Stage 4 Supplier Search

The buyer now tries to identify the most appropriate suppliers, by examining trade directories, doing a computer search, phoning other firms for recommendations, scanning trade advertisements, and attending trade shows. However, these days the most likely place to look is on the Internet. This levels the playing field, because smaller suppliers have the same advantages as larger ones and can be listed in the same on-line catalogs for a nominal fee. One of the more comprehensive, global on-line...

Customer Databases and Direct Marketing

More marketers are harnessing information technology to build sophisticated customer databases and shift from mass marketing to highly targeted, one-to-one marketing (see Table 6.4).4 As discussed in Chapter 4, a customer database is an organized collection of comprehensive data about individual customers or prospects that is current, accessible, and actionable for such marketing purposes as lead generation, lead qualification, sale of a product or service, or maintenance of customer...

Accumulated Production

Suppose TI runs a plant that produces 3,000 calculators per day. As TI gains experience producing calculators, its methods improve. Workers learn shortcuts, materials flow more smoothly, and procurement costs fall. The result, as Figure 4-10 shows, is that average cost falls with accumulated production experience. Thus, the average cost of producing the first 100,000 hand calculators is 10 per calculator. When the company has produced the first 200,000 calculators, the average cost has fallen...

Eciding How To Enter The Market

Once a company decides to target a particular country, it has to determine the best mode of entry. Its broad choices are indirect exporting, direct exporting, licensing, joint ventures, and direct investment. These five market-entry strategies are shown in Figure 6-2. Each succeeding strategy involves more commitment, risk, control, and profit potential. The normal way to get involved in a foreign market is through export. Occasional exporting is a passive level of involvement in which the...

Customized Customer Loyalty By Robert Duboff And Lori Sherer

For estimates of the cost of sales calls, see Sales Force Compensation (Chicago Dartnell's 27th Survey, 1992), and Sales & Marketing Management's 1993 sales manager's budget planner (June 28, 1993), pp. 3-75. 2. For more on sales force automation issues, see Doug Bartholomew, Hard Sell Industry Week, March 1, 1999, www.industryweek.com James LaVoy, So, Did You Get What You Paid For Sales & Field Force Automation, February 1999, pp. 48-54. 3. Adapted from Robert N. McMurry, The Mystique of...

Eciding On The Marketing Program

International companies must decide how much to adapt their marketing strategy to local conditions. At one extreme are companies that use a globally standardized marketing mix worldwide. Standardization of the product, advertising, and distribution channels promises the lowest costs. At the other extreme is an adapted marketing mix, where the producer adjusts the marketing-mix elements to each target market. The Marketing Insight box, Global Standardization or Adaptation discusses the main...

Idea Generation

The marketing concept holds that customer needs and wants are the logical place to start the search for new product ideas. Hippel has shown that the highest percentage of ideas for new industrial products originates with customers.6 Many of the best ideas come from asking customers to describe their problems with current products. For instance, in an attempt to grab a foothold in steel wool soap pads, 3M organized consumer focus groups and asked about problems with these products. The most...

Relationship Marketing

The principles of personal selling and negotiation thus far described are transaction-oriented because their purpose is to close a specific sale. However, in many cases, the company is not seeking an immediate sale but rather to build a long-term supplier-customer relationship by demonstrating that it has the capabilities to serve the account's needs in a superior way over the long run. More companies today are therefore emphasizing relationship marketing rather than transaction marketing, as...

Formulating a Negotiation Strategy

Successful salespeople prepare a strategic plan before meeting their buyers and making tactical decisions during negotiation sessions. A negotiation strategy is a commitment to an overall approach that has a good chance of achieving the negotiator's objectives. Some negotiators pursue a hard strategy, whereas others maintain that a soft strategy yields more favorable results. Fisher and Ury propose a strategy of principled negotiation. In this strategy, the parties (1) actively listen to each...

The Benefits of Direct Marketing

Direct marketing (on-line and off-) benefits customers in many ways. Shopping from home is fun, convenient, and hassle-free it saves time and introduces consumers to a larger selection of merchandise. Shoppers can compare products and prices easily by browsing through mail catalogs and on-line shopping services, then order goods for themselves or others. Business customers also benefit by learning about available products and services without tying up time meeting with salespeople. Sellers gain...

The Development Ideas

The new-product development process starts with the search for ideas. Top managers should define the product and market scope and the new product's objectives. They should state how much effort should be devoted to developing breakthrough products, modifying existing products, and copying competitors' products. New-product ideas can come from many sources customers, scientists, competitors, employees, channel members, and top management. The marketing concept holds that customer needs and wants...

Communication Effect Research

Communication-effect research seeks to determine whether an ad is communicating effectively. Called copy testing, it can be done before an ad is put into media and after it is printed or broadcast. There are three major methods of advertising pretesting. The direct rating method asks consumers to rate alternative ads. These ratings are used to evaluate an ad's attention, read-through, cognitive, affective, and behavior strengths (Figure 5-13). Although an imperfect measure of actual impact, a...

The Growth And Benefits Of Direct Marketing

According to the Direct Marketing Association (DMA), direct marketing is defined as an interactive marketing system that uses one or more advertising media to effect a measurable response and or transaction at any location. This definition emphasizes a measurable response, typically a customer order. Thus, direct marketing is sometimes called direct-order marketing. Many direct marketers see direct marketing as playing a broader role these days, that of building a long-term relationship with...

Growth of Direct Marketing and Electronic Business

Sales produced through traditional direct-marketing channels (catalogs, direct mail, and telemarketing) have been growing rapidly. Whereas U.S. retail sales grow around 3 percent annually, catalog and direct-mail sales are growing about 7 percent annually. These sales include sales to consumers (53 percent), business-to-business sales (27 percent), and fundraising by charitable institutions (20 percent). Annual catalog and direct-mail sales are estimated at over 318 billion, with per capita...

The Promise and Challenges of OnLine Marketing

On-line marketing is bringing profound changes to various sectors of the economy. Consumers' ability to order direct threatens to seriously hurt certain groups, particularly travel agents, stockbrokers, insurance salespeople, car dealers, and bookstore owners. These middlemen will be disintermediated by on-line services.28 At the same time, some reintermediation will take place in the form of new on-line intermediaries, called infomediaries, which help consumers shop more easily and obtain...

The Growing Use of Integrated Direct Marketing

Companies are increasingly recognizing the importance of integrating their marketing communications. Some companies are appointing a chief communications officer (CCO) to supervise specialists in advertising, sales promotion, public relations, and direct on-line marketing. The aim is to establish the right overall communication budget and the right allocation of funds to each communication tool. This movement has been variously called integrated marketing communications (IMC), integrated direct...

Catalog Marketing

Catalog marketing occurs when companies mail product catalogs (full-line merchandise catalogs, specialty consumer catalogs, or business catalogs in print, on CD, or on-line) to selected mail or electronic addressees. The Direct Marketing Association estimates there are currently up to 10,000 mail-order catalogs of all kinds. Catalog marketing has gotten a big boost from the Internet about three-quarters of catalog companies also do business on-line. The Lands' End Web site (www.landsend.com),...

Public and Ethical Issues in Direct Marketing

Although direct marketers and their customers usually enjoy mutually rewarding relationships, a darker side occasionally emerges. Key public and ethical issues include Irritation Many people find the increasing number of hard-sell, direct-marketing solicitations by phone, television, and e-mail to be a nuisance. Unfairness Some direct marketers take advantage of impulsive or less sophisticated buyers. Television shopping channels and infomerciab extended-length, direct-response commercials that...

Eciding On The Marketing Organization

Companies manage their international marketing activities in three ways through export departments, international divisions, or a global organization. A firm normally gets into international marketing by simply shipping out its goods. If its international sales expand, the company organizes an export department consisting of a sales manager and a few assistants. As sales increase further, the export department is expanded to include various marketing services so that the company can go after...

Number of Intermediaries

In deciding how many intermediaries to use, successful companies use one of three strategies Exclusive distribution means severely limiting the number of intermediaries. Firms such as automakers use this approach when they want to maintain control over the service level and service outputs offered by the resellers. Often it involves exclusive dealing arrangements, in which the resellers agree not to carry competing brands. Selective distribution involves the use of more than a few but less than...

Consumer Goods Market Testing

In testing consumer products, the company seeks to estimate four variables trial, first repeat purchase, adoption, and purchase frequency. The company hopes to find all of these variables at high levels. In some cases, however, it will find many consumers trying the product but few rebuying it. Or it might find high permanent adoption but low purchase frequency (as with gourmet frozen foods). The major methods of consumer-goods market testing, from the least to the most costly, are Sales-wave...

Composite of Sales Force Opinions

Where buyer interviewing is impractical, the company may ask its sales representatives to estimate their future sales. Each sales representative estimates how much each current and prospective customer will buy of each of the company's products. Few companies use their sales force's estimates without making some adjustments. Sales representatives might be pessimistic or optimistic, or they might go from one extreme to another because of a recent setback or success. Furthermore, they are often...

Brand Sponsor Decision

A manufacturer has several options with respect to brand sponsorship. The product may be launched as a manufacturer brand (sometimes called a national brand), a distributor brand (also called reseller, store, house, or private brand), or a licensed brand name. Another alternative is for the manufacturer to produce some output under its own name and some under reseller labels. Kellogg, John Deere, and IBM sell virtually all of their output under their own brand names, whereas Whirlpool produces...

The Marketing Effectiveness Review

The president of a major industrial-equipment company reviewed the annual business plans of various divisions and found several lacking in marketing substance. He called in the corporate vice president of marketing and said I am not happy with the quality of marketing in our divisions. It is very uneven. I want you to find out which of our divisions are strong, average, and weak in marketing. I want to know if they understand and are practicing customer-oriented marketing. I want a marketing...

Selecting Trade Promotion Tools

Manufacturers use a number of trade-promotion tools (Table 5.10). Surprisingly, a higher proportion of the promotion pie is devoted to trade-promotion tools (46.9 percent) than to consumer promotion (27.9 percent), with media advertising capturing the remaining 25.2 percent. Manufacturers award money to the trade for four reasons 1. To persuade the retailer or wholesaler to carry the brand Shelf space is so scarce that manufacturers often have to offer prices off, allowances, buyback...

Vertical Marketing Systems

One of the most significant recent channel developments is the rise of vertical marketing systems. A conventional marketing channel comprises an independent producer, wholesaler(s), and retailer(s). Each is a separate business seeking to maximize its own profits, even if this goal reduces profit for the system as a whole. No channel member has complete or substantial control over other members. A vertical marketing system (VMS), by contrast, comprises the producer, wholesaler ), and retailer(s)...

To Brand or Not to Brand

The first decision is whether the company should develop a brand name for its product. Branding is such a strong force today that hardly anything goes unbranded, Figure 4-3 An Overview of Branding Decisions Figure 4-3 An Overview of Branding Decisions including salt, oranges, nuts and bolts, and a growing number of fresh food products such as chicken and turkey. In some cases, there has been a return to no branding of certain staple consumer goods and pharmaceuticals. Generics are unbranded,...

Marketing Strategies Decline Stage

The sales of most product forms and brands eventually decline for a number of reasons, including technological advances, shifts in consumer tastes, and increased domestic and foreign competition. All of these factors lead ultimately to overcapacity, increased price cutting, and profit erosion. As sales and profits decline, some firms withdraw from the market. Those remaining may reduce the number of products they offer. They may withdraw from smaller market segments and weaker trade channels,...

Responding to Competitors Price Changes

How should a firm respond to a price cut that is initiated by a competitor In markets characterized by high product homogeneity, the firm should search for ways to enhance its augmented product, but if it cannot find any, it will have to meet the price reduction. If the competitor raises its price in a homogeneous product market, the other firms might not match it, unless the price increase will benefit the industry as a whole. By not matching it, the leader will have to rescind the increase....

Service Sector Channels

The concept of marketing channels is not limited to the distribution of physical goods. Producers of services and ideas also face the problem of making their output available and accessible to target populations. For instance, schools develop educational-dissemination systems and hospitals develop health-delivery systems. These institutions must determine agencies and locations for reaching a population that is spread out over an area. Similarly, many states face the problem of locating branch...

Ethical Choice of Market Targets

Market targeting sometimes generates public controversy.34 The public is concerned when marketers take unfair advantage of vulnerable groups (such as children) or dis-advantaged groups (such as inner-city poor people), or promote potentially harmful products. For example, the cereal industry has been criticized for marketing to children. Critics worry that high-powered appeals presented through the mouths of lovable animated characters will overwhelm children's defenses and lead them to eat too...

Impact of Price on Other Parties

Management must also consider the reactions of other parties to the contemplated price. How will distributors and dealers feel about it Will the sales force be willing to sell at that price How will competitors react Will suppliers raise their prices when they see the company's price Will the government intervene and prevent this price from being charged In the last case, marketers need to know the laws regulating pricing. U.S. legislation outlaws price-fixing, so sellers must set prices...

Motivating Channel Members

The most successful firms view their channel members in the same way they view their end users. This means determining their intermediaries' needs and then tailoring the channel positioning to provide superior value to these intermediaries. To improve intermediaries' performance, the company should provide training, market research, and other capability-building programs. And the company must constantly reinforce that its intermediaries are partners in the joint effort to satisfy customers....

Selecting Channel Members

During the selection process, producers should determine what characteristics distinguish the better intermediaries. They will want to evaluate number of years in business, other lines carried, growth and profit record, solvency, cooperativeness, and reputation. If the intermediaries are sales agents, producers will want to evaluate the number and character of other lines carried and the size and quality of the sales force. If the intermediaries are store or Internet retailers that want...

Organizations Also Vary in Readiness to Adopt Innovations

The creator of a new teaching method would want to identify innovative schools. The producer of a new piece of medical equipment would want to identify innovative hospitals. Adoption is associated with variables in the organization's environment community progressiveness, community income , the organization itself size, profits, pressure to change , and the administrators education level, age, sophistication . Other forces come into play when trying to get a product adopted into organizations...

Step 4 Analyzing Competitors Costs Prices and Offers

Within the range of possible prices determined by market demand and company costs, the firm must take into account its competitors' costs, prices, and possible price reactions. If the firm's offer is similar to a major competitor's offer, then the firm will have to price close to the competitor or lose sales. If the firm's offer is inferior, it will not be able to charge more than the competitor charges. If the firm's offer is superior, it can charge more than does the competitor remembering,...

Message Execution

The message's impact depends not only upon what is said but also on how it is said. Some ads aim for rational positioning and others for emotional positioning. U.S. ads typically present an explicit feature or benefit designed to appeal to the rational mind gets clothes cleaner Brings relief faster. Japanese ads tend to be more indirect and appeal to the emotions An example was Nissan's Infiniti ad, which showed not the car but beautiful scenes from nature aimed at producing an emotional...

Factors Influencing the Adoption Process

As Figure 3-10 shows, people adopt new products at different rates Innovators are the first to adopt something new, while laggards are the last. Rogers defines a person's innovativeness as the degree to which an individual is relatively earlier in adopting new ideas than the other members of his social system. Because people differ in their readiness to try new products, there are consumption pioneers and early adopters for each product. After a slow start, an increasing number of people adopt...

Choosing the Advertising Message

Advertising campaigns vary in their creativity. In the late 1990s, Taco Bell launched a clever television campaign featuring a chihuahua saying, 'Yo Quiero Taco Bell, meaning I want some Taco Bell. The campaign struck a chord with the chain's 18- to 35-year-old customers and spawned an impressive array of chihuahua merchandise such as T-shirts, magnets, and talking dolls. Taco Bell's sales shot up 4.3 percent in the campaign's first year the firm now spends 200 million a year on advertising and...

Conflict Cooperation and Competition

No matter how well channels are designed and managed, there will be some conflict, if for no other reason than the interests of independent business entities do not always coincide. Here we examine three questions What types of conflict arise in channels What causes channel conflict What can be done to resolve conflict situations Vertical channel conflict means conflict between different levels within the same channel. As one example, General Motors has come into conflict with its dealers in...

Idea Screening

New Product Development Stages Marketing

Once the firm has collected a number of new product ideas, the next step is to screen out the weaker ideas, because product-development costs rise substantially with each successive development stage. Most companies require new-product ideas to be described on a standard form that can be reviewed by a new-product committee. The Figure 3-8 The New-Product-Development Decision Process Figure 3-8 The New-Product-Development Decision Process description states the product idea, the target market,...

Step 1 Define the Problem and Research Objectives

Management must not define a problem too broadly or too narrowly. A marketing manager who tells the marketing researcher, Find out everything you can about air travelers' needs, will collect a lot of unnecessary information. Similarly, a marketing manager who says, Find out if enough passengers aboard a B747 flying between the East Coast and West Coast would be willing to pay 25 to make a phone call so that American Airlines would break even on the cost of offering this service, is taking too...

Marketing Strategies For Service Firms

Types Marketing Service Industries

In addition to the traditional four Ps of marketing, service providers must pay attention to three more Ps suggested by Booms and Bitner for services marketing people, physical evidence, and process.10 Because most services are provided by people, the selection, training, and motivation of employees can make a huge difference in customer satisfaction. Ideally, service employees should exhibit competence, a caring attitude, responsiveness, initiative, problem-solving ability, and goodwill....

Brand Strategy Decision

A company has five choices when it comes to brand strategy. The company can introduce line extensions existing brand name extended to new sizes or flavors in the existing product category , brand extensions brand names extended to new-product categories , multibrands new brand names introduced in the same product category , new brands new brand name for a new category product , and co-brands brands bearing two or more well-known brand names . Line Extensions Line extensions introduce additional...

Core Marketing Concepts

Marketing can be further understood by defining the core concepts applied by marketing managers. A marketer can rarely satisfy everyone in a market. Not everyone likes the same soft drink, automobile, college, and movie. Therefore, marketers start with market segmentation. They identify and profile distinct groups of buyers who might prefer or require varying products and marketing mixes. Market segments can be identified by examining demographic, psychographic, and behavioral differences among...

Corporate And Division Strategic Planning

Marketing plays a critical role in corporate strategic planning within successful companies. Market-oriented strategic planning is the managerial process of developing and maintaining a viable fit among the organization's objectives, skills, and resources and its changing market opportunities. The aim of strategic planning is to shape the company's businesses and products so that they yield target profits and growth and keep the company healthy despite any unexpected threats that may arise....

Step 2 Develop the Research Plan

The second stage of marketing research calls for developing the most efficient plan for gathering the needed information. The marketing manager needs to know the cost of the research plan before approving it. Suppose the company estimates that launching the in-flight phone service would yield a long-term profit of 50,000. The manager believes that doing the research would lead to an improved pricing and promotional plan and a long-term profit of 90,000. In this case, the manager should be...

Managing Service Quality

Service Quality Gap Hospital

Another way for a service firm to succeed is by delivering consistently higher-quality service than that of its competitors and by exceeding customers' expectations. These expectations are formed by the firm's past experiences, word of mouth, and advertising. After receiving the service, customers compare the perceived service with the expected service. If the perceived service falls below the expected service, customers lose interest in the provider. If the perceived service meets or exceeds...

Characteristics of Services and Their Marketing Implications

Services have four major characteristics that greatly affect the design of marketing programs intangibility, inseparability, variability, and perishability. Services are intangible. Unlike physical products, they cannot be seen, tasted, felt, heard, or smelled before they are bought. The person who is getting a face lift cannot see the exact results before the purchase, just as the patient in the psychiatrist's office cannot know the exact outcome before treatment. To reduce uncertainty, buyers...

Categories of Service

As the previous examples show, services are often part of a company's total offering in the marketplace. Five categories of an offering's service mix can be distinguished 1. Pure tangible good The offering is a tangible good such as soap no services accompany the product. 2. Tangible good with accompanying services The offering consists of a tangible good accompanied by one or more services. General Motors, for example, offers repairs, maintenance, warranty fulfillment, and other services along...

Market Test Method

Where buyers do not plan their purchases carefully or experts are not available or reliable, a direct market test is desirable. A direct market test is especially desirable in forecasting new-product sales or established product sales in a new distribution channel or territory. 1. Three developments make the need for marketing information greater now than at any time in the past the rise of global marketing, the new emphasis on buyers' wants, and the trend toward nonprice competition. 2. To...

Product Levels

Five Product Levels Competition

Marketers plan their market offering at five levels, as shown in Figure 4-2.1 Each level adds more customer value, and together the five levels constitute a customer value hierarchy. The most fundamental level is the core benefit the fundamental service or benefit that the customer is really buying. A hotel guest is buying rest and sleep the pur- Figure 4-1 Components of the Market Offering chaser of a drill is buying holes. Effective marketers therefore see themselves as providers of product...

Concept Development

We shall illustrate concept development with the following situation A large food processing company gets the idea of producing a powder to add to milk to increase its nutritional value and taste. This is a product idea. But consumers do not buy product ideas they buy product concepts. A product idea can be turned into several concepts. The first question is Who will use this product The powder can be aimed at infants, children, teenagers, young or middle-aged adults, or older adults. Second,...

Steps in the Marketing Process

Demographic Environment Marketing

The marketing process consists of analyzing market opportunities, researching and selecting target markets, designing marketing strategies, planning marketing programs, and organizing, implementing, and controlling the marketing effort. The four steps in the marketing process are 1. Analyzing market opportunities. The marketer's initial task is to identify potential longrun opportunities given the company's market experience and core competencies. To evaluate its various opportunities, assess...

Executive Summary

Before developing their marketing plans, marketers need to use both rigorous scientific procedures and more intuitive methods to study consumer behavior, which is influenced by four factors cultural culture, subculture, and social class , social reference groups, family, and social roles and statuses , personal age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept , and psychological motivation, perception, learning, beliefs, and attitudes ....

Step 3 Collect the Information

The data collection phase of marketing research is generally the most expensive and the most prone to error. In the case of surveys, four major problems arise. Some respondents will not be at home and must be recontacted or replaced. Other respondents will refuse to cooperate. Still others will give biased or dishonest answers. Finally, some interviewers will be biased or dishonest. Yet data collection methods are rapidly improving thanks to computers and telecommunications. Some research firms...

Personal Factors Influencing Buyer Behavior

Cultural and social factors are just two of the four major factors that influence consumer buying behavior. The third factor is personal characteristics, including the buyer's age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept. People buy different goods and services over a lifetime. They eat baby food in the early years, most foods in the growing and mature years, and special diets in the later years. Taste in clothes, furniture, and...

Social Factors Influencing Buyer Behavior

In addition to cultural factors, a consumer's behavior is influenced by such social factors as reference groups, family, and social roles and statuses. Reference groups consist of all of the groups that have a direct face-to-face or indirect influence on a person's attitudes or behavior. Groups that have a direct influence on a person are called membership groups. Some primary membership groups are family, friends, neighbors, and co-workers, with whom individuals interact fairly continuously...

Psychological Factors Influencing Buyer Behavior

Psychological factors are the fourth major influence on consumer buying behavior in addition to cultural, social, and personal factors . In general, a person's buying choices are influenced by the psychological factors of motivation, perception, learning, beliefs, and attitudes. A person has many needs at any given time. Some needs are biogenic they arise from physiological states of tension such as hunger, thirst, discomfort. Other needs are psychogenic they arise from psychological states of...

Nternal Records System

Marketing managers rely on internal reports on orders, sales, prices, costs, inventory levels, receivables, payables, and so on. By analyzing this information, they can spot important opportunities and problems. The heart of the internal records system is the order-to-payment cycle. Sales representatives, dealers, and customers dispatch orders to the firm. The sales department prepares invoices and transmits copies to various departments. Out-of-stock items are back ordered. Shipped items are...

Full Market Coverage

Here a firm attempts to serve all customer groups with all of the products they might need. Only very large firms can undertake a full market coverage strategy. Examples include IBM computer market , General Motors vehicle market , and Coca-Cola drink market . Large firms can cover a whole market in two broad ways through undifferentiated marketing or differentiated marketing. In undifferentiated marketing, the firm ignores market-segment differences and goes after the whole market with one...

Establishing Strategic Business Units

A business can be defined in terms of three dimensions customer groups, customer needs, and technology.6 For example, a company that defines its business as designing incandescent lighting systems for television studios would have television studios as its customer group lighting as its customer need and incandescent lighting as its technology. In line with Levitt's argument that market definitions of a business are superior to product definitions,7 these three dimensions describe the business...

Multi Attribute Segmentation Geoclustering

Marketers are increasingly combining several variables in an effort to identify smaller, better defined target groups. Thus, a bank may not only identify a group of wealthy retired adults, but within that group may distinguish several segments depending on current income, assets, savings, and risk preferences. One of the most promising developments in multi-attribute segmentation is geoclustering, which yields richer descriptions of consumers and neighborhoods than does traditional...

The Boston Consulting Group Approach

The Boston Consulting Group BCG , a leading management consulting firm, developed and popularized the growth-share matrix shown in Figure 1-5. The eight circles represent the current sizes and positions of eight business units in a hypothetical company. The dollar-volume size of each business is proportional to the circle's area. Thus, the two largest businesses are 5 and 6. The location of each business unit indicates its market growth rate and relative market share. The market growth rate on...

Systems Buying and Selling

Many business buyers prefer to buy a total solution to their problem from one seller. This practice, called systems buying, originated with government purchases of major weapons and communication systems. The government solicited bids from prime contractors the winning contractor then bid out and assembled the system from subcomponents purchased from other contractors. Thus, the prime contractor was providing a turnkey solution that allowed the buyer to, in effect, turn one key and get the job...

Stage 5 Postpurchase Behavior

How Consumers Use Dispose Products

After purchasing the product, the consumer moves into the final stage of the consumer buying process, in which he or she will experience some level of satisfaction or dissatisfaction. This is why the marketer's job does not end when the product is bought. In particular, marketers must monitor postpurchase satisfaction, postpur-chase actions, and postpurchase product uses. Postpurchase Satisfaction The buyer's satisfaction with a purchase is a function of the closeness between the buyer's...

Marketing

Robert Lauterborn Marketing Mix

Marketers use numerous tools to elicit the desired responses from their target markets. These tools constitute a marketing mix 12 Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. As shown in Figure 1-3, McCarthy classified these tools into four broad groups that he called the four Ps of marketing product, price, place, and promotion.13 Marketing-mix decisions must be made to influence the trade channels as well as the final...

Company Responses and Adjustments

Given these changes, companies are doing a lot of soul-searching, and many highly respected firms are adjusting in a number of ways. Here are some current trends Reengpneering From focusing on functional departments to reorganizing by key processes, each managed by multidiscipline teams. Outsourcing From making everything inside the company to buying more products from outside if they can be obtained cheaper and better. Virtual companies outsource everything, so they own very few assets and,...

Business Goods Market Testing

Business goods can also benefit from market testing. Expensive industrial goods and new technologies will normally undergo alpha testing within the company and beta testing with outside customers . During beta testing, the vendor's technical people observe how test customers use the product, a practice that often exposes unanticipated problems of safety and servicing and alerts the vendor to customer training and servicing requirements. The vendor can also observe how much value the equipment...

Total Market Potential

Total market potential is the maximum amount of sales that might be available to all the firms in an industry during a given period under a given level of industry marketing effort and given environmental conditions. A common way to estimate total market potential is as follows Estimate the potential number of buyers times the average quantity purchased by a buyer times the price. If 100 million people buy books each year, and the average book buyer buys three books a year, and the average...

He Components Of A Modern Marketing Information System

Every firm must organize a rich flow of information to its marketing managers. Competitive companies study their managers' information needs and design marketing information systems MIS to meet these needs. A marketing information system MIS consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. To carry out their analysis, planning, implementation, and control responsibilities,...

Shifts of Secondary Cultural Values Through Time

Although core values are fairly persistent, cultural swings do take place. The advent in the 1960s of hippies, the Beatles, Elvis Presley, and other cultural phenomena had a major impact on young people's hairstyles, clothing, sexual norms, and life goals. Today's young people are influenced by new heroes and fads Pearl Jam's Eddie Ved-der, Michael Jordan, and rollerblading. Marketers have a keen interest in spotting cultural shifts that might bring new marketing opportunities or threats....

Anaging The Development Process Development To Commercialization

If the product concept passes the business test, it moves to R amp D or engineering to be developed into a physical product. Up to now it has existed only as a word description, a drawing, or a prototype. This step involves a large jump in investment that dwarfs the costs incurred in the earlier stages. At this stage the company will determine whether the product idea can be translated into a technically and commercially feasible product. If it cannot, the accumulated project cost will be lost...

Population Age Mix In Marketing

National populations vary in their age mix. At one extreme is Mexico, a country with a very young population and rapid population growth. At the other extreme is Japan, a country with one of the world's oldest populations. Milk, diapers, school supplies, and toys would be important products in Mexico. Japan's population would consume many more adult products. A population can be subdivided into six age groups preschool, school-age children, teens, young adults age 25 to 40, middle-aged adults...