MKTG 3010 Complete FINAL

o Channel level

layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer; # of levels=length of channel

dividing a market into different age and life-cycle groups • Must be careful of stereotypes • Poor predictor of a person's life cycle, health, work, or family status, needs, and buying power

Age and life-cycle segmentation:

Raw material exporting economies

These economies are rich in one or more natural resources but poor in other ways. Much of their revenue comes from exporting these resources. Some examples are Chile (tin and copper) and the Democratic Republic of the Congo (copper, cobalt, and coffee). These countries are good markets for large equipment, tools and supplies, and trucks. If there are many foreign residents and a wealthy upper class, they are also a market for luxury goods.

bait-and-switch advertising

advertising nice product to attract customers and then downplay performance to try to get to switch to nicer machine

o persuasive advertising

advertising that is more important as competition increases to build selective demand

Value marketing:

after the Great Recession, marketers are looking for ways to offer today's more financially frugal buyers greater value (expect more. Pay less)

to serve target customers and create strong relationships with them

aim of the entire delivery network

Ethnographic research:

form of observational research that involves sending trained observers to watch and interact with customers in their "natural environments"

o Product (marketing mix)

goods-and-services combination the company offers to the target market

• Regional Shopping centers

largest (50-100 stores); like a mini-downtown and attracts customers from wide area

o Search-related ads

largest form of online advertising (46.5%)-buys search terms from search site and pays only if consumers click through to its site

Political environment

laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society

Branded entertainment (brand integrations)

making the brand an inseparable part of some other form of entertainment • Ex: product placements • Many companies are even producing their own (ex: Denny's always open)

o Environmental sustainability

management approach that involved developing strategies that both sustain the environment and produce profits for the company

Government publics:

management must take government developments into account; consults with lawyers on product safety, truth in advertising

Marketing

managing markets to bring about profitable customer relationships

o Supply chain management

managing upstream and downstream value-added flows of materials, final goods, and related info among suppliers, the company, resellers, and final consumers

• Monopolistic competition

many buyers or sellers who trade over a range of prices Differentiation and research to stand out

• Pure monopoly

market dominated by one seller

o Functional organization

most common; different marketing activities are headed by a functional specialist

• Supermarkets

most frequently visited; large, low-cost, low-margin, high volume, self-service store that carries a wide variety of grocery and household products Slow sales growth because competition from discounters and specialty food stores Some have improved food offerings and moved upscale, others have cut costs, more efficient, lower prices

o Family

most important consumer buying organization in society

Survey research:

most widely use method for primary data collection; flexible; BUT some people can't answer questions because they can't remember or never thought about what they would do; bias in answers

• In-bound logistics (Supply chain management)

moving products and materials from suppliers to the factory

• Out-bound logistics (Supply chain management)

moving products from the factory to resellers and ultimately to customers

Branding

name, term, sign, symbol, or design or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors • Viewed as important part of product and can add value to consumer's purchase • So strong that today's products rarely go unbranded

Motive (drive):

need that is sufficiently pressing to direct the person to seek satisfaction of the need Freud-people's buying decisions affected by subconscious motives not even the buyer may fully understand • Motivation research • Interpretive consumer research Maslow-human needs hierarchy

• Marketing ROI

net return from a marketing investment divided by the costs of the marketing investment; measures profits generated by investment marketing activities o 63 percent of CMOs said will be the most important measure of their success by 2015 o company can assess in terms of standard marketing performance measures • can assemble into marketing dashboards

Value delivery network

network made up of the company, its suppliers, its distributors, and ultimately its customers who partner with each other to improve the performance of the entire system • Competition between firm takes place between entire value delivery networks

Developing economies:

outstanding opportunities for the right kinds of products • Ex: India's Tata Motors (smaller, more affordable)

• Factory outlets

owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods Now feature luxury brands Powerful shopper appeal, esp in thrifty times

Core beliefs and values

passed on from parents to children and are reinforced by schools, churches, business, and government] o Ex: believing in marriage

• Market-centered company

pays balanced attention to both customers and competitors in designing its marketing strategies o Watch customers and find innovative ways to build profitable customer relationships by delivering more customer value than competitors do

Marketing Information System (MIS):

people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights 1. Interacts with information users to assess information needs 2. Interacts with environment to develop needed information through internal company databases, marketing intelligence activities, and marketing research 3. Analyze and use the information to develop customer insights, make marketing decisions, and manage customer relationships

opinion leaders

people whose opinions are sought by others-marketers educate them on their products so they can inform others

Self-concept (self-image):

people's possessions contribute to and reflect their identities

• 3PL Providers (Third Party Logistics)

performs any or all of the functions required to get a client's product to market • help tighten up sluggish, overstuffed supply chains, slash inventories, and get products to customers quickly and reliably • outsourcing logistics allow company to focus on core business

• performance quality

product's ability to perform its functions o rarely try to offer the higher possible but choose quality level that matches target market needs and quality of competing products

• Salutary product:

products that have low immediate appeal but may benefit consumers in the long run

• Deficient products

products that have neither immediate appeal nor long-run benefits

Product Design

products usefulness as well as looks

Introduction (Product Life-Cycle Stage)

profits nonexistent because heavy production expenses Company (esp market pioneer) must choose launch strategy that is consistent with intended positioning

o Pop-up stores

promote brands to seasonal shoppers and create buzz in busy areas o Online equivalent=flash sales (ex: Hautelook)

allowance

promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way

• More for more

providing the most upscale product or service and charging a higher price to cover the higher costs Four seasons, Rolex, SubZero Profitable but vulnerable because invites imitators who claim same quality but lower price Sell well during good times but at risk during economic downturns

General publics:

public image that affects buying

• Seasonal discount-

purchase services/goods off season

to ensure that the company achieves the sales, profits, and other goals set out in its annual plan

purpose of operating marketing control

find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment so SP evaluates... o Attractiveness of SBU's market or industry o Strength of SBU's position in that market or industry

purpose of strategic planning

Reverse Auctions

put purchasing requests online and invite suppliers to bid for the business

Motivation research

qualitative research designed to probe consumers' hidden, subconscious motivations

Media impact

qualitative value of message exposure through a given medium

Service variability:

quality of services vary greatly depending on who provides them and when, where, and how they are provided • Ex: employee service at hotel varies based on person

Growth (Product Life-Cycle Stage)

rapid market acceptance; increase profits Later buyers follow lead and competition attracted to opportunities for profit Strategies to sustain market growth

Materials and parts: Industrial product

raw materials (farm products and natural products) and manufactured materials and parts (component materials like iron, yarn, cement, wires and component parts like small motors, tires, castings)

trade allowance

reductions for turning in old item when buying new

User Status

reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users Potential users-

• Supply chain

relationships with key suppliers and resellers o Upstream-raw materials, components, parts, info, finances, and expertise o Downstream (focused on more)-wholesalers and retailers

Competence Brand Personality

reliable, intelligent

o Agent

represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods

o Innovative marketing

requires a company to seek real product and marketing improvements

day cooling off rule

special protection to homes, workplace, dorm, hotel, convention center, restaurant-pushed to buy more than $25 can cancel contract or return merchandise and get their money back

Promotion Mix (aka marketing communication mix):

specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships • Primary communication activity BUT must coordinate whole marketing mix (including product, price, and place)

o Marketing strategy

specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels

Services differentiation:

speedy convenient or careful service (ex-nordstrom customer service)

sales contests

spur sales force to make a selling effort above normal expectations

General needs description

stage in the business buying process in which a buyer describes the general characteristics and quantity of a needed item o Can help buyers define their needs and provide info about the value of different product characteristics

• Test marketing (The New-Product Development Process)

stage of new-product development in which the product and its proposed marketing program are tested in realistic market settings o Test marketing costs can be high and time consuming o When new product requires big investment, high risks, or management is not sure, might do a lot of testing o Alternatively, can use controlled test markets or simulated test markets

Performance review:

stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement

Proposal solicitation

stage of the business buying process in which the buyer invites qualified suppliers to submit proposals o Some businesses just have websites/promotional materials o Some come up with formal presentations/proposals that inspire confidence

Supplier search

stage of the business buying process in which the buyer tries to find the best vendors o More companies are turning to the internet to find suppliers o The newer the buying task and the more complex and costly the item, the greater the amount of time the buyer will spend searching for suppliers o Supplier's task is to get listed in major directories and build a good reputation in the marketplace

Order-routine specification

stage of the business buying process in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties

Evaluation of alternatives

stage of the buyer decision process in which consumer uses information to evaluate alternative brands in the choice set o Depends on individual consumer and specific buying situation o Sometimes consumers use careful calculations and logical thinking o Other times, little to no evaluating and rely on impulse and intuition o By knowing importance you assigned to each attribute, the marketer could predict your car choice more reliably

Postpurchase behavior:

stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction o Depends on consumer's expectations and product's perceived performance o Cognitive dissonance: o Consumer satisfaction is key to building profitable relationships with consumers-buy product again, talk favorably to others, pay less attention to competing brands o Many marketers go beyond merely meeting the expectations of customers-aim to delight customers o Company should set up systems that encourage customers to complain

Information search

stage of the buyer decision process in which the consumer is motivated to search for more information o Can obtain from many sources-personal (friends/family), commercial (ads. salespeople packaging, displays), public sources (mass media, peer reviews), experiential sources (handling, examining, using) o Most effective tend to be personal o Commercial sources inform but personal legitimize o As more info is obtained, consumer's awareness and knowledge of available brands and features increases

Product specification

stage of the buying process in which the buying organization decides on and specifies the best technical product characteristics for the needed item o Product value analysis: o Sellers can also show buyers better ways to make objects and obtain new business

• events:

staged occurrences that communicate messages to target audiences

• sales quota

standard that states the amount a salesperson should sell and how sales should be divided among the company's products

Inside-out perspective:

starts with factory, focuses on existing products, calls for heavy selling; wants short-term sales

Mission statement

statement of the organization's purpose-what it wants to accomplish in the larger environment

Product Mix Length:

total number of items a company carries within its product lines (ex: multiple brands within each line (simple meals line-soups, tomato sauce, salsas))

RFID technology

track products through various points in the distribution channel

Lagging adopters

tradition bound-suspicious of change and adopt the innovation only when it had become a tradition itself

o Click-and-mortar companies

traditional brick-and-mortar that have added online marketing to their operations • More online success than click-only

• Interactive marketing:

training service employees in the fine art of interacting with customers to satisfy their needs Service quality depends on both service deliverer and quality of delivery

• Sample

trial amount of product Most effective but most expensive

Vendor-managed inventory

turn over ordering and inventory relationships to their suppliers • Large retailers, etc • Buyers share sales and inventory information directly with key suppliers

• Marketing implementation

turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives o Who, where, when and how of marketing activities

Groups

two or more people who interact to accomplish individual or mutual goals

Customer segment-different customers pay different prices o Product-form-different versions are priced differently, not necessarily because of cost o Location-based-different prices for different locations even though cost of offering each location is the same o Time-based pricing-firm varies its prices by season, month, day, and hour

types of segmented pricingo

• Threats include

unfavorable external factors or trends that may present challenges to performance

• Pure competition:

uniform commodity (wheat), no single buyer or seller has much effect, not much time spent on marketing strategy

o Spam

unsolicited unwanted commercial email messages • Produced consumer irritation and frustration • 68% of all emails sent

Sophistication Brand Personality

upper class and charming

o informative advertising

used in introducing new products to build primary demand

o Consumer promotions

used to boost short-term customer buying and involvement or enhance long-term customer relationships

• Advertising specialties-

useful articles imprinted with an advertiser's name, logo, or message given as gifts to customers (pens, key rings, etc)

Shopper Marketing

using in-store promotions and advertising to extend brand equity to the "last mile" and encourage favorable point-of-purchase decisions

o Team selling

using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts • can unearth problems, salutations, and opportunities that no individual could • salespeople are competitive so they may have trouble trusting others on team • can confuse or overwhelm customers who are used to working with only one salesperson

Slice of life:

"typical" people using the product in a normal setting

Role

(activities people are expected to perform according to the people around them)

Promotion (Marketing Mix)

(communicating with target customers and persuading of merits)

controlled test markets

(controlled panels of shoppers and stores)

• Service-firm-sponsored retailer franchise system

(ex: Burger King and franchise-operated restaurants)

• Manufacturer-sponsored wholesaler franchise system

(ex: Coca-cola licenses bottlers [wholesalers] in various world market to buy syrup concentrate and bottle/sell finished product)

• Manufacturer-sponsored retailer franchise system

(ex: Ford and network of independent franchised dealers)

status

(general esteem given by society)

Place (Marketing Mix)

(how it will make the offering available to target consumers)

Price (Marketing Mix)

(how much it will charge for the offering)

target marketing

(identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each)

simulated test markets

(measure consumer responses to new products in labs or in-home marketing efforts)

Product (Marketing Mix)

(need-satisfying market offering)

share of customer

(share they get of the customer purchasing in their product categories) o To increase -> firms can offer greater variety to current customers

customer equity

(the total combined customer lifetime values of all the company's customers) o The more loyal the firm's profitable customers, the higher it is

customer lifetime value

(value of the entire stream of purchases a customer makes over a lifetime of patronage)

Reach

-% of people in the target market who are exposed to the ad campaign during a given period of time

o Market or customer management organization

-companies that sell one product line to many different types of markets and customers; managers are responsible for developing marketing strategies and plans for their specific markets or customers

• Event marketing

-creating a brand-marketing event or serving as a sole or participating sponsor of events created by others-huge and possibly fastest growing

• Contests, sweepstakes, and games

-give chance to win something, (submit entry, name, etc)

Strangers

-low potential profitability and low projected loyalty

• Cash discount

-price reduction to buyers who pay their bill promptly

Air Transportation

<1%; good for speed and distance (perishables, high-value, low bulk

Pipeline Transportation

<1%; specialized for gas, oil, and chemicals

• Community Shopping centers

15-20 stores

• Marketing analysis

1st step of management that starts with complete analysis of company's situation

What customers will serve (what's our target market)? o Chooses markets it can serve well and profitably How can we serve these customers best (what's our value proposition)?

2 important questions about marketing management

• push strategy: promotion strategy that calls for using sales force and trade promotion to push the product through channels; producer promotes the product to channel members, which in turn promote it to final customers John Deere does not promote to customers, works with Lowe's, Home Depot, etc • pull strategy: calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that "pulls" the product through the channel unilever promotes axe directly to customers and customers demand walgreens has it • most large companies use combination of both • business to consumer companies usually pull more, b2b usually pushes more

2 major promotion strategies

• Analyzing current business portfolio and determine which businesses should receive more, less, or no investment • Shaping the future portfolio by developing strategies for growth and downsizing

2 steps of planning a business portfolio

• Corporate chains

2+ outlets that are commonly owned and controlled Allows to buy in large quantities at lower prices; economies of scale Hire specialists to deal with pricing, promotion,etc

Innovators

2.5 percent of first buyers to try a new idea; opinion leaders in their communities and adopt new ideas early but carefully

who is to be studied? How many should be included? How should the people in the sample be chosen?

3 decisions for a sampling plan

• setting advertising objectives (specific communication task to be accomplished with a specific target audience during a specific period of time) • setting the advertising budget (dollars and other resources allocated to a product or a company advertising program) • developing advertising strategy (strategy by which company accomplishes its advertising objectives) • evaluating advertising campaigns

4 important decisions involved in developing an advertising program

• sets specific marketing goals • measures its performance in the marketplace • evaluates the causes of any differences between expected and actual performance • takes corrective action to close the gaps between goals and performance

4 steps of marketing control

• stars: • cash cows: • question marks: • dogs:

4 types of SBUs in Growth-Share Matrix

Rail Transportation

40%; bulk products over long distances

Truck Transportation

40%; flexible in routing and time schedules; faster service than rail;

1. Understand customer needs and wants and the marketplace in which they operate 2. Designing a customer-drive marketing strategy 3. Preparing an integrated marketing plan and program 4. Building customer relationships 5. Creating and delivering superior customer value

5 step process of marketing

• Neighborhood Shopping centers

5-15; close and convenient; supermarket and service stores

Retailer cooperatives

: group of independent retailers that band together to set up jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts; give independents the buying and promotion economies they need to meet the prices of corporate chains

Water Transportation

:<5%; cheap for bulky, low-value, nonperishable products but very slow and sensitive to weather

• invest more to build its share • invest enough to hold the SBU's share • harvest the SBU, milking short term cash flow • divest the SBU by selling or phasing out

Action once a company classifies SBUs in Growth-Share Matrix

Geographic location & International Segmentation

Assumes neighboring nations will have many common traits and behaviors-many exceptions

78 million people born during the years following WW2 and lasting until 1964 The maturing boomers are rethinking the purpose and value of their work, responsibilities and relationships Recession hit them hard because of declining house values so they spend carefully and plan to work longer Wealthiest generation in US history

Baby boomers

o Shaves off transaction costs and results in more efficient purchasing for both buyers and suppliers o Reduces the time between order and delivery o Eliminates paperwork o Frees purchasing people to concentrate on more-strategic issues (reducing costs) • Can also create potential security concerns o Companies are spending millions for research on defensive strategies to keep hackers at bay

Benefits and Concerns of E-Procurement

Names help consumers identify products Say something about quality and consistency Gives seller several advantages (legal protection for unique product features, help seller to segment markets, basis for story on product's special qualities)

Benefits of Branding

• Well-suited for quantitative research • Speed, low cost, more interactive and engaging, easier to complete, less intrusive, high response rates • Online focus groups • Drawbacks: controlling who's in the online sampling

Benefits of Online Marketing Research

Growth-share matrix

Boston Consulting Group portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share

buyer's characteristics and decision process • Buyer's characteristics influence how he or she perceives and reacts to the stimuli • Buyer's decision process itself affects his or her behavior

Buyer's black box

how do consumers respond to various marketing efforts the company might use?

Central question for marketers:

Many marketers think that companies should aggressively promote only one benefit to the target market • USP (unique selling proposition) company should choose for each brand and stick to it Other marketers think that companies should position themselves on more than one differentiator • If two or more firms claim to be the best at the same attribute • Gatorade G series has 3 primary benefits

Choosing How many differences to promote

takes up time, failing reputation, delays search for replacements, hurts current profits

Costs of carrying a weak product:

o Resellers: o Physical distribution firms: o Marketing services agencies: o Financial intermediaries:

Examples of Marketing Intermediaries

• Wife has traditionally been considered main purchasing agent-more women work outside so now 51% of men identify themselves as primary grocery shoppers in their housholds-women 50% tech purchases and 2/3 of new car purchases • IKEA-in-store area called manland • Children-strong influence-disposable income and influence family decisions

Family & Consumer Buying Behavior

• Relative advantage- • Compatibility- • Complexity- • Divisibility- • Communicability-

Five characteristics that are important of influence an innovation's rate of adoption

o Defining the problem and research objectives o Developing the research plan o Gathering Secondary Data o Primary Data Collection

Four steps to marketing research:

• Using commercial online databases, marketing researchers can conduct their own searches of secondary data sources • Internet search engines also help locate sources (frustrating and inefficient) • Can be obtained more quickly and at a lower cost than primary data • Can also provide some data that an individual company cannot collect on its own • Problems with secondary data: Can rarely obtain all the data they need Must evaluate to make sure its relevant, accurate, current, and impartial

Gathering Secondary Data (benefits/problems

birth dearth that followed the baby boomers Less materialistic; prize experience Skeptical-research products, quality>quantity More likely to be receptive to irreverent ads that make fun of convention and tradition Most educated generation to date

Generation X

children of baby boomers-becoming even larger than them Most financially strapped generation Technology is their life

Generation Y

• US population shift towards west and south and away from Midwest and northeast • Move from rural to metropolitan, then cities to suburbs, now to micropolitan areas • Increase in people who telecommute-work from home and conduct business by phone and internet

Geographic shifts in Population

to improve strategic marketing decision making by understanding the consumer environment, assessing and tracking competitors' actions, and providing early warnings of opportunities and threats

Goal of Competitive Marketing Intelligence

1. Attract new customers by promising superior value 2. Keep and grow current customers by delivering satisfaction

Goals of marketing

• Importance Product style and design

Good design requires customer observation, understanding their needs, and shaping their product-use experience

Social factors

Groups

• Fastest-growing form of marketing ($163 billion on DM) • Becoming more internet based • Benefits to buyers o Easy, convenient, private o Ready access to a wealth of products o Give buyers access to a wealth of comparative information about companies, products, and competitors o Immediate and interactive • Benefits to sellers o Can target small groups/individuals-ask questions and volunteer feedback o Low-cost, efficient, speedy alternative • Grown rapidly in B2B marketing because low cost • Online direct marketing avoids expense of maintaining stores o Greater flexibility o Rich opportunities for building close, personalized, interactive customer relationships o Gives sellers access to buyers that they could not reach through their channels

Growth and Benefits of Direct Marketing

Fastest growing-Will have total annual buying power of $1.5 trillion by 2015, accounting for 11 percent of the nation's total buying power Tend to be deeply family oriented-old is brand loyal but younger is more price sensitive 78 percent of US Hispanics use the Internet as their primary info source Hispanic consumers shop for groceries 3x more often than the general US shopper

Hispanic Americans

• Many companies view the marketing environment as an uncontrollable element to which they must react and adapt-the passively accept it and do not try to change it • Other companies take a proactive stance and craft a strategy that defines your strategy-take aggressive actions to affect the publics and force in their marketing environment o Ex: Taco Bell had class-action suit to stop calling beef-Taco Bell thanked for opportunity to tell the truth about its seasoned beef

How Companies are Responding to the Marketing Environment

talking to people in their homes or offices, flexible, show actual products, very expensive

Individual interviewing (benefits/problems)

schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care o Low budgets and captive patrons o Objective is not profit nor strict cost minimization-looks for vendors whose quality meets or exceeds a minimum standard and whose prices are low o Many marketers set up separate divisions to meet the special characteristics/needs of institutional buyers

Institutional market

price escalation problem

It must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin to its factory price. Depending on these added costs, a product may have to sell for two to five times as much in another country to make the same profit.

Contact methods

Mail questionnaires: Telephone interviewing: Individual interviewing: Focus group interviewing: Online marketing research:

• Customer value-based pricing • Cost-based pricing • Competition-based pricing

Major Pricing Strategies

o Consumers are more informed and communications empowered because of technology o Marketers are fragmenting markets to focus their programs for building closer relationships o Companies and customers are able to communicate through countless new technologies o Less broadcasting more narrowcasting-specializing and targeting media to reach smaller customer segments with more personalized, interactive messages o Most marketers use a mix of traditional mass media and targeted, new media • Digital advertising has surged while magazines, newspaper, and radio has declined (more expensive, shrinking audiences, ad clutter)-some marketers skipping altogether • Online advertising (fastest growing) is the 2nd largest medium behind TV

Major factors changing today's marketing communications

o Straight rebuy: o Modified rebuy: o New task: o Systems selling (or solutions selling):

Major types of buying situations

o The environment: o Buyer's black box: o Buyer response:

Model of Consumer Behavior

African Americans

More price conscious than other segments but also motivated by quality and selection

o Brand Sponsorship

National Brand Licensing Cobranding

Research approaches in Primary Data Collection

Observational research: Ethnographic research: Netnography research: Survey research: Experimental research:

Lifestyle

Person's pattern of living as expressed in his or her activities, interests, and opinions • Measures major AIO dimensions • Products buy values and lifestyles products represent

type and stability of the government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy

Political and legal factors: & International Segmentation

4 Ps, economic, tech, social, cultural

The environment (model of consumer behavior)

stage of the business buying process in which the company recognizes a problem or need that can be met by acquiring a good or a service o Can be from internal or external stimuli • Internal-product requires new materials or machine breaks down • External-buyer gets new ideas at trade show/from ad o In advertising, business marketers often alert customers to potential problems and show how products can fix them

Problem recognition

• Product development: • Introduction: • Growth: • Maturity: • Decline:

Product Life-Cycle Stages

most common, flexible, open-ended is good to find out what people think, close-ended shows how many think this; need to be careful in wording and order of questions

Questionnaire (positives, drawbacks)

Questionnaires Neuromarketing

Research Instruments

• Not everyone is married with 2 kids and a dog anymore • Women make up larger portion of workers (59%) • Married couples with children represent only 20% of the nation's households • Married without children = 29 % • Non=family households = 34%

Rise in nontraditional households

Asian Americans

Second fastest growing Diverse group and all speak different languages Most brand conscious

Sustainable Marketing

Socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs

• Licensing

Some companies license names or symbols from other manufacturers, well-known celebrities, or popular characters Name and character licensing has been growing rapidly lately

o Mental process through which an individual passes from first hearing about an innovation to final adoption o 5 stages • awareness: • interest: • evaluation: • trial: • adoption:

Stages in the adoption process

brand created and owned by a reseller of a product or service • More price-conscious-higher sales in store brands • Growing much faster than national brands • Many large retailers skillfully market deep assortment of store brands • No longer cheap knockoffs of national brands-Target and Trader Joe's more innovative

Store brand (or private brand):

stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers o Buyer rates suppliers against each other based on product/service quality, reputation, on-time delivery, ethical corporate behavior, honest communication, & competitive prices o Today's supplier development managers want to develop a full network of supplier-partners that can help the company bring more value to its customers

Supplier selection

more flexibility, quicker, can explain questions, higher response rates, high cost, person might feel uncomfortable

Telephone interviewing (benefits/problems)

problem recognition general needs description product specification supplier search proposal solicitation supplier selection order-routine specification performance review

The Business Buying Process Steps

• Consumers pass through all stages but may go quickly or slowly for purchases in a considered way • For routine purchases, may skip or reverse some stages • Need recognition • Information search: • Evaluation of alternatives: • Purchase decision: • Postpurchase behavior:

The Buyer Decision Process

• Idea generation • Idea-screening • Concept development and testing • Marketing strategy development • Business analysis • Product development • Test marketing • Commercialization

The New-Product Development Process

to build market share and strengthen customer relationships at the expense of competitors who cut back

The goal in uncertain economic times

exporting

The simplest way to enter a foreign market. The company may passivelyor it may make an active commitment to a particular market. In either case, the company produces all its goods in its home country. It may or may not modify them. involves the least change in the company's product lines, organization, investments, or mission.

o Need for ever-greater efficiency- increased use of computerized, automated, and internet-based systems that will help cut costs o Goal: build value-adding customer relationships o Distinction between large retailers and large wholesalers continues to blur

Trends in Wholesaling

its industrial structure and its income distribution.

Two economic factors reflect the country's attractiveness as a market

• Attitude of others-if someone important to you thinks something, decision will move towards it • Unexpected situational factors-bad economy, close competitor drops price

Two factors can come between the purchase intention and purchase decision

• Complex buying behavior • Dissonance-reducing buying behavior • Habitual buying behavior • Variety-seeking buying behavior

Types of Buying Decision Behavior

to produce high customer equity

Ultimate aim of marketing process

o Vertical axis-provides measure of market attractiveness o Horizontal axis-measure of company strength in the market

Vertical and Horizontal axes of Growth Share Matrix

• Firm may have grown too fast or entered areas where it lacked experience • Some products or business units simply age and die

Why would a company might downsize products or markets?

Societal marketing concept:

a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests o Calls for sustainable marketing o Shared value-societal needs, not just economic needs, define markets o Balance between company profits, consumer wants, and society's interests

Marketing concept:

a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do o Customer focus and value are the paths to sales and profits

o Competitive advantage

advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices • Must think through the customer's entire experience with the company's product or service • Product differentiation: • Services differentiation: • Channel differentiation: • People differentiation: • Image differentiation: • Symbols provide strong company or brand recognition

Licensing

a simple way for a manufacturer to enter international marketing. The company enters into an agreement with a licensee in the foreign market. For a fee or royalty payments, the licensee buys the right to use the company's manufacturing process, trademark, patent, trade secret, or other item of value. The company thus gains entry into a foreign market at little risk; at the same time, the licensee gains production expertise or a well-known product or name without having to start from scratch. potential disadvantages, however. The firm has less control over the licensee than it would over its own operations. Furthermore, if the licensee is very successful, the firm has given up these profits, and if and when the contract ends, it may find it has created a competitor.

o Social marketing

a type of idea marketing that uses commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society • Social ad campaigns about health care, education, etc • Involves more than just advertising

• Federal Trade Commission Act of 1914

act that held false, misleading, deceptive labels constitute unfair competition

o robinson-patman act

act that said cannot favor certain customers through their use of trade promotion

• Fair Packaging and Labeling Act of 1966

act that set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed fed agencies to set packaging regulations in specific industries

AIO Dimensions

activities (work, shopping, sports, social) interests (food, fashion, family) opinions (themselves, social issues, business)

Packaging

activities of designing and producing the container or wrapper for a product • Primary function=to hold and protect the product • Now attracts buyers, communicates brand position, closes the sale • Important for immediate consumer recognition of the brand • Poorly designed cause headaches for consumers and lost sales for the company Hard to open or dangerous Overpackaging-environmental waste • Innovative can give advantage and boost sales Ex: Puma bag instead of shoe box

o Promotion (marketing mix)

activities that communicate the merits of the product and persuade target customers to buy it

o Person marketing:

activities undertaken to create, maintain, or change attitudes or behavior toward particular people • Ranging from presidents, entertainers, and sports figures to professionals • Ex: Rachel Ray not has talk show, brand of dog food, rayisms, cooking show

o Place marketing:

activities undertaken to create, maintain, or change attitudes or behavior toward particular places • Cities, states, regions, and even entire nations compete to attract tourists, new residents, conventions

o Organization marketing:

activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization • Both profit and non-profit • Corporate image marketing campaigns to market themselves and polish their images

• Service

activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything o include banking, hotel, airline travel, retail

Marketing environment

actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers o Marketers must carefully study the environment to adapt their strategies to meet new marketing

Microenvironment

actors close to the company that affect its ability to serve its customers-the company, supplies, marketing intermediaries, customer markets, competitors, and public

Differentiation

actually differentiating the market offering to create superior customer value; starts effective positioning

o Cost-plus pricing (markup pricing)

adding a standard markup to the cost of the product • Not the best but popular because Sellers are more certain about costs than demand Sellers do not have to make adjustments based on demand changes If all firms in industry use this method, minimize price competition Cost-plus pricing is fairer to both buyers and sellers

o Product line filling

adding more items within the present range of the line • For reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors • New items must be noticeably different from old ones

o Dynamic pricing

adjusting prices continually to meet the characteristics and needs of individual customers and situations

o reminder advertising

advertising for mature products to maintain customer relationships and to keep consumers thinking about the product

• Wholesaling

all activities involved in selling goods and services to those buying for resale or business use

Retailing

all activities involved in selling goods or services directly to final consumers for their personal nonbusiness use

Consumer market

all the individuals and households that buy or acquire goods and services for personal consumption

o Price (marketing mix)

amount of money customers must pay to obtain the product

Managing the Sales Force

analyzing, planning, and implementing, and controlling sales force activities

Public

any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives

Advertising

any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor • US $144 billion; world $489 billion spent

• Advertising

any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor (broadcast, print, Internet,)

• Product

anything that can be offered to a market or attention, acquisition, use, or consumption that might easily satisfy a want or need o Include more than just tangible objects-include services, events, persons, places, organizations, ideas, or a mix o Ex: trip to Vegas, Facebook page, advice from doctor, iPhone

Product Style

appearance of product

o Online advertising

appears while consumers are browsing the internet, including display ads, search-related ads, online classifieds, and other forms

Total Quality Management (TQM):

approach in which all of the company's people are involved in constantly improving the quality of products, services, and business processes • Most top companies=customer driven • Today, return on quality=viewing quality as an investment and holding quality efforts accountable for bottom-line results

Product value analysis:

approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production

• Execution style

approach, style, tone, words, and format used for executing an ad message

• Positioning

arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers

• Market positioning

arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers

• Territorial sales force structure

assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company's full line

• Horizontal Channel conflict

at same level of the channel (ex: ford dealers in same city)

o Value-added pricing

attaching value-added features and services to differentiate a company's offers and charging higher prices

Financial intermediaries

banks, credit companies, insurance companies, and other businesses that help financial transactions or insure against the risks associated with the buying and selling of goods

o Style

basic and distinctive mode of expression

Consumer-generated marketing

brand exchanges created by consumers themselves-both invited and uninvited-by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers o Ex: Starbuck's My Starbuck Idea site; consumer-generated commercials o can be time-consuming and costly (Ex: Heinz Ketchup commercials)

Brand personality

brand's specific mix of traits • Sincerity- • Excitement- • Competence- • Sophistication- • Ruggedness- • Most well-known brands are strongly associated with one trait

o Vertical marketing system (VMS):

channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate

• Public relations (PR):

building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handing or heading off unfavorable rumors, stories, and events (press releases, sponsorships, events)

PR

building good relations with the company's various publics by obtaining favorable publicity; building up a good corporate image; and handling or heading off unfavorable rumors, stories, and events

New task:

business buying situation in which the buyer purchases a product or service for the first time

Straight rebuy:

business buying situation in which the buyer routinely reorders something without any modifications

Derived demand

business demand that ultimately comes from (derives from) the demand for consumer goods o Many business markets have inelastic and more fluctuating demand

Retailers

business whose sales come primarily from retailing

o B2C online marketing

businesses selling goods and services online to final consumers • More than half of US households regularly shop online • Captures 7% of total sales but influences 48% • Customers initiate and control the market

o B2B online marketing

businesses using online marketing to reach new business customers, serve current customers more effectively, and obtain buying efficiencies and better prices\ • Offer product info, customer purchasing, and customer-support services online • Some conduct almost all of their business online

Business markets

buy goods and services for further processing or use in their production processes

Reseller markets

buy goods and services to resell for a profit

• Volume discount

buy large volumes

Completely loyal

buy one brand all the time and can't wait to tell others about it (quietly satisfied vs MacHeads)

Cognitive dissonance:

buyer discomfort caused by postpurchase conflict-consumers feel at least some for every purchase

Purchase decision

buyer's decision about which brand to purchase

Affordable Differences

buyers can afford to pay the difference

Systems selling (or solutions selling):

buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation

Buyer response (model of consumer behavior)

buying attitudes and preferences; purchasing behavior (what the buyer buys, when, where, and how much); brand and company relationship behavior

Consumer buying behavior

buying behavior of final consumers-individuals and households that buy goods and services for personal consumption

Business buyer behavior

buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others

Modified rebuy:

buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers

• Off-price retailers:

buys at less than regular wholesale prices and sells at less than retail

• global firm

by operating in more than one country, gains R&D, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competition

Economic factors & International Segmentation

by population income levels or by overall level of economic development

Accessible Requirement for Effective Segmentation

can be effectively reached and served

Product differentiation:

can differentiate based on features, performance, style or design (ex-seventh generation is greener)

Service intangibility:

cannot be seen, tasted, felt, heard, or smelled before they are bought • Ex: cosmetic surgery cannot see results before purchase • To reduce uncertainty, look for signals-from place, people, price, equipment, and communications

o Service intangibility

cannot be seen, tasted, felt, heard, or smelled before they are bought • Ex: cosmetic surgery cannot see results before purchase • To reduce uncertainty, look for signals-from place, people, price, equipment, and communications

Service perishability:

cannot be stored for later sale or use • Ex: missed appt's at doctor • When demand fluctuates, may adjust prices or take on seasonal employees to produce a better match to demand and supply

• Integrated marketing communications (IMC):

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

• Department stores

carries a wide variety of product lines, each operated as a separate department managed by specialist buyers or merchandisers Squeezed by specialty stores and lower-priced discounters Some add promotional pricing, others open store brands/single-brand designer shops, others catalog/telephone/online shopping

Media publics:

carries news, features, and editorial opinion (ex: newspapers, magazines, TV stations, and blogs)

• Coupons-

certificates that save buyers money when they purchase specified products Can promote early trial of a new brand or stimulate sales of old brand Growing so clutter-marketers targeting better New outlets for distributing-digital fastest growing (11% of all redeemed)-sites

• Horizontal Marketing Systems

channel arrangement in which 2+ companies at one level join together to follow a new marketing opportunity o Ex: McDonald's in Walmart-spend more time in Walmart and McDonald's benefits from Walmart foot traffic

o Conventional distribution channel

channel consisting of one+ independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole

Franchise organization

channel member links several stages in the production-distribution process; most common type of contractual relationship

• Trade discount

channel members who perform certain functions

Divisibility-

degree to which innovation may be tried on a limited basis (too expensive, etc)

o personal communication channels:

channels through which 2+ people communicate directly with each other, including face-to-face, on the phone, via mail or e-mail, or even through texting or an Internet chat

less public (directed to specific person) immediate and customized interactive(allows dialogue) well suited for targeted marketing efforts and one-to-one relationships

characteristics of DM (reach, richness, impersonal/personal, one way or two, cost)

very believable can reach prospects who avoid salespeople and ads can dramatize a company or product companies tend to underuse PR or use as afterthought-can be effective and economical

characteristics of PR (reach, richness, impersonal/personal, one way or two, cost)

• Product quality

characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs Linked closely to customer value and satisfaction

reaches masses of geographically dispersed buyers at low cost per exposure and enables seller to repeat message many times consumers tend to view advertised products as more legitimate very expressive-allows artful use of color, print, sound can build up long term image and trigger quick sales impersonal and lacks direct persuasiveness only one way communication can be very costly

characteristics of advertising (reach, richness, impersonal/personal, one way or two, cost)

most effective at building up buyers' preferences, convictions, and actions involves personal interaction so can observe needs allows many customer relationships buyer feels greater need to respond requires more long-term commitment than advertising most expensive promotion tool

characteristics of personal selling (reach, richness, impersonal/personal, one way or two, cost)

attract consumer attention, offers strong incentive to purchase, can be used to dramatize product offers and boost sagging sales invite and reward a quick response short lived and not as effective at long-term

characteristics of sales promotion (reach, richness, impersonal/personal, one way or two, cost)

high-low pricing

charging higher prices on everyday basis but running frequent promotions

• Strangers • Butterflies- • True friends • Barnacles-

classifying customers based on potential profitability

Online marketing research:

collecting primary data online through internet surveys, online focus groups, web-based experiments, or tracking consumers' online behavior (internet surveys, online panels, experiments, and online focus groups and brand communities)

Implementing the research plan

collecting processing, and analyzing the information o Must check data for accuracy, completeness, and code it for analysis

• Complex sales force structure

combines several types of sales force structures

• Corporate VMS

combines successive stages of production and distribution under single ownership-channel leadership is established through common ownership

• Intermodal transportation

combining 2+ modes of transportation; combines advantages of each

Product bundle pricing:

combining several products and offering the bundle at a reduced price

Cultural factors: & International Segmentation

common languages, religions, values and attitudes, customs, and behavioral patterns

• product features

companies create higher-level models by adding features to the base model competitive tool for differentiation assess feature's value to the customers vs cost to the company

o Product management organization

companies with many different products; specialize in developing strategy and marketing program for specific product or brand

Online trading exchanges-

companies work collectively to facilitate the training process

o Place (marketing mix)

company activities that make the product available to target consumers

Profitable Differences

company can introduce the difference profitably

o Uniform-delivered pricing

company charges the same price plus freight to all customers, regardless of their location

Market development

company growth by identifying and developing new market segments for current company products Ex: new demographics (elderly, teens), new geographic markets (outside US)

Communicability-

degree to which results of using the innovation can be observed or described to others

Market penetration

company growth by increasing sales of current products to current market segments without changing the product Ex: adding new stores in current market areas; improvements in ads, prices, service, menu, store design

Product development

company growth by offering modified or new products to current market segments Ex: Starbucks introducing lighter-roast coffee

Diversification

company growth through starting up or acquiring businesses outside the company's current products or markets Ex: Starbucks buying Evolution Fresh (fresh squeezed juices)

o Zone pricing

company sets up 2+ zones; all customers within a zone pay the same total price; the more distant the zone, the higher the price

o Sense-of-mission marketing

company should define its mission in broad social terms rather than narrow product terms • Mission-focused positioning drives everything the brand does-internally and externally • Having a double bottom line of value and profits can be hard-new generation of social entrepreneurs believe must do well to do good

o Societal marketing

company should make marketing decisions by considering consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests

o Customer-value marketing

company should put most of its resources into customer-value-building marketing investments to capture value from the customers

o Geographic organization

company that sells across the country or internationally; allows people to settle into a territory, get to know their customers, and work with a min of travel cost and time

Company buying sites

company trading sites where it posts buying needs, invites bids, places orders

Data warehouse

company-wide electronic database of finely detailed customer info that needs to be sifted through for gems

Creative concept

compelling "big idea" that will bring an advertising message strategy to life in a distinctive and memorable way

o compensation consists of 4 elements: fixed amount, variable amount, expenses, and fridge benefits • fixed (salaries)-stable income • variable (commissions/bonuses)-motivation for effort/success o management must determine mix makes most sense • types of fixed/variable compensation-straight salary, straight commission, salary plus bonus, and salary plus commission • average person's pay consists of 67% salary and 33% bonus o should direct salespeople toward activities consistent with overall sales force and marketing objectives (acquire new business vs maximize current account profitability)

compensating salespeople (what it consists of, best mix)

Preemptive Differences

competitors cannot easily copy the difference

Distinctive Differences

competitors do not offer the difference or the company can offer it in a more distinctive way

• Value delivery network

composed of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system in delivering customer value

o sales force automation systems

computerized, digitized sales force operations that let salespeople work more effectively anytime, anywhere

Differentiable Requirement for Effective Segmentation

conceptually distinguishable and respond differently to different marketing mix elements and programs

• Customer value analysis

conducted to determine what benefits target customers value and how they rate the relative value of various competitors' offers

• Direct marketing

connecting directly with carefully targeted segments or individual consumers, often on a one-to-one, interactive basis • Early direct marketers gathered customer names and sold goods mainly by mail and phone • DM is part of direct distribution and the promotion mix • DM is supplementary channel or medium for some; complete model for others (amazon, ebay)

Government markets:

consist of government agencies that buy goods and services

Consumer markets

consist of individuals and households that buy goods and services for personal consumption

Market segment

consists of consumers who respond in a similar way to a given set of marketing efforts

Product invention

consists of creating something new to meet the needs of consumers in a given country. As markets have gone global, companies ranging from appliance manufacturers and carmakers to candy and soft drink producers have developed products that meet the special purchasing needs of low-income consumers in developing economies. For example, Ford developed the economical, low-priced Figo

• Everyday low pricing (EDLP

constant, everyday low price with few or no temporary price discounts

Subsistence economies:

consume most of their own agricultural and industrial output and offer few market opportunities

awareness stages in the adoption process

consumer becomes aware of the new product but lacks info about it

evaluation stages in the adoption process

consumer considers whether trying the new product makes sense

adoption stages in the adoption process

consumer decides to make full and regular use of the new product

Unsought product:

consumer either does not know about or knows about but does not normally consider buying Most major new innovations Ex: life insurance, blood donations

Specialty product:

consumer product with unique characteristics and brand identification for which a significant group of buyers is willing to make a special purchase effort Buyers normally do not compare Ex: specific brands of cars, designer clothes

• Price packs (cents-off deals)-

consumer savings off regular price of product (2 for 1, discount)-maybe more effective than coupons

interest stages in the adoption process

consumer seeks info about the new product

trial stages in the adoption process

consumer tries the new product on a small scale to improve his or her estimate of its value

Selective retention

consumers are likely to remember good points made about a brand they favor and forget good points made about competing brands

Potential users

consumers facing life-stage changes who can be turned into heavy users

• C2B online marketing:

consumers search out sellers, learn about their offers, initiate purchases, and sometimes even drive transaction terms Forums where customers ask questions, share ideas, give praise, report problems

showrooming

consumers will come to stores to test product and then buy online; amazon encourages so in stores must match prices or work for exclusive merchandise

Product concept:

consumers will favor products that offer the most quality, performance, and features; organization should devote its energy to making continuous product improvements

Selling concept:

consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort o Focuses on creating sales transactions rather than on building long-term profitable customer relationships

Perceived obsolescence

continually changing consumer concepts of acceptable styles to encourage more and earlier buying

• Franchise organizations

contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent businesspeople (franchises) who buy the right to own and operate one+ units of the franchise system Normally based on unique product or service, method of doing business or the trade name, goodwill, or patent that the franchisor has developed Ex: McDonalds, Subway

• Administered VMS

coordinates successive stages of production and distribution through the size and power of one of the parties (ex: GE and Kraft can command cooperation over retailers while Walmart and B&N can exert influence on many manufacturers)

Product Life-Cycle

course of product's sales and profits over its lifetime

Personality symbol:

creates a character that represents the product

Fantasy:

creates a fantasy around the product or its use

• buzz marketing

cultivating opinion leaders and getting them to spread information about a product or service to others in their communities

o Fashion

currently accepted or popular style in a given field

o Demand curve

curve that shows the number of units the market will buy in a given time period at different prices that might be changed

Shopping product:

customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style Consumers spend much time and effort gathering info and making comparisons ex: furniture, clothing, used cars

Convenience product:

customers usually buy frequently, immediately, and with minimal comparison and buying effort ex: laundry detergent, candy

Low-margin customers

customers who's relationship is through ads, public relations, and apps Ex: general Nike customers

• Less for much less

customers will gladly settle for less than optimal performance or give up extras for lower price Ex: Holiday Inn suspends pool and charges less; Costco-less selection and service, lower prices

o Disintermediation

cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries • Ex: travel agents; brick-and-mortar stores for online • Innovators who find new ways to add value in the channel displace traditional resellers and reap the rewards but traditional intermediaries must continue to innovate to avoid being side swept • Developing new channel opportunities brings into direct competition with established channels-look for ways to make governing direct a plus for the entire channel

Excitement Brand Personality

daring, spirited, imaginative

Relative advantage-

degree to which innovation appears superior to existing products

Compatibility-

degree to which innovation fits the values and experiences of potential customers

Complexity-

degree to which innovation is difficult to understand or use

Early mainstream

deliberate-rarely leaders but adopt new ideas before average person

Belief

descriptive thought that a person holds about something

• atmosphere:

designed environments that create or reinforce the buyer's leanings toward buying a product

o Corporate (or brand) website

designed to build customer goodwill, collect customer feedback, and supplement other sales channels rather than sell the company's products directly

• Marketing strategy development (The New-Product Development Process)

designing an initial marketing strategy for a new product based on the product concept o Statement consists of 3 parts: • Target market: planned value proposition, sales, market share, and profit goals for the first few years • Product's planned price, distribution, and marketing budget • Planned long-run sales, profit goals, and marketing mix strategy

• Marketing channel design

designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives

suggest something about benefits and qualities easy to pronounce, recognize, and remember should be distinctive should be extendable should translate easily into foreign languages should be capable of registration and legal protection

desirable qualities in a brand name

o Product concept

detailed version of the new-product idea stated in meaningful consumer terms

Environmental sustainability

developing strategies and practices that create a world economy that the planet can support indefinitely • Shortages of raw materials • Increased pollution • Increased government intervention in natural resource management-marketers should develop solutions to the material and energy problems facing the world • Many companies are responding to consumer demands with more environmentally-responsible packaging/products

• Product development (The New-Product Development Process)

developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering o Rigorous testing for safety and customer value o Actual customers often involved

o objective-and-task method

developing the promotion budget by 1) defining specific promotion objectives, 2) determining the tasks needed to achieve these objectives, 3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget • forces management to spell out its assumptions about relationship between dollars spend and promotion results • hard to figure out which specific tasks achieve stated objectives

• New-product development

development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts • Most important source of growth but very expensive and very risky • Fail because overestimated market size, poor design, incorrect positioning or timing, poorly advertised

Important Differences

difference delivers highly valued benefit to target buyers

Superior Differences

difference is superior to other ways that customers might obtain the same benefit

• Vertical Channel Conflict

different levels (even more common); (KFC v its franchises)

Brand Equity

differential effect that knowing the brand name has on customer response to the product or its marketing (powerful brands-> high brand equity) • Positive when customers react more favorably to it than to a generic or unbranded version of the same product o Brands succeed when they forge deep relationships with their customers

• Differentiation

differentiating the market offering to create superior customer value

• Electronic data interchange (EDI):

digital exchange of data between organization; most sharing takes lace

Internet Transportation

digital products

• Direct marketing

direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships (catalogs, kiosks, the Internet)

Direct-mail marketing

direct marketing through print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online o More are going digital-eliminates printing and mailing costs; more presentation formats; o Paper catalogs create emotional connects and one of best ways to drive online sales (70% of online sales come from catalogs & spend more)

Extranet links

direct procurement accounts with key suppliers through which company buyers can purchase equipment, materials, and supplies directly

• comparative (aka attack)-

directly or indirectly compares its brand with 1+ other brands-use with caution because can create ad war that no side will win • can lead to lawsuits-Sara Lee and Kraft-publicly called into question the taste and contents of both hot dog brands

o Channel conflict

disagreements among marketing channel members on goals, roles and rewards-who should do what and for what rewards

• Point-of-purchase promotions-

displays and demonstrations that take place at the point of sale

Resellers

distribution channel firms that help the company help customers or make sales to them

Geographic segmentation:

dividing a market into different geographical units such as nations, states, regions, counties, cities, or even neighborhoods • Many companies today are localizing their products, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and neighborhoods

Income segmentation:

dividing a market into different income segments • Long used in cars, clothing, cosmetics, financial services, and travel • Target affluent customers with luxury goods and convenience services • Dollar tree and dollar general target low- and middle-income groups (under $30,000)-look for specific neighborhoods where people where less-expensive shoes and drive old cars that drip oil

Gender segmentation:

dividing a market into different segments based on gender • Long used in clothing, cosmetics, toiletries, magazine

Psychographic segmentation

dividing a market into different segments based on social class, lifestyle, or personality characteristics • The products people buy reflect their lifestyles • Targeting different personalities (soft drinks-adventurous vs mature/practical)

• Market segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Behavioral segmentation:

dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product • Occasion segmentation: • Benefit segmentation: • User status: • Usage rate: • Loyalty status:

• Market segmentation

dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs

Occasion segmentation:

dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item Campbell's advertises its soups more heavily in the cold winter months Other companies try to boost consumption by promoting usage during nontraditional occasions

Benefit segmentation:

dividing the market into segments according to the different benefits that consumers seek from the product Requires finding major benefits people look for in a product class, the kinds of people who look for each benefit, and major brands that deliver each benefit

Demographic segmentation:

dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation • Most popular bases for segmenting • Consumer needs, wants, and usage rates vary closely with demographic variables

Sincerity Brand Personality

down-to-earth, honest, cheerful

Experience curve (learning curve):

drop in the average per-unit production cost that comes with accumulated production experience

Probability samples

each has a known chance to be included, sampling error can't be measured

Economic environment

economic factors that affect consumer purchasing power and spending patterns o Income distribution-created a tiered market • Companies tailor their marketing offers to affluent vs modest means

Actionable Requirement for Effective Segmentation

effective programs can be designed for attracting and serving segments

Online Marketing

efforts to market products and services and build customer relationships over the internet

Independent off-price retailers

either independently owned and run or is a division of larger retain corporation

Internal databases

electronic collections of consumer and market information obtained from data sources within the company network o USAA uses marketing base to create an incredibly loyal customer base and to tailor direct marketing offers to the needs of individual customers o Cheap and quickly accessed o Collected for other purposes so may be incomplete or in the wrong form for making marketing decisions o Data ages quickly so requires a lot of effort to update o Managing that much info requires highly sophisticated techniques and equipment

• Integrated Logistics Management

emphasizes team work-both inside the company and among all the marketing channel organizations-to maximize the performance of the entire distribution system

o Marketing website

interacts with consumers to move them closer to direct purchase or other marketing outcomes

• lovemarks

engage customers on a deep, emotional level (ex: Apple, Google, Nike, Trader Joe's)

price gouger

enrichment at expense of customers

standardized global marketing

essentially using the same marketing strategy approaches and marketing mix worldwide

North American Free Trade Agreement (NAFTA)

established a free trade zone among the United States, Mexico, and Canada. Total trade among the countries has nearly tripled from $288 billion in 1993 to $1 trillion in 2011.

o SWOT analysis

evaluates overall strengths, weaknesses, opportunities, and threats

• Market targeting (targeting):

evaluating each market segment's attractiveness and selecting one or more segments to enter

Image differentiation:

even when competing offers look the same, buyers may perceive a difference in the company or brand image that conveys a products distinctive benefits and positioning

• The same for less

everyone likes a good deal Walmart and "category killers" like DSW use this Offer many of brands as department stores and specialty stores but at deep discounts based on superior purchasing power and lower-cost operations Other companies offer imitative but lower-priced brands to lure customers from market leader (ex: Amazon Kindle fire vs iPad)

Line Extension (Brand Development)

extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category Low-cost, low-risk way to introduce new products or meet consumer desires for variety, use excess capacity, or command more shelf space Risks: may cause consumer confusion or lose some of its specific meaning works best when takes sales from competing brands not cannibalizes the company's other items (ex: Doritos flavors)

Brand extension (Brand Development)

extending an existing brand name to new product categories Ex: Special K cereal to crackers, fruit crisps, etc Gives new product instant recognition and faster acceptance-saves ad costs to build new name May confuse the image-Cheetos lip balm Failure may hurt reputation of other products with same brand name May not be appropriate for new product even if well made and satisfying (Hooters Air)

Emerging economies (industrializing economies

fast growth in manufacturing results in rapid overall economic growth. Examples include the BRIC countries—Brazil, Russia, India, and China. As manufacturing increases, the country needs more imports of raw textile materials, steel, and heavy machinery, and fewer imports of finished textiles, paper products, and automobiles. Industrialization typically creates a new rich class and a growing middle class, both demanding new types of imported goods. As more developed markets stagnate and become increasingly competitive, many marketers are now targeting growth opportunities in emerging markets

• Opportunities include

favorable factors or trends in the external environment that the company may be able to exploit to its advantage

Testimonial evidence or endorsement:

features a highly believable or likeable source endorsing the product

• Oligopolistic competition:

few large sellers; customer alert and responsive to changes in price

Customer-centered sense and respond philosophy

finding the right products for your customers NOT finding right customers for product

• Wholesaler

firm engaged primarily in wholesaling activities

Marketing intermediaries

firms that help the company to promote, sell, and distribute its goods to final buyers

Need recognition

first stage of the buyer decision process, in which the consumer recognizes a problem or need o Triggered by internal stimuli when person's normal needs rises to a level high enough to become a drive o May be triggered by external stimuli like an ad

• Customer-centered company

focuses on customer development in designing its marketing strategies and delivering superior value to its target customers o Can concentrate resources most on customers needs that are most important to serve and

Technological environment

forces that create new technologies, creating new products and market opportunities o Many firms are already using RFID technology to track products through various points in the distribution channel o The technology environment changes rapidly o New technology creates new markets and opportunities but also replaces older technology-> companies that don't keep up will find their products outdated o As products and technology become more complex, the public needs to know that these items are safe • FDA-drugs • CPSC-safety standards/penalties for consumer products

• Strengths include

internal capabilities, resources, and positive situational factors

Intermarket (cross-market) segmentation: & International Segmentation

forming segments of customers who have similar needs and buying behaviors even though they are located in different countries

• conformance quality

free from defects and consistency in delivering targeted level of performance

Customer insights

fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships

Key customers

full partnerships Ex: Nike with Dick's, Sports Authority

• Value proposition

full positioning of a brand-the full mix of benefits on which it is positioned

communication adaptation

fully adapting their advertising messages to local markets. Consumer products marketer Unilever does this for many of its brands. For example, whereas ads for Unilever toothpaste brands in Western markets might emphasize anything from whiter teeth or fresher breath to greater sex appeal, ads in Africa take a more basic educational approach, emphasizing the importance of brushing twice a day.

o Content sponsorships

gain name exposure on internet by sponsoring special content on various websites

Online focus groups

gathering a small group of people online with a trained moderator to chat about a product, service, or organization and gain qualitative insights about consumer attitudes and behavior

Observational research:

gathering primary data by observing relevant people, actions, and situations; used for info they can't obtain by asking questions

Experimental research:

gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses

o Business promotions

generate business leads, stimulate purchases, reward customers, and motivate salespeople • Trade shows help companies reach prospects that are not reached through their sales force • Sales contest-salespeople or dealers to motivate to increate their sales performance over a given period

o FOB-origin pricing

geographical pricing strategy in which goods are placed free on board a carrier; customer pays the freight from the factory to the destination

• Category killer

giant specialty store that carries a very deep assortment of a particular line

• Desirable products

give both high immediate appeal and long run benefits-ultimate goal for companies

• Pleasing products

give high immediate satisfaction but may hurt consumers in the long run

to understand customer needs even better than customers do

goal of marketing concept

New product

good, service, or idea that is perceived by some potential customers as new

• Premiums-

goods offered either free or at low cost as an incentive to buy a product-happy meal toys

o Strategic group

group of firms in an industry following the same or similar strategy in a given target market • The more one firm strategy resembles another's the more the two firms compete • If a company enters, the members of that group become its key competitors-most intense • Also rivalry among groups-may appeal to overlapping customer segments, customers may not see much of a difference, might expand into new strategy segments

o Economic communities

group of nations organized to work toward common goals in the regulation of international trade • Free trade zones -ex: European Union • Great trade opportunities for other countries but also great threats

Subculture

group of people with shared value systems based on common life experiences and situations • Include nationalities, religions, racial groups, and geographic regions

o Product line

group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

o Shopping centers

group of retail businesses built on a site that is planned, developed, owned, and managed as a unit

Membership groups

have direct influence and person belongs to it

Customer insight teams

headed by VP and composed of reps from all functional areas • Collect customer and marketing info from a variety of sources and use this info to develop important customer insights from which the company can create more value to its customers

o Chief marketing officer-

heads up the company's entire marketing operation and represents marketing on the company's top management team

Physical distribution firms

help company stock and move goods from their points of origin to their destinations

stars:

high growth, high share businesses or products; need a lot of investment so eventually slow down and turn into cash cows

True friends

high loyalty and profitable Want to turn into true believers: come back regularly and tell others

• Full-service retailers

high-end specialty stores and first-class department stores; carry more specialty goods for which customers need/want assistance

Barnacles

highly loyal, not profitable Ex: smaller bank customers who bank regularly but do not generate enough returns

People differentiation:

hiring and training people better than their competitors do (ex: Disney)

o Consumer-oriented marketing

holds a company should view and organize its marketing activities from the consumer's point of view

Product Mix Consistency:

how closely related the various product lines are in end use, production requirements, distribution channels (ex: consistent in consumer products and distribution channels but perform different functions)

Relevance (Perception Dimension)

how consumers feel it meets their needs

Esteem (Perception Dimension)

how highly consumers regard and respect the brand

frequency

how many times the average person in the target market is exposed to the message

Knowledge (Perception Dimension)

how much consumers know about the brand

• Power center

huge unenclosed shopping centers of a long strip of retail stores (large freestanding anchors-walmart, target, Costco)

Production concept:

idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency

• Weaknesses include

internal limitations and negative situational factors

Labeling

identifies the product or brand, describes several things about the product (who made it, where it was made, when, contents), promotes the brand • Add personality to the brand and support position • Can become crucial element in brand-customer connection-may anger if changed

Competitor Analysis

identifying key competitors, assessing their objectives, strategies, strengths, weaknesses, and reaction patterns, and selecting which competitors to attack or avoid

• market variability

if buyers have same tastes, buy the same amount, and react the same way to marketing efforts, undifferentiated marketing is appropriate

Nonprobability Sample

if probability is too time-consuming or costly

• Service Offer

include innovative features that set one company's offer apart from competitors' offers Ex: Dick's in-store foot track

• Contractual VMS

independent firms at different levels of production and distribution join together through contracts Franchise organizatio

o Merchant wholesaler

independently owned wholesale business that takes title to the merchandise it handles

• Sales person

individual who represents a company to customers by performing one+ of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building

Capital items: Industrial product

industrial products that aid in the buyer's production or operations including installation or accessory equipment Installations: Accessory equipment:

Financial publics:

influences company's abilities to obtain funds (ex: banks, investment analysts, and stockholders)

Primary data

info collected for the specific purpose at hand

Secondary data

information that already exists somewhere

Cultural environment

institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors

adapted global marketing

international-the producer adjusts the marketing strategy and mix elements to each target market, resulting in more costs but hopefully producing a larger market share and return

o Viral marketing

internet version of word-of-mouth marketing (website, video, e-mail message, or other marketing event that is so infectious that customers will seek it out or pass it along to friends)

• Commercialization (The New-Product Development Process)

introducing a new product into the market o High costs o Must decide on timing-if eat sales of existing, needs improvement, or economy is down, delay o Must decide where-single location, region, international

• More for the same

introducing brand offering comparable quality to more for more but at lower price Lexus line versus Mercedes and BMW

Crowdsourcing:

inviting broad communities of people-customers, employees, independent scientists and researchers, and even the public at large-into the new-product innovation process

Product adaptation

involves changing the product to meet local requirements, conditions, or wants. For example, Kraft has adapted its popular Oreo cookie to the unique tastes of consumers all around the world, whether it's mango-and-orange flavored Oreos in the Asia Pacific region, green tea Oreos in China, a chocolate and peanut variety Indonesia, or banana and dulce de leche in Argentina.

o operating control

involves checking ongoing performance against the annual plan and taking corrective action when necessary

• Marketing planning

involves choosing marketing strategies that will help the company attain its overall strategic objectives o Detailed marketing plan needed-starts with executive summary, SWOT analysis, major objectives and specific strategies to achieve them o What and why of marketing activities

o strategic control

involves looking at whether the company's basic strategies are well matched to its opportunities • programs can quickly become outdated, and each company should periodically reassess its overall approach to the marketplace

Barter

involves the direct exchange of goods or services. For example, China agreed to help the Democratic Republic of Congo develop $6 billion of desperately needed infrastructure—2,400 miles of roads, 2,000 miles of railways, 32 hospitals, 145 health centers, and two universities—in exchange for natural resources needed to feed China's booming industries—10 million tons of copper and 400,000 tons of cobalt.

joint venturing

joining with foreign companies to produce or market products or services. differs from exporting in that the company joins with a host country partner to sell or market abroad. It differs from direct investment in that an association is formed with someone in the foreign country.

Mail questionnaires (benefits/problems)

large amounts of info at a low cost per respondent; not flexible, take longer to complete, return rate is low, hard to control who in the household fills it out

Local publics:

large companies have departments and programs that deal with local community issues and provide community support (ex: neighborhood residents and community organizations)

Substantial Requirement for Effective Segmentation

large or profitable enough to serve

• Distribution centers

large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quick as possible

Macroenvironment

larger societal forces that affect the microenvironment-demographic, economic, natural, technological, political, and cultural forces

o Leader: firm in an industry with the largest market share (40%) o Challenger: runner-up firm that is fighting hard to increase its market share in an industry (30%) o Follower: runner-up firm that wants to hold its share in an industry without rocking the boat (20%) o Nicher: serves small segments that the other firms in an industry overlook or ignore (10%)

leader, challenger, follower, nicher

o Operational excellence:

leading by price and convenience-works to cut costs

o Product line stretching

lengthens its product line beyond its current range • Downward: for companies at upper end plug a market hole that would attract a new competitor or respond to a competitors attack on the upper end • upward: add prestige to their current products

Usage rate:

light, medium, and heavy product users

exchange controls

limit the amount of foreign exchange and the exchange rate against other currencies.

quotas

limits on the amount of foreign imports that they will accept in certain product categories. The purpose is to conserve on foreign exchange and to protect local industry and employment.

o Service profit chain

links service firm profits with employees and customer satisfaction

Blanket contract

long-term contractual relationship

cash cows:

low growth, high share businesses or products; established & successful so produce a lot of cash and can support themselves; support other SBUs

dogs:

low growth, low share businesses and products' generate enough cash to maintain themselves but not a lot of promise

question marks:

low share business units in high growth markets; require a lot of cash to simply hold their share

Somewhat loyal

loyal to 2 to 3 brands of a given product and favor one brand while sometimes buying others

Loyalty status:

loyal to brands (Tide), stores (target), and companies (apple) Completely loyal: Somewhat loyal: Company should start by studying most loyal and then study less-loyal to detect which brands are most competitive and target its marketing weaknesses

Industrial economies

major exporters of manufactured goods, services, and investment funds. They trade goods among themselves and also export them to other types of economies for raw materials and semifinished goods. United States, Japan, and Norway.

Installations: (Capital Item)

major purchases such as buildings (factories, offices) or fixed equipment (generators, drill presses)

Advertainment

make ads themselves so entertaining or useful that consumers • Ex: superbowl ads • DVR systems can improve viewership of a really good ad • Advertisers also create new advertising forms that look less like ads and more like short films or shows (ex: spoofs)

o Undifferentiated (mass) marketing

market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer • Focuses on common needs rather than differing • Difficulties arise in developing a product that satisfies all consumers

o Differentiated (segmented) marketing

market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each • P&G detergents, Hallmark cards • Creates more total sales than undifferentiated marketing across all segments • Also increases costs of doing business-requires extra marketing research, forecasting, sales analysis, promotional planning, channel management

o Concentrated (niche) marketing

market-coverage strategy in which a firm goes after a large share of one or a few segments • Whole Foods • Greater knowledge of consumer needs it serves and special reputation it acquires • Markets more effectively (fine-tunes to needs) and efficiently (target to consumers that it can serve best and most profitably) • Lets smaller companies focus their limited resources on serving niches that may be unimportant to or overlooked by larger competitors • Many competitors start to get foothold against larger, more resourceful competitors and then grow into broader competitors • Low cost of setting up shop on the internet makes even more profitable to serve seemingly minuscule segments • Higher-than-normal risks-rely on few segments

o Indirect mktg channel:

marketing channel containing one+ intermediary levels

o Direct marketing channel

marketing channel that has no intermediary

Citizen-action publics:

marketing decisions may be questioned by consumer organizations, environmental groups, minority groups

Multibrands (Brand Development)

marketing different brands in a given product category Pepsi: Mountain Dew, Sierra Mist, Pepsi, Gatorade, Liton, Aquafina, etc Offers way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share Drawback: each brand might only obtain only a small market share and none may be profitable-may end up spreading its resources over many brands instead of building a few brands to a highly profitable level

Marketing strategy

marketing logic by which the company hopes to create customer value and achieve profitable company relationships

Customer-managed relationships

marketing relationships in which customers, empowered by today's new digital technologies, interact with companies and with each other to shape their relationship with brands o Greater consumer control means that companies can no longer rely on marketing by intrusion but by attraction (involving customers rather than interrupting them) • Ex: creating dialogues using online social networks (twitter, facebook, insta) o Need to find unobtrusive ways to enter consumers' social conversations with engaging and relevant brand messages

Descriptive research

marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product of the demographics and attitudes of consumers

Exploratory research

marketing research to gather preliminary info that will help define problems and suggest hypotheses

Causal research

marketing research to test hypotheses about cause-and-effect relationships

• advertising agency

marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs • can often perform ad tasks better than company's own staff • outside point of view and lots of experience working with different clients and situations • most agencies have staff and resources to handle all phases of an ad campaign for their clients

New brands (Brand Development)

may believe power of brand name is waning or may create new brand name to enter new product category (Toyota and Lexus) Offering too many new brands can spread resources thin Large consumer-product marketers are pursuing megabrand strategies-weeding out weaker brands and focusing $$ on brands that can achieve high market share positions with good growth prospects

marketing dashboards

meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance

• Satisfied and productive service employees

more satisfied, loyal, and hardworking employees, which results in... • Greater service value

Straight product extension

means marketing a product in a foreign market without making any changes to the product. The first step, however, should be to find out whether foreign consumers use that product and what form they prefer. has been successful in some cases and disastrous in others. Apple iPads, Gillette razors, Black & Decker tools, and even 7-11 Slurpees are all sold successfully in about the same form around the world. is tempting because it involves no additional product development costs, manufacturing changes, or new promotion. But it can be costly in the long run if products fail to satisfy consumers in specific global markets.

o Price elasticity

measure of the sensitivity of demand to changes in price

• Marketing control

measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved

Neuromarketing

measuring brain activity to learn how consumers feel and respond Companies hire research companies to figure out what people are really thinking-Cheetos found out the favorite part is the cheese dust

o nonpersonal communication channels

media that carry messages without personal contact or feedback, including major media, atmospheres, and events • using mass media affects buyers both directly and indirectly (causes more personal communication) • often use to replace or stimulate personal communications by embedding consumer endorsements or word-of-mouth testimonials in their ads and other promotions

Club marketing programs

members special benefits and create member communities Ex: Apple encourages local Apple user groups

o Retail convergence

merging of consumers, products, prices, and retailers; greater competition for retailers and greater difficulty in differentiating product assortments

Generational marketing

might need to be careful about turning off one generation each time they craft a product or message that appeals effectively to another Each generation spans decades and multiple socioeconomic levels

• Product stewardship

minimizing not only pollution from production and product design but also environmental impacts throughout the full product life cycle, while at the same time reducing costs

Cues

minor stimuli that determine when, where, and how a person responds

• Greater service value

more effective and efficient customer value creation and service delivery, which results in... • Satisfied and loyal customers

Secondary beliefs and values

more open to change o Believing people should get married early in life

• Limited-service retailers:

more sales assistance so higher prices (JCPenney or Sears)

• Team-based new product development

new product development in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness o Get products on market more quickly o Company assembles team from various departments to stay with product from start to finish o Creates more organization confusion and tension

Product development (Product Life-Cycle Stage)

new product idea; sales=0 and investment costs rise

• Customer-centered new-product development

new-product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences o Most important factor is understanding what consumers want- get out of research lab and connect with customers

Early adopters

next 13.5 percent to adopt a new product

o Nonprice positions

not to charge the lower price but differentiate the marketing offer to make it worth the higher price

Product Mix Width:

number of different product lines the company carries (ex: Campbell's sells nourishing food-healthy beverages, baked snacks, simple meals)

o Product line length

number of items in the product line • Must assess how each item contribute to line's overall performance

Product Mix Depth

number of versions offer for each product in the line (ex: campbell's condensed soups, chunky soups, healthy request soups)

(stages consumers normally pass through on their way to a purchase) • awareness & knowledge-first two steps; introductory campaign using broad range of media to increase • liking-feeling favorable toward product • preference-preferring product over similar products • conviction-believing product is best product for them • purchase-leading reluctant customers to final step (special promotions)

o 6 stages of buyer-readiness

Personal factors

o Age and life-cycle stage o Occupation o Economic situation o Lifestyle o Personality and self-concept

• Lowest level=product attributes Competitors can easily copy Ex: P&G inventing disposable diapers with pampers (fit, disposability) Customers are not interested in attributes but what they will do for them • 2nd level: benefit ex: talk about resulting containment and skin-health benefits from dryness of diapers • 3rd level: beliefs and values ex: pampers village website "where we grow together"

o Brand positioning (in target customer's minds)

Expand total demand-developing new users, new uses, or more usage of its products New users by tapping into other market segment (weight watchers for men) New uses (WD-40) More usage-use more often or more per occasion (Campbell's soup recipes) • Protect market share-against competitors' attacks Must prevent or fix weaknesses that provide opportunities, fulfill its value promise, work to keep strong relationships with customers Offense: continuous innovation-constantly tries to innovate-increase competitive effectiveness and value to customers • Expand market share-on average-profitability rises with increasing market share Other studies show that profitability rises with share relative to competitors in its served market Gaining market share will not automatically improve profitability

o Can take 3 actions to remain number one: (market leader)

• Some critics say omits or underemphasizes certain important activities-4 Ps include them • 4 Ps concept takes seller's view, not the buyer's-should be 4 Cs (customer solution, customer cost, convenience, communication)

o Concerns: (marketing mix)

Complex buying behavior

o Consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands o For products expensive, risky, purchased infrequently, or highly self-expressive o Consumer has to learn a lot about the product category o Learning process-develop beliefs about product, attitudes, makes thoughtful purchase choice o Marketers must help buyers learn, differentiate brand's features, motivate store salespeople and buyer's acquantances

Dissonance-reducing buying behavior

o Consumer buying behavior in situations characterized by high involvement but few perceived differences among brands o For expensive, infrequent, or risky purchase but see little difference among brands o May shop around to learn what is available but will buy relatively quickly o Postpurchase dissonance-after-sale discomfort when they notice certain disadvantages of purchase or favorable things about brands not purchasesd o Marketer's after sale communications should provide evidence and support to help consumers feel good about their brand choices

Habitual buying behavior

o Consumer buying behavior in situations characterized by low consumer involvement and few significant perceived brand differences o Little involvement in this brand category o If brand consistency, out of habit rather than loyalty o Low-cost, frequently purchased o Buying process involves brand beliefs based on passive learning, may or may not be evaluation o Marketers of low-involvement products with few brand differences often use price and sales promotions o Can add product features or enhancements to differentiate their brands

Variety-seeking buying behavior

o Consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences o Might pick another brand out of boredom or simply for sake of variety o Market leader will try to encourage habitual buying behavior by dominating shelf space, keeping fully stocked, and running frequent reminder ads o Challenger firms will offer lower prices, special deals, free samples, ads for trying something new

Examples of publics

o Financial publics: o Media publics: o Government publics: o Citizen-action publics: o Local publics: o General publics: o Internal publics:

• Differentiation: • Relevance: • Knowledge: • Esteem: • Strong brand equity-rate highly on all 4 dimensions

o Four consumer perception dimensions

• Segmenting International Markets

o Geographic location: o Economic factors: o Political and legal factors: o Cultural factors: o Intermarket (cross-market) segmentation:

• Segmenting Consumer Markets

o Geographic segmentation: o Demographic segmentation: o Age and life-cycle segmentation: o Gender segmentation: o Income segmentation: o Psychographic segmentation: o Behavioral segmentation:

• High level of consumer brand awareness and loyalty • More leverage in bargaining with resellers • Can more easily launch line and brand extensions because high credibility • ***forms basis for building strong and profitable customer relationships

o High brand equity competitive advantages

Examples of Economies

o Industrial economies: o Subsistence economies: o Developing economies: o Value marketing:

• Systemic new product development

o Innovation management system to collect, review, evaluate, and manage new-product ideas o Helps create innovation-oriented company culture and yields a large number of new product ideas o New product development requires holistic approach and whole company commitment

demand management

o Managers decide which customers to target and the level/timing/nature of their demand

mobile marketing

o Marketing to on-the-go customers through mobile phones, smartphones, tablets, and other mobile communication devices

Psychological factors

o Motivation o Perception o Learning o Beliefs and attitudes

• Size of incentive-larger incentive produces more sales response • Conditions for participation • Promote and distribute program itself-dif levels of costs, many blend several together • Length of promotion-if too short, may miss; if too long, may not feel urgent • Evaluation-measure returns of sales promotion investments (most compare sales, before, during, and after)

o Must consider the following in designing sales promotion program

Individual differences in innovativeness

o People differ greatly in readiness to try new products o Innovators o Early adopters o Early mainstream o Late mainstream o Lagging adopters

• Positioning Maps

o Prepare to show consumer perceptions of their brands versus competing products on important buying dimensions-price vs luxury-performance

• Segmenting Business Markets

o Use many of consumer methods but also use customer operating characteristics, purchasing approaches, situational factors, and personal characteristics o Starbucks divides into office coffee and food service segments-tries to make Starbucks available to employees in the workplace and teams up with businesses to serve Starbucks to customers o Establish separate systems for dealing with larger or multiple-location customers

• Kiosk marketing

o Vending machines o ZoomSystems kiosks-apple, Sephora, macy's etc

• begins with careful review of product and its benefits, target market, and proposed marketing strategies • decade of quirky or made-up names but now names that have real meaning (Method, Silk) but now getting hard to find • brand name must be protected-many originally protected brand names are now generic names because of popularity

o brand name selection

company's (limited) resources degree of product variability (undifferentiated for uniform differentiation for design variation) product's life cycle stage (new or mature)

o choosing a target strategy depends on

o must also decide message structure issues • draw a conclusion or leave it to the audience? • present strongest arguments first or last? • present one-sided (mentioning only the products strengths) or two-sided argument (touting the product's strengths while admitting its shortcomings)?

o must also decide message structure issues • draw a conclusion or leave it to the audience? Research says leave it to the audience • present strongest arguments first or last? First gets strong attention but may be anticlimactic • present one-sided (mentioning only the products strengths) or two-sided argument (touting the product's strengths while admitting its shortcomings)? One-sided-more effective in sales presentations except when audience is highly-educated or likely to hear opposing claims or when communicator has negative associations to overcome Two-sided-can enhance credibility and make buyers more resistant to customer attacks

net return on advertising investment divided by the costs of the advertising investment

o return on advertising investment

• rational: relate to audience's self-interest (showing product's quality, economy, value, or performance • emotional appeal: stir up either negative or positive emotions that can motivate purchase must be careful with humor because it can detract from comprehension, overshadow product, or even irritate customers • moral appeal: audience's sense of what is "right" and "proper"; often used to urge people to support social causes

o types of appeals or theme that will produce the desired response

Netnography research:

observing consumers in a natural context on the internet Cannot observe things like attitudes, motives, long-term, infrequent behavior Observations can be difficult to interpret

o Good-value pricing

offering just the right combination of quality and good service at a fair price • Less expensive versions of established, brand name products • Redesigning existing brands to offer more quality for a given price or the same quality for less

blocked currency

one whose removal from the country is restricted by the buyer's government—if they can buy other goods in that country that they need or can sell elsewhere for a needed currency.

o Online social networks

online communities where people congregate socialize, and exchange views and info

o C2C online marketing

online exchanges of goods and info between final consumers • Customers sell goods or info

• Blogs:

online journals where people post their thoughts usually on a narrowly defined topic Many use social networks to promote so have huge reach Companies set up own blog or advertise on existing blogs (54%) Offer fresh, original, personal, cheap way to enter but cluttered and difficult to control

Online social networks:

online social communities-blogs, social networking Web Sites, and other online communities-where people socialize or exchange information and opinions Hope to use the internet and social media to interact with consumers and become a part of their conversations/lives Most brands have built a comprehensive social media presence but must be careful when tapping into online social networks-results are difficult to measure and control Users control the content so social network marketing attempts can backfire

Supplies and services (Industrial Product)

operating supplies (lubricants, pen, paper) and repair and maintenance supplies (paint, nails, brooms) Include maintenance and repair services (window cleaning) and business advisory services (legal, advertising)

• Marketing concept

organizations thrive from day to day by determining current needs and wants of target customers and fulfilling these needs effectively and efficiently BUT do not always serve future best interests of customer nor the company

Customer database

organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data]

• Consumerism

organized movement of citizens and government agencies designed to improve the rights and power of buyers in relation to sellers

• Environmentalism

organized movement of concerned citizens, businesses, and government agencies designed to protect and improve people's current and future living environment

• Internal marketing

orienting and motivating customer-contact employees and supporting service employees to work as a team to provide customer satisfaction Must precede external marketing

Ruggedness Brand Personality

outdoorsy and tough

Decline (Product Life-Cycle Stage)

period when sales fall off and profits drop May decide to maintain its brand, repositioning or reinvigorating it to move back to growth stage May decide to harvest-reduce various costs holding sales hold up Might decide to drop-sell to another firm or liquidate

Opinion leader

person within a reference group who because of special skills, knowledge, personality, or other characteristics, exerts social influence on others

Attitude

person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea Difficult to change Company should usually try to fit product into existing attitudes rather than try to change

Focus group interviewing:

personal interviewing that involves inviting 6 to 10 people to gather for a few hours with a trained interviewer to talk about a product, service, or organization; the interviewer "focuses" the group discussion on important issues • Qualitative insights into thoughts feelings-body movements, facial expressions

• Personal selling

personal presentation by the firm's sales force for the purpose of making sales and building customer relationships (sales presentations, trade shows)

Personal Selling

personal presentations by the firm's sales force for the purpose of making sales and building customer relationships

o Marketing logistics (physical distribution):

planning, implementing, and controlling the physical flow of materials, final goods, and related info from points of origin to points of consumption to meet customer requirements at a profit • Traditionally started with products at plants • Now customer-centered logistics-starts with marketplace and works backward to factory

Accessory equipment (Capital Item)

portable factory equipment and tools (hand tools and lift trucks) and office equipment (computers, fax machines, desks)

Product/market expansion grid

portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

Butterflies

potentially profitable but not loyal Ex: stock investors who trade often and in large amounts

Cross-cultural marketing

practice of including ethnic themes and cross-cultural perspectives within their mainstream marketing

• Cobranding

practice of using the established brand names of two different companies on the same product Each brand dominates in a different category so combined brands create broader consumer appeal and greater brand equity (ex: Pillsbury/Cinnabon) Plays on complementary strengths of the brands (ex: Tim Hortons coffee and Cold Stone Creamery Shops-different points of day) Allows company expand its existing brand into a category it might otherwise have difficulty entering alone (Nike + iPod) Limitations: complex legal contracts and licenses, coordination for ads, trust with reputation of brand)

Scientific evidence:

presents survey or scientific evidence that the brand is better or better liked than one+ brands

• Rebates (cash refunds)-

price reduction occurs after purchase rather than at retail outlet

Optional-product pricing:

pricing of optional or accessory products along with a main product

psychological pricing

pricing that considers the psychology of prices and not simply the economics; the prices is used to say something about the product o Higher prices associated with higher quality o Reference prices: prices that buyers carry in their minds and refer to when they look at a given product o Consumers do not have all skills or info they need to figure out whether they are paying a good price

o Target costing

pricing that starts with an ideal selling price, then targets costs that will ensure that the price

• centralized approaches can be difficult, time-consuming, and costly to implement • may be difficult to define SBUs and measure market share and growth • focus on classifying current businesses but provide little advice for future planning • many companies have dropped formal matrix methods in favor of customized approaches-decentralization • Ex: Disney expanded as a centralized company but decentralized to division managers

problems with matrix approaches

Today's marketing

process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return

Mass customization

process by which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs

Portfolio analysis

process by which management evaluates the products and businesses that make up the company 1. Identify the key businesses that make up the company (strategic business units aka SBUs) 2. Assess the attractiveness of its various SBUs and decides how much support each deserves

Strategic planning

process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities o Sets the stage for the rest of planning in the firm o Adapting the firm to take advantage of opportunities in its constantly changing environment

o Brand valuation

process of estimating the total financial value of a brand

• Market targeting

process of evaluating each market segment's attractiveness and selecting one or more segments to enter

• full-line forcing

producers of strong brands only sell to dealers if dealers will take some or all of the rest of its line • can only drop deals for a cause

o Consumer products

product bought by final consumers for personal consumption • Convenience product: • Shopping product: • Specialty product: • Unsought product:

o Industrial product

product bought by individuals and organizations for further processing or for use in conducting a business • Distinction between industrial and consumer is the purpose for which the product is purchased (ex: lawn mower bought for home use=consumer; lawn mower bought for landscaping biz=industrial) • Materials and parts: • Capital items: • Supplies and services:

• exclusive dealing

requiring dealer to not handle competitors' products o exclusive territorial agreements- producer doesn't sell to other dealers in a given area (legal) or buyer agrees to sell only in its own territory (causes problems) • exclusive arrangements okay as long as do not lessen competition or create a monopoly/mutual agreement

Marketing services agencies

research firms, ad agencies, media firms, and consulting firms that help company target and promote its products to the right markets

Interpretive consumer research

research that digs deeper into consumer psyches

• Discount store

retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume Today Have improved environment and increased services but maintained low cost Dollar stores are today's fastest-growing retail format (Dollar General)

• Specialty stores

retail store that carries a narrow product line with a deep assortment within that line Flourishing b/c increased market segmentation, market targeting, and product specialization

• Service retailer

retailer whose product line is actually a service, examples include hotels, airlines, banks, colleges

• Reverse logistics (Supply chain management)

reusing, recycling, refurbishing, or disposing of broke, unwanted, or excess products returned by consumers

• Business analysis (The New-Product Development Process)

review of the sales, costs, and profit projects for a new product to find out whether these factors satisfy the company's objectives

Frequency Marketing Programs

reward customers who buy frequently or in large amounts Ex: Airlines, supermarkets

promotional allowance

reward dealers for participating in ad or sales support programs

Industrial economies:

rich markets for many different kinds of goods

o Can have a strong impact on public awareness at a much lower cost than advertising can • Staff to develop and circulate information and manage events o Yet limited and scattered use • So busy thinking about various publics • PR practitioners and marketers do not always speak the same language o Should work hand in hand with advertising to build brands and customer relationships

role and impact of PR

o Trade promotions

sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to customers • Discount off list price on each case purchased • Allowance-in return for retainer's agreement to feature the manufacturer's products in some way • Free goods-extra cases of merchandise to resellers who buy a certain quantity or feature a certain flavor or size • May have to do buy-back guarantees

• Product sales force structure

salespeople specialize in selling only a portion of the company's products or lines o If company has numerous or complex products

• Customer (or market) sales force structure

salespeople specialize in selling only to certain customers or industries

o Inside sales force

salespeople who conduct business from their offices via telephone, internet, or visits from prospective buyers

o Outside sales force (field sales force):

salespeople who travel to call on customers in the field

• Satisfied and loyal customers

satisfied customers who remain loyal, make repeat purchases, and refer other customers, which results in... • Healthy service profits and growth

• Scanner fraud:

scanner based computer checkouts has led to increasing complaints of retailers overcharging their customers-poor management

• Idea-screening (The New-Product Development Process)

screening new product ideas to spot good ideas and drop poor ones as soon as possible o Most companies require execs to write up new product ideas in standard format to be reviewed by committee o Is it real? (real need and customers) Can we win? (sustainable competitive advantage) is it worth doing? (fit with growth strategy? Profit?)

Sample

segment of the population selected for marketing research to represent the population as a whole

o Customer intimacy:

segmenting its markets and tailoring its products/services to match the needs of its target customers-premium to get what they want

• Marketing channel management

selecting, managing, and motivating individual channel members and evaluating their performance over time

target marketing

selects which segments it will go after

o Freight-absorption

seller absorbs all or part of the freight charges in order to get the desired business

o Basing-point pricing

seller designates some city as basing point and charges all customers the freight cost from that city to the customer

Marketing myopia

seller's mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products

segmented pricing

selling a product or service at 2+ prices, where the difference in prices is not based on differences in costs o Should reflect real differences in customers' perceived value

• Predatory pricing

selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business-illegal but hard to determine what constitutes

• Warehouse clubs

sells a limited selection of brand-name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees Appeal to bargain seekers and consumers seeking wide range (necessities->extravagances)

o permission-based marketing

send email pitches only to customers who opt in

o Email marketing

sending highly-targeted, highly personalized, relationship building marketing messages via e-mail o 78% DM campaigns use o can be ultimate medium for success

Value chain

series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products • Success depends on coordination b/w departments • Ex: Walmart markets as "Save money. Live better" but relies on purchases to buy low cost from suppliers, operations to provide low-cost handling, etc

Reference groups

serve as direct or indirect pojtns of comparison or reference in forming a person's attitude or behavior

• Self-service retailers:

serve customers who are willing to perform their own locate-compare-select process to save time or money (target)

Service inseparability:

services are produced and consumed at the same time and cannot be separated from their providers • Customers play active role in delivery-provider-customer interaction important in customer co-production

Market

set of all actual & potential buyers of a product or service

o Product mix

set of all product lines and items that a particular seller offers for sale

Culture

set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions • Most basic cause of consumer behavior • Marketers try to spot cultural shifts to discover new products that might be wanted (health movement)

Value proposition

set of benefits or values it promises to deliver to consumers to satisfy their needs • Ex: Vibram FiveFinger Shoes- "You are the technology"

o Target market

set of buyers sharing common needs or characteristics that the company decides to serve

• Marketing channel (distribution channel):

set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user o Directly affects all other marketing decisions but companies often pay too little attention to distribution channels but many have used imaginative distribution systems to gain comp advantages o Decisions often involve long-term commitments to other firms

• Marketing mix

set of tactical marketing tools-product, price, place, and promotion-that the firm blends to produce the response it wants in the target market; for establishing strong positioning in target markets

• Market-skimming pricing (price skimming):

setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales o Quality and image must support higher price and enough buyers must want product then o Costs of producing a small volume cannot be so high that they cancel advantage of charging more o Competitors shouldn't enter market easily and undercut high price

• Market-penetration pricing

setting a low price for a new product in order to attract a large number of buyers and a large market share o Market must be highly price sensitive o Production and distribution costs must decrease as sales volume increases o Low price must keep out competition and penetration pricer must maintain low-price position

By-product pricing:

setting a price for by-products in order to make the main product's price more competitive

Captive-product pricing:

setting a price for products that must be used along with a main product, such as blades for a razor and games of a video-game console

• Customer value-based pricing

setting price based on buyers' perceptions of value rather than on seller's costs o Price is set before marketing program is set o Hard to measure how much value customers attach to the product-sometimes ask directly or conduct experiments

o Break-even analysis and target profit pricing

setting price to break even on the costs of making and marketing a product, or setting price to make a target return

• Competition-based pricing

setting prices based on competitors' strategies, prices, costs, and market offerings

• Cost-based pricing

setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk o Some companies work to become low-cost producers to charge lower prices while others pay high costs so they can add value and claim higher prices and margins

geographical pricing

setting prices for customers located in different parts of the country or world

Product line pricing:

setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices

o percentage-of-sales method

setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price • simple to use and helps management think about relationship between promotion spending, selling price, and profit per unit • wrongly views sales are cause of promotion rather than result • may prevent increased spending sometimes needed to turn around sales

o affordable method

setting the promotion budget at a level management thinks the company can afford • small businesses often use • ignores the effect of promotion on sales; leads to uncertain annual promotion budget-hard to plan • results in underspending often

o competitive-parity method

setting the promotion budget to match competitors' outlays • companies differ greatly and each has special promotion needs • no evidence that prevents promotion wars

Caring capitalism

setting themselves apart by being civic minded and responsible • Ex: Patagonia, Whole Foods, Method

industrial structure

shapes its product and service needs, income levels, and employment levels.

• Vendor-managed inventory systems (VMI)-

shares real-time data with supplier-or continuous inventory replenishment systems: supplier manages inventories and deliveries

Sales Promotion

short-term incentives to encourage the purchase or sale of a product or a service • Used by most organizations-73% of all marketing expenditures • Targeted toward final buyers, retailers and wholesalers, business customers, and members of the salesforce

• Sales promotion

short-term incentives to encourage the purchase or sale of a product or service (discounts, coupons, displays)

Lifestyle:

shows how a product fits with a particular lifestyle

Musical:

shows people or cartoon characters singing about the product

Chief listening officers

sifting through online customer conversations and pass along key insights to marketing decision makers

• Multichannel Distribution Systems

single firm sets up 2+ marketing channels to reach one+ customer segments o Allows companies to expand sales and market coverage; gains opportunities to tailor products to needs of diverse customer segments o Harder to control and generates conflict as channels compete for customers and sales

measurable Requirement for Effective Segmentation

size, purchasing power, profiles can be measured

Late mainstream

skeptical-adopt new innovations after majority of people have tried it

Maturity (Product Life-Cycle Stage)

slow in sales growth; profits level off Normally lasts longer than previous stages Most successful evolving to meet demands/needs • Modifying the market-new users and new market segments • Product offering-changing characteristics (quality, features, style, packaging, or tech) to retain current users or attract new ones • Modifying the marketing mix to improve sales

Heavy users-

small % of market but account for high % of total consumption

• Convenience stores:

small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods Redesigning to attract female shoppers

• Lifestyle centers

smaller, open-air malls with upscale stores, convenience locations, and nonretail activities (playground, hotel, move theater)

o Click-only companies

so-called dot-coms which operate online only and have no brick-and-mortar market presence\ • E-tailers, search engines, content sites, social network sites

• Poor product quality, safety (company indifference, product complexity, and poor quality control), and may be harmful • Most manufacturers want to product quality goods for reputation and relationships

social criticism-Shoddy, harmful, or unsafe products

o Deceptive practices that lead consumers to believe they are getting more value than they actually do • Pricing-false advertising "factory" or "wholesale" prices or a large price reduction from a phony list price • Promotion-misrepresenting the product's features or luring customers to a store for a bargain that is out of stock • Packaging-exaggerating package contents through subtle design, using misleading labeling or describing size in misleading terms • Wheeler-Lea act gave FTC power to regulate practices-FTC has laid out guidelines • Tough to define what is "deceptive"-is puffery okay? • Marketers argue that most companies avoid deceptive practices because harm business in long run Customers usually can recognize intent

social criticism-deceptive practices

• Salespeople are accused of high pressure selling that persuades people to buy goods they had no thought of buying • Marketers have little gains-want to build long-term relationships

social criticism-high pressure selling

• High distribution costs-too many intermediaries, inefficient intermediaries, unnecessary or duplicate services Resellers answer these charges • Intermediaries do work that would have to be done by manufacturers or customers • Retail competition is so intense that margins are quite low • Low price stores pressure competitors to operate efficiently and keep their prices down • Pushing up prices to finance heavy advertising and sales promotion Much of this packaging and promotion adds only psychological, not functional, value to the product Marketers say adds value by informing potential buyers of the availability and merits of a brand-assurance of consistent quality • Customers want and are willing to pay more for products that also provide psychological benefits • Necessary to match competitors' efforts Continuing shift toward buying store brands and generics suggests want action not talk about value • Companies mark up goods excessively Drug industry and funeral homes Marketers say most businesses try to deal fairly with consumers because they want to build customer relationships and repeat business-unintentional customer abuses

social criticism-marketing causes higher prices

• Products become obsolete before they actually should need replacement • Introducing planned streams of new products to make older models obsolete-serial replacers • Marketers say customers like style changes and want latest high-tech innovations • Companies do not design products to break down but seek constant improvement to meet/exceed expectations

social criticism-o Planned obsolescence

• Presence of large national chain stores in low-income neighborhoods would help keep prices down but accused of redlining (drawing red line around disadvantaged neighborhoods and avoiding store placement there) • Food deserts-markets with only unhealthy food • Marketing systems must be built to serve disadvantage customers

social criticism-o Poor service to disadvantage consumers

sales meetings

social occasions, breaks from the routine, chances to meet and talk with company brass

Marketing offerings

some combination of products, services, information, or experience offered to a market to satisfy a need or a want 1. Include products & services (activities/benefits offered for sale-intangible and do not result in ownership) a. Ex: banking, hotel, airline 2. Also include persons, places, info, & ideas a. Ex: ad campaigns

Needs

states of felt deprivation

• identifying target audience-must be clear, can be individuals, groups, special publics, the general public • determining the communication objectives • designing a message • choosing media • selecting the message source • collecting feedback

steps in developing effective marketing communication

• Selling process

steps that salespeople follow when selling, which include prospecting and qualifying, preapproach, approach, presentation and demonstration, handling objectives, closing, and follow-up

• Just-in-time Inventory Management

stock arrives exactly when needed, accurate forecasting with fast, frequent, and flexible delivery • RFID tracking tell exact position at all times, "smart shelves" reorder needed products

• Superstore:

store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items, and services

o Discount

straight reduction in price on purchases during a stated period of time or in larger quantities

Competitive Strategies

strategies that strongly position the company against competitors and give the company the strongest possible strategic advantage

Supply chain management-

strengthening connections with partners all along the supply chain

Drive & Learning

strong internal stimulus that calls for action

Demography

study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics

Mood or image:

style builds a mood or image around the product or service, such as beauty, love, intrigue-made by suggestion

nontariff trade barriers

such as biases against its bids, restrictive product standards, or excessive host-country regulations or enforcement. For example, foreign businesses in China appear to receive unusually close scrutiny and harsh treatment from Chinese authorities, aimed at boosting the fortunes of local competitors.

o Wheel-of-retailing

suggests new types of retailers usually begin as low-margin, low-price, low-status operations but later evolve into higher-price, higher-service operations eventually becoming like the conventional retailers they replaced

o Positioning statement:

summarizes company or brand positioning using this form: to (target segment and need) our (brand) is (concept) that (point of difference) • First states the product's membership in category and points out difference from other members

• Internal service quality

superior employee selection and training, a quality work environment, and strong support for those dealing with customers, results in... • Satisfied and productive service employee

Healthy service profits and growth

superior service firm performance

o Product leadership:

superior value by offering continuous stream of leading edge products or services

Service Image

symbols and branding Ex: GEICO gecko

Competitive marketing intelligence

systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment

Marketing research

systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization • Insights into customer motivations, purchase behavior, satisfaction, market potential and market share assessment, effectiveness of pricing, product, distribution, and promotion activities

Supplier development

systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others

• Idea generation (The New-Product Development Process)

systematic search for new-product ideas o Companies tend to generate hundreds of ideas to find a few good ones o Internal sources-find new ideas through formal R&D (customers, employees, sales force) • Develop internal social networks and intrepreneurial programs to encourage product innovation o External sources-distributors (close to customers) and suppliers (know about new techniques/materials) and competitors (can watch ads and competing products) and customers (analyze questions and complaints) o Crowdsourcing:

• Individual marketing

tailoring products and marketing programs to the needs and preferences of individual customers Return to consumers being served as individuals-more detailed databases, robotic production, flexible manufacturing, and interactive media Mass customization: Relationships with customers more important than ever B2B marketers are finding new ways to customize their offerings-stand out against competitors

o Micromarketing

tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments (includes local marketing and individual marketing)

whole-channel view

takes into account the entire global supply chain and marketing channel. It recognizes that to compete well internationally, the company must effectively design and manage an entire global value delivery network.

tariffs

taxes on certain imported products designed to raise revenue or to protect domestic firms. For example, China slaps a 25 percent tariff on United States and other imported autos

Data mining

techniques company uses to sift through

promotional pricing

temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales o Special event pricing-certain seasons o Limited-time offers-create buying urgency o Rebates-manufacturer sends rebate directly to customer o Adverse effects: too many deals-> confusion, deal-prone customers from overexposure, erode brand's value in eye of customers

o Fad:

temporary period or unusually high sales driven by consumer enthusiasm and immediate product or brand popularity

Selective attention

tendency for people to screen out most of the info to which they are exposed

Selective distortion

tendency of people to interpret info in a way that will support what they already believe

• Madison & Vine

term that has come to represent the merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching customers with more engaging messages

• Concept testing

testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

Exchange

the act of obtaining a desired object from someone by offering something in return 1. Marketers try to elicit a response ($, vote, membership)

Price

the amount of money charged for a product or service, or sum of the values that customers exchange for the benefits of having or using the product or service o Only element in marketing mix that produces revenue o Most flexible marketing mix element (changes quickly) o Key role in creating customer value and building relationships

Marketing management

the art and science of choosing target markets & building profitable relationships with them

Business portfolio

the collection of businesses and products that make up the company o Large companies are complex (ex: Disney includes theme parks, resorts, studio entertainment, consumer products)

Customer-perceived value

the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers Ex: affordable prices vs more features

Business buying process

the decision process by which business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands

direct investment

the development of foreign-based assembly or manufacturing facilities. The main disadvantage is that the firm faces many risks, such as restricted or devalued currencies, falling markets, or government changes. In some cases, a firm has no choice but to accept these risks if it wants to operate in the host country.

management contracting

the domestic firm provides the management know-how to a foreign company that supplies the capital. Hilton uses this arrangement in managing hotels around the world. For example, the hotel chain operates DoubleTree by Hilton hotels in countries ranging from the UK and Italy to Peru and Costa Rica, to China, Russia, and Tanzania. The properties are locally owned, but Hilton manages the hotels with its world-renowned hospitality expertise. low-risk method of getting into a foreign market, and it yields income from the beginning. The arrangement is even more attractive if the contracting firm has an option to buy some share in the managed company later on. The arrangement is not sensible, however, if the company can put its scarce management talent to better uses or if it can make greater profits by undertaking the whole venture. prevents the company from setting up its own operations for a period of time.

Customer satisfaction

the extent to which a product's perceived performance matches a buyer's expectations Ex: Zappos, Amazon, Ritz-Carlton The delivery matters, customers want their problems solved Seeks to deliver high customer satisfaction but does not attempt to maximize it

Wants

the form human needs take as they are shaped by culture and individual personality

Word-of-mouth influence

the impact of the personal words and recommendations of trusted friends, associates, and other consumers on buyer behavior

Customer relationship management

the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction • Satisfied customers are more likely to be loyal managing detailed info about individual customers and carefully managing customer touch points to maximize customer loyalty o Integrates everything that customer's sales, service, and marketing teams know about individual customers (360-view of customer relationship)

Natural environment

the physical environment and natural resources that are needed as inputs by marketers or that are affected by marketing activities o Unexpected happenings (weather to natural disasters) affect companies and their marketing strategies • Ex: Campbell's coordinates with how cold it is • Ex: Japanese tsunami affected Sony's and Toyota's ability to meet worldwide demand for products

Marketing mix

the set of marketing tools the firm uses to implement its marketing strategy (the 4 Ps) • Product • Price • Place • Promotion • Blended into an integrated marketing program

Subsistence economies

the vast majority of people engage in simple agriculture. They consume most of their output and barter the rest for simple goods and services. They offer few market opportunities. Many African countries fall into this category.

• Telemarketing

using the telephone to sell directly to customers Outbound and inbound (toll-free numbers) National Do Not Call Registry-bans most telemarketing calls to registered phone numbers Inbound consumer telemarketing and outbound b2b telemarketing are still growing Major fundraising tool for nonprofit and political groups

• The internet

vast public web of computer networks that connects users of all types around the world to each other and have an amazingly large info repository o Continues to grow steadily-32 hours a month per user

advertising media

vehicles through which advertising messages are delivered to their intended audiences

Joint ownership

ventures consist of one company joining forces with foreign investors to create a local business in which they share possession and control. A company may buy an interest in a local firm, or the two parties may form a new business venture. may be needed for economic or political reasons. For example, the firm may lack the financial, physical, or managerial resources to undertake the venture alone. Alternatively, a foreign government may require as a condition for entry. has certain drawbacks, however. The partners may disagree over investment, marketing, or other policies. Whereas many U.S. firms like to reinvest earnings for growth, local firms often prefer to take out these earnings; whereas U.S. firms emphasize the role of marketing, local investors may rely on selling.

• Direct-response television marketing:

via television (including infomercials and iTV) o Big sales (proactive) o Often associated with somewhat loud or questionable pitches o iTV-can use TV to obtain more info or make purchased directly from ad

Communicable Differences

visible to buyers

Demands

wants that are backed by buying power

• Product position

way a product is defined by consumers on important attributes-the place the product occupies in consumers' minds relative to competing products o Must decide on a value proposition-how it will create differentiated value for targeted segments and what positions it wants to occupy in these segments o Consumers are overloaded with info about products and services-"position" them in their minds o Aka the complex set of perceptions, impressions, and feelings that consumers have for the product compared with competing products

Channel differentiation:

way they design their channel's coverage, expertise, and performance (ex-Amazon)

Outside-in perspective:

well-defined market, focuses on customer needs, and integrates all marketing activities; creates relationships to yield profits

Differentiation (Perception Dimension)

what makes the brand stand out

o Should be market oriented and defined in terms of satisfying basic customer needs rather than in product or tech terms • Products and technologies eventually become outdated, but basic market needs may last forever • Chipotle: not to sell burritos but "food with integrity" o Should be specific and meaningful yet motivating • Google-not best search engine but give people a window into the world's information o Should not be stated as profits or sales, should focus on customers and the customer experience the company seeks to create • Ex: McDonald's-provide customers with their favorite fast-dining experience

what should a mission statement be?

• Deceptive pricing

when a seller states prices or price savings that mislead consumers or are not actually available to consumers

Internal publics:

when employees feel good about the company they work for, this positive attitude spills over to the external publics (ex: workers, managers, volunteers, board)

direct exporting

whereby they handle their own exports. The investment and risk are somewhat greater in this strategy, but so is the potential return.

contract manufacturing

which the company makes agreements with manufacturers in the foreign market to produce its product or provide its service. The drawbacks are decreased control over the manufacturing process and loss of potential profits on manufacturing. The benefits are the chance to start faster, with less risk, and the later opportunity either to form a partnership with or buy out the local manufacturer.

o Broker

wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation

Voluntary chains

wholesaler-sponsored group of independent retailers that engage in group buying and common merchandising

o Manufacturers' sales branches and offices

wholesaling by sellers or buyers themselves rather than through independent wholesalers

• More for less

winning VP; Home Depot initially offered best product selection, service, and lowest prices Difficult to sustain best of both because of cost and more focused competition (ex: Lowe's enters) Important thing that each company must develop its own winning positioning strategy, one that makes the company special to its target consumers

Partner Relationship Management

working closely with partners in other company departments and outside the company to jointly bring greater value to customers (important for customer relationship management) • All departments must understand marketing and be customer focused

indirect exporting

working through independent international marketing intermediaries. involves less investment because the firm does not require an overseas marketing organization or network. It also involves less risk. International marketing intermediaries bring know-how and services to the relationship, so the seller normally makes fewer mistakes.

o sender: party sending message to another party o encoding: process of putting thought into symbolic form o message: set of symbols that the sender actually transmits o media: communication channels through which message moves from the sender o decoding: process by which the receiver assigns meaning to the symbols o receiver: party receiving the message o response: reactions of the receiver after being exposed to the message o feedback: receiver's response communicated back to the sender o noise: unplanned static or distortion during the process

• 9 elements of communication

o Entrepreneurial stage-market based on what comes to mind o Formulated stage-develop formal marketing strategies and follow them closely, developed more formal market outreach efforts o Intrepreneurial stage-reestablishing more of the initial entrepreneurial spirit • Key is to give key employees the freedom and support that enables them to pursue their visions and develop new products, services, and systems

• Approaches to marketing strategy and practice often pass through 3 stages:

Learning

• Changes in an individual's behavior arising from experience

Worth establishing if satisfies: • Important- • Distinctive- • Superior- • Communicable- • Preemptive- • Affordable- • Profitable- Many companies have advertised differentiations that failed these tests (Westin Stamford claimed tallest hotel in world but false)

• Choosing Which differences to promote

o Once it has chosen a position, the company must take strong steps to deliver and communicate the desired position to its target consumers-CONCRETE ACTION o Easier to come up with than implement it-establishing a position or changing one takes a long time but can be quickly lost

• Communicating and Delivering the Chosen Position

Nielsen PRIZM system

• Companies use multiple segmentation bases in an effort to identify smaller, better-defined target groups classifies every American household into 66 demographically and behaviorally distinct segments • Help marketers segment people and locations into marketable groups of like-minded consumers

moves are mainly based on competitors' actions and reactions o Good because fighter orientation, watches for weaknesses in its own position, and searches out competitors' weaknesses o Bad because becomes too reactive

• Competitor-centered company (+/-)

• First marketer develops new product into alternative product concepts to find out how attractive each is to the customers (ex: mid-priced sporty eco-friendly compact vs midsize SUV) • Concept testing: testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

• Concept development and testing (The New-Product Development Process)

market segmentation

• Divides market into segments

to provide a target level of customer service at the least cost; profit is important, not sales

• Goals of the Logistics System

o Product managers face greater pressures to increase current sales so view promotion as effective short-run tool o Company faces more competition and competing brands are less differentiated o Ad efficiency has declined o Consumers have become deal oriented in the current economy o Resulted in promotion clutter-37% of all groceries sold with promotional support

• Reasons for rapid growth

Social class

• Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors • Measured as a combination of occupation, income, education, wealth, and other variables

o measurable: o Accessible: o Substantial: o Differentiable: o Actionable:

• Requirements for Effective Segmentation

Major buyers of goods and services-US more than $1 trillion each year o Government organizations typically require supplier to submit bids and normally award the contract to the lowest bidder o Will also buy on a negotiated contract basis-complex projects involving major R&D or if little competition o Tend to favor domestic suppliers over foreign suppliers-EEC is removing bias towards nationals o Government is carefully watched by outside publics so require considerable paperwork from suppliers o US government is the world's largest buyer of products and services and its checks don't bounce o Most governments provide would-be suppliers with detailed guides describing how to sell to the government o Not very marketing oriented because total government spending is determined by elected individual and emphasizes price o Some companies have separate government marketing departments or sell primarily to government buyers o Much has gone online-designed to eliminate much of the hassle

• Government market

o Most basic level=core customer value • Addresses the question what is the buyer really buying? • Must define core, problem-solving benefits or services that consumers seek (iPad-entertainment, productivity, connectivity, self-expression) o 2nd level=actual product • develop product and service features, design, quality level, brand name, packaging • ex: the actual iPad, packaging, etc o 3rd level=augmented product • core benefit and actual product by offering additional customer services and benefits • ex: iPad-warranty on parts, website o customers see products as complex bundles of benefits that satisfy their needs

• Levels of Products and Services

Brand Development

• Line extensions: • Brand extension: • Multibrands: • New brands:

tailoring brands and marketing to the needs and wants of local customer segments-cities, neighborhoods, and even specific stores High-tech versions of location-based marketing (retailers can offer daily deals on Groupon) SoLoMo-ability of on-the-go consumers to get local info fast wherever they are Drawbacks • Drives up manufacturing and marketing costs by reducing the economies of scale • Creates problems as companies try to meet the varied requirements of different regional and local markets

• Local marketing (what it is and drawbacks)

o Find or create favorable news about the customer or products/people o Special events-news conferences, speeches, press tours, grand openings o Written materials-annual reports, brochures, articles, and company newsletters and magazines o Audiovisual materials-DVDs and online videos o Corporate identity materials-corporate identity that public immediate recognizes-logos, stationary, brochures o Public service activities-improve public goodwill by contributing time and money o The Web

• Major PR tools

Economic situation as a personal factor

• Marketers try to watch trends in personal income, savings, and interest rates • Recession-take steps to redesign, reposition, and reprice

Defining the problem and research objectives

• Marketing managers and researchers must work closely to define problem and agree on research objectives • Written down statement of problem and research objectives guides entire research process

o Overall cost leadership: low costs so price lower and win larger market share o Differentiation: highly differentiated product line and marketing program so customers would prefer to own this brand if its price is not too high o Focus: serving fewer market segments well rather than whole market o LOSING: middle of the roaders try to be good on all strategic counts so not very good at anything

• Michael Porter competitive positioning strategies

Developing the research plan

• Must determine the exact info needed, develop a plan for gather it efficiently, and present the plan to management • Research plan should be in a written proposal (covers problems addressed, research objectives, info to be obtained and how results will help decision making)

• segment size and growth not necessarily largest but more profitable • segment structural attractiveness strong and aggressive competitors or ease for new entrants actual or potential substitutes, relative power of buyers-strong bargaining power will force prices down, demand more services, and set competitors against one another • company objectives and resources some do not mesh with company's long-run objectives company may lack skills or resources to succeed in an attractive segment

• Must look at _____ when Evaluating Market Segments

Roles and status & Consumer Buying Behavior

• People usually choose products appropriate to their status and role

Costs and availability vary greatly from country to country Countries differ in the extent to which they regulate ad practices • No alcohol in india and muslim countries • Sweden and Canada ban junk food ads to children • China has lots of restrictions

• Problems that global advertisers face

Perception

• Process by which people select, organize, and interpret information to form a meaningful picture of the world • People are exposed to an estimated 3,000 to 5,000 ad messages every day • Selective attention • Selective distortion

• Width: • Length: • Depth: • Consistency:

• Product Mix Decisions

Product Mix Pricing Strategies

• Product line pricing: • Optional-product pricing: • Captive-product pricing: • By-product pricing: • Product bundle pricing:

E-Procurement

• Purchasing through electronic connections between buyers and sellers-usually online • Reverse auctions- • Online trading exchanges- • Company buying sites- • Extranet links- • Today's B2B marketers use a wide range of digital and social marketing approaches-from websites, blogs, smartphone apps to mainstream social networks such as Facebook, LinkedIn, YouTube, and Twitter

o Prospecting: identifying qualified potential customers • Must approach many prospects to get only a few sales-must find many of their own leads Best source is referrals Cold calling, directories, referral services • Qualifying leads-identifying the good ones and screening out the bad ones o Preapproach: salesperson learns as much as possible about a prospective customer before making a sales call • Consult standard industry and online sources, acquantances to learn about company • Call objectives- make an immediate sale? Gather info? • Determine best approach-email, phone call • Timing-many prospects are busiest at certain times of the day or week o Approach: salesperson meets the customer for the first time • Appearance, opening lines, follow-up remarks • Listening to customer is crucial o Presentation: salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems • Customer-solution approach-sell customers what benefits them most • Must develop solutions to present-good listening and problem solving skills • Customers .... Dislike most: pushy, late, deceitful, unprepared, disorganized Value: good listening, empathy, honesty, dependability, thoroughness, and follow-through • Must plan presentation methods-demand richer presentation experiences to keep attention o Handling objections: salesperson seeks out, clarifies, and overcomes any customer objections to buying o Closing: salesperson asks the customer for an order • Recognize closing signals from the buyer • May offer special reasons to close (lower price, extra quantity at no charge, additional services) o Follow-up: salesperson follows up after the sale to ensure customer satisfaction and repeat business • Reveal any problems, assure buyer of salesperson's interest, reduce any buyer concerns that might have arisen since sale

• Steps of the selling process

Age and life-cycle stage

• Tastes are often age related • Buying is also shaped by stage of family cycle-develop appropriate products and marketing plans for each stage

o Service intangibility: o Service inseparability: o Service variability: o Service perishability:

• The Nature and Characteristics of a Service

o Operational excellence o Customer intimacy o Product leadership o Some companies can successfully pursue more than one value discipline at one time-but by trying to be good at all may end up best at none

• Three value disciplines for delivering value (Treacy and Wiersema)-more customer-centered

Personality and self-concept

• Unique psychological characteristics that distinguish a person or group Brands have personalities and consumers are likely to choose brands with personalities that match their own

Occupation

• affects clothes bought • try to identify with groups with an above average interest in their products and services

targeting vulnerable or disadvantaged consumers with controversial or potentially harmful products marketing to children • critics worry that premium offers and high-powered ads overwhelm children's defenses (McDonald's happy meals) • marketing of adult products spill over to children's segments (VS marketing) • Children's advertising review unit has published extensive children's advertising guidelines that recognize the special needs of child audiences Cigarette, beer, and fast-food marketers and inner-city consumers (lower-income and heavier) Banks and mortgage lenders targeting consumers in poor urban areas with attractive adjustable rates that they can't afford

• biggest issue in target marketing

print media, broadcast, display, online

• major media:

Service Delivery

•more able and reliable customer-contact people, developing a superior physical environment in which the service product is delivered, or designing a superior delivery process Ex: online shopping and home delivery