Marketing 3000 Ch. 3-8

New Buy

In a B2B setting, a purchase of a good or service for the first time; the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item o Putting it in for the first time o Building a pent up demand o Ex. o A small college may need to decide which apparel company to approach for a sponsorship, for multiple sports teams is a priority, and the length of the contract is important o Custom fittings, 1. Purchase for the first time • Likely to be quite involved • The buying center will probably use all six steps in the buying process

Extended Network

In social media, it is the total number of people a person or entity reaches or has influence over

Impulse buying

o A buying decision made by a customer on the spot when they see the merchandise

Locational privacy

o A persons ability to move normally in public spaces with the expectation his or her location will not be recorded for subsequent use

Request for proposals (RFP)

o A process through which buying organizations invite alternative suppliers to bid on their required components

Habitual decision making

o A purchase decision process in which consumers engage with little conscious effort

Distributors

o A type of reseller or marketing intermediary that resells manufactured products without significantly altering their form. Distributors often buy from manufacturers and sell to other businesses like retailers in B2B transactions

Web portal

o An internet site whose purpose is to be a major starting point for users when they connect to the web

Professionals

o Constantly on the go and busy, want to appear efficient, with everything together, so they use social media to demonstrate just how smart they are

Choosing a Global Entry Strategy

o Export • Producing goods in one country and selling them to another • The entry level requires the least financial risk but also allows for only a limited return to the exporting firm • Rolex sells a small amount of watches all over the world, they do this because transportation costs are small compared to the costs of the watches, so the best way to service the market is to sell it from where it is located in Switzerland o Franchising (companies) • A contractual agreement between a franchiser and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor • McDonald's, Pizza Hut, Starbucks, are all global franchisors. It requires lower risk and less investment than if they were to open units owned wholly by the firm. Though the firm has little control of the market operations in a foreign country, its profit is reduced because it must split it with the franchisee o Strategic alliance • A collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; that is they do not invest in one another • Cisco systems Inc. and Tata Consultancy Services entered as a strategic alliance they both continued to develop a market ready infrastructure and network solutions for customers, but they relied on one another to provide training and skills that the other one lacked o Joint Venture (Best one) • Formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared • Sony teamed up with Ericsson, its central management was located in London, it maintained R&D facilities in India, United States, Sweden, Japan, China, Germany, and United Kingdom. The spread of this success lead Sony to pursue complete ownership of the Sony Ericsson handset line o Direct Investment (Biggest: local people) • When a firm maintains 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries • The entry requires the highest level of investment and exposes the firm to risks, including its loss of operating and investments • X: Risk • Y: Control

Creators

o Hip, cool contributors, sit at the cutting edge and plan to stay there. Social Media gives them new ways to post and share their creative, clever ideas

Resellers

o Marketing intermediaries that resell manufactured products without significantly altering their form • Wholesalers • Distributors • Retailers o Represent resellers and engage in B2B transactions when they buy merchandise for their stores, fixtures, capital investments, leasing locations, and financing operations

• Sociocultural analysis (Geert Hofsted's)

o Power distance • Willingness to accept social inequality as natural o Uncertainty avoidance • The extent to which society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life o Individualism • Perceived obligation to and dependence on groups o Masculinity • The extent to which dominant values are male oriented. A lower masculinity ranking indicates that men and women are treated equally in all aspects of society; a higher masculinity ranking suggests that men dominate in position power o Time orientation • Short versus Long-term orientation. A country that tends to have a long term orientation values long term commitments and is willing to accept a longer time horizon, for say, the success of a new product introduction o USA, Australia, Canada, and The United Kingdom are higher on individualism but low on power distance o Several Latin American countries are high in Power Distance and low in Individuality o Business relationships in China often are formalized by just a handshake, and trust and honor are often more important than legal arrangements

Sharers

o Really want to help others, and the best way to do so is being constantly well informed so that they can provide genuine insights to others

Globalization

o Refers to the processes by which goods, services, capital, people, information, and ideas flow across national borders

Political/Regulatory Environment: Competitive practice and Trade legislation

• 1890: Sherman Antitrust Act o Prohibits monopolies and any other activities that would restrain trade or competition and makes fair trade within a free market a national goal • 1914: Clayton Act o Prohibiting the combination of two or more competing corporations through pooling ownership of stock and restricting pricing policies such as price discrimination, exclusive dealing, and tying clauses to different buyers • 1914: Federal Trade Commissions o Establish the Federal Trade Commission to regulate unfair competitive practices and practices that deceive or are unfair to customers • 1936: Robinson-Putman Act o Outlaws price discrimination toward wholesalers, retailers, or other producers and requires sellers to make secondary services or allowances available to all buyers on proportionately equal terms • 1938: Wheeler-Lea Act o • 1993: North American Free Trade Agreement (NAFTA) o (E. Union) • Started out with six now they are at 27 countries • Napoleon wanted to be king of Europe • Hitler wanted to take over Europe • Iso-9000: companies need to have this to trade in the European Union

Social Reach

• A metric used to determine how many people a person influences ( number of individuals in the person's social networks such as Facebook and LinkedIn)

Maslow's Hierarchy of Needs

• A paradigm for classifying peoples motives. It argues that when lower level, more basic needs (physiological and safety) are fulfilled, people turn to satisfy their higher level human needs (social and personal)

Institutions

• A public school may have a $40 million dollar budget for textbooks alone, which gives it significant buying power and enables it to take advantage of bulk discounts • Schools, Museums, and Religious Organizations o UGA, High Schools o Ex. IPads • They are playing a significant role in educational institutions and businesses, which means institutions need to start making purchasing decisions about them

Hits

• A request for a file made by web browsers and search engines. Hits are commonly misinterpreted as a metric for website success, however the number of hits typically is much larger than the number of people visiting the website

Sentiment Analysis

• A technique that allows marketers to analyze data from social media sites to collect consumer contents about companies and their products

Blog

• A web page that contains periodic posts; corporate blogs are a new form of marketing communication

Corporate Blog

• A website created by a company and often used to educate customers o Starbucks • Uses its blogs for new product development and it helps experience ideas from its customers o Wegman's • Sharing employees' ideas about entertaining, nutrition, and recipes o General Electric • Educates customers through its blog by telling entertaining stories about why they are more than just a light bulb company

Go

• A well-developed marketing strategy involves a host of social and mobile tools, working in conjunction with the firm's traditional IMC tactics, to move the consumer up the purchase decision hierarchy from awareness to purchase to loyalty.

Engage the Customer

• Action, loyalty, and commitment • Positively engaged consumers lead to more profitability • Engagement can also backfire o Positively engaged customers tend to be more profitable consumers, purchasing 20-40 percent more than less engaged customers o Ex. Dave Carroll, a traveling musician, flew on United Airlines and he was so appalled by the handling of his guitar, he wrote songs about it. This gained international recognition

Price Check Apps

• Amazon or stylish girl o Customers can scan a product in a store and instantly compare the prices online to see whether a better deal is available • Results tend to favor online merchants for the best price o Amazon promoted $5 off any toy, electronic, or DVD item for 3 items maximum around Christmas time, so long as they used the price checking app in a store.

Keyword Analysis

• An evaluation of what keywords people use to search on the internet for their products and services.

Factors Affecting Consumers Search Process

• Balancing act o Perceived Benefits o Perceived Costs • Ex. Gasoline, when it was almost $4.00 a gallon • Average Merit Increase over the last 5 years: 4.2-5.2% • Most families spend a lot of time researching the housing market in their preferred area before buying a home because homes are expensive and important purpose that has enjoyment and safety implications. • They will most likely spend less time searching for a doll house for their youngest daughter

Manufacturers and Service Providers

• Buy raw materials, components or parts • Manufacture their own goods o Ex. Car companies o Volkswagen Group, the largest auto manufacturer in Europe, owns and distributes the Audi, Bentley, Bugatti, Lamborghini, Seat, Skoda, Scania VW, and VW commercial vehicle brands o This group is used by 45,000 suppliers

Organizational Culture (Buying Culture)

• Buying Culture o Democratic • A buying center in which the majority rules in making decisions • The majority rules o Consultative • One person to make a decision but solicit input from others before doing so o Autocratic • A buying center in which one person makes a decision alone, though there may be multiple participants • May be multiple participants, one person makes the decision alone o Consensus • All members of the team must reach a collective agreement that can support a particular purchase

Location Apps

• Companies use these apps to gain loyalty by making support a game o Ex. Foursquare • Users can check in at their favorite restaurants or stores, sharing their location on Facebook • They can compete with other users to become Mayor if they check in at a retail chain the most in a 60 day period • They are exciting apps because they provide customers with relevant offers when they are close to retailers or service providers, or competitive offers

A marketing environment analysis framework

• Consumer o Immediate Environment • Company • Pepsi o Manufacturer, Distributor, and Promotion of carbon beverages is its strength, but it is also successful with its water product Aquafina because consumers desire bottled water • Competition • Gillette Co. and Energizer USA o Energizer USA makes Schick razors o Gillette Co. makes Fusion ProGlide razors • They are both at each others throats saying that they are falsely advertising their products. One says that the Schick hydro razor doesn't hydrate the skin. The other company said that Gillette's thinnest blades ever are a load of crap • Corporate partners • Parties that work with the focal firm • Nau o An outdoor clothing company uses synthetic renewable materials (corn and recycled plastic bottles). In order to develop clothing from sustainable materials, they turned to manufacturing partners to develop new fabrics. PLA (polyatic acid) was one of them. They used organic cotton from "happy sheep" from partnered ranching industry and they clearly demonstrate "going green" o Macroenvironment • Technology • Consumers have constant access to the internet, 3G, 4G, and WiFi • Smartphones using Apple, RIM, Android, and Symbian networks allow for greater computing, data storage, and communication • Netflix suggests what shows/movies we should watch, Pandora outlines the music we should listen to, and Amazon tells us what we should read • RFID- allows you to track an item from when it was manufactured, to the distribution system, to the retail store, and into the hands of the final consumer • By 2015 people will access the web from their smartphones more than their laptops, and desktops combined, so companies need to convey less information for the mobile users • Political/Legal • Organizations must fully comply with any legislation regarding fair competition, consumer protection, or industry-specific regulation • Demographics • Information about the characteristics of human population and segments, especially those used to identify consumer markets such as by age, gender, income, and education • Ex. CVS o There ExtraCard loyalty program, they collect a lot of data about shoppers who visit all its stores, they use this to target offers for cosmetics for young females or they actively remind their elderly members about prescription refills • Country Culture • Entails easy to spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and more subtle aspects, which are trickier to identify o Ex. BMW Mini • Produce advertising to appeal to the same target market across countries • Regional Culture • The influence of the area within a country in which people live o Ex. Soft Drink market • 38% of Americans consider the Soft Drink Market to be called "Soda" • 38% of Americans consider the Soft Drink Market to be called "Pop" • 19% of Americans consider the Soft Drink Market to be called "Coke" even when it is Pepsi • Economic • The rate of inflation, foreign currency, exchange rates, and interest rates are all factors that influence an economy • Inflation cause the dollar to buy less than it use to • In the summer of 2002, the Euro was slightly less than $1, in 2013 it was worth $1.32, and in 2008 it rose to $1.60 • European consumers purchase 22% of U.S. exports, this could drop if Italy and Greece's economies fail • When inflation increases, consumers don't really buy less food, but they may switch out what products they buy, Expensive restaurants lose compared to grocery stores and inexpensive restaurants

Factors influencing the consumer Decision Process

• Consumer Decision Process o Marketing mix • Product • Price • Place • Promotion o Psychological factors 1. Motives • Need or want that is strong enough to cause the person to seek satisfaction 2. Attitudes • A persons enduring evaluation of his or her feelings about and behavior tendencies toward an object or idea; consists of three components: cognitive, affective, and behavioral 3. Perceptions • The process by which people select, organize, and interpret information to form a meaningful picture of the world o Lisa has always wanted an apartment in the Back Bay neighborhood of Boston because her aunt had one, and they had a great time visiting for thanksgiving one year. Matt on the other hand doesn't like the idea because he says that the apartments are small, expensive, and unsuitable for a family thinking about having children 4. Learning • Refers to a change in a persons thought process or behavior that arises from experience and takes place throughout the consumer decision process o Katie found out that Macy's had the most extensive collection of Business apparel, once she went to the store and tried on their dresses she immediately liked the way she looked in them and how they felt on her so she purchased them 5. Lifestyle • A component of psychographics; refers to the way a person lives his or her life to achieve goals o When you graduate college o Living requirements are going to change, products are going to change o Social factors 1. Family • Influence • When choosing a restaurant that the family wants to go to, they all may have a say in it • When a husband and teenage child are looking through car magazines and consumer reports for a new car, but the wife and Husband will pick out the make, model and color when they get to the dealership, and the wife negotiates the final deal 2. Reference groups o One or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors o Offer information o Provide rewards for specific purchasing behaviors o Enhance a consumers self image o Family o Friends o Coworkers • People you hang out with o Famous People • Influence • Provide: • Information • Rewards • Self-image 3. Culture • The set of values, guiding beliefs, understandings, and ways of doing things shared by members of a society; exists on two levels: visible artifacts (behavior, dress, symbols, physical settings, ceremonies) and underlying values (thought processes, beliefs, and assumptions) • The culture at Katie's college is rather fashion conscious, this influences the way she spends her money, how she dresses, and where she shops. o Situational factors • Purchase situation • Samantha considers herself a thrifty, cautious shopper, someone who likes to get a good deal. The only thing is her friend is getting married and she wants to get her a silver trey so she buys it from Tiffany and Co, instead of Walmart • Shopping situation • Store Atmosphere o Music, scent, lighting, and even color can positively influence the decision process • Salespeople o Educate customers about product attributes, pointing out advantages in products, and encouraging multiple purchases • Crowding o Too many people in the stores, too much merchandise, or lines are too long • In-Store demonstrations • Promotions o An unadvertised price promotion can alter someone's preconceived buying plan • Packaging o Companies spend millions of dollars designing and updating packages to be more appealing to the eye • Convenience, time, energy, cost • Temporal states • Some people are morning people and others function better at night o Suppose Samantha received a parking ticket just before she went shopping at Tiffany and Co, she is most likely to be less receptive to the salespersons influence than if she came into the store with a different mood

Post-Purchase (Kroger Card)

• Customer Satisfaction o No matter how good the merchandise and service may be, if a store is not clean and appealing from the entrance, customers are not likely to enter o Build realistic expectations, not too high and not too low o Demonstrate correct product use-improper usage can cause dissatisfaction • Customer Loyalty o Probability of switching products, new product introductions o They will buy certain brands and shop at certain stores, and they include no other firms in their evoked set o Companies have designed CRM (customer relationship management) programs to specifically retain them • Postpurchase cognitive Dissonance o You may have buyers remorse after purchasing a TV because you question whether a high priced TV is appreciably better quality than a similar size TV at a lower price or whether you need a television at all o When a consumer questions the appropriateness of a purchase after his or her decision has been made o Cognitive dissonance theory • Women go shopping when they are angry

Thought Sharing Sites

• Different types of blogs: corporate, professional, personal, and micro • Corporate Blogs o Educate their customers about their offerings o Engage them by responding to their communications, both positive and negative

Microblog

• Differs from a traditional blog in size. Consists of short sentences, short videos, or individual images. o Twitter is an example of a microblog o This helps companies educate the customer by providing corporate and product information as well as engage the customers by providing a platform for two way communication o As much as Twitter can help build a firm's brand image, it can also tarnish it instantly o Companies such as best buy have multiple twitter accounts to help customers with anything they need from geek squad to their help force

Listening

• Sentiment Analysis o Marketers can analyze content found on sites such as Facebook, Twitter, online blogs, and reviews to assess the favorableness or un-favorableness of the sentiments o Fundamentally transforming how companies interact with and engage their customers • Attitudes • Preferences o Ex. Salesforce.com • May identify negative consumer sentiment; it then provides services to help it's clients respond. Reacting to these attitudes allows companies to counter negative opinions, perhaps win back customer loyalty Perception- Dangerous word in marketing, getting to change consumer's perceptions is hard

Implementation phase

• Should the Firm be relocating production to another country? • Should the firm be targeting this market with this product? • Should the firm be selling its product in this market, in this manner? o Camel Cigarettes (they had a cartoon character that was a camel on their cigarettes) o Colorado and Weed dispensaries o Buy American and Sell American • Back in the 60s VW had 67% American parts on their cars • How accessible is the product to people underage? o Ex. Molson Brewery • Launched a Facebook campaign that targeted college students to post pictures at parties, so it could identify the top party school.

Click Paths

• Shows how users proceed through the information on a website-not unlike how grocery stores try to track the way shoppers move through their aisles

Links between ethics and corporate social responsibility

• Socially Responsible → • Ethical → Both Ethical and Socially responsible • Ex. • Socially Irresponsible → • Ethical → Ethical firm not involved with the larger community • The companies main concern is with their stakeholders, employees, customers, and stockholders • Socially Responsible → • Unethical → Questionable firm practices, donates a lot to the community • BP oil spill; they committed to donating millions of dollars to help economically states promote tourism • Socially Irresponsible → • Unethical → Neither ethical or socially responsible (how long can they stay in business)

A framework for ethical decision making

• Step one o Identify Issues • Investigate the use or misuse of data collected from consumers by a market research firm • The way the data is collected o Are the results being used in a way that might harm the public or mislead you • Step two o Gather information and identify stakeholders • Gather all relevant legal information • Stakeholders • Employees, retired employees, suppliers, the government, customer groups, stockholders • Step three o Brainstorm and evaluate alternatives • Halting the market research project, making responses anonymous, instituting training of the AMA code of ethics • Management reviews and refines these alternatives • Step four o Choose a course of action • The best solution for its stakeholders, using ethical practices • Investigate any legal activities • Managers need to apply all relevant decision making criteria and to assess his/her confidence that the decision being made follows the criteria

Fashion apps

• Style.com offers the same content available on their style.com magazine website, including blogs, reviews, couture shows, and video feed • Louis Vuitton's app NOWNESS combines magazine content with brand promotion • Pinterest allows people to post merchandise, services, recipes, or ideas onto a virtual bulletin board

Planning phase

• The mission or vision statement sets the overall ethical tone for planning • Mission statement can be used as a means to guide a firms SWOT analysis o Ex. Burts Bee's • "create natural, Earth friendly personal care products formulated to help you maximize your well being and that of the world around you" o Ex. Numans Own • Over $280 million has been donated since 1982 to charities and Newman's Hole in the wall Gang camps that help those children with life threatening diseases

Page Views

• The number of times an internet page gets viewed by any visitor

Bounce Rate

• The percentage of times a visitor leaves the website almost immediately, such as after viewing only one page

Gamification

• The process of building customer loyalty through the offering of free apps

B2B Marketing

• The process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers o Involves manufacturers selling to wholesalers that in turn sell products as retailers • Who is the end user? o Target Market Profile

Postpurchase Cognative Dissonance

• The psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; buyers remorse

Ethical Climate

• The set of values within a marketing firm, or in the marketing division of any firm, that guide decision making and behavior o Everyone within a firm must share the same understanding of its ethical values and how they translate into the business activities of the firm

Government

• US Government spends $3.7 Trillion obtaining goods and services • State and local governments also make significant purchases • Firms specialize in selling to government

The Consumer Decision Process Evaluation of Alternatives: Attribute Sets

• Universal sets o Includes all possible choices for a product-category • Decision matrix really expands where you can use any product in that area to deliver anything close to what you need • Katie knows that there are a lot of apparel stores • Retrieval sets o Includes those brands or stores that consumers can readily bring forth from memory • Only some apparel stores have the stile Katie is looking for (Macy's, Ann Taylor, The Gap, and Banana Republic • Evoked sets o Comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision • High degree of substitution • One of the keys from the marketing standpoint • Ex. Coca-Cola vs. Pepsi Cola • Katie chooses Banana Republic or Macy's because she knows that they are the only stores that carry business attire that she would like

Identify issues

• Using results to mislead or even harm the public o Marketing research firm issues • Hiding the real purpose of the study • Data collection methods

Creating an ethical climate in the workplace

• Values o Establish o Share o Understand • Rules o Management commitment o Employee dedication • Controls o Reward o Punishment • Transparency- people pay for unethical behavior, management has to walk the walk, if you remain ethical you will be happy

Personal Blog

• Websites written by people that receive no products or payment for their effort o Marketers have the lowest level of control for these bloggers

Professional Blog

• Websites written by people who review and give recommendations on products and services o Companies have less control over what these bloggers have to say than their own corporate blog o Consumers seem to trust professional bloggers more than corporate bloggers

Why people act unethically

• What makes people take actions that create so much harm? • How can certain manufacturers engage in such egregious behavior as using lead paint on toys marketed toward young children? • Are all the individuals who engage in questionable behavior just plain immoral or unethical? • Decisions often have conflicting outcomes, where both options have positive and negative consequences

4 E Framework

1. Excite customers with relevant offers 2. Educate them about the offering 3. Help them Experience products, whether directly or indirectly 4. Give them an opportunity to Engage with their social network a. Ex. Home Shopping Network i. They use a multichannel strategy with its television channel as a central focus. They have added an e-commerce site, a Facebook and MySpace page. They also have a YouTube channel which it reaches target shoppers in a way that maximizes its value of its media content

Firm Goals

1. Greed and Short term profit seeking 2. Serious long term consequences 3. Creating value over the long run 4. Long term success

Engaging Customers using Social Media

1. Listening 2. Analyzing 3. Do

Buying Situation

1. New Buy 2. Modified Rebuy 3. Straight Rebuy

B2B Markets

1. Resellers 2. Institutions o UGA 3. Government o USA government paperwork is very detailed 4. Manufacturers/ Service Providers o 20/80 rule o Ex. Wal-Mart o Executives live in Bentonville, AR for companies that sell to Wal-Mart

Social Trends

1. Thrift o Save more money, spend less on luxuries, and try not to use savings accounts o Lipstick effect-some shoppers enjoy treating themselves to small luxuries like buying channel lipstick, and forgo larger luxuries like a vacation o Groupon and LivingSocial have created ways for people to find great deals • They deliver daily emails to consumers telling them about deals for their shopping habits, preferences and location 2. Health and Wellness concerns o Child obesity has doubled in the last 20 years and teenage obesity has tripled in the last 20 years as well, leading to skyrocketed rates of high blood pressure, high cholesterol, early signs of heart disease, and type two diabetes among children o U.S. CDC and prevention says that 1/3 of adults are obese, and diabetes has reached up to 8.3% o Companies cannot link unhealthy foods with cartoons and celebrity figures o Ex. Burger King • They no longer use SpongeBob Square Pants to promote burgers and fries 3. Greener consumers o Hudson River o Nearly half of U.S. adults now recycle their soda bottles and newspapers, and European consumers are even more green, Germans are required by law to recycle bottles, and the EU doesn't allow beef that is raised on artificial hormones to be imported o Frito-Lay's Sunchip line • Uses solar power at one of its eight production facilities to help produce its product 4. Privacy Concerns o Facebook, Twitter, Social Media, etc. o In 2011, multiple multinational corporations suffered security breaches, of those are Lockhead Martin, NASA, Fox Network, and Sony, they stole 102 million Play-Station users personal Information 5. Time-Poor Society o Time Management-professional career o Both parents work and the kids are busier than ever o Since 1973 the median number of hours people work went from 41-49 hours a week and leisure time has dropped from 26 hours per week to just 19 o Many retailers have become multi-retailers, that offer stores, catalogs, and internet shopping options o Office Depot and Walgreens have extended their hours to benefit those customers that work during the day

Corporate Social Responsibility

o Refers to the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of it's stakeholders o AMA says it's the impact of the companies actions and operating in a way that balances short term profit needs with society's long term needs, thus ensuring the companies survival in a healthy environment • Ex. Dannon • Ethically and socially responsible. They have an ethical commitment to make healthy foods "health food to as many people as possible" and its social responsibility is that it donates food and money to the hunger-relief charity Feeding America, encourages employees to volunteer in their communities, holds annual children's day outreach programs, and reduces its environmental footprint

Modified Rebuy

o Refers to when the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, or so forth o Buyers spend less time at each stage in the B2B buying process • Corona bringing out an 18 pack and that goes in the systems • Different product code • Ex. o Ohio State University's sports department may ask addidas to modify their specifications for their basketball shoes after noticing some improvements to addidas shoes of The University of Michigan. 2. Purchasing a similar product but changing specifications • Current vendors have an advantage

Straight Rebuy

o Refers to when the buyer or the buying organization simply buys additional units of products that have previously been purchased o The buyer is the only member of the buying center involved in the process • Electronic system • Scanning products • Not buying anything new, filling inventory requirements • Electronic commerce • IRC and mento reports • Ex. o Sports teams need to repurchase a tremendous amount of equipment that is not covered by apparel sponsorships, such as tape for athletes ankles or weights for the weight room 3. Buying additional units or products that have been previously purchased • Most B2B purchases fall into this category

Organizational Culture

o Reflects the set of values, traditions, and customs that guide a firms employees behavior o Ex Walmart • Buyers aren't allowed to accept a gift from a vendor, not even a cup of coffee

Bonders

o Social butterflies who use social media to enhance and expand their relationships, which they consider all important in their lives

Control phase

o Systems must be in place to check whether each potentially ethical issue raised in the planning process was actually successfully addressed o They need to react to change o Firms have emergency response plans in place just in case they ever get in a similar situation that Tylenol was in or an accident at a manufacturing plant

Assessing Government Actions

o Tariff • A tax levied on a good imported into a country • Tax • Artificially raises prices • Lower demand • Aka a Duty • Intended to make imported goods more expensive and less competitive to domestic products • They may be imposed to penalize other countries for their trade practices that the home country views as unfair o Quota • Designates the maximum quantity of a product that may be brought into a country during a specific time period • Maximum limit • Reduces availability of imported goods • The USA allows 1.2 million tons of sugar to be imported without a tariff because the country generally consumes more than it produces, it then monitors consumption slowly to protect domestic farmers, if demand exceeds supply then it increases the quota • (Tariffs and Quotas benefit domestically made products because they reduce foreign competition) o Exchange control • Refers to the regulation of a countries currency exchange rate • When the U.S. dollar falls it has a twofold effect on U.S. Firms ability to conduct global business. o Trade agreement • Intergovernmental agreements designed to manage and promote trade activities for specific regions • European Union o 27 member countries • Countries to join recently: Croatia, Macedonia, Turkey, Iceland, and Montenegro • NAFTA o USA, Canada, Mexico • CAFTA o USA, Costa-Rica, Dominican Republic • Mercosur o Full members: Argintina, Brazil, Paraguay, Uraguay, and Venezuela • ASEAN o Cambodia, Indonesia, Laos, Malaysia • Trade Bloc • Consists of those countries that have signed a particular trade agreement • WTO, GATT • They were meant to break up barriers and create a level playing field

Infrastructure

o The basic facilities, services, and installations needed for a community or society to function, such as transportation and communication systems, water and power lines, and public institutions like schools, post offices, and prisons

Buying Center

o The group of people typically responsible for the buying decisions in large organizations o Ex. Hospitals

Derived Demand

o The linkage between consumers demand for a companies output and its purchase of necessary inputs to manufacture or assemble that particular output

Wholesalers

o Those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users

Assessing global markets

• Economic analysis using metrics o General economic Environment • Level of imports and exports • Ex. USA suffers from a trade deficit Trade Deficit o Results when a country imports more than it exports o This can cause greater competition at home with foreign products Trade Surplus o Results when a country exports more than it imports o Companies prefer this because it allows them to export more products to more markets Gross Domestic Product o Defined as the market value of the goods and services produced by a country in a year; most widely used standardized measure of output Gross National Income o Consists of GDP plus the net income earned from investments abroad (minus any payments made to non residents who contribute to the domestic economy) Purchasing Power Parity o A theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, expressed in the same currency o Market size and population growth rate • Pepsi and Coke are investing $2.5 billion into China to gain double digit annual growth o Evaluating Real income • Proctor and Gamble developed a single use shampoo packet for consumers in less developed countries that cannot afforded an entire bottle at one time • Coca-Cola lowered its price to the equivalent of about 10 cents per bottle in India

Types of Buying Decisions

• Extended Problem Solving o A purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk • Did I pay too much for this dress? Will my potential employer and friends think I look professional? • Limited Problem Solving o Occurs during a purchase decision that calls for, at most, a moderate amount of effort and time • Impulse Buying • Habitual Decision Making

The consumer decision process Need Recognition

• Functional needs o BMW • They have made superior motorcycles and one of them is the K1600 that has an inline six cylinder motor, something that was only in their automobiles, it offers great power on a bike, so it out performs the other luxury touring bikes in comfort and out does itself in speed • Psychological needs o Shoes • People buy shoes that are worth more than $1000 because it satisfies their psychological needs • Christian Loubounstin's shoes are the hottest show on the market, it may have to do with celebrities wearing them such as Beyonce, Sarah Jessica, Parker, Penelope Cruz, Lady Gaga, and Ashley Olsen

Influence of personal ethics

• Genetics • Family • Religion • Values

Educate the Customer

• Golden opportunity: products value proposition and offered benefits o Ex. Blogs and blogging tools (WordPress and Twitter), HubSpot(all-in-one marketing software), Youtube and google +.

Media Sharing Sites

• Highlight how consumers can experience their goods or services • Encourage consumers to engage with the firm, its other social media outlets, and other consumers o Ex. Instagram, YouTube, Flickr

Analyzing

• Hits o Total requests for a page, visits to a site or page • Page views o The number of times any pages gets viewed by a visitor • Bounce rate o The percentage of times a visitor leaves a site almost immediately • Seeing which pages are the most frequent entry and exit locations help make a website more effective • Click paths o Shows how users proceed through the information • Provide users an easier navigation experience through their site to find what they want • Conversion rates o Percentage of visitors or potential customers act as the marketer hopes, whether by clicking, buying or donating • Keyword Analysis (this is what employers do when they look at resumes) o Companies do this to see what keywords people use to search on the internet for their products and services

How to do a Social Media Marketing campaign

• Identify strategy goals (Find more about customers) o Does it want to increase awareness of the product? o Is it's focus mainly on increasing sales of the product? • Ex. Focus on developing a Facebook page or creating a Facebook app • Target Audience o Facebook enables the firm to perform targeting that is based on location, language, education, gender, profession, age, relationship status, likes/dislikes, and friends or connections • Campaign: experiment and engage o There should be a call to action that is clear and compelling o Strong, eye-catching images and designs are important (updated constantly) o It must appeal to the right kind of customers • Budget (Good news, Primary and Secondary research) o Demand nearly constant review o Ex. • If a competitor lowers its price significantly, it might be necessary to follow suit to avoid be excluded from customers consideration sets • Monitor and Change (Put it in a format that they want) o Great Avenue for primary research o Managing your individual brand value in a social media world o Social reach refers to how many people a person influences o Influence is the extent to which the person influences others • Network

Influence

• In a social media context, the extent to which the person influences others (how much do the people in a persons network read that persons content)

Experience the product or service

• Information about a firms goods or services • Simulating real experiences o Ex. Youtube o Ex. Apple allowing you to listen to almost an entire song before buying it o Ex. Home Depot, if customers forget what their sales clerk said about how to install a new water heater, they can go online to get step by step instructions

Integrating ethics into marketing strategy

• Planning Phase (mission statement) o Firms will decide what level of commitment to its ethical policies and standards it is willing to declare publicly • Implementation phase (Communication flow) o • Control phase

Psychological Factors: Motives (Maslow's Hierarchy of Needs)

• Self-actualization o When a person is completely satisfied with their life • I will dress the way I want and I will do what I want • People engage in personal growth activities and attempt to meet their intellectual, aesthetic, creative, and other such needs • You drive a ford fusion because it suit the person you are • Esteem o Needs that enable people to fulfill their inner desires • Confidence • Respect • Health clubs • Yoga • Love o Needs expressed through interactions with others • Social Status • Friendships • Family • Safety o Pertain to protection and physical well-being • Air bags in cars • Secure employment • Health • Physiological o Those relating to the basic biological necessities of life, food, drink, rest, and shelter • Food • Water • Shelter • Clothing

The Buying Center

• Initiator o The person who first suggests buying the particular product or service • Ex. Your Doctor • Say you fell backward off of your snowboard and shattered your elbow, and you need surgery that will add screws to keep your elbow in place, you doctor will notify the hospital about a time in which the procedure will take place, and what screws to use. • Influencer o The person whose views influence other members of the buying center in the making of the final decision • Ex. The Pharmacy • ElbowMed had a sales representative come by one year and introduce them to your medical doctor and she loved them, your doctor has used them ever since because there was empirical data and case studies proving that they were the best • Decider o The person who ultimately determines any part of the entire buying decision • Ex. The Hospital • They have the final say in what screws they want to purchase for your surgery because they have to supply all of the other tools for the surgery and they may not have a budget for a particular kind • Buyer o The person who handles the paperwork of the actual purchase • Ex. The hospitals materials manager • He is in charge of buying and maintaining inventory for the hospital in the most cost-effective manner possible. • User o The person who consumes or uses the product or service • Ex. The patient • You also have a deciding factor in what procedure you want done and what type of screws you want put in • Consumer • Someone is going to evaluate their purchasing decisions • Gatekeeper o The person who controls information or access, or both, to decision makers and influencers • Ex. The Insurance Company • They may not reimburse you for the ElbowMed screws because they are too expensive so they may recommend some screws that they will cover • Someone you know there may let you in

Social Media

• Media content used for social interactions such as YouTube, Facebook, and Twitter. • Content distributed through online and mobile technologies to facilitate interpersonal interaction

Involvement and Consumer Buying Decisions

• Message (Ad) o High Involvement • Greater attitude • Deeper processing • Develops strong attitudes and purchase intentions o Ex. Reviewing an add for career dresses • Katie, who is researching buying a dress for a job interview, will scrutinize the information addressed (price, fabric, quality, construction) and process the key elements more deeply, she will probably judge the ad more truthful or favoring the product or she will develop a negative product impression (her research suggests that the product is not as good as it is being portrayed) o Ex. Truck (Dodge Ram), Brooks Brothers Suit o Low involvement • Less attention • Peripheral processing • More shallow • Generates weak attitudes and increased use of cues o A consumer would pay less attention to the key elements of the message (price, fabric, quality, and construction) and it may hone in on the brand name or the presence of a celebrity endorser o Ex. Campbell's chicken soup

B2B Buying Process

• Need recognition o A school in Salt Lake City, Utah wants to introduce computer tablets into middle school resource programs to help literacy, and matching skills for students. A group of educators gets together to analyze literature and how these devices will help students learn better. They can directly interact with materials rather than hearing information or seeing it, they have convinced the school board that it is a very good purchase • Product specification o The School has sent a list of specifications that vendors could use, it includes screen sizes, battery life, and processor speed, how the device connects to the Internet, and delivery date. They also request that educational apps be downloaded to the tablets and to get rid of all of the other apps, they also want them to come equipped with a power cord, screen protector, cover, stand, keyboard, and headphones. They would also like a 3 year warranty and replacement within 24 hours for serviced tablets • RFP process o Because the school district does not have an RFP it invites various tablet suppliers, technology companies, and other interested parties to bid on the contract. Web portals are used by smaller companies because they are niche portals that involve cost saving abilities because it eliminates periodic negotiation and routine paperwork, and they form a supply chain that can specify to the buyers needs o Request for bit for proposals • Proposal analysis and supplier selection o The school district revises all of the proposals it receives with the school board, they evaluate these proposals on the basis of the amount of experience the vendor has with tablet computers and technology products because they want to make sure their investment in the short run is reliable and they can update new apps o How much you want and how much you want delivered • Order specification o The vendor has a laid out plan to when they are scheduled to preventative maintenance, who the contact person is for issues, and the circumstances with which a vendor is to provide a replacement for a faulty tablet • Vendor/ performance using metrics o They do this to evaluate if they need to switch companies in the future, in a B2B this is a more formal and objective o The school looks at customer service, Issue resolution, Delivery, and Quality of the company they bought from

Negative Word of mouth

• Occurs when consumers spread negative information about a product, service, or store to others

Excite the Customer

• Offer must be relevant to its targeted customer • Relevancy can be achieved by providing personalized offers o Mobile applications and games to get the customer excited about the idea, product, brand, or company o Ex. Groupon price promotion that is communicated through the social networks of already interested customers o Ex. Staples may provide a loyal customer a relevant coupon, based on previous purchases, through his or her mobile phone while the customer is in the store.

Conversion Rates

• Percentage of customers who buy a product after viewing it

Actual or Perceived Risk

• Performance Risk o Involves the perceived danger inherent in a poorly performing product or service • Off-road vehicle • Katie's new interview dress is prone to shrinking when dry cleaned • Psychological Risks o Associated with the way people will feel if the product or service does not convey the right image • Katie thought to ask her friends opinions about the dress she was going to buy and she read several fashion magazines to make sure this dress would suit her needs • Commercials about beach getaways for people up north • People who feel powerless will buy bigger food portions to gain a sense of status • Financial Risks o Risk associated with a monetary outlay; includes the initial cost of the purchase, as well as the costs of using the item or service • Katie is not only concerned about the new dress that will help her with the professional look she wants but the cost of dry-cleaning will be outrageous • People know about the vehicles they are going to buy just as much as the salesman selling them • Physiological Risk o The fear of an actual harm should a product not perform properly • McDonald's with the movie super size me • A car • Government agencies and external agencies put out safety ratings on cars, so consumers research the best car suitable for their needs so they can figure out which cars have faulty issues and which ones don't • Commercials about security: Robbery • Social Risk o The fears that consumers suffer when they worry that others might not regard their purchases positively • Katie may make a conscious effort to make a statement by buying a unique, more stylish, and more expensive dress than her friends would typically buy