
LO 6

Global Cultural DiversityGlobal marketing requires cross-
cultural analysis
*
LO 6
Global Marketing Success
*A thorough cross-cultural analysis will force an understanding
of the country’s:
Values
Customs
Symbols
Language
LO 6
Marketing & People
*
Learning ObjectivesExplain market segmentation and its
relevance to marketingDescribe and differentiate among the
different forms of market segmentationOutline the steps
involved in segmenting a marketCreate a target market

profilePosition a product in the market and develop a
positioning map
*
Segmentation and Targeting
Chapter
6
*
Segmentation and Targeting
*
LO 1
Market SegmentationA single product cannot satisfy
everyoneFocus on the consumers most likely to purchaseA
market segment is a “piece of the market”Aggregating
prospective buyers into groups that share common needs and
respond similarly to marketing programsCompetition for
segments leads to product differentiationTwo main market
segments
Consumer markets
Business markets

*
LO 1
“You cannot try to be all things, to all people …”
“… because you end up satisfying none.”
Imagine trying to market a running shoe that appealed to
basketball stars, grandmothers, teen girls, and skateboarders!
You would make so many compromises, trying to bring
something to market that wouldn’t OFFEND anyone … that’d
you’d likely have something that interested NONE of them.
Entrepreneurs and marketers need to organize the marketplace
into groups of people that are likely to want their good, service
or idea.
These groups are called “segments.”
Just think of them as slices of the overall marketplace.
Later, this helps entrepreneurs and marketers to FOCUS their
efforts one one or two very interested groups of people.
It doesn’t mean that if you’re focused on “male surfers between
the ages of 18-25, who eat large portions of food, have a
moderate income and love to support local businesses” … that
you won’t let businessmen and women in your restaurant. It just
means you’ve designed and/or positioned your restaurants to
appeal to your chosen market segment. More about that later
*
Forms of Market SegmentationMass MarketingSegment

MarketingNiche MarketingIndividualized Marketing
*
LO 2
Mass Marketing
Rarely seen todayCompetitiveness of the marketNeed to
specifically address consumer needs
*
LO 2
Segment MarketingMost common form of segmentation
followed by large companiesMeeting the needs of target groups
(chosen segments) with specific products and marketing
programs
*
LO 2
Niche MarketingConcentrate on a smaller area to be
successfulKashi targets ‘health enthusiasts’
*
LO 2
Individualized MarketingThrough the use of sophisticated
tracking and statistical models, behaviour is predictedIndividual

offers are developedProduct selection and products can be
customized
*
LO 2
The Evolution of Segmentation
Segmentation divides the larger potential market into smaller
pieces, or slices
A Market Niche is a small segment
Market Fragmentation: today, due to changes in media, the
Internet, and brand proliferation, there are MANY different and
very small consumer segments with distinct needs and wants
VIDEO: http://www.youtube.com/watch?v=ciSrNc1v17M
Market fragmentation:Explosion in number of channels,

therefore not a common brand/advertising experience in a
familyTurning to customizable websites for entertainment
and/or watching video on demandExplosion in number of
brands, features, versions, options … even “mass
customization” for some products that individuals can
customize
*
10 Steps In Market Segmentation
*
LO 3
Target Market Profiles
Created by
considering:GeographicsDemographicsPsychographicsBehaviou
ristics
*
LO 4
*
LO 4
How did you "segment” in high school?

Glee photo source:
http://www.fanpop.com/spots/glee/images/8088197/title/glee-
wallpaper-wallpaper
What groups or segments of teens were there in your high
school? What did you call segments in high school? (cliques?
Or?)
What “factors” did you use to organize them into “virtual
groups”? (what kinds of things did they have in common)
Could a student be in more than one group?
How about teachers? Where they segmented too? If so, how?
Let’s organize those high school “factors” into traditional
segmentation factors that marketers use:
Geographic
Demographic
Behavioural/Benefits
Psychographic/Lifestyle
*
Market Segmentation Factors
(Start with one category, and add another.)
e.g. “T2P”
Usage & Commitment
Demographics

Psychographics
Geographics
Benefits
Heavy Users
Age
(Lifestyle)
Country
Reliability
Non-Users
Gender
Activities
Region
Speed
Brand-loyal Users
Marital Status
Interests
Province/State
Glamour
Switchers/Variety Seekers
Income
Opinions
City/Rural
Luxury
Emergent Customers
Education
Personality
Neighbourhood
Comfort
Stage in Adoption
Occupation
Prestige
80/20 Principle
Ethnicity
Safety
Religion
Affordability

Family Life-cycle
Etc.
Etc.
Climate
Behaviour
Geodemographics
*
These are the 4 most common categories of Market
Segmentation Factors.
Sometimes you’ll see Geographics added into Demographics.
Other textbooks will tell you that Benefits and Usage are
separate categories.
But these 4 are the most common.
Here’s a way to remember them: “The 4 O’s” (Geo, Demo,
Behavo, Psycho)
You would do MARKET RESEARCH to find out this
information and decide on your segments.
Together, let’s use these factors describe a couple of possible
segments featured here
Which Segmentation Factor/Category would you start with?
Why?
1) Young Oil Rig Working Men
2) Active Senior Women
3) Social Second-Generation Grads

All variables must be considered in the creation of the profile
The profile forms the basis of all aspects of the marketing
program
*
LO 4
Product PositioningProduct imageTarget Audience’s
mindRelative to competition
Positioning Statements include:
Product name
Category in which product competes
Why target buys the product
What sets product apart
“simple, clear and focused”
*
LO 5
Repositioning
As a result of changing consumer trends
McDonald’sPhysical changesMenu changesProduct
additionsCommunication changes
*
LO 5

Repositioning
*
LO 5
Positioning Maps
*
LO 5
Positioning MapsAlso known as Perceptual MapsTwo most
important attributes of your product that drive target group
purchases in the categoryMaps result in a visualization of
opportunities and threats
*
In Practice:
Positioning drives the coordination of the marketing mix to
meet targets’ expectations
LO 5
Developing a marketing strategy aimed at influencing how a
particular market segment (Target Market) perceives a
good/service in comparison to the competition Brand
conceptBrand image
Positioning

What WORDS would you use to describe the competitive
POSITIONING of these coffee products?
*
Positioning
x
y
a
b
Let’s do a perceptual positioning map.
Any other coffee retailers you’d like to add?
*
Is this product consistent with the Starbucks brand positioning?
Would it be different in Europe?
*
Positioning

x
y
a
b
Shall we do a perceptual or factual positioning map for these
automotive brands?
Why?
*
Continuously innovateHide in a niche marketProtect by erecting
barriers:
Marketing expertise
Customer loyalty
Monopolization
Proprietary technology
Culture-based expertise
Legislation
Capital requirements
Ways to defend a positioning strategy:
Once you’ve staked out your product or brand’s unique
positioning … how do you stop copycats?
Remember, people don’t always choose the least expensive
product, they value other things.
Here’s a list of things you can do to protect your position.
Let’s think of products or brands that have done these things.
For example: Apple always innovates.
Who has a monopoly?

Etc. …
*
The Marketing Environment
What are some of the things we need to think about in The
Marketing Environment?
Let’s identify a few of the Marketing Environment trends,
issues or changes we see in this photo montage.
*
Module B – The Marketing Environment
TODAY: REVIEW & UpdatesBirds of a Feather groupsStudent
shares :-)Copy of book in Library this week (on order)Quizzes
up by end of today on Blackboard (in Lab)Assignment Part 1
posted, Part 2 up by next class
VIDEO REVIEW
The Marketing Mix (4 P’s, 4E’s)
Market Segmentation Variables (Target Market, the 4
O’s)Today: Chapter 2 (Marketing Environment)Review
Assignment Part 1 + CELEBRITIES & PRODUCT LINE(We
may start Chapter 4, if time)
The Marketing Environment

Chapter
2
*
Learning ObjectivesUnderstand the importance of a marketing
environment scan and how it is used to improve marketing
programsDescribe the elements of a marketing environmental
scan and summarize the trends affecting each elementOutline
the current demographic and socio-cultural influences that are
affecting marketing approachesExplain how changes in the
economic environment can influence consumer purchase
behaviourDiscuss the technological developments shaping
current marketing practicesDescribe the different forms of
competition and the regulatory forces that shape the marketing
industry
*
*
*
*
Marketing Environment
LO 2
*
*

The Marketing Environmental Scan:
The process of continually acquiring information on events
occurring outside an organization to identify trends,
opportunities, and threats to a business.
This ensures the organization’s goods, services and ideas are
relevant and meaningful.
*
*
Demographic ForcesStatistics CanadaCompanies can also do
research
LO 3
Source: http://www12.statcan.gc.ca/census-
recensement/2006/dp-pd/92-596/index.cfm?Lang=eng
*
*
Statistics Canada provides access to demographic information
Characteristics such as age, gender, ethnicity, income and
occupation of a group of people
Companies can also complete their own demographic research
*
*
Demographic Forces – Aging Population
People 50+ control 75% of Canadian household net worth
*2006 Census of Canada
LO 3Total Canadian Population*31.6 million100%Population
55-643.7 million11.7%Population 65+13.7%

*
*
*
*
Demographic Forces – Aging Population
LO 3
*
*
*
*
Demographic Forces – Diverse GenerationsBaby Boomers (1946
and 1964)Generation X (1965 and 1974)Generation Y (1975 and
1991)Generation Z (1992 and 2010)
LO 3
*
*
Baby Boomers
Born between 1946 and 1964

60% of consumer goods and service expenditures
Have redefined concept of aging: health focus
Growing social media use
Generation X
12% of the population
Different from Baby Boomers:
Not brand loyal, more self-reliant, entrepreneurial and educated
Less prone to materialism and extravagance
Generation Y
Children of Baby Boomers
Also referred to as “echo boom” or “millennials”
27.5% of the population
Music, technology and sports purchases
Generation Z
Grown up with the Internet
Very objective in purchases, not brand loyal
Discoverers and creators of online content
*
*
Demographic Forces – Ethnic Diversity
LO 3
*
*

*
Demographic Forces – Ethnic Diversity2/3 of Canada’s
population growth (2001-2006) from immigrationIn 2006, 6.2
million foreign-born people living in CanadaVisible minorities
make up 50% of population in large urban areas
*
LO 3
*
*
*
Demographic Forces – Big City DwellingIn more than 2006,
more than 80% of Canadians lived in urban areas and suburbs
LO 3
*
*
photo is of Hong Kong
*
*

Demographic Forces – Non-Traditional Families
Changes in family structure:Smaller familiesMore common-law
relationshipsSingle-parent familiesBlended familiesSame-sex
marriages
LO 3
*
*
*
*
Socio-Cultural ForcesMarketers monitor socio-cultural forces so
they can capitalize on new opportunitiesCan include shared
cultural values and beliefs
LO 3
*
*
Marketers monitor socio-cultural forces so they can capitalize
on new opportunities
These can be cultural values, ideas and attitudes that are learned
and shared among a group of people
Also includes society’s morals and beliefs, demonstrated
through common behaviour
*
*

Socio-Cultural ChangesMedia usageEthnic foodsHealth and
fitnessEnvironmental awarenessChanging gender roles
LO 3
*
*
*
*
Economic ForcesA change in the economy impacts a person’s
ability to purchase
LO 4
*
*
*
*
Macroeconomic Forces
State of a country’s economy as a wholeKey economic
indicators:
Inflation rate
Unemployment rate
Economic growth rate
Consumer confidence
Recession

LO 4
*
*
*
*
Microeconomic Forces
Consumer buying powerImpact on supply and demand of these
factors:
Inflation rate
Unemployment rate
Economic growth rate
Consumer confidence
Recession
LO 4
*
*
How this is impacted by individual, household and company
decisions to purchase based on:
Gross income
Disposable income
Discretionary income
*
*

Technological ForcesNew technologies are being introduced and
consumers are accepting these new tools at different rates
LO 5
http://www.kickstarter.com/projects/597507018/pebble-e-paper-
watch-for-iphone-and-android
*
*
New technologies are being introduced and consumers are
accepting these new tools
Canadians lead the world in tablet computer use (2011)
Only 10% of Canadians feel “lost” with technology (2010)
83% of people see high speed internet as a necessity
62% of Canadians are on a computer or smartphone while
watching TV
*
*
Technological AdvancesInternet and searchGlobal
communicationsDownloadingSocial MediaSmartphonesTablets
and eReaders
ManufacturingTransportation
LO 5
*
*
Internet and search engines
Email, text, and instant messaging
Social networking sites
Video sharing sites
Media Downloading

Blogs
Online TV
Cell phones
Tablets and eReaders
*
*
Competitive ForcesMarketers must monitor and analyze
competitive activity
LO 6
*
*
*
*
Competitive ForcesMarketers must understand the competitive
nature of their industry
LO 6
*
*
*

*
Regulatory ForcesA marketer must be aware of the regulations
that affect how they do business
protect consumers from unscrupulous business practices
encourage fair competition
legal and ethical guidelines for businesses
LO 6
*
*
*
*
Regulatory Groups in CanadaCompetition BureauAdvertising
Standards Canada (ASC)Canadian Radio & Television &
Telecommunications Commission (CRTC)Do Not Call List
(DNCL)Canadian Marketing Association (CMA)Better Business
Bureau (BBB)Legislation: spam, contests
LO 6
*
*
*
p. 52 Environmental Scan: Canadian Universities

http://youtu.be/GIWg8v2BeEQ
http://youtu.be/HH_PRdi87w4
p. 52 – Environmental Scan
A. FACTS?
B. MKTG IDEAS? 4P’s
Market Research
Chapter
4
Learning ObjectivesExplain the use and benefits of a marketing
information system and market researchOutline the importance
and challenges of market research to companiesDifferentiate
between exploratory, descriptive, and causal researchIdentify
the step-by-step market research approachList and describe the
primary research tools available to marketersDescribe the

advantages and disadvantages of primary research tools
*
Sklar, Wilton, and Associates (SW&A)
*
Market Research
“If the research we commission does not drive a decision or
avoid a mistake, then our job is not done. ”
- Luke Sklar, partner & founder, SW&A
Consumer Insights = Stimulating Ideas
*
Information for Marketing
Gathering correct information about your market is crucial for
business operationMarketing Information Systems (MIS)
procedures and processes for gathering data on an ongoing basis
Market Research Studies
studies to answer questions not answered by MIS
*
LO 1
Market ResearchGood market research can reduce risk and
uncertainty in decision-makingMarket research is not an easy

undertakingGoal: Obtain accura
decisionsTypes:
Exploratory
Descriptive
Causal
*
LO 2
Exploratory ResearchPreliminary researchPrecedes more
conclusive research
*
*
LO 3
http://youtu.be/y3IXprSddNc
http://www.understandingsociety.org.uk/
Descriptive ResearchGeneral understanding of the
problemConclusive data to answer particular questions
*
LO 3
Causal ResearchPreceded by descriptive and exploratory
researchExpectation about a cause-and-effect relationship to be
explained
*
LO 3

Six-Step Market Research Approach
*
LO 4
Step 1: Define the Problem/Issue/OpportunityPrecise definition
of the problem and a formal proposal defining the taskRequires
clarifying research objectives
*
LO 4
Step 2: Design the Research PlanDecide on collection
methodSelect a sampling plan
*
LO 4

Decide on collection method
*
Choose method to maximize accuracy of results
Collection Methods:In-depth personal interviewsFocus
groupsTelephone surveysMall interceptsOnline
questionnairesDirect mail surveys
LO 4
Sampling Samples should be representative of the
-
*
LO 4
Step 3: Conduct Exploratory Research
Clarify scope and nature of problemSecondary data
analysisFocus group researchIn-depth interviews
*
LO 4

Secondary Data
*
Internal Data
External Data
Secondary data first, then primary data
LO 4
Sources of Secondary Data
*
LO 4
Sources of Secondary Data
*
*
LO 4
Secondary Research Sources
GoogleGoogle SearchGoogle ImageGoogle VideoGoogle
BooksGoogle Scholar
NewspapersBusiness, Lifestyle, etc. sections
MagazinesBusiness, Hobbies, Lifestyle, etc.
Research Reports Private Research FirmsAcademic Papers and
ArticlesCensus data

Discuss library session …. purpose, location and date.
Let’s list all the kinds of research sources we’ve discussed so
far in this course where you can find information for marketers
to use.
Hint: “The Internet” is not a source!
Newspapers
Magazines (what kind?)
ETC. …
*
MRU LIBRARY
*
http://www.mtroyal.ca/Library/index.htm
Focus Group ResearchInformal interview sessionSmall
groupModerator
*
*
LO 4 & 5
In-Depth InterviewOne-on-on interviewsFree-flowing
conversation
*
LO 4 & 5

Online ResearchOnline Research CommunitiesOnline Research
Bulletin BoardsSocial Listening
*
LO 4 & 5
Step 4: Collect Quantitative Primary Research
*
LO 4, 5 & 6
*
Step 5: Compile, Analyze, and Interpret DataSynthesize and
simplify pages of data into actionable information
*
LO 4

Step 6: Generate Report and RecommendationsMarket data and
information has little value unless recommendations are
provided that lead to marketing actions
*
LO 4
Report WritingCorrectness: spelling, punctuation, grammar,
etc.Citations: in-text “breadcrumbs” that inform
readerReferences: end of document … why???
*
http://www.mtroyal.ca/Library/Research/CiteSources/index.htm
http://library.senecacollege.ca/Research_Help/Citing_Sources/a
pa_guide.html
requiredMar
top-of-mind
*

Marketing Information System (MIS)
A set of procedures and processes for collecting, sorting,
analyzing, and summarizing information on an ongoing basis
*
Market Research
Process of collecting and analyzing information in order to
recommend actions to improve marketing activities
*
Exploratory Research
Preliminary research conducted to clarify the scope and nature
of the marketing problem
*
Descriptive Research
Research designed to describe basic characteristics of a given
population or to clarify their usage and attitudes
*
Causal Research
Research designed to identify cause-and-effect relationships
among variables
*

Objectives
Specific, measurable goals
*
Sampling
The process of gathering data from a subset of the total
population rather than from all members of that particular
population
*
Secondary Data
Facts and figures that have already been recorded by a third
party
*
Primary Data
Facts or figures that are newly collected for a project
*
Focus Groups

A research technique where a small group of people (usually 6-
10) meet for a few hours with a trained moderator to discuss
predetermined areas
*
Marketing Fundamentals
Chapter
1
*
Learning ObjectivesUnderstand the essence of marketing and
explain the marketing processDefine and analyze elements of
the marketing mixDifferentiate between goods, services, and
ideasDescribe the evolution of different business philosophies
Discuss the latest marketing approachesSummarize careers that
exist in marketing
*
The Customer is Central

*
LO 1
The Essence of Marketing
*
Satisfying consumers and providing them with value through
goods, services and ideas that meet their needs.
“… delight consumers and encourage customer loyalty.”
LO 1
Customer Value
*
Loyalty comes from providing added value:Product
designPricing strategiesService elements
LO 1
*
*

Marketers need focus
A single product will not satisfy everyone
Marketers focus their efforts on the group most likely to
purchase
*
LO 1
The Marketing Mix or “The 4 Ps”
*
A well-coordinated program that appeals to the target market
The Marketing Mix:Product Place PricePromotion
LO 2
A Continuous Process
*
LO 1
Key points
*Marketing is more than just advertising and sellingMarketers
manage all the elements of the marketing mixMarketers use
research to support activitiesMarketing creates exchanges
between buyers and sellersProfits are realized when needs are
met and exchange takes place

LO 1
What Can Be Marketed?
*
Goods
Services
Ideas
Product
An Idea That Worked:
>1 billion people in >134 countries and 4,000 cities and towns
supported Earth Hour
LO 3
What is a Market?
MARKET (money and means to purchase)Parents with children
ages 3-6 years
TARGET MARKET (decision-makers and influencers)Parents
and children
CONSUMERS (users of the product)Children
*
LO 1
Evolution of Business Philosophies
Production orientation: focus on manufacturing, goods in short
supply

Sales orientation: selling as much as possible, more available
Marketing orientation: satisfy customer needs & meet
organization’s goals
Relationship marketing orientation: building long-term
relationships with customers
*
LO 4
Corporate Social Responsibility
*
An organization’s consideration for society’s well-being
LO 5
Partnership Marketing
Brands with similar customers but different distribution
channels (and products) can collaborate
*
LO 5
Ethics: Not All Companies Are On Board
Canadian government regulations: pollution food and safety
advertising and telemarketing water safety
Canadian Marketing Association (CMA) code of ethics
Consumer Groups also exert pressure
*
LO 5

Careers
Do your research
Landing a good job may take work
Keep up to date on consumer and societal trends
Networking is key! Meet as many people as possible, stay in
touch, and never burn a bridgeHave a network in place before
you graduateGet work experience through summer jobs and
volunteering
*
LO 6
Careers
Succeeding in the Job
Passion, creativity, and the desire for knowledge
Change and lifelong learning are the norm
Keep informed!
*
LO 6
“Show, Don’t Tell!” :-)
The Internet in 1994: http://youtu.be/JUs7iG1mNjI
The Internet Today: http://youtu.be/BLJ4VmWk5tw
Social Media stats: http://youtu.be/KU_GW_MD4hA
Best Job, P&G: http://youtu.be/NScs_qX2Okk
Dove Evolution: http://youtu.be/iYhCn0jf46U
Hug Me, Coke: http://youtu.be/OvxMpv-TkYw

Think Different, Apple: http://youtu.be/vmG9jzCHtSQ
IKEA Small Spaces: http://youtu.be/BQjBrt9LriY
NIKE + FUELBAND: http://youtu.be/MT50eLLxPco
PUMA & FuseProject: http://youtu.be/vwRulz8hPKI
Pedigree Dog Food: http://youtu.be/mUCRZzhbHH0
*
For next class
Check out the course Blackboard site
Read Course Outline
Prepare your textbook Readings
*
To do!
Chapter 1
An Overview of Marketing
*

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