Relationship Marketing

The principles of personal selling as described are transaction oriented, in that their aim is to help salespeople close a specific sale with a customer. But in many eases, the company is not seeking simply a sale it has targeted a major customer that it would like to win and keep. The company would like to show the customer Corporate Hospitality Drawing the Line on Freebies Corporate entertaining or hospitality is an expected part of business life. But when does an all-expenses-paid golfing...

Licensing

Licensing is a simple way for a manufacturer to enter international marketing. The company enters into an agreement with a licensee in the foreign market. For a fee or royalty, the licensee buys the right to use the company's manufacturing process, trademark, patent, trade secret or other item of value. The company thus gains entry into the market at little risk the licensee gains product-ion expertise or a well-known product or brand name without having to start from scratch. Coca-Cola markets...

The Principle of Consumer Education and Information

An effective marketing system invests heavily in consumer education and information to increase long-run consumer satisfaction and welfare. The principle of economic efficiency requires this investment, especially in cases where products are confusing because of their numbers and conflicting claims. Ideally, companies will provide enough information about their products. But consumer groups, regulatory agencies and government can also give out information and ratings. They should encourage more...

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,...

Case

Virgin Direct - Personal Financial Services You bought the record, you drank the cola, you took the aeroplane to New York. Richard Branson's Virgin empire is more than a casual assortment of consumer goods in marketing terms, it is a whole way of life. But Branson's baby boomers are about to grow up. With all the pre-publicity of i Hollywood film premiere, Virgin is set to enter its least glamorous market the personal equity plan.1 Ask any member of the Virgin Direct team why Richard Branson...

Applying the Concepts

Different types of product can fulfil different functional and psychologic al needs, List five luxury products or services that are very interesting or important to you. Sonic possibilities are tars, clothing, sports equipment, cosmetics, golf club membership. List five other necessities that you use which have little interest to you, such as pens, laundry detergent or petrol. Make a list of words that describe how you feel about each of the products services listed. Are there differences...

Setting Sales Force Objectives

Companies set different objectives for their sales forces. Salespeople usually perform one or more of the following tasks Prospecting. They find and develop new customers. Communicating. They communicate information about the company's products and services. Selling. They sell products by approaching customers, presenting their products, answering objections and closing sales. Servicing. In addition, salespeople provide services to customers (e.g. consulting on problems, providing technical...

Demand Management

Most people think of marketing management as finding enough customers for the company's current output, but this is too limited a view. The organization has a desired level of demand for its products. At any point in time, there may be no demand, adequate demand, irregular demand or too much demand, and marketing management must find ways to deal with these different demand states. Marketing management is concerned not only with finding and increasing demand, but also with changing or even...

Marketing

Philip Kotier Gary Armstrong John Saunders Veronica Wong Principles of Marketing Second European Edition This new edition of the classic Prentice Hall text has received cutting-edge treatment to make it the most complete and up-to-date introductory marketing textbook available. Beautifully laid out, with an accessible and highly readable style, this new edition has impressive ease support to bring the dynamics of modern European marketing vividly into focus. An indispensable text for new and...

The Times For a Change

THE TIMES PRICE CUT FROM 45p to 30p in July 1993 shook the United Kingdom quality newspaper industry. Rupert Murdoch's News International, whose Times newspaper had a circulation of 360,000, had declared war on the other quality daily newspapers the Daily Telegraph (circulation 1,017,000), the Guardian (403,000), the Independent (336,000) and the Financial Times (288,000). It was not the first time News International (Ml) had started a price war. NI, which owns five of the UK's national papers...

Summary

A marketing system should sense, serve and satisfy consumer needs and improve the quality of consumers' lives. In working to meet consumer needs, marketers may take some actions that arc not to everyone's liking or benefit. Marketing managers should be aware of the main criticisms of marketing. Marketing's impact on individual consumer welfare has been criticized for its high prices, deceptive practices, high-pressure selling, shoddy or unsafe products, planned obsolescence and poor service to...

The Hole of the Sales Force

Personal selling is the interpersonal arm of the promotion mix. Advertising consists of one-way, non-personal communication with target consumer groups. In contrast, personal selling involves two-way personal communication between salespeople and individual customers - whether faee-to-faee, by telephone, through videoeonferenees or by other means. As such, personal selling can be more effective than advertising in more complex Celling situations. Salespeople can probe customers to learn more...

Joint Ownership

Joint-ownership ventures consist of one company joining forces with foreign investors to create a local business in which they share joint ownership and control. A company may buy an interest in a local firm, or the two parties may form a new business venture. Joint ownership may be needed for economic or political reasons. A foreign government may require joint ownership as a condition for entry. Or the firm may lack the financial, physical or managerial resources to undertake the venture...

Telemarketing

Telemarkcting uses the telephone to sell directly to consumers. It has hecorne a primary direct marketing tool. Marketers use outbound telephone marketing in a proactive way to generate and qualify sales leads, and sell directly to consumers and businesses. Calls may also be for research, testing, database building or appointment making, as a follow-up to a previous contact, or as part of a motivation or customer-care programme. Marketers use if abound freephone numbers to receive orders from...

Bottled Water Market

By the end of 1985 the bottled water market in Ireland was IS1.2 million (2.8 million litres) with about 10 per cent of adults drinking mineral water regularly. 1 Unlvefstty College Dublin, Ireland By 1990 it had grown to IS12.5 million (12.5 million litres), 5.5 per cent of the Irish soft-drinks market. The bottled water market was 'one of the fastest growing sectors in the food trade in both Ireland and the UK'. Reasons for this were a reduction in the quality of tap water and changing...

Political Legal Environment

Nations differ greatly in their political-legal environments. At least four political-legal factors should be considered in deciding whether to do business in a given country attitudes towards international buying, political stability, monetary regulations and government bureaucracy. We will consider each oi' these in turn. ATTITUDES TOWARDS INTERNATIONAL BUYING. Some nations are quite receptive to foreign firms, and others are quite hostile. Western firms have found newly industrialized...

References

Based on John Griffiths, 'The pace hots up'. Financial Times (26 January 1990). p. I Andrew Bolder, 'Growth by successful targeting', Financial Times (21 June 1994), p. 12 Shim Sidhva, 'Carmakers drive deep into India', Financial Times (20 July 1994), p. 28 David Done, 'Benetton Grand Prix ream changes gear', Fiita.nt.-ial Times (24 August 1994), p. 2 Meg Carter, 'Wheels of fortune, Marketing Week (26 August 1994), pp. 28-30 Anil Bhoyrul, 'Devil take the hindmost', Business Age, 4, 49(1994),...

Institutional Markets

The institutional market consists of schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care. Institutions differ from one another in their sponsors and in their objectives. For example, in the United Kingdom, BUPA hospitals are operated for profit and are predominantly used by people with private medical insurance. National Health Service trust hospitals provide health care as part of the welfare state, while charities, such as...

Training Salespeople

Many companies used to send their new salespeople into the field almost immediately after hiring them. They would be given samples, order books and general instructions. Training programmes were luxuries. To many companies, a training programme translated into considerable expense for instructors, materials, space and salary for a person who was not yet selling, and a loss of sales opportunities because the person was not in the field. Today's new salespeople, however, may spend anything from a...

Marketing Highlight

By turning over its assets four times each year, a supermarket can achieve a 20 per cent return on capital employed although its return on sales is only 5 per cent, while an exclusive clothes shop has very high margins but only turns its assets over slowly. These arc powerful ratios chat can define how a company can do business. Aldi, the German discount grocery chain, succeeds with margins half those of many grocers. Its margins are very low (2-3 per cent), but it keeps its return on capital...

Discussing the Issues

Why is demand for services growing How would marketers gain a competitive advantage by satisfying the growing demand for increased services How can a theatre deal with the intangibility, inseparability, variability and perishability of the service it provides Give examples. A fast-food restaurant serves its hamburgers 'fresh off the grill'. This ensures high quality, but creates leftover hamburgers if the staff overestimates demand. The restaurant solves this peris liability problem by using...

Choosing Transportation Modes

In choosing a transportation mode for a product, shippers consider as many as five criteria, as shown in Table 21.2. Thus, if a shipper needs speed, air and truck are the prime choices. If die goal is low cost, then water or pipeline might be best. Trucks appear to offer the most advantages. In practice, firms may rely on a combination of transportation methods which would best enable them to meet logistics objectives cost effectively. SoltKCK Carl Mj Guelzo, introduction to Logistics...

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...

Introduction

One of the chief trends in our modern economy in the past two decades has been the dramatic growth of services. In the major European countries, America and Japan, more people are employed in services than in all other sectors of the economy put together. Roth public and private sector services in these countries account for between 60 and 70 per cent of national output. In international trade, services make up nearly a quarter of the value of total world exports.2 Service jobs include not only...

Implementing the Public Helations Plan

Implementing public relations requires care. Take, for example, the placing of stories in the media. A great story is easy to place, but, unfortunately, most stories are not earth shattering and would not get past busy editors. Thus one of the main assets of public relations people is their personal relationships with media editors. In fact, PR professionals are often former journalists who know many media editors and know what they want. They view media editors as a market to be satisfied so...

Interpersonal Factors

The buying centre usually includes many participants who influence each other. The business marketer often finds it difficult to determine what kinds of interpersonal factors and group dynamics enter into the buying process. As one writer notes 'Managers do not wear tags that say decision maker or unimportant person. The powerful are often invisible, at least to vendor representatives.'2 Nor docs the buying-centre participant with the highest rank always have the most influence. Participants...

Expanding Market Share

Market leaders can also grow by increasing their market shares further. In many markets, small market-share increases mean very large sales increases. For Gillette is building on its strength in the marfeet place by moving into the women'smarket. Gillette is building on its strength in the marfeet place by moving into the women'smarket. example, in the coffee market, a 1 per cent increase in market share is worth million in soft drinks, 440 million No wonder normal competition turns into...

Acknowledgements

No book is the work only of its authors. We owe much to the pioneers of marketing who first identified its major issues and developed its concepts and techniques. Our thanks o to our colleagues at the. J.L. Kellogg Graduate School of Ma n age men i, Northwestern University the Kenan-Flatter Business School. University of North Carolina and Aston, Loughborough and Warwick Business Schools for ideas, encouragement and suggestions. Thanks also to all our friends in the Academy of Marketing, the...

Economic Circumstances

A person's economic situation will affect product choice. Anna Flores can consider buying an expensive Olympus autofocus superzoom camera if she has enough disposable income, savings or borrowing power. Marketers of income-sensitive goods closely watch trends in personal income, savings and interest Sbuifa Joseph T. Plummer, 'The concept and application of lifestyle segmentation Journal of Marketing (January 1974) p. 34. Sbuifa Joseph T. Plummer, 'The concept and application of lifestyle...

Evaluating the Main Alternatives

Suppose a company has identified several channel alternatives and wants to select the one that will best satisfy its long-run objectives. The firm must evaluate each alternative against economic, control md adaptive criteria. Using economic criteria, the company compares die likely profitability of different channel alternatives. It estimates the sales that each channel would produce and the costs of selling different volumes through each channel. The company must also consider control issues....

Concept Development and Testing

Attractive ideas must now be developed into product concepts. It is important to distinguish between a produce idea, a product concept and a product image. A product idea is an idea for a possible product that the company can see itself offering to the market. A product concept is a detailed version of the idea stated in meaningful consumer terms. A product image is the way consumers perceive an actual or potential product. Suppose a car manufacturer figures out how to design an electric car...

Marketings Impact on Other Businesses

Critics also charge that companies' marketing practices can harm other companies and reduce competition. Three problems sire involved acquisition of competitors, marketing practices that create barriers to entry, and unfair competitive marketing practices. Critics claim that firms are harmed and competition reduced when companies expand by acquiring competitors rather than by developing their own new products. In the car industry alone there has been a spate of acquisitions over the past decade...

Learning

Learning describes changes in an individual's behaviour arising from experience. Learning theorists say that most human behaviour is learned. Learning occurs through the interplay ofdrfoeS, stimuli, cues, responses and reinforcement. We saw that Anna Flores has a drive for self-actualization. A drive is a strong internal stimulus that calls for action. Her drive becomes a motive when it is directed towards a particular stimulus object - in this case, a camera....

Rapid Growth of Online Marketing

In recent years, several large Internet marketing systems have failed because of a lack ol' subscribers or coo little use, or because consumers found the buying procedures baffling and returned to the familiarity of conventional buying channels. The online information and shopping services industry has its roots in the United States. Although still in their infancy, Internet usage and online marketing are growing explosively. According to a recent study, 23 per cent of people 16 or older in the...

Advertising Evaluation

The advertising programme should regularly evaluate both the communication impact and the sales effects of advertising. Measuring the communication effect of an ad or copy testing tells whether the ad is communicating well. Copy testing can be done before or after an ad is printed or broadcast. There are three principal methods of pretesting in advertising. The first is through direct rating, where the advertiser exposes a consumer panel to alternative ads and asks them to rate the ads. These...

Value Pricing

During the slow-growth 1990s, many companies have adjusted their prices to bring them into line with economic conditions and with the resulting fundamental shift in consumer attitudes towards quality and value. More and more, marketers have adopted value-pricing strategies - offering just the right combination of quality and good service at a fair price. In many cases, this has involved die introduction of less expensive versions of established, brand name products. Thus Campbell introduced its...

Direct and Online Marketing

After reading this chapter, you should he able to Discuss the benefits of direct marketing to customers and companies and the trends fuelling its rapid growth. Define a customer database and list the four ways in which companies use databases in direct marketing. Identify the major forms of direct marketing. Compare the two types of online marketing channel and explain the effect of the Internet on electronic commerce . Identify the benefits of online marketing to consumers and marketers, and...

Brand Equity

Brands vary in the amount of power and value they have in the marketplace. Some brands are largely unknown to most buyers. Other brands have a high degree of consumer brand awareness. Still others enjoy brand preference -buyers select them over the others. Finally, some brands command a high degree of brand loyalty. A top executive at II.J. Heinz proposes this test of brand loyalty 'My aeid test is whether a consumer , intending to buy Heinz Ketchup in a store but finding it out of stock, will...

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...

Order Routine Specification

The buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected time of delivery, return policies and warranties. In the ease of maintenance, repair and operating items, buyers are increasingly using blanket coiifruc-ts rather than periodic purchase orders. A blanket contract creates a long-term relationship in which the supplier promises to resupply the buyer as...

Services Differentiation

In addition to differentiating its physical product, the firm can also differentiate the services that accompany the produet. Some companies gain competitive advantage through speedy, reliable or careful delivery. Harrods, the luxury retailer, delivers to its customers using replica vintage vans a service particularly popular ai Christinas, At the other end of the scale. Domino's Pizza promises delivery in less to 30 minutes or reduces the price. Installation can also differentiate one company...

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...

Concentrated Marketing

A third market-coverage strategy, concentrated marketing, is especially appealing when company resources are limited. Instead of going after a small share of a large market, the firm goes after a large share of one or a few submar-kets. For example, Oshkosh Trucks is the world's largest producer of airport rescue trucks and front-loading concrete mixers. Recycled Paper Products concentrates on the market for alternative greeting cards, and Ecover concentrates on a narrow segment of...

Inelastic and elastic demand

Company must consider consumer perceptions of price and how these perceptions affect consumers' buying decisions. Pricing decisions, like other marketingmix decisions, must be buyer-oriented. When consumers buy a product, they exchange something of value (the price) to get something of value (the benefits of having or using the product), Effective, buyer-oriented pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that...

When Positions Collide

Some positions, just like some .segments, do not mix. In an attempt to understand classical concert goers, London's South Bank Centre commissioned CRAM International to analyze its audience. The resulting segments include classical purists, mainstream stalwarts, new modernists and good time noi'ices. The problem for the South Bank Centre is that the segments don't only differ in their musical tastes, but they also dislike each other. Marketers can sometimes use this alienation profitably. When...

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...

Commercialization

Test marketing gives management the information needed to make a final decision about whether to launch the new product. If the company goes ahead with commercialization - that is, introducing the new product into the market - it will faee high costs. The company will have to build or rent a manufacturing facility. It must have sufficient funds to gear up production to meet demand. Failure to do so can ieave an opening in the market for competitors to step in. For example, London-based...

Music Gyberstores Now Plays a Global Song

The upbeat tempo may not be music to all ears. The cost of Internet placement deals, expansion and software advances is proving loo much for smaller companies. Meanwhile, N2K and CDnow are intent on battling it out, making substantial investments from their flotation proceeds to keep the business rolling in cyberspace. SOURCES'- Alice Hawthorn, Chain of online stores planned' and 'Internet music retailers hear an upbeat tempo', Financial Times (5 December 1997), p. 27 Paul Taylor, 'Virgin Group...

Supplements arid Website

A successful marketing course requires more than a well-written textbook. Today's classroom requires a dedicated teacher and a fully integrated teaching system. Principles of Marketing is supported by an extensive, innovative and high-quality range if teaching and learning materials. This comprehensive and helpful teaching resource, prepared by T.C. Melewar, comprises Teachinjydiscussion notes for all the cases. Answers to all the chapter-end 'Discussing the Issues' questions and 'Applying the...

Business Promotion Tools

Companies also promote to industrial customers. These husiness promotions are used to generate business leads, stimulate purchases, reward customers and motivate salespeople. Business promotion includes many of the same tools used for consumer or trade promotions. Here, we focus on two of the main business promotion tools - conventions and trade shows, and sales contests. CONVENTIONS AND TRADE SHOWS. Many companies and trade associations organize conventions and trade shows to promote their...

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...

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...

Competitive Positions

Finns competing in a given target market will, at any moment, differ in their objectives and resources. Some firms will be large, others small. Some will have great resources, others will he strapped for funds. Some will be old and established, others new and fresh. Some will strive for rapid market share growth, others for long-term profits. And the firms will occupy different competitive pos- j itions in the target market. Michael Porter suggests four basic competitive positioning strategies...

Using email and Webcasting

A company can encourage prospects and customers to send questions, suggestions and complaints to the company via e-mail. Customer service representatives can quickly respond to such messages. The company may also develop Internet-based electronic mailing lists of customers or prospects. Such lists provide an excellent opportunity to introduce the company and its offerings to new customers and to build ongoing relationships with current ones. Using the lists, online marketers can send out...

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...

Channel Strategy For Economos

The case of Eeonomos shows how a firm can use technological innovations to achieve greater distribution effectiveness (including international expansion) and efficiency, and to enhance customer service delivery. Increasingly, many firms, operating in all types of product sectors, are utilizing technical advances in areas such as information gathering and processing, communications and logistical processes, and methods to improve distribution channel performance. In this chapter, we will take a...

Marketing Strategy Development

Suppose Toyota finds that Concept 3 for the fuel-cell-powered electric car tests best. The next step is to develop a marketing strategy for introducing this car to the market. marketing strategy The marketing logic by TC MC I the business unit hopes to achieve its marketing objectives. marketing strategy statement A statement of the planned strategy for a new product that outlines the intended target market, the planned product positioning, and the safes, market share and profit goals for the...

Exhibit 23 Focus GROUPS

Young men 18-24 01 02 3. Women 22-32 (12 with children 4. Women 22-32 Bl 132 with children Healtli body conscious Soft-drink consumers A B Cl Late teens twenties Young and early teens Teenage adults SOURCE Behaviour & Attitudes. Market Research, August 1980. Discussions with each group followed a similar pattern. Initially respondents freely discussed their use and purchase of soft drinks. This naturally led to conversations about different brands. Next,...

Differentiation

Consumers typically choose products and services that give them the greatest value. Thus the key to winning and keeping customers is to understand their needs and buying processes better than competitors do, and to deliver more value. To the extent that a company can position itself as providing superior value to selected target markets, either by offering lower prices than competitors do or by providing more benefits to justify higher prices. It gains competitive advan-tage.2 Solid positions...

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...

Logistics Partnership

The trend towards globalization means that more and more multinational businesses have cut their number of factories in Europe and concentrated production in fewer countries. Many such companies have also subcontracted their transport and warehousing services to a single outside provider of logistics services. A recent study carried out jointly by McKinsey, the management consultancy, and the Centre for European Logistics examined logistics alliances between 50 customer companies and 20...

The Net Worke

A phone, fax, Web browser. E-Mail terminal, SMS message device and personal organiser in one. hJokifl and the a trows symbol sre registered Uademarki. The Nokia 9000 Communicator. A phone, fax, Web browser. E-Mail terminal, SMS message device and personal organiser in one. hJokifl and the a trows symbol sre registered Uademarki. With this all-in-one pocket phone, fax, diary and E-Mail terminal, Nokia creates hat has never existed before. Group), the C5 (Clive...

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...

Segmenting International Markets

Few companies have either the resources or the will to operate in all, or even most, of the more than 170 countries that dot the globe. Although some large companies, such as Unilever or Sony, sell products in more than 100 countries, most international firms focus on a smaller set. Operating in many countries presents new challenges.*' The different countries of the world, even those that arc close together, can vary dramatically in their economic, cultural and political make-up. Thus, just as...

The MX5s Popularity Drives Its Prices

Sources Rebeeca Fannin, Mazda's sporting chance'. Marketing and Media D cisions (October 1989), pp. 24 30 S,C. pwyone, 'Romancing the roadster', Time (24 July 1989), p. 39 The roadster returns', Consumer Reports (April 1990), pp. 2.12-4 Larry Armstrong, 'After the Mia ta. Mazda isn't just idling', Business Week (2 September 1991), p. 35. ANALYZING THE PRICE-DEMAND RELATIONSHIP. Each price the company might charge will lead to a different level of demand. The relation between the price charged...

Customer Satisfaction

Consumers form judgements about the value of marketing offers and make their buying decisions based upon these judgements. Customer satisfaction with a purchase depends upon the product's performance relative to a buyer's expectations, A customer might experience various degrees of satisfaction. If the product's performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer...

Expert Opinion

Companies can also obtain forecasts by turning to experts. Experts include dealers, distributors, suppliers, marketing consultants and trade associations. Thus motor vehicle companies survey their dealers periodically for their forecasts of short-term demand. Dealer estimates, however, are subject to the same strengths and weaknesses as sales force estimates. Many companies buy economic and industry forecasts. These forecasting specialists are in a better position than the company to prepare...

Case 7 TrolIAEG

Javier Sard a, Franscesc ('ares and Hals Q. Re.nart* J. FELIU DK LA PENA, SA (JFP) is a Spanish manufaeturer of electric lamps1 known for its modern Troll products. In the late afternoon of 21 January 1992 Miguel Tey Feliu de la Pefia, JFP's managing director, was reflecting on the reciprocal commercial distribution contracts to be signed the next day with the managers of AEG's Technical Lighting Business Area AEG Aktiengesellschaft Fachbereich Liehttechnik, or AEG-LT) from Germany. The first...

The Growth of Direct Marketing

Sales through traditional direct marketing channels (catalogues, direct mail and telemarketing) have been growing rapidly. A recent survey on worldwide Internet (the Net) A vast global computer network that enables computers, with the right software and a modem (a telecommunications device that sends data across telephone lines), to be linked together so that cheir users can obtain or share information and interact with other users. marketing expenditure suggests not only that direct marketing...

Building Channel Partnerships

The members of a distribution channel are linked closely in delivering customer satisfaction and value. One company's distribution system is another company's supply system. The success of each channel member depends on the performance of the entire supply chain. For example, a big supermarket can charge the lowest prices at retail only if its entire supply chain - consisting of thousands of merchandise suppliers, transport companies, warehouses and service providers - operates at maximum...

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....

Sum man7

Markets have to be understood before marketing strategies can be developed. The consumer market buys goods and services for personal consumption. Consumers vary tremendously in age, income, education, tastes and other factors. Marketers must understand how consumers transform marketing and other inputs into buying responses. Consumer behaviour is influenced by the buyer's characteristics and by the buyer's dcei.sion process. Buyer characteristics include four main factors cultural, social,...

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....

Strong Influences on Government Buyers

Like consumer and business buyers, government buyers are affected by environmental, organizational, interpersonal and individual factors. One unique thing about government buying is that it is carefully watched by outside publics, ranging from elected representatives to a variety of private groups interested in how the government spends taxpayers' money. Because their spending decisions are subject to public review, government organizations are buried in paperwork. Elaborate forms must be...

Market Leader Strategies

Most industries contain an acknowledged market leader. The leader has the largest market share and usually leads the other firms in price changes, new product introductions, distribution coverage and promotion spending. The leader may or may not be admired, but other firms concede its dominance. The leader is a focal point for competitors, a company to challenge, imitate or avoid. Some of the best-known market leaders are Boeing (airliners), Nestle (food). Microsoft (software), L'Oreal...

Question of Extracting Gold from the Information a 1

Databases are at the heart of contemporary direct marketing. The latter has been boosted by improvements in computer technology, which help businesses to develop bigger, more complex databases containing vast amounts of information about their customers. Collecting data is one thing, using it profitably is quite a different matter. More retailers and manufacturers are now learning how to extract gold from the informational ore. Fanning Relationships and Deepening Customer Loyalty Database...

Cross Functional Teamwork Inside the Company

In most companies, responsibility for various logistics activities is assigned to many different functional units - marketing, sales, finance, manufacturing, purchasing. Too often, each function tries to optimize its own logistics performance without regard for the activities of the other functions. However, transportation, inventory, warehousing and order-processing activities interact, often in an inverse way. For example, lower inventory levels reduce inventory carrying costs. But they may...

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...

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...

International Division

Many companies get involved in several international markets and ventures. A company may export to one country, license to another, have a joint-ownership venture in a third and own a subsidiary in a fourth. Sooner or later it will create an international division or subsidiary to handle all its international activities. International divisions are organized in a variety of ways. The international division's corporate staff consists of marketing, manufacturing, research, finance, planning and...

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...

Retailing Trench

A number of general trends affect the retailing industry worldwide. During the 1980s, retail sales in real terms grew in most European countries, the United States and Japan. Many retailers expanded their operations quickly, often using borrowed money. During the 1990s, a combination of sluggish consumer spending -as recession hit harder in these countries - rising interest rates and overcapacity led to manv casualties A host of American department stores, including Bloomiugdales and Bon...

Optional Product Pricing

Many companies use optional-pro duet pricing - offering to sell optional or accessory products along with their main product. For example, a ear buyer may choose to order power windows, cruise control and a radio with a CD player. Pricing these options is a sticky problem. Car companies have to decide which items to include in the base price and which to offer as options. BMWs basic cars come famously underequipped. Typically the 318i is about DM40,000, but the customer then has to pay extra...

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...

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...

Defining Internationa Marketing Objectives and Policies

The company should define its international marketing objectives and policies. First, it should decide what volume of foreign sales it wants. Most companies start small when they go abroad. Some plan to stay small, seeing foreign sales as a small part of their business. Other companies have bigger plans, seeing foreign business as equal to or even more important than their domestic business. Second, the company must choose koi& many countries it wants to market in. Generally, it makes better...

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....

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...

Product Bundle Pricing

Using, product-bundle pricing, sellers often combine several of their products and offer the bundle at a reduced price. Thus theatres and sports teams sell season tickets at less than the cost of single tickets hotels sell specially priced packages that include room, meals and entertainment computer makers inelude attractive software packages with their personal computers. Price bundling can promote the sales of products that consumers might not otherwise buy, but the combined price must be low...

Strategics That Are Used By The Organisation To Apply Societal Market Concept

Preface xiii Guided Tour xx About the Autfmrf xxii Marketing and the Marketing Process 2 Marketing in a Changing World Satisfying Hitman Needs 4 Chapter Objectives 4 Preview Case Nike 4 lntroduction 7 Needs, Wants and Demands 1G Products and Services ll Value, Satisfaction and Quality ll Exchange, Transactions and Relationships l2 Markets l4 Marketing 15 Marketing Management l6 Demand Management 16 Marketing Management Philosophies 17 The Production Concept 17 The Product Concept 18 The Selling...

The Global Marketplace

After reading this chapter, you should be able to Discuss how the economic, political-legal and cultural environments affect a company's international marketing decisions. Describe three key approaches to entering international markets. Explain the primary issue of deciding on the global marketing programmes and whether to standardize or adapt their marketing mixes for international markets. Distinguish among the three main ways companies manage their global marketing organizations.

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...

Pieta Luxury Chocolates

PETER ABEL, THE YOUNG MANAGING director of his family's firm, was pleased with the way he had revitalized the firm after he took over in 1989. Since formed in 1923, Pieta had sold its luxury Belgian chocolates through its own small shops. It had a high reputation within the trade and many devoted customers. lr was the country's largest luxury chocolate manufacturer, but until Peter took over, the company had stagnated. In his opinion, Pieta should he more like other leading family firms such as...

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...

Competitive Strategy Dont Play in the Middle of the Road

Being mainstream used to be a blessing for products. Now it is becoming a curse. Today, companies in most industries face slow-growing and fiercely competitive markets. Solid middle-of-the-road names like Olivetti and Holiday Inn are struggling against a lot of new competitors that strike from both above and below. Encircled by rivals offering either more luxurious goods or plain cheaper ones, companies with products in the middle are finding their market shares dwindling. They are striving to...

Implementing the Research Plan

The researcher next puts the marketina research plan into action. This involves collecting, processing and analyzing the information. Data collection can be by the company's marketing research staff or, more usually, by outside firms. The company keeps more control over the collection process and data quality by using its staff. However, outside firms that specialize in data collection can often do the job more quickly and at lower cost. The data collection phase of the marketing research...

The Market and Demand

Whereas costs set the lower limit of prices, the market and demand set the upper limit. Both consumer and industrial buyers balance the price of a product or service against the benefits of owning it. Thus, before setting prices, the marketer must understand the relationship between price and demand for its product. In this section, we explain how the price-demand relationship varies for different types of market and how buyer perceptions of price affect the pricing decision. We then discuss...

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...

Zachry Schiller Stalking The New Consumer

From Valerie Reitman, 'Rubbermaid turns up plenty of profit in the mundane'. Wall (Street Journal (27 March 1992), p. B4 see also Erik Calonius, 'Smart moves by the quality champs', in Tlte New American Century, special issue of Fortune (1991), pp. 24-8 Grisly Marshall, 'Rubbermaid yes, plastic'. Business Month (December 1988), p. 38 Maria Mallory, 'Profits on everything but the kitchen sink', Business Wfeefe, special issue on innovation (1991), p. 122 William Band, 'Use ISaldridge criteria as...

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...