mar4480 exam 2

swot issues managers should be aware of

1. look beyond firms resources to examine process that meet customers' needs. Offering solutions to their problems. 2. achievment is based on capabilities--> matching; capabilities become comp advantage if they have better value 3- convert w into s by investing in key areas 4-weakness that dont turn into s become limitations 5-s and w should b assessed via upside down thinking 6-op and threats should be assessed via outside-in thinking

need v want

A need occurs when an individual's current level of satisfaction does not equal their desired level of satisfaction. A want is a consumer's desire for a specific product that will satisfy the need. Hence, people need transportation, but they choose to fulfill that need with a car, rather than with alternative products such as motorcycles, bicycles, public transportation, a taxi, or a horse

product line

A product line consists of a group of closely related product items.

3 basic strategies companies have developed to maintain competitive advantage

After the magnitude and importance of each element in the SWOT matrix have been assessed, the manager should focus on identifying competitive advantages by matching strengths to op-portunities and adopting a disruptive mindset. The key strengths most likely to be converted into capabilities will be those that have a compatibility with important and sizable opportunities. Remember that capabilities that allow a firm to serve customers' needs better than the competi-tion give it a competitive advantage. As a final step, the entire SWOT analysis should be reviewed for upside-down and outside-in thinking to assess areas of likely disruption of plans and ways to capitalize via disruption of competitors. As outlined in Exhibit 4.9, competitive advantages can arise from many internal or external sources

look for causes not characteristics

Although taking the customers' perspective is important, it often provides just enough informa-tion to get into serious trouble. That is, it provides a level of detail that is often descriptive, but not ery constructive. The problem lies in listing strengths, weaknesses, opportunities, and threats as simple descriptions or characteristics of the firm's internal and external environments without going deeper to consider the causes for these characteristics. Although the customers' perspective is quite valuable, customers do not see behind the scenes to understand the reasons for a firm's characteristics. More often than not, the causes for each issue in a SWOT analysis can be found in the resources possessed by the firm and/or its competitors

goals

As statements of broad, desired accomplishments, goals are expressed in general terms and do not contain specific information about where the organization presently stands or where it hopes to be in the future

AIDA model

Attention, Interest, Desire=To be successful, firms must move potential customers beyond mere interest in the product. Good promotion will stimulate desire by convincing potential customers of the product's superiority and its ability to satisfy specific needs., Action

behavioral segmentation

Behavioral segmentation is the most powerful approach because it uses actual consumer behavior or product usage to make distinctions among market segments. Typ-ically, these distinctions are tied to the reasons that customers buy and use products A common use of behavioral segmentation is to group consumers based on their extent of product usage—heavy, medium, and light users. Heavy users are a firm's bread-and-butter customers, and they should always be served well. Marketers often use strategies to increase product usage among light users, as well as nonusers of the product or brand. One of the best uses of behavioral segmentation is to create market segments based on specific consumer benefits.

strategic focus

By strategic focus, we mean the overall concept or model that guides the firm as it weaves various marketing elements together into a coherent strategy. A firm's strategic focus is typically tied to its competitive advan-tages. However, depending on the situation, the strategic focus can shift to compensate for the firm's weaknesses or to defend against its vulnerabilities. A firm's strategic focus can change over time to reflect the dynamic nature of the internal and external environments. Th

mass marketing

Companies that adopt mass marketing take an undifferentiated approach that assumes that all customers in the market have similar needs and wants that can be reasonably satisfied with a single marketing program. This marketing program typically consists of a single product or brand (or, in the case of retailers, a homogeneous set of products), one price, one promotional program, and one distribution system.

searching for info

Consumers evaluate products as bundles of attributes that have varying abilities to sat-isfy their needs. In buying a car, for example, each potential choice represents a bundle of attributes, including brand attributes (e.g., image, reputation, reliability, safety), product features (e.g., self-driving features, Apple CarPlay, battery range), aesthetic attributes (e.g., styling, sportiness, roominess, color), and price. Each consumer has a different opinion as to the relative importance of these attributes—some put safety first, while others consider price the dominant factor. Another interesting feature of the evaluation stage is that the priority of each consumer's choice criteria can change during the process. Consumers may visit a dealership with price as their dominant criterion, only to leave the dealership with price dropping to third on their list of important attributes.There are several important considerations for marketers during the initial evaluation stage. First and foremost, the firm's products must either be in the initial set of alternatives or be visible enough to be considered as options are formally evaluated. For this reason, marketers constantly remind consumers of their company and its product offerings even when the consumer isn't ac-tively seeking to make a purchase. Second, it is vital that marketers take steps to understand con-sumers' choice criteria and the importance they place on specific product attributes. As we will see later in this chapter, understanding the connection between customers' needs and product at-tributes is an important consideration in market segmentation and target marketing decisions. Fi-nally, marketers must often design marketing programs that change the priority of choice criteria or change consumers' opinions about a product's image.

in the post-purchase stage, consumers will experience one of these four experience outcomes

Delight—the product's performance greatly exceeds the consumer's expectations ●●Satisfaction—the product's performance matches the consumer's expectations ●●Dissatisfaction—the product's performance falls short of the consumer's expectations ●●Cognitive Dissonance (Post-purchase Doubt)—the consumer is unsure of the product's performance relative to their expectation

demographic segmentation

Demographic segmentation divides markets into segments using demographic factors such as gender (e.g., Secret deodorant for women), age (e.g., Amer-ican Eagle clothing for teens and young adults), income (e.g., Lexus automobiles for wealthy consumers), and education (e.g., online executive MBA programs for busy professionals). Demographic segmentation tends to be the most widely used basis for segmenting consumer markets because demographic information is widely available and relatively easy to measure. In fact, much of this information is easily obtainable during the situation analysis through secondary sources

sales promotion

Despite the attention paid to advertising, sales promotion activities account for the bulk of pro-motional spending in many firms. Sales promotion involves activities that create buyer incen-tives to purchase a product or that add value for the buyer or the trade. Sales promotion can be targeted toward consumers, channel intermediaries, or the sales force. Regardless of the activity and toward whom it is directed, sales promotion has one universal goal: to induce product trial and purchase.Most firms use sales promotion in support of advertising, public relations, or personal selling activities rather than as a stand-alone promotional element. Advertising is frequently coordinated with sales promotion activities to provide free product samples, premiums, or value-added incen-tives. For example, a manufacturer might offer free merchandise to channel intermediaries who purchase a stated quantity of product within a specified time frame. A 7-Up bottler, for example, might offer a free case of 7-Up for every 10 cases purchased by a retailer.

disintermediation

Disintermediation is a marketing term that describes the process of removing the middleman in a transaction This can allow a consumer to buy directly from a wholesaler rather than through an intermediary such as a retailer. Disintermediation often results in lowering the prices of the products as the middlemen are removed from the distribution channel

benefits of offering large folio of products

Economies of Scale. Offering many different product lines can create economies of scale in production, bulk buying, and promotion. Many firms advertise using an umbrella theme for all products in the line. Nike's "Just Do It" is an example of this. The single theme covering the entire product line saves considerably on promotional expenses.●●Package Uniformity. When all packages in a product line have the same look and feel, customers can locate the firm's products more quickly. It also becomes easier for the firm to coordinate and integrate promotion and distribution. For example, Duracell batteries all have the same copper look with black and copper packaging. Even its green rechargeable batteries are recognizable because of the copper tip and black cardboard backer.●●Standardization. Product lines often use the same component parts. For example, GM often shares components across its Buick, GMC, and Chevrolet product lines. This greatly reduces GM's manufacturing and inventory handling costs.●●Sales and Distribution Efficiency. When a firm offers many different product lines, sales personnel can offer a full range of choices and options to customers. For the same reason, channel intermediaries are more accepting of a product line than they are of individual products.●●Equivalent Quality Beliefs. Customers typically expect and believe that all products in a product line are about equal in terms of quality and performance. This is a major advantage for a firm that offers a well-known and respected line of products. For example, Crest's complete portfolio of oral care products enjoys the same reputation for high quality.

Intangibility w goals

Finally, goals should involve some degree of intangibility. Some planners have been known to confuse strategies, and even tactics, with goals. A goal is not some action the firm can take; rather, it is an outcome the organization hopes to accomplish. Actions such as hiring 100 new salespeople or doubling the advertising budget are not goals, as any firm with adequate resources can accomplish both tasks. However, having "the best-trained sales force in the indus-try" or "the most creative and effective advertising campaign in the industry" are suitable goals. Note the intangibility associated with the use of terms such as best trained, most creative, and most effective. These terms are motivational because they promote comparisons with rival firms. They also continually push for excellence, as their open-ended nature always leaves room for improvement.

product line extensions

Firms may introduce product line extensions that allow it to compete more broadly in an industry. The recent trend of flavored sparkling water—such as Bubly, LaCroix, and Spindrift—is a good ex-ample of this. Sometimes, a firm may decide that a product or product line has become obsolete or is just not competitive against other products. When this happens, the firm can decide to contract the product line, as makeup brands regularly do. For example, Glossier, a New York-based cosmetics company, eliminated its Glossier Play product line after a poor reception from its customer base.

market concentration

Firms using the market concentration approach focus on a single market segment. These firms often find it most efficient to seek a maximum share in one segment of the market. For example, Armor All markets a well-known line of automotive cleaners, protectants, and polishes targeted primarily to young, driving-age males. The main advantage of market concentration is specialization, as it allows the firm to focus all of its resources toward understanding and serving a single segment. Specialization is also the major disadvantage of this approach. By "putting all of its eggs in one basket," the firm can be vulnerable to changes in its market segment, such as eco-nomic downturns and demographic shifts.

multisegment approach

Firms using the multisegment approach seek to attract buyers in more than one market seg-ment by offering a variety of products that appeal to different needs. Firms using this option can increase their share of the market by responding to the heterogeneous needs of different seg-ments. If the segments have enough buying potential, and the product is successful, the resulting sales increases can more than offset the increased costs of offering multiple products and mar-keting programs. The multisegment approach is the most widely used segmentation strategy in medium- to large-sized firms. It is extremely common in packaged goods and grocery products.

goals v objectives

However, failure to understand the key differences between them can severely limit the effective-ness of the marketing plan. Goals are general desired accomplishments, while objectives provide specific, quantitative benchmarks that can be used to gauge progress toward the achievement of the marketing goals

Pull and Push Strategy

In essence, the firm must decide whether it will use a pull strategy, a push strategy, or some combination of the two. When firms use a pull strategy, they focus their promotional efforts toward stimulating demand among final customers, who then exert pressure on the supply chain to carry the product. The coordinated use of heavy adver-tising, public relations, and consumer sales promotion has the effect of pulling products through the supply chain, hence its name. In a push strategy, promotional efforts focus on members of the supply chain, such as wholesalers and retailers, to motivate them to spend extra time and effort on selling the product. This strategy relies heavily on personal selling and trade sales promotion to push products through the supply chain toward final customers

when do consumers become less sensitive to price inelastic

In general, customers become much less sensitive to price when they have few choices or options for fulfilling their needs and wants. Price elasticity is lower (more inelastic) in these situations: lack of subs real or perecived neccessties complementary products situational influences product differentiation

IMC

Integrated marketing communications (IMC) refers to the strategic, coordinated use of promotion to create one consistent message across multiple channels to ensure maximum persuasive impact on the firm's current and potential customers. components include advertising, public relations, personal selling, and sales promotion

5 basic sources of power in the supply chain

Legitimate Power. This power source is based on the firm's position in the supply chain. Historically, manufacturers held most of the legitimate power, but this power balance shifted to retailers in the 1990s. In today's economy, retailers still wield a great deal of power, but consumers are clearly in charge.●●Reward Power. The ability to help other parties reach their goals and objectives is the crux of reward power. Rewards may come in terms of higher volume sales, sales with more favorable margins, or both. Individual salespeople at the buyer end of the channel may be rewarded with cash payments, merchandise, or vacations to gain more favorable presentation of a manufacturer's or wholesaler's products.●●Coercive Power. The ability to take positive outcomes away from other channel members, or the ability to inflict punishment on other channel members. For example, a manufacturer may slow down deliveries or postpone the availability of some portions of a product line to a wholesaler or retailer. Likewise, a retailer can decide not to carry a product, not to promote a product, or to give a product unfavorable placement on its shelves.●●Information Power. Having and sharing knowledge is the root of information power. Such knowledge makes channel members more effective and efficient. Information power may stem from knowledge concerning sales forecasts, market trends, competitive intelligence, product uses and usage rates, or other critical pieces of information. In many supply chains, retailers hold the most information power because their close proximity to customers gives them access to data and information that is difficult to obtain from other sources.●●Referent Power. Referent power has its basis in personal relationships and the fact that one party likes another party. It has long been said that buyers like to do business with salespeople they enjoy being around. This is still true, but increasingly referent power has its roots in firms wanting to associate with other firms, as opposed to individual one-on-one relationships. Similar cultures, values, and even information systems can lead to the development of referent power

dervied demand

Many business products are also characterized by derived demand, where the demand for the product is derived from, or dependent on, the demand for other business or consumer products. For example, the demand for business products such as mica, beeswax, kaolin, and paraffin is dependent on the demand for cosmetics.

what has personal selling evolved to

Many firms are reducing the cost of personal selling via new processes and systems. Like all aspects of business, sales operations have been transformed by technology. Many large firms now apply a modular sales process to better utilize human resources. Using online demand generation communications, marketers develop leads (interest by potential customers) that are developed by business development representatives to sort out interested qualified leads from those that are not. Utilizing technology, like Salesforce.com's relationship management system, these leads are passed to acquisition salespeople that develop the lead into a prospect (a prospective customer) in hopes of eventually making the sale. Once a customer has adopted the product, they may work with many different sales employees, from a customer success manager that helps them master product use to a retention salesperson that helps them add features and new products to their sales. Across all salespeople in the process, different technologies, data, and AI help to maintain and grow customer relationships via quality service and delivery of consistent product value to the customer. or this reason, personal selling has evolved to take on elements of customer service and marketing research. More than any other part of the firm, salespeople are closer to the customer and have many more opportunities for communication with them. Every contact with a customer gives the sales force a chance to deliver exceptional service and learn more about the customer's needs. Salespeople also have the opportunity to learn about competing products and the customer's reaction toward them. These relational aspects are important—whether the salesperson makes a sale or not. In today's highly competitive markets, the frontline knowledge held by the sales force is one of the most important assets of the firm. In fact, the knowledge held by the sales force is often an important strength that can be leveraged in developing marketing strategy.

why is market segmentation important

Market segmentation is critical to the success of most firms. Segmentation allows mar-keters to more precisely define and understand customer needs, and gives them the ability to tailor products to better suit those needs. The level of detailed information available about customers today has changed the way firms do business. However, the use of such infor-mation raises concerns about consumer privacy. Still, without segmentation we would not enjoy the incredible variety of products available today. Consider the number of choices we have in categories such as soft drinks, cereals, packaged goods, automobiles, and clothing. In addition, segmentation allows firms such as Amazon to better anticipate and serve con-sumer needs without ever having to ask what those needs are. In many respects, segmen-tation has improved our standard of living.

marketing channel functions and contact efficiency

Marketing channels make our lives easier because of the variety of functions performed by channel members. Likewise, channel members, particularly manufacturers, can cut costs by working through channel intermediaries. The most basic benefit of marketing channels is contact efficiency, where channels reduce the number of contacts nec-essary to exchange products. Without contact efficiency, we would have to visit a bakery, poultry farm, slaughterhouse, and dairy just to assemble the products necessary for breakfast.

services dependent on people continued

Moreover, because most services are dependent on people (employees, customers) for their delivery, they are susceptible to variations in quality and inconsistency. Such variations can oc-cur from one organization to another, from one outlet to another within the same organization, from one service to another within the same outlet, and even from one employee to another within the same outlet. Service quality can further vary from week to week, day to day, or even hour to hour. Also, because service quality is a subjective phenomenon, it can also vary from customer to customer, and for the same customer from one visit to the next. As a result, standardization and service quality are difficult to control. The lack of standardization, however, actually gives service firms one advantage: Services can be customized to match the specific needs of any customer.

The Price/Revenue Relationship

Myth #1: When business is good, a price cut will capture greater market share.Myth #2: When business is bad, a price cut will stimulate sales.Unfortunately, the relationship between price and revenue challenges these assumptions and makes them a risky proposition for most firms. The reality is that any price cut must be offset by an increase in sales volume just to maintain the same level of revenue.

product startegy

Of all the strategic decisions to be made in the marketing plan, the design, development, brand-ing, and positioning of the product are perhaps the most critical. At the heart of every organi-zation lies one or more products that define what the organization does and why it exists. As we stated in Chapter 1, the term product refers to something that buyers can acquire via exchange to satisfy a need or a want. This is a very broad definition that allows us to classify many different things as products: food, entertainment, information, people, places, ideas, etc. An organization's product offering is typically composed of many different elements—usually some combination of tangible goods, services, ideas, image, or even people. As we consider product decisions here, it is important to remember that product offerings in and of themselves have little value to customers. Rather, an offering's real value comes from its ability to deliver benefits that enhance a customer's situation or solve a customer's problems. For example, customers don't buy bugspray; they buy a bug-free environment. Neil Lane customers don't buy jewelry; they buy luxury, status, and social appeal. Students who frequent a local nightclub are not thirsty; they want to fulfill their need for social interaction. Likewise, companies do not need computers; they need to store, retrieve, distribute, network, and analyze data and information. Marketers who keep their sights set on developing product offerings that truly meet the needs of the target market are more likely to be successful.

Assignment of responsibility

One final aspect of objectives that sets them apart from goals is that the marketing manager must identify the person, team, or unit responsible for achieving each objective. By explicitly assigning responsibility, the firm can limit the problems of stealing credit and avoiding responsibility

drawback of Public relations

One major drawback of public relations activities is that the firm has much less control over how the message will be delivered. For example, many media personnel have a reputation for inserting their own opinions and biases when communicating a news story. Another drawback involves the risk of spending a great deal of time and effort in developing public relations messages that fail to attract media attention

variety

One of these important decisions is the number of product lines to offer, referred to as the width or variety of the product mix. By offering a wide variety of product lines, the firm can diversify its risk across a portfolio of product offerings

Outsourcing Channel Functions

Outsourcing—shifting work activities to businesses outside the firm—is a trend across many different industries and supply chains.28 In the past, outsourcing was used primarily as a way of cutting expenses associ-ated with labor, transportation, or other overhead costs. Today, though cutting expenses is still a main factor, the desire of many firms to focus on core competencies drives outsourcing. By out-sourcing noncore activities, firms can improve their focus on what they do best, free resources for other purposes, and enhance product differentiation—all of which lead to greater opportunities to develop and maintain competitive advantages.

6 approaches to base pricing

Price Skimming. This strategy intentionally sets a high price relative to the competition, thereby "skimming" off the profits early after the product's launch. Price skimming is designed to recover the high R&D and marketing expenses associated with developing a new product. For example, new prescription drugs are priced high initially and only drop in price once their patent protection expires.●●Price Penetration. This strategy is designed to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price. This approach works best when customers are price sensitive for the product or product category, research and development and marketing expenses are relatively low, or when new competitors will quickly enter the market. To use penetration pricing successfully, the firm must have a cost structure and scale economies that can withstand narrow profit margins.●●Freemium Pricing. For subscription services, many use a freemium pricing strategy by offering a free trial in order to gain customers with the goal that individuals will continue their subscription once the trial period ends. This strategy is commonly used by digital streaming services (e.g., Hulu, CBS All Access, and Sling TV) or recurring ship-to-home services (e.g., Dollar Shave Club and Blue Apron). In these cases, the pricing strategy is dependent on subscription renewal as the initial freemium is considered a customer acquisition cost that is only recovered with paid subscription renewal (typically over 12-18 months). ●●Prestige Pricing. This strategy sets prices at the top end of all competing products in a category. This is done to promote an image of exclusivity and superior quality. Prestige pricing is a viable approach in situations where it is hard to objectively judge the true value of a product. Ritz-Carlton Hotels, for example, never compete with other hotels on price. Instead, the company competes only on service and the value of the unique, high-quality experience that they deliver to hotel guests.●●Value-Based Pricing (EDLP). Firms that use a value-based pricing approach set reasonably low prices but still offer high-quality products and adequate customer services.

consumer products

Products used for personal use and enjoyment

psychographic segmentation

Psychographic segmentation deals with state-of-mind issues such as motives, attitudes, opinions, values, lifestyles, interests, and personality. These issues are more difficult to measure and often require primary marketing research to properly determine the makeup and size of various market segments. Once the firm identifies one or more psycho-graphic segments, they can be combined with demographic, geographic, or behavioral segmenta-tion to create fully developed consumer profiles

public realtions

Public relations is one component of a firm's corporate affairs activities. The goal of public relations is to track public attitudes, identify issues that may elicit public concern, and devel-op programs to create and maintain positive relationships between a firm and its stakeholders. A firm uses public relations to communicate with its stakeholders for the same reasons that it develops advertisements. Public relations can be used to promote the firm, its people, its ideas, and its image and can even create an internal shared understanding among employees. Because various stakeholders' attitudes toward the firm affect their decisions relative to the firm, it is important to maintain positive public opinion

5 major benefits of SWOT analysis

Simplicity= SWOT analysis requires no extensive training or technical skills to be used successfully. The analyst needs only a comprehensive understanding of the nature of the company and the industry in which it competes. decreases costs=Because specialized training and skills are not necessary, the use of SWOT analysis can actually reduce the costs associated with strategic planning. As firms begin to recognize this benefit of SWOT analysis, many opt to downsize or eliminate their strategic planning departments flexibility=SWOT analysis can enhance the quality of an organization's strategic planning even without extensive marketing information systems. However, when comprehensive sys-tems are present, they can be structured to feed information directly into the SWOT framework. The presence of a comprehensive information system can make repeated SWOT analyses run more smoothly and efficiently. integration and synthesis=SWOT analysis gives the analyst the ability to integrate and synthesize diverse infor-mation, both of a quantitative and a qualitative nature. It organizes information that is widely known as well as information that has only recently been acquired or discov-ered. SWOT analysis can also deal with a wide diversity of information sources. In fact, SWOT analysis helps transform information diversity from a weakness of the planning process into one of its major strengths. collaboration=SWOT analysis fosters collaboration and open information exchange between differ-ent functional areas. By learning what their counterparts do, what they know, what they think, and how they feel, the marketing analyst can solve problems, fill voids in the analysis, and eliminate potential disagreements before the finalization of the marketing plan

assortment

Sometimes called assortment, product line depth is an important marketing tool. Firms can attract a wide range of customers and market segments by offering a deep assortment of products in a specific line.

strengths and weaknesses

Strengths and weaknesses exist either because of resources possessed (or not possessed) by the firm, or in the nature of the relationships between the firm and its customers, its employees, or outside organi-zations (e.g., supply chain partners, suppliers, lending institutions, government agencies, etc.). Given that SWOT analysis must be customer focused to gain maximum benefit, strengths are meaningful only when they serve to satisfy a customer need (becomes a capability)

Firm's Cost Structure

The firm's costs in producing and marketing a product are an important factor in setting prices. Obviously, a firm that fails to cover both its direct costs (e.g., finished goods/components, materials, supplies, sales commission, transportation) and its indi-rect costs (e.g., administrative expenses, utilities, rent) will not make a profit. Perhaps the most popular way to associate costs and prices is through breakeven pricing, where the firm's fixed and variable costs are considered han the breakeven level in order to make a profit. The breakeven number is only a point of ref-erence in setting prices, as market conditions and customer demand must also be considered.Another way to use the firm's cost structure in setting prices is to use cost-plus pricing—a strategy that is quite common in retailing. Here, the firm sets prices based on average unit costs and its planned markup percentage

Continuity

The need for realism brings up a second consideration, that of continuity. Mar-keting objectives can be either continuous or discontinuous. A firm uses continuous objectives when its current objectives are similar to objectives set in the previous planning period. For example, an objective "to increase market share from 20 to 22 percent in the next fiscal year" could be carried forward in a similar fashion to the next period: "to increase market share from 22 to 24 percent in the next fiscal year." This would be a continuous objective because the factor in question and the magnitude of change are similar, or even identical, from period to period.An important caveat about continuous objectives: Objectives that are identical, or only slightly modified, from period to period often do not need new strategies, increased effort, or better im-plementation to be achieved. Marketing objectives should lead employees to perform at higher levels than would otherwise have been the case. Employees naturally tend to be objective oriented. Once they meet the objective, the level of creativity and effort tends to fall off. There are certainly circumstances where continuous objectives are appropriate, but they should not be set simply as a matter of habit. Discontinuous objectives significantly elevate the level of performance on a given outcome factor or bring new factors into the set of objectives. If sales growth has been averaging 10 percent, and the SWOT analysis suggests that this is an easily obtainable level, an example of a discon-tinuous objective might be "to increase sales 18 percent during the next fiscal year." This would require new strategies to sell additional products to existing customers, to expand the customer base, or at the very least to develop new tactics and/or enhance the implementation of existing strategies. Discontinuous objectives require more analysis and linkage to strategic planning than continuous objectives.Developing discontinuous objectives is one of the major benefits a company can gain from applying for the Malcolm Baldrige National Quality Award. Exhibit 4.12 identifies the elements of the Baldrige performance frame

buyer behavior in consumer markets

Trying to understand the buyer behavior of consumers is a challenging task for many reasons, but it is worth the effort. Consumers often behave in irrational and unpredictable ways. Con-sumers often say one thing but do another. Consumers are difficult to please and easy to upset. Still, the effort spent trying to understand consumers is valuable because it provides needed insight on how to design products and marketing programs that better meet consumer needs and wants.

value

We define valueas a customer's subjective evaluation of benefits relative to costs to determine the worth of a firm's product offering relative to other product offerings. (benefits/costs)

marketing channels

a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer Likewise, channel members, particularly manufacturers, can cut costs by working through channel intermediaries. The most basic benefit of marketing channels is contact efficiency,

four general directions companies may use for strategic efforts

agressive (many internal s and many external opp) diversification (many internal strengths many external threats) turnaround (many internal weakness, many external opp) defensive (many internal weak, many extenral threats)

mass customization

an extension of one-to-one marketing, mass customization refers to providing unique products and solutions to individual customers on a mass scale.

factors that affect the consumer purchase decision journey

descion making complexity individual influences social influences situational influences

6 of most common techniques for adjusting base prices

discounting reference pricing = is the amount that the general consumer declares they can pay for an item price lining= Price lining is the practice of releasing multiple versions of the same product or service at different price points simultaneously. It gives the impression that a product has both budget-friendly, standard options and premium options with extra features and benefits. Price lining is intended to appeal to both higher-end and value-conscious buyers by giving them a choice between better product and a better deal. odd pricing= using odd numbers for the end digits of a price. For example, a business might choose to price its product $9,99 instead of 10$ to make the product appear much cheaper. price bundling= here businesses combine complementary products or services into one package deal. This bundled price is usually lower than the sum of the individual prices of the products sold separately. tiered pricing= provides customers with several product plans or packages that offer a particular set of benefits at different price points.

what does demand for services depend on

employees

different marketing channels

exclusive distribution=Exclusive distribution is the most restrictive type of market coverage. Firms using this strategy give one merchant or outlet the sole right to sell a product within a defined geographic region., selective= Firms using selective distribution give several merchants or outlets the right to sell a product in a defined geographic region. Selective distribution is desirable when customers need the opportunity to comparison shop, and after-sale services are important intensive = Intensive distribution makes a product available in the maximum number of merchants or outlets in each area to gain as much exposure and as many sales opportunities as possible

unique characteristics of services

intangibility, inseparability, heterogeneity, perishability cilent based relationships

product mix (or portfolio)

is the total group of products offered by the company. For example, Procter & Gamble's entire product portfolio consists of beauty, hair, and personal care products; baby, feminine, and family care products; and health and grooming products in addition to the products in its fabric and home care line

what is a marketing program

marketing program, we are referring to the strategic combination of the four basic marketing mix elements, commonly known as the four Ps: product, price, place (distribution), and promotion. Although each element is vitally important to the success of the marketing strategy, the product usually receives the most attention because it is most responsible for fulfilling the customers' needs and wants. However, since customers' needs and wants are multifaceted, we prefer to think of the outcome of the marketing program as a complete "offering" that consists of an array of physical (tangible), service (intangible), and symbolic (perceptual) attributes designed to satisfy customers' needs and wants. In other words, the best marketing strategy is likely to be one that combines the product, price, place (distribution), and promotion elements in a way that maximizes the tangible, intangible, and perceptual attributes of the complete offering.

adverstising

mitted through the media such as television, radio, mag-azines, newspapers, direct mail, outdoor displays, the In-ternet, and mobile devices.●●is rapidly expanding online as consumers spend less time with traditional media.●●online is evolving, with influencer marketing.●●offers many benefits because it is extremely cost efficient when it reaches a large number of people. On the other hand, the initial outlay for advertising can be expensive.●●is sometimes difficult to measure in terms of its effective-ness in increasing sales

6 stages to which companies go in product development process

new to the world products (disruptive innovation) new product lines product line extensions improvements or revisions of exisiting products repositioning cost reductions

opportunities and threats

opportunities and threats exist outside the firm, independently of internal strengths, weaknesses, or marketing options. Opportunities and threats typically occur within the competi-tive, customer, economic, political/legal, technological, and/or sociocultural environments. After identifying opportunities and threats, the manager can develop strategies to take advantage of opportunities and minimize or overcome the firm's threats

power in supply chain

owerful channel members have the ability to get other firms to do things they otherwise would not do. Depending on how the channel member uses its influence, power can create considerable conflict, or it can make the entire supply chain operate more smoothly and effectively. Today, Amazon, discount mass merchandise retailers—like Walmart and Costco—and category focused retailers (also known as category killers)—such as Best Buy, Office Depot, and AutoZone—hold the power in most consumer channels. The sheer size and buying power of these firms allows them to demand price concessions from manufacturers. They also perform their own wholesaling functions; therefore, they receive trade discounts traditionally reserved for true wholesalers. Like-wise, their control over retail shelf space allows them to dictate when and where new products will be introduced. Manufacturers typically must pay hefty fees, called slotting allowances, just to get a single product placed on store shelves or featured as a "choice" product on e-commerce sites. Finally, their closeness to millions of customers allows these large retailers to gather valuable information at the point of sale. As mentioned previously, control over information is a valuable commodity and a source of power in virtually all supply chains

trade allowances

price reductions given for turning in an old item when buying a new one; A trade allowance is a special type of discount that we give as a producer to our wholesalers or retailers in exchange for them promoting and selling our products

four actions framework questions

reduce- which factors should be reduced well below the industrys standard eliminate= which of the factors that the industry takes for granted should be eliminated create= which factors should be created that the industry has never offered raise= which factors should be raised well above the industry standard

price elasticity

refers to customers' responsiveness or sensitivity to changes in price. A more precise definition defines elasticity as the relative impact on the demand for a product, given specific increases or decreases in the price charged for that prod-uct. Firms cannot base prices solely on price elasticity calculations because they will rarely know the elasticity for any product with great precision over time. Further, the same product can have different elasticities in different times, places, and situations. Since the actual price elasticity calculation is difficult to pinpoint precisely, firms often consider price elasticity in regard to differing customer behavior patterns or purchase situations. Understanding when, where, and how customers are more or less sensitive to price is crucial in setting fair and profitable prices

the marketing program

refers to the strategic combination of the four basic mar-keting mix elements, commonly known as the four Ps: product, price, place (distribution), and promotion. ●●has as its outcome a complete offering that consists of an array of physical (tangible), service (intangible), and symbolic (perceptual) attributes designed to satisfy cus-tomers' needs and wants. ●●strives to overcome commoditization by enhancing the service and symbolic elements of the offering

unsought products

s only when the consumer's ability and willingness to purchase a specific product backs up their want for the product. Many customers want a luxury yacht, for example, but only a few are able and willing to buy one. In some cases, consumers may actually need a product, but not want it. So-called unsought products such as life insurance, funeral services, long-term health insur-ance, and continuing education are good examples. In these cases, the marketer must first educate consumers on the need for the product, and then convince consumers to want their products over competing products. For example, Allstate often ends its advertisements posing the question, "Are You in Good Hands?" which specifically questions whether potential customers are sure about their insurance coverage. Creating the seed of doubt in the consumer's mind is a good first step toward educating potential customers about the need for adequate insurance

3 basic structural options for distribution

s. There are three basic structural options for distribution in terms of the amount of market coverage and level of exclusivity between vendor and retailer (applies to e-commerce and traditional retail):●●Exclusive Distribution. Exclusive distribution is the most restrictive type of market coverage. Firms using this strategy give one merchant or outlet the sole right to sell a product within a defined geographic region.●●Selective Distribution. Firms using selective distribution give several merchants or outlets the right to sell a product in a defined geographic region. Selective distribution is desirable when customers need the opportunity to comparison shop, and after-sale services are important.●●Intensive Distribution. Intensive distribution makes a product available in the maximum number of merchants or outlets in each area to gain as much exposure and as many sales opportunities as possible.

5 target market strategies

single segment targeting selective targeting mass marketing targeting product specializtion Product specialization is a marketing technique where businesses focus their marketing or branding efforts on a specific product or product line. market specialization A marketing specialization is a specific area of study that focuses on building campaigns to promote a brand, service, or product

physical distribution

the actual, physical movement of products along the distribution pathway

5 ways business markets differ from consumer markets

the buyer center hard and soft costs reciprocity mutual dependence value outcomes over experience

three types of individualized seg-mentation approaches

three types of individualized segmentation approaches are one-to-one marketing (personalized) , mass customization (Mass customization is a technique that combines the personalization of custom-made products with the low cost of mass production) and permission marketing (a form of advertising where the intended audience is given the choice of opting in to receive promotional messages.)

elements of customer service

time, dependability, communication/coordination, convenience/flexibility

business products

while those purchased for resale, to make other products, or for use in a firm's operations