Bài tập cá nhân marketing management

Bài tập cá nhân Marketing Management -

CONTENT
I.INTRODUCTION:
Under the pressure of globalization, the stormy development of technology and the opening
of new markets, the world economy has changed dramatically in the past decade.
Globalization is a business development opportunities that the big economics organizations
in the world can not be ignored, because they have the advantage of the resources and play
rules of the predecessors. Beside, the development of technology , especially information
technology, has removed all barriers of space and geography. Customers now have more
rights than ever before. Thanks to the technology they have access to information about
products better, so they have many more choices. Technology has also helped to shorten the
time that an idea needs to have for becoming a ready serves customers' product. Many years
ago, automakers companies could only come up with one new model each year. Today they
can introduce to the market 5.6 new models in a year . On the other hand , technology has
also posed a challenge for businesses : the life of the product on the market is shortened .
Previously, people used a mobile phone in 2-3 years time is normal , then for today's youth ,
if after a year you do not change the cell phone , it is abnormal. Globalization has also
changed the nature of business activities, instead of concentrating produce the best products,
the cheapest possible, businesses have shifted their attention to the market. In order to attract
more customers, the enterprises need to understand customer demands better, they need
better communication about their products, and they need to build a long term relationship
between brands with audiences target. Because of these reasons, marketing becomes an
increasingly important function in the business. After the industrial revolution of the
nineteenth century, the science of marketing was born and became an indispensable tool of
business. Studying marketing management and applying the knowledge of this interesting
subject is an indispensable duty of every enterprise. That's the key features to exist and
develop of enterprises.

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On the purpose of this paper, I would like to focus on five contents of marketing included:
First, the definitions of marketing; second, explain market segmentation with suitable
examples; third, justify the statement "PLC as a tool for marketing strategy"; fourth,
Elucidate the topic “Advertising forces people to buy goods that they do not want" ; finally,
Explain the process of integrated Marketing communication. What will be presented here is a
combination of what I learnt, read and experienced.
II. BODY
1. Explain the following: (a) Production concept (b) Product line (c) Augmented
product (d) Social marketing concept (Source: Kotler, Philip. (2000) Marketing
Management. Upper Saddle River, New Jersey: Prentice Hall)
a. Production concept: This concept is the oldest of the concepts in business. It holds that
consumers will prefer products that are widely available and inexpensive. Managers
focusing on this concept concentrate on achieving high production efficiency, low costs, and
mass distribution. They assume that consumers are primarily interested in product
availability and low prices. This orientation makes sense in developing countries, where
consumers are more interested in obtaining the product than in its features.The production
concept believes that the consumer will favour products that are readily available at
reasonable prices. Improvement in production and distribution effiency will be the focus area
for managements under this concept
The most understandable example for this concept is the case of Ford Motor Company (also
known as simply Ford). Ford Motor Company is an American multinational automaker
which adopt production concept. When Ford came out with its car model T, Henry Ford
believed that if cost is reduced more people would buy it. Ford did not have any concern
about customer's preferences and joked that the customer can have any colour for the car,
privided it was black. The production concept though useful in some situations , can result in
“marketing myopia” according to the Theodore. Companies following this concept focus too
narrowly on their own activities and lose sight of the real objective of customer’s need
satisfaction. But with the continuous industrialization and more and more players entered into
the market, too many people were selling the same product. Production concept to

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Customization concept where each and every product is manufactured and delivered
according the tastes and choices of the customer.
Take, for example: Dell is one of the world's largest computer systems companies which is
globally known for building personal computers, enterprise products like servers as well as
storages and IT solutions which are customized per order to match the customer's needs.The
formula of segmentation is the base for strategic marketing. Companies realize that they
cannot appeal to all customers but have to identify the customers they are able to serve best
and profitably. According to Kotler, "A company must identify the parts of the market that it
can serve best and most profitably".
The computer market has various products which can basically be classified into software
and hardware categories where each are sub-divided into various product segments. It is clear
that Dell is focused on the computer hardware market where it started with the desktop
personal computer as its initial product segment. Further product segments such as
notebooks, servers and computer peripherals have been added to its marketing mix as
revenue increased. In addition, Dell has partnered with major corporations such as Microsoft
to ensure their products are equipped with the latest software as per customers' needs.
Dell mainly uses customer segmentation in its market strategy along with the product
segmentation where it is targeting several market segments and designing separate products
or offers for them. On one hand, geographically, Dell has segmented the market into the US/
Americas, EMEA and Asia Pacific-Japan where each area has different pricing and
marketing strategies. On the other hand, demographically, there is no age, gender or race bias
but income, occupation and education play a role in deciding the customer needs and hence
the product offer.
b.The product line: According to the oxforddictionaries, it is “An arrangement in a factory
in which a thing being manufactured is passed through a set linear sequence of mechanical or
manual operations” ( />A production line is the traditional method which people associate with manufacturing. The
production line is arranged so that the product is moved sequentially along the line and stops
at work centers along the line where an operation is performed. The item may move along

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some kind of conveyor, or be moved manually by staff or forklift. For example, operations
along the production line could include assembly, painting, drying, testing, and packaging. If
needed some parts can be removed from the production line and stored as semi-finished
goods.
The production line manufacturing process is very suited to high volume manufacturing of a
single product or product group. For example, a production line may be used to manufacture
a range of vacuum cleaners, where the only difference between the models is the color of the
plastic assembly and the attachments that are included in the final product.
The production line is a series of the same products about the structure, function, shape, and
characteristic that can be readily identified. Example: There are a lot of Iphone’s categories,
in every term Apple produces its own a certain product lines such as Iphone 3, Iphone 4,
Iphone 4S, …..
c. Augmented product: ( />According to Philip Kotler, who is an economist and a marketing guru, a product is more
than a tangible ‘thing’. A product meets the needs of a consumer and in addition to a tangible
value this product also has an abstract value. In order to shape this abstract value, Kotler uses
five levels (included: Core benefit of the product, Generic Product, Expected Product,
Augmented Product and Potetial product) in which a product is located or seen from the
perception of the consumer. These levels indicate the value that consumers attach to a
product. The customer will only be satisfied when the specified value is identical or higher
than the expected value.
Augmented Product refers to all additional factors which sets the product apart from that of
the competition. And this particularly involves brand identity and image. Is that warm coat in
style, its colour trendy and made by a well-known fashion brand? But also factors like
service, warranty and good value for money play a major role in this. For example:
Apple's iPhone design has enabled it to become a smart phone market leader. It is and
Example for augmented product, one of Apple’s customer said: “ I’ll be buying the iPhone 5
regardless of its physical features. Why? Because Apple’s augmented product is so much

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more than physical features. And the company has already delivered where it matters most:
the social and emotional components of the phone”.
d. Social marketing concept: Societal Marketing is basically a marketing concept that is of
the view that a company must make good marketing decisions after considering consumer
wants, the requirements of the company and most of all the long term interests of the society.
Societal Marketing is actually an offshoot of the concept of Corporate Social
Responsibility and sustainable development. This concept urges companies to do more than
having an exchange relationship with customers, to go beyond delivering products and work
for the benefit of the consumers and the society. Following is an example of Societal
Marketing Concept: Body Shop is a cosmetic company found by Anita Roddick. The
company uses only vegetable based materials for its products. It is also against Animal
testing, supports community trade, activate Self Esteem, Defend Human Rights, and overall
protection of the planet. Thus it is completely following the concept of Societal Marketing.
2. Explain Market Segmentation with suitable examples
Market segmentation is an integral part of a company's marketing strategy. It is the process of
breaking down a larger target market into smaller, more homogeneous groups of customers
that you can more efficiently market to. Both consumer-oriented and business-oriented
companies should segment customers using one of several below approaches:
Demographics
Demographic market segmentation is one of the most common approaches to segmenting
markets. With this strategy, a company simply divides the larger market into groups based on
several defined traits. Age, race, gender, marital status, occupation, education and income are
among the commonly considered demographics segmentation traits. As a simple example of
usage, a company that sells feminine hygiene products will include "female" in its description
of its primary market segment.
Geographic
Geographic segmentation is used by companies that sell products or service specific to a

certain community, state, region, country or group of countries. Local businesses usually get
no benefit in paying for national or international advertising. Companies that operate

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nationally can often save by delivering the same marketing messages to a national audience
through one television, radio, magazine or newspaper ad. Global businesses typically decide
whether to maintain a universal message or tailor messages to each country's marketplace.
Psychographics
Psychographics or lifestyle segmentation has become increasingly common as companies
look to identify consumers based on interests and activities in lieu of demographics. As an
example of this strategy's benefits, consider the lifestyle of an outdoor adventurer. Camping
enthusiasts, for instance, typically have few consistent demographic traits. Campers are a
diverse group. Thus, marketers would likely target a segment of outdoor hobbyists or
campers for new camping equipment through outdoor programs or magazines.
Behavioral
Behavioral segmentation is based on user behaviors, including patterns of use, price
sensitivity, brand loyalty and benefits sought. A company may have customers with a similar
demographic makeup but distinct behavioral tendencies. Some may use the product daily,
while others use it weekly or monthly. Higher-income earners may have more interest in
higher-quality models versus low-cost models. This may prompt the provider to target
higher-end products and services to one group and more value-oriented offerings to lower-
income or budget-conscious customers.
Business Segmentation
Segmenting for business customers often has overlap but commonly includes geographic,
customer type and behavior-based strategies. Geographic business segmentation is similar to
that with consumer segmenting. Customer type segmenting may include business size or the
nature of the business. Banks, for instance, often have different products for small versus
large businesses. Behavioral segmenting is based on repeat or loyal customers versus one-
time users.

3. Justify the statement:“PLC as a tool for marketing strategy”.
(source: />
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Everyday, we're regularly bombarded by advertisements which telling us about exciting new
features of existing products; a brand of milk with a new, improved formula; or a yoghurt
that now contains more delicious fruit. Meanwhile, at the same time, if we go to the supper
market, there are lot of products which are seemingly not advertised at all. The main reason
of difference in two phenomenons is that the marketers are acting according to where the
item is in its product lifecycle. Once a product has been developed and tested, it goes to
market. There it may pass through a product life cycle of four stages: introduction, growth,
maturity, and decline. This cycle is a theoretical model of what happens to sales and profits
for a product class over time. However, Each product may has a different life cycle, and
particular brands may act differently. For example, while frozen foods as a generic class may
go through the entire cycle. Some product classes, such as washing machine, stay in the
introductory stage for years. Some products, like cooking oil, become classics and never
experience decline. Still others may be withdrawn from the market altogether. Nonetheless,
the product life cycle may provide some basis for determining revenue earned, contributing
to strategic marketing planning. Also, PLC may helps the firm to identify when a product
needs support, redesign, reinvigorating, withdrawal, etc. It may help in new product
development planning and in forecasting and managing cash flow.

Let’s consider in detail PLC’s 4 stages which have its own characteristics. The organizations
are trying to manage the life cycle of their particular products:

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Introduction Stage: This stage of the cycle could be the most expensive for a company
launching a new product. The size of the market for the product is small, which means sales
are low, although they will be increasing. On the other hand, the cost of things like research

and development, consumer testing, and the marketing needed to launch, such as the product
Advertising and promotion campaigns, can be very high, especially if it’s a competitive
sector. Example for this stage is Holographic Projection: Only recently introduced into the
market, holographic projection technology allows consumers to turn any flat surface into a
touchscreen interface. With a huge investment in research and development, and high prices
that will only appeal to early adopters, this is another good example of the first stage of the
cycle.
Growth Stage: The growth stage is typically characterized by a strong growth in sales and
profits, and because the company can start to benefit from economies of scale in production,
the profit margins, as well as the overall amount of profit, will increase. This makes it
possible for businesses to invest more money in the promotional activity, such as to increase
consumer awareness and monitor market – competitors reaction, to maximize the potential of
this growth stage. increased consumer awareness. Tablet PCs is an example. There are a
growing number of tablet PCs for consumers to choose from, as this product passes through
the Growth stage of the cycle and more competitors start to come into a market that really
developed after the launch of Apple’s iPad.
Maturity Stage: During the maturity stage, the product is established and the aim for the
manufacturer is now to maintain the market share they have built up. This is probably the
most competitive time for most products and businesses need to invest wisely in any
marketing they undertake. They also need to consider any product modifications or
improvements to the production process which might give them a competitive advantage. In
this stage, sales reach peak, cost of supporting the product declines, ratio of revenue to cost
high, sales growth likely to be low, market share may be high, competition likely to be
greater, price elasticity of demand, monitor market – changes/ new strategies. It is necessity
to develop new strategies becomes more pressing: in searching out new markets, developing
new uses, focus on adapting the product, re-packaging or format, improving the standard or

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quality, developing the product range. For instance, Laptop computers have been around for

a number of years, but more advanced components, as well as diverse features that appeal to
different segments of the market, will help to sustain this product as it passes through the
Maturity stage
Decline Stage: Eventually, the market for a product will start to shrink. This shrinkage could
be due to the market becoming saturated (i.e. all the customers who will buy the product have
already purchased it), or because the consumers are changeing to a different type of product.
While this decline may be inevitable, it may still be possible for companies to make some
profit by changeing to less-expensive production methods and cheaper markets. Typewriters
are a product that is passing through the final stage of the product life cycle: Typewriters, and
even electronic word processors, have very limited functionality. With consumers demanding
a lot more from the electronic equipment they buy.
For example: Many year ago, Black and white television had appeared, then color tivi had
appeared and developed, Black & white TV was declined. Plasma and LCD appeared more
than ten years ago, thanks to the studies experience, they have changed, created & upgrated
the technology (stereo, hifi, …) and until now the Color TV have continuously been
developed in the electronic products market by using various marketing strategies in each
stage to lengthen the product life cycles. Most strategies are executed to counter to key
moves and strategies of competitive companies. Marketing strategy needs to know where the
product currently stands, then only it can enable strategies to be made. For example if a
product is already in decline stage the strategies would be different from a product at
introduction. Therefore, we can say: “The Product Life Cycle (PLC) is a tool for marketing
strategy”
4. Eluciate the statement “Advertising forces people to buy goods that they don’t want”
The purpose of this part is to eluciate the question whether advertising forces people to buy
goods that they don’t want. We can argue that the behaviour of the people depends
on the individual personality, economic condition and the way a company advertises their
product and the discount offers given to the product. Our point is, that there are various
advertising techniques with various targets. Another big question is how can we judge what

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kind of goods and services are necessary, and which good is bought only to show-off among
their friends and relatives? What is a need, and what is just a will? This paper will argue the
manipulation via marketing exists and the advertisement is making us to buy things we do
not actually need. We would like to stress the importance of psychology which is considered
as a key tool used by advertising companies. Only via careful use of psychology are
marketers able to create emotional advertisements that touches our minds, our senses and
feelings that push us to buy things even if it is unnecessary. We want to support the
statement by using real examples, that are divided based on the common psychological
effect or methods used to force people’s making decision. Before discussing the main points,
it is crucial to define and understand the meaning and the definitions of used terms:
Phychological perspective and consumner:
To define our perception consumer behavior, we have to think what can explain consumer’s
behavior and how companies try to influence it. Traditionally, there are four different
theories around consumer behavior:(Consumer Behavior, 2010), including: (1)
Psychological models, (2)Sociological models, (3) Economic models, (4) Stimulus respond
models. Therefore, we have to consider the psychological aspect to understand the problem.
Indeed, to show how consumers are persuaded by companies, we have to describe aspects
below that can influence consumer’s mind. We pay attention to motivation because it is the
driving force of behavior and there must be a reason, a motive for purchasing, and using
products.
Motivation can be described as the driving force within individuals that impels them to
action. The driving force is produced by a state of tension, which exists as a result of an
unfulfilled need. Individuals strive –both consciously and unconsciously – to reduce this
tension through behaviour which they expect will fulfill their needs and thus relieve them of
the stress they feel. People experience wishes, desires and needs. These can originate from
unmet physical needs or from fantasy. On this basis, we can assume that needs can be started
by both internal and external forces. Motivation is due to many factors, and motivational
researchers try to identify and understand these factors. Until now, there has been a tendency
to focus on needs, and a popular approach has been to assume that people do not act of their

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own will. Freud introduced the notion are largely unconscious of the real psychological
forces shaping their behaviour. his theory assumes that we grow up repressing many urges.
These urges are never eliminated or under perfect control; they appear as dreams, slips of the
tongue, or in neurotic behaviour. So, reasons for purchasing a product may be conscious or
unconscious. Each consumer has his own motives to buy. These motives arises from
consumer’s needs and wants which are based on factors such as wealthy, sex or religion of
the person.
One of the most widely accepted theories for human motivation has been developed by
Abraham Maslow. His theory can be applied to interpreting how consumer goods and
services can be perceived as satisfying different level of needs of consumers. In summary, the
hierarchy of needs theory postulates a five-level hierarchy of prepotent human needs. Higher-
order needs become the driving force behind human behavior as lower-level needs are
satisfied. The theory says, in effect, that dissatisfaction – not satisfaction – motivates
behavior. Some psychologists believe in the existence of a trio of basic needs: the needs for
power, affiliation, and achievement. The power need relates to our desire to control our
environment. It includes the need to control other people and various objects. This need
appears to be closely related to the ego need, in that many individuals experience increased
self enhancement when they exercise power over objects or people. A number of products,
such as cars, lend themselves to promises of power or superiority for users.
Affiliation is a well-known and well-researched social motive that has far-reaching influence
on consumer behavior. The affiliation need suggests that behavior is highly influenced by
the desire for friendship, acceptance, and belonging. People with high affiliation needs tend
to have a strong dependence on others. They often select goods they feel will meet with the
approval of friends.
A considerable number of research studies have focused on the achievement need.
Individuals with a strong need for achievement often regard personal accomplishment as an
end in itself. The achievement need is closely related to both the egoistic need and self-

actualization need. People with a high need for achievement have certain traits that make
them open to relevant appeals. They are more self-confident, and enjoy taking calculated

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risks. They research their environment actively, and are very interested in feedback. Their
interest in monetary rewards or profits is primarily due to the feedback that money provides
as to how they are doing.
As companies are aware of this effect, they try to exploit consumers perceptions and offer
them products and services according to their needs. Also, using special techniques can
create essential needs from basic want. These techniques are described below. However,
Maslow hierarchy could not be used for all consumers while each consumer thinks
differently and has own scheme of his needs and wants. Therefore, consumers are exposed to
offers that are more and more designed for individual wants. Moreover, not only individuals
play important role in various needs. Cultural and national changes across the whole world
must be taken into the account. What is considered as need in one country could not be
reflected as need in another country. In developed world, nobody can imagine the life without
social networks, however, consumers in developing countries do not have access to Internet
at all. That is why we believe that the crucial point when talking about manipulation is not
really tailoring an advertisement campaign to people’s need but creating the need itself. As
an example could be used Facebook. Many years ago, nobody needed social networks,
however the situation has changed in past years and people desire to use them every day.
Thus, changes from wants to needs are driven by companies. They use special techniques to
manipulate with consumers minds and change the way of thinking.
Perception: The fact how an individual perceives an external stimuli and the
influence of such stimuli on his reaction is the common tool used in advertisement.
Many authors and marketers proved that there are different reactions for the same stimuli,
which can be changed according to time, situation or context. Traditionally, there are three
main types of reactions: (1) Selective attention: consumer screens out the majority of
stimulants.(2) Selective distortion: consumer adjusts his/her perception to his/her current

mind set. (3) Selective Retention: consumer does not remember everything, he remembers
information which reinforces attitudes and beliefs. The background of company’s way of
thinking and how they exploit particular kind of advertisement in particular moment, in a
specific place and by particular person. These techniques can be seen as typical manipulation

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because marketers know their product and its features and benefits, each product or service is
intended for particular segment or target group. Moreover, the product is designed to
satisfy particular needs. There is an obvious objective behind these activities - to sell as
much volume as possible. To discuss the objection, we can divide consumers on easily
influenced consumers and rational thinking consumers who will prove all received message.
We have to state that advertising techniques target on both groups. It means that all
consumers are exposed to advertisements that can lead consumer’s stimuli to buy goods
they do not need.
The buying situation: Consumer’s purchase goes through different stages (Consumer
Behavior, 2010): Problem recognition, Information search, Emergence and evaluation of
alternatives, Purchase decision, Purchase, Post purchase evaluation. At each stage, they have
different motivation and reaction which can be different according to the kind of buying it is
habitual, limited decision making, extensive decision making or impulse. All these stage are
opportunities for companies to convince, to influence and manipulate the customers. For
instance, manipulation is when advertisement changes a buying from a habitual one to an
impulse one. Indeed, in such kind of buying, each stage which is a time of reflection is
shorted to push the consumer to purchase. The classical example of impulse buying is Apple
iOS App Store, where majority of applications are often priced below 3 USD, usually 0,99.
This aggressive pricing makes us to do spontaneous buy so we do not care about the small
amount of money spent. Man can argue 0.99 is not a big deal, however, the whole App Store
is a huge multi-billion dollar business.
To continue, we are going to present some techniques used by companies to show how
companies and firms deal with all these psychological aspect to manipulate the client?

This section contains 7 techniques which include: Salesman´s Techniques, Guerrilla
Marketing, Psychological pricing, Dreams and Idols, The Bandwagon Effect, Code of
advertising, Word of mouth marketing.
Let begin with Salesman’s Techniques: in this part, we focus on 3 techniques:
Limited time offer, Buy one get one free and, Loyalty cards:

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Limited time offer: It is the persuasive technique in advertisement that accelerate the
customers purchase of particular product due to limited time for purchase. The task is
to frighten people, if the product is not bought before the end of the limited time offer,
there is no other opportunity to purchase the product for lower price. However it’s not
common that the product in the camping is the cheapest on the market. This is meant
to put pressure on the customer by creating a sense of urgency that the deal is only
available right now. This forces the customer to make up his or her mind on the spot,
rather than take the time to shop around and make an informed choice.
Buy one get one free: When the market is saturated it creates disadvantage for
competitors. It also cause ineffectiveness in consumption and increase revenues for
sellers. The psychology influence like “buy-one-get-one-free” is used in this sales
promotion technique as well - for many consumers it is interesting and catchy if there
is something free, they have feeling that this occasion will never happen again.
Loyalty cards: Loyalty cards are used widely in supermarkets and by retailers. It is an
key approach in marketing techniques which allows to collect important data about
consumers and consequently find the best way how to create most attractive and
catchy product offer. On the other hand it can be consider as a part of positive
relationship with customer. There are numbers of similar shops offering identical
portfolios of products. However, for consumers it makes difference to get something
extra (collect points, receive extra vouchers for birthday etc.) or just buy a product.
Most of the consumers will prefer supermarket where its possible to get something
free and be part of the community. For instance, Saigon Coop and Metro system are

very sucsessful in applying Loyalty cards technique.
Guerrilla Marketing: According to Jay Conrad Levinson 1984, Guerrilla Marketing as a
tool of achieving conventional goals, such as profits and joy, with unconventional methods to
conduct trade promotion actions with inexpensive techniques. Guerrilla Marketing is about
attracting our attention differently than in traditional way. It derives benefits from the
moment of surprise and our astonishment. Strangeness and innovation are also its key
factors. Guerrilla marketing is not purely based on any specified priciple. Enterprises use

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anything that they think is unique one, low cost and appropriate to business laws. Guerrilla
Marketing makes the viewer think that they are exploring a mystery. Usually Guerrilla
marketing campaigns are unexpected, possibly interactive and consumers are targeted in
unforeseen places (general public, campuses, street marketing/giveaways, PR stunts, etc).
Below are some awesome examples of Guerrilla marketing campaigns that will get your
heads turning.The more creative Campaign is, the more the viewers pay attention to it. One
of the most unforgettable is to make viewers feel like they 're lucky to witness them. Today,
not only small businesses use guerrilla marketing, but top brands like Sony, Apple, Coca-
Cola with Guerrilla marketing on a college campus in the United States by using coca-cola
happiness machine, Adidas also choose this way of marketing. In Vietnam, G7 instant coffee
in branding campaigns agricultural, Tan Hiep Phat "first appeared in Vietnam" is a number
examples of how guerrilla marketing
Psychological pricing: The price is very important and key element of the marketing mix.
Pricing is a part of business strategy and can be based on different factors, for example
profitability or market penetration, however price influences the character of promotion and
can be a very efficient advertise. That’s why it is efficient to ground it on psychological
aspects. Firms must offer their products for a price their target market is willing to pay. There
is still a question how do customers perceive the value of the product? Companies have to
find a price that enables them to make a fair profit and seems fair to their customers.

Odd pricing: This is the very popular psychological pricing technique, to be honest
it’s imposible if you’ve never seen this classic trick. Prices ending in 9, 95, 97, 99 are
sometimes called “charm prices” because they are used to give an illusion of value; to
play less. “that people are more likely to buy odd-priced items because the mere image
of odd prices makes products seem less expensive (Schindelr, 1991). For example, if
the price is $9.99 whereas another is $10, although the real difference is only one
penny, but the fact the number 10 has two digits, we perceive its value as a lot higher
than it really is. Therefore, the consumer thinks they are receiving great savings by
going for the $9.99. By doing so, you are telling customers that your product “it looks
cheap” which equates to higher affordability anh that’s why they are more likely to

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purchase. This idea was used at the beginning of the 20th Century, but until now the
impact is still very strong. You might think that you made rational decision, in fact
people make mentally influence decisions rather than completely rational decisions.
Because thoughts are partially made in an emotional sense. Makerters have profitably
used odd pricing to increase their sales.
Prestige pricing: From the psychology perspective, at the four level in Maslow
hierarchy is human’s need for appreciation and respect. Advertising companies apply
this need in manipulating their customers. Contrary to Odd pricing, the places where
you should not make you product “look cheap” but “Expensive” is in the luxury
industry such as automobiles, jewelery, cosmetics, car…. Prestige pricing is one of the
most commonly use pricing tactic in marketing. It adjusts high price for a product or
service in order to create an image of high quality. Prestige pricing is useful for
consumers who believe price and quality are related. If the cost of your high end
product is expensive, it won’t lower your sales but in fact engage more customers,
because of thinking “ the more expensive, the more good products is”. It’s not a secret
that we pay the brand and not the quality. To conclude, psychological pricing is very
often used to manipulate us and we can’t ignore it. Of course, everybody is

not influenced by this technique but its efficiency is proved and that’s why firms use
it.
Dreams and Idols: Companies are using customer’s dreams and wishes to manipulate them
to buy goods and services. From the psychology perspective, people want to be a members of
any society or cultural groups. Advertising companies are using that so in the advertising,
they are picturing groups of either rich, famous, beautiful or talented people to enhance our
need for social belongings. Marketers have been using celebrities in commercials,
print campaigns and promotions for years, because it just works. Celebrities get the
viewer’s attention; but whether they work to sell the product depends on proper celebrity
casting. The billions of dollars spent per year on celebrity endorsement contracts show that
celebrities, like Cristiano Ronaldo, Megan Fox, Troy Polamalu and Tiger Woods, play an
important role for the advertising industry. Theory and practice prove that the use of super

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stars in advertising generates a lot of publicity and attention from the public. The

underlying question is, if and how the lively interest of the public in ‘the rich and famous’

can be effectively used by companies to promote their brands and consequently increase

revenues.

The Bandwagon Effect: The bandwagon effect is when people go along with what everyone

else is doing. This psychological phenomenon which is also called “cromo effect” or “social

proof” means that the customer is willing to purchase one product which is purchased by

others. The reason can be various, this product can be modern and the customer

wants this product just to “be in. The bandwagon effect is used to create an illusion of

popularity on a product that may have been or is about to be introduced into the market. It

feeds on the human emotion of, “if everyone has one, I want one too,” by making a certain

product seem desirable by all. If the bandwagon effect is executed effectively, the

“illusionary” trend seems accepted by a majority of people and others will join in. For

example: Marketing campaigns of Samsung Electronics. This company places new phone on

market almost each month and promotes it in a modern and sometimes futuristic way, so it

forces you change your “old” phone for a new one. The technologies in cell phones also

change rapidly than in computers so the customers just want to be in. Customers change cell

phone each 6 month to have the up-to date technology in their pocket, just in order to not be

out. Another real case which can be well manipulated by this effect is children market of

LEGO or iPhone games. Good example of this can be free samples of toys or ice cream

in the TV advertisements on toys and games before the Christmas. Especially children want

to belong to the group of others and when the child sees particular product e.g. LEGO or

iPhone games in other child’s hand, it automatically want the product too and force the

parents to buy it.We can say, that the bandwagon effect, when used wisely, can be very

powerful tool to manipulate people to buy a product.

Code of advertising: Code of Advertising serves as a regulation factor. Moreover, it protects

consumers against deceptive advertising of advertising agencies. Even that each country has

its own regulations design for their competitive environment, there are some general

conditions that must meet the requirements. Responsible advertising practice should

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include: decency, truthfulness , health claims, safety, children, environmental claims. In
general, there is code that regulates conditions of using advertisement and direct which
practice are allowed and which are forbidden. If we admit that the code is developed to
protect consumers rights, we have to also admit that the advertising can influence consumers
and manipulate with their decision making. It means that advertising can have positive or
negative effect on consumers perception . Nevertheless, if forbidden practise are not
applied, the impact of advertising is not maximise, therefore, allowed advertising practice
cannot be harmful for consumers.
Word of mouth marketing: Before purchasing a product, service, the consumers often ask-
consult for ideas of their relatives or friends. At that moment, Word of mouth marketing has
been “actived”. In the context of modern marketing tools are so expensive now, every famous
brands take full advantage of this tool. Mouth marketing, also known as "rumors", as
spontaneous forms of communication in human daily life. Thanks to the rumors that have
been handed down stories for generations. Also thanks to rumors that a lot of lessons in life
have been transmitted, this is also a benefit of rumors. However, a question arises how much

percent truth in the rumor? According to psychologist, people always like to cause "shock "
for others inorder to creating their attention, so by the story travels often "more sauce, add
salt " on , and so on, through as many intermediate, rumors as to lead people away from
reality, sometimes causing major consequences that the media did not imagine, because they
really did not mean to. Development of marketing science to the 70s of the twentieth century
became complete theoretical system. Word of mouth marketing is considered as an technique
which is used to support other tools in marketing product to consumers by the power of
spreading. By the late '90s, the internet revolution has made certain achievements, the spread
of information becomes ever more favorable by the explosion of social networks, and each
can have their own individual "newspaper" by tools such as Blog, Facebook, Twitter ... Now
word of mouth marketing to promote more effective. To facilitate communication support,
word of mouth marketing requires a Information Management and more professional.
Summary: Based on studying customer’s behaviours, understanding of techniques to
manipulate with consumers minds and change the way of thinking and purchasing the

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products, supported by real examples the paper have elucidated the statement: “Advertising
forces people to buy goods that they do not want". Most of us are suggestible and psychology
techniques in marketing are really powerful tool to manipulate customer, to change their
needs. Based on the fact of growing knowledge of psychology, some of the methods are so
powerful that have to be regulated. Traditional ways of advertising, such as psychological
pricing, various sales techniques, and new methods of advertisements, such as usage of social
networks, guerrilla marketing and others are nowadays able to adjust the advertisements to fit
to expected needs and manipulate with specially targeted groups. There are also other factors,
for example different personal purchasing behaviour and different perceiving external stimuli
that does not straight the process. On the contrary they make the advertisement
techniques more inspiring and creative. Companies are maximizing their profits and they
will do the best to sell their products. More investments will go to the development of
new approaches in psychology as the most important tool to increase sales. Nevertheless, a

proper manipulation by advertisement and others will create needs that could have the
disposition of survival needs that are definitely included in our rational thinking.
Finally interaction between psychology and advertisement are apparent. However psychology
without advertisement is something obvious, advertisement without psychology is not
possible
5. The process of intergrated Marketing communication (IMC)
The process of intergrated Marketing communication (IMC) can be Explained by the
organization chart below:

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IMC Commmunication
Tools

Advertising Direct Marketing Interactive/Internet
Maketing

Sales Promotion Pupblicity/Public Personnal Selling
Relations

( Adapted: communication tools)
The IMC process generally begins with an integrated marketing communications plan
describing the different types of marketing, advertising, and sales tools to be used during
campaigns. These are largely promotional tools, which include everything from search
engine optimization (SEO) tactics and banner advertisements, to webinars and blogs.
Traditional marketing communication elements such as newspapers, billboards, and
magazines may also be used to inform and persuade consumers. Marketers must also decide
on the appropriate combination of traditional and digital communications for their target
audience to build a strong brand-consumer relationship. Regardless of the brand's
promotional mix, it is important that marketers ensure their messaging is consistent and

credible across all communication channels.
Let’s considering some following definitions which are included in IMC:
Advertising: According to Kotler’s and Armstrong’s (Kotler, 2001) definition: "Advertising
is any paid form of non-personal presentation and promotion of ideas, goods and services
through mass media such as newspapers, magazines, television or radio by an identified
sponsorr”. Advertising plays an very important role in IMC, but every thing has both two
sides, let find out about Advantage and disadvantage of Advertising. In positive side,

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