Relationship Marketing
Upcoming SlideShare
Loading in...5
×
 

Relationship Marketing

on

  • 2,729 views

 

Statistics

Views

Total Views
2,729
Views on SlideShare
2,728
Embed Views
1

Actions

Likes
0
Downloads
60
Comments
0

1 Embed 1

http://ernesthschan.wordpress.com 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Relationship Marketing Relationship Marketing Document Transcript

    • Marketing Management Unit 4 Delivering Marketing Programs Chapter 14 - Promotion-Decisions and Strategies Lesson 48 - Relationship marketingStudents , we have talked of many promotion tools in previous chapters such as Advertising , Salespromotion ,Personal selling ,Direct Marketing etc.We will talk of Relationship Marketing now . We can not exactly term it as promotion tool for it ismuch more beyond it.WHAT IS RELATIONSHIP MARKETING ?Can you tell me about it ?Relationship Marketing -The process of creating , maintaining and enhancing strong ,value-ladenrelationships with Customers and other stakeholders.Students, Relationship marketing is based on the premise that important accounts need focused andcontinuous attention. Let us look at a relationship focused definition of marketingRelationship focused definition of marketing - ‘The purpose of marketing is to establish,maintain, enhance and commercialise customer relationships (often, but not necessarily al-ways, long term relationships) so that the objectives of the parties involved are met. This isdone by the mutual exchange and fulfilment of promises. - Gronroos, C (1990)Specifically speaking relationship marketing focuses on with the following Focal point is integrating customer service and quality with a market orientation. Focus is on getting and keeping customers Concept of total quality across all functions focuses on total relationship between firm and its customers, suppliers and key markets on an ongoing basisGROWING IMPORTANCE OF RELATIONSHIP MARKETINGYou would agree that today’s customers face a growing range of choices in the products and ser-vices they can buy . . They are making their choice on the basis of their perceptions of quality,service, and value. Companies need to understand the determinants of customer value and satisfac-tion.Here lies the role of relationship marketing.A major challenge for high-performance companies is that of building and maintaining viable busi-nesses in a rapidly changing marketplace. They must recognize the core elements of the businessand how to maintain a viable fit between their stakeholders, processes, resources, and organizationcapabilities and culture478 © Copy Right : Rai University 16.101G
    • Marketing ManagementTo create customer satisfaction, companies must manage their value chain as well as the wholevalue delivery system in a customer-centered way. The company’s goal is not only to get customers,but even more importantly to retain customers. Customer relationship marketing provides the key toretaining customers and involves providing financial and social benefits as well as structural ties tothe customers. Companies must decide how much relationship marketing to invest in different mar-ket segments and individual customers, from such levels as basic, reactive, accountable, proactive,and full partnership. Much depends on estimating customer lifetime value against the cost streamrequired to attract and retain these customers.Let us look at the differences between transaction marketing and relationship marketing ,which would further highlight the role of relationship marketing.16.101G © Copy Right : Rai University 479
    • Marketing ManagementMain steps in establishing a relationship marketing programCan you suggest how to incorporate relationship marketing program ? Students, do you thinkthere are set rules or guidelines for the same ?Obviously there can not be. Each organizationhas to look at its business offerings , its resources and most importantly its customer profile toarrive at a suitable relationship marketing program.Broadly speaking the following outline the relationship marketing program1. Identify the key customers meriting relationship marketing2. Assign a skilled relationship manager to each key customer3. Develop a clear job description for relationship managers4. Appoint an overall manager to supervise the relationship managers Have relationship managers develop long-range goals and annual customer-relationship plansHere is an interesting article for you……….APPLICATION EXERCISE :Review the following article. Which strategies did you find interesting and why ? Discuss some ofthe points you did not agree to .Customer retention: The key to business performanceCustomer retention is not given the attention due to it, by most firms. It has been found thatcustomer retention has more impact on profits than market share, economies of scale andother variables that are considered to provide competitive advantage to a firm. In fact, it hasbeen found that companies, which reduced customer defections by 5 per cent, could boostprofits from 25 per cent to 85 per cent. Traditionally, marketing management has relied onpermutations and combinations of the marketing mix elements (product, price, place and promotion)to achieve market dominance through enhanced market share by acquiring new customers. Thisapproach considers the formation of homogenous segments of relatively heterogeneous customers.It does not take into account the history of association between the customer and the seller andhence does not reveal the actual buying behaviour of the customer. Aggressive branding and promo-tions are other tactics used by sellers adopting the traditional marketing approach. But brands withthe highest market share are not always the most profitable. In some cases, they may even beunprofitable. The relationship marketing approach on the other hand, focuses on customer retention,encouraging increased spends and on long-term relationships with customers. Gronroos, a researchscholar, has stated - ‘Marketing is to establish, maintain and enhance relationships with customersand other parties at a profit so that the objectives of the parties involved are met. This is done by amutual exchange and fulfillment of promises’. Customer retention should thus become a part of thestrategic marketing planning process of any firm. It is important to define customer retention and alsoto understand how it can be measured. Definition of customer retention Since customer retentionis of prime importance, it is imperative to understand what any organisation should retain. Table 1illustrates the type of variables that ought to be retained.Aggressive branding and promotions are other tactics used by sellers adopting the tradi-tional marketing approach. But brands with the highest market share are not always themost profitable . Both attitudinal and behavioural variables need to be understood when studyingcustomer retention. Attitude variables act as antecedents in most cases of behavioural changes. Soit is inappropriate to consider only one variable as explaining customer retention. It is generally aresultant composite of multiple variables. The definition of customer retention should take into con-sideration its appropriateness to the business of the firm. There are issues regarding whether theabsolute number of customers or their relative purchases should be considered for definition purpose.An associated concern is whether the purchases should be in terms of volume or value. Research480 © Copy Right : Rai University 16.101G
    • Marketing Managementhas also indicated that the definition of customer retention that is in terms of percentage share ofcustomer savings, borrowings, spending, or purchases is more useful than just absolute numbers ofcustomers. Table 1: The assortment of variables that can be retained Behaviour variablesAttitudinal variables Number of customers (including dormant) Salience of brand proposition andits components Number of active customers Brand preference Frequency of buying Psychologicalcommitment/loyalty Recency of buying Trust Size of expenditure Empathy Share of expenditurePropensity to consider buying/use again/ contribute resources Extent of cross-sales Propensity topay more/ a premium Contract Customer satisfaction/delight Adjust buying/usage procedures to fitsupplier Likelihood to recommend/advocacy Routinized re-ordering Top-of-mind awareness Join clubProven adequacy Enquiries Provide information when requested regarding needs and/or charac-teristics Notification of complaints and successes Give you more time than competitors/beforePay attention to organization’s announcement Source: Aspinall et al (2001) Hidden defectionshave also to be kept track of. An example of hidden defection is that the growth in sales to aparticular retained customer is slower than the growth of the market. Appropriateness of definitionthus leads us to the issue of measurement of customer retention. Measurement of customerretention It is important to measure customer retention since this helps set benchmarks and gaugeperformance against this benchmark. Without measuring customer retention it cannot be managed.Studies have shown that a relatively small percentage increase in the customer retention rate canlead to a large increase in the net present value of customers. Crude retention rate is the absolutepercentage of customers that are retained. For example, if the number of customers drops from 1000to 900, the crude rate is 90 per cent. A better measure is the weighted retention rate in which thecustomers are weighted by the volume of purchases made by each of them. The ‘lifetime value’(LTV) is a useful concept in measuring customer retention. The LTV of a customer depicts thecustomer’s net present value to the seller. In this kind of analysis the cost of acquiring a customer istaken as a sunk cost. The only costs considered are the selling and servicing costs for a customer.The aim of the seller is to achieve a positive level of revenues as against these costs. By assumingthe period of future sustained relationship, the net value of cash flows and a suitable discount rate(this is taken after accounting for the company’s cost of capital and risk), the LTV for a customer isarrived at. It is important to retain employees and investors in order to retain customers.Disloyal employees are not motivated enough to build a base of loyal customers LTV is adifficult concept to operationalise. There is no clarity about what the lifetime of a consumer is - it canbe age, working life, product life cycle, etc. Estimating the value through studying the past is also notprecise. Assuming purchase probabilities into the future is also not easy. Moreover, carrying out thisexercise for each and every individual customer is a long and tedious process. Hence, if carried outat an aggregate group level, questions about who should actually be the constituents of the group playa significant role. Benefits of customer retention Customer retention affects both revenues andcost in the equation of profitability Profit = Revenue – Cost Revenues are enhanced due to in-creased sales and costs are lowered due to lesser generation and marketing costs of such revenues.Scholars have outlined six economic benefits of customer retention:a) savings on customer acquisition or replacement costs,b) a guarantee of base profits as existing customers are likely to have a minimum spend per period,c) growth in per customer revenue over time,d) a reduction in relative operating costs as firms can spread the cost over many more customers and over a longer period,e) free of charge referrals of new customers from existing customers, andf) price premiums as current customers usually do not wait for promotions or price reductions before they make their purchases. Certain non-economic benefits from customer retention are increased customer trust, commitment and cooperation.Strategies for retaining customers In service marketing, customer retention has beenconceptualised as resulting from customer perceptions of service quality and customer satisfaction.Scholars have advocated four steps as essential to retain customers:16.101G © Copy Right : Rai University 481
    • Marketing Managementa) define the market structure,b) segment the customer base and determine segment value,c) identify the segments’ service needs, andd) implement a segmented service strategy. It is important to retain employees and investors in order to retain customers. Disloyal employees are not motivated enough to build a base of loyal customers. Similarly, disloyal investors will not be interested in building long-term relationships. The team of customers, employees and investors must hence share a common vision of a long- term relationship. It is important for the firm to understand the reasons that make customers switch. Some of the reasons could be price, inconvenience, core service failure, failed employee responses to service failure, ethical problems, involuntary factors, competitive issues and service encounter failures. Understanding the causes of switching will help the firm develop barriers to prevent switching. Interviewing former customers is another way to understand why they switched. This can provide information that is specific and actionable.Studies have revealed six types of defectors. These are:a) Price defectors, who switch to a low-priced competitor,b) Product defectors, who defect to a superior product offered by a competitor,c) Service defectors, who leave due to poor service,d) Market defectors, who are lost but not to any other business - they may go out of business or to another market,e ) Technological defectors, who switch to products offered by companies outside the industry, andf) Organisational defectors, who switch due to internal or external politics. Analysing complaint and service data is a good method to identify problems and understand why customers defect. Analysis should be statistical and should be fairly detailed in order to understand the underlying patterns of the problems. Strategic bundling is another way of erecting a barrier against defec- tions that can lead to enhanced customer retention.A bundle is a group of products or services offered as a single cost saving and convenient package.A customer who opts for a bundle will not switch to a competitor even if he is offered a better dealon a single item of the bundle. Usage analysis is a method that can be effectively used to help incustomer retention. Segmenting markets by consumption can provide valuable insights into the mix ofcustomers. Heavy users are more valuable than the medium or light ones and appropriate marketingstrategies have to be devised to retain them. Similarly in the business context, we find the ParetoPrinciple or the 80/20 rule in operation. Key accounts that comprise about 20 per cent of the businesscustomers are responsible for about 80 per cent of the sales generated. Such heavy and key usersare prone to poaching by competitors. Hence it is important to concentrate advertising, promotion,sales and communication efforts on this segment. Medium customers should be targeted with rev-enue enhancement strategies through phone calls and e-mails. The light or unprofitable customersshould be served in new ways to upgrade them. In some cases, the unprofitable customers might alsohave to be ignored. The strategies for retaining customers are a function of the nature of the product,the stage of the product life cycle, and the buying behaviour of the customers. The relationshipsbetween the core elements that create value in an organisation can be depicted as shown in Figure 1.Customer value affects customer satisfaction, which in turn affects loyalty. Customer loyalty affectscustomer retention. Loyalty of the customer increases with customer satisfaction at an increasingrate. Segmentation of customers should be done by satisfaction levels, prior to the strategising ofretention activities. Beyond customer retention It is not enough to just retain customers throughprevention of defections. Positive changes in customer spending can have ten times the impact ofcustomer retention. It has been found that a lot more of customers decrease their spending thandefect. Managing this downward migration in spends is a challenge. This is more important in indus-tries where the customer deals with more than one company for the same product or service. Anexample is the credit card industry where a customer can have credit cards of more than one com-pany. Managing this kind of migration effectively helps stop the downward spiral and brings about areversal in spends towards higher figures. Customer satisfaction, measured broadly, can indicate the482 © Copy Right : Rai University 16.101G
    • Marketing Managementlikelihood of customers defecting. But it does not help understand what makes customers loyal.Loyalty may be related to the difficulty of finding a replacement. Customer satisfaction measure-ment alone does not explain the tendencies of customers to change their spending patterns. Spendingpatterns may change as a result of changes in lives, changes in what the company or its competitorsare offering. Thus, it is crucial to understand what factors actually drive loyalty. Researchers havecombined the different degrees of loyalty exhibited with the spending patterns, into six customersegments. Figure 2 illustrates these in detail. Three of these segments, the loyalists, either maintain orincrease their spends. Loyalists may be emotionally attached to their brands (emotive loyalists), don’tfeel like taking the trouble to switch (inertial loyalists) or rationally choose the best option (delibera-tive loyalists). The remaining three segments are the downward migrators who spend less. Down-ward migrators may do so since their lifestyles have changed (lifestyle downward migrators), ratio-nally reassess their options and needs (deliberative downward migrators) or may be actively dissat-isfied with the product or service (dissatisfied downward migrators). The emotive loyalists are leastlikely to defect. Inertial loyalists too are unlikely to switch easily. Thus, retention activities aimed atthe deliberative loyalists are the most rewarding. Loyalty profiling is influenced by factors such as thefrequency of purchase, the frequency of interactions such as service calls, the emotional or financialimportance of a purchase, the degree of differentiation among competitive offerings, and the ease ofswitching. The loyalty profiles consisting of the six segments illustrated above help develop differenttactics to address different segments. When this is combined with customer-value analysis, the com-pany can concentrate on loyalty building by assessing the size of each opportunity. Downward migra-tion has been reduced by 20 to 30 per cent by companies who have understood the many facets ofcustomer retention and loyalty. Customer retention and arresting downward migration thus hold thekey to superior business performance. Points to remember16.101G © Copy Right : Rai University 483
    • Marketing Management484 © Copy Right : Rai University 16.101G
    • Marketing ManagementSUMMMARYPromotion’s role is to communicate with individuals, groups, or organisations to directly or indirectlyfacilitate exchanges by informing and persuading one or more of the audiences to accept anorganisation’s products.Promotion tolls consists of –Advertising, personal selling , sales promotion , public relations .There isan growing importance of Direct Marketing and Relationship marketing in promotion practices too.Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or servicesby an identified sponsor. Advertisers include not only business firms but also charitable, nonprofit,and government agencies that advertise to various publics.Developing an advertising program is a five-step process: (1) Set advertising objectives; (2) establisha budget that takes into account stage in product life cycle, market share and consumer base, com-petition and clutter, advertising frequency, and product substitutability; (3) choose the advertisingmessage, determine how the message will be generated, evaluate alternative messages for desirabil-ity, exclusiveness, and believability; and execute the message with the most appropriate style, tone,words and format and in a socially responsible manner; (4) decide on the media by establishing thead’s desired reach, frequency, and impact and then choosing the media that will deliver the desiredresults in terms of circulation, audience, effective audience, and effective ad-exposed audience; and(5) evaluate the communication and sales effects of advertising.Sales promotion consists of a diverse collection of incentive tools, mostly short term, designed tostimulate quicker or greater purchase of particular products or services by consumers or the trade.Public relations would mean - building good relations with the company’s various publics by obtainingfavorable publicity, building up a good corporate image, and handling or heading off unfavorablerumors, stories, and eventsDirect marketing is the use of consumer-direct (CD) channels to reach and deliver goods and ser-vices to customers without using marketing middlemen. These channels include direct mail, catalogs,telemarketing, interactive TV, kiosks, Web sites, and mobile include direct mail, catalogs, telemarketing,interactive TV, kiosks, Web sites, and mobile devices. Direct marketing is one of the fastest growingavenues for service customers.Personal selling process that allows marketers the greatest freedom to adjust a message to satisfycustomers’ information needs. Personal selling allows the marketer or seller to communicate directlywith the prospect or customer and listen to his or her concerns, answer specific questions, provideadditional information, inform, persuade, and possibly even recommend other products or services.Personal selling process consists of –prospecting, pre-approach, approach ,sales presentation ,handling objections and follow up. Management of sales force is equally important, it includes ,establishing objectives , determining sales force size , recruiting ,selecting ,training motivating andevaluating performance.Relationship marketing is also critical in today’s scenario . Relationship marketing is based on thepremise that important accounts need focused and continuous attention16.101G © Copy Right : Rai University 485
    • Marketing ManagementEXCERCISESMULTIPLE CHOICE QUESTIONS1. There are five major decisions in developing an advertising program. These are known as the five“Ms.” Which of the following is not one of the five “Ms”? Mission Morale Money Media2. There are a number of objectives of advertising that need to be considered. Which of the followingis not one of the objectives of advertising? Entertainment advertising Informative advertising Persuasive advertising Reminder advertising3. There are five specific factors to consider when setting the advertising budget. Which of thefollowing is not one of those considerations? Stage in the product life cycle Market share and consumer base Competition and clutte All of the above are considerations4. Ads that make claims that are simple exaggerations not intended to be believed are described aswhat Funny Cheaper Puffery Outlandish5. _______________ is the number of different persons or households exposed to a particularmedia schedule at least once during a specific time period Frequency Reach Impact Audience6. _________________ indicates how much brand holdover occurs independent of the level ofadvertising Habitual behavior Carryover Holdover Matriculation7. Which of the following is an example of a promotional device that would be used to entice consum-ers to purchase a good? Trade show Sales conventions Cash refund offers Contests for sales reps486 © Copy Right : Rai University 16.101G
    • Marketing Management8. A __________________________ is a program providing rewards related to the consumers’frequency and intensity in purchasing the company’s products or services free trial frequency program tie-in promotion product warranty9. A good public relations department does a number functions. They include press relations, productpublicity, corporate communications, lobbying, and which one of the following? Creating ads Creating marketing plans Counseling Human resource audits10. Which one of the following is not one of the five major modes of the marketing communicationsmix? Advertising Commercials Sales Promotions Personal Selling11. Which of the following is not one of the steps in developing effective communication? Identify target audience Determine objectives Select channels All of the above are steps12. There are three distinct benefits to using sales promotions. Which of the following is not one ofthe benefits? Communication Incentive Invitation All of the above are benefits13. Companies need to take several steps to stimulate personal influence channels to work on theirbehalf. Which of the following is not one of those steps? Identify influential individuals and companies and devote extra effort to them Develop word-of-mouth referral channels to build business Use influential or believable people in testimonial advertising All of the above would stimulate the channel14. There are several tasks that are specific to the salesperson Which of the following is not one ofthose tasks? Prospecting Packaging Selling Servicing15. Which of the following is not one of the major steps in effective selling? Prospecting Product production16.101G © Copy Right : Rai University 487
    • Marketing Management Pre-approach Follow-up and MaintenanceESSAY QUESTIONS Describe the parts of a creative brief that is used to create advertising. Describe how an advertiser chooses the media to be used for an advertisement. What are the reasons a manufacturer would award money to the trade? A target audience may not receive the intended message delivered by a company for three reasons. Describe the reasons State the steps in developing effective communication.488 © Copy Right : Rai University 16.101G
    • Marketing Management Tutorial-NMarketing Spotlight-OracleLarry Ellison, along with three partners, founded the database management software company Sys-tem Development Laboratories in 1977. In 1982, the company changed its name to Oracle, after thename of its first product. By 1988, Oracle had a 36 percent share of the U.S. government’s PCdatabase market. The company began offering consulting services to its customers in 1989.Oracle’s adjustment to this rapid growth was not seamless, however. The company developed areputation as a leader in “vaporware,” or products that are announced publicly but are still underdevelopment and therefore unavailable. Its software often contained numerous bugs or lacked prom-ised features. The company found itself embroiled in an accounting scandal in 1990, a result of awidespread practice among the sales representatives of recording sales a quarter early in order toboost earnings during slow quarters. Oracle was forced to restate earnings, pay a fine to the SEC,and spend millions of dollars settling shareholder lawsuits. The company’s stock plummeted as aresult of these developments.Beginning in 1991, Ellison enacted a plan that rescued Oracle from the brink. He secured $80 millionin financing from Nippon Steel, installed experienced Booz Allen manager Ray Lane as COO andpresident, reduced headcount by 10 percent, and imposed stricter policies governing its sales force.Ellison took a hands-on approach to establishing sales protocol for his company. He rewrote salescontracts himself and initiated a standard pricing policy that eliminated haggling. He also altered thecompensation scheme so that managers were rewarded for meeting profit-margin targets ratherthan for reaching sales volume quotas regardless of cost.These moves, along with the launch of the next-generation Oracle 7 database in 1993, allowed thecompany to complete a turnaround. By 1994, the company was the number-one database manage-ment software maker in the world, with sales exceeding $2 billion that year. Oracle’s revenues tripledbetween 1995 and 1999, yet the company’s sales force doubled during the same period. In 1998, thecompany split its sales force into two teams. One team concentrated on the company’s core products– database software – while the other team was charged with selling Oracle’s data-processingapplications. More than anything else, however, Oracle’s sales reps were able to handle the heavyworkload because the company embraced the Internet. In 1999, 25 percent of the company’s soft-ware sales were accomplished online.As business continued to flood the company, Oracle sought to take more of its business to the Web.It invested in a new e-commerce site called OracleSalesOnline.com – later renamed Sales.Oracle.com– that enables customers to place orders directly online. The site also allows customers to purchaseupgrades and add users to its license. Oracle also developed another site that sales reps use todemonstrate software during phone calls with customers, who are then directed to order online.Additionally, it required sales reps to enter detailed customer data into a central system that othersalespeople or executives can access. In 2001, the company integrated online customer service andsupport features with the Sales.Oracle.com service, calling this new site Support.Oracle.com. Thecompany also licensed its sales and support applications to more than 10,000 companies around theworld.Oracle’s network of information and its powerful software helped trim costs considerably. The com-pany claimed in an aggressive ad campaign that it saved $1 billion in 2000 by running its own e-business software. In a specific instance, a manager noticed one day that U.S. sales forecastsdropped $3.5 million. Using the network, the manager identified which company had changed itspurchase, contacted the sales rep working with the account, who renegotiated the deal in less than 24hours. In another example of cost cutting, the company moved its sales and training meetings with16.101G © Copy Right : Rai University 489
    • Marketing Managementcustomers from hotels and conference centers to the Web. These Web-conferences reduced costsfrom $325 per person to two dollars a head.Competitors are quick to criticize Oracle’s aggressive sales tactics. An executive from IBM criti-cized Oracle’s strategy of over promising: “They take the P.T. Barnum approach to business: There’sa sucker born every minute.” Oracle’s 85 percent customer-retention rate, which is higher thaneither Microsoft’s or IBM’s, proves that many customers are satisfied with the company’s productsand service. Aggressive sales and marketing, along with sales force automation based on the Internet, have helped Oracle become the largest application server company in the world. However, Oracle faces some complex marketing issues for the future. Develop some of these issues, based on information from the text and case materials Oracle’s turnaround was rapid and dramatic, but was their marketing success the cause or the effect of other important changes? Discuss If Oracle continues to apply aggressive sales tactics, despite the high rate of customer retention, what can we assume about its customers and the future of the business sector?490 © Copy Right : Rai University 16.101G
    • Marketing Management Glossary of MarketingA- B- C- D- E- F- G- H- I- J- K- L- M- N- O- P- Q- R- S- T- U- V- W- X- Y- ZGlossary of Marketing DefinitionsaccessAccess to library materials and services, on one dimension, is represented in the location of physicalfacilities. Because libraries are travelled-to outlets, marketing location theories can be applied suc-cessfully to library siting. (Wood and Koontz)accountabilityLibraries like private sector businesses are increasingly called upon to make all units accountable forresults. Growing funds are needed for technology as opposed to only books. Funders often cut thelibrary budget first, in favor of other agencies such as police and fire or other seemingly, morenecessary agencies. Libraries are developing better performance measures within the present daycontrol systems to offer better accountability. (Wood and Koontz)acculturationThe process by which people in one culture or subculture learn to understand and adapt to the norms,values, life styles and behaviors of people in another culture or subcultures. For example, accultura-tion is the process by which a recent immigrant learns the way of life of the new country. Libraryservices and materials facilitate this process.acquisition valueThe users’ perception of the relative worth of a product or service to them. Formally defined as thesubjectively weighted difference between the most a buyer would be willing to pay for the product orservice, less the actual price of the item. Time user must spend to ‘acquire’ is often used as asurrogate for ‘relative worth or price paid,’ in library research. For example, a user might be willingto expend drive time and a brief time in the library to check out a best seller, but not wait two weeksfor a copy to be returned.activities, interests, and opinions (AIO)A measurable series of psychographic (as opposed to demographic) variables involving the interestsand beliefs of users. Note, because psychographics are usually expensive to gather, yet offer a moreprecise profile of users, demographic variables are usually relied upon.adopter categoriesPersons or agencies that adopt an innovation are often classified into five groups according to thesequence of their adoption of it. (To illustrate this think of individual use of the Internet within thelibrary, and for an agency, libraries that offer Internet access to the general public. 1) Innovators(first 2-5%); 2) Early adopters (10-15%)’ 3) Early majority (next 35%); 4) Late majority (next 35%);5) Laggards (final 5-10%). This is important when considering how long it may take for the generalpublic to ‘adopt’ a product or service.advertisingThe placement and purchase of announcements and persuasive messages in time or space in any ofthe mass media by business firms, nonprofit organizations. This has not been a traditional method ofinforming the public, rather public service announcements, which are placed at no cost, are the normfor libraries.16.101G © Copy Right : Rai University 491
    • Marketing ManagementA concept of market segmentation that assumes that most consumers are alike. A library of the pasthad an ‘opening day’ collection of materials, that could be found in most towns and cities. Today’slibraries are more aware of considering the unique needs of individuals in the market area.agingThe length of time merchandise has been in stock. For the library this could be of benefit by gainingknowledge about the duration of certain goods.all-you-can-afford budgetingAn approach to the advertising budget that establishes the amount to be spent on advertising as thefunds remaining after all other necessary expenditures and investments are covered. Libraries oftenrelegate all promotion related materials and services into this category.ambianceAn overall feeling or mood projected by a store through its aesthetic appeal to human senses. Abrightly colored children’s room is more appealing to juveniles than an area sectioned off within theadult room which blends in.analysisIn marketing and other social science disciplines, a variety of statistical and nonstatiscal methods areused to analyze data, instead of sheer intuition, or simple descriptive statistics— which have been thenorm in the library filed. (Wood and Koontz)attitudesEnduring systems of positive or negative evaluations, emotional feelings, and action tendencies withrespect to an object. Consumer’s overall liking or preference for an object. (Assael)atmosphericsThe physical characteristics of the library such as architecture, layout, signs and displays, color,lighting, temperature, access, noise, assortment, prices, special events, etc., that serve as stimuli andattention attractors of users to the library or information agency.audienceThe number and/or characteristics of the persons or households who are exposed to a particular typeof advertising media or media vehicle. In a library this could be a certain number of people that attenda library program.auditThe process of reviewing the library’s strengths and weaknesses (internally), and opportunities andthreats (externally) to shed light on the agency’s performance.balanced stockThe composition of merchandise inventory in the colors, sizes, styles and other assortment character-istics that will satisfy user wants. For the library this would mean, services and materials based uponusers wants and needs.barcodeAn information technology application that uniquely identifies various aspects of product character-istics, increasing speed, accuracy, and productivity of distribution process. Most library materials arebarcoded for security.492 © Copy Right : Rai University 16.101G
    • Marketing Managementbenefit segmentationThe process of grouping users into market segments on the basis of the desirable consequencessought from the product. For example, the library market for children’s books, may include childrenand parents who are benefiting by developing the library and reading habit, and or recent immigrantswho benefit from learning the language of the new country. Each is receiving a benefit from theproduct or service.body languageThe nonverbal signals communicated in interactions through facial expressions, arms, legs and hands—or nonverbal communication. This can be positive ( a smile) or negative (a frown.)brandA name, term, design, symbol, or any other feature that identifies one seller’s good or service asdistinct from those of other sellers. The legal term for brand is trademark. A brand may identify oneitem, a family of items, or all items of that seller. If used for the firm as a whole, the preferred termis trade name. Library could be considered a trade name.broadcast televisionA method of distributing television signals by means of stations that broadcast signals over channelsassigned to specific geographic areas.budgetThe detailed financial component of the strategic plan that guides the allocation of resources andprovides a mechanism for identifying deviations of actual from desired performance so correctiveaction can be taken. A budget assigns a dollar figure to each revenue and expense related activity. Abudget is usually prepared for a period of one year by each component of an organization. A budgetprovides both a guide for action and a means of assessing performance. A budget is a library’s postcontrol system.bureaucratic organizationOfficial decision making is circumscribed by laws, rules, and regulations which often result in inflex-ibility, “red tape” and slowness to act. A hierarchical business structure, unlike business that operatesin a competitive environment that does not reward slow decision making if it results in poor sales orcustomer service. Library’s are often linked to large bureaucracies, government or schools anduniversities.cable televisionA method of distributing television signals by means of coaxial or fiber-optic cables. Some librarieshave programs on public access channels.censusA complete canvass of a population.census blockUsually a well-defined rectangular area bounded by streets or roads. It may be irregular in shape andmay be bounded by physical features such as railroads or streams. Census block do not cross bound-aries of countries, tracts, or block numbering areas.census tractA small, relatively permanent area (US) into which metropolitan statistical areas (MSAs) and certainother area are divided for the purpose of providing statistics for small areas. When census tracts are16.101G © Copy Right : Rai University 493
    • Marketing Managementestablished they are designed to be homogeneous with respect to population characteristics, eco-nomic status and living conditions. Census tracts generally have between 2,500 and 8,000 residents.chain store systemA groups of retail stores of essentially the same type, centrally owned and with some degree ofcentralized control of operation. This would be similar to the public library’s system of branches.channel of distributionAn organized network of agencies and institutions which in combination perform all the functionsrequired to link producers with end customers to accomplish the marketing task. For a library thiswould include vendors, publishers as well as library facilities.circulationThe number of copies of a print advertising medium that are distributed. For the library field, this isnumbers of items checked out by users.classic merchandiseThe merchandise that is not influenced by style changes for which a demand virtually always exists.For the library this might be print encyclopedias, indexes, classical literary works.clusteringA statistical method of forming natural groupings in which a number of important characteristics of alarge diverse group are identified in order to define target markets. For a library such a cluster mightinclude higher education levels, and income. (Wood and Koontz)community analysisFor a public library this is a market research exercise reviewing library statistics, population servedcharacteristics, users and other stakeholders in the library characteristics to better profile the library’smarket area. (Wood and Koontz)community relationsThe library’s interactions with the locality in which it operates, with emphasis on disseminating li-brary-related information to foster trust in the library or information organization’s activities.competitionThe rivalry among sellers trying to achieve such goals as increasing profits, market share and salesvolume by varying the elements of the marketing mix: price, product, distribution and promotion. Theagency changes to better meet consumer wants and needs. For a library competition may be book-stores, community events, video stores or even other libraries.consumerThe ultimate user of goods, ideas or services. Also the buyer or decision maker, for example, theparent selecting children’s books is the consumer.consumer behaviorThe behavior of the consumer or decision maker in the market place of products and services.Library user behavior is often captured in library literature under use studies.consumer characteristicsThe demographic, lifestyle and personality characteristics of the consumer. For a library this wouldbe the user.494 © Copy Right : Rai University 16.101G
    • Marketing Managementconsumer satisfactionThe degree to which a consumer’s expectations are fulfilled or surpassed by a product. User satis-faction with library services and materials is often difficult to determine because: 1) there is no clearring of the cash register at the end of the day; 2) privacy issues concerning use of library materialsand services usually deter marketing-type exit interviews; 3) and little research is conducted in thisarea due to lack of expertise.contingency planningDeveloping plans to provide alternative plans to the main plan. This is proactive management thatdeals with events considered unlikely to occur. For example, while a library budget may appear to beadequate and stabile, a contingency plan should be in place in case of cutbacks in funding.convenience productA consumer good and/or service (such as soap, candy bar, and shoe shine) that is bought frequently,often on impulse, with little time effort spent on the buying process. A convenience product usually islow-priced and is widely available. For a public library this type of material might be newspapers ormagazines, or perhaps a quick selection of other materials with little browsing or research. Thesematerials or services are usually located within facility for easy and quick access.convenience sampleA nonprobability sample of individuals who just happen to be where the study is being conductedwhen it is being conducted. For example, a library could interview people exiting the library asking,‘Were you satisfied with the materials and services, if not why?’copyrightA copyright offers the owner of original work that can be printed, recorded or “fixed” in any mannerthe sole right to reproduce and distribute the work, to display or perform it and to authorize other to doso., during the author’s lifetime and for fifty years thereafter.core productThe central benefit or purpose for which a consumer buys a product or service. The core productvaries from purchaser to purchaser. For a library user the core benefit of checking out a book, maybe for one user that there is no charge, and to another the availability of a work which can no longerbe purchased.correlation analysisA statistical technique used to measure the closeness of the linear relationship between two or moreintervally scaled variables. For example public library use has a close linear relationship with peopleof higher education and income.cultureThe set of learned values, norms, and behaviors that are shared by a society and are designed toincrease the probability of the society’s survival. These include shared superstitions, myths, folk-ways, mores and behavior patterns that are rewarded or punished. For libraries, the understanding ofdifferent cultures, as new immigrant groups move into the market area is extremely important to takeinto consideration, in order to provide the needed materials and services.customerThe actual or prospective purchaser of products or services. The library user is the library’s cus-tomer.16.101G © Copy Right : Rai University 495
    • Marketing ManagementdatabaseA compendium of information on current and prospective users that usually includes demographicdata as well as use data, volume and content. This is a privacy issue in American libraries. Theaddress data of library users can be called “point-of-sale (use) data and is a rich source of marketingdata for library management.decennial censusIn the U.S. this is a complete count of the population every ten years. For example the next count isthe year 2000, and previous years 1990, 1908, etc. There is also a sample census which is taken forhundreds of other population descriptive characteristics. For the library field census data are identi-fied that strongly indicate library use through research.decision support system (DSS)A decision support system (marketing definition) is a systematic collection of data, techniques andsupporting software and hardware by which an organization gathers and interprets relevant informa-tion from business and the environment and turns it into a basis for making management decisions. ADSS differs from a management information system in that it is designed to answer precise questionsand what/if questions. An example would be, ‘What affect on system library use will there be ifBranch X is closed?’Delphi techniqueA frequently used method in futures research to gain consensus opinion among experts about likelyfuture events, through a series of questionnaires.demandThe number of units of a product sold in a market over a period of time. For example, six thousandlibrary books were circulated in Branch X’s market area last year.demarketingThe process of reducing the demand for a product—or decreasing consumption.demographicsObjective characteristics of consumers such as age, income, education, sex or occupation (Assael.)descriptive researchA research design in which the major emphasis is on determining the frequency with which some-thing occurs. For example, how often users access the Internet in a given month.destination merchandiseA type of merchandise that motivates or triggers a trip to a specific store. A library’s special collec-tion on African history is an example. This is also a ‘specialty good.developing countryCharacteristics: 1) more than 33% of the population is engaged in agriculture, less than 30% ofpopulation is urban; 2) at least 50% of population is literate; and 3) highly developed industrial sectorsand consumer markets of significant per capita size.diffusion modelA model representing the contagion or spread of something through a population. (Examples: spreadof air conditioning in Florida and subsequent population growth, and spread of Library of Congresspre-printed cards to American libraries.) Mathematical formulations are available to predict spread/growth.496 © Copy Right : Rai University 16.101G
    • Marketing Managementdiffusion of innovationThe spread of innovation with a market group in stages—innovators (2- 5%), early adopters (10-15%), early majority (next 35%), late majority(next 35%), and laggards (final 5-10%.) Fair amount ofdisagreement about the percentages.direct marketingMarketing efforts, in total directed toward a specific targeted group—direct selling, direct mail, cata-log or cable—for soliciting a response from customer. A library may mail a library registration cardto every new mother in the hospital.directional and departmental signageA signage system that helps guide the library user through the library and locate specific departmentsof interest.displayA special exhibit of a product or service at the point of sale, generally over and above standard shelfstocking. Simply books place on display over specific subject areas.distributionThe marketing and carrying of products to customers (bookmobiles, facilities, library loan.)diversification (Wood)Extends skills or experience from current product or market activities rather than covering totallyunfamiliar territory. Customized online searches by reference librarians would extend their currentresearch in print skills.dummyPreliminary layout for an ad, or other print material.dwell timeThe amount of time a customer/user spends in time waiting in line. For a library user this is a priceexpended.dwelling unitA single home or other unit in which a cohesive set of individuals reside, and typically many good sare purchased in common.economic environmentPart of the macroenvironment encompassing wealth, income, productivity, inflation, credit, employ-ment, etc. which affect the agency/library’s markets and opportunities.eighty-twenty principleThe situation in which a disproportionately small number (e.g., 20%) of staff, products or usersgenerate a disproportionately large amount (e.g., 80%) of a firm’s use/profits. A use analysis shouldbe conducted to determine what the cause is.elasticityThe degree that an economic variable changes in response to a change in another economic variable.For example how much library use changes according to how far an individual must travel for libraryservices.16.101G © Copy Right : Rai University 497
    • Marketing Managementenvironment, externalThe complex set of physical and social stimuli in the external world of consumers.environmental analysisGathering data regarding political, cultural, social, demographic, economic, legal, international andecological forces , identifying trends affecting agency.environmental monitoringKeeping track of a changes in the environment.erratic demandA pattern of demand for a product that is varied and unpredictable, e.g., some best sellers, or specificonline databases randomly assigned in curriculum by teachers.evoked setA set of alternatives that are activated directly from memory—certain brands considered during thebuying process.exchangeAll activities associated with receiving something from someone by giving something voluntarily inreturn. This is the heart of the marketing process. A library user gives time instead of money toborrow materials, but it is still an exchange.exhibitThe gathering and displaying of products, people, or information at a central location for viewing bya diverse audience. Most libraries have exhibits created by staff, community or other stakeholders.experience surveyA series of interviews with people knowledgeable about the general subject being investigated.exploratory researchA research design in which the major emphasis is on gaining ideas and insights.external dataData that originate outside the organization for which research is being done.factor analysisA body of statistical techniques concerned with study of interrelationships among a certain set ofvariables—none of which is given the special status of a criterion variable.familyA group of at least two people in a household based on marriage, cohabitation, blook relationships oradoption.family decision makingThe processes, interactions, and roles of family members involved in making decisions as a group.family life cycleA sociological concept that describes changes in families across time, emphasizing effects of mar-riage, divorce, births and deaths on families and changes in income.498 © Copy Right : Rai University 16.101G
    • Marketing ManagementfeatureThe use of advertising, displays, or other activity, generally by a retailer, to call special attention to aproduct, generally for a limited period of time.feature storyA type of publicity material that can be used by the media at their convenience because it is not time-related. Library materials and services available are good candidates for this type of story.fill rateAn inventory’s availability goal used when setting customer service objectives, for example 80 out of100 reference questions were answered in a workday.flagship storeIn a local department store organization/library system, the main or central store/library when it islarge or dominant in relation to other company stores.focus groupA method of gathering quantitative data on the preferences and beliefs of consumers through groupinteraction and discussion usually focused on a specific topic or product.forecasting modelsIn forecasting sales, or library use, or other objectives, a variety of statistical models are used andavailable, offering insights otherwise difficult to obtain.galley proofA copy of the individual pages of an ad, brochure, poster or other printed material used for finalproofreading of the text before final negatives are made for the printing process.gatekeeperUsually the individual who controls the flow of information from the mass media to the group orindividual.geodemographyThe availability of demographic consumer behavior and life style data by arbitrary geographic bound-aries that are typically quite small. For example, a library-designated service area of two censustracts (US).goalsA concrete point of measurement that the business unit/library intends to meet to achieve objectives.For example, the library’s goal is to improve reference services, its objectives include increasing fillrate by 20% in two months.goodsA product that has tangible form in contrast to services that are intangible. A book versus a storyread.gravity modelA theory about the structure of market areas. The model states that the volume of purchases byconsumers/users the frequency of trips to the outlets are a function of the size of the stores/libraryand the distance between the store and the origin of the shopping trip.growth state of product life cycle16.101G © Copy Right : Rai University 499
    • Marketing ManagementSecond stage during which sales/use are increasing.habitA learned response to a stimulus that has become automatic and routine, requiring little or no cogni-tive effort. It is often said that the reading and library habit if not learned as a child, will not be learnedas an adult.halo effectA problem that arises in data collection when there is carry over from one judgement to another.high income countriesCountries whose income per capita are high compared to the rest of the world.imageThe sum of beliefs, ideas and impressions that a person has of an object or agency. (Assael). Forexample, the library holds an image of prestige for some communities.income differentialThe difference in income levels among people of various categories, such as different jobs, geo-graphic areas, age classes, sexes, races and the like.industrialized countryCharacteristics: 1) degree of urbanization increases, literacy levels are high, exceeding 85%, popula-tion engaged in agriculture drops substantially; 2) wage levels rise sharply and ownership of durables;3) need for labor saving methods creates new industries.key success factorsThe factors that are a necessary condition for success in a given market. For example in a highlyhispanic market, a library to succeed would have spanish language materials.knowledgeConsumers’ meanings or beliefs about products, brands, stores, that are stored in memory.life styleThe manner in which people conduct their lives, including their activities, opinions, and interests(AIO).literature searchA search of statistics, trade journal articles and other media for data or insight into the problems athand. Special libraries often provide customized searches for a fee.low income countriesCountries with the lowest income per capita compared with the rest of the world. The bottom quartileis often considered low income.macroenvironmentThe conditions facing a company/library including demographic economic, natural, technological,political, and cultural forces.market500 © Copy Right : Rai University 16.101G
    • Marketing ManagementThe set of actual of potential users/customers. (Kotler)market areaA geographical area containing the customers/users of a particular firm/library for specific goods orservices. (The library’s legal service area.)market demandThe total volume of a product or service bought/used by a specific groups of customers/users in aspecified market area during a specified period.market developmentExpanding the total market served by 1) entering new segments, 2) converting nonusers, 3) increas-ing use by present users.market positioningPositioning refers to the user’s perceptions of the place a product or brand occupies in a marketsegment. Or how the company/library’s offering is differentiated from the competition’s.market profileA breakdown of a facility’s market area according to income, demography, and life style (often.)market researchThe systematic gathering, recording and analyzing of data with respect to a particular market, wheremarket refers to a specific user group in a specific geographic area.market segmentationThe process of subdividing a market into distinct subsets of users that behave in the same way orhave similar needs. Segments for the library could be demographic (Asian); geographic (branch-level); psychographics (leisure-oriented); customer size (largest user group area); benefits (havechildren in the home learning to read.)market shareA proportion of the total sales/use in a market obtained by a given facility or chain.marketingThe process of planning and executing the conception, pricing, promotion, and distribution of ideas,goods, and services to create exchanges that satisfy individual and organizational goals.marketing channelA set of institutions necessary to transfer the title to goods and to move goods from the point ofconsumption. (Vendors, publishers, library facilities.)marketing mixThe mix of controllable variables that the firm/library uses to reach desired use/sales level in targetmarket, including price, product, place and promotion- 4 P’s.marketing opportunityAn attractive arena of relevant marketing action in which a particular organization is likely to enjoy asuperior and competitive advantage. (Kotler) marketing plan A document composed of an analysisof the current marketing situation, opportunities and threats, analysis, marketing objectives, market-ing strategy, action programs, and projected income statement16.101G © Copy Right : Rai University 501
    • Marketing Managementmaturity stage of product life cycleInitial rapid growth is over and use/sales level off. microenvironment The set of forces close to anorganization that have direct impact on its ability to serve its customers, including channel memberorganizations, competitors, user markets, publics and the capabilities of the organization.mission statementAn expression of a company’s/library’s history, managerial preferences, environmental concerns,resources, and competencies. It is used to guide the company’s decion making process, answeringwhat is our business, who do we serve, etc.moresThe cultural norms that specify behavior of vital importance to society and embody its basic moralvalues.motivationThe positive or negative needs, goals, desires and forces that impel an individual toward or awayfrom certain actions, activities, objects or conditions. The inner needs and wants of an individual—what affects behavior.multiple purpose tripA key concept in central place theory that argues consumers prefer to visit more than one store pertrip, generating positive externalities for neighboring stores. This view has mixed reviews in thelibrary field.newsletterA brief digest of important or noteworthy information. A method of reaching various publics quickly—e.g., the friends of the library newsletter.nominal scaleA measurement scale in which numbers are assigned to attributes of objects or classes of objectssolely for the purpose of identifying the objects.nonprobability sampleA sample that relies on personal judgment somewhere in the element selection process.nonprofit marketingThe marketing of a product or service in which the offer itself is not intended to make a monetaryprofit for the marketer.normsThe rules of behavior that are part of the ideology of the group. Norms tend to reflect the values ofthe group and specify those actions that are proper and those that are inappropriate, as well asrewards for adherence and the punishment for conformity. Norms are important for librarians tounderstand when serving culturally diverse markets.objectivesThe desired or needed result to be achieved by a specific time. An objective is broader than a goal,and one objective can be broken down into a number of specific goals.observationA method of data collection in which the situation of interest is watched and the relevant facts,502 © Copy Right : Rai University 16.101G
    • Marketing Managementactions and behaviors are recorded. This is a important area of library use which is usually un-counted—what people are actually doing in the library e.g., browsing, using the computer, reading toa child, etc.opinionA belief or emotionally neutral cognition the individual holds about some aspect or object in theenvironment.ordinal scaleA measurement in which numbers are assigned to attributes of objects of classes of objects to reflectthe order.output evaluationAn objective measure of use performance, such as circulation per capita of a library population,reference transactions per capita, etc.patronage motivesThe motives that drive an individual/user toward selection of a particular outlet, retailer, or supplier ofservices.penetrated marketActual set of users actually consuming the product/service. (Kotler)per capita incomeA nation’s or other geographic market’s total income divided by the number of persons in its popula-tion.perceptionPerception is the cognitive impression that is formed of “reality” which in turn influences the individual’sactions and behavior toward that object.personal incomeThe current income received by persons from all sources less contributions for social insurance—e.g., Social Security (US).personal interviewA direct, face-to face conversation between a representative of the research organization (the inter-viewer) and a respondent or interviewee.personalityConsistent pattern of responses to the stimuli from both internal and external sources.physical inventoryAn inventory determined by actual count and evidenced by a listing of quantity, weight, or measure.Number of volumes, periodicals, vides a library owns.placeIn the channels of distribution, the physical facilities point of location.point-of-purchasePromotional materials placed at the contact sales point designed to attract user interest or call atten-16.101G © Copy Right : Rai University 503
    • Marketing Managementtion to a special offer, e.g., ‘Sign up for Summer Reading Program.point-of-sale(POS)A data collection system that electronically receives and stores bar code information derived from asales transaction. This could the zip codes for library users, facilitating the library in determininggeographic market are that users reside in.populationThe totality of cases that conforms to some designated specifications.positioning(see product positioning)potential marketSet of users who profess some level of interest in a designed market offer. (Kotler)poverty levelThe poverty level is based solely on money income and updated every yearr to reflect changes in theconsumer price index, used to classify families as being above or below the poverty level.preindustrialized countryCharacteristics: 1) Low literacy rates and high perecentage of employment in agriculture; 2) lowpopulation density and low degree of urbanization; 3) linguistic heterogeneity and a small percentageof working age population; 4) industrial sectors nonexistent and undeveloped; 5) heavy reliance onforeign sources for all manufacturers and principal engagement in agricultural endeavors.press conferenceA convening of media by a person or organization to explain, announce or expand on a particularsubject.priceThe formal ratio that indicates the quantities of money goods or services needed to acquire a givenquantity of goods or services. For a library user price may come in the form of time the library usersmust expend to obtain library materials or services.private sectorActivities outside the public sector that are independent of government control, usually, but not al-ways carried on for a profit.productA bundle of attributes or features, functions, benefits and uses capable of exchange, usually in tan-gible or intangible forms. The library’s products include materials to use, questions answered, storyhours,online searching, etc.product life cycleThe four stages products go through from birth to death: introductory, growth, maturity, and decline.product mixThe full set of products offered by an organization e.g., books, videos, storyhours, etc.504 © Copy Right : Rai University 16.101G
    • Marketing Managementproduct positioningThe way users/consumers view competitive brands or types of products. This can be manipulated bythe organization/library. The library’s video collection, available for free, is competitive with localvideo stores that charge, if video collections are comparable. If the collections are not, the library isdifferentiating the video collection from the video store.promotion mixThe various communication techniques such as advertising, personal selling, sales promotion, andpublic relations/ product publicity available to the marketer to achieve specific goals. A library mayuse a combination of newspaper editorial, public service announcements (PSAs) on radio and pos-sible television, if no budget is available for advertising.psychographic analysisA technique that investigates how people live, what interests them, what they like—also called lifestlyeanalysis or AIO because it relies on a number of statements about a person’s activities, interests andopinions.psychographic segmentationDividing markets into segments on the basis of consumer life styles.public opinionThe consensus view of a population on a topic. public policy A course of action pursued by thegovernment pertaining to people as a whole on which laws rest.public relationsThe form of communication management that seeks to make use of publicity and other nonpaidforms of promotion and information to influence feelings, opinions or beliefs about the agency/libraryand its offerings. This is a traditional form of communication for library management, as paid adver-tising media is rarely used.public sectorThose marketing activities that are a carried out by government agencies for public service ratherthan for profit.public service announcement (PSA)An advertisement or commercial that is carried by an advertising vehicle at no cost as a publicservice to its readers, viewers, or listeners. While the no cost aspect is appealing, a library or otheragency utilizing this media quickly realizes there is no control on the most effective time of place-ment.publicsThe groups of people that have an actual or possible interest in or impact on the company’s efforts toachieve its goals.quality controlAn ongoing analysis of operations, to verify goods or service meet specified standards, or to betteranswer customer/user complaints. Libraries have been criticized for not employing more qualitycontrol standards on library services.quality of life16.101G © Copy Right : Rai University 505
    • Marketing ManagementSometimes measured by income, wealth, safety, recreation and education facilities, education health,aesthetics, leisure time and the like.quantity discountA reduction in price for volume purchases.questionnaireA document that is used to guide what questions are to be asked respondents and in what order,sometimes lists the alternative responses that are acceptable. An excellent research instrument forlibraries to assess customer satisfaction on exit interviews.rangeThe maximum distance a consumer is ordinarily willing to travel for a good or service; as such itdetermines the outer limit of a store/library’s market area. Research in the library field indicate thereis an average two mile limit for a library user to travel to a branch, while for a central library withspecialized good, it may widen to even 10 or 15 miles. This research does not allow for the travellimitations imposed by culture, age, or physical handicap, or topographical barriers.reachThe number of people or households exposed to a particular advertising media or media scheduleduring a specified time.reference groupA group that the individual tends to use as the anchor point for evaluating his/her own beliefs andattitudes. Teenagers influence their peers regarding library use.regression analysisA statistical technique to derive an equation that relates a single, continuous criterion variable to oneor more continuous predictor variables.Reilly’s lawA model used in trad area analysis to define the relative ability of two cities to attract users from thearea between them.respondentA person who is asked for information using either written or verbal questioning, typically employinga questionnaire to guide the questioning.rolesThe behavior that is expected of people in standard situations.rural populationThe part of the total population not classified as urban.salaryCompensation paid periodically to a person independent of performance (in sales or levels of usestimulated.)sampleThe selection of a subset of elements from a larger group of objects.506 © Copy Right : Rai University 16.101G
    • Marketing Managementsample surveyA cross sectional study in which the sample is selected to be representative of the target populationand in which the emphasis is on the generation of summary statistics such as averages and percent-ages.scannerAn electronic device that automatically reads imprinted codes, as the product is pulled across thescanner. The library field is successfully using these for circulation and other use counts.secondary shopping districtA cluster of stores outside the central business district that serves a large population within a sectionor part of a large city.segmentation(see market segmentation)self-conceptThe ideas, attitudes, and perceptions people have about themselves.self serviceThe type of operation in which the customer/user is exposed to merchandise (browsing and self-selection) without assistance, unless customer/user seeks assistance.selling orientation (Wood)A company-centered rather than a client-centered approach to conduct of business. This orientationtends to ignore what the customer/user really wants and needs.service(s)Products such as a bank loan or home security or library loans, that are intangible or at least substan-tially so.shopping goodGoods and products can be classified as convenience, shopping or specialty. A shopping good is onethat more time is spent selecting (browsing) than a quick convenience good. Example, a certain typeof mystery book.situation analysis (SWOT)An examination of the internal factors of a library to identify strengths and weaknesses, and theexternal environment to identify opportunities and threats.sloganThe verbal or written portion of an advertising message that summarizes themain idea in a fewmemorable words—a tag line.social advertisingThe advertising designed to education or motivate target audiences to undertake socially desirableactions.social classA status hierarchy by which groups and individuals are classified on the basis of esteem and prestige.16.101G © Copy Right : Rai University 507
    • Marketing Managementsocial indicatorThe data and information that facilitate the evaluation of how well a society or institution is doing.specialty advertisingThe placement of advertising messages on a wide variety of items of interest to the target marketssuch as calendars, coffee cups, pens, hats, note paper, t-shirts, etc. These are widely given out tolibrarians at professional conferences from vendors. Libraries may use these items as well, but areusually sold in library gift shops.specialty goodA specialty good is one that users/consumers will spend more time searching for, and time travellingto and pay higher for. A library specialty good could be a certain online service or special collectionof materials.stakeholderOne of a group of publics with which a company must be concerned. Key stakeholders for a librarycould be users, employees, board members, vendors or other who have a relationship with the library.store layoutThe interior layout of the store/library for the ease of user movement through the store to providemaximum exposure of good and attractive display. Retail store layout, is also successfully applicableto library layout.strategic market planningThe planning process that yields decisions in how a business unit can best compete in the markets itelects to serve. The strategic plan is based upon the totality of the marketing process.subcultureThe segments within a culture that share distinguishing meanings, values, and patterns of behaviorthat differ from those of the overall culture. These subcultures are important to recognize in librarycommunities that may serve a disproportionate number, whose information needs may be nontradi-tional and unique.subliminal perceptionA psychological view that suggests that attitudes and behaviors can be changed by stimuli that arenot consciously perceived.target marketThe particular segment of a total population on which the retailer focuses its merchandising expertiseto satisfy that submarket in order to accomplish its profit objectives. Or for the library, a targetmarket might be within the market area served, children 5-8 years old, for summer reading programs,to increase juvenile use and registration.target market identificationThe process of using income, demographic, and life style characteristics of a market and censusinformation for small areas to identify the most favorable locations.technologyThe purposeful application of scientific knowledge; an environmental force that consists of inven-tions and innovations from applied scientific and engineering research.telephone interview508 © Copy Right : Rai University 16.101G
    • Marketing ManagementA telephone conversation between a representative of the research organization, the interviewer,and a respondent or interviewee.thumbnailA rough sketch for a layout for a piece of print advertising.transportationA marketing function that adds time and place utility to the product by moving it from where it ismade to where it is purchased and used. In includes all intermediate steps in the process.underdeveloped countryCharacteristics: small factories erected to supply batteries, tires, footwear, clothing, building materi-als and packaged foods; agricultural activity declines and egree of urbanization increases; availableeducational effort expands and literacy rises.underprivileged familyA family in social class that does not have enough money to purchase the necessities, i.e., shelter,clothing and transportation, appropriate for its class status.unit controlThe control of stock in terms of merchandise units rather than i terms of dollar value. This is repre-sentative of a the number of books, magazines, etc of a library collection.urban populationPersons living in places of 2,500 or more inhabitants incorporated as cities, villages, boroughs, orareas designated as such by the US Census, with some exceptions.utilityThe state or quality of being useful. What is the utility of marketing practices to the library field?VALS (values and lifestyles)An acronym standing for values and life styles. VALS is a psychographic segmentation approachdeveloped at Stanford Research Institute International. This data is useful to public and privatesector. Unfortunately, the data is still largely expensive, therefore, libraries and other non-profits stillwidely rely on demographics.valueThe power of any good to command other goods in peaceful and voluntary exchange.valuesThe beliefs about the important life goals that consumers are trying to achieve. The important endur-ing ideals or beliefs that guide behavior within a culture or for a specific person.varietyThe number of different classifications of goods carried in a particular merchandising unit. Howmany different children’s authors are represented in the juvenile collection?vicarious learningThe changes in an individuals behavior brought about by observing the actions of others and theconsequences of those actions. Research indicates that immigrant adults often learn about the read-ing land library habit through their children’s same experiences at school.16.101G © Copy Right : Rai University 509
    • Marketing ManagementvisionA guiding theme that articulates the nature of the business/library and its intentions for the future,based upon how management believes the environment will unfold. A vision is informed, share,competitive and enabling.wantsThe wishes, needs, cravings, demands or desires of human beings.wealthThe aggregate of all possessions of economic good owned by a person.will-callThe products ordered by customers/users in advance of the time delivery desired. Books on reserve.word of mouth communication(WOM)This occurs when people share information about products or promotions with friends—researchindicate WOM is more likely to be negative.workroomA service department such as apparel alterations, drapery manufacture, library materials processing.young single stage(see family life cycle)ZIP codeA geographical classification system developed by the U.S. government for mail distribution, a nestednumeric range of 5 to 9 numbers.REFERENCESAssael, Henry. Consumer Behavior and Marketing Action, 2nd ed. Boston, MA.: Kent PublishingCo., 1984.Bennett, Peter D., ed. Dictionary of Marketing Terms,, 2nd ed. Published in conjunction with theAmerican Marketing Association. Chicago, IL.: NTC Business Books, 1995.Koontz, Christine. Florida State University, Tallahassee, FL 32306. Developed library definitionsfrom fifteen years of work and reading in the marketing field. Taught non-profit marketing to gradu-ate library and information studies students utilizing a nonprofit business text.Kotler, Philip. Marketing for Non-Profit Organizations, 5th ed. Englewood Cliffs, NJ: Prentice- Hall,Inc., 1996.Wood, Elizabeth J. Strategic Marketing for Libraries: a Handbook. Westport, CT: Greenwood Pub-lishing, 1988.Latest Revision: October 28, 1998 Copyright © 1995-2000International Federation of Library Associations and Institutionswww.ifla.org510 © Copy Right : Rai University 16.101G