Sales Promotion

Personnel Differentiation

Companies can gain a strong competitive advantage through hiring and training better people than their competitors do. Singapore Airlines enjoys an excellent reputation largely because of the grace of its flight attendants, McDonald's people are courteous, IBM people are professional and knowledgeable, and Mark Warner's resort staff are friendly and upbeat. Marks amp Spencer helps differentiate its stores by careful selection, training and looking after its staff. Personnel differentiation...

Types of Marketing Intermediaries

Distribution channels can be described by the number of channel levels involved. Each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer is a channel level. Because the producer and the final consumer both perform some work, they are part of every channel. The nitmher of intermediary levels indicates the length of a channel. The image shows several consumer distribution channels of different lengths. Channel 1. called...

Defining the Channel Objectives and Constraints

Channel objectives should be stated in terms of the desired service level of target customers. Usually, a company can identify several segments wanting different levels of channel service. The company should decide which segments Co serve and the best channels to use in each ease. In each segment, the company wants to minimize the total channel cost of supplying customers, while also meeting their service requirements. The company's channel objectives are also influenced by the nature of its...

Channel Behaviour and Organization

Distribution channels are more than simple collections of firms tied together by various flows. They are complex behavioural systems in which people and companies interact to accomplish individual, company and channel goals. Different forms of channel system exist. Some channel systems consist only of informal interactions among loosely organized firms, while others consist of formal interactions guided by strong organizational structures. Moreover, channel systems do not stand still - new...

Value Chain

Michael Porter proposed the value chain as the main tool for identifying ways to create more customer value see Figure 11.2 .15 Every firm consists of a collection of activities performed to design, produce, market, deliver and support the firm's products. The value chain breaks the firm into nine value-creating activities in an effort to understand the behaviour of costs in the specific business and the potential sources of competitive differentiation. The nine value-creating activities...

Channel Organization

Conventional distribution channel A channel consisting of one or mure independent producers, wholesale r,s and retailers, each a separate business seeking tit maximize its men profits even at the expense of profit for the system an a whole. vertical marketing system VMS A distributiim channel structure i which producers, wholesalers and retailers act as a unified system. One channel member owns the others, has contracts wich them, or has so much power that they alt co-operate. Historically,...

The Personal Selling Process

Selling process The steps that the salesperson follows when selling, which include prospecting uiul qualifying, preapprouch, approach, pre sentatkm and demonstration, handling objections, closing a nd follow-up. The step in the selling process in which the salesperson identifies qualified potential customers. Companies spend a huge amount of money on seminars, books, cassettes and other materials to teach salespeople the 'art' of selling. Millions of books on selling are purchased every year,...

The Information Technology Boom

The explosive growth in computer, telecommunications and information technology has had a major impact on the way companies bring value to their customers. The technology boom has created exciting new ways to learn about and track customers, create products and services tailored Co meet customer needs, distribute products more efficiently and effectively, and communicate with customers in large groups or one-to-one. For example, through videoconferencing, marketing researchers at a company's...

Standardization or Adaptation for International Markets

Atone extreme are companies that use a standardized marketing mix worldwide. Proponents highlight several reasons for global standardization. An international marketing strategy for using basically the same product, advertising, distribution channels and other elements of the marketing mix in all the company's iniernacujnal markets. Tins Italian execution of a Pirelli campaign allows the global application of many of today's ads. HOMOGENEOUS NEEDS AND PREFERENCES. The presence of homogeneous...

The Worlds Top Ten Brands

Companies around the v HlI invest large amounts of money each year to create awareness and preference for their top brands. Powerful brand names command strong consumer loyalty and provide competitive advantage in the marketplace. What are the world's most powerful brands Interbrand, a consultancy that specializes in branding, released a new piece of research in 1996, naming McDonald's as the world's leading brand. Interbrand drew up an initial list of some 1,200 brands by polling staff in its...

Consumer Promotion Tools

The main consumer promotion tools include samples, coupons, cash refunds, price packs, premiums, advertising specialities, patronage rewards, point-of-purchase displays and demonstrations, and contests, sweepstakes and games. Samples are offers of a trial amount of a product. Some samples are free for others, the company charges a small amount to offset its cost. The sample might be delivered door to door, sent by mail, handed out in a store, attached to another product or featured in an ad....

Preview Case Rfk

MARS CONFECTIONERY LAUNCHES A 140 MILLION European advertising campaign in a bid to maximize its appeal to Europe's male teenage market.' 'Sony doubles its pan-European advertising spend to back its new video games system. Playstation, with press and TV campaigns that will feature comic testimonies of people who have had their lives changed by playing Playstation.' The UK's third largest charily, the Royal National Lifeboat Institution (RNLI), spends 1.5 million on direct marketing and will...

The Societal Marketing Concept

The societal marketing coneept holds that the organization should determine the needs, wants and interests of target markets. It should then deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumer's and the society's well-being. The societal marketing concept is the newest of the five marketing management philosophies.

Marketing Ethics

Ethics, in the broadest sense of the word, is rising to the top of the corporate agenda. Scarcely a week goes by without a leading company coming under attack, rightly or wrongly, for alleged unethical business practices, whether it is Ford removing the black faces from a sales brochure, Shell UK dumping its redundant oil platform, Brent Spar, in the North Sea, or MeVities' use of fish oil from sand eels, an endangered species and puffins' staple diet. However far from reality the accusations...

The Companys Microenvironment

Marketing management's job is to create attractive offers for target markets. However, marketing managers cannot simply focus on the target market's needs. Their success will also be affected by actors in the company's microenvironment. These actors include other company departments, suppliers, marketing intermediaries, customers, competitors and various publics see Figure 4.1 . In designing marketing plans, marketing management should take other company groups, such as top management, finance,...

Models of Consumer Behaviour

Tlie buying behaviour of final consumers -individuals and households who buy goods and services for personal consumption. eon sumo r market All the individuals and households who buy or acquire gvods and services fiir personal consumption. In earlier times, marketers could understand consumers well through the daily experience of selling to them. But as firms and markets have grown in size, many marketing decision makers have lost direct contact with their customers and must now turn to...

Touchy Feely Research into Consumer Motivations

Box You taste nice riot harsh.' Ideal cigarette to smoker 'If I can make you relaxed and happy, that's what I am here for. I always try to please my customers.' researchers use a wide variety of non-directive and projective techniques to uncover underlying emotions and attitudes towards brands and buying situations. The techniques range from sentence completion, word association and inkblot or cartoon interpretation tests, to having consumers describe typical brand users or form daydreams and...

Types of Buying Decision Behaviour

Consumer decision making varies with the type of buying decision. Consumer buying behaviour differs greatly for a tube of toothpaste, a tennis racket, an expensive camera and a new car. More complex decisions usually involve more buying participants and more buyer deliberation. Figure 6.5 shows types of consumer buying behaviour based on the degree of buyer involvement and the degree of differences among brands.2'1 Consumers undertake complex buying behaviour when they are highly involved in a...

Dissonance Reducing Buying Behaviour

Dissonance-reducing buying behaviour occurs when consumers are highly involved with an expensive, infrequent or risky purchase, but see little difference among brands. For example, consumers buying carpeting may face a high-involvement decision because carpeting is expensive and self-expressive. Yet buyers may consider most carpet brands in a given price range to be the same. In this case, because perceived brand differences are not large, buyers may shop around to learn what is available, but...

Habitual Buying Behaviour

Habitual buying behaviour occurs under conditions of low consumer involvement and little significant brand difference. For example, take salt. Consumers have little involvement in this product category - they simply go to the store and reaeh for a brand. If they keep reaching for the same brand, it is out of habit rather than strong brand loyalty. Consumers appear to have low involvement with most low-cost, frequently purchased products. Consumers do not search extensively for information about...

References Duv

World Bunk Adas 1994 , Miurosoft Bouksktilf 1998 . Several models of the consumer buying process have been developed liy marketing scholars. The most prominent models arc those of John A Howard and Jagdish N. Shetli, The Theory fif Buyer Behaviour New York Wiley, 1969 Francesco M. Nicosia, Consumer Decixirni Processes Englewood Cliffs, NJ Prentice Hall, 1966 James F. Engel, Roger D. Bktckwcll and Paul W. Milliard, Consumer Behaviour, 5th edn New York Holt, Rinehart amp Winston, 1986 James K....

Common sales forecasting techniques

Surveys of buyers' intentions Composite sales force opinions Expert opinion Test markets Time-series analysis Leading indicators Statistical demand analysis What people do What people have done anticipating what buyers are likely to do under a given set of Conditions, Very few products or servioes lend themselves to easy forecasting. Those that do generally involve a product with steady sales, or sales growth in a stable competitive situation. But most markets do not have stable total and...

Maturity Stage

At some point, a product's sales growth will slow down and the product will enter a maturity stage. This maturity stage normally lasts longer than the previous stages, and it poses strong challenges to marketing management. Most products are in the maturity stage of the life cycle, and, therefore, most of marketing management deals with the mature product. The slowdown in sales growth results in many producers with many products to sell. In turn, this overcapacity leads to greater competition....

Identifyingthe Target Audience

A marketing communicator starts with a clear target audience in mind. The audience may be potential buyers or cxirrent users, those who make the buying decision or those who influence it. The audience may be individuals, groups, special publics or die general public. The target audience will heavily affect the communicator's decisions on 'what will be said, how it will be said, when it will he said, where it will be said and who will say it. buyer-readiness stages The stages that consumers...

Internal Factors Affecting Pricing Decisions

Internal factors affecting pricing include the company's marketing objectives, marketing-mix strategy, costs and organization. Before setting price, the company must decide on its strategy for the product, If the company has selected its target market and positioning carefully, then its marketing-mix strategy, including price, will be fairly straightforward. For example, if Toyota decides to produce its Lexus cars to compete with European luxury cars in the high-income segment, this suggests...

Markets of One Customizing the Marketing Offer

Several technologies have converged in recent years to allow companies in a wide range of industries to treat large numbers of customers as unique 'markets of one'. Advances in computerdesign, database, interactive-communication and manufacturing technologies have given birth to 'mass customization', the process through which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs. Here are some examples Check into any Ritz-Carleton...

Designing the Competitive Intelligence System

We have described the main types of information that company decision-makers need to know about their competitors. This information needs collecting, interpreting, distributing and using. Although the cost in money and time of gathering competitive intelligence is high, the cost of not gathering it is higher. Yet the company must.design its competitive intelligence system in a cost-effective way. The competitive intelligence system first identifies the vital types of competitive information and...

Identifying Major Alternatives

Having defined its channel objectives, the firm then identifies its major channel alternatives in terms of the types and number of intermediaries to use and the responsibilities of each channel member. Types of Alternative Channel A number of options exist Direct marketing. A number of direct marketing approaches can be used, ranging from direct-response selling via advertisements in print media, on radio or television, by mail order and catalogues to telephone and Internet selling. These...

Other Sales Force Strategy and Structure Issues

Sales management also have to decide who will be involved in the selling effort and how various sales and sales support people will work together. OUTSIDE AND INSIDE SALES FORCES. The company may have an outside sales force (or field sales force), an inside sales foree or both. Outside salespeople travel to call on customers, whereas inside salespeople conduct business from their offices via telephone or visits from prospective buyers. To reduce time demands on their outside sales forces, many...

Implementing Total Quality Marketing

Customer satisfaction and company profitability are linked closely to product and serviee quality. Higher levels of quality result in greater customer satisfaction, while at the same time supporting higher prices and often lower costs. Therefore, quality improvement programmes normally increase profitability. The Profit Impact of Marketing Strategies studies show similarly high correlations between relative product quality and profitability for Europe and the United States see Figure 11.6 .31...

SWOT Analysis

SWOT analysis draws the critical strengths, weaknesses, opportunities and threats SWOT from the strategic audit. The audit contains a wealth of data of differing importance and reliability. SWOT analysis distils these data to show the critical items from the internal and external audit. The number of items is small for forceful communications, and they show where a business should focus its attention. Managers need to identify the main threats and opportunities that their company faces. The...

Undifferentiated Marketing

Using an undifferentiated marketing strategy, a firm might decide to ignore market segment differences and go after the whole market with one offer. This can Three alternative market-coverage strategic be because there are weak segment differences or through the belief that the product's appeal transcends segments. The offer will focus on what is common in the needs of consumers rather than on what is different. The company designs a product and a marketing programme that appeal to the largest...

Perceptual Mapping

Perceptual maps A product positioning tool that uses mu hidimensional scaling of consumers' perceptions and preferences to portray the psychological distance between products and segments. Perceptual maps are a valuable aid to product positioning. These maps use multidimensional scaling of perceptions and preferences that portray psychological distance between products and segments, using many dimensions. They contrast with conventional maps that use two dimensions to show the physical distance...

Roberto Alvarez del Blanco and Jeff Rapaport

THE SPANISH COMPANY FREIXENET is the world's largest producer and exporter of ccfoa sparkling wines . In September 1985, management needed to decide a new distribution .strategy for the US market. There wss much concern and uncertainty regarding the decision. Freixenet had enjoyed spectacular growth from 1983 to 1985 and the management questioned the wisdom of implementing far-reaching changes so soon. The Freixenet management team had two main responsibilities for the US market. These were the...

Enlightened Marketing

The philosophy of enlightened marketing holds that a compan s marketing should support the best long-run performance of the marketing system. Enlightened marketing consists of five principles consumer-oriented marketing, innovative marketing, value marketing, sense-of-mission marketing and societal marketing. Enlightened marketers also ensure that their marketing approach reflects corporate ethics. Con sinner-oriented marketing means that the company views and organizes its marketing activities...

Segmented Pricing

Companies will often adjust their basic prices to allow for differences in customers, products and locations. In segmented pricing, the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs. Segmented pricing takes several forms Customer-segment pricing. Different customers pay different prices for the same product or service. Museums, for example, will charge a lower admission for young people, the unwaged, students...

Developing the Research Plan

The second step of the marketing research process calls for determining the information needed, developing a plan for gathering it efficiently and presenting the plan to marketing management. The plan outlines sources of existing data and explains the specific research approaches, contact methods, sampling plans and instruments that researchers will use to gather new data. exploratory- research Marketing research Co gather preliminary information that will help better to define problems and...

Choosing a Market Coverage Strategy

Many factors need considering when choosing a market-coverage strategy. The best strategy depends on company resources. Concentrated marketing makes sense for a firm with limited resources. The best strategy also depends on the degree of product variability. Undifferentiated marketing is suitable for uniform products such as grapefruit or steel. Products that can vary in design, such as cameras and cars, require differentiation or concentration. Consider the product's stage in the life cycle....

Consumer Products

Consumer products are tho.se bought by final consumers for personal consumption. Marketers usually classify these goods based on consumer shopping habits. Consumer products include convenience products, shopping produces, speciality products and unsought products. These products differ in the way consumers buy them, so they differ in how they are marketed see Table 13,1 .2 Convenience products are consumer goods and services that the consumer usually buys frequently, immediately and with a...

Nature and Characteristics of a Service

Any activity or benefit that one party van offer to another which is essentiallyintangible and does not result in the ownership of anything. A service is any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything. Activities such as renting a hotel room, depositing money in a bank, travelling on an aeroplane, visiting a doctor, getting a haircut, having a car repaired, watching a professional sport, seeing a...

Nature and Importance of Physical Distribution and Marketing Logistics

To some managers, physical distribution means only trucks and warehouses. But modern logistics is much more than this. Physical distribution or marketing logistics involves planning, implementing and controlling the physical flow of materials, final goods and related information from points of origin to points of consumption to meet customer requirements at a profit. In short, it involves getting the right product to the right customer in the right place at the right time. Traditional physical...

Irritation Unfairness Deception and Fraud

Direct marketing excesses sometimes annoy or offend consumers. Most of us dislike direct-response TV commercials that are too loud, too long and too insistent. Especially bothersome arc dinner-time or late-niglit phone calls. Beyond irritating consumers, some direct marketers have been accused of taking unfair advantage of impulsive or less sophisticated buyers. TV shopping shows and programme-long 'infomercials' seem to be the worst culprits. They feature smooth-talking hosts, elaborately...

Socially Responsible Marketing C omin uriica tion

Whoever is in charge, people at all levels of the organization must be aware of the growing body of legal and ethical issues surrounding marketing communications. Most marketers work hard to communicate openly and honestly with consumers and resellers. Still, abuses may occur, and public policy makers have developed a substantial body of laws and regulations to govern advertising, personal selling, sales promotion and direct marketing activities. By law, companies must avoid false or deceptive...

Choosing an Attack Strategy

How can the market challenger best attack the chosen competitor and achieve its strategic objectives Figure 12.6 shows five possible attack strategies. FRONTAL ATTACK. In a full frontal attack, the challenger matches the competitor's product, advertising, price and distribution efforts. It attacks the competitor's strengths rather than its weaknesses. The outcome depends on who has the greater strength and endurance. Even great size and strength may nor be enough to challenge a firmly...

Demographic Segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, family life eycle, income, occupation, education, religion, race and nationality. Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs, wants and usage rates often vary closely with demographic variables. Another is that demographic variables are easier to measure than most other types of variable. Even when market...

Analysis of International Market Opportunity Deciding Whether or Not to Go Abroad

Doing international business successfully requires firms to take a market-led approach. A critical evaluation of why firms enter foreign markets shows that, in many cases, the practice of international business falls short of the market-led approach essential for long-term success. Firms must consider the factors that draw them into the international arena. International marketing planning model International marketing planning model A surprisingly large proportion of sales to foreign markets...

Estimating Total Market Demand

The total market demand for a product or service is the total volume that would be bought by a defined consumer group in a defined geographic area in a defined time period in a defined marketing environment under a defined level and mix of industry marketing effort. Total market demand is not a fixed number, but a function of the stated conditions. One of these conditions, for example, is the level and mix of industry marketing effort. Another is the state of the environment. Part A of Figure...

Idea Generation

The PIC should then direct the search for new-product ideas. Idea generation should be systematic rather than haphazard. Otherwise, although the company will find many ideas, most will not be good ones for its type of business. A company typically has to generate many ideas in order to find a few good ones. A recent survey Irproduet managers found that of 100 proposed new product ideas, 39 begin the product development process, 17 survive the development process, 8 actually reach the...

The Marketing Process

The strategic plan defines the company's overall mission and objectives. Within each business unit, marketing plays i role in helping to accomplish the overall strategic objectives. Marketing's role and activities in the organization are shown in Figure 3.6, which summarizes die marketing process and the forces influencing marketing strategy. marketing process The process of 1 analyzing marketing opportunities 2 selecting target markets f,3 developing tlie marketing mix and 4 managing the...

Customer Value Analysis The Key to Competitive Advantage

In analyzing competitors and searching for competitive advantage, one of the most important marketing tools is customer value analysis. The aim of a customer value analysis is to determine the benefits that target customers value and how they rate the relative value of various competitors' offers. The main steps in customer value analysis are as follows 1. Identify the chief attributes that customers value. Various people in the company may have different ideas on what customers value. Thus the...

Colgate One Squeeze Too Many

You PROBABLY KNOW ABOUT COLGATE toothpaste - perhaps you have even used it. But what would you think of Colgate aspirin or Colgate antacid Would you buy Colgate laxatives or Colgate dandruff shampoo That is exactly what Colgate-Palmolive would like to know. Colgate wants to investigate the possibility of entering the over-the-counter OTC dnigs market. Can it use its Colgate brand name, developed in the oral-care products market, in the OTC healthcare market Why does the OTC market interest...

Setting Sales Promotion Objectives

Sales promotion objectives vary widely. Let us take consumer promotions first. Sellers may use consumer promotions to (1) increase short-term sales (2) help build long-term market share (3) entice consumers to try a new product (4) lure consumers away from competitors' products (5) encourage consumers to load up' on a mature product or (6) hold and rew.ard loyal customers. Objectives for trade promotions include (1) moti vat ing retailers to carry new items and more inventory (2) inducing them...

Test Marketing

If the product passes functional and consumer tests, the next step is test marketing, the stage at which the product and marketing programme are introduced into more realistic market settings. Test marketing gives the marketer experience with marketing the product before going to the great expense of full introduction. It lets the company test the product and its entire marketing programme - positioning strategy, advertising, test marketing The stage of new-product development where the product...

Product Mix Decisions

Some companies may offer, not one, but several lines of products which form a product mix or product assortment. For example, a cosmetics firm may have four main product lines in its product mix cosmetics, jewellery, fashions and household items. Each product line may consist of a range of items or sublines. Take cosmetics. This could be broken down into several sublines - lipstick, powder, nail varnish, eye-shadows and so on. Each subline may have many individual items. For example,...

Defining Customer Value and Satisfaction

More than 35 years ago, Peter Drueker observed that a company's first task is co create customers'. However, creating customers can be a difficult task. Todays customers face a vast array of product and brand choices, prices and suppliers. The company must answer a key question How do customers make their choices The answer is that customers choose the marketing offer that gives them the most value. Customers are value-maximizers, within the bounds of search costs and limited knowledge,...

Le Shuttle Eurostar and the Rest

The Channel Tunnel about as welcome to cross-channel ferry operators as Henry Ford was to carriage makers. In July 1994 Stena Sealink, the Swedish ferry company, was waiting for the outcome of a battle caused by the opening of the Channel Tunnel between Folkestone and Calais. Although the tunnel carried only four Eurostar trains a day in each direction between London and Paris, cross-channel ferry prices had already dropped to 20 per cent of 1993 levels. On some routes the competition was...

Integrated Direct Marketing

Integrated direct marketing Direct marketing campaigns that use multiple vehicles and multiple stages Co improve response rates and profits. Although direct marketing and online marketing have boomed in recent years, many companies still relegate them to minor roles in their marketing and promotion mixes. Many direct marketers use only a 'one-shot' effort to reach and sell to a prospect, or a single vehicle in multiple stages to trigger purchases. For example, a magazine publisher might send a...

Product Life Cycle Strategies

After launching the new product, management wants the product to enjoy .along and healthy life. Although it does not expect the product to sell for ever, the Sales and profits over the product's fife from inception to demise company wants to earn a decent profit to cover all the effort and risk that went into launching it. Management is aware that each product will have a life cycle, although the exact shape and length is not known in advance. Figure 14.2 shows a typical product life cycle PLC...

Customer Databases arid Direct Marketing

Table 22.1 lists the main differences between mass marketing and so-called one-to-one marketing.' Companies that know about individual customer needs and characteristics can customize their offers, messages, delivery modes and payment methods to maximize customer value and satisfaction. Today's companies have a very powerful tool for accessing the names, addresses, preferences and other pertinent information about individual customers and prospects the customer database. customer database An...

Marketing Strategies for Service Firms

Internal marketing Marketing by a service firm to train and effectively motivate its customer-contact employees and all the supporting service people to teorfe as a team to provide customer satisfaction. interactive marketing Marketing by a service firm that recognizes that perceived service quality depends heavily on the quality of buyer-seller interaction. Until recently, service firms lagged behind manufacturing firms in their use of marketing. Many service businesses are small shoe repair...

Cost Based Pricing t Cost Plus Pricing

The simplest pricing method is cost-plus pricing - adding a standard mark-up to the cost of the product. Construction companies, for example, submit job bids by estimating the total project cost and adding a standard mark-up for profit. Lawyers, accountants and other professionals typically price by adding a standard mark-up to their costs, Some sellers tell their customers they will charge cost plus a specified mark-up for example, aerospace companies price this way to the government....

Preview Case British Home Stores

BRITISH HOME STORES BHS , THE retailer which is part of the United Kingdom's Storehouse Group, recently embarked on a eampaign to revamp its staid image. BHS has long been noted for its good quality and value-for-money range of clothing, household furnishings and appliances, and food. This long-established institution has been a big player in Britisli high streets. The problem, however, is that in the face of increasing high-street competi tion and retailing innovations in the 1990s, the stores...

Personal Selling and Sales Management

After reading this chapter, you should be able to Discuss the ro e of a company's salespeople in creating value for customers. Identify the six main Kales force management steps. Explain how companies set sales force strategy and structure. Explain how companies recruit, select and train salespeople. Describe how companies compensate and supervise salespeople and how they evaluate their effectiveness. Discuss the personal yelling process. IN EARLY 1993, IBM's BOARD of directors decided that the...

Satisfying Human Needs

After reading this chapter, you should he able to Define marketing and discuss its core concepts. Define marketing management and examine how marketers manage demand and build profitable customer relationships. Compare the five marketing management philosophies, and express the basic ideas of demand management and the creation of customer value and satisfaction, Analyse the key marketing challenges facing marketers heading into the next century THE 'SWOOSH' - IT'S EVERYWHERE JUST for fun, try...

The Benefits of Direct Marketing

Direct marketing benefits customers in many ways. First, home shopping is convenient and hassle-free. It saves time and introduces consumers to a larger selection of merchandise. They can do comparative shopping by browsing through mail catalogues and online shopping services, then order products for themselves or others. Industrial customers ean learn about available products and services without waiting for and tying up time with salespeople. Direct marketers also benefit. They can buy...

Important Public Relations Tools

One essential tool is news. PR professionals find or create favourable news about the company and its products or people. Sometimes news stories occur naturally. At other times, the PR person can suggest events or activities that would create news. Speeches also create product and company publicity. Increasingly, company executives must field questions from the media or give talks at trade associations or sales meetings. These events can either build or hurt the...

Choosing Public Relations Messages and Vehicles

The organization next selects its major public relations message themes and the PR tools it will use. Message themes should be guided by the organization's overall marketing and communications strategics. PR is an important part of the organization's overall integrated marketing communications programme, so the public relations messages should be carefully integrated with the organization's advertising, personal selling, direct marketing and other communications. In some cases the choice of PR...

Evaluation of Alternatives

We have seen how the consumer uses information to arrive at a set of final brand choices. How does the consumer choose among the alternative brands The marketer needs to know about alternative evaluation - that is, how the consumer processes information to arrive at brand choices. Unfortunately, consumers do not use a simple and single evaluation process in all buying situations. Instead, several evaluation processes are at work. Certain basic concepts help explain consumer evaluation...

Consumer Behaviour Across International Borders

Understanding consumer behaviour is difficult enough for companies marketing in a single country. For companies operating in many countries, however, understanding and serving the needs of consumers is daunting. Although consumers in different countries may have some things in common, their values, attitudes, and behaviours often vary greatly. International marketers must understand such differences and adjust their products and marketing programmes accordingly. Sometimes the differences are...

Product Line Length Decisions

Product line managers have to decide on product line length. Product line length is influenced by company objectives. Companies that want to be positioned as full-line companies, or that are seeking high market share and market growth, usually carry longer lines. Companies that are keen on high short-term profitability generally enrry shorter lines consisting of selected items. Over time, product line managers tend to add new products either to use up excess manufacturing capacity, or because...

The Business Portfolio

The business portfolio is the collection of businesses and products that make up the company. It is a link between the overall strategy of a company and those of its parts. The best business portfolio is the one that fits the company's strengths and weaknesses to opportunities in the environment. The company must analyze its current business portfolio and decide which businesses should receive more, less or no investment, and 2 develop growth strategies for adding IKW products or businesses to...

Behavioural Segmentation

Behavioural segmentation divides buyers into groups based on their knowledge, attitudes, uses or responses to a product. Many marketers believe that behaviour variables are the best starting point for building market segments. OCCASIONS. Buyers can be grouped according to occasions when they get the idea to buy, make their purchase or use the purchased item. Occasion segmentation can help firms build up product usage. For example, most people drink orange juice at breakfast, but orange growers...

Persistence of Cultural Values

People in a given society hold many beliefs and values. Their core beliefs and values have a high degree of persistence. For example, most of us believe in working, getting married, giving to charity and being honest. These beliefs shape more specific attitudes and behaviours found in everyday life. Core beliefs and values are passed on from parents to children and are reinforced by schools, religious groups, business and government. Secondary beliefs and values are more open to change....

Relationship Marketing

Relationship marketing involves creating, maintaining and enhancing strong relationships with customers and other stakeholders. Increasingly, marketing is moving away from a focus on individual transactions and towards a focus on building value-laden relationships and marketing networks. Relationship relations hip marketing The process ofcreafing, maintaining and enhancing strong, vatue-laden relationships -with customers and other stakeholders. Airbus Industrie's programme shows relationships...

Sale Force Structure

Sales force strategy influences the structure of the sales force. The sales force structure decision is simple if the company sells only one product line to one industry with customers in many locations. In that case the company would use a territorial sales force structure. If the company sells many products to many types of customer, it might need either a product sales force structure or a customer sales force structure , or a combination of the two. territorial sales force structure A sales...

Supervising Salespeople

New salespeople need more than a territory, compensation and training they need superuixiim. Through supervision, the company directs and motivates the sales force to do a better job. To what extent should sales management be involved in helping salespeople manage their territories It depends on everything from the company's size to the experience of its sales force. Consequently, companies vary widely in how closely they supervise their salespeople. Furthermore, what works for one company may...

Creating an Electronic Storefront

In opening an electronic storefront, a company has,two choices it can buy space on a commercial online service or it can open its own Web site. Buying a location on a commercial online service involves either renting storage space on the online service's computer or establishing a link from the company's own computer to (he online service's shopping mall. A retailer, for example, can link to America Online, CompuServe and Prodigy, gaining access to the millions of consumers who subscribe to...

Planning Primary Data Collection Good decisions require good

Just as researchers must carefully evaluate the quality of secondary information they obtain, they must also take great care in collecting primary data to ensure that they provide marketing decision makers with relevant, accurate, current and unbiased information. This could be qualitative research that measures a small sample of customers' views, or quantitative research that provides statistics from a large sample of consumers. Table 8.2 shows that designing a plan for primary data...

The Promise and Challenges of Online Marketing

Online marketing offers great promise for the future. Its most ardent supporters envision a time when the Internet and electronic commerce will replace magazines, newspapers and even stores as sources for information and buying. Yet despite all the hype and promise, online marketing may be years away from realizing its full potential. And even then, it is unlikely to fulfil such sweeping predictions. Instead, eventually, online marketing will become another important tactical tool, much like...

Value Satisfaction and Quality

Consumers usually face a broad array of products and services that might satisfy a given need. How do they choose among these many products Consumers make buying choices based on their perceptions of the value that various products and sendees deliver. The guiding concept is customer value. Customer value is the difference between the values the customer gains from owning and using a product and the costs of obtaining the product. For example, Federal Express customers gain a number of...

Procter Gamble How Many is Too Many

PROCTER amp GAMBIA is THE market leader in the United States and the European detergent markets. In the United Ktat.es it markets nine brands of laundry detergent Tide, Cheer, Gain, Dasb, Bold 3, Dreft, Ivory Snow, Oxydol and Era . The cultural and competitive diversity in Europe means that even more brands, such as Ariel, are used to serve that market. Why so many Besides its many detergents Procter amp Gamble sells eight brands of hand soap Zest, Coast, Ivory, Safeguard. Camay, Oil of Ulay,...

Brand Strategy

A company must define its overall branding strategy, which affects all of its products. This strategy will also guide the branding of new products. A company has four choices when it comes to brand strategy see Figure 1,3.4 . It can introduce line extensions existing brand names extended to new forms, sizes and flavours of an existing product category , brand extensions existing brand names extended to new product categories , multibrands new brand names introduces in the same product category...

Balancing Customer and Competitor Orientations

A company whose moves arc mainly based on competitors' actions and reactions it spends most of its time tracking competitors'moves and market shares and trying to find strategies to counter them. A company that focuses on customer developments in designing irs marketing strategies ami on delivering superior value to its target customers. We have stressed the importance of n company watching its competitors closely, Whether a company is a market leader, challenger, follower or nicher, it must...

Brand Sponsor

A manufacturer has four sponsorship options. The product may be launched as a manufacturer's brand, as when Lever Brothers, Nestle and IBM sell their output under their own manufacturer's brand names. Or the manufacturer may sell to intermediaries that give it a private brand also called retailer brand, distributor brand or afore brand . For example, Jaka Foods, a Danish company, manufactures tinned food products notably ham for sale to own-label retailers like Marks amp Spencer. Cott, a...

Estimating Competitors Reaction Patterns

A competitor's objectives, strategies and strengths and weaknesses explain ils likely actions, and its reactions to moves such as a price cut, a promotion increase or a new product introduction. In addition, each competitor has a certain philosophy of doing business, a certain internal culture and guiding beliefs. Marketing managers need i deep understanding of a given competitor's mentality if they want to anticipate how that competitor will act or react. Each competitor reacts differently....

What is a Product

A pair of Adidas trainers, a Volvo truck, a Nokia mobile telephone, a Vidal Sassoon haircut, an Oasis concert, a EuroDisney vacation, advice from a solicitor and tax preparation services are all products. We define a product as anything that is offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need. Products include more than just tangible goods. Broadly defined, products include physical objects, services, persons, places, organizations, ideas...

Designing International Distribution Channels

International marketers face many additional complexities in designing their channels. Each country has its own unique distribution system that has evolved over time and changes very slowly. These channel systems can vary widely from country to country. The relative significance of different members or elements of a channel system - for example, the role of wholesalers versus retailers or shopkeepers - can vary significantly across countries. For instance, in food and drinks retailing, contract...

Why arc Marketing Intermediaries Used

Why do producers give some of the selling job to intermediaries V After all, doing so means giving up some control over how and to whom the products are sold. The use of intermediaries results from their greater efficiency in making goods available to target markets. Through their contacts, experience, specialization and scale of operation, intermediaries usually offer the firm more than it can achieve on its own. Figure 21.1 shows how using intermediaries can provide economies. Part A shows...

Procter Gamble Going Global in Cosmetics

PROCTER & GAMBLE, THE MULTINATIONAL company- known for its household products Daz, Fairy, etc., has decided to expand its cosmetics business. The question is can the firm that has got us to Pamper-away our babies wetness, Crest-away our cavities and Tide-away the grime in our clothes now get us to make up our faces P & G's aggressive chairman, Edwin L. Artzt, thinks it can. The company tiptoed into the skin-care business in 1985 when it bought the Oil of Ulay skin-care line. Under Artzt's...

Initiating Price Changes

In some cases, the company may find it desirable to initiate cither a price cut or a price increase. In both cases, it must anticipate possible buyer and competitor reactions. Several situations may lead a firm to consider cutting its price. One such circumstance is excess capacity. In this case, the firm needs more business and cannot get it through increased sales effort, product improvement or other measures. It may drop its follow-the-leader pricing - charging about the same price as its leading competitor - and aggressively cut prices to boost sales. But as the airline, construction equipment and other industries have learned in recent years, cutting prices in an industry loaded with excess capacity may lead to price wars as competitors try to hold on to market share. Another situation leading to price changes is falling market share in the face of strong price competition. Several American industries - cars, consumer electronics, cameras, watches and steel, for example - lost...

Market Skimming PricingMa

Many companies that invent new products initially set high prices to 'skim' revenues layer by layer from the market. Intel is a prime user of this strategy, called market-skimming pricing. When Intel first introduces a new computer chip, it charges the highest price it can, given, the benefits of the new chip over competing chips. It sets a price that makes it just worthwhile for some segments of the market to adopt computers containing the chip. As initial sales slow down and as competitors...

Expanding the Total Market

The leading firm normally gains the most when the total market expands. If people take more pictures, then as the market leader, Kodak stands to gain the most. If Kodak can persuade more people to take pictures, or to take pictures on more occasions, or to take more pictures on each occasion, it will benefit greatly. Generally, the market leader should look for new users, new uses and more usage ofits products. NEW USERS. Every product class can attract buyers who are still unaware of the...

Direct Mail Marketing

Direct-mail marketing involves mailings of letters, ads, samples, fold-outs and other 'salespeople on wings' sent to prospects on mailing lists. The mailing lists direct-mail marketing Direct marketing through single mailings that include letters, ads, samples, fold-outs, and other 'sales-people on cozies' sent to prospects on mailing lists. Door-to-door retailing selling door to door, office to office, or at tome-safes parties. are developed from eustomer lists or obtained from mailing-list...

View of the Communication Process

Too often, marketing communications focus on overcoming immediate awareness, image or preference problems in the target market. This approach to communication has limitations It is too short term and costly, and most messages of this nature fall on deaf ears. Today, marketers are moving towards viewing communications as the management of the customer buying process over time - that is, from pre-selling through selling, to consuming and post-consumption stages. Eiecause customers differ, the...

Discussing the Issues Dup

Describe the channel service needs of a consumers buying a emnpuccr for home use b retailers buying computers to resell to Individual eonsumers c purchasing agents buying computers for company use. 'hat ehannels would computer manufacturer design to satisfy these different needs 2. What are the advantages accruing to firms that have developed vertical marketing systems Contrast the advantages and limitations of the three major types of vertical marketing system - corporate, contractual and...

Direct Response Television Marketing

The marketing of produces or services via televisian comm arciuls and programmes which involve a responsive clement, typically ihe usf of a freephone number that allows consumers to phone for more information or to plac-e an order for the goods advertised. Direct-response television marketing (DRTV) takes one of two main forms. The first is direct-response advertising. Direct marketers air television spots, 30-60 seconds long, that persuasively describe a product or service and give customers a...

ACORN and Related Classificalorv Systems

As a direct challenge to the socioeconomic classification system, the ACORN A Classification Of Residential Neighbourhoods system was developed by the CACI Market Analysis Group.1 The system is based on population census data and classifies residential neighbourhoods into 54 types within 17 groups and 6 main categories. The groupings were derived through a clustering of responses to census data required by law on a regular basis. The groupings reflect neighbourhoods with similar...

Anton Hartmann Qlesen

In 1983 Bang & Olufsen, a .small Danish manufacturer of stylish consumer electronics products, had to make a double-or-quits decision. Should it try to penetrate the German market further or get out altogether If it was to stay in, how was it to gain the market share it needed The company's German operation, based in Hamburg, had so far been unable to make much impression on the huge German market. Over the last five years, sales had grown by less than 3 per cent and the financial results...

Individual Differences in Innovativcncss

People differ greatly in their readiness to try new products. In each product area, there are 'consumption pioneers' and early adopters. Other individuals adopt new products much later This has led to a classification of people into the adopter categories shown in Figure 6.8. After a slow start, an increasing number of people adopt the new product. The number of adopters reaches a peak and then drops off as fewer non-adopters remain. Innovators arc defined as the first 2.5 per cent of the...

The Nature of Personal Selling

People hold many stereotypes of salespeople. 'Salesman' may bring to mind the image of Arthur Miller's pitiable Willy Loman in Death of a Salesman or .Meredith Willson's cigar-smoking, back-slapping, joke-telling Harold I Jill in The .Music Man. Both examples depict salespeople as loners travelling their territories trying to foist their wares on unsuspecting or unwilling buyers. However, modern salespeople are a far cry from these unfortunate stereotypes. Today, most salespeople are...

Evaluating Public Relations Resulls

Public relations results are difficult to measure because PR is used with other promotion tools and its impact is often indirect. If PR is used before other tools come into play, its contribution is easier to evaluate. The easiest measure of publicity effectiveness is the number of exposures in the media.

Value Delivery System

In its search for competitive advantage, the firm needs to look beyond its own value chain, into the value chains of its suppliers, distributors and, ultimately, customers. More companies today are 'partnering' with the other members of the supply chain to improve the performance of the customer value deHvery system. For example Campbell Soup operates a qualified supplier programme, in which it sets high standards for suppliers and chooses only the few suppliers that are willing to meet its...

Market Follower Strategics

Not all runner-up companies will challenge the market leader. The effort to draw away the leader's customers is never taken lightly by the leader. If the challenger's lure is lower prices, improved service or additional product features, the leader can quickly match these to diffuse the attack. The leader probably has more staying power in an all-out battle. A hard fight might leave both firms worse off and this means the challenger must think twice before attacking. Many firms therefore prefer...

Two Way Stretch

Companies in the middle range of the market may decide to stretch their lines in both directions. Sony did this to hold off copycat competitors of its Walkman line of personal tape players. Sony introduced its first Walkman in the middle of the market. As imitative competitors moved in with lower-priced models, Sony stretched downwards. At the same time, in order to add lustre to its lower-priced models and to attract more affluent consumers keen to trade up to a better model, Sony stretched...

Participating in Forums Newsgroups and IVcb Communities

Companies may decide to participate in or sponsor Internet forums, newsgroups and bulletin boards that appeal to specific special interest groups. Such activities may be organized for commercial or non-commercial purposes. Forums are discussion groups located on commercial online services. A forum may operate a library, a 'chat room' for real-time message exchanges and even a classified ad directory. For example, America Online boasts some 14,000 chat rooms, which account for a third of its...

Product Attributes

Developing a product involves defining the benefits that the product will offer. These benefits are communicated and delivered by tangible product attributes, such as quality, features and design. Decisions about these attributes are particularly important as they greatly affect consumer reactions to a product. We will now discuss the issues involved in each decision. product quality The. ability of a product to perform its functions it includes the product's overall durability, reliability,...

Shifts in Secondary Cultural Values

Although core values are fairly persistent, cultural swings do take place. Consider the impact of popular music groups, movie personalities and other celebrities on young people's hair styling, clothing and sexual norms. Marketers want to predict cultural shifts in order to spot new opportunities or threats. Such information helps marketers cater to trends with appropriate products and communication appeals. The principal cultural values of a society are expressed in people's views of...

Evaluating and Controlling Channel Members

The producer must regularly monitor the channel's performance against agreed targets such as sales quotas, average inventory levels, customer delivery time, treatment of damaged and lost goods, co-operation in company promotion and training programmes, and services to the customer. The company should recognize and reward intermediaries that arc performing well. Those which are under-performing should he helped, remedial actions should he taken or, as a last resort, the intermediary should he...