Marketing

Marketing develops through:

-Economics *microeconomic concepts of perfect competition) -Psycology (what motivates us, personality) -Sociology (class, behaviors in different areas) -Data science (algorithms)

Research Programme Proposed (ex. the karma)

A three-stage research programme is recommended, involving desk research, qualitative research, and quantitative research. Desk research should be carried out initially, to map the structure of this market offering for the ten largest university towns in the country. Qualitative research will be carried out before the quantitative stage to provide a stronger understanding of how (a) restaurants and (b) students perceive this new offering and the decision-making processes they go through to use it. This will provide a stronger understanding of how the samples should be determined in the quantitative research. Finally, quantitative research provides a stronger understanding of the market potential for the offering and a representative overview of how (a) restaurants and (b) students rate the prototype and those of its competitors on various dimensions

Stages within the new product development process Screening

All ideas need to be assessed so that only those that meet predetermined criteria are advanced. Key criteria include the fit between the proposed new idea and the overall corporate strategy and objectives. Another consideration involves the views of customers, which can be determined using concept testing. Other approaches consider how the market will react to the idea and what effort the organization will need to make if the offering is to be brought to market successfully. Whatever approaches are used, screening must be a separate activity to the idea-generation stage. If it is not, creativity might be impaired.

Difference market and marketing orientation

Company with marketing orientation: recognizes importance of marketing within the organization; appointing a marketing person as chief executive officer (CEO)/ chair of its board. Market orientation: not only involves the marketing function, but also involves everyone gathering and responding to market intelligence; customers' verbalized needs, preferences, customer and employee survey data.. from discussions with customers, trade partners, websites...

Reliability

Defined as 'a criterion for evaluating measurement scales; representing how consistent or stable the ratings generated by a scale are'. Reliability is affected by time, analytical bias, and questioning error. We can also distinguish between two types of reliability: internal and external reliability. To determine how reliable the data are, we conduct a study again over two or more time periods to evaluate the consistency of the data.

Market Share

Determining a company's performance within the marketplace, particularly when measured relative to the market leader, because it gives an indication of how competitive a company is.

Distribution/Availability

Extent to which an offering is distributed within the marketplace can be an important marketing metric. In other businesses, the quantity of locations within which a product is sold matter less than the quality of those locations. In a wide range of diverse industry sectors, distribution is critical so that customers can readily purchase a company's offerings. So companies set up sophisticated systems to link their customers' purchasing needs with their own purchasing and distribution needs. Measures of distribution and offering availability are critical in this and many other industries.

B2C: Consumer goods perspective

Focus placed on the use of advertising to stimulate demand, market research to determine how to develop appropriate consumer products and to determine how they are received once launched into the marketplace. Digital marketing techniques have greatly increased the amount of information that customers receive, and online procurement approaches now dictate how retailers reorder goods and services from suppliers.

Non-durable goods

Food and grocery items—reflect low levels of involvement and buyers are seldom concerned what product they buy. Risk is seen to be low and so there is little need to shop around for the best possible price. Buyers may buy on the basis of availability, price, habit, or brand experience. Yoghurt and newspapers, have a limited duration and are often used only once.

Framework for Price Perception Formation

Here, price perceptions are based on a variety of antecedents. Once we see a price, we make a judgement. This judgement is a newly formed price perception, which affects our willingness to pay, which in turn affects our purchase behaviour. Price perceptions are affected by prior beliefs, prior knowledge of reference prices, prior experiences with the offering or brand under consideration, price consciousness, our own price sensitivities, customer characteristics, and cultural factors. We compare the price we see with internal reference prices (price knowledge gained from experience) and external reference prices (what others tell us prices should be, perhaps through price comparison websites). Reference prices are price bands against which customers judge the purchase price of offerings. Reference prices can be viewed as predictive price expectations based on prior experience with those offerings or gained through word of mouth.

Stages within the new product development process Idea Generation

Ideas can be generated through customers, competitors, market research data (such as reports), social media analyses, R&D, customer service employees, the sales force, project development teams, and secondary data sources such as sales records. What this means is that organizations should foster a corporate culture that encourages creativity and supports people when they bring forward new ideas for product enhancements and other improvements.

Marketing in Context

In some cases services make up more than 40 per cent of the economy. Marketing techniques need to be adapted to the specific sector in which they are used. industrial B2Bconsumer-based ex. retail such as accountancy and profit or not-for-profit has impact on the marketing tools and techniques that we use

How companies' messages are perceived and remembered.

As consumers, we are interested in certain types of offering that are relevant to us when we receive marketing messages. Young people are not usually interested in advertising messages for pensions. We may also expose ourselves selectively to particular messages through the media we choose to read. Offerings can be characterized on the basis of whether consumers use rational or emotional thinking to evaluate their relative appeal.

Marketing as Exchange

Customers specify how marketers satisfy their needs. Customers then pay for the offering. Exchange relationships were seen to be economic; buying groceries and social; service provided by the police on behalf of society paid for by government. Ex: police, charity..

Market Orientation

Fundamental for survival in service firms and competitive advantage in manufacturing firms

Number of New Products

Innovating new offerings is vital for the prosperity of the industry. Developing new offerings without measuring or predicting their impact on the sales of existing offerings can be problematic, because the new offering can cannibalize the existing sales without adding any new business. This strategy may cause customer confusion as customers try to determine what they want from a variety of offers.

The Legal Environment

Laws and regulation makes transparency of pricing, the prevention of restrictive trade practices, product safety, good practice in packaging and labelling, the abuse of a dominant market position, and codes of practice in advertising, to take just a small selection, are enacted in most countries. Most countries also place restrictions on the prices that pharmaceutical companies can charge for drugs. In Japan, price regulations are stipulated for individual products. Companies that develop cosmetics and fragrances are required to comply with legislative measures designed to protect users, ensure products remain cosmetics and are not reclassified under different regulations. Product labelling regulation relate to the recycling of packaging and waste to ensure that it complies with environmental regulations.

pricing objectives

Marketing-based, for example pricing to achieve a particular market share (so-called market penetration pricing) or to position the brand so that it is perceived to be of a certain quality. Sometimes, companies price their propositions simply to survive, for example pricing to discourage new competitors from entering the market by lowering prices to maintain sales volumes whenever competitors lower their prices. Alternatively, a company might price to avoid price wars, maintaining prices at levels similar to its competitors—so-called competitor-oriented pricing. Finally, a company may price to achieve certain social goals (for example a pharmaceutical company pricing a drug to ensure maximum reach in a highly disease-afflicted country). The important consideration is whether or not the pricing objective is reasonable and measurable.

Difference marketing and sale

Marketing: focuses on creating 'product pull', by stoking demand among customers and consumers. Offering is designed through customer insight and co-creation to meet customers' long-term needs. Understanding and communicating with the customer to help in the design, development, delivery. Stimulates demand. Sales: enhancing distribution and solicitation of the companies' offerings once those offerings have already been designed. Delivery part of the value creation process. Emphasizes process of 'product push' by creating distribution incentives for salespeople and customers to make exchanges.

B2B perspective

Much B2B marketing activity: develop strong prospects for a company's offerings, ensure effective supply chain management operations to develop the market for a B2B offering, ensure that it is delivered appropriately. Because buyers purchase large volumes of products or complex 'bundles' of services tight specifications are produced with which suppliers must comply.

Shopping products

Not bought as frequently as convenience products. Consequently, consumers do not always have sufficient up-to-date information to make buying decisions. Purchase of shopping products such as furniture, electrical appliances, jewellery, and mobile phones requires some search for information, if only to explore the latest features. Consumers give time and effort to planning these purchases, because the level of risk is more substantial than that associated with convenience products. They will visit several stores, and use online and word-of-mouth communications for price comparisons, product information, and product reviews. Not surprisingly, levels of brand loyalty are quite low, because consumers switch brands to get the level of functionality and overall value they need.

Key marketing performance metrics

Operating Margin, Proftability, Sales, Awareness, Market share, nr of new products, Relative Price, Customer Satisfaction, Customer Advocacy, Distribution/Availability

Porter's 3 Generic Strategies

Overall cost leadership; differentiation; and focus.

four different processes:

People processing; possession processing; mental stimulus processing; and information processing.

Differentiation strategy

Requires that all value chain activities are geared towards the creation of offerings that are valued by, and which satisfy the needs of, particular broad segments. By identifying particular customer groups, each of which has a discrete set of needs, a product can be differentiated from its competitors. Zara differentiated itself by reformulating its value chain so that it became the fastest high-street brand to design, produce, distribute, and make fashion clothing available in its shops.

Strategic market analysis consists of?

SWOT Porter's 5 forces PESTLE

Qualitative Research Phase

Sampling: Ex; 15 in-depth interviews across a variety of restaurants and 10 group discussions with students in different university towns with a mix of gender/gender identity, as well as a mix of previous experience of using a similar platform. In-depth interviews with potential restaurants will be conducted in person on-site using an interview of approximately 45 minutes' duration. The discussion groups will last between 60 and 90 minutes, held at a central location within each of the towns listed. Data Analysis The qualitative data will be fully transcribed before analysis. All verbatim quotes obtained from in-depth interviews and discussion groups for the first set of interviews will be reviewed to ensure that our interviewers are questioning correctly before they proceed further. The analysis will use a thematic analytic approach based on research questions 3-5.

Stages within the new product development process Business Planning and Market Analysis

The development of a business plan is crucial, simply because it will indicate the potential and relative profitability of the product. To prepare the plan, important information about the size, shape, and dynamics of the market should be determined. The resultant profitability forecasts will be significant in determining how and when the product will be developed, if at all.

The Relationship between Pricing and Proposition Costs

The relationship between price and costs is important because costs should be substantially less than the price assigned to a proposition; otherwise the firm will not sell sufficient units to obtain sufficient revenues to cover costs and make long-term profits.

Launch Pricing

When launching new offerings, organizations tend to adopt one of two classic pricing strategies. In the first approach, they charge a lower price in the hope of generating a large volume of sales and recouping their research and development (R&D) investment that way (hence penetration pricing). With the second approach, they charge an initially high price and reduce the price over time, recouping the cost of the R&D investment from sales to the group of customers who are prepared to pay the higher price (hence price skimming the market). The actual amount sold at each of these unit prices depends on the price elasticity of demand and a more inelastic demand curve would give greater revenue from a market skimming price than a market penetration price, because the quantity sold would not be very different between the two prices. On average, the market skimming price is likely to yield a lower quantity of offerings sold than the market penetration price. Skim pricing is a fairly standard approach for high-tech offerings or those offerings that require substantial R&D investment initially.

Ch.15 Characteristics of services

intangibility, perishability, variability, inseparability, and a lack of ownership

Influencers at different stages of the proposition acquisition process:

■key influencers (with their own blogs and huge numbers of Twitter followers, but who are unlikely to know the consumer personally); ■social influencers (people within the consumer's social network, whom they might know personally, commenting in Twitter feeds and on blogs/forums); and ■known peer influencers (for example family members or part of the consumer's 'inner circle'). Known peer influencers were the most persuasive but the three groups were differentially important at different points in the proposition acquisition process. Close family and friends exert the most influence at the motive development and information-gathering phases. YouTube and anonymous peer reviewers exert most influence at the proposition evaluation and selection phases and close family and friends exert the most influence in the proposition selection and acquisition phases.

Ch.3 Criterias to evaluate when doing a market research

■the agency's reputation; ■the agency's perceived expertise; ■whether the study offers value for money; ■the time taken to complete the study; and ■the likelihood that the research design will provide insights into the management problem. Shortlisted agencies are given a preliminary outline of the client's needs in a research brief and asked to provide proposals on research methodology, timing, and costs. Afterwards, an agency is selected to undertake the work required. In the long term, clients are most satisfied with flexible agencies that avoid rigid research solutions and demonstrate professional knowledge of the industry, have an ability to focus on the management problem and to provide solutions.

Eugene McCarthy (1960):s 4Ps:

1. product— offering and how it meets the customer's need, its packaging, and its labelling (ch8) 2. place (distribution channels)—that is, in which the offering is delivered to the customer (ch9) 3. price— the cost to the customer and the cost plus profit to the seller (see Chapter 9) 4. promotion—how the offering's benefits and features are communicated to the potential buyer (see Chapters 10 and 11)

Booms and Bitner:s (1981), further three Ps into the marketing mix:

5. Physical evidence—Tangible components of services are strategically important. Ex: potential university students might assess whether or not they want to attend a university and a particular course by requesting a copy of brochures or by visiting the campus to assess the servicescape for themselves. 6. Process— importance of the service delivery. When processes are standardized, it is easier to manage customer expectations. Ex: DHL International GmbH, the German international express, produces a standardized menu of service options, such as track-and-trace delivery services, consistent around the world. 7. People— importance of customer service personnel, (professionals, interacting with the customers). How they interact with customers, and how satisfied customers are as a result of their experiences, is of strategic importance.

Desk Research Phase

A desk research phase involves systematic search of market intelligence databases, industry reports, and census data on the different university towns. Intention of this research is to pull together a market map of the towns, assessing the potential market on both sides of the platform (that is, restaurants and students). Therefore the analysis aims to provide answers to the research questions 1 and 2

Ch.9 Proposition Costs

There are costs associated with the distribution of the product components to and from farms and other catering suppliers to the restaurants.; costs of acquiring and maintaining computer and purchasing systems, and the costs of the packaging, bags, and any extras, such as the BK® crown.Firms determine what its fixed costs are and what its variable costs are for each proposition. These items vary for individual industries. Fixed costs do not vary according to the number of units of goods made or services sold and are independent of sales volume. In a Burger King restaurant, fixed costs are the cost of heating and lighting, rent, and staffing costs. In contrast, variable costs depend on the number of units of goods made or services sold. For example, with the production of Burger King cheeseburger meals, when sales and demand decrease, fewer raw goods such as cheeseburger ingredients, product packaging, and novelty items such as toys are required, so less spending on raw materials is necessary. Conversely, when sales increase, more raw materials are used and spending rises.

How to achieving above-average performance according to Porter

To become the lowest cost producer; or to differentiate the offering until it is of superior value to the customer.

Awareness

We can become aware of a brand, but not particularly like it and therefore not buy it; hence building awareness may not necessarily build sales. Brands can be marketed heavily, but not achieve success, ex. cigarettes. Awareness doesn't necessarily lead to purchase. Useful for determining if marketing communications activity has the required impact on customer recognition. While it is true that it may take time for any increased awareness to lead to increases in sales, if it does so at all and particularly in the short term, it is generally also true that the more a target market recognizes a brand, the more likely they are to become purchasers of it.

CH1. Questions when developing a product

What physical and service-based components is it made of? What societal contributions, positive or negative, do these offerings make, if any? Are substitute offerings available that meet your needs and the needs of society better?

Stage 2 Decide the Research Plan

When marketing research question(s) are decided, it is time for a research plan. here, the framework for conducting the project is developed. In developing this framework, marketing researchers need to consider what research is needed. The market research need can be specified based on objective (exploratory research, descriptive research, causal research), as well as source (primary versus secondary data) and methodology (qualita-tive versus quantitative). The research need will have implications for the design of the research plan.

Customer Advocacy

customers are then categorized into the following groups: 1promoters—those who are rated extremely likely to recommend (9-10 rating); 2passively satisfied—those who are rated likely to recommend (7-8 rating); and 3detractors—those who are extremely unlikely to recommend (0-6 rating).

Pricing Tactics

■Competition—How much are competitors charging for similar offerings? ■Cost—How much do the individual components that make up our offering cost? ■Demand—How much of this product or service will we sell at what price? ■Value—What components of the offering does the customer value and how much are they prepared to pay for them?

Intrinsic and extrinsic cues in servces

■Intrinsic cues are drawn directly from the 'service product' itself and are regarded as difficult to change. ■Extrinsic cues are said to surround the 'service product' and can be changed relatively easily.

Variability

As already noted, an important characteristic of services is that they are produced and consumed by people, simultaneously, as a single event. It is therefore exceedingly difficult to standardize the delivery of services for even the same customer on consecutive occasions. It is also difficult to deliver services so that they always meet the brand promise, especially because these promises often serve to frame customer service expectations. If demand increases unexpectedly and there is insufficient capacity to deal with the excess number of customers, service breakdown may occur. The variability of services does not mean that planning is a worthless activity. By anticipating situations in which service breakdown might occur, service managers can mitigate the potential for harm.

Focus strategies

Seek gaps in broad market segments or to find gaps in competitors' ranges, helps to seek out unfulfilled market needs. The focused operator then concentrates all value chain activities on a narrow range of offerings. Focus strategies can be oriented towards being the lowest cost producer for the particular segment or offering a differentiated offering for which the narrow target segment is willing to pay a higher price (for example Vans, in the trainer market). Means that there are two options for a company wishing to follow a focus strategy. The difference between a broad differentiator and a focused differentiator is that the former bases its strategy on attributes valued across a number of markets, whereas the latter seeks to meet the needs of particular segments within a market.

Reporting

We will work in partnership with Circularity to ensure that the results from the research are actionable. The report will be produced in PowerPoint and structured in line with the research objectives to include all aspects of the methodology and sampling. The report is designed to include charts and tables to best depict the main findings, together with clear and concise commentary. And copies of the report with accompanying tables, will be delivered to Circularity.

Technological Environment

The emergence of new technologies has affected most businesses, ex. changes in energy, transportation, and information and communication technologies. New technology also changes the way in which companies go to market. Companies are compelled to use a variety of channels, ex. smartphone apps, as well as traditional websites and physical stores. An app enables shoppers to test whether a melon is ripe.

What to ask after doing SWOT

1. Does the organization do something far better than its rivals? If it does, this is known as a competitive advantage. 2. Which of the organization's weaknesses does the strategy need to correct and is it competitively vulnerable? 3. Which opportunities can be pursued, and are there the necessary resources and capabilities to exploit them? 4. Which strategies are necessary to defend against the key threats?

Bartels (1951) two well-known economic marketing generalizations

1. Engels' Law— When consumer's income increases, the percentage of income spent for food decreases; for rent, fuel, and light remains the same; for clothing remains the same; and for miscellaneous items increases. 2. Reilly's Law of Retail Gravitation—Two cities attract retail trade from an intermediary city or town in the vicinity of the breaking point (the 50 per cent point) approximately in direct proportion to the populations of the two cities and in inverse proportion to the square of the distance from these two cities to the intermediate town. supermarket should locate stores near the larger of two major population centres.

Examples of marketing exchange processes

1. manufacturer and a retailer who buys goods through credit facility, expects any damaged goods to be returnable and wants the goods delivered in a certain way within a particular time The retailer undertakes to pay a wholesale (that is, trade-discounted) price. 2. Retailer and a custome to purchase groceries and paying through cash or by credit card. 3. Manufacturer dealing directly with its customers. Ex: Dell, selling directly from its website and via the telephone. 4. Exchange between police and the public who support them. 5 charity and its donors, whereby the donors provide funds and charity makes products and services available to third parties. 6. university providing education to educate its audiences in turns for payment. By understanding how exchanges take place between members of the supply chain, we can determine where to add value to the customer experience.

Borden:s 12-item list of elements which the manufacturer should consider when developing marketing mix:

1product planning; 2pricing; 3branding; 4channels of distribution; 5personal selling; 6advertising; 7promotions; 8packaging; 9display; 10servicing; 11physical handling; and 12fact finding and analysis.

Process of Market Segmentation

2 main approaches to market segmentation: Build-up method, approaches the task from the perspective of identifying markets that consist of customers who are similar. Breakdown method is the most established approach to segmenting consumer markets, the build-up approach seeks to move beyond the individual level, at which all customers are indeed different, to a more general level of analysis based on identifying similarities. Build-up method is customer-oriented, seeking to determine common customer needs. The aim of both methods is to identify market segments between which identifiable differences exist—segment heterogeneity—but within which similarities exist between members.

Difference between Customers and Consumers

A customer purchases an offering, but a consumer uses it (or eats it, in the case of food). If you paid your college fees, you are the customer. If someone else paid, they are the customer. You are the consumer.

Marketing:s positive contributions to society

Aggregate marketing system is considering the well. Works well in most countries, but there are parts of the world in which these systems have weaknesses. Some countries experience imperfections in supply and demand because of political circumstances or environmental circumstances. Therefore marketing plays an important role in developing and transforming society. Bringing innovations to the marketplace through the aggregate marketing system (social media..). Also: ■the promotion and delivery of desired offerings; ■the provision of a forum for market learning ■the stimulation of market demand; ■the provision of a wide scope of choice of offerings by providing a close or customized fit with consumer needs; ■the facilitation of purchases (or acquisitions generally, for example if no payment is made directly, as in the case of public services); ■time savings and the promotion of efficiency in customer requirement matching; ■the bringing of new offerings, and improvements, to market to meet latent and unserved needs; and ■the seeking of customer satisfaction for repeat purchases

Understanding the Internal Environment through portfolio analysis

An analysis of the internal environment of an organization is concerned with understanding and evaluating the capabilities and potential of the products, systems, human, marketing, and financial resources. An analysis of an organization's resources should not focus only on the relative strength and weakness of a particular resource; it is also important to consider how the resources compare to those of competitors, and how a company is able to manage and develop such resources going forward. Attention here is given to two main elements, products and finance, within portfolio analysis Portfolio Analysis By creating a balance of old, mature, established, growing, and very new offerings, there is a better chance of delivering profits now and at some point in the future, when the current offerings cease to be attractive and profitable. One of the popular methods for assessing the variety of businesses/offerings that an organization has involves the creation of a two-dimensional graphical picture of the comparative strategic positions. This technique is referred to as a portfolio matrix. BCG developed their idea and its matrix based on two key variables: market growth and relative market share A relative share of 0.8 means that the product achieves 80 per cent of the sales of the market leader's sales volume. This is not the strongest competitive position, but neither is it a weak position. A relative market share of 1 means that the company equally shares market leadership with a competitor. A relative market share of 2 means that the company has twice the market share of its nearest competitor.

Analysing Industries

An industry is composed of various organizations that market similar offerings. According to Porter (1979), we should review the 'competitive' environment within an industry to identify the major competitive forces, because this helps us to assess their impact on an organization's present and future competitive positions. Numerous variables help us to determine how attractive an industry is and shape the longer-term profitability for the different companies that make up the industry. Analysing an industry, however, is important because it helps us to determine its attractiveness and determine its relative competitive positioning. The competitive pressures across different markets vary quite considerably, but there are enough similarities to establish an analytical framework to gauge the nature and intensity of competition. Competition in an industry is a composite of the 'Five Forces' of competitive industry analysis. : the level of threat that new competitors will enter the market; the threat posed by substitute products; the bargaining power of buyers; and the bargaining power of suppliers. Affects the intensity of rivalry between the current competitors. The more intense the rivalry between industry players, the lower their overall performance. However, the lower the rivalry, the greater will be the performance of the industry players. Porter's model is useful because it exposes the competitive forces in operation in an industry and can lead to an assessment of their relative strengths. The collective impact determines what competition is like in the market. The stronger the competitive forces, the lower the profitability in a market. An organization needs to determine a competitive approach that allows it to influence the industry's competitive rules, protects it from competitive forces as much as possible, and gives it a strong position from which to compete.

Stages within the new product development process Test Marketing

Before committing a new product to a market, most organizations decide to test market the finished product. By piloting and testing the product under controlled real-market conditions, many of the genuine issues as perceived by customers can be raised and resolved, while minimizing any damage or risk to the organization and the brand. Test marketing can be undertaken using a particular geographical region or specific number of customer locations. The intention of test marketing is to evaluate the product and the whole marketing programme under real working conditions. Enables the product and marketing plan to be refined or adapted in the light of market reaction, but before release to the whole market.

Ch.8 Durable goods

Bicycles, music players, and refrigerators, can be used repeatedly and provide benefits each time they are used. Durable goods often require the purchaser to have high levels of involvement in the purchase decision. There is a high perceived risk in these decisions, and so consumers often spend time, care, and energy searching, formulating, and making the 'right' decision. Marketers should seek to understand these patterns of behaviour, provide and make accessible sufficient amounts of appropriate information, and ensure that there is the right type of service and support necessary to meet the needs of the target market.

Brand equity

Brand equity contributes to company valuations when they are sold, acquired, or merged. Companies increasingly focus on generating price premiums. Nevertheless, a price premium is useless if it's perceived to be unfair. When setting value-based prices, it is important to consider the following questions 1. What is the market strategy for the segment? What does the supplier want to accomplish? 2. What is the differential value that customers are likely to perceive—that is, the value between this offering and the next best alternative, assuming that the differential value can be verified with the customer's own data? 3. What is the price of the next-best alternative? 4. What is the cost of the supplier's offering? 5. What pricing tactics will be used initially (for example price discounting)? 6What is the customer's expectation of a 'fair' price?

Cost leadership

By having the lowest cost structure, an organization can offer standard offerings at acceptable levels of quality, yet still generate above-average profit margins. If attacked by a competitor using lower prices, the low-cost leader has a far bigger cushion than its competitors. Charging a lower price than rivals is not the critical point; the competitive advantage is derived from how the organization exploits its cost/price ratio. By reinvesting the profit, for example by improving product quality, investing more in product development, or building extra capacity, it is more likely to achieve long-run superiority.

Demographics and Lifestyles

Changes in population proportions impact on an organization's marketing activity. Significant market changes as a result of the ageing of most Western societies and significant rises in life expectancy. Trends imply significant growth in some industries—typically, medical and financial services. Other industries, are be negatively affected. Research predicts, for example, that manufacturers of cars will be negatively affected because older people are less likely to buy vehicles. The same applies to hospitality and education—two industries that tend to target younger customers. On the contrary, some countries and regions have a comparatively high proportion of younger citizens. Differences in the age structure in different countries give rise to different-sized markets for brand propositions.

Consumers repurchasing

Cognitive dissonance has significant application in marketing. Industrial or consumer purchasers are likely to feel cognitive dissonance if their expectations of proposition performance are not met in practice. This feeling of dissonance may be particularly acute in a high-involvement purchase, for example of a car. If we are happy with our purchase, we might decide to repurchase it, thereby displaying some degree of behavioural loyalty to a particular brand. This stage is termed the loyalty stage. Repeat purchase and loyalty in terms of relative attitude, is prefered for the brand above other relevant competitors. The goal of marketers is to build loyalty on the basis of both repeat purchase and superior relative attitude.

pestel The Economic Environment

Companies and organizations develop understanding of the economic environment because a country's economic circumstances impact what economists term factor prices within a particular industry, for a particular organization. These factors could include raw materials, labour, building and other capital costs, or any other input to a business. The economic environment of a firm is affected by the following: ■Wage inflation—Annual wage increases in a particular sector will depend on the supply of labour in that sector. Where there is scarcity of supply, wages usually increase (for example doctors). ■Price inflation—How much consumers pay for goods and services depends on the rate of supply of those goods and services. If supply is scarce, there is usually an increase in the price of that consumer good or service (for example petrol). ■Gross domestic product (GDP) per capita—The combined output of goods and services in a particular nation is a useful measure for determining relative wealth between countries when comparisons are calculated per member of the population—that is, GDP per capita at purchasing power parity (PPP), at which we look shortly. ■Income, sales, and corporation taxes—These taxes, typically operating in all countries around the world, usually at different levels, substantially affect how we market different offerings. ■Exchange rates—The relative value of a currency vis-à-vis another currency is an important calculation for those businesses operating in foreign markets or holding financial reserves in other currencies. ■Export quota controls and duties—Restrictions are often placed on the amounts (quotas) of goods and services that any particular firm or industry can import into a country, depending on which trading bloc or country a company or firm is exporting to

Buyers

Companies should ask themselves what percentage of their sales a single buyer represents. This is an important question because if one buying company purchases a large volume of offerings from the supplying company, as car manufacturers do from steel suppliers, it is likely to be able to demand price concessions when there are a lot of competing suppliers in the marketplace relative to the proportion of buyers. Buyers may also decide to increase their bargaining power through what is known as backward integration. Ex, a company is said to have integrated backwards when it moves into manufacturing the offerings it previously bought from its suppliers. Amazon offers an example of backward integration, shifting from being a bookseller at the time of its launch. Another factor impacting on a buyer's bargaining power is how price-sensitive a particular company is. Depending on their trading circumstances, some companies might be more price-sensitive than other buyers. If such companies are more price-sensitive and yet there are a lot of competing suppliers for their business, they are likely to switch supplier rather than be loyal to one. Most companies try to enhance other factors associated with an offering, for example aftersales service or product/service customization, to try to reduce a client company's price-sensitivity. When analysing an industry, we should understand the bargaining power that buyers have over their suppliers because this can impact on the price charged and the volumes sold or total revenue earned.

Stage 4 Data Analysis and Interpretation

Comprises data input, analysis, and interpretation. Qualitative data—usually alphanumeric (that is, words and numbers)—is often entered into computer software applications as word-processed documents, or as video or sound files, for content analysis. Quantitative data analysis uses statistical analysis packages (for example IBM SPSS). In these cases, data are numeric and entered into spreadsheet packages (for example Microsoft Excel) or directly into the statistical computer application. Online questionnaires are useful because the data are automatically entered into a database, saving time and ensuring higher level of data quality. If computer-assisted personal interviewing (CAPI) or computer-assisted telephone interviewing (CATI) methods are used, analysis can occur instantaneously as the interviews are undertaken. Computer-assisted web interviewing (CAWI) techniques allow the researcher to read the questions from a computer screen and to directly enter the responses of the respondents.

Operating Margin

Determined by dividing operating income by net sales. Problem: that they do not always provide an indication of how much the customer is actually willing to pay. For example, smoothie manufacturers generally operate higher operating margins (because they charge higher prices) than manufacturers in the fruit juice category. If the smoothie manufacturers had set their initial prices based on typical fruit juice margins, they would never have been as successful as they have.

Sales

Determined by measuring how many units of an offering are sold, multiplying this by the average unit price, and sales volume is calculated simply by determining how many units of an offering have been sold. Benefit: sales values and volumes can be measured directly against individual offerings. May be linked to geographical sales territories, and so, when sales fall in a particular territory and efforts have been made to increase sales, it is relatively easy to determine whether or not those efforts have been successful. Use of sales volumes as marketing metric is problematic because with high-volume turnover products the profit may actually be disproportionately low. In such situation, it's wiser to measure profit/profitability, where the data are available. Sales values may also hide the fact that an offering is being sold at unprofitable levels.

The Concept of Market Segmentation

Division of a mass market into distinct and identifiable groups, or segments, defined by common characteristics and needs, and displays similar responses to marketing actions. Main segments in the consumer photography market: ■The slow photography segment; consumers who share the pleasure associated with the creation and capture of an image as much as the photo itself. They like photography and the capture of a high-quality image is integral to the activity. ■The fast photography segment involves the speedy creation and consumption of images. Most of the images are used for immediate communication, very often shared with friends and family through social media. Mobile devices are a key device for this segment. ■The casual photography segment uses occasional photos to capture memories. These people rarely take photos and can be categorized as snapshot photographers. ■The intelligent photography segment; characterized by people who wish to blend the capture of a high-quality image with social and memory-keeping purposes. They enjoy using innovative techniques and new devices.

Pricing Strategies and Objectives

Four main pricing strategies are as follows: ■Premium pricing focuses on pricing an offering to indicate its distinctiveness in the marketplace. For example, Aston Martin prices the DB11 in this way, at around £150,000 ■Penetration pricing refers to setting the price low relative to the competition to gain market share. Amazon has adopted this approach to build its now substantial customer base. This strategy is frequently used for new proposition launches. ■Economy pricing involves setting the prices at a bare minimum to attract price-sensitive customers. Supermarkets often use this approach with their everyday low pricing approach (for example Walmart in the United States) ■Price skimming occurs when the price is initially set high and then lowered in sequential steps. Apple iPhone adopted this strategy, for example. This strategy is frequently used for the launch of new offerings. Companies' pricing objectives may relate to other objectives, for example to maximize profit, or to achieve a satisfactory level of profits or sales, or achieve a particular return on investment. Companies may price to generate cash flow, offering discounts for quick payment.

Quantitative Research Phase

Here, we propose computer-assisted web-interviewing (CAWI) methodology for both the restaurants and students, which allows us to use complex question routing and skip patterns. Aim to interview and undertake more 200 restaurants using a judgemental sampling method, identifying appropriate companies and respondents in conjunction with Circularity. Sampling In the survey, respondents will be screened to ensure that they are appropriate. To determine the correct number of interviews to conduct in a given research study, we need to consider several factors, including the overall objective, requirements for subset analysis, and, in this case, the overall size of the target universe. We recommend using an overall sample size of 200 interviews. Using standard industrial classification (SIC) codes and company size, we will draw the sample proportionally to Circularity's key intended target markets using a judgemental sampling methodology. To facilitate the selection of the sample, we will purchase lists of client companies from Dun & Bradstreet and/or other reputable list providers. In the student survey, we will use a subcontracted omnibus survey provider specializing in youth/student panels. Respondents are screened to ensure that they are in the target audience. The subcontracted agency typically uses a sample size of c.1,000 respondents and aims to ensure that the sample is representative of the population by questioning panels constructed using a combination of gender/gender identity, location, and ethnicity. The survey uses a random sampling methodology and weighting to ensure a representative sample within this target group.

Customer Satisfaction

Hotels work hard to satisfy their customers and to ensure an enjoyable experience. In some industries, customer satisfaction is notoriously low, but customers perceive the costs of switching their business to other providers to be too high, exr etail banking services because customers are reluctant to switch banks even when they are dissatisfied. Energy companies ex. ScottishPower measure the proportion of their customers who leave and switch supplier. Some companies provide a high level of individual and personal help for customers, ex. staff members at the Ritz-Carlton hotels are famously authorized to spend up to $2,000 to resolve a customer's problem. Businesses may spend too much time and effort serving customers who are neither profitable nor offer the most profit potential in the future. Generating high levels of customer satisfaction or delight may ultimately reduce shareholder value because the costs involved produce lower levels of profitability.

Ch.6 STP process

Identifies which potential customers, they should focus on,the most attractive and accessible groups of customers. Identifies new products and service opportunities, develop positioning and communication strategies, and to allocate scarce resources to support key marketing goals. Organizations commission segmentation research to revise their marketing strategy, investigate a declining brand, launch a new offering, or restructure their pricing policies. When operating in highly dynamic environments, segmentation research should be conducted at regular intervals to identify changes in the marketplace.

Validity and reliability

Important concepts in quantitative market research. Help researchers understanding the extent to which the data obtained from the study represent reality, or 'truth'. Quantitative research methods rely on the degree to which the data elicited is reproduced in a later study (that is, reliability) and the extent to which the data generated are free from bias (valid). Validity = criterion for evaluating measurement scales; represents the extent to which a scale is a true reflection of the underlying variable or construct it is attempting to measure'. Way of measuring validity is simply the researcher exercising their subjective judgement to ascertain whether or not an instrument is measuring what it is supposed to measure. Ex, a question asked about job satisfaction does not necessarily infer loyalty to the organization.

Price Consciousness

In addition to deciding whether a price is fair or what customers expect to pay, we also need to know whether customers are conscious of prices in a particular category. So if people do not know the reference prices of particular offerings, how can they determine their fairness? In the world of contactless payment cards, consumers are increasingly less likely to remember prices as they 'swipe and go', meaning that they are also likely to spend more. In the UK, supermarkets have come under pressure to pay farmers more for their produce because it has emerged that many supermarket chains have been paying the farmers less than the cost of production, meaning that many farmers have been forced to sell at a loss, and the public have seen this as unfair.

Willingness to Pay

In an online consumer survey of price perceptions in the United States 53 per cent had strongly negative perceptions of the price of replacement razor cartridges and prescription drugs, and a quarter of respondents regarded airline pricing negatively. This indicates that we memorize certain prices for some items, and when companies deviate from those prices, we perceive them as unfair. A key question is: why do some consumers see one proposition's price as fair and others don't? If we are to price an offering according to customer needs, we should understand which customers think a particular price is a fair price to pay, or what they expect to pay, or what they think others would pay. For example, Superdrug in the UK was forced to review its 'sexist' pricing after an investigation by The Times revealed that women were being charged more than men on certain offerings such as razors.

Substitutes

In any industry, there are usually substitute offerings that perform the same function or meet similar customer needs. Substitutes are thus a threat because they could, in the long run, replace current offerings. Levitt (1960) warned that many companies fail to recognize the competitive threat from newly developing offerings. He cites the refusal of the American railroad industry to recognize the competitive threat arising from the development of the automobile and airline industries in the transport sector. Most countries' fixed-line operators have found it difficult to hold on to their original subscribers, partly because cheaper alternatives are appearing in the market. It takes time for consumers to become aware of new offerings and to obtain the necessary information to allow them to make a decision over whether or not to switch. Consumers consider the switching costs associated with such a decision affecting their propensity to substitute the offering for another. They consider the relative price performance of one offering over another. Ex. if we were to wish to travel from Amsterdam to Paris, we would consider the relative price differences and we would also factor into this decision how comfortable and convenient these different journeys are likely to be before we finally make our choice. In analysing our place within an industry, we should consider what alternative offerings exist in the marketplace that also, to a greater or lesser extent, meet our customers' needs.

Stages within the new product development process Business Product Development and Selection

In many organizations, several product ideas are considered simultaneously. It is management's task to select those that have commercial potential and are in the best interests of the organization and its longer-term strategy, goals, and use of resources. There is a trade-off between the need to test and reduce risk, and the need to go to market and drive income to get a return on the investment committed to the new proposition. This phase is expensive, so only a limited number of projects are allowed to proceed into development. Prototypes and test versions are developed for those projects that are selected for further development. These are then subjected to functional performance tests, design revisions, manufacturing requirements analysis, distribution analysis, and a multitude of other testing procedures.

Forward integration

In some industries, suppliers increase their market dominance by forward integration. Ex. a toy manufacturer could set up a retail outlet or e-commerce facility to sell its own products direct to end users. Allows companies not only to better control their own supply chains, but also to sell at lower prices, thereby increasing sales and profit from increased retail sales. Equally, if companies face high switching, economic, resource, and time costs associated with using another supplier, the supplier has stronger bargaining power with that particular company.

relationship marketing (Payne, 1993)

Integrating customer service, quality assurance, and marketing activity. Customer retention over customer acquisition. Customer retention is an important activity in marketing, because research has demonstrated that when a company retains loyal customers, it is more likely to be profitable compared with competitors who do not, because loyal customers: ■will increase their purchases over time; ■are cheaper to promote to; ■who are happy with their relationship with a company refer it to others; and ■are prepared to pay a (small) price premium if they are loyal (Reichheld and Sasser, 1990).

Inseparability

Interaction within the solo experience (doctor-patient) allows the service provider to exercise greater control, if only because they can manage the immediate context within which the interaction occurs and not be unduly influenced by wider environmental issues. Opportunities exist for flexibility and adaptation as the service delivery unfolds. For example, a check-in operator for an airline operates within a particular context, is not influenced by other major events during the interaction, and can adapt tone of voice, body language, and overall approach to meet the needs of particular travellers. One final aspect of variability concerns the influence arising from the mixture of customers present during the service delivery. If there is a broad mix of customers, service delivery may be affected because the needs of different groups have to be attended to by the service provider. Such a mixture may dilute the impact of the service actually delivered.

Stage 5 Report Preparation and Presentation

Involves reporting the results and the presentation of the findings of the study to the external or in-house client. The results should be presented free from bias. Marketing research data are of little use unless translated into a format that is meaningful to the manager or client who initially demanded the data. Senior people within the commissioning organization who may or may not have been involved in commissioning the work often attend presentations. Usually, agencies and consultants prepare their reports using a basic pro-forma template.

Stage 3 Data Collection and Sampling

Involves the conduct of fieldwork and the collection of data. At this stage, we send out questionnaires, or run online focus group sessions, or conduct a netnographic study, depending on the decisions taken in the first design stage of the fieldwork. The procedures undertaken when conducting the fieldwork might relate to how to ask the questions of the respondents—whether using the telephone, mail, or in person, how to select an appropriate sample, how to pre-code the answers to a questionnaire, how to code the answers arising out of open-ended questions. When market research companies undertake shopping mall intercept interviews, they usually re-contact a proportion of the respondents to check their answers to ensure that the interviews have been conducted properly. In qualitative research, samples are selected on a convenience or judgemental basis. In quantitative research, probability or non-probability methods are used, including: ■simple random sampling, where the population elements are accorded a number and a sample is selected by generating random numbers that correspond to the individual population elements; ■systematic random sampling, where population elements are known and the first sample unit is selected using random number generation, but after that each of the succeeding sample units is selected systematically based on nth number, where n is determined by dividing the population size by the sample size; and ■stratified random sampling, where a specific characteristic(s) is used (for example gender, age) to design homogeneous subgroups from which a representative sample is drawn. Non-random methods include: ■quota sampling, where criteria such as gender, ethnicity, or some other customer characteristic are used to restrict the sample, but the selection of the sample unit is left to the judgement of the researcher; ■convenience sampling, where no such restrictions are placed on the selection of the respondents and anybody can be selected; and ■snowball sampling, where respondents are selected from rare populations (ex high-performance car buyers), perhaps initially from among responses to newspaper adverts and then later using referrals from the initial respondents, thereby 'snowballing' the sample.

The Socio-cultural Environment

Lifestyles are constantly changing and, over time, consumers shift their preferences. Companies that fail to recognize changes in the socio-cultural environment and to adapt or change their offerings often fail. In US, there is an important segment of Hispanic millennials representing a specific group within the broader Hispanic community. These consumers have stronger connections with Hispanic culture and tend to spend more on products such as clothing, accessories, and grooming products. When considering the socio-cultural environment, firms need to consider the changing nature of households, demographics, lifestyles, and family structures, and changing values in society.

Marketing

Long-term satisfaction of customer needs; part of the design and development of customer value processes. Greater customer input into design of offering (co-creation). Focus on stimulation of demand.

Profit/Profitability

Main key performance measure. Pprofit defined by how much cash there is left in the business when expenses are subtracted from revenues generated. Indicates what is left over either for distribution to the shareholders of the business or for reinvestment in the business. Problem: its link with marketing activity is not always clear. Process required to determine the link requires input from finance department to measure contributions. Can be difficult determining if marketing activity has improved profitability. We might have a very profitable business operating in the short term,ex low-value overpriced offering. In the long term customers will defect and leave the business once they realize that they can either get better value elsewhere or they perceive manipulative intent on the part of the company from which they are buying.

Customer Perceptions of Price, Quality, and Value

Marketers are concerned with how individuals react to the way in which offerings are priced, questioning how consumers perceive prices and why they perceive them as they do. Here, we consider individual perceptions of proposition quality and value, and their relationship to customer response to prices.

Type of Marketing Research:

Methodology Qualitative research: small samples, using open and probing questions that set out to uncover underlying motives and feelings. Data gathered should focusing on meanings and is hard replicating. Typically, qualitative research intendeds to provide insights and understanding of the problem setting, and is frequently used in exploratory market research. The main methods for collecting qualitative data are individual interviews, focus groups, and observations. Quantitative research methods are used to elicit responses to predetermined standardized questions from many respondents. Involves collecting information, quantifying the responses as frequencies or percentages, and analysing them statistically. Quantitative research is thus commonly used in descriptive and causal marketing research, and replication is a highly desirable property of the outcome of such research. Thus quantitative data collection methods are much more structured than qualitative data collection methods. Common methods include different types of survey (online, offline), face-to-face or telephone interview, and longitudinal study. Although qualitative research methods are characterized as being exploratory and quantitative methods as being descriptive or causal, methods are not intrinsically associated with one kind of research purpose or another. The key concern is not which methods are used to generate data, but how they are used and for what purpose. There are also several ways of combining qualitative and quantitative research. What's more, many methods can be used qualitatively or quantitatively depending on purpose. Ex; open and participative observations (ex. ethnography) are typically used in qualitative research, whereas structured observations (for example mystery shopping) are used in quantitative research. Another example; sentiment analysis, which starts out by qualitatively assessing different exemplars (ex. ads, or comments on social media) and gradually builds a vast amount of such observations, analysed quantitatively. Ex; user-generated content in social media is mined for meaning to better understand consumer quality perceptions for different brands without having to ask questions.

could be inmortant for developing a market orientation

Mix of people with different skills, including instigators (challengs the status quo), innovators (develop new offerings and processes), integrators (build bridges across organizational functions ), and implementers (who execute the new ideas).

Consumer proposition acquisition process

Motive Development Begins when we wish to obtain an offering and become aware of our need. Iinvolves the recognition that we need to solve a problem—and we must first become aware of it. Ex. couple's decision to holiday might be a routine activity or dictated by a unique event such as a promotion or the celebration of a special occasion. Information Gathering We seek alternative ways of solving our problems, Ex. start by brainstorming different alternatives/reading magazines. We are not actively looking for information to help us. Internal search for information; we might consider what we already know about the problem and the offerings we might buy to solve our problem. External; we realize that we don't know enough about our problem so we seek supplementary information and build our awareness by increasing our knowledge. Proposition Evaluation Having neccesary info, we evaluate alternative propositions and determine the criteria used to rank the offerings. These might be rational, ex. based on cost or irrational, ex; based on desire. The couple might choose the destination that meets their holiday budget or opt for the more exiting destination. Proposition Selection Typically, the offering eventually selected is the one we evaluate as fitting our needs most closely. However, we might select a particular offering away from where we actually buy or acquire it. A consumer buying an electronic device might go to a shop to see the item and gather information, but they might ultimately buy it online. So proposition selection is a separate stage in the proposition acquisition process since there are times when we must re-evaluate what we buy or acquire because what we want is not available, for example buying a cinema ticket for one film because the seats for another are sold out. Acquisition/Purchase Once selection has taken place, different approaches to purchasing might exist. When a purchase is regular, we don't get too involved in the decision-making process; we simply buy the offering again that we bought previously. If the purchase is specialized, we may become more involved in the decision-making process to ensure that we understand what we are buying and that we are happy that it will satisfy our needs. Re-evaluation Theory of cognitive dissonance suggests we are motivated to re-evaluate our beliefs, attitudes, opinions, or values if the position we hold on them at one time is not the same as the position we held at an earlier period owing to some intervening event. This is psychologically uncomfortable. We are motivated to reduce our anxiety by redefining our beliefs, attitudes, opinions, or values to make them consistent with our circumstances and avoid situations that might increase our feeling of dissonance. To reduce dissonance, we might try to neutralize it by: ■selectively forgetting information; ■minimizing the importance of an issue, decision, or act; ■selectively exposing ourselves only to new information that is consonant with our existing view (rather than information that isn't); and/or ■reversing a purchase decision,

Convenience products

Non-durable and are bought because the consumer does not want to put very much effort, if any, into the buying decision. Most decisions in this category are made habitually, and if the usual brand is unavailable, an alternative brand is selected—or none at all if it is seen to be too inconvenient to visit another store. Subdivided into three further categories: staples; impulse; and emergency products These types of convenience product indicate that different marketing strategies might be required to make each work. However, one element common to all is distribution. If the product is not available when an emergency arises, or when a consumer is waiting to pay or walking around the supermarket, then a sale cannot be made. Pricing is also important, because customers know the expected price of convenience items and may well switch brands if price exceeds that of the competition.

Why success rate of new products is consistently poor

Often firms are using inadequate segmentation approaches (Nobel, 2011). Main reasons for this: 1. No market exists for the product. For example the Sinclair C5 (a one-person electric car) famously launched in 1985 in the UK and was swiftly withdrawn nine months later when the company folded. 2. .There is a market need, but the product fails to meet customer requirements, for example Frito-Lay's WOW! fat-free crisps, made with olestra, launched in the United States in 1998, but caused gastrointestinal problems in consumers and were quietly withdrawn in 2004.. 3. The product's ability to meet the market need, although satisfactory, is not adequately communicated to the target market, for example Buckler, a very low alcohol beer in the Dutch market in the 1980s (Anon., n.d.). Ironically, low- and no-alcohol beer sales have now taken off, a record 18.2 million litres of it selling in the UK in 2017.

Data Analysis

On finalization of the fieldwork, collected data is processed and tabulated. Data is tested for statistical significance (at the 95 per cent confidence level). Cluster analysis is employed to determine whether or not any segments emerge from either the residential or the industrial samples. Multiple regressions are undertaken to determine the key drivers of both the residential and industrial customers' perceptions of the prototype offering. An Insights International executive will talk through the results and answer any questions. Topline survey results are checked regularly and a response analysis is produced. This regular check allows us to identify errors as quickly as possible. The analysis answers research questions 1, 3, and 4.

Perishability

Once a train pulls out of a station, or an aeroplane takes off, or a film starts, those seats are lost and can never be sold. This is referred to as perishability and is an important aspect of services marketing. Services are manufactured and consumed simultaneously; they cannot be stored either prior to or after the service encounter. The reason why these seats remain empty reflects variations in demand. One of the main ways in which demand patterns can be influenced is through differential pricing. By lowering prices to attract custom during quieter times and raising prices when demand is at its highest, demand can be levelled and marginal revenues increased. Some football clubs categorize matches according to the prestige or ranking of the opposition and adjust prices to fill the stadium.

Understanding competitors through:

Organizations which pay particular attention to their competitors perform better than those which do not. To undertake an analysis of our firm's competitors, we must answer five key questions; 1Who are our competitors? 2What are their strengths and weaknesses? 3What are their strategic goals? 4Which strategies are they following? 5How are they likely to respond?

People's rational or emotional buying?

People indulge in socio-psychological buying with emotional buying motives. This focus on consumption experiences that go beyond the satisfaction of material needs. Purchase motivation can be seen to stem from a buyer's social and psychological interpretation of the offering and its performance

Proposition Quality

Quality; 'the standard of something as measured against other things of a similar kind; the degree of excellence of something; a distinctive attribute or characteristic possessed by someone or something'. In this context, the quality of goods and services relates to standards to which that offering satisfies needs. For example, a very high-quality car will satisfy both an aesthetic need for aerodynamic beauty and an ego-driven and/or functional need for high-performance road-handling, speed, and power. But quality is not a single standard in an offering; rather, it encompasses many standards because there are many levels at which our needs might or might not be satisfied.

The Principles of Relationship Marketing

Relationship marketing is based on the principle that there is a history of exchanges and an expectation that there will be exchanges in the future. Furthermore, the perspective is long term, envisaging a form of loyalty or continued attachment by the buyer to the seller. Price, as the key controlling mechanism, is replaced by customer service and quality of interaction between the two organizations. The exchange is termed collaborative because the focus is on both organizations seeking to achieve their goals in a mutually rewarding way and not at the expense of one another. Although market exchanges focus on products and prices, there is still a relational component, if only because interaction requires a basic relationship between parties for the transaction to be completed.

Sales

Short-term satisfaction of customer needs; part of the value delivery process. Lesser customer input into design of offering. Low focus on stimulation of demand; more focused on meeting existing demand

The Ecological Environment

Sustainability issues embrace the sourcing of products from countries with poor and coercive labour policies. Consumers are also keen to ensure that companies and their products are not damaging the environment or causing harm to consumers. This has been accompanied by a rise in the popularity of Fairtrade products. An important question for marketers concerns the way in which an organization should embrace and incorporate the changing trend in sustainability. ■Eco-efficiency—Lowers costs by means of improved organizational processes, such as the promotion of resource productivity, energy efficiency and utilization of by-products. ■Beyond compliance leadership—Involves adoption of a differentiation strategy through organizational processes such as certified schemes to demonstrate the company's ecological credentials or its environmental excellence by adopting the UN Global Compact principles. Sshould be adopted by firms that supply industrial markets, such as car manufacturers. ■Eco-branding—The firm might differentiate its products or services to promote environmental responsibility. ■Environmental cost leadership—Involves offerings that provide greater environmental benefits at a lower price. This strategy particularly suits firms operating in price-sensitive and ecologically sensitive markets, such as the packaging and chemical industries. Whatever the company and industry, ecological trends in marketing look set to stay and further develop as the sustainability debate rages on and as companies use it to develop their own competitive strategies. It is important to assess how this movement towards greener and more sustainable marketing is affecting a particular industry to ensure that a company within that industry not only is not adversely affected by these changes but also can take advantage of the opportunities.

Step 1 in market research Problem Definition>

The first step in a market research project is defining the management problem and writing the research brief. Often, the problem is described in vague terms, because organizations are not always sure what information they require. Ex: the supermarket Carrefour explains that sales are not as strong as expected in its Romanian stores and wonders whether or not this is a result of the emergence of a competitor supermarket. The problem description provides the researcher with small depth of understanding of the situation in which the supermarket finds itself, so the researcher needs to discuss the problem with the staff commissioning the study to investigate further. This allows the researcher to translate the management problem into a marketing research question. Typically, this question may include a number of sub-questions for further exploration.

The Relationship between Quality and Pricing Levels

The idea that price indicates quality is based on an assumption that prices are objectively determined by market forces. In truth, people within firms set prices, often dispassionately, to try to obtain the maximum profit possible. Various studies to determine whether or not price bears a relation to quality found that a general relationship between price and perceived quality does not exist. Interestingly, they also found that the price-perceived quality relationship is stronger in studies that investigate higher-priced products and use samples from European countries, but is weaker for services, durable goods, and respondents who are familiar with the offering.

Ch.4 Pestel P

The political environment relates to interaction between business, society, and government. The legal environment is often also linked to the political environment because political institutions such as parliaments and governments are typically responsible for debating and establishing the laws and regulations associated with consumers and business practices. Understanding of the political environment helps to evaluate conditions leading to the development of laws and their enactment. Political environmental analysis is important because companies can detect signals concerning potential legal and regulatory changes in their industries and thus have a chance to impede, influence, and alter that legislation. Companies often respond to political pressure because of a concern that otherwise legislation could be introduced to regulate their activities, at least in part. Monitoring the political process is important if a company is to foresee and potentially anticipate regulatory changes that can significantly impact its day-to-day running. Organizations collaborate to influence governments. through industry or trade bodies. Experts from member companies actively participate in working groups and taskforces covering a wide range of issues and concerns particular to their industry to influence key stakeholders, including national governments and the European legislature.

The Process of Adoption

The process starts with people gaining awareness of a proposition as it moves through various stages of adoption before a purchase is eventually made. In the knowledge stage, consumers become aware of the new proposition. They have little information and have yet to develop any particular attitudes towards the product. Indeed, at this stage, consumers are not interested in finding out any more information. The persuasion stage is characterized by consumers becoming aware that the innovation may be of use in solving a potential problem. Consumers become sufficiently motivated to find out more about the proposition's characteristics, including its features, price, and availability. In the decision stage, individuals develop an attitude toward the proposition and reach a decision about whether the innovation will meet their needs. If this is positive, they will experiment with the innovation. During the implementation stage, users try the innovation for the first time. Sales promotions often offer samples to allow individuals to test the product without any undue risk. Individuals accept or reject an innovation on the basis of their experience of the trial. Consider, for example,

Start-up launching system for food waste in restaurants (karma)

The research will answer the following questions. 1. What is the size of the marketplace for the platform for (a) restaurants and (b) students in key university towns? 2. What existing competitors are serving university towns and what are those competitors' relative market shares? 3. What criteria do (a) restaurants and (b) students use to evaluate the perceived value of such platforms? 4. How do (a) restaurants and (b) students rate Circularity's prototype platform and those of its competitors in relation to the attributes listed in research question 3? (Attributes are likely to include assortment, price, service, etc.) 5. What is the decision-making process used by (a) restaurants and (b) students when selecting from among different platforms?

Stages within the new product development process Commercialization

To commercialize a new product, a launch plan is required. Considers the needs of distributors, end users, marketing communication agencies, and other relevant stakeholders. The objective is to schedule all those activities that are required to make the launch successful. These include communications (to inform audiences of the product's capabilities, and to position and persuade potential customers), training, and product support for all customer-facing employees. Any perceived rigidity in this formal process should be disregarded. Many new offerings come to market via rather different routes, at different speeds, and at different levels of preparation.

The typical contents of a research brief include the following:

■A background summary provides brief introduction and details about the company and its offerings. ■The management problem is a clear statement of the purpose of the research and what business decisions depend upon its outcome. ■The marketing research questions comprise a detailed list of the information necessary to make the decisions outlined. ■The intended scope of the research outlines the areas to be covered, which industries, type of customer, etc. Should give an indication of when the information is required and why that date is important (ex. pricing research required for a sales forecast meeting). ■The client organization should also outline how agencies will be selected; its tendering procedures. Specific information may be required, such as CVs from agency personnel and preferences with regard to layout and format.

Leone and Shultz (1980), these law-like generalizations

■Advertising has a direct and positive influence on total industry (market). Advertising done at industry level increases sales within that industry. ■Selective advertising has a direct and positive influence on individual company (brand) sales. Company's advertising increases the sales of the particular brand. ■The elasticity of selective advertising on company sales is low (inelastic). For frequently purchased goods, advertising has a very limited effect in raising sales. ■Increasing store shelf space (display) has a positive impact on sales of non-staple grocery items: products bought on impulse< ice cream,chocolate rather than planned purchases (more luxurious types of good: gravy mixes). The more shelf space you give impulse goods, the more likely you are to sell it. ■ Distribution: setting up more retail locations has positive influence on sales.

Business-to-Business Pricing

■Geographical pricing sees prices based on customer location (for example pharmaceutical companies selling their prescription drugs at different prices in different countries). This might include free on board factory prices whereby the price represents the cost of the goods and the buyer must pay for all transport costs incurred. ■Negotiated pricing sees prices set according to specific agreements between a company and its clients or customers (for example in professional services, such as architectural or structural engineering). This approach occurs where a sale is complex and consultative, although sales representatives should not concede on price too quickly before properly understanding a client's needs. ■Discount pricing sees companies reducing the price on the basis that a customer commits to buying a large volume of that offering now or in the future, or is prepared to pay for it quickly. Large retailers work on the discount principle when buying for their stores. Their mighty procurement budgets and long experience ensure that they can buy at cheaper prices from their suppliers and so lower their costs. Note that, when price is discounted, we disproportionately reduce the operating profit. ■Value-in-use pricing focuses attention on customer perceptions of the attributes of offerings and away from cost-oriented approaches. It prices offerings based on what the customer is prepared to pay for the individual benefits received from that proposition, so the company must first ascertain what benefit components the customer perceives to be important, quantify those benefit values, determine the price equivalence of value, rate competitive and alternative products to provide a benchmark for price determination, quantify the value in use (that is, the value in using its product vis-à-vis its competitors' products), and only then is the price actually fixed. ■Relationship pricing seeks to understand customers' needs before pricing the offering around those needs to generate a long-term relationship. This means offering excellent financial terms, credit or more lenient time periods for payment, or discounts based on future sales revenue or the risk involved in the purchase. ■Pay-what-you-want pricing allows customers to pay whatever they want for an offering. This type of pricing works best for last-minute sales to fill empty capacity, where the customer has a previous relationship with the business, or when the earnings are given to charity.

three levels of customer contact can be observed, as follows:

■In high-contact services, customers visit the service facility, so that they are personally involved throughout the service delivery process, for example in retail branch banking and higher education. ■In medium-contact services, customers visit the service facility, but do not remain for the duration of the service delivery, for example in consulting services, and delivering and collecting items to be repaired. ■Low-contact services require little or no personal contact, for example software repairs, and television and radio entertainment.

Different types of growth

■Intensive growth: concentrating activities on markets and offerings that are familiar. By increasing market share or introducing new offerings to an established market, growth is achieved by intensifying activities. Ex: Volkswagen said they'll launch 30 new electric vehicles 2025 ■Integrative growth: organization continues to work with the same offerings and the same markets, but starts to perform some of the activities in the value chain that were previously undertaken by others. Ex: Benetton not only designe and manufacture clothing but retailes them also. ■Growth through diversification: developments outside the current chain of value-adding activities. Brings new value chain activities because the firm is operating with new offerings and in new markets. Ex. Mars bought VCA, building its profile in the pet care business.

Pricing tactics

■List pricing occurs when a single price is set for an offering, for example hotels charging what they call 'rack rates' for hotel conferencing facilities, combining residential accommodation for a set number of delegates with daytime accommodation for a conference room, refreshments, and lunch. ■Loss-leader pricing involves setting the price at a level lower than the actual cost incurred to produce it. This approach is often used in supermarkets on popular price-sensitive items to entice customers into store. The loss incurred is made up by increasing the prices of other less price-sensitive items or it is absorbed as a short-term promotional cost. ■Promotional pricing sees companies temporarily reduce their prices below the standard price to raise brand awareness and to encourage trial. Such approaches incorporate the use of loss leaders, sales discounts, cash rebates, low-interest financing (for example car manufacturers offering 0 per cent interest-free financing deals), and other price-based promotional incentives. ■Segmentation pricing involves setting prices for different groups of customers. For example, Unilever's ice cream is offered as various different ice-cream products at differing levels of quality and price, ranging from super-premium (for example Ben & Jerry's ice cream, available in cinemas) to economy offerings (for example standard vanilla ice cream available in supermarkets). Economists call this approach price discrimination. ■Customer-centric pricing involves companies taking advantage of customer segments by measuring their value perceptions, measuring the value created, and designing a unique bundle of products and services to cater to the value requirements of each segment, then continually assessing the impact this has on company profitability, taking advantage of up-selling and cross-selling (that is, selling other different offerings to the same customer).

Developing New Service Propositions stages

■Stage 1 Services are used as aftersales support for goods (for example parts and repair services). Service innovation is framed around maintaining the good and ensuring that customers are satisfied with their purchase. As a result, customers typically view the service and goods business as distinct entities. ■Stage 2—Characterized by aftersales services designed to complement the core element of the proposition. Here, services should improve customer satisfaction with existing goods, should increase loyalty, and may generate additional purchases. ■Stage 3—The portfolio includes a full line of services and goods designed to provide a clearly differentiated offering aimed at solving clients' lifecycle problems. Shelton (2009) refers to Motorola's 'Total Network Care' which provides end-to-end support services for wireless networks. Although the service organization is often consolidated into one identifiable business, goods are still core to the company. End users see no major perceived boundaries between goods and services. ■Stage 4 The highest end of innovation maturity, firms seek to integrate the services dimension as part of their total offer. Known as servitization, this involves the provision of an integrated bundle of goods-service solutions for the entire life cycle of their customers, 'from cradle to grave'. These solutions are developed collaboratively with clients and therefore require a deep understanding of the customer's overall business. These firms, often market leaders, generate innovative solutions through buyer-seller collaborative processes.

Ch:5 SWOT

■Strength: something an organization is good at doing, giving it particular credibility and market advantage. ■Weakness: something an organization lacks or performs in an inferior way in comparison with others. Opportunities and threats: externally oriented issues that can potentially influence the performance of an organization or offering. Information about these elements is generated through PESTLE analysis: ■Opportunity: the potential to advance the organization by developing and satisfying an unfulfilled market need. ■Threat: something that, at some time in the future, may destabilize and/or reduce the potential performance of the organization.

Developing New Physical Propositions

■buy in finished products from other suppliers, perhaps from other parts of the world, or license the use of other products for specific periods of time ■develop products through collaboration with suppliers or even competitors, for example as Sony tried to do, but failed, with Ericsson in the mobile phone business ■develop new products internally, often through R&D departments or by adapting current products with minor design and engineering changes (for example as Dyson did with its dual-cyclone vacuum cleaner).

Developing a market orientation means developing:

■customer orientation— creating superior value by continuously developing and redeveloping offerings to meet customer needs—through measuring customer satisfaction on a continuous basis and train front-line service staff; ■competitor orientation— develop an understanding of its competitors' short-term strengths and weaknesses, and its own long-term capabilities and strategies. ■interfunctional coordination— requires all orgamization's functions to work together for long-term profit growth.

Benefits of the STP process include:

■enhancing a company's competitive position, providing direction and focus for marketing strategies, including targeted advertising, new proposition development, and brand differentiation, such as when Coca-Cola identified that Diet Coke was perceived as 'feminine'. ■examining and identifying market growth opportunities in terms of new customers, growth segments, or proposition uses, such as fashion brand Burberry, once perceived as gangwear becoming chic and in demand around the world ■the effective and efficient matching of company resources to targeted market segments, promising greater return on marketing investment (ROMI), for example supermarkets such as Asda and Carrefour using data-informed segmentation strategies to target direct marketing messages (online and offline) and rewards to customers.

B2B marketers create a competitive advantage if they develop strong linkage between marketing and logistics functions and strong customer service proposition by>

■reductions of order cycle times; ■accurate invoicing procedures; ■reliable delivery; ■effective claims procedures; ■readily available inventory; ■goods delivered in good condition or effective service delivery; ■few order size constraints or the limited customization of services; ■effective and planned visits from a salesperson; ■convenient ordering systems and the provision of order status information; ■flexible delivery times; and ■strong aftersales support (Christopher, 1986).

Four types of underlying pricing approach:

■the cost-oriented approach (that is, prices set based on costs); ■the demand-oriented approach (that is, prices set based on price sensitivity and demand); ■the competitor-oriented approach (that is, prices set based on competitors' prices); and ■the value-oriented approach (that is, prices based on what customers believe to offer value). When setting prices, an organization might use a combination of these. For example, identifying the costs and trying to work out potential demand before setting a price is a common approach. We consider each of these pricing approaches in more detail next.

The skim pricing approach is particularly appropriate:

■when companies need to recover their R&D investment quickly; ■when demand is likely to be price inelastic; ■where there is an unknown elasticity of demand, since it is safer to offer a higher price and then lower it than to offer a lower price and try to increase it; ■where there are high barriers to entry within the market; ■where there are few economies of scale or experience; and ■where product life cycles are expected to be short

Designing the Research Project

■who to question and how (the sampling plan and procedures to be used); ■what methods to use (ex. discussion groups or an experiment); ■which types of question are required (whether open questions for qualitative research or closed questions for a survey); and ■how the data should be analysed and interpreted (what approach to data analysis should be undertaken). Research methods describe the techniques and procedures that will be used to obtain the necessary information. We could use a survey or a series of in-depth interviews. We might use observation (that is, mystery shopping) to see how consumers purchase goods online or how employees greet consumers when they enter a particular shop. We could use consumer panels in which respondents record their weekly purchases or their television viewing habits over a specified time period.