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Posáfioning: Thfl First SUV tátii Ant BolLCvSf ::: iinr tjfli A Volvo ad foi-..:;:!s ihe cünn|Mrty"s oenirai lierdJt,.sajíety safetV is a major concern, Volvo, therefore, positions its car as [tic safest a customer can buy. Cumpames do best when they chnose their target markeL(s) carefully and prepare tailored marketing programs,

OFFERINGS AND BRANDS Companies address needs by putting forth a value proposition. a set of benefits they offer to customers to satisfy their needs. The intangible value proposition is iriacle physical by an offering, which tan be a combination of products, services, information, and experiences.

A brand is an offering from a known source. A brand name such as McDonalds carries many associations in the minds of people: hamburgers. Fun, children, fast food, convenience, and golden arches. These associations make up the brand image. All companies strive to Imiltl brand strength—that is, a strong, favorable, and unique brand Image.

VALUE AND SATISFACTION The offering will be successful if it delivers value and satisfaction to the target buyer, The buyer chooses between different offerings on the basis of which is perceived to deliver the most value. Mr/ríe reflects the perceived tangible and intangible benefits and costs to customers. Value can be seen as primarily a combination of quality, service, and price (qsp), called the "customer value triad." Value increases with quality and service and decreases with price, although other factors can also play an important role.

Value is a central marketing concept. Marketing can he seen as the identification, creation, Communication, delivery, and monitoring of custouter value. Satisfaction reflects a

36 PAflT 1

UNDERSTANpINC; MARKETING MANAGEMENT

person's comparative judgments resulting from a produces perceived perfofinance [or outcome) in relatiQit Jo his or her expectations. If the performance falls short uf expectations, the customer is dissatisfied and disappointed. If the performance matches the expectations, the customer is sat is lied, [f the performance exceeds expectations, the customer is highly satisfied or delighted.

., -. r ■ . ..: To reach a target market, the marketer uses three kinds of marketing channels, CptnmiinicatiQii channelsdeliver and receive messages from target hovers, antl in elude news [jape rs, magazine1., radio, television, mail, telephone, billboards, posters. Iliers, CDs. audiotapes, and the Internet. Beyond these, communications are conveyed by facial expressions and clothing, the look of retail stores, and many other media. Marketers arc increasingly adding dialogue channels (e-mail and toll-free number*) to counterbalance the more normal monologue channels (such as ads).

The marketer uses distribution channels display, sell, or deliver the physical product or service(s) tit the buyer or user. They include distributors, wholesalers, retailers, and agents.

The marketer also uses twice channels to carry out transactions with potential buyers, Service channels include warehouses, transportation companies, banks, and insurance companies that facilitate transactions. Marketers clearly face a design problem in choosing the best nrr* of communication. distribution, and service channel* for their offerings.

! '■■: Whereas marketing channels conned the marketer to the target buyers, the supply chain describes a longer Channel stretching from raw materials to components to final products that are carried to final buyers. The sop ply chain for women's purses starts with hides, and moves through tanning operations, cutting operations, manu facluring, and the marketing channels bringing products to customers, ihe supply chain represents a value delivery sy.siem. f-ach company captures only a certify! percentage of the total value generated by the supply chain. When a company acquires competitors or moves upstream or downstream, its aim is to capture a higher percentage of supply chain value.

Competition includes till the actual and potential rival offerings and substitutes that a buyer might consider, Suppose an automobile company i-. planning [<> buy steel for its cars, [ here are several possible levels of competitors. The ear manufacturer can buy steel from IJ.lv Steel or other integrated steel mills in ihe United Stales (e.g., from Bothlehem) or abroad {e.g.. from Japan or Korea); or buy Steel from a mini-mill such a^ Nucor :it a cost savings: or buy aluminum for certain paltsofthe ear to lighten the car's weight (e.g., from Alcoa)1; or buy engineered plasties for bumpers instead of steel (e.g., from OH Plastics). Clearly, U.K. Steel would be thinking loo narrowly of competition If it thought only of other Integrated steel companies. In fact, U.S. Steel is more likely to be hurt in ihe long tun by substitute products than by its immediate steel company rivals. It must also consider whether tu make substitute materials or stick only to those applications where steel offers superior performance,

■ (inmpelitinn represents only one force in the environment in which the marketer operates, Ihe marketing environment consists "fihe ta^k environment and die broad environment.

the taskenviraitnieHi includes the immediate actors involved in producing, distributing, and promoting the offering. The main actors are the company, suppliers, distributors, dealers, and the target customers. Included in the supplier group are material suppliers and service suppliers such as marketing research agencies, ¡advertising agencies, banking and insurance companies, transportation companies, and telecommunications companies. Included with distributors and dealer^ are agents. brokers, manufacturer representatives, and others who facilitate finding and selling to customers.

T he Irnyid eiii'iraitittefit consists of six components; demographic environment, economic environment, physical environment, technological environment, political-legal envi-ronniem. ami social-cultural environment. These environments contain forces that can have a major impact on the actors in the task environment. Market actors must pay close attention to the trends and developments in these environments and make timely adjustments to their marketing si rallies.

DEFINING MARKETING FOR Z15T CENTURY chapter 1

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