MrktEssayCh1
In a short essay, list three questions that marketing should ask when monitoring and controlling execution and performance of a marketing offer.
a.) Are the various elements of the offer design being implemented as planned? b.) Is the firm's market and financial performance reaching planned objectives? c.) Have there been significant changes in the environment that necessitate reconsidering the objectives and strategies?
In a short essay, list and discuss five environmental factors that influence the consumer purchase-decision process. Include specific examples of each factor to support your answer.
Culture - individuals' purchasing behavior is conditioned both by the norms of their own cultures and subcultures, but also by other cultures and subcultures that they want to emulate. In the United States, inner-city African-American youths have developed their own idiosyncratic styles of dress, yet these styles have also been adopted by middle-class suburban youths. b.) Social class - all societies include hierarchically ordered groupings or social classes. Economic factors are, perhaps, the dominant variables in deciding a person's social class, but occupation, residential location, education, and other variables also play a part. The various social classes are relatively homogenous regarding values and interests, and although individuals are born into a social class, they may move from one class to another during their lifetimes. c.) Personal influence - customers are subject to influence from other individuals, frequently members of reference groups that provide standards or values of behavior. Primary groups are those with which the individual has frequent face-to-face interaction, notably family members in consumer marketing and various organizational work groups in business-to-business marketing. d.) Family - a fourth environmental influence concerns the family. First, two main types of family exist: nuclear, the immediate group of father, mother and children, and the extended family, which includes grandparents, aunts, uncles, cousins, and in-laws. Depending on the specific culture, one of these two family types tends to predominate. e.) Situational factors - over and above the various environmental factors already described, critical influences on customer behavior are the situational conditions of purchase and use. Among critical dimensions of the purchase situation are the amount and presentation of information, time availability, and aesthetics of the purchase location.
In a short essay, list and discuss six typical roles that customers play in the purchase process. Include specific examples of each role to support your answer.
Gatekeeper - an individual who has the power to impede access to the decision-maker and influencers. In many organizations, secretaries, administrative assistants, and purchasing agents play this role. b.) Influencer - an individual whose opinion the decision-maker values as he or she makes the decision. Individuals vary in degree of influence they can bring to bear on a specific purchase decision. For an individual buyer, a friend or colleague may be an influencer; within a family, depending upon the product or service, an influencer might be the husband, wife, or children. In organizational purchases, many individuals from various functional areas may exercise influence. c.) Specifier - a person exercising indirect influence on the purchase by virtue of his or her role in drawing up specifications, even though he or she might not otherwise be formally involved in the decision per se. For example, in a family housing decision, an architect might play this role; in an organization, it might be an engineer. d.) Decision-maker - the individual with the formal power to make the decision. e.) Buyer - the individual with the formal power to consummate the purchasing act with a supplier. In Western families, for many products and services, the female head of household traditionally plays this role. In organizations, purchasing agents are the "buyers." f.) User - the individual who most directly receives the benefit of (or actually uses) the product. For example, young children are extremely powerful user/influencers for ready-to-eat cereal. In manufacturing organizations, this person may be a factory worker. g.) Spoiler - an individual who seeks to prevent the firm from making sales. Perhaps this is a disgruntled former employee or a person whose brother-in-law works for the competition. h.) Champion - a person who promotes the firm's interests in attempting to make sales. Such a person may previously have had a good experience with the selling firm or have a personal relationship with its personnel. i.) Information provider - a person who keeps the selling firm advised of the purchasing organization's procurement processes and/or relationship quality (firm and competitor).
In a short essay, list and discuss three factors that influence the organizational purchase-decision process.
In general, formal organizational buying decisions involve greater amounts of money than household and individual decisions. As a result, the decision process is frequently more protracted, complex, and involves greater numbers of people. It is also much more likely to involve political considerations. b.) The role of personal selling is generally more important in those organizational buying decisions that involve significant micro-tailoring of the seller's offer. By contrast, advertising is often critical in the sale of consumer products, especially where the average purchase price is low. c.) Organizational buying decisions are often subject to some type of process regulation imposed either by the buyer or an external authority
In a short essay, list and describe five stages of the product form life cycle.
Introduction - sales volume is initially low. Product introduction frequently follows many years of R&D but reflects the market entry/or entries by leading firms. b.) Early growth - sales volume grows at an increasing rate. Many products do not reach early growth, but the survivors' sales revenues grow at an increasing rate. c.) Late growth - sales volume grows at a decreasing rate. By late growth, the uncertainties that dominated introduction are largely resolved. Strong competitors initiate tough actions to maintain their growth rates. d.) Maturity - sales volume averages GNP growth year to year. Most sales are to repeat and loyal users. Competitive situations vary widely so that the firm must secure deep market insight. e.) Decline - sales volume eventually declines. When decline is swift, overcapacity often leads to fierce price competition. Firms often raise prices to cover costs as sales drop.
In a short essay, discuss the concept of product cannibalization.
One way to increase margins is to replace sales of low-margin products with sales of higher-margin products. To the extent that the firm can make such substitutions without losing volume, few would argue with the increased profits that this strategy delivers. A more serious issue concerns the reverse case, when the firm contemplates introducing a lower-margin product that is expected to lead to reduced sales of a higher-margin product. This is referred to as product cannibalization. In such cases, pressures within the firm often build up against introduction of this lower-margin product. However, under some circumstances, despite volume reductions from current products, the new entry will cause overall revenues and profits to increase. Furthermore, the new product may allow the firm to retain market position in the face of current or anticipated future competition. If sales of the high-margin product are to be lost, better they are secured by the firm's lower-margin product than by a competitor.
In a short essay, list and describe the six forces according to the PESTLE model.
Political forces - governments set the frameworks for developing the rules for business. Typically, governments intervene in economies to pursue political ends and enhance consumer welfare by creating a level playing field. b.) Economic forces - generally, the country's economic well-being influences market demand. High inflation, high and rising rates, falling share prices, and depreciating currency point to an unhealthy economy. Per-capita GDP and disposable income are generally good indicators of market demand. c.) Sociocultural forces - culture is learned early in life, largely by influence from the family, schools, and religious institutions, and culture norms are resistant to change. Generally, people do not notice culture in their everyday lives, but see cultural values by comparison with different cultures. d.) Technological forces - today, the pace of technological change continues to accelerate. Some technological innovations are industry-specific; others affect the entire economy. e.) Legal/regulatory forces - legal frameworks are the rules for business. It aims to protect societal interests, regulate market power, hinder collusion, and stop deceptive practices. Legal frameworks differ across countries, but generally govern mergers and acquisitions, capital movements, consumer protection, and employment conditions. f.) Physical environmental forces - firms face increasing pressure from governments, environmentalists, single-issue advocacy groups, and the public at large to assume greater environmental responsibility for their products, packaging, and production systems. Natural resources availability is also a significant environmental issue
In a short essay, list and discuss the commonly found attitudes regarding the internally focused approaches to market segmentation.
a.) "That's the way we've always done it" - this internally focused method ignores the impact of changes in the environment, customers, and competitors. Clearly, a segmentation method that may have been appropriate in the past could now be outdated in a changing market place. b.) "That's the way the data are available" - this passive method assumes that independent data-gatherers had the firm's market segmentation problem as their prime goals when devising data-collection instruments. When this method is used, it commonly involves government or trade association data used by several competitors in the same industry. c.) "That's the way we're organized" - this method implies that strategic direction is driven by current organization design (strategy follows structure), rather than organization being constructed based on a strategic response to environmental imperatives (structure follows strategy). This method tends to produce rigidity, a particular problem in a changing marketplace. d.) "That's the way the competitors do it" - this method accepts equivalence with competitors and ignores the potential for innovative market segmentation to redefine the market and secure superior market position. It renders a company's moves much more visible in the competitor's information system and may well result in the firm competing on terms favorable to the competitor.
In a short essay, provide a comparison of the growth-share and multifactor portfolio methods
a.) An assessment of the value of the growth-share and multifactor portfolio approaches in choosing among investment opportunities proceeds best by comparison across a set of criteria. The major advantage of the growth-share matrix is the limited number of criteria and its unambiguous, objective nature. Since the basis for investment decisions is reduced to market growth and relative market share, the ability of managers to manipulate individual entries is limited. Because of these factors, the growth-share matrix has the advantage in ease of implementation and communicability. Senior management can view an entire complex, diversified organization arrayed on a single sheet of paper. Overall, it is simpler to evaluate diverse business and market segments using the simple criteria from the growth-share matrix than to use the more complex multifactor matrix. b.) Conversely, whereas the multifactor matrix is useful both for assessing investment potential in current products/businesses and evaluating totally new opportunities, the growth-share matrix is only really useful for assessing existing businesses. Also, whereas risk can be explicitly built into the multifactor matrix, risk is not explicitly considered in the growth-share matrix. Furthermore, because of the market definition problem, fragmented markets are not dealt with well by the growth-share matrix, but are handled appropriately in the multifactor framework. Finally, although neither matrix deals well with marketplace dynamics, since neither explicitly assesses the costs of changing a position, the multifactor system makes explicit the business strength improvements required.
In a short essay, list and discuss three major options a firm has for addressing low-profit or unprofitable customers.
a.) New business model - review the current way in which the firm interfaces with its customers. If the firm current deploys a direct-sales model, it might eliminate face-to-face interactions for this portion of its customer base in favor of telesales, automated, or Internet approaches. b.) Hand off to third parties - some firms pass their customers over to distributors or contract sales forces. These organizations often have cost structures that are better aligned to address these less profitable customers. c.) Fire customers!
In a short essay, list and discuss the four classic strategic recommendations that are derived from the Boston Consulting Group growth-share matrix.
a.) Cash cows (low market growth/high market share) - products/businesses in this matrix cell are typically highly profitable, due to good cost position from economies of scale and experience-curve effects and because market leaders are frequently able to command premium prices. Since the market is mature (low growth), required reinvestment should be lower than earlier with consequential benefits for cash flow. If well-managed, and absent major environmental change, products/businesses in this cell can generate significant cash for many years, hence the term cash cow. b.) Dogs (low market growth/low market share) - these products/businesses trail market leaders in low-growth markets. If the dominant firm's product/business is well-managed, low market share businesses should have inferior cost position, lower prices, and consequently be less profitable than the leader. Furthermore, if costs are bloated or relative market shares are quite small, low or zero profitability is likely. c.) Stars (high market growth/high market share) - these products/businesses are much beloved, yet relatively rare; overall, few products/businesses are in dominant positions in high-growth markets. Typically, they are profitable, though not necessarily so at the very beginning of the life cycle, but investment in capacity expansion and increased working capital often means they are cash negative. d.) Problem children, lottery tickets, wildcats (high market growth/low market share) - products/businesses in this position are typically viewed as the most risky because of the inherent uncertainty in high-growth markets and the weak market share position. Often these products/businesses are marginally profitable, yet to continue to hold position and grow with the market, they consume substantial cash for investment in fixed assets and working capital.
In a short essay, list and describe five industry forces according to the five-forces model
a.) Current direct competitors - a firm's current direct competitors offer customers similar benefits with similar products, technology, and/or business models. Current direct competitors are the competitive status quo, the traditional rivalry between established competitors. b.) New direct entrants - new direct competitors offer similar products and services to the firm—but previously they were not competitors. Entry barriers like economies of scale, brand strength, and/or preferred access to raw materials significantly affect market entry by new firms. c.) Indirect competitors - indirect competitors offer customers benefits similar to the firm's offers, but they provide them in a significantly different way. These functional substitutes often appear as different product forms or product classes. d.) Suppliers - suppliers provide the firm's inputs. The greater the importance of the supplier to the firm, the greater is the pressure. Supplier pressure may lead to higher prices, poor service, and/or poor delivery. e.) Buyers - buyers purchase the firm's products. A firm with many small customers faces little buyer pressure. Conversely, a small number of large customers can exert tremendous pressure; buyer pressure typically increases as market share increases.
In a short essay, list and discuss five methods a firm can use to increase the margin from current customers and thereby increase customer lifetime value.
a.) Customer selection - well-selected current customers provide a base level of profit margin. b.) Customer satisfaction and loyalty - research shows that well-served customers will increase their purchases over time. Hence, the firm's revenues and profit margins increase. c.) Customization - specially targeted offers to defined segments provide greater value to customers. d.) Reduce operating costs - as the firm learns to serve its customers, it reduces its operating costs and may reap scale economies with individual customers. e.) Raise prices - if the firm has really satisfied its customers, it may be able to set higher prices.
In a short essay, list the seven elements of the marketing research process
a.) Define the business issue. b.) Identify a researchable problem. c.) Formulate objectives and hypotheses. d.) Conduct preliminary investigation. e.) Develop the research plan. f.) Collect and analyze data. g.) Prepare the report.
In a short essay, list and discuss three target marketing problems of smaller firms.
a.) Demand shortage - the small firm targets a few market segments. If demand drops, other segments cannot cushion the impact. An industry-wide recession can wreak havoc with a specialized firm, as happened to many dotcom and high-tech businesses in the early 2000s. b.) Too successful - the small firm is too successful and attracts the attention of major players. c.) High costs - a narrow focus may lead to high costs that the firm cannot offset by high prices.
In a short essay, list and discuss the three major types of scenarios used in competitor analysis
a.) Emergent scenarios - start with the current strategy and consider what might emerge b.) Unconstrained scenarios - based on open-ended what-if questions that might suggest possible end states c.) Constrained scenarios - what-if scenarios that ask what the competitor might do under different market or industry conditions
In a short essay, list and describe four data-gathering methods for securing qualitative research data.
a.) Focus groups - one of the most popular qualitative data collection methodologies used by researchers. Typically, focus groups comprise eight to 12 members moderated by a skilled facilitator. The facilitator asks carefully scripted probing questions, maintains good participant interaction, and tries to ensure that each member contributes. b.) One-on-one interviews - combine direct and indirect questions asked of individuals to probe their needs and underlying purchase motivations. One-one-one interviews avoid the group bias sometimes found in focus groups and can address more sensitive topics, but are generally more expensive and time-consuming. c.) Blogs and wikis - these are two versions of online collaborative message boards, organized by individuals or firms, where people post complimentary or critical comments about products, brands, or firms. Proper analysis of dialogues on popular blogs and wikis can help the firm identify where performance is good, where it is poor, and what it might do differently. d.) Projective techniques - also known as motivation research, researchers use this method mainly to uncover latent customer needs. Developed by psychologists, these approaches have a long history in marketing. e.) Observation - in this method, the research does not ask questions, but secures insights by watching and recording behavior in naturalistic settings. Conducted correctly, observational data are objective, accurate, and unbiased by researcher intervention. f.) Ethnographic research - an observational method where researchers spend a day in the life of their customers, corresponding to the anthropological process of living with the tribe. Observers gain insight into their subjects' culture and belief systems and uncover unarticulated needs.
In a short essay, list and discuss the four criteria that should be met prior to grouping customers as market segments.
a.) Measurable - the firm is able to measure the number of members and propensity to purchase of each segment. b.) Differentiated - people or organizations in the different segments have different needs and wants, causing them to respond differently to different marketing offers. c.) Identifiable - demographic and other characteristics of the segments can be identified for the purpose of reaching them with marketing offers. d.) Appropriate size - neither too small for a large company (too costly) nor too large for a small company (potentially severe competition).
In a short essay, list and discuss four segmentation variables typically suggested as possibilities among which distinguishing characteristics might be found. Include at least five specific examples of each variable to support your answer.
a.) Geographic characteristics - include country, region, county size, city or SMSA size, population density, and climate. b.) Demographic characteristics - these are physical descriptors of customers. For consumers, these include variables such as age, gender, education, family size, social class, language, race, nationality, religion, wealth, income, and occupation. For organizations, they include industry SIC code, firm size, growth, profitability, balance sheet items, legal entity, number of years in business, and length of time at location. c.) Behavioral variables - include use occasion, decision-making practices, user situation, composition of the decision-making unit, and type of purchase decision. Specific variables for organizations include power structure (such as engineering dominated, financially dominated) and organization of the procurement function (such as centralized or decentralized). d.) Social/psychological variables - include personality, attitudes, sexual orientation, life stage, social class, and lifestyle characteristics such as activities, interests, and opinions. Corresponding variables for organizations include organizational climate and culture and inward/outward orientation.
In a short essay, list and discuss the five-step framework commonly used for gaining competitor insight
a.) Identify competitors - who are our competitors today? Who will they be tomorrow? b.) Describe the competition - what are our competitors' capabilities and difficulties? c.) Evaluate the competition - what are our competitors' strategic options? d.) Project the decisions of the competition - what do we expect our competitors to do? In the short term? Medium term? Long term? e.) Manage the competition - how can we get our competitors to do what we want them to do?
In a short essay, list and describe the three ways a firm can increase customer lifetime value
a.) Increase the margin the firm earns from its customer. b.) Increase the customer retention rate, or (restated), reduce the customer defection rate. c.) Reduce the discount rate.
In a short essay, list and discuss four major approaches a firm can use to acquire customers
a.) Independent marketing activities - this is the most common approach. The firm uses its communications efforts to reach potential customers and persuade them to buy. b.) Affiliations - the firm has formal or informal relationships with individuals or other organizations to feed customers to the firm. Informal relationships are very common in the service sector. c.) Channel strategies - rather than approach potential customers directly, the firm works through third parties like distributors and selling agents. d.) Firm and business unit acquisitions - whenever it completes a merger or acquisition, the firm acquires customers, regardless of the acquisition's purpose. However, some acquisitions are made solely for the purpose of acquiring customers.
In a short essay, list and discuss five reasons a firm might fire or cease doing business with a current customer or forgo a relationship with a potential customer
a.) Instability - customers may be profitable, but too unstable. People-intensive service businesses like advertising or PR agencies often have to add employees to serve new customers. If those customers left, the necessary staff reductions could be very difficult. b.) Competition - the customer is a current or potential competitor. The competitor could reverse-engineer the firm's product, then launch a similar product. c.) Non-payer - this customer would be profitable if it paid, but it doesn't. Or it eventually pays, but the collection costs in money, human resources, and general aggravation are too high. d.) Potential costs - the future costs of doing business with this customer are too high. Selling to them might be quite profitable in the short run, but future servicing costs could be prohibitive. e.) Foreclosing options - the customer forecloses the firm's options by prohibiting it from serving other customers. f.) Impact on the firm's reputation - a firm/customer relationship hurts the firm. g.) Customization requirements - customization is a way to deliver extra value and generate customer loyalty; the firm should customize only for the right customers. It should avoid customers whose value to the firm is less than the costs of customization. h.) Mismatch to the offer - if the firm's offer is mismatched to customer needs, the customer may be dissatisfied. The firm may take a direct loss and/or suffer harmful word-of-mouth communications.
In a short essay, list and discuss four time-based methods for defining and forecasting market size.
a.) Judgmental extrapolation - a special case of executive judgment using history to predict a percentage change from the previous year. The basis for the judgment could be the most recent year-to-year change, a simple average of the previous years' changes, or a weighted average of previous years' changes, with greater weight to more recent years. b.) Linear extrapolation - two-variable regression analysis estimates the year-by-year change in sales. Forecast sales for next year are simply last year's sales, plus an increment (or decrement) based on sales in prior years. The extrapolation increment is calculated mathematically, but judgment is needed to decide how many prior years to use. c.) Moving average - the manager uses sales data from the previous few years to calculate an average; this average is the forecast. For each successive year, the manager drops the earliest sales datum and adds in the most recent. Once again, the manager must judge how many years to include. d.) Exponential smoothing - this method uses previous sales data in a slightly unusual way. Rather than forecasting based only on actual sales data from previous years, exponential smoothing uses both last year's actual sales and the last year's forecast sales. It calculates a smoothing parameter, "a," from previous sales data. Forecast sales (t + 1) = a X actual sales (t) + (1 - a) forecast sales (t)
In a short essay, list and describe the hierarchy of life cycles based on longevity and demand.
a.) Market life cycles last the longest, and, in general, the firm has little impact on these life cycles. b.) Product class and product form life cycles are each shorter than the market life cycle—understanding these two life cycles is helpful in developing market strategy. c.) Product item and product line life cycles are the shortest and are critical for product and brand managers, as they offer important performance data by product item and product line.
In a short essay, discuss the nature of both positive and negative complementarity between a firm's products and its customers. Include specific examples to support your answer.
a.) Positive complementarity - in many markets, the sequence of a customer's purchases over time is closely related to the initial purchase. This over-time complementarity results in the customer trading up to high-quality, high-profit products form the same supplier. Thus, General Motors' historical product strategy was based on trading customers up from Chevrolet to Pontiac, Buick, and other higher-value brands. More recently, Apple Computer has had success in securing loyalty to its Macintosh operating system as customers trade up to successive generations of Macintosh products. Similarly, many software customers buy successive versions of software products. b.) Negative complementarity - the firm may lose sales as a result of customer dissatisfaction resulting from its product strategy. This occurs when customers believe their interests are ill-served by the firm's actions. Similar concerns occur with distributors when firms adopt alternate channels to reach end-use customers. In some cases, customers may decide to cease doing business with the firm and seek alternative suppliers.
In a short essay, discuss primary and secondary data. Include specific examples of each type of data to support your answer.
a.) Primary data - implies a focused effort to secure information. Primary data sources include the firm's executives, sales force, and other employees, such as R&D personnel who come into direct or indirect contact with competitors via professional activities essential to their work. Other important sources are competitor's suppliers, distributors, and customers; trade associations; and industry specialists, such as consultants, investment bankers, and stock market analysts. b.) Secondary data - implies that the information is already available but needs to be collected, sorted, and given meaning in the context of the questions management wants to answer. Sources of secondary data include several types of competitor communications. Examples include those required of corporate entity (annual reports, 10Ks), marketing communications (advertising, promotional literature), and other periodic communications such as news releases, articles in the business press or local newspapers where the competitor is headquartered or has a facility, and patent filings.
In a short essay, list and discuss the five elements of the marketing mix.
a.) Product benefits are delivered to satisfy customer needs. They are designed into the product and package. The greater the benefits, the better the chance that customers will exhibit the required behavior. b.) Place benefits concern the time and place convenience of securing the product or service. c.) Promotion, embracing both personal and impersonal communications, is the means by which the firm informs and persuades customers that product, service, and location benefits are being offered. d.) Price is the net monetary outlay that, relative to customers' perceptions of the benefits received, determines the net value received for behaving in the desired manner. e.) Services included in the offer are often key elements distinguishing the firm from its competitors. Services may be provided by the manufacturer, an intermediary, or some combination and may be received before, during, or after purchase
In a short essay, list and describe four categorizations of product offerings.
a.) Product class - in any market, several product classes (or categories) serve customer needs. b.) Product form - several product forms (or sub-categories) that make up each product class c.) Product line - a group of related products that a single firm offers d.) Product item - a subset of the product line that is uniquely identified
In a short essay, list and discuss the three basic types of secondary data.
a.) Public data - includes all information that can be found about industry trends, customers, competitors, suppliers, and technologies. Sources include general business and industry-specific media and books, supplier white papers, trade show literature and presentations, trade associations, governments, published academic research, competitors' annual reports, competitor and public domain websites, other Internet sites, and legal and government filings. b.) Company data - comprises all of the routinely generated data from transactions with customers and suppliers and information from internal enterprise databases on costs, production, capacity; customer lists; salesperson call reports; delivery, maintenance, and servicing reports; customer payment history; and previously completed marketing research reports. c.) Technical analysis - includes objective, repeatable descriptions of products and services or production capacity collected by internal engineers or developers. Examples include reverse engineering competitors' products, benchmarking product design, or disassembling products to estimate manufacturing costs and supply-chain processes.
In a short essay, list and discuss three dimensions in which the customer purchase-decision process can be classified. Include specific examples for each dimension to support your answer.
a.) Routinized-response behavior - this type of decision-making occurs when the customer has made a similar purchase many times before. Key characteristics of routinized-response behavior are a well-defined set of purchase criteria and several familiar suppliers whose purchase offers are both well known and only marginally distinguishable from each other. Examples include repetitive purchases of consumer package goods and corporate purchases of basic raw materials and supplies where financial and socio-psychological risk is limited. b.) Limited problem-solving - this type of decision-making occurs when there is some level of decision-making uncertainty. Buyers have well-established purchase criteria, but one or more alternatives is novel and performance on the purchase criteria is unknown or uncertain. Limited problem-solving purchases are exemplified whenever a new supplier must be considered by the buyer or where a new material might replace a traditional choice, such as substitution of plastics for metal, replacement of natural fibers by synthetic fibers, or replacement of fabric-based tires by steel-belted radial tires. c.) Extended problem-solving - this complex decision-making is completely novel. Not only is the alternative new to the customer, but also criteria for making a purchasing decision have not been developed. Great uncertainty surrounds this purchase, which if consummated, may change the customer's behavioral patterns. Purchase of a first house is an example for a consumer; for an organizational customer, examples are outsourcing the work of an important department or the first purchase of video conferencing facilities
In a short essay, list and describe the four stages of developing a perceptual map for targeting.
a.) Stage 1 - Identify two key dimensions of customers' needs for the perceptual map. b.) Stage 2 - On the map, plot customers' perceptions of the various products on the market. c.) Stage 3 - Identify the position and size of segments in the market. d.) Stage 4 - Use product data (step 2) and segment data (step 3) to make targeting decision.
In a short essay, list and discuss three ways of securing data for quantitative analysis.
a.) Surveys - sample surveys of the target population are the most common way to secure primary data for quantitative analysis. Selecting a sample that reflects the underlying population is critical. So is assessing the required sample size for estimating the parameter(s) of interest at the desired accuracy level. b.) Panels - sometimes the firm wants to follow up on individual responses, so it uses a tracking study that requires forming a panel of individuals who agree to provide responses periodically over time. Panel data allows the firm to keep its pulse on customers, conduct more sophisticated analysis, and better identify causal relationships. c.) Objective sales data - the firm's own sales reporting system can provide valuable quantitative data. Sales data to end-user customers can be more difficult to secure when products move through distribution channels. Collection and use of automatically collected sales data are likely to increase. d.) Experiments - allow researchers to definitively establish causal relationships. The researcher manipulates independent variables, like advertising programs and price levels, and measures results, like awareness or product sales.
In a short essay, list and discuss the six tasks of strategic marketing
a.) Task 1: Determine and recommend which markets to address - although they may have been profitable in the past, businesses are unlikely to remain profitable unless they take major new strategic initiatives. Organizations must make critical choices about where to invest the firm's scarce resources, for it is likely that pressures to enhance shareholder value will lead to faster rates of change in firms' business portfolios in the years ahead b.) Task 2: Identify and target market segments - market segmentation is the process of grouping together actual and potential customers in a market for the purpose of forming market segments. Each of the market segments so formed is comprised of customers seeking similar sets of benefits with similar levels of priority. However, from market segment to market segment, customers have different sets of needs, and seek different sets of benefits. c.) Task 3: Set strategic direction - the firm must formulate its objectives for each targeted segment and conceptualize the basic rationale for why customers in each segment will purchase from the firm rather than from competitors. The firm must also develop an approach to each market segment that forms an overarching framework for the design of its various marketing offers. d.) Task 4: Design the marketing offer - this task is concerned with the design of marketing offers so that selected customer targets behave in the manner desired by the firm. Although purchase of the firm's products and services is typically the ultimate goal, behaviors such as active selling, holding inventories, or making strong purchase recommendations can also be crucial. e.) Task 5: Secure support from other functions - marketing requires two very different types of support—support for design and support for implementation. Support for design is conditioned by considerations of technical, operational, and economic feasibility whereas support for implementation assumes that the design has been fixed. The second type of support is required for successful implementation. This support is often described as internal marketing, or "getting buy-in." f.) Task 6: Monitor and control execution and performance - this task is concerned with how to monitor and control firm activities and performance in the marketplace. Although such groups as the field sales force, promotion experts, and advertising agencies implement the marketing offer, overall responsibility for modifying and evolving the offer lies with marketing, which must ensure that sensitive market feedback systems are in place.
In a short essay, list and discuss the four principles of strategic marketing that are fundamental to successful execution of the marketing job.
a.) The principle of selectivity and concentration - in the marketing arena, two aspects comprise the principle of Selectivity and Concentration. First, the marketing manager must carefully choose the market target; second, resources should be concentrated toward that target. The Principle of Selectivity and Concentration focuses on one key issue—the danger of attempting too much and dissipating the impact of limited resources by spreading them over too many alternatives. b.) The principle of customer value - this principle simply states that success in targeted segments is directly related to the firm's ability to provide perceived value to customers. This principle is central to understanding the job of the marketing manager, and drives marketing research activity that seeks to probe deeply into customer needs, wants, priorities, and experiences. c.) The principle of differential advantage - this principle states that the firm must not only deliver value to customers, but must do so better than competitors. In simple terms, this principle asserts that the way to make high profits is to offer customers something they want but cannot get elsewhere. d.) The principle of integration - this principle states that to assure success, all elements in design and execution must be carefully integrated and coordinated. Integration is most likely secured in those organizations with a corporate-wide external perspective
In a short essay, discuss variable costs, direct fixed costs, and indirect fixed costs. Include specific examples to support your answer.
a.) Variable costs vary directly with sales volume and include raw materials and direct labor. b.) Direct fixed costs are associated with individual products, like product managers, specialized product supervisors, and other technical personnel. If the product disappeared, these costs would also disappear. c.) Indirect fixed costs are not directly related to either product. They include corporate functions such as R&D, human resources, and shareholder relations.
In a short essay, list the four key areas used when describing competitors
a.) What competitor data should the firm collect? b.) What sources of competitor data are available? c.) What processes should the firm use for competitive data-gathering? d.) What frameworks can the firm use to describe competitors?
In a short essay, list three questions that the firm should ask regarding the portfolio of businesses that should comprise the set of product or markets in which it will compete.
a.) Which new businesses should be added? b.) Which of the current businesses should continue to receive investment? c.) From which businesses should the firm withdraw?
In a short essay, list and discuss five internal processes for securing competitive data.
a.) competitive intelligence department - this unit is responsible for collecting, analyzing, and distributing competitive information. This can be a highly focused approach, but expensive. b.) competitive intelligence system - the firm builds a culture where all employees are responsible for competitive intelligence. This approach is less expensive than a competitive intelligence department, but is relatively unfocused. c.) shadow system - individual executives or teams shadow specific competitors, either as a full- or part-time job. When shadowing is an extra responsibility, it can be an effective way of focusing attention on individual competitors, at relatively low cost. d.) review of business lost and business gained - when the firm wins or loses a sale, it can gain good competitor insight by knowing why it won or lost. In well-managed firms, this process is standard operating procedure. e.) formal development of strategic plans - when the firm has few major competitors, it can develop strategic plans as though it were the competitor. This approach is highly focused but is usually practical for only one or two competitors. f.) gaming with multifunctional teams - in these war games, executive teams play one of two roles: the firm or the competitor. Conducted at one- or two-day offsite meetings, this process can generate important competitor insights.
In a short essay, list and discuss the three types of needs and wants that may be satisfied by benefits delivered by a product or service. Include specific examples of each type of benefit to support your answer.
a.)Functional benefits - these benefits serve a particular purpose, typically by allowing the individual, family, or organization to do something that needs to be done. They are generally concerned with such dimensions as performance level, performance reliability, time and place availability, accuracy, and ease of use. For example, food fulfills the function of satisfying hunger needs, disc brakes enable the car to stop, and a word-processing program reduces the author's labor in writing a book. b.) Psychological benefits - in contrast to functional benefits, psychological benefits typically make people feel good in dimensions such as status, affiliation, reassurance, reduced risk by not changing suppliers, security, and scarcity. These benefits may be associated with functional benefits, but are different in kind. For example, in addition to the quality of the food, fine restaurants offer such benefits as perceived prestige and ambience. Certain models and brands of automobiles offer status in addition to functional comfort and transportation benefits. c.) Economic benefits - here the focus is on economic aspects of the purchase, such as price, cost savings, credit terms, and profits; some customers maintain that these are the only benefits that matter. In general, customers prefer to pay less rather than more for the functional and psychological benefits they receive because this maximizes their utility. However, for some goods and services, customers may actually prefer higher prices, as these signal psychological benefits such as status and prestige.