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Marketing management-by-philip-kotler-719-slides-1234238345990514-2

  1. 1. PowerPoint by Milton M. Pressley Creative Assistance by D. Carter and S. Koger
  2. 2. Chapter 1Defining Marketing for the21st Centuryby PowerPoint by Milton M. Pressley University of New Orleans 1-2
  3. 3. Kotler onMarketingThe future is not ahead of us. It has already happened. Unfortunately, it is unequally distributed among companies, industries and nations. 1-3
  4. 4. Chapter ObjectivesIn this chapter we will address the followingquestions: What is the new economy like? What are the tasks of marketing? What are the major concepts and tools of marketing? What orientations do companies exhibit in the marketplace? How are companies and marketers responding to the new challenges? 1-4
  5. 5. The New EconomySubstantial increase in buying powerA greater variety of goods and servicesA greater amount of information aboutpractically anythingA greater ease in interacting and placingand receiving ordersAn ability to compare notes on productsand services 1-5
  6. 6. The New EconomyWebsites can provide companies withpowerful new information and saleschannels.Companies can collect fuller and richerinformation about markets, customers,prospects and competitors.Companies can facilitate and speed upcommunications among employees.Companies can have 2-way 2-communication with customers andprospects 1-6
  7. 7. The New EconomyCompanies can send ads, coupons,samples, information to targetedcustomers.Companies can customize offerings andservices to individual customers.The Internet can be used as acommunication channel for purchasing,training, and recruiting.Companies can improve logistics andoperations for cost savings whileimproving accuracy and service quality. 1-7
  8. 8. The three major challenges faced bybusinesses today are globalization,advances in technology, and deregulation.Which of these affords the greatestopportunity for established businesses?Which affords the greatestopportunities for newbusinesses? Why? 1-8
  9. 9. Marketing TaskTen rules of radical marketing The CEO must own the marketing function. Make sure the marketing department starts small and flat and stays small and flat. Get face to face with the people who matter most – the customers. Use market research cautiously. Hire only passionate missionaries. 1-9
  10. 10. Marketing Task Love and respect your customers. Create a community of consumers. Rethink the marketing mix. Celebrate common sense. Be true to the brand.Three stages of marketing practice Entrepreneurial Marketing Formulated Marketing Intrepreneurial Marketing 1-10
  11. 11. The Scope of Marketing Marketing: typically seen as the task of creating, promoting, and delivering goods and services to consumers and businesses. 1-11
  12. 12. 1. Negative A major part of the market dislikes the demand product and may even pay a price toTable 1.1 avoid it—vaccinations, dental work, it—Demand vasectomies, and gallbladder operations, for instance. Employers haveStates and a negative demand for ex-convicts and ex-Marketing alcoholics as employees. The marketing task is to analyze why the marketTasks dislikes the product and whether a marketing program consisting of product redesign, lower prices, and more positive promotion can change beliefs and attitudes. 2. No demand Target consumers may be unaware of or uninterested in the product. Farmers may not be interested in a new farming method, and college students may not be interested in foreign-language foreign- courses. The marketing task is to find ways to connect the benefits of the product with people’s natural needs and interests. See text for complete table 1-12
  13. 13. Can you name a category ofproducts for which your negativefeelings have softened?What precipitatedthis change? 1-13
  14. 14. The Scope of MarketingPlaces GoodsProperties ServicesOrganizations ExperiencesInformation EventsIdeas Persons 1-14
  15. 15. The DecisionsMarketers MakeConsumer MarketsBusiness MarketsGlobal MarketsNonprofit andGovernmental Markets 1-15
  16. 16. Marketing Concepts and Tools Defining Marketing Marketing Marketing management Core Marketing Concepts Target Markets and Segmentation 1-16
  17. 17. Figure 1-1: A Simple Marketing System 1-17
  18. 18. Marketing Concepts and Tools Marketplace, Marketspace, and Metamarket 1-18
  19. 19. Marketing Concepts and ToolsMarketers and ProspectsNeeds, Wants, and DemandsProduct, Offering, and BrandValue and Satisfaction Customer value triad Value Value = Benefits / Costs = (Functional benefits + Emotional benefits) / (Monetary costs + Time costs + Energy costs + Psychic costs) 1-19
  20. 20. Marketing Concepts and Tools Exchange and Transactions Exchange Transaction Barter Transfer Behavioral response 1-20
  21. 21. Marketing Concepts and Tools Relationships and Networks Relationship marketing Marketing network Marketing Channels Supply Chain Competition 1-21
  22. 22. Marketing Concepts and Tools Brand competition Industry competition Form competition Generic competitionMarketing environment Task environment Broad environmentMarketing Program Marketing program Marketing mix 1-22
  23. 23. Company OrientationsToward the Marketplace Production Concept Product concept Selling Concept Marketing Concept 1-23
  24. 24. Company OrientationsToward the Marketplace Target Market Customer Needs Stated needs Real needs Unstated needs Delight needs Secret needs 1-24
  25. 25. Company OrientationsToward the Marketplace Integrated Marketing External marketing Internal marketing 1-25
  26. 26. Company OrientationsToward the Marketplace Profitability Sales decline Slow growth Changing buying patterns Increasing competition Increasing marketing expenditures 1-26
  27. 27. Company OrientationsToward the Marketplace Societal Marketing Concept Cause- Cause-related marketing 1-27
  28. 28. Can you identify the trends that havemade the marketing concept, thecustomer concept, and the societalmarketing concept more attractivemodels for contemporarymarketing managers? 1-28
  29. 29. How Business andMarketing are Changing Customers Brand manufacturers Store- Store-based retailers 1-29
  30. 30. How Business and Marketing are ChangingCompany responses and adjustments Reengineering Partner- Partner-suppliers Outsourcing Market- Market-centered E-commerce Global and local Benchmarking Decentralized Alliances 1-30
  31. 31. How Business and Marketing are ChangingMarketer Responsesand Adjustments Customer relationship Integrated marketing marketing communications Customer lifetime value Channels as partners Customer share Every employee a Target marketing marketer Customization Model- Model-based decision Customer database making 1-31
  32. 32. Chapter 2Adapting Marketing To TheNew Economyby PowerPoint by Milton M. Pressley University of New Orleans 1-32
  33. 33. Kotler onMarketingThe Internet willcreate new winnersand bury thelaggards. 1-33
  34. 34. Chapter ObjectivesIn this chapter, we will address thefollowing questions: What are the major forces driving the New Economy? How are business and marketing practices changing as a result of the New Economy? How are marketers using the Internet, customer databases, and customer relationship management in the New Economy? 1-34
  35. 35. Adapting Marketing to the New Economy Major Drivers of the New Economy Digitization and Connectivity Disintermediation and Reintermediation Customization and Customerization 1-35
  36. 36. Procter & Gamble’s site allows customers to design their own beauty products 1-36
  37. 37. Adapting Marketing to the New Economy Industry ConvergenceHow Business Practices are Changing Organize by product units to organize by customer segments Shift focus from profitable transactions to customer lifetime value Shift focus from financial scorecard to also focusing on the marketing scorecard Shift focus from shareholders to stakeholders 1-37
  38. 38. Table 2-1: Old Economy vs. New EconomyOld Economy New EconomyOrganize by product units Organize by customer segmentsFocus on profitable transactions Focus on customer lifetime valueLook primarily at financial Look also at marketing scorecardscorecard Focus on stakeholdersFocus on shareholders Everyone does the marketingMarketing does the marketing Build brands through behaviorBuild brands through advertising Focus on customer retention andFocus on customer acquisition growthNo customer satisfaction Measure customer satisfaction andmeasurement retention rateOverpromise, underdeliver Underpromise, overdeliver 1-38
  39. 39. Adapting Marketing to the New Economy Everyone does the marketing Build brands through performance, not just advertising Customer retention rather than customer acquisition From none to in-depth customer in- satisfaction measurement From over-promise, under-deliver to over- under- under- under-promise, over-deliver over- The New Hybrid 1-39
  40. 40. Adapting Marketing to the New EconomyHow Marketing Practicesare Changing: E-Business E- E-business E-commerce E-purchasing E-marketingInternet Domains: B2C(Business to Customer) 1-40
  41. 41. Customers can shop online at Calyx and Corolla or ask for a catalog and shop by phone 1-41
  42. 42. Adapting Marketing to the New Economy Internet Domains: B2B (Business to Business) 1-42
  43. 43. Figure 2-1:The Supplier-CustomerRelationship:Traditional andNew EconomyStructures 1-43
  44. 44. global online marketplace for the consumer packaged goods industry 1-44
  45. 45. Adapting Marketing to the New Economy Internet Domains: C2C (Consumer to Consumer) Internet Domains: C2B (Customer to Business) Pure Click vs. Brick and Click Companies Pure- Pure-click companies 1-45
  46. 46. CarPoint, leading metamediary for car buying, is a pure click company: It exists only on the Web. 1-46
  47. 47. Adapting Marketing to the New Economy Brick and Click companies 1-47
  48. 48. Which is more important fordeveloping an e-presence: the agility e-of a pure click company, or the welldefined and readily identifiableresources of a traditionalbrick and mortarcompany? 1-48
  49. 49. Adapting Marketing to the New EconomyHow Marketing Practices are Changing:Setting Up Web Sites Designing an Attractive Website Seven elements of effective sites Context Content Community Customization Communication Connection Commerce 1-49
  50. 50. Would you be willing to give up one ormore of the seven elements of an effectiveweb site in order to speed the deploymentof a new company e-commerce site? e-What would the expected trade-offs be trade-between an effective siteand an early webpresence? 1-50
  51. 51. Attracting and Keeping VisitorsTable 2-2: 2- How can we get more prospects to know and visit our site?Setting How can we use marketing to spread word-of-mouth? word-of-Up a How can we convert visitors into repeaters?Dot-Dot-com How do we make our site more experiential and real?Presence How can we build a strong relationship with our customers? How can we build a customer community? How can we capture and exploit customer data for up-selling up- and cross-selling? cross- How much should we spend on building and marketing our site? Advertising on the Internet What are the various ways that we can advertise on the Internet? How do we choose the right sites for placing our ads or sponsorship? See text for complete table 1-51
  52. 52. Adapting Marketing to the New Economy Context factors Content factors Getting feedback 1-52
  53. 53. Adapting Marketing to the New Economy Placing Ads and Promotions Online Banner ads Sponsorships Microsite Interstitials Browser ads Alliances and affiliate programs Push 1-53
  54. 54. “pushes” targeted content and ads to those who are interested in a product or product category 1-54
  55. 55. Adapting Marketing to the New Economy Building a Revenue and Profit Model Advertising income Sponsorship income Membership and subscriptions Profile income Product and service sales Transaction commission and fees Market research/information Referral income 1-55
  56. 56. Adapting Marketing to the New EconomyHow Marketing Practices are Changing:Customer Relationship Marketing Reduce rate of customer defection Increase longevity of customer relationship Enhance growth potential through cross-selling and up-selling cross- up- Make low profit customers more profitable or terminate them 1-56
  57. 57. Adapting Marketing to the New Economy Focus disproportionate effort on high value customers 1-57
  58. 58. Table 2-3: Mass Marketing vs. One-to-One MarketingMass Marketing One-to-One Marketing One-to-Average customer Individual customerCustomer anonymity Customer profileStandard product Customized marketMass production offeringMass distribution Customized productionMass advertising Individualized distributionMass promotion Individualized messageOne-One-way message Individualized incentivesEconomies of scale Two- Two-way messagesShare of market Economies of scopeAll customers Share of customerCustomer attraction Profitable customers Customer retention 1-58
  59. 59. Adapting Marketing to the New Economy Four steps for One-to-One Marketing One-to- Don’t go after everyone, identify prospects. Define customers by their needs and their value to the company. Individual interaction with customers builds stronger relationships. Customize messages, services, and products for each customer. 1-59
  60. 60. Adapting Marketing to the New Economy Customer Databases and Database Marketing Customer mailing list Business database 1-60
  61. 61. Adapting Marketing to the New EconomyData Warehouses and Data Mining Using the database To identify prospects To determine target market To deepen customer loyalty To reactivate customer purchases To avoid serious customer mistakes The Downside of Database Marketing 1-61
  62. 62. Chapter 3Building CustomerSatisfaction, Value, andRetentionby PowerPoint by Milton M. Pressley University of New Orleans 1-62
  63. 63. Kotler onMarketingIt is no longerenough to satisfycustomers. You mustdelight them. 1-63
  64. 64. Chapter ObjectivesIn this chapter, we will address thefollowing questions: What are customer value and satisfaction, and how can companies deliver them? What makes a high-performance business? high- How can companies both attract and retain customers? How can companies improve both customer and company profitability? How can companies deliver total quality? 1-64
  65. 65. Defining Customer Value and Satisfaction Customer Perceived Value (CPV) Total customer value Total customer cost 1-65
  66. 66. Figure 3-1:Determinantsof CustomerDeliveredValue 1-66
  67. 67. Defining Customer Value and Satisfaction Total Customer Satisfaction Satisfaction Customer Expectations Delivering High Customer Value Value proposition Value- Value-delivery system Measuring Satisfaction 1-67
  68. 68. Table 3-1: Tools for Tracking and Measuring Customer SatisfactionComplaint A customer-centered organization makes it easy for customer-and customers to register suggestions and complaints.suggestion Some customer-centered companies-P&G, General customer- companies- Electric, Whirlpool—establish hot lines with toll-free Whirlpool— toll-systems: numbers. Companies are also using Web sites and e-mail for quick, two-way communication. two- Studies show that although customers are dissatisfiedCustomer with one out of every four purchases, less than 5 percent will complain. Most customers will buy less orsatisfaction switch suppliers. Responsive companies measuresurveys: customer satisfaction directly by conducting periodic surveys. While collecting customer satisfaction data, it is also useful to ask additional questions to measure repurchase intention and to measure the likelihood or willingness to recommend the company and brand to others. See text for complete table 1-68
  69. 69. Would you feel more brand loyalty for acompany that tried to immediately resolvea complaint via E-mail, or a company that E-had a customer service representative callwithin two business days toresolve the problem overthe phone? 1-69
  70. 70. Premier is a special business-oriented part of the business-Dell Web site that allows customers to interact with Dell and customize all phases of doing business with Dell. 1-70
  71. 71. The Nature of HighPerformance Business High- High-performance business 1-71
  72. 72. Figure 3-2: The High Performance Business 1-72
  73. 73. The Nature of HighPerformance BusinessStakeholdersProcessesResources Core competency Distinctive capabilitiesOrganization and Organizational Culture Organization Corporate culture Scenario analysis 1-73
  74. 74. Can you name a company that haschanged the public’s perception oftheir corporate culture? Has thiseffectively rehabilitated thatcompany’s image? 1-74
  75. 75. Delivering Customer Value and Satisfaction Value Chain Value chain 1-75
  76. 76. Figure 3-3: The Generic Value Chain 1-76
  77. 77. Delivering Customer Value and Satisfaction BenchmarksCore Business Processes The market sensing process The new offering realization process The customer acquisition process The customer relationship management process The fulfillment management process 1-77
  78. 78. Delivering Customer Value and Satisfaction The Value Delivery Network (Supply Chain) 1-78
  79. 79. Figure 3-4:LeviStrauss’sValue-DeliveryNetwork 1-79
  80. 80. Attracting and Retaining Customers Partner relationship management (PRM) Customer relationship management (CRM) 1-80
  81. 81. Saturn has gained a customer loyalty rateof more than 60% by fundamentallychanging the buyer-seller relationship. buyer-Can you think of another company thathas made a change of similarmagnitude? Have theyhad similar results? 1-81
  82. 82. Attracting and Retaining Customers Attracting Customers Computing the Cost of Lost Customers Customer churn Lifetime value 1-82
  83. 83. On the Lands’ End Web site, customers can click abutton to talk with a customer service representative 1-83
  84. 84. Attracting and Retaining CustomersThe Need for Customer RetentionMeasuring CustomerLifetime Value (CLV)Customer Relationship Management(CRM): The Key Customer equity Three drivers of customer equity Value equity Brand equity Relationship equity 1-84
  85. 85. Figure 3-5:TheCustomer-DevelopmentProcess 1-85
  86. 86. Attracting and Retaining Customers Five levels of investment in customer relationship building Basic marketing Reactive marketing Accountable marketing Proactive marketing Partnership marketing 1-86
  87. 87. Figure 3-6: Levels of Relationship Marketing 1-87
  88. 88. Attracting and Retaining Customers Forming Strong Customer Bonds: The Basics Cross- Cross-departmental participation Integrate the Voice of the Customer into all business decisions Create superior offering for the target market 1-88
  89. 89. Attracting and Retaining Customers Organize and make accessible a database of customer information Make it easy for customers to reach the appropriate personnel Reward outstanding employees Adding Financial Benefits Frequency programs (FPs) 1-89
  90. 90. The H.O.G. Web site presents the benefits of joining. 1-90
  91. 91. Attracting and Retaining Customers Adding Social Benefits 1-91
  92. 92. Good Things Bad ThingsTable 3-2: Initiate positive phone calls Make only callbacksSocial Actions Make recommendations Make justificationsAffecting Candor in language Accommodative languageBuyer-Seller Use phone Use correspondenceRelationships Show appreciation Wait for misunderstandings Make service suggestions Wait for service requests Use “we” problem-solving problem- Use “owe-us” legal language “owe- language Only respond to problems Get to problems Use long-winded long- Use jargon or shorthand communications Personality problems aired Personality problems hidden Talk of “our future together” Talk about making good on Routinize responses the past Accept responsibility Fire drill and emergency Plan the future responsiveness Shift blame Rehash the past 1-92
  93. 93. Attracting and Retaining Customers Adding Structural Ties Create long-term contracts long- Charge lower price to high volume customers Turn product into long- long-term service 1-93
  94. 94. Customer Profitability,Company Profitability, andTotal Quality Management Measuring Profitability Profitable customer 1-94
  95. 95. Figure 3-7: Customer-Product Profitability Analysis 1-95
  96. 96. Figure 3-8: Allocating marketing investment according to customer value 1-96
  97. 97. Customer Profitability,Company Profitability, andTotal Quality Management Increasing Company Profitability Competitive advantage Implementing TQM Total Quality Management Quality 1-97
  98. 98. Chapter 4Winning Markets ThroughMarket-Market-Oriented StrategicPlanningby PowerPoint by Milton M. Pressley University of New Orleans 1-98
  99. 99. Kotler onMarketingIt is more importantto do what isstrategically rightthan what isimmediatelyprofitable. 1-99
  100. 100. Chapter ObjectivesIn this chapter, we examine thefollowing questions: How is strategic planning carried out at the corporate and division levels? How is planning carried out at the business unit level? What are the major steps in the marketing process? How is planning carried out at the product level? What does a marketing plan include? 1-100
  101. 101. Strategic Planning: Three Key Areas and Four Organization Levels Strategic marketing plan Tactical marketing plan Marketing plan 1-101
  102. 102. Corporate and Division Strategic PlanningAll corporate headquarters undertakefour planning activities Defining the Corporate Mission Establishing Strategic Business Units (SBUs) Assigning resources to each SBU Planning new businesses, downsizing, or terminating older businesses 1-102
  103. 103. Corporate and Division Strategic PlanningDefining the Corporate Mission Mission statements define which competitive scopes the company will operate in Industry scope Products and applications scope Competence scope Market- Market-segment scope Vertical scope Geographical scope 1-103
  104. 104. Can you name a company that hasrecently changed its product scopeor market segment scope in a verypublic way? Was this an expansionor contraction of scope? 1-104
  105. 105. Corporate and Division Strategic PlanningEstablishing Strategic Business Units(SBUs) 1-105
  106. 106. Table 4.1: Product-Oriented versus Market-Oriented Definitions of a BusinessCompany Product Definition Market DefinitionMissouri-Missouri-Pacific We run a railroad We are a people-and- people-and-Railroad goods moverXerox We make copying We help improve office equipment productivityStandard Oil We sell gasoline We supply energyColumbia Pictures We make movies We market entertainmentEncyclopaedia We sell encyclopedias We distribute InformationCarrier We make air We provide climate conditioners and control in the home furnaces 1-106
  107. 107. Corporate and Division Strategic PlanningThree characteristics of SBUs Single business or collection of related businesses that can be planned for separately Has its own set of competitors Has a manager who is responsible for strategic planning and profit 1-107
  108. 108. The Growth-Share Matrix Growth- Relative market share Four Cells Question Marks Stars Cash Cows DogsSBU StrategiesSBU Lifecycle 1-108
  109. 109. Can you give an example of a “Star”that skipped “Cash Cow”, and wentstraight to “Dog” status? 1-109
  110. 110. Corporate and Division Strategic Planning The General Electric Model 1-110
  111. 111. Table 4-2: Factors underlying Market Attractiveness and Competitive Position in GE Multifactor Portfolio Model: Hydraulic-Pumps Market Rating = Weight (1-5) (1- Value Overall market size 0.20 4 0.80 Annual market growth rate 0.20 5 1. Historical profit margin 0.15 4 0.60 Competitive intensity 0.15 2 0.30Market Technological requirements 0.15 4 0.60Attractiveness Inflationary vulnerability 0.05 3 0.15 Energy requirements 0.05 2 0.10 Environmental impact 0.05 3 0.15 Social-political- Social-political-legal Must be acceptable 1.0 3.70 Market share 0.10 4 0.40 Share growth 0.15 2 0.30Business Product quality 0.10 4 0.40Strength Brand reputation 0.10 5 0.50 Distribution network 0.05 4 0.20 See text for complete table 1-111
  112. 112. Corporate and Division Strategic Planning Critique of Portfolio Models Planning New Businesses, Downsizing Older Businesses 1-112
  113. 113. Corporate and Division Strategic Planning Intensive Growth 1-113
  114. 114. Starbucks’ home page: Customers can request a catalog of Starbucks products, subscribe to a newsletter, and shop online 1-114
  115. 115. Corporate and Division Strategic Planning Integrative Growth Diversification Growth Downsizing Older Businesses 1-115
  116. 116. Give an example of a marketsegment where integrative growthwould be preferable to growththrough diversification. Explainwhy one approach is betterthan the other. 1-116
  117. 117. Business Unit Strategic PlanningBusiness MissionSWOT Analysis External Environment Analysis (Opportunity and Threat Analysis) Marketing Opportunity Buying opportunity more convenient or efficient Meet the need for more information and advice Customize an offering that was previously only available in standard form 1-117
  118. 118. Give some examples of companiesthat have grown to dominate theirmarket segment by using technologyto make buying opportunities moreconvenient and efficient. 1-118
  119. 119. Business Unit Strategic PlanningMarketing Opportunity Analysis (MOA) Can the benefits be articulated to a target market? Can the target market be reached with cost- cost- effective media and trade channels? Does the company have the critical capabilities to deliver the customer benefits? Can the company deliver these benefits better than any actual or potential competitors? Will the rate of return meet the required threshold of investment? 1-119
  120. 120. Figure 4-7: Opportunity and Threat Matrices 1-120
  121. 121. Business Unit Strategic PlanningInternal Environmental Analysis(Strength/Weakness Analysis)Goal FormationStrategicFormulation Strategy 1-121
  122. 122. Business Unit Strategic PlanningPorter’s Generic Strategies Overall cost leadership Differentiation Focus 1-122
  123. 123. Travelocity’s Web site helps the consumer plan thewhole vacation – flights, lodging, and car 1-123
  124. 124. Business Unit Strategic PlanningOperational Effectiveness and Strategy Strategic group Strategic alliances 1-124
  125. 125. Business Unit Strategic PlanningMarketing Alliances Product or service alliances Promotional alliances Logistical alliances Pricing collaborationsPartner RelationshipManagement, PRMProgram Formulation andImplementation 1-125
  126. 126. Business UnitStrategic Planning Feedback and Control 1-126
  127. 127. The Marketing Process Steps in the Planning Process The marketing process Analyzing Market Opportunities Developing Marketing Strategies Planning Marketing Programs Managing the Marketing Effort Annual- Annual-plan control Profitability control Strategic control 1-127
  128. 128. Figure 4-10:FactorsInfluencingCompanyMarketingStrategy 1-128
  129. 129. Product Planning: The Nature and Contents of a Marketing Plan Contents of the Marketing Plan Executive Summary Current Marketing Situation Opportunity and issue analysis Objectives Marketing strategy Action programs Financial projections Implementation controls 1-129
  130. 130. Product Planning: The Nature and Contents of a Marketing Plan Sample Marketing Plan: Sonic Personal Digital Assistant Current Marketing Situation Opportunity and Issue Analysis Objectives Action Programs Financial Projections 1-130
  131. 131. Product Planning: The Nature and Contents of a Marketing Plan Implementation Controls Marketing Strategy Positioning Product Management Pricing Distribution Marketing Communications Marketing Research 1-131
  132. 132. Chapter 5Gathering Information andMeasuring Market Demandby PowerPoint by Milton M. Pressley University of New Orleans 1-132
  133. 133. Kotler onMarketingMarketing is becoming a battle based more on information than on sales power. 1-133
  134. 134. Chapter ObjectivesIn this chapter, we focus on the followingquestions: What are the components of a modern marketing information system? What constitutes good marketing research? How can marketing decision support systems help marketing managers make better decisions? How can demand be more accurately measured and forecasted? 1-134
  135. 135. The Components of a ModernMarketing Information System Marketing Information System (MIS) 10 useful questions for determining the information needs of marketing managers. What decisions do you regularly make? What information do you need to make these decisions? What information do you regularly get? What special studies do you periodically request? 1-135
  136. 136. The Components of a ModernMarketing Information System What information would you want that you are not getting now? What information would you want daily? Weekly? Monthly? Yearly? What magazines and trade reports would you like to see on a regular basis? What topics would you like to be kept informed of? What data analysis programs would you want? What are the four most helpful improvements that could be made in the present marketing information system? 1-136
  137. 137. Internal Record Systems The Order-to-Payment Cycle Order-to- Sales Information Systems Databases, Data Warehouses And Data-Mining Data- 1-137
  138. 138. Can you name a company that usestargeted mailings to promote newproducts, or regional offerings? 1-138
  139. 139. The MarketingIntelligence SystemA Marketing Intelligence Systemis a set of procedures and sourcesused by managers to obtaineveryday information aboutdevelopments in the marketingenvironment. 1-139
  140. 140. What are some of the potentialhazards a company might face byrelying too heavily on distributors,retailers, or otherintermediaries formarket intelligence? 1-140
  141. 141. The Marriott Vacation Club International Web sitegives interested customers the opportunity to sell themselves on the Marriott offerings 1-141
  142. 142. is a portal to information–a user information–clicks on a listing and is then connected to that site 1-142
  143. 143. Table 5-1: Secondary-Data SourcesSecondary-Secondary- A. Internal SourcesData Sources Company profit-loss statements, balance profit- sheets, sales figures, sales-call reports, sales- invoices, inventory records, and prior research reports. B. Government Publications • Statistical Abstract of the United States • County and City Data Book • Industrial Outlook • Marketing Information Guide C. Periodicals and Books • Business Periodicals Index • Standard and Poor’s Industry See text for complete table 1-143
  144. 144. Marketing Research System Marketing Research Suppliers of Marketing Research Engaging students or professors to design and carry out projects Using the Internet Checking out rivals Syndicated- Syndicated-service research firms Custom marketing research firms Specialty- Specialty-line marketing research firms 1-144
  145. 145. Figure 5-1:The Marketing Research Process 1-145
  146. 146. Marketing Research System The Marketing Research Process Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives Step 2: Develop the Research Plan Data Sources Research Approaches Observational research Focus group research 1-146
  147. 147. Marketing Research System Survey research Behavioral data Experimental research Research Instruments Questionnaires Psychological tools Mechanical devices Quantitative measures 1-147
  148. 148. Table 5-2: Types of Questions A. Closed-end Questions Closed-Name Description ExampleDichotomous A question with two possible answers. In arranging this trip, did you personally phone American? Yes NoMultipleChoice A question with three or more answers. With whom are you traveling on this flight? No one Children only Spouse Business associates/friends/relatives Spouse and An organized tour group childrenLikert scale A statement with which the respondent Small airlines generally give better service than large ones. shows the amount of agreement/ Strongly Disagree Neither agree Agree Strongly disagreement. disagree nor disagree agree 1_____ 2 _____ 3_____ 4_____ 5_____ See text for complete table 1-148
  149. 149. Marketing Research System Sampling Plan Sampling unit Sample size Sampling procedure 1-149
  150. 150. is a consumer psychology Web site set up by Dr. Brian Wansink of the University of Illinois 1-150
  151. 151. Table 5-3: Probability and Nonprobability SamplesA. Probability SampleSimple random sample Every member of the population has an equal chance of selectionStratified random The population is divided into mutuallysample exclusive groups (such as age groups), and random samples are drawn from each groupCluster (area) sample The population is divided into mutually exclusive groups (such as city blocks), and the researcher draws a sample of the groups to interview Continued on next slide . . . 1-151
  152. 152. Table 5-3: Probability and Nonprobability Samples (Continued)B. Nonprobability SampleConvenience sample The researcher selects the most accessible population membersJudgment sample The researcher selects population members who are good prospects for accurate informationQuota sample The researcher finds and interviews a prescribed number of people in each of several categories 1-152
  153. 153. Marketing Research System Contact Methods Mail questionnaire Personal interviewing Arranged interviews Intercept interviews Online methods Click-stream Cookies Automated telephone surveys 1-153
  154. 154. Marketing Research System Step 3: Collect the Information Step 4: Analyze the Information Step 5: Present the Findings Step 6: Make the Decision 1-154
  155. 155. Table 5-4: The Seven Characteristics of Good Marketing Research1. Scientific Effective marketing research uses the principlesmethod of the scientific method: careful observation, formulation of hypotheses, prediction, and testing.2. Research At its best, marketing research developscreativity innovative ways to solve a problem: a clothing company catering to teenagers gave several young men video cameras, then used the videos for focus groups held in restaurants and other places teens frequent.3. Multiple Marketing researchers shy away from overreliancemethods on any one method. They also recognize the value of using two or three methods to increase confidence in the results. See text for complete table 1-155
  156. 156. Marketing Research System Overcoming Barriers to the Use of Marketing Research A narrow conception of the research Uneven caliber of researchers Poor framing of the problem Late and occasionally erroneous findings Personality and presentational differences 1-156
  157. 157. Marketing Decision Support System Marketing Decision Support System (MDSS) Marketing and sales software programs BRANDAID CALLPLAN DETAILER GEOLINE MEDIAC PROMOTER ADCAD CONVERSTORY 1-157
  158. 158. Table 5-5: Quantitative Tools Used in Marketing Decision Support SystemsStatistical Tools1. Multiple A statistical technique for estimating a “best fitting”regression: equation showing how the value of a dependent variable varies with changing values in a number of independent variables. Example: A company can estimate how unit Example: sales are influenced by changes in the level of company advertising expenditures, sales force size, and price.2. Discriminant A statistical technique for classifying an object oranalysis: persons into two or more categories. Example: A large Example: retail chain store can determine the variables that discriminate between successful and unsuccessful store locations.3. Factor A statistical technique used to determine the fewanalysis: underlying dimensions of a larger set of intercorrelated variables. Example: A broadcast network can reduce a Example: large set of TV programs down to a small set of basic program types. See text for complete table 1-158
  159. 159. Forecasting and Demand MeasurementThe Measures of Market DemandFigure 5-3: NinetyTypes of DemandMeasurement(6X5X3) 1-159
  160. 160. Forecasting andDemand Measurement Which Market to Measure? Market Potential market Available market Target market (severed market) Penetrated marketA Vocabulary for Demand Measurement Market Demand Market share Market penetration index Share penetration index 1-160
  161. 161. Forecasting andDemand MeasurementFigure 5-4: Market Demand Functions 1-161
  162. 162. Can you name a market segmentwith a low penetration index? Ahigh penetration index? Can youthink of a market where the highpenetration index might be amisleading indicator? 1-162
  163. 163. Forecasting and Demand Measurement Market Forecast Market Potential Product penetration percentage Company Demand Company Sales Forecast Sales quota Sales budget Company Sales Potential 1-163
  164. 164. Forecasting and Demand MeasurementEstimating Current demand Total Market Potential Area Market Potential Market- Market-Buildup Method 1-164
  165. 165. Table 5-6: Market-Buildup Method Using SIC Codes (c) (a) Potential Annual Number Sales in (b) of Lathe Sales Market Millions Number of Per $1 Million PotentialSIC of $ Establishments Customer Sales (a x b x c)2511 1 6 10 60 5 2 10 1002521 1 3 5 15 5 1 5 25 30 200 1-165
  166. 166. Forecasting and Demand Measurement Multiple-Factor Index Method Brand development index (BDI) 1-166
  167. 167. Table 5-7: Calculating the Brand Development Index (BDI) (a) (b) Percent of Percent of U.S. Brand U.S. Category BDITerritory Sales Sales (a ÷ b) x 100Seattle 3.09 2.71 114Portland 6.74 10.41 65Boston 3.49 3.85 91Toledo .97 .81 120Chicago 1.13 .81 140Baltimore 3.12 3.00 104 1-167
  168. 168. Forecasting and Demand Measurement Industry Sales and Market Shares Estimating Future Demand Survey of Buyers’ Intentions Forecasting Purchase probability scale 1-168
  169. 169. Forecasting and Demand Measurement Composite of Sales Force Opinions Expert Opinion Group discussion method Pooling of individual estimates Past-Sales Analysis Time-series analysis Exponential smoothing Statistical demand analysis Econometric analysis Market-Test Method 1-169
  170. 170. Chapter 6Scanning the MarketingEnvironmentby PowerPoint by Milton M. Pressley University of New Orleans 1-170
  171. 171. Kotler onMarketingToday you have to run faster to stay in place. 1-171
  172. 172. Chapter ObjectivesIn this chapter, we focus on twoquestions: What are the key methods for tracking and identifying opportunities in the macroenvironment? What are the key demographic, economic, natural, technological, political, and cultural developments? 1-172
  173. 173. Analyzing Needs and Trends in the Macroenvironment Trend Fad Megatrends 1-173
  174. 174. Given the definitions for fads,trends, and megatrends presented inthe text, how would you define youronline activities? Can you identifyan online trend that is likelyto grow into a megatrend? 1-174
  175. 175. Identifying and Responding to the Major Macroenvironment Forces The substantial speedup of international transportation, communication, and financial transactions, leading to the rapid growth of world trade and investment, especially tripolar trade (North America, Western Europe, Far East) The movement of manufacturing capacity and skills to lower cost countries. The rising economic power of several Asian countries in world markets. The rise of trade blocks such as the European Union and NAFTA signatories. 1-175
  176. 176. Identifying and Responding to the Major Macroenvironment Forces The severe debt problems of a number of countries, along with the increasing fragility of the international financial system. The increasing use of barter and countertrade to support international transactions. The move toward market economies in formerly socialist countries along with rapid privatization of publicly owned companies. The rapid dissemination of global lifestyles. The gradual opening of major new markets, namely China, India, eastern Europe, the Arab countries, and Latin America. 1-176
  177. 177. Identifying and Responding to the Major Macroenvironment Forces The increasing tendency of multinationals to transcend their locational and national characteristics and become transnational firms. The increasing number of cross-border corporate cross- strategic alliances–for example, MCI and British alliances– Telecom, and Texas Instruments and Hitachi. The increasing ethnic and religious conflicts in certain countries and regions. The growth of global brands in autos, food, clothing, electronics. 1-177
  178. 178. Identifying and Responding to the Major Macroenvironment Forces Demographic Environment Worldwide Population Growth Population Age Mix Ethnic and Other Markets 1-178
  179. 179. Can you identify one or morenations whose populations hold thepromise of huge potential marketsfor consumer goods? How havepressures from potential marketersto these untapped consumergroups driven the politicaldiscussion on a nationaland international level? 1-179
  180. 180. Identifying and Responding to the Major Macroenvironment Forces Educational Groups Household Patterns Geographical Shifts in Population From a Mass Market to Micromarkets 1-180
  181. 181. Identifying and Responding to the Major Macroenvironment Forces Economic Environment Income Distribution Savings, Debt, and Credit Availability 1-181
  182. 182. Identifying and Responding to the Major Macroenvironment Forces Natural Environment Shortage of Raw Materials Increased Energy Cost Anti- Anti-Pollution Pressures Changing Role of Governments 1-182
  183. 183. Identifying and Responding to the Major Macroenvironment Forces Technological Environment Accelerating Pace of Change Unlimited Opportunities for Innovation 1-183
  184. 184. Identifying and Responding to the Major Macroenvironment Forces Varying R&D Budgets Increased Regulation of Technological Change Political- Political-Legal Environment Legislation Regulating Business Growth of Special-Interest Special- Groups Consumerist movement 1-184
  185. 185. Identifying and Responding to the Major Macroenvironment Forces Social- Social-Cultural Environment Views of themselves Views of others Views of organizations Views of society Views of nature Views of universe 1-185
  186. 186. Identifying and Responding to the Major Macroenvironment Forces High Persistence of Core Cultural Values Existence of subcultures Subcultures Shifts of Secondary Cultural Values Through Time 1-186
  187. 187. Chapter 7Analyzing ConsumerMarkets and Buyer Behaviorby PowerPoint by Milton M. Pressley University of New Orleans 1-187
  188. 188. Kotler onMarketingThe most important thing is to forecast where customers are moving, and be in front of them. 1-188
  189. 189. Chapter ObjectivesIn this chapter, we focus on two questions: How do the buyers’ characteristics – cultural, social, personal, and psychological – influence buying behavior? How does the buyer make purchasing decisions? 1-189
  190. 190. Influencing Buyer Behavior Consumer BehaviorCultural Factors Culture Subcultures Diversity marketing Social class 1-190
  191. 191. Influencing Buyer Behavior Social Factors Reference Groups Reference groups Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups Opinion leader 1-191
  192. 192. Table 7.1: Characteristics of Major U.S. Social Classes1. Upper Uppers The social elite who live on inherited wealth. They (less than 1%) give large sums to charity, run the debutante balls, maintain more than one home, and send their children to the finest schools. They are a market for jewelry, antiques, homes, and vacations. They often buy and dress conservatively. Although small as a group, they serve as a reference group to the extent that their consumption decisions are imitated by the other social classes.2. Lower Uppers Persons, usually from the middle class, who have (about 2%) earned high income or wealth through exceptional ability in the professions or business. They tend to be active in social and civic affairs and to buy the symbols of status for themselves and their children. They include the nouveau riche, whose pattern of conspicuous consumption is designed to impress those below them. See text for complete table 1-192
  193. 193. Influencing Buyer Behavior Secondary groups Aspirational groups Dissociative groups Opinion leader 1-193
  194. 194. Influencing Buyer Behavior Family Family of orientation Family of procreation Roles and Statuses Role Status 1-194
  195. 195. With the “graying” of the American populace,marketers have begun to shift images andcultural references in advertising from thingsthat are relevant to the twenty-somethings to twenty-images of active seniors, and soundtracksfrom the sixties and seventies. Can youidentify any particularad campaigns that fitthis pattern? 1-195
  196. 196. Influencing Buyer Behavior Personal Factors Age and Stage in the Life Cycle Family life cycle Occupation and Economic Circumstances 1-196
  197. 197. In recent years, many organizations have“provided” televisions with limited programmingaccess for use in K-12 classrooms. Do these K-entities have a moral obligation to avoid overtmarketing to their captive audiences, or is this avalid tool for introducing offerings to futureconsumers? What should theresponsibilities of the educatorsbe in these situations? 1-197
  198. 198. Table 7.2: Stages in the Family Life Cycle1. Bachelor stage: Few financial burdens. Fashion opinionYoung, single, not living leaders. Recreation oriented. Buy: basic homeat home equipment, furniture, cars, equipment for the mating game; vacations.2. Newly married Highest purchase rate and highest averagecouples: purchase of durables: cars, appliances,Young, no children furniture, vacations.3. Full nest I: Home purchasing at peak. Liquid assets low.Youngest child under Interested in new products, advertisedsix products. Buy: washers, dryers, TV, baby food, chest rubs and cough medicines, vitamins, dolls, wagons, sleds, skates.4. Full nest II: Financial position better. Less influenced byYoungest child six or advertising. Buy larger-size packages, larger-over multiple- multiple-unit deals. Buy: many foods, cleaning materials, bicycles, music lessons, pianos. See text for complete table 1-198
  199. 199. Figure 7.2: The VALS segmentation system: An 8-part typologyGroups with HighResources1. Actualizers2. Fulfilleds3. Achievers4. ExperiencersGroups with LowerResources1. Believers2. Strivers3. Makers4. Strugglers 1-199
  200. 200. SRI Consulting Business Intelligence’s Web site 1-200
  201. 201. Influencing Buyer Behavior Personality and Self-Concept Self- Personality Brand personality Sincerity Excitement Competence Sophistication Ruggedness Self- Self-concept Person’s actual self-concept self- Ideal self-concept self- Others’ self-concept self- 1-201
  202. 202. Influencing Buyer Behavior Psychological Factors Motivation Motive Freud’s Theory Laddering Projective techniques 1-202
  203. 203. Influencing Buyer Behavior Ernest Dichter’s research found: Consumers resist prunes because prunes are wrinkled looking and remind people of old age. Men smoke cigars as an adult version of thumb sucking. Women prefer vegetable shortening to animal fats because the latter arouse a sense of guilt over killing animals. Women don’t trust cake mixes unless they require adding an egg, because this helps them feel they are giving “birth.” 1-203
  204. 204. Influencing Buyer Behavior Maslow’s Theory Figure 7.3: Maslow’s Hierarchy of Needs 1-204
  205. 205. Influencing Buyer Behavior Herzberg’s Theory Dissatisfiers Satisfiers 1-205
  206. 206. Influencing Buyer Behavior Perception Selective attention People are more likely to notice stimuli than relate to a current need People are more likely to notice stimuli than they anticipate People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli Selective distortion Selective retention 1-206
  207. 207. Influencing Buyer Behavior Learning Drive Cues Discrimination Beliefs and Attitudes Belief Spreading activation Attitude 1-207
  208. 208. The purchase of a product from a Company Aturns out to be a positive experience. You arelooking for a loosely related product, which is alsooffered by Company A. Do you assume that youwill again have a positive experience withCompany A’s offering, or do youlook for the “best of breed,”regardless of whichcompany offers it? 1-208
  209. 209. The Buying Decision Process Buying Roles Initiator Influencer Decider Buyer User Buying behavior 1-209
  210. 210. Table 7.3: Four Types of Buying Behavior High Involvement Low InvolvementSignificant Differences Complex buying Variety- Variety-seekingbetween Brands behavior buying behaviorFew Differences between Dissonance- Dissonance-reducing Habitual buyingBrands buying behavior behavior 1-210
  211. 211. The Buying Decision Process Complex Buying Behavior Dissonance- Dissonance-Reducing Buyer Behavior Habitual Buying Behavior Variety- Variety-Seeking Buying Behavior 1-211
  212. 212. Stages in the Buying Decision ProcessHow marketers learn about the stages: Introspective method Retrospective method Prospective method Prescriptive methodUnderstanding by mapping the customer’s Consumption system Customer activity cycle Customer scenarioMetamarketMetamediaries 1-212
  213. 213. The home page shows the variety ofservices this Web company offers those shoppingfor a car. 1-213
  214. 214. Stages of the Buying Decision ProcessProblem recognitionInformation search Personal sources Figure 7.4: Commercial sources Five-Stage Model of the Public sources Consumer Buying Experiential sources Process 1-214
  215. 215. Figure 7.5: Successive Sets Involved in Customer Decision Making 1-215
  216. 216. The Buying Decision Process Evaluation of Alternatives Potential Attributes of interest Cameras Hotels Mouthwash Tires Brand beliefs Brand image 1-216
  217. 217. Table 7.4: A Consumer’s Brand Beliefs about ComputersComputer Attribute Memory Graphics Size and Capacity Capability Weight Price A 10 8 6 4 B 8 9 8 3 C 6 8 10 5 D 4 3 7 8 1-217
  218. 218. The Buying Decision Process Strategies designed to stimulate interest in a computer Redesign the computer Alter beliefs about the brand Alter beliefs about competitors’ brands Alter the importance weights Call attention to neglected attributes Shift the buyer’s ideas 1-218
  219. 219. The Buying Decision Process Purchase Decision Figure 7.6: Steps Between Evaluation of Alternatives and a purchase decision 1-219
  220. 220. The Buying Decision Process Informediaries Consumer Reports Zagats Unanticipated situational factors Perceived risk Brand decision Vendor decision Quantity decision Timing decision Payment- Payment-method decision 1-220
  221. 221. The Buying Decision Process Postpurchase Behavior Postpurchase Satisfaction Disappointed Satisfied Delighted Postpurchase Actions Postpurchase Use and Disposal 1-221
  222. 222. Figure 7.7: How Customers Dispose of Products 1-222
  223. 223. The Buying Decision Process Other Models of the Buying Decision Process Health Model Stages of Change Model Precontemplation Contemplation Preparation Action Maintenance Customer Activity Cycle Model Pre, during and post phases 1-223
  224. 224. Figure 7.8:Activity cyclefor IBMcustomers inthe globalelectronicnetworkingcapabilitymarket space 1-224
  225. 225. Figure 7.9:Value addsfor IBMcustomers inthe globalelectronicnetworkingcapabilitymarket space 1-225
  226. 226. Chapter 8Analyzing Business Marketsand Business BuyingBehaviorby PowerPoint by Milton M. Pressley University of New Orleans 1-226
  227. 227. Kotler onMarketingMany businesses are wisely turning their suppliers and distributors into valued partners. 1-227
  228. 228. Chapter ObjectivesIn this chapter, we focus on six questions: What is the business market, and how does it differ from the consumer market? What buying situations do organizational buyers face? Who participates in the business buying process? What are the major influences on organizational buyers? How do business buyers make their decisions? How do institutions and government agencies do their buying? 1-228
  229. 229. What is Organizational Buying? Organizational buyingThe business market versus the consumermarket Business market Fewer buyers Larger buyers Close supplier-customer relationship supplier- Geographically concentrated buyers 1-229
  230. 230. What is Organizational Buying? Derived demand Inelastic demand Fluctuating demand Professional purchasing 1-230
  231. 231. Blue Shield of California’s mylifepath 1-231
  232. 232. What is Organizational Buying? Several buying influences Multiple sales calls Directed purchasing Reciprocity Leasing 1-232
  233. 233. If you were tasked with marketing aproduct or service to an organization,would you attempt to initially contact thepurchasing department, or potential department,users of your company’s offerings? Why?Would the product youwere selling make adifference? Why? 1-233
  234. 234. What is Organizational Buying? Buying Situations Straight rebuy Modified rebuy New Task Systems Buying and Selling Systems buying Turnkey solution Systems selling 1-234
  235. 235. What are some of the benefits to anorganization that can be derivedfrom a single source solution, or a solution,systems buying arrangement with aprime contractor? What are some ofthe potential pitfalls? Whatcan the company do toprotect itself fromthese hazards? 1-235
  236. 236. Participants in the Business Buying Process The Buying Center Initiators Users Influencers Deciders Approvers Buyers Gatekeepers Key buying influencers Multilevel in-depth selling in- 1-236
  237. 237. Figure 8-1: Major Influences on Industrial Buying Behavior 1-237
  238. 238. Major Influences on Buying DecisionsEnvironmental FactorsOrganizational Factors Purchasing- Purchasing-Department Upgrading Cross- Cross-Functional Roles Centralized Purchasing Decentralized Purchasing of Small-Ticket Small- Items Internet Purchasing 1-238
  239. 239. The e-hub home page offers buyers and e-sellers of plastics a marketplace plus news andinformation 1-239
  240. 240. Covisint’s Web site offers both services andinformation 1-240
  241. 241. Major Influences on Buying Decisions Other Organizational Factors Long- Long-Term Contracts Vendor- Vendor-managed inventory Continuous replenishment programs Purchasing- Purchasing-Performance Evaluation and Buyers’ Professional Development Improved Supply Chain Management Lean Production Just-in- Just-in-time 1-241
  242. 242. Major Influences on Buying DecisionsInterpersonal and Individual FactorsCultural Factors France Germany Japan Korea Latin America 1-242
  243. 243. The Purchasing/Procurement Process Incentive to purchaseThree Company Purchasing Orientations Buying Orientation Commoditization Multisourcing Procurement Orientation Materials requirement planning (MRP) Supply Chain Management Orientation 1-243
  244. 244. The Purchasing/Procurement ProcessTypes of Purchasing Processes Routine products Leverage products Strategic products Bottleneck products 1-244
  245. 245. The Purchasing/Procurement Process Stages in the Buying Process Problem Recognition General Need Description and Product Specification Product value analysis Supplier Search Vertical hubs Functional hubs Direct external links to major suppliers Buying alliances Company buying sites Request for proposals (RFPs) 1-245
  246. 246. Table 8.1: Buygrid Framework: Major Stages (Buyphases) of theIndustrial Buying Process in Relation to Major Buying Situations (Buyclasses) Buyclasses New Modified Straight Task Rebuy Rebuy 1. Problem recognition Yes Maybe No 2. General need description Yes Maybe No 3. Product specification Yes Yes YesBuyphases 4. Supplier search Yes Maybe No 5. Proposal solicitation Yes Maybe No 6. Supplier selection Yes Maybe No 7. Order-routine specification Order- Yes Maybe No 8. Performance review Yes Yes Yes 1-246
  247. 247. The Purchasing/Procurement ProcessGeneral Need Description andProduct Specification Product value analysisSupplier Search Vertical hubs Functional hubs Direct extranet links to major suppliers Buying alliances Company buying sites Request for proposals (RFPs) 1-247
  248. 248. The Purchasing/ Procurement ProcessProposal SolicitationSupplier Selection 1-248
  249. 249. Table 8-2: An Example of Vendor AnalysisAttributes Rating Scale Importance Poor Fair Good Excellent Weights (1) (2) (3) (4)Price .30 xSupplier reputation .20 xProduct reliability .30 xService reliability .10 xSupplier Flexibility .10 xTotal score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5 1-249