PowerPoint by                        Milton M. Pressley                       Creative Assistance by                      ...
Chapter 1Defining Marketing for the21st Centuryby                             PowerPoint by                        Milton ...
Kotler onMarketingThe future is not ahead of us. It has already happened. Unfortunately, it is unequally distributed among...
Chapter ObjectivesIn this chapter we will address the followingquestions:  What is the new economy like?  What are the tas...
The New EconomySubstantial increase in buying powerA greater variety of goods and servicesA greater amount of information ...
The New EconomyWebsites can provide companies withpowerful new information and saleschannels.Companies can collect fuller ...
The New EconomyCompanies can send ads, coupons,samples, information to targetedcustomers.Companies can customize offerings...
The three major challenges faced bybusinesses today are globalization,advances in technology, and deregulation.Which of th...
Marketing TaskTen rules of radical marketing  The CEO must own the marketing function.  Make sure the marketing department...
Marketing Task  Love and respect your customers.  Create a community of consumers.  Rethink the marketing mix.  Celebrate ...
The Scope of Marketing Marketing: typically seen as the task of creating, promoting, and delivering goods and services to ...
1. Negative          A major part of the market dislikes the             demand               product and may even pay a p...
Can you name a category ofproducts for which your negativefeelings have softened?What precipitatedthis change?            ...
The Scope of MarketingPlaces                 GoodsProperties             ServicesOrganizations          ExperiencesInforma...
The DecisionsMarketers MakeConsumer MarketsBusiness MarketsGlobal MarketsNonprofit andGovernmental Markets                ...
Marketing Concepts    and Tools Defining Marketing   Marketing   Marketing management Core Marketing Concepts   Target Mar...
Figure 1-1: A Simple Marketing System                                        1-17            www.bookfiesta4u.com
Marketing Concepts    and Tools  Marketplace,  Marketspace,  and  Metamarket                              1-18       www.b...
Marketing Concepts    and ToolsMarketers and ProspectsNeeds, Wants, and DemandsProduct, Offering, and BrandValue and Satis...
Marketing Concepts    and Tools Exchange and Transactions   Exchange   Transaction   Barter   Transfer   Behavioral respon...
Marketing Concepts    and Tools  Relationships and Networks    Relationship marketing    Marketing network  Marketing Chan...
Marketing Concepts    and Tools  Brand competition  Industry competition  Form competition  Generic competitionMarketing e...
Company OrientationsToward the Marketplace     Production Concept     Product concept     Selling Concept     Marketing Co...
Company OrientationsToward the Marketplace    Target Market    Customer Needs      Stated needs      Real needs      Unsta...
Company OrientationsToward the Marketplace    Integrated Marketing      External marketing      Internal marketing        ...
Company OrientationsToward the Marketplace    Profitability      Sales decline      Slow growth      Changing buying patte...
Company OrientationsToward the Marketplace  Societal Marketing Concept    Cause-    Cause-related marketing               ...
Can you identify the trends that havemade the marketing concept, thecustomer concept, and the societalmarketing concept mo...
How Business andMarketing are Changing    Customers    Brand manufacturers    Store-    Store-based retailers             ...
How Business and Marketing are ChangingCompany responses and adjustments  Reengineering       Partner-                    ...
How Business and Marketing are ChangingMarketer Responsesand Adjustments  Customer relationship          Integrated market...
Chapter 2Adapting Marketing To TheNew Economyby                            PowerPoint by                       Milton M. P...
Kotler onMarketingThe Internet willcreate new winnersand bury thelaggards.                                      1-33      ...
Chapter ObjectivesIn this chapter, we will address thefollowing questions:  What are the major forces driving the New  Eco...
Adapting Marketing to the     New Economy Major Drivers of the New Economy   Digitization and Connectivity   Disintermedia...
Procter & Gamble’s Reflect.com site allows customers         to design their own beauty products                          ...
Adapting Marketing to the     New Economy  Industry ConvergenceHow Business Practices are Changing  Organize by product un...
Table 2-1: Old Economy vs. New EconomyOld Economy                          New EconomyOrganize by product units           ...
Adapting Marketing to the     New Economy  Everyone does the marketing  Build brands through performance,  not just advert...
Adapting Marketing to the     New EconomyHow Marketing Practicesare Changing: E-Business              E-  E-business  E-co...
Customers can shop online at Calyx and Corolla or      ask for a catalog and shop by phone                                ...
Adapting Marketing to the     New Economy  Internet Domains: B2B  (Business to Business)                                  ...
Figure 2-1:The Supplier-CustomerRelationship:Traditional andNew EconomyStructures                                         ...
www.transora.com: global online marketplace for   the consumer packaged goods industry                                    ...
Adapting Marketing to the     New Economy Internet Domains: C2C (Consumer to Consumer) Internet Domains: C2B (Customer to ...
CarPoint, leading metamediary for car buying, is a pure      click company: It exists only on the Web.                    ...
Adapting Marketing to the     New Economy   Brick and Click companies                                     1-47            ...
Which is more important fordeveloping an e-presence: the agility               e-of a pure click company, or the welldefin...
Adapting Marketing to the     New EconomyHow Marketing Practices are Changing:Setting Up Web Sites  Designing an Attractiv...
Would you be willing to give up one ormore of the seven elements of an effectiveweb site in order to speed the deploymento...
Attracting and Keeping VisitorsTable 2-2:      2-             How can we get more prospects to know and visit our site?Set...
Adapting Marketing to the     New Economy    Context factors    Content factors    Getting feedback                       ...
Adapting Marketing to the     New Economy  Placing Ads and Promotions Online    Banner ads    Sponsorships    Microsite   ...
Infogate.com “pushes” targeted content and ads to those   who are interested in a product or product category             ...
Adapting Marketing to the     New Economy  Building a Revenue and Profit Model    Advertising income    Sponsorship income...
Adapting Marketing to the     New EconomyHow Marketing Practices are Changing:Customer Relationship Marketing  Reduce rate...
Adapting Marketing to the     New Economy  Focus disproportionate effort  on high value customers                         ...
Table 2-3: Mass Marketing vs.           One-to-One MarketingMass Marketing             One-to-One Marketing               ...
Adapting Marketing to the     New Economy Four steps for One-to-One Marketing                One-to-   Don’t go after ever...
Adapting Marketing to the     New Economy   Customer Databases and   Database Marketing     Customer mailing list     Busi...
Adapting Marketing to the     New EconomyData Warehouses and Data Mining  Using the database     To identify prospects    ...
Chapter 3Building CustomerSatisfaction, Value, andRetentionby                             PowerPoint by                   ...
Kotler onMarketingIt is no longerenough to satisfycustomers. You mustdelight them.                                     1-6...
Chapter ObjectivesIn this chapter, we will address thefollowing questions:  What are customer value and satisfaction,  and...
Defining Customer Value    and Satisfaction  Customer Perceived Value (CPV)    Total customer value    Total customer cost...
Figure 3-1:Determinantsof CustomerDeliveredValue                                      1-66               www.bookfiesta4u....
Defining Customer Value    and Satisfaction  Total Customer Satisfaction    Satisfaction  Customer Expectations  Deliverin...
Table 3-1: Tools for Tracking and Measuring                Customer SatisfactionComplaint      A customer-centered organiz...
Would you feel more brand loyalty for acompany that tried to immediately resolvea complaint via E-mail, or a company that ...
Premier Dell.com is a special business-oriented part of the                               business-Dell Web site that allo...
The Nature of HighPerformance Business  High-  High-performance business                               1-71        www.boo...
Figure 3-2: The High Performance Business                                            1-72              www.bookfiesta4u.com
The Nature of HighPerformance BusinessStakeholdersProcessesResources  Core competency  Distinctive capabilitiesOrganizatio...
Can you name a company that haschanged the public’s perception oftheir corporate culture? Has thiseffectively rehabilitate...
Delivering Customer Value     and Satisfaction    Value Chain      Value chain                                  1-75      ...
Figure 3-3: The Generic Value Chain                                      1-76           www.bookfiesta4u.com
Delivering Customer Value     and Satisfaction  BenchmarksCore Business Processes  The market sensing process  The new off...
Delivering Customer Value     and Satisfaction  The Value Delivery Network  (Supply Chain)                                ...
Figure 3-4:LeviStrauss’sValue-DeliveryNetwork                                     1-79              www.bookfiesta4u.com
Attracting and Retaining       Customers  Partner relationship  management (PRM)  Customer relationship  management (CRM) ...
Saturn has gained a customer loyalty rateof more than 60% by fundamentallychanging the buyer-seller relationship.         ...
Attracting and Retaining       Customers  Attracting Customers  Computing the Cost of  Lost Customers    Customer churn   ...
On the Lands’ End Web site, customers can click abutton to talk with a customer service representative                    ...
Attracting and Retaining       CustomersThe Need for Customer RetentionMeasuring CustomerLifetime Value (CLV)Customer Rela...
Figure 3-5:TheCustomer-DevelopmentProcess                                     1-85              www.bookfiesta4u.com
Attracting and Retaining       Customers  Five levels of investment in  customer relationship building    Basic marketing ...
Figure 3-6: Levels of Relationship Marketing                                               1-87               www.bookfies...
Attracting and Retaining       Customers Forming Strong Customer Bonds: The Basics   Cross-   Cross-departmental participa...
Attracting and Retaining       Customers    Organize and make accessible a    database of customer information    Make it ...
The H.O.G. Web site presents the benefits of joining.                                                        1-90         ...
Attracting and Retaining       Customers    Adding Social Benefits                                1-91         www.bookfie...
Good Things                      Bad ThingsTable 3-2:       Initiate positive phone calls    Make only callbacksSocial Act...
Attracting and Retaining       Customers    Adding Structural Ties      Create long-term contracts             long-      ...
Customer Profitability,Company Profitability, andTotal Quality Management  Measuring Profitability    Profitable customer ...
Figure 3-7: Customer-Product Profitability Analysis                                                      1-95             ...
Figure 3-8: Allocating marketing investment        according to customer value                                            ...
Customer Profitability,Company Profitability, andTotal Quality Management  Increasing Company Profitability    Competitive...
Chapter 4Winning Markets ThroughMarket-Market-Oriented StrategicPlanningby                            PowerPoint by       ...
Kotler onMarketingIt is more importantto do what isstrategically rightthan what isimmediatelyprofitable.                  ...
Chapter ObjectivesIn this chapter, we examine thefollowing questions:  How is strategic planning carried out at  the corpo...
Strategic Planning: Three Key Areas   and Four Organization Levels Strategic marketing plan Tactical marketing plan Market...
Corporate and Division   Strategic PlanningAll corporate headquarters undertakefour planning activities  Defining the Corp...
Corporate and Division    Strategic PlanningDefining the Corporate Mission  Mission statements define which competitive  s...
Can you name a company that hasrecently changed its product scopeor market segment scope in a verypublic way? Was this an ...
Corporate and Division  Strategic PlanningEstablishing Strategic Business Units(SBUs)                                     ...
Table 4.1: Product-Oriented versus Market-Oriented                Definitions of a BusinessCompany             Product Def...
Corporate and Division    Strategic PlanningThree characteristics of SBUs  Single business or collection of related  busin...
The Growth-Share Matrix    Growth-  Relative market share  Four Cells    Question Marks    Stars    Cash Cows    DogsSBU S...
Can you give an example of a “Star”that skipped “Cash Cow”, and wentstraight to “Dog” status?                             ...
Corporate and Division  Strategic Planning  The General Electric Model                               1-110        www.book...
Table 4-2: Factors underlying Market Attractiveness and Competitive  Position in GE Multifactor Portfolio Model: Hydraulic...
Corporate and Division  Strategic Planning  Critique of Portfolio Models  Planning New Businesses,  Downsizing Older Busin...
Corporate and Division  Strategic Planning      Intensive Growth                              1-113       www.bookfiesta4u...
Starbucks’ home page: Customers can request a catalog of Starbucks products, subscribe to a          newsletter, and shop ...
Corporate and Division  Strategic Planning  Integrative Growth  Diversification Growth  Downsizing Older Businesses       ...
Give an example of a marketsegment where integrative growthwould be preferable to growththrough diversification. Explainwh...
Business Unit Strategic PlanningBusiness MissionSWOT Analysis  External Environment Analysis  (Opportunity and Threat Anal...
Give some examples of companiesthat have grown to dominate theirmarket segment by using technologyto make buying opportuni...
Business Unit  Strategic PlanningMarketing Opportunity Analysis (MOA)  Can the benefits be articulated to a target  market...
Figure 4-7: Opportunity and Threat Matrices                                              1-120               www.bookfiest...
Business Unit Strategic PlanningInternal Environmental Analysis(Strength/Weakness Analysis)Goal FormationStrategicFormulat...
Business Unit Strategic PlanningPorter’s Generic Strategies  Overall cost leadership  Differentiation  Focus              ...
Travelocity’s Web site helps the consumer plan thewhole vacation – flights, lodging, and car rental.com                   ...
Business Unit     Strategic PlanningOperational Effectiveness and Strategy  Strategic group  Strategic alliances          ...
Business Unit     Strategic PlanningMarketing Alliances  Product or service alliances  Promotional alliances  Logistical a...
Business UnitStrategic Planning  Feedback and Control                            1-126     www.bookfiesta4u.com
The Marketing Process Steps in the Planning Process   The marketing process Analyzing Market Opportunities Developing Mark...
Figure 4-10:FactorsInfluencingCompanyMarketingStrategy                                      1-128               www.bookfi...
Product Planning: The Nature and  Contents of a Marketing Plan   Contents of the Marketing Plan     Executive Summary     ...
Product Planning: The Nature and  Contents of a Marketing Plan  Sample Marketing Plan: Sonic Personal  Digital Assistant  ...
Product Planning: The Nature and  Contents of a Marketing Plan    Implementation Controls    Marketing Strategy      Posit...
Chapter 5Gathering Information andMeasuring Market Demandby                            PowerPoint by                      ...
Kotler onMarketingMarketing is becoming a battle based more on information than on sales power.                           ...
Chapter ObjectivesIn this chapter, we focus on the followingquestions:  What are the components of a modern  marketing inf...
The Components of a ModernMarketing Information System  Marketing Information System (MIS)  10 useful questions for determ...
The Components of a ModernMarketing Information System   What information would you want that you are not   getting now?  ...
Internal Record Systems  The Order-to-Payment Cycle      Order-to-  Sales Information Systems  Databases, Data Warehouses ...
Can you name a company that usestargeted mailings to promote newproducts, or regional offerings?                          ...
The MarketingIntelligence SystemA Marketing Intelligence Systemis a set of procedures and sourcesused by managers to obtai...
What are some of the potentialhazards a company might face byrelying too heavily on distributors,retailers, or otherinterm...
The Marriott Vacation Club International Web sitegives interested customers the opportunity to sell       themselves on th...
CEOExpress.com is a portal to information–a user                                  information–clicks on a listing and is t...
Table 5-1: Secondary-Data SourcesSecondary-Secondary-     A.   Internal SourcesData Sources         Company profit-loss st...
Marketing Research System   Marketing Research   Suppliers of Marketing Research     Engaging students or professors to   ...
Figure 5-1:The Marketing  Research  Process                                       1-145                www.bookfiesta4u.com
Marketing Research System   The Marketing Research Process     Step 1: Define the Problem, the     Decision Alternatives, ...
Marketing Research System         Survey research         Behavioral data         Experimental research  Research Instrume...
Table 5-2: Types of Questions                                                  A. Closed-end Questions                    ...
Marketing Research System  Sampling Plan    Sampling unit    Sample size    Sampling procedure                            ...
www.wansink.com is a consumer psychology Web site set up by Dr. Brian Wansink of the            University of Illinois    ...
Table 5-3: Probability and Nonprobability SamplesA. Probability SampleSimple random sample    Every member of the populati...
Table 5-3: Probability and Nonprobability Samples                       (Continued)B. Nonprobability   SampleConvenience s...
Marketing Research System   Contact Methods     Mail questionnaire     Personal interviewing       Arranged interviews    ...
Marketing Research System    Step 3: Collect the    Information    Step 4: Analyze the    Information    Step 5: Present t...
Table 5-4: The Seven Characteristics of Good                       Marketing Research1. Scientific   Effective marketing r...
Marketing Research System Overcoming Barriers to the Use of Marketing Research   A narrow conception of the research   Une...
Marketing Decision Support         System  Marketing Decision Support  System (MDSS)    Marketing and sales    software pr...
Table 5-5: Quantitative Tools Used in Marketing Decision                         Support SystemsStatistical Tools1. Multip...
Forecasting and  Demand MeasurementThe Measures of Market DemandFigure 5-3: NinetyTypes of DemandMeasurement(6X5X3)       ...
Forecasting andDemand Measurement  Which Market to  Measure?    Market    Potential market    Available market    Target m...
Forecasting andDemand MeasurementFigure 5-4: Market Demand Functions                                      1-161           ...
Can you name a market segmentwith a low penetration index? Ahigh penetration index? Can youthink of a market where the hig...
Forecasting and Demand     Measurement   Market Forecast   Market Potential     Product penetration     percentage   Compa...
Forecasting and Demand     MeasurementEstimating Current demand  Total Market Potential  Area Market Potential    Market- ...
Table 5-6: Market-Buildup Method Using SIC Codes                                            (c)          (a)              ...
Forecasting and Demand     Measurement    Multiple-Factor Index    Method       Brand development       index (BDI)       ...
Table 5-7: Calculating the Brand             Development Index (BDI)                    (a)              (b)              ...
Forecasting and Demand     Measurement   Industry Sales and Market Shares Estimating Future Demand Survey of Buyers’ Inten...
Forecasting and Demand     Measurement  Composite of Sales Force Opinions  Expert Opinion    Group discussion method    Po...
Chapter 6Scanning the MarketingEnvironmentby                            PowerPoint by                       Milton M. Pres...
Kotler onMarketingToday you have to run faster to stay in place.                                     1-171              ww...
Chapter ObjectivesIn this chapter, we focus on twoquestions:  What are the key methods for tracking and  identifying oppor...
Analyzing Needs and Trends in    the Macroenvironment     Trend     Fad     Megatrends                                   1...
Given the definitions for fads,trends, and megatrends presented inthe text, how would you define youronline activities? Ca...
Identifying and Responding to the Major Macroenvironment Forces  The substantial speedup of international  transportation,...
Identifying and Responding to the Major Macroenvironment Forces  The severe debt problems of a number of countries,  along...
Identifying and Responding to the Major Macroenvironment Forces  The increasing tendency of multinationals to transcend  t...
Identifying and Responding to the Major Macroenvironment Forces  Demographic Environment    Worldwide Population    Growth...
Can you identify one or morenations whose populations hold thepromise of huge potential marketsfor consumer goods? How hav...
Identifying and Responding to the Major Macroenvironment Forces    Educational Groups    Household Patterns    Geographica...
Identifying and Responding to the Major Macroenvironment Forces  Economic Environment    Income Distribution    Savings, D...
Identifying and Responding to the Major Macroenvironment Forces  Natural Environment    Shortage of Raw Materials    Incre...
Identifying and Responding to the Major Macroenvironment Forces  Technological Environment    Accelerating Pace of Change ...
Identifying and Responding to the Major Macroenvironment Forces    Varying R&D Budgets    Increased Regulation of    Techn...
Identifying and Responding to the Major Macroenvironment Forces  Social-  Social-Cultural  Environment      Views of thems...
Identifying and Responding to the Major Macroenvironment Forces  High Persistence of Core  Cultural Values  Existence of s...
Chapter 7Analyzing ConsumerMarkets and Buyer Behaviorby                               PowerPoint by                       ...
Kotler onMarketingThe most important thing is to forecast where customers are moving, and be in front of them.            ...
Chapter ObjectivesIn this chapter, we focus on two questions:  How do the buyers’ characteristics – cultural,  social, per...
Influencing Buyer Behavior  Consumer BehaviorCultural Factors  Culture    Subcultures    Diversity marketing    Social cla...
Influencing Buyer Behavior  Social Factors    Reference Groups      Reference groups      Membership groups      Primary g...
Table 7.1: Characteristics of Major U.S. Social Classes1. Upper Uppers The social elite who live on inherited wealth. They...
Influencing Buyer Behavior     Secondary groups     Aspirational groups     Dissociative groups     Opinion leader        ...
Influencing Buyer Behavior     Family        Family of orientation        Family of procreation     Roles and Statuses    ...
With the “graying” of the American populace,marketers have begun to shift images andcultural references in advertising fro...
Influencing Buyer Behavior  Personal Factors    Age and Stage in the Life Cycle      Family life cycle    Occupation and E...
In recent years, many organizations have“provided” televisions with limited programmingaccess for use in K-12 classrooms. ...
Table 7.2: Stages in the Family Life Cycle1. Bachelor stage:        Few financial burdens. Fashion opinionYoung, single, n...
Figure 7.2: The VALS segmentation system:             An 8-part typologyGroups with HighResources1. Actualizers2. Fulfille...
SRI Consulting Business Intelligence’s Web site                                             1-200                 www.book...
Influencing Buyer Behavior    Personality and Self-Concept                    Self-      Personality      Brand personalit...
Influencing Buyer Behavior  Psychological Factors    Motivation      Motive    Freud’s Theory      Laddering      Projecti...
Influencing Buyer Behavior  Ernest Dichter’s research found:    Consumers resist prunes because prunes are    wrinkled loo...
Influencing Buyer Behavior   Maslow’s Theory  Figure 7.3:  Maslow’s  Hierarchy of  Needs                                  ...
Influencing Buyer Behavior    Herzberg’s Theory      Dissatisfiers      Satisfiers                                     1-2...
Influencing Buyer Behavior  Perception    Selective attention      People are more likely to notice stimuli than      rela...
Influencing Buyer Behavior    Learning      Drive      Cues      Discrimination    Beliefs and Attitudes      Belief      ...
The purchase of a product from a Company Aturns out to be a positive experience. You arelooking for a loosely related prod...
The Buying Decision Process   Buying Roles     Initiator     Influencer     Decider     Buyer     User   Buying behavior  ...
Table 7.3: Four Types of Buying Behavior                           High Involvement      Low InvolvementSignificant Differ...
The Buying Decision Process    Complex Buying Behavior    Dissonance-    Dissonance-Reducing Buyer Behavior    Habitual Bu...
Stages in the Buying   Decision ProcessHow marketers learn about the stages:  Introspective method  Retrospective method  ...
The Edmunds.com home page shows the variety ofservices this Web company offers those shoppingfor a car.                   ...
Stages of the Buying Decision ProcessProblem recognitionInformation search  Personal sources                Figure 7.4:  C...
Figure 7.5: Successive Sets Involved in Customer                Decision Making                                           ...
The Buying Decision Process   Evaluation of Alternatives     Potential Attributes of interest       Cameras       Hotels  ...
Table 7.4: A Consumer’s Brand Beliefs                  about ComputersComputer                                 Attribute  ...
The Buying Decision Process     Strategies designed to stimulate interest in a     computer        Redesign the computer  ...
The Buying Decision Process   Purchase Decision      Figure 7.6: Steps Between Evaluation of       Alternatives and a purc...
The Buying Decision Process    Informediaries       Consumer Reports       Zagats    Unanticipated situational factors    ...
The Buying Decision Process  Postpurchase Behavior    Postpurchase Satisfaction      Disappointed      Satisfied      Deli...
Figure 7.7: How Customers Dispose of Products                                                1-222                www.book...
The Buying Decision Process  Other Models of the Buying Decision  Process    Health Model      Stages of Change Model     ...
Figure 7.8:Activity cyclefor IBMcustomers inthe globalelectronicnetworkingcapabilitymarket space                          ...
Figure 7.9:Value addsfor IBMcustomers inthe globalelectronicnetworkingcapabilitymarket space                              ...
Chapter 8Analyzing Business Marketsand Business BuyingBehaviorby                            PowerPoint by                 ...
Kotler onMarketingMany businesses are wisely turning their suppliers and distributors into valued partners.               ...
Chapter ObjectivesIn this chapter, we focus on six questions:  What is the business market, and how does it  differ from t...
What is Organizational         Buying?  Organizational buyingThe business market versus the consumermarket  Business marke...
What is Organizational       Buying? Derived demand Inelastic demand Fluctuating demand Professional purchasing           ...
Blue Shield of California’s mylifepath                                         1-231                 www.bookfiesta4u.com
What is Organizational       Buying? Several buying influences Multiple sales calls Directed purchasing Reciprocity Leasin...
If you were tasked with marketing aproduct or service to an organization,would you attempt to initially contact thepurchas...
What is Organizational       Buying?  Buying Situations    Straight rebuy    Modified rebuy    New Task  Systems Buying an...
What are some of the benefits to anorganization that can be derivedfrom a single source solution, or a                    ...
Participants in the Business      Buying Process    The Buying Center      Initiators      Users      Influencers      Dec...
Figure 8-1: Major Influences on  Industrial Buying Behavior                                  1-237        www.bookfiesta4u...
Major Influences on Buying         DecisionsEnvironmental FactorsOrganizational Factors  Purchasing-  Purchasing-Departmen...
The e-hub Plastics.com home page offers buyers and     e-sellers of plastics a marketplace plus news andinformation       ...
Covisint’s Web site offers both services andinformation                                               1-240               ...
Major Influences on Buying         Decisions  Other Organizational Factors    Long-    Long-Term Contracts       Vendor-  ...
Major Influences on Buying         DecisionsInterpersonal and Individual FactorsCultural Factors  France  Germany  Japan  ...
The Purchasing/Procurement Process  Incentive to purchaseThree Company Purchasing Orientations  Buying Orientation     Com...
The Purchasing/Procurement ProcessTypes of Purchasing Processes  Routine products  Leverage products  Strategic products  ...
The Purchasing/Procurement Process Stages in the Buying Process   Problem Recognition   General Need Description and   Pro...
Table 8.1: Buygrid Framework: Major Stages (Buyphases) of theIndustrial Buying Process in Relation to Major Buying Situati...
The Purchasing/Procurement ProcessGeneral Need Description andProduct Specification  Product value analysisSupplier Search...
The Purchasing/ Procurement ProcessProposal SolicitationSupplier Selection                                    1-248       ...
Table 8-2: An Example of Vendor AnalysisAttributes                                             Rating Scale               ...
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Marketing management

  1. 1. PowerPoint by Milton M. Pressley Creative Assistance by D. Carter and S. Koger 1-1www.bookfiesta4u.com
  2. 2. Chapter 1Defining Marketing for the21st Centuryby PowerPoint by Milton M. Pressley University of New Orleans 1-2 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  13. 13. Can you name a category ofproducts for which your negativefeelings have softened?What precipitatedthis change? 1-13 www.bookfiesta4u.com
  14. 14. The Scope of MarketingPlaces GoodsProperties ServicesOrganizations ExperiencesInformation EventsIdeas Persons 1-14 www.bookfiesta4u.com
  15. 15. The DecisionsMarketers MakeConsumer MarketsBusiness MarketsGlobal MarketsNonprofit andGovernmental Markets 1-15 www.bookfiesta4u.com
  16. 16. Marketing Concepts and Tools Defining Marketing Marketing Marketing management Core Marketing Concepts Target Markets and Segmentation 1-16 www.bookfiesta4u.com
  17. 17. Figure 1-1: A Simple Marketing System 1-17 www.bookfiesta4u.com
  18. 18. Marketing Concepts and Tools Marketplace, Marketspace, and Metamarket 1-18 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  20. 20. Marketing Concepts and Tools Exchange and Transactions Exchange Transaction Barter Transfer Behavioral response 1-20 www.bookfiesta4u.com
  21. 21. Marketing Concepts and Tools Relationships and Networks Relationship marketing Marketing network Marketing Channels Supply Chain Competition 1-21 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  23. 23. Company OrientationsToward the Marketplace Production Concept Product concept Selling Concept Marketing Concept 1-23 www.bookfiesta4u.com
  24. 24. Company OrientationsToward the Marketplace Target Market Customer Needs Stated needs Real needs Unstated needs Delight needs Secret needs 1-24 www.bookfiesta4u.com
  25. 25. Company OrientationsToward the Marketplace Integrated Marketing External marketing Internal marketing 1-25 www.bookfiesta4u.com
  26. 26. Company OrientationsToward the Marketplace Profitability Sales decline Slow growth Changing buying patterns Increasing competition Increasing marketing expenditures 1-26 www.bookfiesta4u.com
  27. 27. Company OrientationsToward the Marketplace Societal Marketing Concept Cause- Cause-related marketing 1-27 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  29. 29. How Business andMarketing are Changing Customers Brand manufacturers Store- Store-based retailers 1-29 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  32. 32. Chapter 2Adapting Marketing To TheNew Economyby PowerPoint by Milton M. Pressley University of New Orleans 1-32 www.bookfiesta4u.com
  33. 33. Kotler onMarketingThe Internet willcreate new winnersand bury thelaggards. 1-33 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  36. 36. Procter & Gamble’s Reflect.com site allows customers to design their own beauty products 1-36 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  41. 41. Customers can shop online at Calyx and Corolla or ask for a catalog and shop by phone 1-41 www.bookfiesta4u.com
  42. 42. Adapting Marketing to the New Economy Internet Domains: B2B (Business to Business) 1-42 www.bookfiesta4u.com
  43. 43. Figure 2-1:The Supplier-CustomerRelationship:Traditional andNew EconomyStructures 1-43 www.bookfiesta4u.com
  44. 44. www.transora.com: global online marketplace for the consumer packaged goods industry 1-44 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  46. 46. CarPoint, leading metamediary for car buying, is a pure click company: It exists only on the Web. 1-46 www.bookfiesta4u.com
  47. 47. Adapting Marketing to the New Economy Brick and Click companies 1-47 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  52. 52. Adapting Marketing to the New Economy Context factors Content factors Getting feedback 1-52 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  54. 54. Infogate.com “pushes” targeted content and ads to those who are interested in a product or product category 1-54 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  57. 57. Adapting Marketing to the New Economy Focus disproportionate effort on high value customers 1-57 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  60. 60. Adapting Marketing to the New Economy Customer Databases and Database Marketing Customer mailing list Business database 1-60 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  62. 62. Chapter 3Building CustomerSatisfaction, Value, andRetentionby PowerPoint by Milton M. Pressley University of New Orleans 1-62 www.bookfiesta4u.com
  63. 63. Kotler onMarketingIt is no longerenough to satisfycustomers. You mustdelight them. 1-63 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  65. 65. Defining Customer Value and Satisfaction Customer Perceived Value (CPV) Total customer value Total customer cost 1-65 www.bookfiesta4u.com
  66. 66. Figure 3-1:Determinantsof CustomerDeliveredValue 1-66 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  70. 70. Premier Dell.com 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 www.bookfiesta4u.com
  71. 71. The Nature of HighPerformance Business High- High-performance business 1-71 www.bookfiesta4u.com
  72. 72. Figure 3-2: The High Performance Business 1-72 www.bookfiesta4u.com
  73. 73. The Nature of HighPerformance BusinessStakeholdersProcessesResources Core competency Distinctive capabilitiesOrganization and Organizational Culture Organization Corporate culture Scenario analysis 1-73 www.bookfiesta4u.com
  74. 74. Can you name a company that haschanged the public’s perception oftheir corporate culture? Has thiseffectively rehabilitated thatcompany’s image? 1-74 www.bookfiesta4u.com
  75. 75. Delivering Customer Value and Satisfaction Value Chain Value chain 1-75 www.bookfiesta4u.com
  76. 76. Figure 3-3: The Generic Value Chain 1-76 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  78. 78. Delivering Customer Value and Satisfaction The Value Delivery Network (Supply Chain) 1-78 www.bookfiesta4u.com
  79. 79. Figure 3-4:LeviStrauss’sValue-DeliveryNetwork 1-79 www.bookfiesta4u.com
  80. 80. Attracting and Retaining Customers Partner relationship management (PRM) Customer relationship management (CRM) 1-80 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  82. 82. Attracting and Retaining Customers Attracting Customers Computing the Cost of Lost Customers Customer churn Lifetime value 1-82 www.bookfiesta4u.com
  83. 83. On the Lands’ End Web site, customers can click abutton to talk with a customer service representative 1-83 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  85. 85. Figure 3-5:TheCustomer-DevelopmentProcess 1-85 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  87. 87. Figure 3-6: Levels of Relationship Marketing 1-87 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  90. 90. The H.O.G. Web site presents the benefits of joining. 1-90 www.bookfiesta4u.com
  91. 91. Attracting and Retaining Customers Adding Social Benefits 1-91 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  94. 94. Customer Profitability,Company Profitability, andTotal Quality Management Measuring Profitability Profitable customer 1-94 www.bookfiesta4u.com
  95. 95. Figure 3-7: Customer-Product Profitability Analysis 1-95 www.bookfiesta4u.com
  96. 96. Figure 3-8: Allocating marketing investment according to customer value 1-96 www.bookfiesta4u.com
  97. 97. Customer Profitability,Company Profitability, andTotal Quality Management Increasing Company Profitability Competitive advantage Implementing TQM Total Quality Management Quality 1-97 www.bookfiesta4u.com
  98. 98. Chapter 4Winning Markets ThroughMarket-Market-Oriented StrategicPlanningby PowerPoint by Milton M. Pressley University of New Orleans 1-98 www.bookfiesta4u.com
  99. 99. Kotler onMarketingIt is more importantto do what isstrategically rightthan what isimmediatelyprofitable. 1-99 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  101. 101. Strategic Planning: Three Key Areas and Four Organization Levels Strategic marketing plan Tactical marketing plan Marketing plan 1-101 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  105. 105. Corporate and Division Strategic PlanningEstablishing Strategic Business Units(SBUs) 1-105 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  108. 108. The Growth-Share Matrix Growth- Relative market share Four Cells Question Marks Stars Cash Cows DogsSBU StrategiesSBU Lifecycle 1-108 www.bookfiesta4u.com
  109. 109. Can you give an example of a “Star”that skipped “Cash Cow”, and wentstraight to “Dog” status? 1-109 www.bookfiesta4u.com
  110. 110. Corporate and Division Strategic Planning The General Electric Model 1-110 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  112. 112. Corporate and Division Strategic Planning Critique of Portfolio Models Planning New Businesses, Downsizing Older Businesses 1-112 www.bookfiesta4u.com
  113. 113. Corporate and Division Strategic Planning Intensive Growth 1-113 www.bookfiesta4u.com
  114. 114. Starbucks’ home page: Customers can request a catalog of Starbucks products, subscribe to a newsletter, and shop online 1-114 www.bookfiesta4u.com
  115. 115. Corporate and Division Strategic Planning Integrative Growth Diversification Growth Downsizing Older Businesses 1-115 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  118. 118. Give some examples of companiesthat have grown to dominate theirmarket segment by using technologyto make buying opportunities moreconvenient and efficient. 1-118 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  120. 120. Figure 4-7: Opportunity and Threat Matrices 1-120 www.bookfiesta4u.com
  121. 121. Business Unit Strategic PlanningInternal Environmental Analysis(Strength/Weakness Analysis)Goal FormationStrategicFormulation Strategy 1-121 www.bookfiesta4u.com
  122. 122. Business Unit Strategic PlanningPorter’s Generic Strategies Overall cost leadership Differentiation Focus 1-122 www.bookfiesta4u.com
  123. 123. Travelocity’s Web site helps the consumer plan thewhole vacation – flights, lodging, and car rental.com 1-123 www.bookfiesta4u.com
  124. 124. Business Unit Strategic PlanningOperational Effectiveness and Strategy Strategic group Strategic alliances 1-124 www.bookfiesta4u.com
  125. 125. Business Unit Strategic PlanningMarketing Alliances Product or service alliances Promotional alliances Logistical alliances Pricing collaborationsPartner RelationshipManagement, PRMProgram Formulation andImplementation 1-125 www.bookfiesta4u.com
  126. 126. Business UnitStrategic Planning Feedback and Control 1-126 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  128. 128. Figure 4-10:FactorsInfluencingCompanyMarketingStrategy 1-128 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  132. 132. Chapter 5Gathering Information andMeasuring Market Demandby PowerPoint by Milton M. Pressley University of New Orleans 1-132 www.bookfiesta4u.com
  133. 133. Kotler onMarketingMarketing is becoming a battle based more on information than on sales power. 1-133 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  137. 137. Internal Record Systems The Order-to-Payment Cycle Order-to- Sales Information Systems Databases, Data Warehouses And Data-Mining Data- 1-137 www.bookfiesta4u.com
  138. 138. Can you name a company that usestargeted mailings to promote newproducts, or regional offerings? 1-138 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  140. 140. What are some of the potentialhazards a company might face byrelying too heavily on distributors,retailers, or otherintermediaries formarket intelligence? 1-140 www.bookfiesta4u.com
  141. 141. The Marriott Vacation Club International Web sitegives interested customers the opportunity to sell themselves on the Marriott offerings 1-141 www.bookfiesta4u.com
  142. 142. CEOExpress.com is a portal to information–a user information–clicks on a listing and is then connected to that site 1-142 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  145. 145. Figure 5-1:The Marketing Research Process 1-145 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  147. 147. Marketing Research System Survey research Behavioral data Experimental research Research Instruments Questionnaires Psychological tools Mechanical devices Quantitative measures 1-147 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  149. 149. Marketing Research System Sampling Plan Sampling unit Sample size Sampling procedure 1-149 www.bookfiesta4u.com
  150. 150. www.wansink.com is a consumer psychology Web site set up by Dr. Brian Wansink of the University of Illinois 1-150 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  159. 159. Forecasting and Demand MeasurementThe Measures of Market DemandFigure 5-3: NinetyTypes of DemandMeasurement(6X5X3) 1-159 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  161. 161. Forecasting andDemand MeasurementFigure 5-4: Market Demand Functions 1-161 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  164. 164. Forecasting and Demand MeasurementEstimating Current demand Total Market Potential Area Market Potential Market- Market-Buildup Method 1-164 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  166. 166. Forecasting and Demand Measurement Multiple-Factor Index Method Brand development index (BDI) 1-166 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  168. 168. Forecasting and Demand Measurement Industry Sales and Market Shares Estimating Future Demand Survey of Buyers’ Intentions Forecasting Purchase probability scale 1-168 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  170. 170. Chapter 6Scanning the MarketingEnvironmentby PowerPoint by Milton M. Pressley University of New Orleans 1-170 www.bookfiesta4u.com
  171. 171. Kotler onMarketingToday you have to run faster to stay in place. 1-171 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  173. 173. Analyzing Needs and Trends in the Macroenvironment Trend Fad Megatrends 1-173 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  178. 178. Identifying and Responding to the Major Macroenvironment Forces Demographic Environment Worldwide Population Growth Population Age Mix Ethnic and Other Markets 1-178 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  181. 181. Identifying and Responding to the Major Macroenvironment Forces Economic Environment Income Distribution Savings, Debt, and Credit Availability 1-181 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  183. 183. Identifying and Responding to the Major Macroenvironment Forces Technological Environment Accelerating Pace of Change Unlimited Opportunities for Innovation 1-183 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  187. 187. Chapter 7Analyzing ConsumerMarkets and Buyer Behaviorby PowerPoint by Milton M. Pressley University of New Orleans 1-187 www.bookfiesta4u.com
  188. 188. Kotler onMarketingThe most important thing is to forecast where customers are moving, and be in front of them. 1-188 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  190. 190. Influencing Buyer Behavior Consumer BehaviorCultural Factors Culture Subcultures Diversity marketing Social class 1-190 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  193. 193. Influencing Buyer Behavior Secondary groups Aspirational groups Dissociative groups Opinion leader 1-193 www.bookfiesta4u.com
  194. 194. Influencing Buyer Behavior Family Family of orientation Family of procreation Roles and Statuses Role Status 1-194 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  196. 196. Influencing Buyer Behavior Personal Factors Age and Stage in the Life Cycle Family life cycle Occupation and Economic Circumstances 1-196 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  200. 200. SRI Consulting Business Intelligence’s Web site 1-200 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  202. 202. Influencing Buyer Behavior Psychological Factors Motivation Motive Freud’s Theory Laddering Projective techniques 1-202 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  204. 204. Influencing Buyer Behavior Maslow’s Theory Figure 7.3: Maslow’s Hierarchy of Needs 1-204 www.bookfiesta4u.com
  205. 205. Influencing Buyer Behavior Herzberg’s Theory Dissatisfiers Satisfiers 1-205 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  207. 207. Influencing Buyer Behavior Learning Drive Cues Discrimination Beliefs and Attitudes Belief Spreading activation Attitude 1-207 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  209. 209. The Buying Decision Process Buying Roles Initiator Influencer Decider Buyer User Buying behavior 1-209 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  211. 211. The Buying Decision Process Complex Buying Behavior Dissonance- Dissonance-Reducing Buyer Behavior Habitual Buying Behavior Variety- Variety-Seeking Buying Behavior 1-211 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  213. 213. The Edmunds.com home page shows the variety ofservices this Web company offers those shoppingfor a car. 1-213 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  215. 215. Figure 7.5: Successive Sets Involved in Customer Decision Making 1-215 www.bookfiesta4u.com
  216. 216. The Buying Decision Process Evaluation of Alternatives Potential Attributes of interest Cameras Hotels Mouthwash Tires Brand beliefs Brand image 1-216 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  219. 219. The Buying Decision Process Purchase Decision Figure 7.6: Steps Between Evaluation of Alternatives and a purchase decision 1-219 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  221. 221. The Buying Decision Process Postpurchase Behavior Postpurchase Satisfaction Disappointed Satisfied Delighted Postpurchase Actions Postpurchase Use and Disposal 1-221 www.bookfiesta4u.com
  222. 222. Figure 7.7: How Customers Dispose of Products 1-222 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  224. 224. Figure 7.8:Activity cyclefor IBMcustomers inthe globalelectronicnetworkingcapabilitymarket space 1-224 www.bookfiesta4u.com
  225. 225. Figure 7.9:Value addsfor IBMcustomers inthe globalelectronicnetworkingcapabilitymarket space 1-225 www.bookfiesta4u.com
  226. 226. Chapter 8Analyzing Business Marketsand Business BuyingBehaviorby PowerPoint by Milton M. Pressley University of New Orleans 1-226 www.bookfiesta4u.com
  227. 227. Kotler onMarketingMany businesses are wisely turning their suppliers and distributors into valued partners. 1-227 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  230. 230. What is Organizational Buying? Derived demand Inelastic demand Fluctuating demand Professional purchasing 1-230 www.bookfiesta4u.com
  231. 231. Blue Shield of California’s mylifepath 1-231 www.bookfiesta4u.com
  232. 232. What is Organizational Buying? Several buying influences Multiple sales calls Directed purchasing Reciprocity Leasing 1-232 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  237. 237. Figure 8-1: Major Influences on Industrial Buying Behavior 1-237 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  239. 239. The e-hub Plastics.com home page offers buyers and e-sellers of plastics a marketplace plus news andinformation 1-239 www.bookfiesta4u.com
  240. 240. Covisint’s Web site offers both services andinformation 1-240 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  242. 242. Major Influences on Buying DecisionsInterpersonal and Individual FactorsCultural Factors France Germany Japan Korea Latin America 1-242 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  244. 244. The Purchasing/Procurement ProcessTypes of Purchasing Processes Routine products Leverage products Strategic products Bottleneck products 1-244 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  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 www.bookfiesta4u.com
  248. 248. The Purchasing/ Procurement ProcessProposal SolicitationSupplier Selection 1-248 www.bookfiesta4u.com
  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 www.bookfiesta4u.com

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