Marketing Comprehensive Final Exam
Control
- Involves evaluating results of the marketing strategies and plans and taking corrective actions to ensure that the objectives are met -Set goals -Measure performance -Evaluate performance -Take corrective action
Consumer Products Shopping Products:
-Bought less frequently; more planning and effort, brand comparisons on basis of price, quality, style E.g., furniture, appliances
Factors to consider when choosing a media vehicle:
-Cost -Audience quality: match the product with the audience via the vehicle (e.g. camera ads in photography magazines) -Audience engagement: how engaged individuals are likely to be with ads (e.g. consumers are less likely to be engaged with ads appearing in the Wall Street Journal than those appearing in the Vogue) -Editorial quality: believability of the vehicle
Strategic Planning: Corporate Level
-Defining the company mission -Setting objectives and goals -Designing the business portfolio Business unit, and product, and market level: -Planning marketing and other functional strategies
Price Elasticity
-How responsive demand will be to a change in price -Demand may be characterized as Elastic or Inelastic
Consumer Products Unsought Products:
-Little product awareness or knowledge of the brand, sometimes negative interest E.g., life insurance, cemetery plots, blood donation
Product Line Decisions
-Major decision: product line length; the number of items in a product line -Line is short if profits increase after adding items; line is long if profits increase after dropping items -Analyze lines periodically to assess each item's sales and profits and understand the item's contribution to the line
Consumer Products Convenience goods:
-Purchased frequently and immediately with little comparison shopping effort -Low customer involvement E.g., candy, soda, newspapers
Consumer Products Specialty Products:
-Strong brand preference and loyalty; special purchasing effort, little comparison shopping -High price E.g., luxury items
Steps in the Marketing Process
-What marketers do for their customers 1. Understand marketplace & customers needs and wants 2. Design a customer-driven marketing strategy 3. Develop an integrated marketing program delivering superior value 4. Engage customers, build profitable relationships and create customer delight -What marketers expect from their customers 1. Capture value to create profits and customer equity
Understanding Marketplace and Customer Needs
1(a) Needs, wants & demands 1(b) Marketing offers 1(c) Value & satisfaction 1(d) Exchanges & relationships 1(e) Markets
One of the four strategies might be pursued for each SBU:
1. Build: invest more for building its share 2. Hold: invest enough to hold on to the current share 3. Harvest: using the short-term cash flow 4. Divest: liquidating the business
Continuous vs Pulsing
1. Continuous (steady): spread ads evenly during a given period; expanding markets with frequently purchased items; steady demand 2. Pulsing (intermittent): spreading ads unevenly during a given period; limited budget; purchase seasonal
Developing AD Strategy
1. Crete Ad messages: what general message will be communicated; customers must think about or react to the product/company in a particular way; hence, identify customer benefits 2. Selecting Ad media / Creative Concept: message is brought to life by making it distinct and memorable; maybe a visualization or phrase or a combination of both / must be MEANINGFUL, BELIEVABLE, DISTINCTIVE
Factors Influencing Consumer Behavior
1. Cultural 2. Social 3. Personal 4. Psychological -affect all steps
Marketing Research Process
1. Define the problem and research objectives 2. Developing the research plan for collecting information 3. Implementing research plan- collecting and analyzing the data 4. Interpreting and reporting the findings
Consumer Buyer Decision Process
1. Need recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase behavior
Major Ad Decisions
1. Objectives Setting: Communication & Sales objectives 2. Budget Decisions: Affordable approach, Percent of sales, Competitive Parity, and Objective/task 3A. Message Decisions: Message Strategy and Message Execution 3B. Media Decisions: Reach/Frequency/ Impact, Major media types, Specific media vehicles, and Media timing 4. Advertising Evaluation: Communication impact, sales/profit impact, and return on advertising
Personal Selling Process
1. Prospecting and qualifying 2. Pre approach 3. Approach 4. Presentation and Demonstration 5. Handling Objectives 6. Closing 7. Follow-up
Types of Consumer Decisions
1. Routine Problem Solving 2. Limited Problem Solving 3. Extensive Problem Solving Less Involvement - More Involvement
The Communication Process
1. Sender: company/person 2. Encoding: process of having the sender transform the benefits into a message 3. Promotional Tool: advertising, sales promotion, personal selling, public relations, direct marketing 4. Receivers: consumers 5.. Decoding: process of understanding the message 6. Response: impact of the message on the receiver's knowledge, behavior or attitude 7. Feedback: sender's interpretation of the response and indicates whether the message was decoded & understood as intended 8. Noise: anything that interferes with the communication process
Selecting Target Markets
1. Undifferentiated (Mass) Marketing 2. Differentiated (Segmented) Marketing 3. Concentrated (Niche) Marketing 4. Micromarketing (Local or Individual) Marketing Targeting Broadly ---> Targeting Narrowly
What six conditions doe good advertising follow?
1. extends from sound marketing strategy 2. takes the consumer's view 3. it is persuasive 4. breaks through the clutter 5. never promises more than it can deliver 6. prevents the creative idea from overwhelming the strategy
Stages in the Business Buying Process
1. problem recognition 2. general need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. order-routine specification 8. performance review
Cultural : Subculture
A distinct cultural group that exists as an identifiable segment within a larger, more complex society -Example, religions, racial groups, geographic regions, age groups etc. Traditional path of immigrants in this country has been integration into the American 'melting pot'; recently the pressures to blend in has lessened Due to the maintenance of one's subcultural values, America is now viewed as a 'salad bowl' - a huge potpourri of people who mix but do not blend -Marketers develop products/offerings that have special meanings for certain groups (however the marketer has defined such groups) of consumers
Post Purchase Behavior: Cognitive Dissonance
A doubt, arising mainly for major purchases, that makes consumers feel uneasy about their decision Cognitive dissonance exists for all decisions If doubts are not handled properly, consumers might spread negative word-of-mouth
Identifying Possible Value Differences & Competitive Advantages
A marketer can differentiate along the lines of... Product Services Channels People Image
Psychological Factors: Perception
A motivated person is ready to act; how one acts is dependent on how one perceives the situation Perception: our understanding of the world around us Different people perceive the same thing differently Differences in perception exists because of: selective attention, selective distortion, & selective retention -Marketers have to work hard to get their messages through and make sure that correct encoding occurs
Psychological Factors: Motivation
A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction Maslow's hierarchy of needs explains why people are driven by particular kinds of needs at specific times
Psychological Factors: Attitudes
A person's favorable or unfavorable evaluations toward an object or idea Puts people into a frame of mind of liking or disliking things, or, moving towards or away from them Marketers must make sure that consumers have a positive attitude towards the company's offerings
What is Positioning?
A product's position is the way a product is defined by consumers on important attributes —the place the product occupies in consumers' minds relative to competing products
What are Marketing Channels?
A set of interdependent organizations that help make a product or service available for use by the consumer or business users
Multi- Channel Distribution Systems
A single firm sets up two or more marketing channels to reach one or more customer segments For instance, a majority of companies sell directly to the consumers via the web and also make their products available through retailers Company expands its market coverage and can tailor its products/services to the specific needs of the consumers Channels become harder to control and are likely to generate more conflict
Current Business Portfolio Strategic business unit:
A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses An SBU can be a company division, a product line within a division, or sometimes a single product or brand
What do Marketing Channels do?
Affects company's pricing decisions, promotion decisions, and new product development decisions Usually involves a long-term commitment
Budget Decisions: Common Methods to Set the Budget
Affordable: What the company can afford; used mainly by smaller companies Percentage of Sales: Certain percentage of the current/forecasted sales; simple to use; no basis for a specific percentage Competitive Parity: Matching competitors' budgets; usually represent collective wisdom; however, competitors might not be accurate and they differ greatly Objective and tasks: Budget based on what is to be accomplished; most logical method; Define objectives, determine tasks required to achieve them, & estimate the costs of those tasks
Product Life Cycle (PLC)
After developing a new product, management wants the product to enjoy a long and profitable life Product will not sell forever; but management wants it to earn decent profits PLC is the course that a product's profits and sales take over its lifetime
Consumer Market Segmentation: Demographic
Age, gender, family size, family life cycle, income, occupation, education, race, religion, generation, nationality The most popular variable for segmenting customer groups Easier to measure than most other types of variables
Managing the Marketing Effort/Process
Analysis Planning Implementation Organization Control
What is a Product?
Anything that can be offered to a market to satisfy a want or need Products include physical objects, services, events, persons, places, organizations, ideas or some combination thereof
Value - Based Pricing Process
Assess customer need and value perceptions ---> Set target price to match customer perceived value---> Determine costs that can be incurred ---> Design product to deliver desired value at target price
How Channel Members add value : Logistical Function
Assorting, Storing, Sorting, Transporting
Generation Z
Born between 1996 - 2010; some sources include those born only after 2000 Hyper-connected, fluent in meme culture Work hard to manage online personas and their physical selves
Decline Stage
Both sales and profits start to decline gradually Declines occurs due to technological advances, changes in consumer tastes, and increased competition Firms cut back on their offerings in terms of markets targeted, channels of distribution used, and/or reduce promotional expenses
Building Strong Brands: Major Brand Strategy Decisions
Brand Positioning -Attributes -Benefits -Beliefs & Values Brand Name Selection -Selection -Protection Brand Sponsorship -Manufacturer's Brand -Private Brand -Licensing -Co-Branding Brand Development -Line Extensions -Brand Extensions -Multibrands -New Brands
Brand Sponsorship
Brand sponsorship options include: Manufacturer's brands (Dell computers, Levi's jeans, Sony) -Also called national brands Store brands -Also called private brands Licensed brands -Agreement in which a company permits another organization to use its brand on products for a fee Co-branding
Brand Equity and Brand Value
Brands are one of the most fundamental pieces of information used to simplify choices and reduce purchase risk Brand is a: -Name -Term -Sign -Symbol/Character - Design or a combination of these
Nature of the Buying Unit
Business purchases involve more decision participants Business buying involves a more professional purchasing effort
How Channel Members add value : Transactional Function
Buying, Selling, Risk taking
Advertising
Can reach huge audiences and can be repeated numerous times Consumers perceive advertised (versus unadvertised) products as being more legitimate Is impersonal; can be quite expensive and is usually not interactive
Discounts
Cash: for those who pay their bills promptly Quantity: for those who buy in large volumes Functional/Trade: offered to businesses for functions like selling and storing Seasonal: for buying merchandise out of season
Economic Environment
Changes in spending patterns are observable in consumers at different income levels As income rises, spending on food decreases, spending on housing remains constant, while spending on other categories and savings increase
Maturity Stage: Product Modification
Changing characteristics of the product such as quality, style, features, or packaging to attract new users
Common Marketing Channels for Consumer Goods
Channel A: selling directly to consumers via telemarketing, mail-order, online shopping etc Channel B: when the retailer is large & can buy in large quantities directly from manufacturers Channel C: commonly used for low-cost items that are frequently purchased, such as, candy, magazines etc Channel D: used when there are many small manufacturers and many wholesalers/retailers that lack resources to find each other; agents bring the parties together without taking title to merchandise
Channel Behavior and Organization: Channel Behavior
Channel members usually partner together for a common good and depend on each other Each channel member plays a specialized role in the channel; overall channel is most effective when each member assumes and performs the task it can do best Ideally all channel members should work together efficiently However, channel members often act alone for their own interests disagreeing about who should do what and for what rewards Such actions generate channel conflict
Products & Service Classifications - Consumer Products
Classification based on how consumers buy different products Based on that behavior marketers use different strategies in terms of marketing mix
Implementing the Research Plan
Collecting the data -Most expensive phase -Subject to error Processing the data -Check for accuracy -Code for analysis Analyzing the data -Tabulate results
Designing a business portfolio
Collection of business & products making up the company Best portfolio fits the company's strengths and weaknesses to the opportunities in the environment 2 steps: analysis of current business portfolio & shaping future portfolio
Pre approach
Collection of information about the potential customer and the company prior to initial visit Very important in international marketing because of different customs and norms - who makes the purchase decisions - what are the person's interests - what is the person's job title - what does the company do - what are the specific needs of the company - what is current use of the product in the company
Developing the Research Plan
Common sources of secondary data: -Internal databases; Commercial data services; Government sources Advantages: -Available more quickly and at a lower cost than primary data -Can sometimes lead to information that an individual firm cannot not gather by itself Disadvantages: -Needed information may not exist as secondary data -Secondary data must be carefully evaluated for relevancy, accuracy, currency, and impartiality
Price Adjustment Strategies
Companies usually adjust their basic prices for various customer differences and changing situations Discount and allowance pricing; Psychological pricing; Promotional pricing;
The Micro-Environment
Company Suppliers Marketing intermediaries Customers Competitors Publics
Brand Equity and Brand Value: Advantages of Brand Equity
Company enjoys reduced marketing costs Company can charge higher prices than its competitors Company can easily launch product and brand extensions Offers the company some defense against price competition Helps build strong customer relationships
Communicating and Delivering the Chosen Position
Company must take strong steps to deliver and communicate the desired position to target consumers The marketing mix efforts must support the positioning strategy
Promotion Mix
Concept of IMC suggests that company needs to blend the promotion tools into a coordinated promotion mix 2 basic promotion mixes: push and pull promotion strategy
Psychological pricing
Considers the psychology of prices; for example, higher-priced products are thought to have higher quality Consumers use price less during product evaluation when they can judge the quality of a product by examining it or recalling experiences Reference Pricing: EX: List Price $280 Amazon Price: $199.95
Product Mix
Consists of all product lines and items offered for sale Dimensions of product mix - width, length, and depth
Economic Environment
Consists of factors affecting consumers' purchasing power & spending patterns Value marketing is the main mantra Income distribution -Upper class: getting wealthier; spending patterns not affected by current economic events -Middle class: careful with money, however, can still afford some luxuries sometime; shrinking in size -Working class: stick to the basic purchasing and tries hard to save; have remained poor
Sales Promotion
Consumer oriented sales promotions are used to support a company's advertising and personal selling Short-term incentives Offers reasons to buy now Sales promotions should be integrated with other elements of the communication mix
Post Purchase Behavior
Consumer satisfaction is a function of consumer expectations and perceived product performance Performance < Expectations: Dissatisfaction Performance = Expectations: Satisfaction Performance > Expectations: Delight
Reasons for Growth of Sales Promotions
Consumers have become more deal oriented Managers are facing more pressure to increase their current sales Companies face more competition Advertising efficiency has declined
Market Structure and Demand:
Contains far fewer but larger buyers Buyers are more geographically concentrated Business demand is derived from consumer demand and are more inelastic
Indirect Marketing Channels
Contains one or more intermediaries
Types of Vertical Marketing Systems
Corporate VMS Contractual VMS Administered VMS
Cost Based Pricing
Cost-plus/mark-up pricing (simplest): adding a standard dollar amount or markup to the cost of the product Cost based pricing methods typically fail to consider the notion of customer value and relationship between price & demand Cost plus pricing is popular because it is simple and when all firms use this method, price competition is minimized
Price & Demand
Costs set lower limit of price while demand sets the upper limit
Factors Influencing Consumer Behavior
Cultural: Culture, Subculture, Social class Social: Groups and social networks, Family, Roles and status Personal: Age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept Psychological: Motivation, Perception, Learning, Beliefs and attitudes
Engaging & Building Profitable Relationships
Customer Relationship Management: the most important concept of modern marketing Overall process of engaging and building profitable customer relationships by delivering superior customer value and satisfaction Customer value: evaluation of the difference between all benefits and all costs of an offer relative to other offerings Satisfaction: difference between the product's perceived performance relative to the expectations
Understanding Marketplace and Customer Needs: (c) value & satisfaction
Customers usually form expectations of value and satisfaction and make choices accordingly Marketers must make sure to set the right level of expectations - too low a level might drive customers away; too high a level might result in disappointment
Maturity Stage: Marketing Mix Modification
Cut prices Implement coupon, rebate, or other promotions Launch a better ad campaign Use larger re-sellers
Marketing
Deals with customers; managing profitable customer relationships Goals of marketing - keep current customers & attract new customers Critical for the success of all kinds of organizations - for profit or not for profit
Developing Ad Strategy: Media Selection
Deciding on reach, frequency, impact, and engagement Choosing among major media types Selecting specific media vehicles Deciding on media timing
The Macro- Environment
Demographic Economic Natural Technological Political Cultural
Cost - Based Pricing Process
Design a Good Product ---> Determine Product Costs ---> Set Price Based on Cost ---> Convince Buyers of Product's Value
Marketing Strategy Development
Designing an initial strategy for introducing the concept Target markets Value proposition Marketing mix Profit goals Sales targets and market shares
Approach
Developing rapport with the customer; salesperson should illustrate that he/she is working to understand and assist in meeting the prospective client's needs - must make a good first impression - dress neatly and professionally - prospect should be greeted with a firm handshake and direct eye contact - should maintain a posture to indicate interest and openness to the customer - should let the customer know that he/she is actively listening
Product Development
Develops concept into a physical product Calls for a large jump in investment Prototypes are made Prototypes are subjected to physical tests
Direct Marketing
Direct communication from the marketer Direct mail, catalogs, telemarketing, online marketing Used for targeted marketing efforts
Consumer Market Segmentation: Psychographic
Dividing a market into different groups based on social class, lifestyle, or personality characteristics
What is Market Segmentation?
Dividing a market into smaller groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes
Consumer Market Segmentation: Behavioral
Dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product; many believe that this is the best variable for building market segments Occasions; Benefits sought; Usage rate
Designing Business Portfolio: Shaping Future Portfolio
Downsizing must also be considered by the firm Due to changes in market environment the company's product is not that profitable; firm entered an arena where it lacked the necessary expertise; products might simply age and die
Persuasive Advertising: Comparative AD
EX. Allegra
Reminder Advertising
EX. Coca Cola
Informative Advertising
EX. Geico
Value chain: Partnering with other Company depts.
Each dept. is a link in the value chain Firm's success depends on how well the various depts. coordinate their activities In reality, however, departmental relations produce conflict Marketers have to find a way to make sure depts. think of consumers and develop an efficient chain
Number of Channel Levels
Each marketing intermediary performing some work in bringing the product closer to the final buyer is a channel level The number of intermediary levels indicates the length of a channel.
AD Evaluation
Evaluation of communication & sales and profits effects Communication effects: whether the ad is communicating the message as intended; pre and post tests are conducted Sales/profits effects are harder to measure since these are affected by many other factors
Evaluation of Alternatives and Purchase Decision
Evaluation process is dependent upon the specific buying situation and the individual consumers Two factors that may interfere with realization of purchase intentions: -Attitudes of others -Unexpected situational factors
Understanding Marketplace and Customer Needs: (d) exchanges & relationships
Exchange: act of obtaining a desired object from someone by offering something in return Relationship: retaining customers and grow their business with the company; strong relationships are forged by delivering superior customer value
How Channel Members add value : Facilitating Function
Financing, Grading, Marketing Information and Research
Qualifying
Finding qualified sales leads (that is finding good ones and screening out poor ones)
Commercialization
First decide on timing (i.e., when to introduce the product) Next decide on where to introduce the product (e.g., single location, state, region, nationally, internationally) Develop a market rollout plan - for instance, small companies initially introduce the new product in attractive cities or regions one at a time; bigger companies usually introduce it in several regions or into the entire national market
Types of costs
Fixed costs (overheads): Costs that do not vary with production level Variable costs: Costs that vary directly with the level of production Total costs: sum of fixed and variable costs for a given level of production A price charged should cover at least the Total costs incurred
Organization
For a small company, one person might be responsible for all marketing work Large companies will contain specialists Companies are shifting to customer management, profitability, and equity
Follow Up
For complete customer satisfaction and repeat business Salesperson needs to complete details in terms of delivery time, purchase terms, servicing, and other matters Follow-up call should be scheduled to ensure proper delivery, installation, and complete all agreed upon actions Stay in touch by writing thank-you notes and occasionally calling on customers to ensure that they are still happy with their purchase decisions
Planning Marketing
Functional depts. in each unit work together to accomplish strategic objectives Key role of marketing: provides guiding philosophy; provides input to strategic planners; designs strategies to reach the unit's objectives Marketers must form an effective value chain and form a competitively superior value delivery network
Primary data collection research approach: Surveys
Gathering descriptive information - knowledge, attitudes, buying behavior, preferences etc. Advantages: used to obtain many different kinds of information for different situations; easy to administer Disadvantages: individuals might not remember information and/or provide wrong answers; surveys might be ignored; some might be unwilling to participate in a survey
Value Based Pricing
Good-value pricing: offering just the right combination of quality and good service at a fair price; involves offering less expensive versions of established branded products - Kenneth Cole (established), Kenneth Cole Reaction (less expensive component) Everyday Low Pricing: an important type of good value pricing; constant everyday low price with few or no discounts
Direct Marketing Channels
Have no intermediary levels between the manufacturer and the customer
Concept Testing
Have something concrete for the consumer - a description, drawing, or a 3-D visualization on the computer
Two types of Channel Conflict
Horizontal Conflict and Vertical Conflict
What is Consumer Buyer Behavior
How a consumer makes purchase decisions and what factors influence such decisions
Setting Objectives Advertising objectives can be classified by their primary purpose
INFORM - when introducing a new product category or new brand PERSUADE - build secondary demand when competition increases; comparative advertising: a company directly/indirectly compares its brand with one or more brands REMIND- keep consumers thinking about the product and maintain relationships; for mature products
Prospecting
Identifying potential customers Cold calling, trade shows, referrals, trade association directories, company sales records; best source: referrals
Elastic Demand
If demand changes greatly with a change in price, sellers in this case consider lowering price in order to sell more as long as the extra costs of producing and selling do not exceed the revenue generated
Inelastic Demand
If demand hardly changes with a change in price
Product Mix Pricing
If the product is a part of a product mix then the price is set such that profit is maximized for the product mix Pricing in this case is difficult because each product has different factors to deal with
Undifferentiated Marketing
Ignores segmentation opportunities Focuses on what is common in the needs of the consumer, rather than on what is different Company designs and markets a product that appeals to the largest number of buyers Mass marketers often have trouble competing with more focused firms that do a better job of satisfying the needs of the specific segments
Capturing Value from Customers: Share of Customer
In addition to customer lifetime value, marketers also want Share of Customer How much marketers get of the customer's purchasing in the product categories Firms offer greater variety to current customers
Political & Social Environment
Includes laws, government agencies, and pressure groups that influence or limit various organizations in a society Areas of concern: -Increasing legislation: reasons for business legislation (1) protecting consumers; (2) protecting businesses (3) protecting the society in which businesses operate -Changing government agency enforcement -Increased emphasis on ethics and socially responsible behavior
Maturity Stage: Market Modification
Increase the consumption of the current product How? Look for new users and market segments Look for ways to increase usage among present customers
Baby Boomers
Individuals born between 1946 - 1964 Largest age group in U.S. Marketers have always focused more on this group Physically fit and active Levi Strauss built its core business based on this group Spend a lot of money on housing, cars and entertainment; also spend the most of any age category on food, apparel, retirement programs
Generation X
Individuals born between 1965 - 1976 Described as being multicultural, media-savvy and techie-oriented; concerned about environmental issues, drugs and the AIDS epidemic More cynical and alienated than other age groups Marketers have targeted this group by appealing to their pragmatic nature and by creating ads that are stripped of glitz
Generation Y
Individuals born between 1977 - 2000 Media and tech savvy Ethnically diverse generation More upbeat about their lives and prospects Engages in multitasking; hence marketers make sure that advertising messages are short and to the point Tends to search for personal identity - buys products that are unique and stand out in the crowd Gets a lot of information from the web
Public Relations
Influences the feelings, opinions or beliefs held by actual and/or potential customers, suppliers, employees, stockholders about a company and its product/services News stories, special events, sponsorships, Rarely the main component of a promotional campaign
Introduction Stage
Initial sales are low; profits are minimal or even negative Marketing objectives are to stimulate awareness and trial Usually a basic version of the product is sold Heavy expenditures in advertising, promotion, distribution, and personal selling are incurred in order to initiate a primary demand Price might be either high or low
Service Nature & Characteristics
Inseparability: not able to separate the provider of the service from the service; the employee becomes a part of the service -Solution: have superior customer interaction Perishability: inability to store or stock services; they are developed and used almost instantly -Solution: encourage off-peak consumption
Service Nature & Characteristics
Intangibility: cannot be seen, tasted, felt or heard before purchase; hence more difficult to evaluate -Solution: show consumers a signal of service quality - place, people, price, equipment, etc. Variability: quality depends on who provides them and also when, where, and how they are provided -Solution: standardization and training
Services Marketing
Intangible activities/benefits provided to consumers by an organization in lieu of money One of the most important components of the U.S. economy About 80% of U.S. GDP comes from services
Brand Equity and Brand Value
Intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of the competitors A brand is a seller's promise to deliver consistently a specific set of features, benefits and services; the best brands convey a warranty of quality
Interpreting and Reporting Findings
Interpret the findings Draw conclusions Report to management: -Present findings and conclusions that will be most helpful to decision making
Line Extension
Introduction of additional items in a given product category under the same brand name (e.g., new flavors, forms, colors, ingredients, or package sizes)
Business Analysis
Involves a review of the sales, costs, and profit projections to assess fit with company objectives If results are positive, project moves to the product development phase
Marketing Planning
Involves deciding on marketing strategies that will help the company attain its overall objectives Address the what & why of marketing activities Detailed marketing plan needed for each business, product, or brand
Natural Environment
Involves natural resources that are needed as inputs by marketers or that are affected by marketing activities Be aware of trends in the natural economy: -Shortages of raw materials -Increased pollution -Increased government intervention -Environmentally sustainable strategies
Product Line Pricing
Involves setting prices across an entire product line based on cost differences between products and customer perceptions of value
Conventional Channel
Is made up of independent members each looking to maximize it own profits; no member has much control over others and there is no mechanism for assigning roles and managing channel conflicts
Brand Name Selection
It should suggest the product's benefits and qualities It should be easy to pronounce, recognize, and remember It should be distinctive It should be extendable It should translate easily into foreign languages It should be capable of registration and legal protection
Business Markets
Key differences exist between business and consumer buying situations: -Market structure and demand -Nature of the buying unit -Business decision process and the different types
Segmenting Consumer Markets
Key segmentation variables for Consumer markets: -Geographic -Demographic -Psychographic -Behavioral No single way to segment; often combine more than one variable to define segments
Administered VMS
Leadership is assumed through the SIZE OR POWER of a dominant channel member The powerful member dominating the channel is called the channel leader or channel captain For instance, manufacturers of successful and popular brands might be channel leaders; or, large retailers might be channel leaders
Capturing Value from Customers: Customer loyalty & retention
Losing a customer not only means losing out on one sale, but probably losing a stream of purchases that the customer might have made Stream of purchases that the customer makes over a lifetime is customer lifetime value Customer lifetime value essentially shows loyalty
Requirements for Effective Segmentation
MEASURABLE: size, purchasing power and profiles of segments must be measurable ACCESSIBLE: segments can be effectively reached and served SUBSTANTIAL: segments are large and profitable enough to serve DIFFERENTIABLE: segments respond differently to different marketing mix elements ACTIONABLE: the company has effective resources to take advantage of the segments and serve the varying needs
Cultural Environment
Made up of institutions and other forces that affect a society's basic values, perceptions, preferences, and behaviors -Core beliefs and values are passed on from parents to children and are reinforced by schools, religious institutions, business, and government -Secondary beliefs and values are more open to change Marketers may be able to change secondary beliefs, but NOT core beliefs
Contact Methods
Mail surveys Telephone surveys Personal interviews: Individual interviewing Focus group interviewing Online marketing research
How Many Differences to Promote
Many marketers believe that only one difference should be promoted via the unique selling proposition (USP) Sometimes when firms are competing on two or more attributes, it is necessary to promote more differences; however, using multiple differences may generate consumer disbelief
What happens if you are Market Penetrating?
Market is highly price sensitive Costs must fall as sales volume rises Competition must be kept out of the market or the price advantage will be only temporary
Brand Positioning
Marketers can position brands at any of three levels: Attributes Benefits Beliefs and values
Introduction
Marketers cannot appeal to all individuals in the marketplace There are varied consumers with multitude of different needs, preferences, and demands Companies also are varied in terms of their own abilities Hence, companies identify markets they can serve best - move from mass marketing to target marketing
Product & Service Decisions
Marketers make Product & Service Decisions at 3 levels: -Individual Product & Service Decisions -Product Line Decisions -Product Mix Decisions
Maslow's Hierarchy of Needs
Marketers try to find out what kinds of needs tend to motivate target consumers to make favorable decisions regarding the offering
What is Marketing?
Marketing is defined as the process by which companies engage customers, build strong relationships, and create customer value in order to capture value from customers in return
2. Design a Customer-driven Marketing Strategy
Marketing management orientations - Production - Product - Selling - Marketing - Societal
2. Design a Customer Value-Driven Marketing Strategy
Marketing management: choosing target markets & how best to serve them (value proposition) Target markets: only those customers that the marketer can serve well and profitably Value proposition: set of benefits/values delivered to customers to satisfy their needs; answers the question - why will I buy your offering?
Vertical Marketing System (VMS)
Members act as an unified system; one channel member (could be the manufacturer, wholesaler, or retailer) has the power to lay down the policies of channel operation and others listen to that member
Setting Company Objectives & Goals
Missions needs to be transformed to detailed supporting objectives Creates a hierarchy of objectives that are consistent with one another. For example: -Business objective: Increase profits -Marketing objective: Increase market share of domestic and international markets
Product Mix Decisions
Mix Width: number of different product lines Mix Length: the total number of items within the product lines Mix Depth: number of versions offered of each item in the line
Technological Environment
Most dramatic force shaping our destiny Changes rapidly, creating new markets and opportunities and/or danger of products becoming obsolete Challenge is to make practical, affordable new products Safety regulations result in higher research costs and longer time between product conceptualization and introduction
Social Factors: Family
Most important consumer buying entity among the different social factors Marketers are interested in the roles of the different family members and the amount of influence children (if any in the family) have Marketers need to identify which family members take on which roles and how children influence decisions
Closing
Most important stage Look for physical actions, comments, and questions; the salesperson must ask for the order
Need Recognition and Information Search
Need recognition can be triggered by internal or external stimuli Several sources of information may used during information search: -Personal sources -Commercial sources -Public sources -Experiential sources
Understanding Marketplace and Customer Needs: (a) needs, wants, & demands
Needs: States of felt deprivation including physical, social, & individual needs; basic part of human make-up Wants: the form of needs shaped by culture & individual personality Demand: wants backed by purchasing power
New Brands
New brands: -Developed based on belief that the power of its existing brand is waning and a new brand name is needed -Also used for products in new product categories for which none of the firm's existing brands are appropriate
New Product
New products can be obtained via acquisition or new-product development
Product Life Cycle (PLC)
Not all product follows the life cycle - some are introduced and decline/die quickly; others stay in the maturity stage for a long time; still others enter the decline stage, are then re-positioned, and re-enter the growth stage
Handling Objectives
Objections are likely to indicate that the salesperson has failed to provide adequate information to the buyer or has not demonstrated effectively how the product meets the needs of the prospect Salesperson should approach the objections as a sign of interest on the part of the prospect As salesperson becomes more experienced, he/she will realize that certain objections occur on a regular basis; hence, one should work to provide information early in the presentation to counter these objections
Optional Product Pricing
Offering to sell optional or accessory products sold along with the main product Pricing the options is problematic since the marketer must know which items to include in the base price and which to offer as options
Multibrands
Offers a way to establish different features and appeal to different buying motives
Defining the Problem & Research Objectives
Often the most difficult step - although something is wrong, it is not always possible to know exactly what or why Managers & researchers work together in this particular stage - managers understand better what information is needed ad researchers understand better what to do and how to get it After the problem is defined, research objectives are set
Capturing Value from Customers
Outcomes of creating customer value -Customer loyalty & retention -Grow share of customer -Build customer equity
Setting Objectives
Overall objective is to build customer relationships by delivering customer value: communication (knowledge regarding product/brand) and/or sales Specific task to be accomplished with a specific target audience during a specific period of time
Why New Products Fail
Overestimation of market size Design problems Incorrectly positioned, priced, or advertised Pushed despite poor marketing research findings Excessive development costs Competitive reaction Bad luck!
Personal Selling
Personal face-to-face interaction between two (or more) people Can be quite persuasive and sometimes buyers feel obligated to listen and respond even when there is no purchase Most expensive tool based on a cost per contact basis; maintaining a sales force is a long term investment
Personal Selling
Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships Personal selling is more effective than advertising in complex selling situations
Current Business Portfolio Portfolio analysis:
Portfolio analysis: -Process by which management evaluates the products and businesses making up the company -Resources are directed toward more profitable businesses while weaker ones are phased out or dropped
Selecting an Overall Positioning Strategy
Positioning of the brand is known as value proposition: the full mix of benefits used to differentiate and subsequently position the brand Value proposition answers the question: why one should buy the marketer's brand?
Major Pricing Strategies
Price charged by company falls somewhere in between costs (incurred to produce the offering) at one end and target consumers' perceived value at the other
Product Bundle Pricing
Pricing bundles of products sold together Can promote the sale of products that consumers might not otherwise buy; the combined price must be low enough to have value for the consumer
Captive Product Pricing
Pricing products that must be used with the main product The main products are often priced low and the supplies have a high mark-up
Developing the Research Plan
Primary data collection decisions: Research approach: -Observation, survey, or experiment Contact methods: -Mail, telephone, personal, or online Sampling plan: -Sampling unit, sample size, and sampling procedure Research instruments: -Questionnaire or mechanical instrument
Strategic Planning
Process of developing & maintaining a strategic fit between the organization's goals & capabilities and the changing marketing opportunities SETS THE STAGE FOR THE REST OF THE PLANNING OF THE FIRM- long range & annual plans deal with the current conditions; strategic plan deals with finding opportunities in constantly changing environment
Integrated Marketing Mix The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market
Product Price Place (distribution) Promotion
Test Marketing
Product and program are introduced in a more realistic market setting Not needed for all products -like when the cost of developing the product is low or when the management is quite confident and has a lot of experience with new product development Can be expensive and time consuming, but better than making a major marketing mistake
What should happen if you are market skimmming?
Product's quality and image must support its higher price Costs of low volume can't be so high they cancel the advantage of charging more Competitors should not be able to enter market easily and undercut price
Shaping Future Portfolio
Product/market expansion grid -Market penetration: Existing markets, existing products -Market development: New markets, existing products -Product development: Existing markets, new products -Diversification: New products, new markets
Pull Strategy
Promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product used more for products used by consumers and when consumers form the primary target market
Push Strategy
Promotion strategy that calls for using the sales force and trade promotion to push the product through channels used more for products used by a business and when other businesses form the primary target market
Buying Center: People
Purchasing manager almost always present Individuals from other functional areas are present depending on the need
Designing Business Portfolio: Current Business Portfolio
Question marks: Low-share of high-growth market Strategies: Build or Divest Stars: High-share of high-growth market Strategy: Build; Invest money to maintain growth in the market Cash cows: High-share of low-growth market Strategy: Hold; use money to support other SBUs and pay bills Dogs: Low-share of low-growth market Strategies: Harvest or Divest
Research Instruments: Questionnaires & Mechanical devices
Questionnaire decisions: What questions to ask? Form of each question? -Closed-ended -Open-ended Wording should be simple, direct, and unbiased Questions should be arranged in a logical order
Media Selection for an AD
Reach: Percentage of people exposed to an ad campaign during a given period of time Frequency: Number of times an average person is exposed to an advertisement Media Impact: Qualitative value of a message exposure through a given medium Engagement: Advertisers want to choose a medium that will engage consumers rather than simply reach them
Responding to the Environment
Reactive responses: -Many firms simply react to changes in the marketing environment Proactive responses: -Some firms attempt to manage the marketing environment via aggressive actions designed to affect the publics and forces in the marketing environment
Idea Screening
Reduce the number of ideas generated by spotting good ideas and dropping poor ones as soon as possible -Executives provide a description of the product along with estimates of market size, product price, development time and costs, manufacturing costs, and rate of return -Evaluated against a set of company criteria for new products
Personal Factors: Self Concept
Refers to the beliefs that a person hold about his/her self; overall self-concept is positive Consumers tend to approach products with images that could enhance their self-concept and avoid those products that do not
Create Delight
Relationships can be built by: 1. Basic relationships 2. Frequency marketing programs 3. Club marketing programs -Focus is on relating directly to profitable customers, for the long term Satisfied customers tend to remain loyal and spread positive word-of-mouth; aim of customer relationship management is to delight customers
Repositioning
Repositioning: Firm must also monitor and adapt the position over time to match changes in consumer needs and competitors' strategies
Customer Driven Marketing Strategy
Requires careful customer analysis To be successful, firms must engage in: -Market segmentation -Market targeting -Differentiation -Positioning
Developing the Research Plan
Research plan calls for gathering primary, or secondary data or both Primary data: Secondary data: Researchers usually start by collecting and analyzing secondary data
Growth Stage
Sales start to grow quickly; profits also increase Repeat purchases New competitors enter the market Promotional expenditures continue in order to initiate a secondary demand Emphasis is on building a loyal set of consumers (through product improvements) and distribution channel members
Presentation & Demonstration
Salesperson must attract and hold the prospective buyer's interest; salesperson must also listen to what the prospective buyer has to say Features vs. benefits Focus of the presentation should be how the features provide the benefits that address the prospect's needs or problems thereby offering value to the customer Customer-solution approach: calls for good listening & problem solving skills; flexible presentations to identify the customers' needs; customize presentation specifically for the individual customer Planning on presentation method
Major Sales Promotion Tools
Samples: expensive but effective for new products or create excitement for existing products Coupons: for early trial or stimulate sales of mature product Price packs: effective in stimulating short term sales Premiums: an item that provides an incentive to buy the marketer's product Contests and sweepstakes
Sampling Plan
Sampling requires three decisions: Who is to be surveyed? -Selecting the sampling unit How many people should be surveyed? -Referred to as sample size How should the people in the sample be chosen? -Describes the sampling procedure: Probability vs. non probability samples
Developing Sales Promotion Program
Selecting the type of promotion to use Deciding on the size of the incentive Conditions, if any, for the promotion How to promote and distribute the promotion program Length of the promotion Evaluation: compare sales before, during, and after the promotion program
How Consumers Purchase Services
Services are difficult to evaluate because of its intangible nature Due to inseparability and variability, evaluation also becomes difficult from one purchase situation to the next
Cultural : Culture
Set of socially acquired values that society accepts as a whole and transmits to its members through language and symbols Culture reflects basic values, perceptions, wants, and behaviors Marketers try to spot cultural shifts to discover new products that might be wanted (think about hybrid cars, environment friendly products, etc.)
Market Skimming
Setting a high price for a new product; company makes fewer, but more profitable sales
Market Penetration
Setting a low price in order to reach the mass market; attracts a large number of buyers quickly and wins a large market share
Competition Based Pricing
Setting prices based on competitors' strategies, costs, prices & market offerings Consumers usually base their judgments of value by comparing the price of similar products that competitors offer If consumers perceive value to be less (vis-à-vis competition), company must charge a lower price; alternatively, company needs to change customer perceptions to justify a higher price
Cost Based Pricing
Setting prices based on the costs for producing, distributing, & marketing the product plus a fair rate of return for the effort & risk undertaken by the marketer
Buying Center
Several people participating in the buying process sharing common goals, risk, and knowledge relevant to a purchase decision In some companies such centers might be formalized (Buying Committee); in others it might be an impromptu group -Individuals in the buying center -Relative influence of each member in the group -Buying criteria of each member -Perception of each member regarding the firm, product, services and salespeople
Defining a Market-Oriented Mission
Should not be too broad nor too narrow Should be realistic Should be specific Should fit the market environment Should be motivating Should not be stated in terms of profits/sales Focus on the experience that provides for the customers
Understanding Marketplace and Customer Needs: (b) market offerings
Some combination of products, services, information, or experiences; not only physical, but also intangible goods comprise market offerings Focusing too closely on specific offerings, rather than the overall customer needs/wants, results in marketing myopia; marketers ought to try & provide an 'experience' to their customers through their offering
Defining a Market-Oriented Mission
Statement of the organization's scope, often identifying its customers, markets, products, technology, and value Purpose for existence; guides people in the organization -What is our business? -Who is our customer? -What do consumers value? Mission statements should be MARKET ORIENTED
Defining the Problem & Research Objectives
Statement of the problem & research objectives guide the entire research process Research objectives may include: Exploratory Research: Gathering preliminary information that will help define the problem and suggest hypotheses Descriptive Research: Generating information to better describe marketing problems, situations, or markets Causal Research: Testing hypotheses about cause-and-effect relationships
Types of Buying Situations
Straight rebuy: -Buyer routinely reorders something without any modifications Modified rebuy: -Buyer wants to modify product specifications, prices, terms, or suppliers New task: -Buyer purchases a product or service for the first time
SWOT Analysis
Strengths: -Internal capabilities that may help a company reach its objectives Opportunities: -External factors that the company may be able to exploit to its advantage Weaknesses: -Internal limitations that may interfere with a company's ability to achieve its objectives Threats: -Current and emerging external factors that may challenge the company's performance
Brand Equity and Brand Value
Successful brands develop brand equity - effect of knowing about a brand; a measure of the brand's ability to capture consumer preference & loyalty Generally brands that rate high on differentiation, relevance, knowledge, and esteem have high brand equity As of 2016, 10 of the world's top brands include (valuation in millions): Apple ($178), Google ($133), Coca-Cola ($73), Microsoft ($72.8), Toyota ($53.6), IBM ($52.5); Samsung, Amazon, Mercedes, GE
What is Price?
Sum of all of the values that consumers give up in order to gain the benefits of having or using the offering
What is Marketing Research?
Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization Used to gather insights about customer motivations, purchase behavior, satisfaction, effectiveness of marketing strategies etc.
Micromarketing (Individual Marketing)
Tailoring products and marketing programs to the needs and preferences of individual customers Also known as mass customization or one-to-one marketing This has become popular due to great strides made in technology Makes relationships with customers more important than ever
The Product - Service Continuum
Tangible Dominant -> Intangible Dominant - Salt -> Teaching
Concentrated/Niche Marketing
Targets a large share of one or a couple of small segments Usually marketer achieves a strong position because of its greater knowledge of consumer needs and the special reputation it acquires Marketing is done more effectively and efficiently It does however involve higher than normal risks
Differentiated Marketing
Targets several segments and designs separate offers for each Companies hope for higher sales and a stronger position within each segment Developing a stronger position within each segment usually creates more total sales than undifferentiated marketing across all segments Expensive; companies must evaluate the trade-off between more sales and increased costs
Primary data collection research approach: Observation
Techniques in which the researcher relies on his or her powers of observation rather than communicating with a person in order to obtain information Advantage: provides information people are unable or unwilling to provide; usually costs less Disadvantages: can be difficult to interpret; infrequent and long-term behavior difficult to observe
Business Markets and Business Buyer Behavior
The business market is vast and involves far more dollars than do consumer markets Business buyer behavior: -Refers to the buying behavior of the organizations that buy goods and services for use in the production of other products and services, or for the purpose of reselling, or renting them to others for a profit -In the business buying process, buyers decide which products/services the organization needs and then finds, evaluates, and chooses among alternative suppliers
Demographics
The changing American family Geographic shifts in population More professional population Increasing diversity
Capturing Value from Customers: Build Customer Equity
The combined customer lifetime values of all the company's current and potential customers Customer equity is a better measure of firm's performance than sales or market share since sales/market share reflects the past, while equity portrays the future -Classify customers by loyalty and potential profitability -Manage accordingly
New Product Development
The development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts -Very expensive and very risky -60% of new consumer products fail within 12 months -Companies want to reduce the failure rate and hence set up a customer-driven new product development process
Cultural : Social Class
The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes Status is made up of wealth, power, and prestige Measured by occupation, education, and income -Social classes show distinct preferences in categories such as clothing, leisure activity, automobiles; those within a particular social class tend to exhibit similar preferences
Value Delivery Network: Partnering with others in the Marketing System
The firms need to look beyond their own and into the value chains of its suppliers, distributors, & ultimately customers More and more companies are partnering with other members to improve the performance of the value delivery network
Preparing an Integrated Marketing Program
The marketing program delivers the intended value to the target market; it translates the marketing strategy into action Consists of the 4 Ps of marketing: product, price, place, promotion
Price is ?
The only element in the marketing mix producing revenue; the only element that can be changed quickly
Developing the Research Plan
The research plan outlines: Sources of data Specific research approaches Contact methods Sampling plans Instruments for data collection
Demographic Environment
The study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics The changing age structure of the U.S. population is the single most important demographic trend -Baby boomers, Generation X, the Millennials, and Generation Z are key generational groups
Idea Generation
The systematic search for new ideas Internal sources: -Research & development -Company employees at all levels External sources: -Customers -Competitors -Distributors/Suppliers -Crowdsourcing
Select an Overall Positioning Strategy
The way the offering is defined by consumers on important attributes Consumers often do not have essential knowledge and/or time to evaluate offerings properly; instead, they categorize the offerings and position them in their mind The position is the resulting combination of perceptions, impressions, and feelings
Differentiation and Positioning
This is where marketers create value for customers Marketers have to think what makes their offering different from competitors' offerings - customers will buy a product that gives them more value To the extent that a company can provide more value, it gains competitive advantage Ideally a marketer ought to think through the entire experience that a customer has with the offering to differentiate itself from its competitors
Allowances
Trade-in: turning in an old item when buying a new one Promotional: to reward dealers for participating in advertising and sales support programs
Concept Development & Testing
Transformation of the idea to a concept Product idea: -Idea for a possible product that the company can see itself offering to the market Product concept: -Detailed version of the new-product idea stated in meaningful consumer terms Concept testing: -Testing new-product concepts with groups of target consumers to find out if the concepts have strong consumer appeal
Primary data collection research approach: Experimental Research
Tries to explain cause-and-effect relationships Involves: -Selecting matched groups of subjects -Giving different treatments -Controlling related factors -Checking differences in group responses
Implementation
Turns marketing plans into marketing actions by addressing: Who - Where - When - How Successful implementation depends on how well the company blends its people, organizational structure, decision & reward systems, and company culture into a cohesive program that supports its strategies
Co Branding
Two established brands used on the same product; takes advantage of the complimentary strength of each brand name
Social Factors : Groups
Two or more people (i.e. a group) may affect one's decision/s Membership groups: groups that have a direct influence and to which the consumer belongs to are termed Reference groups: used as point of reference such as an Aspirational group - where one does not belong and hopes to belong to; or Dissociative group - when one does not want to be associated with a particular group Marketers try to identify the relevant groups for their target consumers
Sales Promotion
Used to arouse interest regarding a product and provide a strong incentive to BUY NOW Usually such efforts are there for the short term Used in conjunction with personal selling/advertising Offered to channel intermediaries also
Brand Extension
Using a successful brand name to launch a new or modified product in a new category
Personal Factors: Personality
Usually described in terms of traits such as self-confidence, dominance, extroversion, materialism etc. Brands also have a personality and consumers more often than not choose those brands whose personalities match their own Marketers need to find out what kind of personality (if applicable) exists in the minds of the consumer regarding the offering
Value Based Pricing
Value added pricing: attaching value added features and services to differentiate and support higher prices The main idea is to differentiate the offering by adding features/amenities rather than cutting costs
Contractual VMS
Vertical marketing system in which channel members at different levels of are joined together THROUGH CONTRACTS Activities and conflicts are managed through contractual agreements Franchises are the most common types of contractual VMS EX: Subway
Corporate VMS
Vertical marketing system that combines successive stages of production and distribution under SINGLE OWNERSHIP Channel leadership is established via common ownership EX: Starbucks
Maturity Stage
When sales increase at a decreasing rate, product enters the maturity stage Profits drop Normally lasts longer and poses more challenges for the marketer Competition is intense; investment in product development and promotion increases; marginal competitors leave the market Strategies available: market modification, product modification, marketing-mix modification
Consumer Market Segmentation: Geographic
World region or country Region of country City or metro size Density Climate
Integrated Marketing Communications (IMC)
carefully integrating and coordinating the company's many communications tools to deliver a clear, consistent, and compelling message about the organization and its products
Price plays a key role in doing what?
creating customer value & building relationships
New Product Development Process
idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, test marketing, commercialization
Brand Development
line extensions, brand extensions, multibrands, new brands
Possible Value Propositions
more for more more for the same more for less the same for less less for much less
Horizontal Conflict
occurs among firms at the same level of the channel (e.g., retailer versus retailer)
Vertical Conflict
occurs between different levels of the same channel (e.g., wholesaler versus retailer)
Individual Product & Service Decisions:
product attributes, branding, packaging, labeling, product support services
Assessing Service Quality
reliability, tangibility, responsiveness, assurance, empathy
Designing a Customer-Driven Marketing Strategy
segmentation, targeting, differentiation, positioning
Promotional pricing
should not be used as a permanent fixture Loss leaders Special-event pricing Low-interest financing Longer warranties Free maintenance
When does disintermediation occur?
when producers by-pass the established intermediaries and go directly to the final buyer When companies sell via the Web there is direct competition with the established channels thereby resulting in conflict Hence, companies sometimes try and use direct channels in a way that helps the multichannel distribution
