Marketing Comprehensive Final Exam

Control

- Involves evaluating results of the marketing strategies and plans and taking corrective actions to ensure that the objectives are met -Set goals -Measure performance -Evaluate performance -Take corrective action

Consumer Products Shopping Products:

-Bought less frequently; more planning and effort, brand comparisons on basis of price, quality, style E.g., furniture, appliances

Factors to consider when choosing a media vehicle:

-Cost -Audience quality: match the product with the audience via the vehicle (e.g. camera ads in photography magazines) -Audience engagement: how engaged individuals are likely to be with ads (e.g. consumers are less likely to be engaged with ads appearing in the Wall Street Journal than those appearing in the Vogue) -Editorial quality: believability of the vehicle

Strategic Planning: Corporate Level

-Defining the company mission -Setting objectives and goals -Designing the business portfolio Business unit, and product, and market level: -Planning marketing and other functional strategies

Price Elasticity

-How responsive demand will be to a change in price -Demand may be characterized as Elastic or Inelastic

Consumer Products Unsought Products:

-Little product awareness or knowledge of the brand, sometimes negative interest E.g., life insurance, cemetery plots, blood donation

Product Line Decisions

-Major decision: product line length; the number of items in a product line -Line is short if profits increase after adding items; line is long if profits increase after dropping items -Analyze lines periodically to assess each item's sales and profits and understand the item's contribution to the line

Consumer Products Convenience goods:

-Purchased frequently and immediately with little comparison shopping effort -Low customer involvement E.g., candy, soda, newspapers

Consumer Products Specialty Products:

-Strong brand preference and loyalty; special purchasing effort, little comparison shopping -High price E.g., luxury items

Steps in the Marketing Process

-What marketers do for their customers 1. Understand marketplace & customers needs and wants 2. Design a customer-driven marketing strategy 3. Develop an integrated marketing program delivering superior value 4. Engage customers, build profitable relationships and create customer delight -What marketers expect from their customers 1. Capture value to create profits and customer equity

Understanding Marketplace and Customer Needs

1(a) Needs, wants & demands 1(b) Marketing offers 1(c) Value & satisfaction 1(d) Exchanges & relationships 1(e) Markets

One of the four strategies might be pursued for each SBU:

1. Build: invest more for building its share 2. Hold: invest enough to hold on to the current share 3. Harvest: using the short-term cash flow 4. Divest: liquidating the business

Continuous vs Pulsing

1. Continuous (steady): spread ads evenly during a given period; expanding markets with frequently purchased items; steady demand 2. Pulsing (intermittent): spreading ads unevenly during a given period; limited budget; purchase seasonal

Developing AD Strategy

1. Crete Ad messages: what general message will be communicated; customers must think about or react to the product/company in a particular way; hence, identify customer benefits 2. Selecting Ad media / Creative Concept: message is brought to life by making it distinct and memorable; maybe a visualization or phrase or a combination of both / must be MEANINGFUL, BELIEVABLE, DISTINCTIVE

Factors Influencing Consumer Behavior

1. Cultural 2. Social 3. Personal 4. Psychological -affect all steps

Marketing Research Process

1. Define the problem and research objectives 2. Developing the research plan for collecting information 3. Implementing research plan- collecting and analyzing the data 4. Interpreting and reporting the findings

Consumer Buyer Decision Process

1. Need recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase behavior

Major Ad Decisions

1. Objectives Setting: Communication & Sales objectives 2. Budget Decisions: Affordable approach, Percent of sales, Competitive Parity, and Objective/task 3A. Message Decisions: Message Strategy and Message Execution 3B. Media Decisions: Reach/Frequency/ Impact, Major media types, Specific media vehicles, and Media timing 4. Advertising Evaluation: Communication impact, sales/profit impact, and return on advertising

Personal Selling Process

1. Prospecting and qualifying 2. Pre approach 3. Approach 4. Presentation and Demonstration 5. Handling Objectives 6. Closing 7. Follow-up

Types of Consumer Decisions

1. Routine Problem Solving 2. Limited Problem Solving 3. Extensive Problem Solving Less Involvement - More Involvement

The Communication Process

1. Sender: company/person 2. Encoding: process of having the sender transform the benefits into a message 3. Promotional Tool: advertising, sales promotion, personal selling, public relations, direct marketing 4. Receivers: consumers 5.. Decoding: process of understanding the message 6. Response: impact of the message on the receiver's knowledge, behavior or attitude 7. Feedback: sender's interpretation of the response and indicates whether the message was decoded & understood as intended 8. Noise: anything that interferes with the communication process

Selecting Target Markets

1. Undifferentiated (Mass) Marketing 2. Differentiated (Segmented) Marketing 3. Concentrated (Niche) Marketing 4. Micromarketing (Local or Individual) Marketing Targeting Broadly ---> Targeting Narrowly

What six conditions doe good advertising follow?

1. extends from sound marketing strategy 2. takes the consumer's view 3. it is persuasive 4. breaks through the clutter 5. never promises more than it can deliver 6. prevents the creative idea from overwhelming the strategy

Stages in the Business Buying Process

1. problem recognition 2. general need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. order-routine specification 8. performance review

Cultural : Subculture

A distinct cultural group that exists as an identifiable segment within a larger, more complex society -Example, religions, racial groups, geographic regions, age groups etc. Traditional path of immigrants in this country has been integration into the American 'melting pot'; recently the pressures to blend in has lessened Due to the maintenance of one's subcultural values, America is now viewed as a 'salad bowl' - a huge potpourri of people who mix but do not blend -Marketers develop products/offerings that have special meanings for certain groups (however the marketer has defined such groups) of consumers

Post Purchase Behavior: Cognitive Dissonance

A doubt, arising mainly for major purchases, that makes consumers feel uneasy about their decision Cognitive dissonance exists for all decisions If doubts are not handled properly, consumers might spread negative word-of-mouth

Identifying Possible Value Differences & Competitive Advantages

A marketer can differentiate along the lines of... Product Services Channels People Image

Psychological Factors: Perception

A motivated person is ready to act; how one acts is dependent on how one perceives the situation Perception: our understanding of the world around us Different people perceive the same thing differently Differences in perception exists because of: selective attention, selective distortion, & selective retention -Marketers have to work hard to get their messages through and make sure that correct encoding occurs

Psychological Factors: Motivation

A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction Maslow's hierarchy of needs explains why people are driven by particular kinds of needs at specific times

Psychological Factors: Attitudes

A person's favorable or unfavorable evaluations toward an object or idea Puts people into a frame of mind of liking or disliking things, or, moving towards or away from them Marketers must make sure that consumers have a positive attitude towards the company's offerings

What is Positioning?

A product's position is the way a product is defined by consumers on important attributes —the place the product occupies in consumers' minds relative to competing products

What are Marketing Channels?

A set of interdependent organizations that help make a product or service available for use by the consumer or business users

Multi- Channel Distribution Systems

A single firm sets up two or more marketing channels to reach one or more customer segments For instance, a majority of companies sell directly to the consumers via the web and also make their products available through retailers Company expands its market coverage and can tailor its products/services to the specific needs of the consumers Channels become harder to control and are likely to generate more conflict

Current Business Portfolio Strategic business unit:

A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses An SBU can be a company division, a product line within a division, or sometimes a single product or brand

What do Marketing Channels do?

Affects company's pricing decisions, promotion decisions, and new product development decisions Usually involves a long-term commitment

Budget Decisions: Common Methods to Set the Budget

Affordable: What the company can afford; used mainly by smaller companies Percentage of Sales: Certain percentage of the current/forecasted sales; simple to use; no basis for a specific percentage Competitive Parity: Matching competitors' budgets; usually represent collective wisdom; however, competitors might not be accurate and they differ greatly Objective and tasks: Budget based on what is to be accomplished; most logical method; Define objectives, determine tasks required to achieve them, & estimate the costs of those tasks

Product Life Cycle (PLC)

After developing a new product, management wants the product to enjoy a long and profitable life Product will not sell forever; but management wants it to earn decent profits PLC is the course that a product's profits and sales take over its lifetime

Consumer Market Segmentation: Demographic

Age, gender, family size, family life cycle, income, occupation, education, race, religion, generation, nationality The most popular variable for segmenting customer groups Easier to measure than most other types of variables

Managing the Marketing Effort/Process

Analysis Planning Implementation Organization Control

What is a Product?

Anything that can be offered to a market to satisfy a want or need Products include physical objects, services, events, persons, places, organizations, ideas or some combination thereof

Value - Based Pricing Process

Assess customer need and value perceptions ---> Set target price to match customer perceived value---> Determine costs that can be incurred ---> Design product to deliver desired value at target price

How Channel Members add value : Logistical Function

Assorting, Storing, Sorting, Transporting

Generation Z

Born between 1996 - 2010; some sources include those born only after 2000 Hyper-connected, fluent in meme culture Work hard to manage online personas and their physical selves

Decline Stage

Both sales and profits start to decline gradually Declines occurs due to technological advances, changes in consumer tastes, and increased competition Firms cut back on their offerings in terms of markets targeted, channels of distribution used, and/or reduce promotional expenses

Building Strong Brands: Major Brand Strategy Decisions

Brand Positioning -Attributes -Benefits -Beliefs & Values Brand Name Selection -Selection -Protection Brand Sponsorship -Manufacturer's Brand -Private Brand -Licensing -Co-Branding Brand Development -Line Extensions -Brand Extensions -Multibrands -New Brands

Brand Sponsorship

Brand sponsorship options include: Manufacturer's brands (Dell computers, Levi's jeans, Sony) -Also called national brands Store brands -Also called private brands Licensed brands -Agreement in which a company permits another organization to use its brand on products for a fee Co-branding

Brand Equity and Brand Value

Brands are one of the most fundamental pieces of information used to simplify choices and reduce purchase risk Brand is a: -Name -Term -Sign -Symbol/Character - Design or a combination of these

Nature of the Buying Unit

Business purchases involve more decision participants Business buying involves a more professional purchasing effort

How Channel Members add value : Transactional Function

Buying, Selling, Risk taking

Advertising

Can reach huge audiences and can be repeated numerous times Consumers perceive advertised (versus unadvertised) products as being more legitimate Is impersonal; can be quite expensive and is usually not interactive

Discounts

Cash: for those who pay their bills promptly Quantity: for those who buy in large volumes Functional/Trade: offered to businesses for functions like selling and storing Seasonal: for buying merchandise out of season

Economic Environment

Changes in spending patterns are observable in consumers at different income levels As income rises, spending on food decreases, spending on housing remains constant, while spending on other categories and savings increase

Maturity Stage: Product Modification

Changing characteristics of the product such as quality, style, features, or packaging to attract new users

Common Marketing Channels for Consumer Goods

Channel A: selling directly to consumers via telemarketing, mail-order, online shopping etc Channel B: when the retailer is large & can buy in large quantities directly from manufacturers Channel C: commonly used for low-cost items that are frequently purchased, such as, candy, magazines etc Channel D: used when there are many small manufacturers and many wholesalers/retailers that lack resources to find each other; agents bring the parties together without taking title to merchandise

Channel Behavior and Organization: Channel Behavior

Channel members usually partner together for a common good and depend on each other Each channel member plays a specialized role in the channel; overall channel is most effective when each member assumes and performs the task it can do best Ideally all channel members should work together efficiently However, channel members often act alone for their own interests disagreeing about who should do what and for what rewards Such actions generate channel conflict

Products & Service Classifications - Consumer Products

Classification based on how consumers buy different products Based on that behavior marketers use different strategies in terms of marketing mix

Implementing the Research Plan

Collecting the data -Most expensive phase -Subject to error Processing the data -Check for accuracy -Code for analysis Analyzing the data -Tabulate results

Designing a business portfolio

Collection of business & products making up the company Best portfolio fits the company's strengths and weaknesses to the opportunities in the environment 2 steps: analysis of current business portfolio & shaping future portfolio

Pre approach

Collection of information about the potential customer and the company prior to initial visit Very important in international marketing because of different customs and norms - who makes the purchase decisions - what are the person's interests - what is the person's job title - what does the company do - what are the specific needs of the company - what is current use of the product in the company

Developing the Research Plan

Common sources of secondary data: -Internal databases; Commercial data services; Government sources Advantages: -Available more quickly and at a lower cost than primary data -Can sometimes lead to information that an individual firm cannot not gather by itself Disadvantages: -Needed information may not exist as secondary data -Secondary data must be carefully evaluated for relevancy, accuracy, currency, and impartiality

Price Adjustment Strategies

Companies usually adjust their basic prices for various customer differences and changing situations Discount and allowance pricing; Psychological pricing; Promotional pricing;

The Micro-Environment

Company Suppliers Marketing intermediaries Customers Competitors Publics

Brand Equity and Brand Value: Advantages of Brand Equity

Company enjoys reduced marketing costs Company can charge higher prices than its competitors Company can easily launch product and brand extensions Offers the company some defense against price competition Helps build strong customer relationships

Communicating and Delivering the Chosen Position

Company must take strong steps to deliver and communicate the desired position to target consumers The marketing mix efforts must support the positioning strategy

Promotion Mix

Concept of IMC suggests that company needs to blend the promotion tools into a coordinated promotion mix 2 basic promotion mixes: push and pull promotion strategy

Psychological pricing

Considers the psychology of prices; for example, higher-priced products are thought to have higher quality Consumers use price less during product evaluation when they can judge the quality of a product by examining it or recalling experiences Reference Pricing: EX: List Price $280 Amazon Price: $199.95

Product Mix

Consists of all product lines and items offered for sale Dimensions of product mix - width, length, and depth

Economic Environment

Consists of factors affecting consumers' purchasing power & spending patterns Value marketing is the main mantra Income distribution -Upper class: getting wealthier; spending patterns not affected by current economic events -Middle class: careful with money, however, can still afford some luxuries sometime; shrinking in size -Working class: stick to the basic purchasing and tries hard to save; have remained poor

Sales Promotion

Consumer oriented sales promotions are used to support a company's advertising and personal selling Short-term incentives Offers reasons to buy now Sales promotions should be integrated with other elements of the communication mix

Post Purchase Behavior

Consumer satisfaction is a function of consumer expectations and perceived product performance Performance < Expectations:  Dissatisfaction Performance = Expectations:  Satisfaction Performance > Expectations: Delight

Reasons for Growth of Sales Promotions

Consumers have become more deal oriented Managers are facing more pressure to increase their current sales Companies face more competition Advertising efficiency has declined

Market Structure and Demand:

Contains far fewer but larger buyers Buyers are more geographically concentrated Business demand is derived from consumer demand and are more inelastic

Indirect Marketing Channels

Contains one or more intermediaries

Types of Vertical Marketing Systems

Corporate VMS Contractual VMS Administered VMS

Cost Based Pricing

Cost-plus/mark-up pricing (simplest): adding a standard dollar amount or markup to the cost of the product Cost based pricing methods typically fail to consider the notion of customer value and relationship between price & demand Cost plus pricing is popular because it is simple and when all firms use this method, price competition is minimized

Price & Demand

Costs set lower limit of price while demand sets the upper limit

Factors Influencing Consumer Behavior

Cultural: Culture, Subculture, Social class Social: Groups and social networks, Family, Roles and status Personal: Age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept Psychological: Motivation, Perception, Learning, Beliefs and attitudes

Engaging & Building Profitable Relationships

Customer Relationship Management: the most important concept of modern marketing Overall process of engaging and building profitable customer relationships by delivering superior customer value and satisfaction Customer value: evaluation of the difference between all benefits and all costs of an offer relative to other offerings Satisfaction: difference between the product's perceived performance relative to the expectations

Understanding Marketplace and Customer Needs: (c) value & satisfaction

Customers usually form expectations of value and satisfaction and make choices accordingly Marketers must make sure to set the right level of expectations - too low a level might drive customers away; too high a level might result in disappointment

Maturity Stage: Marketing Mix Modification

Cut prices Implement coupon, rebate, or other promotions Launch a better ad campaign Use larger re-sellers

Marketing

Deals with customers; managing profitable customer relationships Goals of marketing - keep current customers & attract new customers Critical for the success of all kinds of organizations - for profit or not for profit

Developing Ad Strategy: Media Selection

Deciding on reach, frequency, impact, and engagement Choosing among major media types Selecting specific media vehicles Deciding on media timing

The Macro- Environment

Demographic Economic Natural Technological Political Cultural

Cost - Based Pricing Process

Design a Good Product ---> Determine Product Costs ---> Set Price Based on Cost ---> Convince Buyers of Product's Value

Marketing Strategy Development

Designing an initial strategy for introducing the concept Target markets Value proposition Marketing mix Profit goals Sales targets and market shares

Approach

Developing rapport with the customer; salesperson should illustrate that he/she is working to understand and assist in meeting the prospective client's needs - must make a good first impression - dress neatly and professionally - prospect should be greeted with a firm handshake and direct eye contact - should maintain a posture to indicate interest and openness to the customer - should let the customer know that he/she is actively listening

Product Development

Develops concept into a physical product Calls for a large jump in investment Prototypes are made Prototypes are subjected to physical tests

Direct Marketing

Direct communication from the marketer Direct mail, catalogs, telemarketing, online marketing Used for targeted marketing efforts

Consumer Market Segmentation: Psychographic

Dividing a market into different groups based on social class, lifestyle, or personality characteristics

What is Market Segmentation?

Dividing a market into smaller groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes

Consumer Market Segmentation: Behavioral

Dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product; many believe that this is the best variable for building market segments Occasions; Benefits sought; Usage rate

Designing Business Portfolio: Shaping Future Portfolio

Downsizing must also be considered by the firm Due to changes in market environment the company's product is not that profitable; firm entered an arena where it lacked the necessary expertise; products might simply age and die

Persuasive Advertising: Comparative AD

EX. Allegra

Reminder Advertising

EX. Coca Cola

Informative Advertising

EX. Geico

Value chain: Partnering with other Company depts.

Each dept. is a link in the value chain Firm's success depends on how well the various depts. coordinate their activities In reality, however, departmental relations produce conflict Marketers have to find a way to make sure depts. think of consumers and develop an efficient chain

Number of Channel Levels

Each marketing intermediary performing some work in bringing the product closer to the final buyer is a channel level The number of intermediary levels indicates the length of a channel.

AD Evaluation

Evaluation of communication & sales and profits effects Communication effects: whether the ad is communicating the message as intended; pre and post tests are conducted Sales/profits effects are harder to measure since these are affected by many other factors

Evaluation of Alternatives and Purchase Decision

Evaluation process is dependent upon the specific buying situation and the individual consumers Two factors that may interfere with realization of purchase intentions: -Attitudes of others -Unexpected situational factors

Understanding Marketplace and Customer Needs: (d) exchanges & relationships

Exchange: act of obtaining a desired object from someone by offering something in return Relationship: retaining customers and grow their business with the company; strong relationships are forged by delivering superior customer value

How Channel Members add value : Facilitating Function

Financing, Grading, Marketing Information and Research

Qualifying

Finding qualified sales leads (that is finding good ones and screening out poor ones)

Commercialization

First decide on timing (i.e., when to introduce the product) Next decide on where to introduce the product (e.g., single location, state, region, nationally, internationally) Develop a market rollout plan - for instance, small companies initially introduce the new product in attractive cities or regions one at a time; bigger companies usually introduce it in several regions or into the entire national market

Types of costs

Fixed costs (overheads): Costs that do not vary with production level Variable costs: Costs that vary directly with the level of production Total costs: sum of fixed and variable costs for a given level of production A price charged should cover at least the Total costs incurred

Organization

For a small company, one person might be responsible for all marketing work Large companies will contain specialists Companies are shifting to customer management, profitability, and equity

Follow Up

For complete customer satisfaction and repeat business Salesperson needs to complete details in terms of delivery time, purchase terms, servicing, and other matters Follow-up call should be scheduled to ensure proper delivery, installation, and complete all agreed upon actions Stay in touch by writing thank-you notes and occasionally calling on customers to ensure that they are still happy with their purchase decisions

Planning Marketing

Functional depts. in each unit work together to accomplish strategic objectives Key role of marketing: provides guiding philosophy; provides input to strategic planners; designs strategies to reach the unit's objectives Marketers must form an effective value chain and form a competitively superior value delivery network

Primary data collection research approach: Surveys

Gathering descriptive information - knowledge, attitudes, buying behavior, preferences etc. Advantages: used to obtain many different kinds of information for different situations; easy to administer Disadvantages: individuals might not remember information and/or provide wrong answers; surveys might be ignored; some might be unwilling to participate in a survey

Value Based Pricing

Good-value pricing: offering just the right combination of quality and good service at a fair price; involves offering less expensive versions of established branded products - Kenneth Cole (established), Kenneth Cole Reaction (less expensive component) Everyday Low Pricing: an important type of good value pricing; constant everyday low price with few or no discounts

Direct Marketing Channels

Have no intermediary levels between the manufacturer and the customer

Concept Testing

Have something concrete for the consumer - a description, drawing, or a 3-D visualization on the computer

Two types of Channel Conflict

Horizontal Conflict and Vertical Conflict

What is Consumer Buyer Behavior

How a consumer makes purchase decisions and what factors influence such decisions

Setting Objectives Advertising objectives can be classified by their primary purpose

INFORM - when introducing a new product category or new brand PERSUADE - build secondary demand when competition increases; comparative advertising: a company directly/indirectly compares its brand with one or more brands REMIND- keep consumers thinking about the product and maintain relationships; for mature products

Prospecting

Identifying potential customers Cold calling, trade shows, referrals, trade association directories, company sales records; best source: referrals

Elastic Demand

If demand changes greatly with a change in price, sellers in this case consider lowering price in order to sell more as long as the extra costs of producing and selling do not exceed the revenue generated

Inelastic Demand

If demand hardly changes with a change in price

Product Mix Pricing

If the product is a part of a product mix then the price is set such that profit is maximized for the product mix Pricing in this case is difficult because each product has different factors to deal with

Undifferentiated Marketing

Ignores segmentation opportunities Focuses on what is common in the needs of the consumer, rather than on what is different Company designs and markets a product that appeals to the largest number of buyers Mass marketers often have trouble competing with more focused firms that do a better job of satisfying the needs of the specific segments

Capturing Value from Customers: Share of Customer

In addition to customer lifetime value, marketers also want Share of Customer How much marketers get of the customer's purchasing in the product categories Firms offer greater variety to current customers

Political & Social Environment

Includes laws, government agencies, and pressure groups that influence or limit various organizations in a society Areas of concern: -Increasing legislation: reasons for business legislation (1) protecting consumers; (2) protecting businesses (3) protecting the society in which businesses operate -Changing government agency enforcement -Increased emphasis on ethics and socially responsible behavior

Maturity Stage: Market Modification

Increase the consumption of the current product How? Look for new users and market segments Look for ways to increase usage among present customers

Baby Boomers

Individuals born between 1946 - 1964 Largest age group in U.S. Marketers have always focused more on this group Physically fit and active Levi Strauss built its core business based on this group Spend a lot of money on housing, cars and entertainment; also spend the most of any age category on food, apparel, retirement programs

Generation X

Individuals born between 1965 - 1976 Described as being multicultural, media-savvy and techie-oriented; concerned about environmental issues, drugs and the AIDS epidemic More cynical and alienated than other age groups Marketers have targeted this group by appealing to their pragmatic nature and by creating ads that are stripped of glitz

Generation Y

Individuals born between 1977 - 2000 Media and tech savvy Ethnically diverse generation More upbeat about their lives and prospects Engages in multitasking; hence marketers make sure that advertising messages are short and to the point Tends to search for personal identity - buys products that are unique and stand out in the crowd Gets a lot of information from the web

Public Relations

Influences the feelings, opinions or beliefs held by actual and/or potential customers, suppliers, employees, stockholders about a company and its product/services News stories, special events, sponsorships, Rarely the main component of a promotional campaign

Introduction Stage

Initial sales are low; profits are minimal or even negative Marketing objectives are to stimulate awareness and trial Usually a basic version of the product is sold Heavy expenditures in advertising, promotion, distribution, and personal selling are incurred in order to initiate a primary demand Price might be either high or low

Service Nature & Characteristics

Inseparability: not able to separate the provider of the service from the service; the employee becomes a part of the service -Solution: have superior customer interaction Perishability: inability to store or stock services; they are developed and used almost instantly -Solution: encourage off-peak consumption

Service Nature & Characteristics

Intangibility: cannot be seen, tasted, felt or heard before purchase; hence more difficult to evaluate -Solution: show consumers a signal of service quality - place, people, price, equipment, etc. Variability: quality depends on who provides them and also when, where, and how they are provided -Solution: standardization and training

Services Marketing

Intangible activities/benefits provided to consumers by an organization in lieu of money One of the most important components of the U.S. economy About 80% of U.S. GDP comes from services

Brand Equity and Brand Value

Intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of the competitors A brand is a seller's promise to deliver consistently a specific set of features, benefits and services; the best brands convey a warranty of quality

Interpreting and Reporting Findings

Interpret the findings Draw conclusions Report to management: -Present findings and conclusions that will be most helpful to decision making

Line Extension

Introduction of additional items in a given product category under the same brand name (e.g., new flavors, forms, colors, ingredients, or package sizes)

Business Analysis

Involves a review of the sales, costs, and profit projections to assess fit with company objectives If results are positive, project moves to the product development phase

Marketing Planning

Involves deciding on marketing strategies that will help the company attain its overall objectives Address the what & why of marketing activities Detailed marketing plan needed for each business, product, or brand

Natural Environment

Involves natural resources that are needed as inputs by marketers or that are affected by marketing activities Be aware of trends in the natural economy: -Shortages of raw materials -Increased pollution -Increased government intervention -Environmentally sustainable strategies

Product Line Pricing

Involves setting prices across an entire product line based on cost differences between products and customer perceptions of value

Conventional Channel

Is made up of independent members each looking to maximize it own profits; no member has much control over others and there is no mechanism for assigning roles and managing channel conflicts

Brand Name Selection

It should suggest the product's benefits and qualities It should be easy to pronounce, recognize, and remember It should be distinctive It should be extendable It should translate easily into foreign languages It should be capable of registration and legal protection

Business Markets

Key differences exist between business and consumer buying situations: -Market structure and demand -Nature of the buying unit -Business decision process and the different types

Segmenting Consumer Markets

Key segmentation variables for Consumer markets: -Geographic -Demographic -Psychographic -Behavioral No single way to segment; often combine more than one variable to define segments

Administered VMS

Leadership is assumed through the SIZE OR POWER of a dominant channel member The powerful member dominating the channel is called the channel leader or channel captain For instance, manufacturers of successful and popular brands might be channel leaders; or, large retailers might be channel leaders

Capturing Value from Customers: Customer loyalty & retention

Losing a customer not only means losing out on one sale, but probably losing a stream of purchases that the customer might have made Stream of purchases that the customer makes over a lifetime is customer lifetime value Customer lifetime value essentially shows loyalty

Requirements for Effective Segmentation

MEASURABLE: size, purchasing power and profiles of segments must be measurable ACCESSIBLE: segments can be effectively reached and served SUBSTANTIAL: segments are large and profitable enough to serve DIFFERENTIABLE: segments respond differently to different marketing mix elements ACTIONABLE: the company has effective resources to take advantage of the segments and serve the varying needs

Cultural Environment

Made up of institutions and other forces that affect a society's basic values, perceptions, preferences, and behaviors -Core beliefs and values are passed on from parents to children and are reinforced by schools, religious institutions, business, and government -Secondary beliefs and values are more open to change Marketers may be able to change secondary beliefs, but NOT core beliefs

Contact Methods

Mail surveys Telephone surveys Personal interviews: Individual interviewing Focus group interviewing Online marketing research

How Many Differences to Promote

Many marketers believe that only one difference should be promoted via the unique selling proposition (USP) Sometimes when firms are competing on two or more attributes, it is necessary to promote more differences; however, using multiple differences may generate consumer disbelief

What happens if you are Market Penetrating?

Market is highly price sensitive Costs must fall as sales volume rises Competition must be kept out of the market or the price advantage will be only temporary

Brand Positioning

Marketers can position brands at any of three levels: Attributes Benefits Beliefs and values

Introduction

Marketers cannot appeal to all individuals in the marketplace There are varied consumers with multitude of different needs, preferences, and demands Companies also are varied in terms of their own abilities Hence, companies identify markets they can serve best - move from mass marketing to target marketing

Product & Service Decisions

Marketers make Product & Service Decisions at 3 levels: -Individual Product & Service Decisions -Product Line Decisions -Product Mix Decisions

Maslow's Hierarchy of Needs

Marketers try to find out what kinds of needs tend to motivate target consumers to make favorable decisions regarding the offering

What is Marketing?

Marketing is defined as the process by which companies engage customers, build strong relationships, and create customer value in order to capture value from customers in return

2. Design a Customer-driven Marketing Strategy

Marketing management orientations - Production - Product - Selling - Marketing - Societal

2. Design a Customer Value-Driven Marketing Strategy

Marketing management: choosing target markets & how best to serve them (value proposition) Target markets: only those customers that the marketer can serve well and profitably Value proposition: set of benefits/values delivered to customers to satisfy their needs; answers the question - why will I buy your offering?

Vertical Marketing System (VMS)

Members act as an unified system; one channel member (could be the manufacturer, wholesaler, or retailer) has the power to lay down the policies of channel operation and others listen to that member

Setting Company Objectives & Goals

Missions needs to be transformed to detailed supporting objectives Creates a hierarchy of objectives that are consistent with one another. For example: -Business objective: Increase profits -Marketing objective: Increase market share of domestic and international markets

Product Mix Decisions

Mix Width: number of different product lines Mix Length: the total number of items within the product lines Mix Depth: number of versions offered of each item in the line

Technological Environment

Most dramatic force shaping our destiny Changes rapidly, creating new markets and opportunities and/or danger of products becoming obsolete Challenge is to make practical, affordable new products Safety regulations result in higher research costs and longer time between product conceptualization and introduction

Social Factors: Family

Most important consumer buying entity among the different social factors Marketers are interested in the roles of the different family members and the amount of influence children (if any in the family) have Marketers need to identify which family members take on which roles and how children influence decisions

Closing

Most important stage Look for physical actions, comments, and questions; the salesperson must ask for the order

Need Recognition and Information Search

Need recognition can be triggered by internal or external stimuli Several sources of information may used during information search: -Personal sources -Commercial sources -Public sources -Experiential sources

Understanding Marketplace and Customer Needs: (a) needs, wants, & demands

Needs: States of felt deprivation including physical, social, & individual needs; basic part of human make-up Wants: the form of needs shaped by culture & individual personality Demand: wants backed by purchasing power

New Brands

New brands: -Developed based on belief that the power of its existing brand is waning and a new brand name is needed -Also used for products in new product categories for which none of the firm's existing brands are appropriate

New Product

New products can be obtained via acquisition or new-product development

Product Life Cycle (PLC)

Not all product follows the life cycle - some are introduced and decline/die quickly; others stay in the maturity stage for a long time; still others enter the decline stage, are then re-positioned, and re-enter the growth stage

Handling Objectives

Objections are likely to indicate that the salesperson has failed to provide adequate information to the buyer or has not demonstrated effectively how the product meets the needs of the prospect Salesperson should approach the objections as a sign of interest on the part of the prospect As salesperson becomes more experienced, he/she will realize that certain objections occur on a regular basis; hence, one should work to provide information early in the presentation to counter these objections

Optional Product Pricing

Offering to sell optional or accessory products sold along with the main product Pricing the options is problematic since the marketer must know which items to include in the base price and which to offer as options

Multibrands

Offers a way to establish different features and appeal to different buying motives

Defining the Problem & Research Objectives

Often the most difficult step - although something is wrong, it is not always possible to know exactly what or why Managers & researchers work together in this particular stage - managers understand better what information is needed ad researchers understand better what to do and how to get it After the problem is defined, research objectives are set

Capturing Value from Customers

Outcomes of creating customer value -Customer loyalty & retention -Grow share of customer -Build customer equity

Setting Objectives

Overall objective is to build customer relationships by delivering customer value: communication (knowledge regarding product/brand) and/or sales Specific task to be accomplished with a specific target audience during a specific period of time

Why New Products Fail

Overestimation of market size Design problems Incorrectly positioned, priced, or advertised Pushed despite poor marketing research findings Excessive development costs Competitive reaction Bad luck!

Personal Selling

Personal face-to-face interaction between two (or more) people Can be quite persuasive and sometimes buyers feel obligated to listen and respond even when there is no purchase Most expensive tool based on a cost per contact basis; maintaining a sales force is a long term investment

Personal Selling

Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships Personal selling is more effective than advertising in complex selling situations

Current Business Portfolio Portfolio analysis:

Portfolio analysis: -Process by which management evaluates the products and businesses making up the company -Resources are directed toward more profitable businesses while weaker ones are phased out or dropped

Selecting an Overall Positioning Strategy

Positioning of the brand is known as value proposition: the full mix of benefits used to differentiate and subsequently position the brand Value proposition answers the question: why one should buy the marketer's brand?

Major Pricing Strategies

Price charged by company falls somewhere in between costs (incurred to produce the offering) at one end and target consumers' perceived value at the other

Product Bundle Pricing

Pricing bundles of products sold together Can promote the sale of products that consumers might not otherwise buy; the combined price must be low enough to have value for the consumer

Captive Product Pricing

Pricing products that must be used with the main product The main products are often priced low and the supplies have a high mark-up

Developing the Research Plan

Primary data collection decisions: Research approach: -Observation, survey, or experiment Contact methods: -Mail, telephone, personal, or online Sampling plan: -Sampling unit, sample size, and sampling procedure Research instruments: -Questionnaire or mechanical instrument

Strategic Planning

Process of developing & maintaining a strategic fit between the organization's goals & capabilities and the changing marketing opportunities SETS THE STAGE FOR THE REST OF THE PLANNING OF THE FIRM- long range & annual plans deal with the current conditions; strategic plan deals with finding opportunities in constantly changing environment

Integrated Marketing Mix The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market

Product Price Place (distribution) Promotion

Test Marketing

Product and program are introduced in a more realistic market setting Not needed for all products -like when the cost of developing the product is low or when the management is quite confident and has a lot of experience with new product development Can be expensive and time consuming, but better than making a major marketing mistake

What should happen if you are market skimmming?

Product's quality and image must support its higher price Costs of low volume can't be so high they cancel the advantage of charging more Competitors should not be able to enter market easily and undercut price

Shaping Future Portfolio

Product/market expansion grid -Market penetration: Existing markets, existing products -Market development: New markets, existing products -Product development: Existing markets, new products -Diversification: New products, new markets

Pull Strategy

Promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product used more for products used by consumers and when consumers form the primary target market

Push Strategy

Promotion strategy that calls for using the sales force and trade promotion to push the product through channels used more for products used by a business and when other businesses form the primary target market

Buying Center: People

Purchasing manager almost always present Individuals from other functional areas are present depending on the need

Designing Business Portfolio: Current Business Portfolio

Question marks: Low-share of high-growth market Strategies: Build or Divest Stars: High-share of high-growth market Strategy: Build; Invest money to maintain growth in the market Cash cows: High-share of low-growth market Strategy: Hold; use money to support other SBUs and pay bills Dogs: Low-share of low-growth market Strategies: Harvest or Divest

Research Instruments: Questionnaires & Mechanical devices

Questionnaire decisions: What questions to ask? Form of each question? -Closed-ended -Open-ended Wording should be simple, direct, and unbiased Questions should be arranged in a logical order

Media Selection for an AD

Reach: Percentage of people exposed to an ad campaign during a given period of time Frequency: Number of times an average person is exposed to an advertisement Media Impact: Qualitative value of a message exposure through a given medium Engagement: Advertisers want to choose a medium that will engage consumers rather than simply reach them

Responding to the Environment

Reactive responses: -Many firms simply react to changes in the marketing environment Proactive responses: -Some firms attempt to manage the marketing environment via aggressive actions designed to affect the publics and forces in the marketing environment

Idea Screening

Reduce the number of ideas generated by spotting good ideas and dropping poor ones as soon as possible -Executives provide a description of the product along with estimates of market size, product price, development time and costs, manufacturing costs, and rate of return -Evaluated against a set of company criteria for new products

Personal Factors: Self Concept

Refers to the beliefs that a person hold about his/her self; overall self-concept is positive Consumers tend to approach products with images that could enhance their self-concept and avoid those products that do not

Create Delight

Relationships can be built by: 1. Basic relationships 2. Frequency marketing programs 3. Club marketing programs -Focus is on relating directly to profitable customers, for the long term Satisfied customers tend to remain loyal and spread positive word-of-mouth; aim of customer relationship management is to delight customers

Repositioning

Repositioning: Firm must also monitor and adapt the position over time to match changes in consumer needs and competitors' strategies

Customer Driven Marketing Strategy

Requires careful customer analysis To be successful, firms must engage in: -Market segmentation -Market targeting -Differentiation -Positioning

Developing the Research Plan

Research plan calls for gathering primary, or secondary data or both Primary data: Secondary data: Researchers usually start by collecting and analyzing secondary data

Growth Stage

Sales start to grow quickly; profits also increase Repeat purchases New competitors enter the market Promotional expenditures continue in order to initiate a secondary demand Emphasis is on building a loyal set of consumers (through product improvements) and distribution channel members

Presentation & Demonstration

Salesperson must attract and hold the prospective buyer's interest; salesperson must also listen to what the prospective buyer has to say Features vs. benefits Focus of the presentation should be how the features provide the benefits that address the prospect's needs or problems thereby offering value to the customer Customer-solution approach: calls for good listening & problem solving skills; flexible presentations to identify the customers' needs; customize presentation specifically for the individual customer Planning on presentation method

Major Sales Promotion Tools

Samples: expensive but effective for new products or create excitement for existing products Coupons: for early trial or stimulate sales of mature product Price packs: effective in stimulating short term sales Premiums: an item that provides an incentive to buy the marketer's product Contests and sweepstakes

Sampling Plan

Sampling requires three decisions: Who is to be surveyed? -Selecting the sampling unit How many people should be surveyed? -Referred to as sample size How should the people in the sample be chosen? -Describes the sampling procedure: Probability vs. non probability samples

Developing Sales Promotion Program

Selecting the type of promotion to use Deciding on the size of the incentive Conditions, if any, for the promotion How to promote and distribute the promotion program Length of the promotion Evaluation: compare sales before, during, and after the promotion program

How Consumers Purchase Services

Services are difficult to evaluate because of its intangible nature Due to inseparability and variability, evaluation also becomes difficult from one purchase situation to the next

Cultural : Culture

Set of socially acquired values that society accepts as a whole and transmits to its members through language and symbols Culture reflects basic values, perceptions, wants, and behaviors Marketers try to spot cultural shifts to discover new products that might be wanted (think about hybrid cars, environment friendly products, etc.)

Market Skimming

Setting a high price for a new product; company makes fewer, but more profitable sales

Market Penetration

Setting a low price in order to reach the mass market; attracts a large number of buyers quickly and wins a large market share

Competition Based Pricing

Setting prices based on competitors' strategies, costs, prices & market offerings Consumers usually base their judgments of value by comparing the price of similar products that competitors offer If consumers perceive value to be less (vis-à-vis competition), company must charge a lower price; alternatively, company needs to change customer perceptions to justify a higher price

Cost Based Pricing

Setting prices based on the costs for producing, distributing, & marketing the product plus a fair rate of return for the effort & risk undertaken by the marketer

Buying Center

Several people participating in the buying process sharing common goals, risk, and knowledge relevant to a purchase decision In some companies such centers might be formalized (Buying Committee); in others it might be an impromptu group -Individuals in the buying center -Relative influence of each member in the group -Buying criteria of each member -Perception of each member regarding the firm, product, services and salespeople

Defining a Market-Oriented Mission

Should not be too broad nor too narrow Should be realistic Should be specific Should fit the market environment Should be motivating Should not be stated in terms of profits/sales Focus on the experience that provides for the customers

Understanding Marketplace and Customer Needs: (b) market offerings

Some combination of products, services, information, or experiences; not only physical, but also intangible goods comprise market offerings Focusing too closely on specific offerings, rather than the overall customer needs/wants, results in marketing myopia; marketers ought to try & provide an 'experience' to their customers through their offering

Defining a Market-Oriented Mission

Statement of the organization's scope, often identifying its customers, markets, products, technology, and value Purpose for existence; guides people in the organization -What is our business? -Who is our customer? -What do consumers value? Mission statements should be MARKET ORIENTED

Defining the Problem & Research Objectives

Statement of the problem & research objectives guide the entire research process Research objectives may include: Exploratory Research: Gathering preliminary information that will help define the problem and suggest hypotheses Descriptive Research: Generating information to better describe marketing problems, situations, or markets Causal Research: Testing hypotheses about cause-and-effect relationships

Types of Buying Situations

Straight rebuy: -Buyer routinely reorders something without any modifications Modified rebuy: -Buyer wants to modify product specifications, prices, terms, or suppliers New task: -Buyer purchases a product or service for the first time

SWOT Analysis

Strengths: -Internal capabilities that may help a company reach its objectives Opportunities: -External factors that the company may be able to exploit to its advantage Weaknesses: -Internal limitations that may interfere with a company's ability to achieve its objectives Threats: -Current and emerging external factors that may challenge the company's performance

Brand Equity and Brand Value

Successful brands develop brand equity - effect of knowing about a brand; a measure of the brand's ability to capture consumer preference & loyalty Generally brands that rate high on differentiation, relevance, knowledge, and esteem have high brand equity As of 2016, 10 of the world's top brands include (valuation in millions): Apple ($178), Google ($133), Coca-Cola ($73), Microsoft ($72.8), Toyota ($53.6), IBM ($52.5); Samsung, Amazon, Mercedes, GE

What is Price?

Sum of all of the values that consumers give up in order to gain the benefits of having or using the offering

What is Marketing Research?

Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization Used to gather insights about customer motivations, purchase behavior, satisfaction, effectiveness of marketing strategies etc.

Micromarketing (Individual Marketing)

Tailoring products and marketing programs to the needs and preferences of individual customers Also known as mass customization or one-to-one marketing This has become popular due to great strides made in technology Makes relationships with customers more important than ever

The Product - Service Continuum

Tangible Dominant -> Intangible Dominant - Salt -> Teaching

Concentrated/Niche Marketing

Targets a large share of one or a couple of small segments Usually marketer achieves a strong position because of its greater knowledge of consumer needs and the special reputation it acquires Marketing is done more effectively and efficiently It does however involve higher than normal risks

Differentiated Marketing

Targets several segments and designs separate offers for each Companies hope for higher sales and a stronger position within each segment Developing a stronger position within each segment usually creates more total sales than undifferentiated marketing across all segments Expensive; companies must evaluate the trade-off between more sales and increased costs

Primary data collection research approach: Observation

Techniques in which the researcher relies on his or her powers of observation rather than communicating with a person in order to obtain information Advantage: provides information people are unable or unwilling to provide; usually costs less Disadvantages: can be difficult to interpret; infrequent and long-term behavior difficult to observe

Business Markets and Business Buyer Behavior

The business market is vast and involves far more dollars than do consumer markets Business buyer behavior: -Refers to the buying behavior of the organizations that buy goods and services for use in the production of other products and services, or for the purpose of reselling, or renting them to others for a profit -In the business buying process, buyers decide which products/services the organization needs and then finds, evaluates, and chooses among alternative suppliers

Demographics

The changing American family Geographic shifts in population More professional population Increasing diversity

Capturing Value from Customers: Build Customer Equity

The combined customer lifetime values of all the company's current and potential customers Customer equity is a better measure of firm's performance than sales or market share since sales/market share reflects the past, while equity portrays the future -Classify customers by loyalty and potential profitability -Manage accordingly

New Product Development

The development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts -Very expensive and very risky -60% of new consumer products fail within 12 months -Companies want to reduce the failure rate and hence set up a customer-driven new product development process

Cultural : Social Class

The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes Status is made up of wealth, power, and prestige Measured by occupation, education, and income -Social classes show distinct preferences in categories such as clothing, leisure activity, automobiles; those within a particular social class tend to exhibit similar preferences

Value Delivery Network: Partnering with others in the Marketing System

The firms need to look beyond their own and into the value chains of its suppliers, distributors, & ultimately customers More and more companies are partnering with other members to improve the performance of the value delivery network

Preparing an Integrated Marketing Program

The marketing program delivers the intended value to the target market; it translates the marketing strategy into action Consists of the 4 Ps of marketing: product, price, place, promotion

Price is ?

The only element in the marketing mix producing revenue; the only element that can be changed quickly

Developing the Research Plan

The research plan outlines: Sources of data Specific research approaches Contact methods Sampling plans Instruments for data collection

Demographic Environment

The study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics The changing age structure of the U.S. population is the single most important demographic trend -Baby boomers, Generation X, the Millennials, and Generation Z are key generational groups

Idea Generation

The systematic search for new ideas Internal sources: -Research & development -Company employees at all levels External sources: -Customers -Competitors -Distributors/Suppliers -Crowdsourcing

Select an Overall Positioning Strategy

The way the offering is defined by consumers on important attributes Consumers often do not have essential knowledge and/or time to evaluate offerings properly; instead, they categorize the offerings and position them in their mind The position is the resulting combination of perceptions, impressions, and feelings

Differentiation and Positioning

This is where marketers create value for customers Marketers have to think what makes their offering different from competitors' offerings - customers will buy a product that gives them more value To the extent that a company can provide more value, it gains competitive advantage Ideally a marketer ought to think through the entire experience that a customer has with the offering to differentiate itself from its competitors

Allowances

Trade-in: turning in an old item when buying a new one Promotional: to reward dealers for participating in advertising and sales support programs

Concept Development & Testing

Transformation of the idea to a concept Product idea: -Idea for a possible product that the company can see itself offering to the market Product concept: -Detailed version of the new-product idea stated in meaningful consumer terms Concept testing: -Testing new-product concepts with groups of target consumers to find out if the concepts have strong consumer appeal

Primary data collection research approach: Experimental Research

Tries to explain cause-and-effect relationships Involves: -Selecting matched groups of subjects -Giving different treatments -Controlling related factors -Checking differences in group responses

Implementation

Turns marketing plans into marketing actions by addressing: Who - Where - When - How Successful implementation depends on how well the company blends its people, organizational structure, decision & reward systems, and company culture into a cohesive program that supports its strategies

Co Branding

Two established brands used on the same product; takes advantage of the complimentary strength of each brand name

Social Factors : Groups

Two or more people (i.e. a group) may affect one's decision/s Membership groups: groups that have a direct influence and to which the consumer belongs to are termed Reference groups: used as point of reference such as an Aspirational group - where one does not belong and hopes to belong to; or Dissociative group - when one does not want to be associated with a particular group Marketers try to identify the relevant groups for their target consumers

Sales Promotion

Used to arouse interest regarding a product and provide a strong incentive to BUY NOW Usually such efforts are there for the short term Used in conjunction with personal selling/advertising Offered to channel intermediaries also

Brand Extension

Using a successful brand name to launch a new or modified product in a new category

Personal Factors: Personality

Usually described in terms of traits such as self-confidence, dominance, extroversion, materialism etc. Brands also have a personality and consumers more often than not choose those brands whose personalities match their own Marketers need to find out what kind of personality (if applicable) exists in the minds of the consumer regarding the offering

Value Based Pricing

Value added pricing: attaching value added features and services to differentiate and support higher prices The main idea is to differentiate the offering by adding features/amenities rather than cutting costs

Contractual VMS

Vertical marketing system in which channel members at different levels of are joined together THROUGH CONTRACTS Activities and conflicts are managed through contractual agreements Franchises are the most common types of contractual VMS EX: Subway

Corporate VMS

Vertical marketing system that combines successive stages of production and distribution under SINGLE OWNERSHIP Channel leadership is established via common ownership EX: Starbucks

Maturity Stage

When sales increase at a decreasing rate, product enters the maturity stage Profits drop Normally lasts longer and poses more challenges for the marketer Competition is intense; investment in product development and promotion increases; marginal competitors leave the market Strategies available: market modification, product modification, marketing-mix modification

Consumer Market Segmentation: Geographic

World region or country Region of country City or metro size Density Climate

Integrated Marketing Communications (IMC)

carefully integrating and coordinating the company's many communications tools to deliver a clear, consistent, and compelling message about the organization and its products

Price plays a key role in doing what?

creating customer value & building relationships

New Product Development Process

idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, test marketing, commercialization

Brand Development

line extensions, brand extensions, multibrands, new brands

Possible Value Propositions

more for more more for the same more for less the same for less less for much less

Horizontal Conflict

occurs among firms at the same level of the channel (e.g., retailer versus retailer)

Vertical Conflict

occurs between different levels of the same channel (e.g., wholesaler versus retailer)

Individual Product & Service Decisions:

product attributes, branding, packaging, labeling, product support services

Assessing Service Quality

reliability, tangibility, responsiveness, assurance, empathy

Designing a Customer-Driven Marketing Strategy

segmentation, targeting, differentiation, positioning

Promotional pricing

should not be used as a permanent fixture Loss leaders Special-event pricing Low-interest financing Longer warranties Free maintenance

When does disintermediation occur?

when producers by-pass the established intermediaries and go directly to the final buyer When companies sell via the Web there is direct competition with the established channels thereby resulting in conflict Hence, companies sometimes try and use direct channels in a way that helps the multichannel distribution