Comprehensive Exam Notes for IOBM

1. variousmarketingactivitiesinto marketing-mixtoolsof fourbroadkinds,
whichhe called thefourPs of marketing:product,price,place,andpromotion.
People reflects,inpart,internal marketingandthe factthat employeesare critical tomarketing
success.Marketingwill onlybe asgoodas the people inside the organization.Italsoreflectsthe fact
that marketersmustviewconsumersaspeopletounderstandtheirlivesmore broadly,andnotjust
as theyshopfor and consume productsandservices.
Processes reflectsall the creativity,discipline,andstructure broughttomarketing
management.Marketersmustavoidadhoc planninganddecisionmakingandensure
that state-of-the-artmarketingideasandconceptsplayanappropriate role inall theydo.
Onlybyinstitutingthe rightsetof processestoguide activitiesandprogramscan a firmengage
inmutuallybeneficiallong-termrelationships.Anotherimportantsetof processesguides
the firmin imaginativelygeneratinginsightsandbreakthroughproducts,services,and
marketingactivities.
Programsreflectsall the firm’sconsumer-directedactivities.Itencompassesthe oldfourPsas
well asa range of othermarketingactivitiesthatmightnotfitas neatlyintothe oldview of marketing.
Regardless of whethertheyare online oroffline,traditionalornontraditional,these activities
mustbe integratedsuchthattheirwhole isgreaterthanthe sumof theirpartsand theyaccomplish
multiple objectivesforthe firm.

2. 1)Marketing Strategiesand plan:
 We can divide the value creationanddeliverysequenceintothree phases.2First,choosingthe
value Marketersmust segmentthe market,selectthe appropriate target,anddevelopthe offering’svalue
positioning. The formula“segmentation,targeting,positioning(STP)”isthe essence of strategicmarketing.The
secondphase isprovidingthe value.Marketingmustdetermine specificproductfeatures,prices,and
distribution.The taskinthe thirdphase is communicatingthe value byutilizingthe sales force,Internet,
advertising, andanyothercommunicationtoolstoannounce andpromote the product.
 The marketing plan isthe central instrumentfordirectingandcoordinatingthe marketing
effort.Itoperatesattwo levels:strategicandtactical.The strategic marketingplan laysout the target markets
and the firm’svalue proposition,basedonananalysisof the bestmarketopportunities.The tactical marketing
plan specifiesthe marketingtactics,includingproductfeatures,promotion,merchandising, pricing,sales
channels,andservice.
STRATEGIC PLANNING,IMPLEMENTATIONANDCONTROLPROCESS
2) Core Competencies:
 Many firmsdo notmanufacture theirownproductsbecause offshore manufacturersare more competentinthis
task.Instead,they focusonproduct designanddevelopmentandmarketing,theircore competencies.A core
competencyhas three characteristics:(1) Itis a source of competitiveadvantage andmakesasignificant
contributiontoperceivedcustomerbenefits.(2) Ithasapplicationsina wide varietyof markets. (3) Itis difficult
for competitorsto imitate.Competitiveadvantage alsoaccruestocompaniesthatpossess distinctivecapabilities
or excellence inbroaderbusinessprocesses.
 Competitive advantage ultimatelyderivesfromhow wellthe companyhasfitteditscore competencies and
distinctive capabilitiesintotightlyinterlocking“activitysystems.”
 Successful marketingthusrequirescapabilitiessuchasunderstanding,creating,delivering,capturing,and
sustainingcustomervalue.
3)Corporate missionand SWOT:
 To define itsmission,acompanyshouldaddressPeterDrucker’sclassicquestions:13Whatisour business?Who
isthe customer?Whatis of value to the customer?Whatwill ourbusiness be?Whatshouldourbusinessbe?
 Good missionstatementshave fivemajorcharacteristics.
1. They focuson a limitednumber of goals. The statement“We wantto produce the highestquality
products,offerthe mostservice,achievethe widestdistribution,andsell atthe lowest
prices”claims toomuch.
2. They stress the company’smajorpoliciesandvalues. Theynarrow the range of individual

3. discretionsoemployeesactconsistentlyonimportantissues.
3. They define the majorcompetitive spheres withinwhichthe companywill operate. Table 2.2
summarizessome keycompetitive dimensionsformissionstatements.
4. They take a long-termview.Managementshouldchange the missiononlywhenitceases
to be relevant.
5. They are asshort, memorable,and meaningful aspossible
Strategic Planning Process
SWOT Analysis
The overall evaluationof acompany’s (INTERNAL:strengths,weaknesses),(EXTERNAL:opportunities,andthreatsis
calledSWOTanalysis.It’sa wayof monitoringthe external andinternalmarketingenvironment.
 A marketingopportunity isan area of buyerneedandinterestthata companyhasa highprobability of
profitablysatisfying.
4) Value DeliveryProcess:
The value deliveryprocessincludeschoosing(oridentifying), providing(ordelivering),and communicatingsuperior
value.The value chainisa tool for identifyingkeyactivities thatcreate value andcostsina specificbusiness
EXPLAINEDIN (1)
5) Marketing Research Process:
 Marketing insightsprovide diagnosticinformationabouthow andwhywe observe certaineffectsinthe
marketplace,andwhatthatmeansto marketers.
 We define marketingresearchasthe systematicdesign,collection, analysis,andreportingof dataand findings
relevanttoa specificmarketing situationfacingthe company.

4. 
In conductingresearch,firms mustdecide whetherto collecttheirowndataor use data that already
exist.Theymustalsochoose a researchapproach (observational,focusgroup,survey,behavioraldata,or experimental)
and researchinstruments(questionnaire, qualitative measures,ortechnological devices).In addition,theymustdecide
on a samplingplanand contact methods(bymail,byphone,inperson,oronline).

5. 6)Forecasting and Demand Measurement:
Understandingthe marketingenvironmentandconductingmarketing research(describedin Chapter4) can helpto
identifymarketingopportunities.The companymustthenmeasure and forecastthe size,growth,andprofitpotentialof
each newopportunity.
There are manyproductive waystobreakdownthe market:
• The potential market is the setof consumerswithasufficientlevel of interestinamarket offer.However,their
interestisnotenoughtodefine amarketunlesstheyalsohave sufficient income andaccesstothe product.
• The available market is the setof consumerswhohave interest,income, and accesstoa particularoffer.The company
or governmentmayrestrictsalestocertaingroups;a particularstate mightban motorcycle salestoanyone under21
yearsof age.Eligibleadultsconstitute the qualified availablemarket—the setof consumerswhohave interest, income,
access,and qualificationsforthe marketoffer.
• The target market isthe part of the qualifiedavailable marketthe companydecidesto pursue.The companymight
concentrate itsmarketinganddistributioneffortonthe East Coast.
• The penetratedmarket isthe setof consumerswhoare buyingthe company’sproduct
Market demand fora productisthe total volume thatwouldbe boughtbya definedcustomergroupinadefined
geographical areaina definedtime periodinadefinedmarketingenvironmentunderadefinedmarketingprogram
Total market potential isthe maximumsalesavailable toall firmsinanindustryduringa givenperiod,underagiven
level of industrymarketingeffortand environmental conditions.A commonwayto estimate total marketpotential isto
multiplythe potential numberof buyersbythe average quantityeachpurchases,timesthe price.
There are twotypesof demand: market demandand company demand.To estimate currentdemand,companies
attemptto determine total marketpotential,areamarketpotential,industrysales,andmarket share.Toestimate future
demand,companiessurveybuyers’intentions,solicittheirsalesforce’sinput,gatherexpertopinions,analyzepastsales,
or engageinmarkettesting.Mathematical models,advanced statistical techniques,andcomputerizeddatacollection
proceduresare essential toall typesof demand andsalesforecasting.

6. 7)BuildingCustomervalue,satisfaction and loyalty:
Figure 5.1(b).Atthe topare customers;nextinimportance are frontline people whomeet,serve,andsatisfycustomers;
underthemare the middle managers,whosejobistosupportthe frontline peoplesotheycanserve customerswell;
and at the base is topmanagement,whose jobistohire andsupportgood middle managers.We Have addedcustomers
alongthe sidesof Figure 5.1(b) to indicate thatmanagersat everylevelmustbe personallyinvolvedinknowing,meeting,
and servingcustomers.
Customer-perceivedvalue (CPV) isthe difference betweenthe prospective customer’sevaluationof
all the benefitsandall the costsof an offeringandthe perceivedalternatives. Total customerbenefitis
the perceivedmonetaryvalue of the bundle of economic,functional,andpsychological benefitscustomers expectfrom
a givenmarketofferingbecauseof the product,service,people,andimage. Total customercost is the perceivedbundle
of costscustomersexpecttoincurin evaluating,obtaining,using, anddisposingof the givenmarketoffering,including
monetary,time,energy,andpsychological costs. Customer-perceivedvalueisthusbasedonthe differencebetween
benefitsthe customergetsand costshe or she assumesfordifferentchoices.
Consumershave varyingdegreesof loyaltytospecificbrands,stores,andcompanies.Oliverdefines loyaltyas“a deeply
heldcommitmentto
rebuyor repatronize apreferredproductorservice inthe future despitesituational influencesand
marketingeffortshavingthe potentialto cause switchingbehavior.”
The value propositionconsistsof the whole clusterof benefitsthe companypromisestodeliver; itismore thanthe core
positioningof the offering.
The value deliverysystemincludesall the experiencesthe customerwill have onthe
wayto obtainingandusingthe offering.Atthe heartof a good value deliverysystemisasetof core
businessprocessesthathelpdeliverdistinctiveconsumervalue.
satisfactionis a person’sfeelingsof pleasure ordisappointment thatresultfromcomparingaproduct’sperceived
performance (oroutcome) toexpectations.Periodicsurveys cantrack customersatisfactiondirectlyandaskadditional
questionstomeasure repurchase intentionandthe respondent’slikelihoodor
willingnesstorecommend the companyandbrandto others.

7. Customersare value maximizers.Theyformanexpectation of value andacton it.Buyerswill buyfromthe firmthat they
perceive toofferthe highestcustomer delivered value,definedasthe difference betweentotal customerbenefitsand
total customercost.
A buyer’ssatisfactionisafunctionof the product’sperceived performance andthe buyer’sexpectations. Recognizing
that highsatisfactionleadstohighcustomer loyalty,companiesmustensure thattheymeet andexceedcustomer
expectations.
8)Maximizing customer lifetime value:
Customerlifetime value (CLV) describesthe netpresentvalue of the streamof future
profitsexpectedoverthe customer’slifetimepurchases.The companymustsubtractfromits
expectedrevenuesthe expectedcostsof attracting,selling,andservicingthe accountof that customer,
applyingthe appropriate discountrate (say,between10percentand 20 percent,depending
on cost of capital and riskattitudes).Lifetimevaluecalculationsfor aproduct or service canadd up
to tensof thousandsof dollarsor evenintosix figures.
Many methodsexisttomeasure CLV.
CLV calculationsprovide aformal quantitative frameworkforplanning customerinvestmentandhelpmarketersadopta
long-termperspective.One challenge,however,
isto arrive at reliablecostandrevenue estimates.Marketerswhouse CLV conceptsmust
alsotake intoaccount the short-term,brand-buildingmarketingactivitiesthathelpincrease
customerloyalty.
Marketingmanagersmustcalculate customerlifetimevaluesof theircustomerbase tounderstandtheirprofit
implications.Theymustalsodetermine waystoincrease the value of the customerbase
9)Customer Databases and Database marketing:
customer database isan organized collectionof comprehensive informationaboutindividual customers
or prospectsthat iscurrent,accessible,andactionableforleadgeneration,leadqualification,
sale of a productor service,ormaintenance of customerrelationships. Database marketing is
the processof building,maintaining,andusingcustomerdatabasesandotherdatabases(products,
suppliers,resellers) tocontact,transact,and buildcustomerrelationships.
A customer mailinglistissimplyasetof names,addresses,andtelephone numbers.A customerdatabase contains much
more information,accumulatedthroughcustomertransactions,registrationinformation, telephonequeries,cookies,
and everycustomercontact.
Ideally,acustomerdatabase alsocontainsthe consumer’spastpurchases,demographics
(age,income,familymembers,birthdays),psychographics(activities,interests,andopinions),
mediagraphics(preferredmedia),andotheruseful information.
10) AnalysingConsumerMarkets:
Consumerbehavioris the studyof howindividuals,groups,andorganizationsselect,buy,use,and
dispose of goods,services,ideas,orexperiencestosatisfytheirneedsandwants.
We define brandpersonalityasthe specificmix of humantraitsthat we can attribute to a
particularbrand.

8. 11)Factors Affecting Consumer Behavior:
12)Buying Decision Process:

9. 13) Customer Value Analysis:
customer value analysis reportof the company’sstrengthsand weaknessesrelative tovariouscompetitors.
managersconducta customervalue analysis to reveal the company’sstrengthsand
weaknessesrelative tothose of variouscompetitors.The stepsinthisanalysisare:
1. Identifythe major attributesand benefitscustomers value. Customersare askedwhatattributes,
benefits,andperformance levelstheylookfor inchoosingaproductand vendors.Attributesand
benefitsshouldbe definedbroadlytoencompassall the inputstocustomers’decisions.
2. Assessthe quantitativeimportanceofthe different attributesand benefits. Customersare
askedto rate the importance of differentattributesandbenefits.If theirratingsdivergetoo
much,the marketershouldclusterthemintodifferentsegments.
3. Assessthe company’sandcompetitors’performanceson the different customervalues
againsttheir rated importance. Customersdescribe wheretheysee the company’sandcompetitors’
performancesoneachattribute andbenefit.
4. Examinehow customersin a specificsegment rate the company’sperformanceagainsta specific
major competitoron an individual attributeorbenefit basis. If the company’sofferexceedsthe
competitor’sofferonall importantattributesandbenefits,the companycancharge a higherprice
(therebyearninghigherprofits),oritcan charge the same price and gainmore marketshare.
5. Monitorcustomer valuesover time. The companymustperiodicallyredoitsstudiesof customer
valuesandcompetitors’standingsasthe economy,technology,andfeatureschange.
14)Marketing Segmentation, Targeting and Positioning:
To compete more effectively,many companiesare now embracingtargetmarketing.Insteadof scatteringtheir
marketingefforts,they’re focusingonthose consumerstheyhave the greatestchance of satisfying.
Effective targetmarketingrequiresthatmarketers:
1. Identifyandprofile distinctgroupsof buyerswhodifferintheirneedsandwants(marketsegmentation).
2. Selectone or more marketsegmentstoenter(market targeting).
3. For each targetsegment,establishandcommunicate the distinctive benefit(s)of the company’smarketoffering
(marketpositioning).
In marketing, marketsegmentationisthe processof dividingabroadconsumeror businessmarket,normallyconsisting
of existingandpotential customers,intosub-groupsof consumersbasedonsome type of sharedcharacteristics.

10. A target market is a group of customerswithinabusiness'sserviceable available marketatwhichabusinessaimsits
marketingeffortsandresources.A targetmarketisa subsetof the total marketfora productor service.
Target marketingincludesthree activities: marketsegmentation,
markettargeting,andmarketpositioning. Marketsegmentsare large,identifiablegroupswithin
a market.
2. Two basesfor segmentingconsumermarketsare consumercharacteristicsandconsumerresponses. The major
segmentationvariablesforconsumermarketsare geographic,demographic,psychographic, andbehavioral.Marketers
use themsingly orin combination.

11. Positioningreferstothe place that a brand occupiesinthe mindsof the customersandhow it is distinguishedfromthe
productsof the competitorsanddifferentfromthe conceptof brandawareness.
15)Creating Brand Equity:
Brands are valuable intangible assets thatofferanumberof benefitstocustomersandfirmsandneed tobe managed
carefully.The keytobrandingisthat consumersperceive differencesamongbrandsina
productcategory.
Brand equityisthe addedvalue endowedonproductsandservices.Itmaybe reflectedinthe way
consumersthink,feel,andactwithrespectto the brand,as well asin the prices,marketshare,and profitabilitythe
brand commands.
Brand equityshouldbe definedintermsof marketingeffects uniquelyattributabletoa brand. That is,different
outcomesresultinthe marketingof aproduct or service because of itsbrand,comparedtothe resultsif that same
productor service wasnotidentifiedbythatbrand.
Buildingbrandequitydependsonthree mainfactors:
(1) The initial choicesforthe brandelementsoridentities makingupthe brand;
(2) the waythe brandis integrated intothe supportingmarketingprogram;and
(3) the associationsindirectlytransferredtothe brand by linkstosome otherentity(the company,countryof origin,
channel of distribution,oranotherbrand
Customer-basedbrandequity isthusthe differential effectbrandknowledgehasonconsumer
response tothe marketingof thatbrand. A brand has positivecustomer-basedbrandequity
whenconsumers reactmore favorablytoa product andthe wayit ismarketedwhenthe brandis
identified, than whenitisnot identified.A brandhasnegative customer-basedbrandequityif
consumersreactlessfavorablytomarketingactivityforthe brandunderthe same circumstances.
Marketersbuildbrandequitybycreatingthe right brandknowledge structureswiththe rightconsumers.Thisprocess
dependson all brand-relatedcontacts—whethermarketer-initiatedornot.
From a marketingmanagementperspective,however, there are three mainsetsof brand equity drivers:
1. The initial choicesfor the brand elements or identities
makingup the brand (brandnames,URLs,
logos,symbols,characters,spokespeople,slogans,
jingles,packages,andsignage)
2. The product and service andall accompanyingmarketingactivitiesandsupporting
marketingprograms
3. Other associationsindirectlytransferredto the brand by linkingitto some other
entity (a person,place,or thing)—
How do we measure brand equity?Anindirect approach assessespotential sourcesof brandequity
by identifyingandtrackingconsumerbrandknowledgestructures.49A direct approachassessesthe
actual impactof brand knowledgeonconsumerresponsetodifferentaspectsof the marketing.
Marketerscan reinforce brandequitybyconsistentlyconveyingthe brand’smeaningintermsof
(1) whatproductsit represents,whatcore benefitsitsupplies,andwhatneedsitsatisfies;and
(2) howthe brand makesproductssuperior,andwhichstrong,favorable,and unique brandassociations

12. shouldexistinconsumers’minds.
Brand equityisdefinedasthe value thatyourbrand deliverstoyourorganization.Thatvalue maybe derivedfrom
higherrevenues,lowermarketingcosts,premiumpricing.
16)Devising a Branding Strategy:
A firm’s brandingstrategy—oftencalledthe brandarchitecture—reflectsthe numberandnature
of bothcommonand distinctivebrandelements.
Whena firmusesan establishedbrandtointroduce a new product,the productiscalleda brand
extension.Whenmarketerscombine anewbrandwithan existingbrand,the brandextensioncan
alsobe calledasub-brand,such as HersheyKissescandy,Adobe Acrobatsoftware,ToyotaCamry
automobiles,andAmericanExpressBluecards.The existingbrand thatgivesbirthtoa brand
extensionorsub-brandisthe parent brand. If the parentbrand isalreadyassociatedwithmultiple
productsthroughbrand extensions,itcanalsobe calleda master brand or family brand.
Brand extensionsfall intotwogeneral categories:63Ina line extension,the parentbrandcovers
a newproduct withinaproductcategoryit currentlyserves,suchaswithnew flavors,forms,
colors,ingredients,andpackage sizes
In a category extension,marketersuse the parentbrandtoenter a differentproductcategory,
such as SwissArmywatches.Hondahasuseditscompanyname tocover suchdifferentproducts
as automobiles,motorcycles,snowblowers,lawnmowers,marine engines,andsnowmobiles.
Thisallowsthe firmto advertise thatitcan fit“six Hondasina two-cargarage.
A brand line consistsof all products—original aswell asline andcategoryextensions—sold
undera particularbrand.A brand mix(or brandassortment) isthe setof all brandlinesthata
particularsellermakes.Many companiesare introducing brandedvariants,whichare specific
brand linessuppliedtospecificretailersordistributionchannels.Theyresultfromthe pressure
retailersputonmanufacturerstoprovide distinctiveofferings.A cameracompanymay supply itslow-endcamerasto
mass merchandiserswhilelimitingitshigher-priceditemstospecialtycamerashops.

13. Valentinomaydesignandsupplydifferentlinesof suitsandjacketstodifferentdepartmentstores.64
A licensedproductis one whose brandname hasbeenlicensedtoothermanufacturersthat
actuallymake the product.Corporationshave seizedonlicensingtopushtheircompanynamesand
imagesacrossa wide range of products—frombeddingtoshoes—makinglicensingamultibilliondollar
business.65Jeep’slicensingprogram,whichnowhas600 products and150 licensees,includes
everythingfromstrollers(builtforafather’slongerarms) toapparel (withTefloninthe denim)—as
longtheyfitthe brand’spositioningof “Life withoutLimits.”Through400-plusdedicatedJeep
shop-in-shopsand80 Jeepfreestandingstoresaroundthe world,licensingrevenue now exceeds
$550 millioninretail sales.New areasof emphasisinclude outdoorandtravel gear,juvenile
products,and sportinggoods.
BrandingDecisions:
ALTERNATIVEBRANDINGSTRATEGIES:
Individual orseparate familybrandnames. Consumerpackaged-goodscompanieshave along
traditionof brandingdifferentproductsbydifferentnames.GeneralMillslargelyusesindividual
brand names,suchas Bisquick,GoldMedal flour,Nature Valleygranolabars,OldEl Paso
Mexicanfoods,Progressosoup,Wheatiescereal,andYoplaityogurt.If acompanyproducesquite
differentproducts,one blanketname isoftennotdesirable.SwiftandCompanydevelopedseparate
family namesforitshams(Premium) andfertilizers(Vigoro).A majoradvantage of individual
or separate familybrandnamesisthatif a productfailsor appearsto be of low quality,the
companyhas not tieditsreputationtoit.Companiesoftenuse differentbrandnamesfordifferent
qualitylineswithinthe same productclass.
• Corporateumbrellaor companybrand name. Many firms,suchas HeinzandGE, use theircorporate
brand as an umbrellabrandacrosstheirentire range of products.67Developmentcosts
are lowerwithumbrellanamesbecause there’snoneedtorun“name”researchor spendheavily
on advertisingtocreate recognition.CampbellSoupintroducesnew soupsunderitsbrandname
withextreme simplicityandachievesinstantrecognition.Salesof the new productare likelytobe
strongif the manufacturer’sname isgood.Corporate-image associationsof innovativeness,expertise,
and trustworthinesshave beenshowntodirectlyinfluence consumerevaluations.68
Finally,acorporate brandingstrategycan leadto greaterintangible valueforthe firm.69
• Sub-brandname.Sub-brandscombine twoormore of the corporate brand, familybrand,or
individualproductbrandnames.Kelloggemploysasub-brandorhybridbrandingstrategyby
combiningthe corporate brandwithindividual productbrandsaswithKellogg’sRice
Krispies,Kellogg’sRaisinBran,andKellogg’sCornFlakes.Manydurable-goodsmakerssuchas
Honda,Sony,and Hewlett-Packarduse sub-brandsfortheirproducts.The corporate or company
name legitimizes,andthe individualname individualizes,the new product.
HOUSE OF BRANDS VERSUS A BRANDED HOUSE The use of individualorseparate
familybrandnameshasbeenreferredtoasa “house of brands”strategy,whereasthe use of an
umbrellacorporate orcompanybrand name has beenreferredtoasa “brandedhouse”strategy.
These twobrandingstrategiesrepresenttwoendsof a brandrelationshipcontinuum.A sub-brand
strategyfallssomewhere between,dependingonwhichcomponentof the sub-brandreceives more
emphasis.A goodexample of ahouse of brandsstrategyisUnitedTechnologies.
The brand portfolioisthe setof all brands and brandlinesaparticularfirmoffersforsale ina
particularcategoryor marketsegment
17)Competitive Dynamics:

14. Competitive dynamicsisa term usedto define agamutof actionsas well asreactionsof companiestakingpartina
competitivebusinessenvironmentcomprisingof multiple rivalsandstakeholders.
Three waysto change the course fora brandare market,product, and marketingprogrammodifications.
1. A marketleaderhasthe largestmarketshare inthe relevant productmarket.Toremaindominant,the leader looks
for waysto expandtotal marketdemandandattempts toprotectand perhapsincrease itscurrentshare.
2. A marketchallengerattacksthe marketleaderand othercompetitorsinanaggressive bidformore market share.
There are five typesof general attack;challengers mustalsochoose specificattackstrategies.
3. A marketfollowerisarunner-upfirmwillingtomaintain itsmarketshare andnotrock the boat. It can playthe role of
counterfeiter,cloner,imitator,oradapter.
4. A marketnicherservessmall marketsegmentsnot beingservedbylargerfirms.The keytonichemanship is
specialization.Nichersdevelopofferingstofullymeet acertaingroupof customers’needs,commandinga premium price
in the process.
MARKET MODIFICATION A companymighttry to expandthe marketforitsmature brand
by workingwiththe twofactorsthat make up salesvolume:Volume=numberof brand users×
usage rate peruser,as inTable 11.1, but may alsobe matchedby competitors.
PRODUCT MODIFICATION Managers alsotry to stimulate salesbyimprovingquality,
features,orstyle. Qualityimprovement increasesfunctionalperformance bylaunchinga“new
and improved”product. Featureimprovement addssize,weight,materials,supplements,and
accessoriesthatexpandthe product’sperformance,versatility,safety,orconvenience. Style
improvementincreasesthe product’sestheticappeal.Anyof these canattract consumerattention.
MARKETING PROGRAMMODIFICATION Finally,brandmanagersmightalsotryto
stimulate salesbymodifyingnonproductelements—price,distribution,andcommunicationsin
particular.Theyshouldassessthe likelysuccessof anychangesintermsof effectsonnew and
existingcustomers.
Product Life Cycle:
Most product life-cycle curvesare portrayedasbell-shaped.
1. Introduction—A periodof slowsalesgrowthasthe productisintroducedinthe market.
Profitsare nonexistentbecauseof the heavyexpensesof productintroduction.
2. Growth—A periodof rapidmarketacceptance andsubstantial profitimprovement.
3. Maturity—A slowdowninsalesgrowthbecause the producthasachievedacceptance bymost
potential buyers.Profitsstabilize ordeclinebecause of increasedcompetition.
4. Decline—Salesshowadownwarddriftandprofitserode
Market-FollowerStrategies:
Many companiesprefertofollowratherthanchallengethe marketleader.
We distinguish
fourbroad strategies:
1. Counterfeiter—The counterfeiterduplicatesthe leader’sproductandpackagesandsellsiton
the black marketor throughdisreputabledealers.Musicfirms,Apple,andRolexhave been
plaguedbythe counterfeiterproblem,especiallyin Asia.
2. Cloner—The cloneremulatesthe leader’sproducts,name,andpackaging,withslightvariations.
For example,RalcorpHoldingssellsimitationsof name-brandcerealsinlook-alike
boxes.ItsTasteeos,FruitRings,andCornFlakessell fornearly$1 a box lessthanthe leading
name brands;the company’ssaleswere up28 percentin2008.
3. Imitator—The imitatorcopiessome thingsfromthe leaderbutdifferentiatesonpackaging,
advertising,pricing,orlocation.The leaderdoesn’tmindaslongasthe imitatordoesn’tattack

15. aggressively.FernandezPujalsgrewupinFortLauderdale,Florida,andtookDomino’shome
deliveryideatoSpain,where he borrowed$80,000 to openhisfirststore in Madrid.His
Telepizzachainnowoperatesalmost1,050 storesin Europe and LatinAmerica.
4. Adapter—The adaptertakesthe leader’sproductsandadaptsorimprovesthem.The adapter
may choose tosell todifferentmarkets,butoftenitgrowsintoafuture challenger,asmany
Japanese firmshave done afterimproving productsdevelopedelsewhere.
18)Product and Brand Relationships:
A product systemis a group of diverse butrelateditemsthatfunctioninacompatible manner.For
example,the extensive iPodproductsystemincludesheadphonesandheadsets,cablesanddocks,
armbands,cases,powerandcar accessories,andspeakers.A productmix (alsocalleda product
assortment) is the setof all productsand itemsaparticularselleroffersforsale.
A product mix consistsof variousproductlines.NEC’s(Japan) productmix consistsof communication
productsand computerproducts.Michelinhasthree productlines:tires,maps,and
restaurant-ratingservices.
Marketersoftencombine theirproductswithproductsfromothercompanies invariousways.In co-branding—also
calleddual brandingorbrand bundling—twoormore wellknown brandsare combinedintoajointproductor marketed
togetherinsome fashion.
One formof co-brandingis same-companyco-branding,aswhenGeneral MillsadvertisesTrix
cereal andYoplaityogurt.Anotherformis joint-ventureco-branding,suchasGeneral Electric
and Hitachi lightbulbsinJapan,andthe CitibankAAdvantage creditcard.There is multiple-sponsor
co-branding,suchasTaligent,aone-time technological alliance of Apple,IBM,andMotorola.There is retail co-branding
inwhichtwo retail establishmentsuse the same locationto optimize space andprofits,suchasjointlyownedPizzaHut,
KFC,and Taco Bell restaurants
19)Designing and Managing Services:
A service isany act or performance one partycan offerto anotherthatis essentiallyintangible
and doesnotresultinthe ownershipof anything.Itsproductionmayormay notbe tiedtoa physical
product.Increasingly,manufacturers,distributors,and retailersare providingvalue-added
services,orsimplyexcellentcustomerservice,todifferentiatethemselves.
Servicesare intangible,inseparable,variable,andperishable.
Categoriesof Service Mix
The service componentcanbe a minoror a majorpart of the total offering.We distinguishfive categoriesof offerings:
1. Pure tangiblegood—atangible goodsuchassoap, toothpaste,orsalt withnoaccompanyingservices.
2. Tangiblegoodwith accompanyingservices—atangiblegood,like acar,computer,or cell phone,accompanied by
one or more services.Typically,the more technologically advancedthe product,the greaterthe needfor high-quality
supportingservices.
3. Hybrid—anoffering,like arestaurantmeal,of equal
parts goodsand services.Peoplepatronizerestaurants
for boththe foodand itspreparation.
4. Majorservice with accompanyingminorgoodsandservices—amajor service,likeairtravel,
withadditional servicesorsupportinggoodssuchassnacksand drinks.Thisofferingrequires
a capital-intensive good—anairplane—foritsrealization,butthe primaryitemisaservice.
5. Pure service—primarilyanintangible service,suchasbabysitting,psychotherapy,ormassage.
AchievingExcellence inServicesMarketing

16. Marketingexcellence with servicesrequiresexcellence inthree broadareas:external,internal,and
interactive marketing
• External marketing describesthe normal workof preparing,pricing,distributing,andpromoting
the service tocustomers.
• Internal marketing describestrainingandmotivatingemployeestoserve customerswell.The
mostimportantcontributionthe marketingdepartmentcanmake isarguablyto be “exceptionally
cleveringettingeveryone else inthe organizationtopractice marketing.”43
• Interactive marketing describesthe employees’skillinservingthe client.Clientsjudge service
not onlybyits technical quality (Was the surgerysuccessful?),butalsobyits functionalquality
20)Managing Services Quality:

17. 21)Developing Pricing strategies and programs:
In settingpricingpolicy,acompanyfollowsasix-stepprocedure.Itselectsitspricingobjective.Itestimatesthe demand
curve,the probable quantitiesitwill sell ateach possible price.Itestimateshow itscostsvaryat different levelsof
output,at differentlevelsof accumulatedproduction experience,andfordifferentiatedmarketingoffers. Itexamines
competitors’costs,prices,andoffers.It selectsapricingmethod,anditselectsthe final price.
Companiesusuallysetnot a single price,butrathera pricingstructure thatreflectsvariationsingeographical demand
and costs,market-segmentrequirements,purchase timing,orderlevels,andotherfactors.Several price-adaptation
strategiesare available:(1) geographical pricing,(2) price discountsandallowances,(3) promotional pricing,and(4)
discriminatorypricing.
22)Marketing Channels and Value Networks:
Most producersdo notsell theirgoodsdirectlytothe final users;betweenthemstandsasetof intermediaries
performingavarietyof functions.These intermediariesconstitute amarketingchannel
(alsocalledatrade channel ordistributionchannel).Formally, marketingchannels are setsof
interdependentorganizationsparticipatinginthe processof makinga product or service available
for use or consumption.Theyare the setof pathwaysa productor service followsafterproduction,
culminatinginpurchase andconsumptionbythe final enduser.
Some intermediaries—suchaswholesalersandretailers—buy,take title to,andresell the merchandise;
theyare called merchants.Others—brokers,manufacturers’representatives,sales agents—searchforcustomersand
may negotiate onthe producer’sbehalfbutdonot take title to the goods;theyare called agents.Still others—
transportationcompanies,independentwarehouses, banks,advertisingagencies—assistinthe distributionprocessbut
neithertake title togoodsnor negotiate purchasesorsales;theyare called facilitators.
Hybrid channelsor multichannel marketing occurs whenasingle firmusestwoor more marketingchannelstoreach
customersegments.HPhasuseditssalesforce to sell tolarge accounts,outbound telemarketingtosell to medium-sized
accounts,directmail withan inboundnumbertosell tosmall accounts,retailerstosell tostill smalleraccounts,andthe
Internettosell specialtyitems.Inmultichannelmarketing,eachchannel targetsadifferentsegmentof buyers,or
differentneed
statesfor one buyer,anddeliversthe rightproductsinthe rightplacesinthe rightway at the least
cost.
Value Networks

18. A supplychainviewof afirmseesmarketsas destinationpointsand amountstoa linearview of the flow of ingredients
and components throughthe productionprocesstotheirultimatesale tocustomers.
The company shouldfirstthinkof the targetmarket,however,and thendesignthe supplychainbackwardfromthat
point.Thisstrategy hasbeencalled demandchain planning.
A broaderviewseesacompanyat the centerof a value network—asystemof partnershipsandalliancesthatafirm
createsto source,augment,anddeliver itsofferings.A value networkincludesafirm’ssuppliersanditssuppliers’
suppliers,anditsimmediate customersandtheirendcustomers.The value networkincludesvaluedrelationshipswith
otherssuch as universityresearchersandgovernmentapproval agencies.
23)Channel-Design Decisions:
To designa marketingchannel system,marketersanalyzecustomer needsandwants,establishchannelobjectivesand
constraints, andidentifyandevaluate majorchannel alternatives.
ANALYZING CUSTOMER NEEDS AND WANTS
Consumersmaychoose the channelstheypreferbasedonprice,productassortment,andconvenience aswell astheir
ownshoppinggoals(economic,social,orexperiential).29
Channel segmentationexists,andmarketersmustbe aware
that differentconsumershave differentneedsduringthe purchase process.Eventhe same consumer,though,may
choose differentchannelsfordifferentreasons.
Channelsproduce five service outputs:
1. Desired lot size—The numberof unitsthe channel permitsatypical customertopurchase on one occasion.In
buyingcars forits fleet,Hertzprefersachannel fromwhichitcanbuy a large lot size;ahouseholdwantsa
channel thatpermitsa lotsize of one.
2. Waiting and delivery time—The average time customerswaitforreceiptof goods.Customersincreasinglyprefer
fasterdeliverychannels.
3. Spatialconvenience—The degreetowhichthe marketingchannel makesiteasyforcustomerstopurchase the
product.Toyota offersgreaterspatial convenience thanLexusbecausethere are more Toyotadealers,helping
customerssave ontransportationandsearch costsin buyingandrepairinganautomobile.
4. Productvariety—The assortmentprovidedbythe marketingchannel.Normally,customerspreferagreater
assortmentbecause more choicesincreasethe chance of findingwhattheyneed,thoughtoomanychoicescan
sometimescreate anegative effect.33
5. Service backup—Add-onservices(credit,delivery,installation,repairs) providedbythe channel.The more
service backup,the greaterthe benefitprovidedbythe channel.
24)Managing Retailing, wholesaling and Logistics:
Retailingincludesall the activitiesinsellinggoodsorservicesdirectlytofinal consumersforpersonal,
nonbusinessuse.A retailerorretail store isany businessenterprise whosesalesvolume comesprimarilyfromretailing.
Anyorganizationsellingtofinal consumers—whetheritisa manufacturer,wholesaler,or retailer—isdoingretailing.
Types of Retailers:
1)STORE RETAILERS
2)NONSTORE RETAILING
Althoughthe overwhelmingbulkof goodsandservices—
97 percent—issoldthroughstores, nonstoreretailing has beengrowingmuchfasterthanstore
retailing.Nonstore retailingfallsintofourmajorcategories:directselling,directmarketing(which
includestelemarketingandInternetselling),automaticvending,andbuyingservices:
1. Direct selling, alsocalled multilevel selling and networkmarketing,isamultibillion-dollar
industry,withhundredsof companiessellingdoor-to-doororat home salesparties.
Well-knowninone-to-one sellingare Avon,Electrolux,andSouthwesternCompanyof
Nashville(Bibles).Tupperware andMaryKay Cosmeticsare soldone-to-many:A salesperson

19. goesto the home of a hostwho hasinvitedfriends;the salespersondemonstratesthe products
and takesorders.PioneeredbyAmway,the multilevel (network) marketingsalessystemworks
by recruitingindependentbusinesspeople whoactas distributors.The distributor’scompensation
includesapercentage of salesmade bythose he or she recruits,aswell asearningson
directsalestocustomers.These direct-sellingfirms,now findingfewerconsumersathome,are
developingmultidistributionstrategies.
2. Direct marketing has rootsin direct-mailandcatalogmarketing(Lands’End,L.L.Bean);it
includes telemarketing (1-800-FLOWERS), television direct-responsemarketing (HSN,QVC),
and electronic shopping (Amazon.com,Autobytel.com).Aspeople become more accustomed
to shoppingonthe Internet,theyare orderingagreatervarietyof goodsand servicesfroma
widerrange ofWebsites.Inthe UnitedStates,onlinesaleswere estimatedtobe $210 billionin
2009, withtravel beingthe biggestcategory($80billion).3
3. Automaticvending offersavarietyof merchandise,includingimpulse goodssuchassoft
drinks,coffee,candy,newspapers,magazines,andotherproductssuchas hosiery,cosmetics,
hot food,andpaperbacks.Vendingmachinesare found infactories,offices,large retailstores,
gasoline stations,hotels,restaurants,andmanyotherplaces.Theyoffer24-hourselling,
self-service,andmerchandise thatisstockedtobe fresh.Japanhas the most vendingmachines
perperson—Coca-Colahasover1 millionmachinesthere andannual vendingsalesof
$50 billion—twice itsU.S.figures.
4. Buyingservice is a storelessretailerservingaspecificclientele—usuallyemployeesof large
organizations—whoare entitledtobuyfroma listof retailers thathave agreedtogive discounts
inreturn formembership.
3) CORPORATE RETAILING AND FRANCHISING
Althoughmanyretail storesare independentlyowned,anincreasingnumberare partof a corporate retailing
organization.
In a franchisingsystem, individual franchisees are a tightlyknitgroupof enterpriseswhose systematic
operationsare planned,directed,andcontrolledbythe operation’sinnovator,calleda
franchisor.
Wholesalingincludesall the activitiesinsellinggoodsorservicestothose who buyforresale or
businessuse. Wholesalers(alsocalled distributors)differfromretailersinanumberof ways.First,wholesalers payless
attentiontopromotion,atmosphere,andlocationbecausetheyare dealingwithbusiness customersratherthanfinal
consumers.Second,wholesale transactionsare usuallylargerthanretail transactions,andwholesalersusuallycovera
largertrade areathan retailers.Third,the governmentdealswithwholesalersandretailersdifferentlyintermsof legal
regulations andtaxes.
Why domanufacturersnotsell directlytoretailersorfinal consumers?Whyare wholesalers
usedat all?In general,wholesalersare more efficientinperformingone ormore of the following
functions:
• Sellingandpromoting. Wholesalers’salesforceshelpmanufacturersreachmanysmall business
customersat a relativelylowcost.Theyhave more contacts,andbuyersoftentrustthem
more than theytrusta distantmanufacturer.
• Buyingandassortment building. Wholesalersare able toselectitemsandbuildthe assortments
theircustomersneed,savingthemconsiderable work.
• Bulk breaking.Wholesalersachievesavingsfortheircustomersbybuyinglarge carloadlots
and breakingthe bulkintosmallerunits.
• Warehousing.Wholesalersholdinventories,therebyreducinginventorycostsandrisksto
suppliersandcustomers.

20. • Transportation. Wholesalerscanoftenprovide quickerdeliverytobuyersbecause theyare
closerto the buyers.
• Financing.Wholesalersfinancecustomersbygrantingcredit, andfinance suppliersbyordering
earlyand payingbillsontime.
• Risk bearing.Wholesalersabsorbsome riskbytakingtitle andbearingthe costof theft,damage,
spoilage,andobsolescence.
• Market information. Wholesalerssupplyinformationtosuppliersandcustomersregarding
competitors’activities,newproducts,price developments,andsoon.
Market logisticsincludesplanningthe infrastructuretomeetdemand,thenimplementingand
controllingthe physical flowsof materialsandfinal goodsfrom pointsof origintopointsof use,to
meetcustomerrequirementsataprofit.Marketlogisticsplanninghasfoursteps:57
1. Decidingonthe company’svalue propositiontoitscustomers.(Whaton-timedeliverystandard
shouldwe offer?Whatlevelsshouldwe attaininorderingandbillingaccuracy?)
2. Selectingthe bestchanneldesignandnetworkstrategyforreachingthe customers.(Should
the companyserve customersdirectlyorthroughintermediaries?Whatproductsshouldwe
source fromwhichmanufacturing facilities?How manywarehousesshouldwe maintainand
where shouldwe locate them?)
3. Developingoperationalexcellence insalesforecasting,warehouse management,transportation
management,andmaterialsmanagement
4. Implementingthe solutionwiththe bestinformationsystems,equipment,policies,andprocedures
Producersof physical productsandservicesmustdecide onmarketlogistics—the bestwaytostore and
move goodsand servicestomarketdestinations;tocoordinate the activitiesof suppliers, purchasingagents,
manufacturers,marketers,channel members,andcustomers. Majorgainsinlogistical efficiencyhave come from
advancesininformationtechnology.
25)Managing the Integrated Marketing Communications:
The AmericanMarketingAssociation definesintegratedmarketingcommunications(IMC) as“a planningprocess
designedtoassure thatall brand contactsreceivedbya customeror prospectfora product,service,ororganizationare
relevanttothat personandconsistentovertime
Marketing communicationsare the meansbywhichfirmsattemptto inform, persuade,andremind
consumers—directlyorindirectly—aboutthe productsandbrandstheysell.Marketingcommunications
allowcompaniestolinktheirbrandstootherpeople,places,events,brands,experiences,feelings,
and things.Theycan contribute tobrandequity—byestablishingthe brandinmemoryandcreating
a brand image—aswellasdrive salesandevenaffectshareholdervalue.
To facilitate one-stopshoppingformarketers,media companiesandadagencieshave acquiredpromotionagencies,
publicrelationsfirms,package-designconsultancies,Website developers,social mediaexperts,anddirect-mail houses.
Many international clientssuchasIBM(Ogilvy),Colgate (Young&Rubicam), andGE (BBDO) have optedtoput a
substantial portionof theircommunicationsworkthroughone full-service agency.The resultisintegrated andmore
effectivemarketingcommunicationsata much lowertotal communicationscost.
integratedmarketing communications(IMC) a conceptof marketing communicationsplanningthatrecognizesthe
addedvalue of a comprehensive plan.

21. 26)Advertising and Promotion:
Advertisingreachesgeographicallydispersedbuyers.Itcanbuildupa long-term
image fora productor triggerquicksales .Certainformsof advertisingsuchasTV can require alarge budget,whereas
otherformssuch as newspaper donot.The mere presence of advertisingmighthave aneffectonsales:Consumers
mightbelieveaheavilyadvertisedbrandmustoffer“goodvalue.”Because of the manyformsandusesof
advertising,it’sdifficulttomake generalizationsaboutit.
Informativeadvertising aimsto create brandawarenessandknowledgeof new productsor
newfeaturesof existingproducts.
Persuasiveadvertising aimsto create liking,preference,conviction,andpurchase of aproduct
or service.Some persuasive advertisingusescomparative advertising,whichmakesanexplicit
comparisonof the attributesof twoor more brands.
Reminder advertising aimsto stimulate repeatpurchase of productsandservices.
Reinforcement advertising aimsto convince currentpurchasersthattheymade the right
choice.A

22. Salespromotion, a keyingredientinmarketingcampaigns,consistsof acollectionof incentive
tools,mostlyshortterm,designedtostimulate quickerorgreaterpurchase of particularproducts

23. or servicesbyconsumersorthe trade.
SALES PROMOTION Companiesuse salespromotiontools—coupons,contests,premiums,
and the like—todrawastrongerand quickerbuyerresponse,includingshort-runeffectssuchas
highlightingproductoffersandboostingsaggingsales.Salespromotiontoolsofferthree
distinctive benefits:
1. Abilityto be attention-getting—Theydraw attentionandmayleadthe consumertothe product.
2. Incentive—Theyincorporate some concession,inducement,orcontributionthatgivesvalue
to the consumer.
3.Invitation—Theyincludeadistinctinvitationtoengage inthe transactionnow.

25. 27) New Product Development Process:
Once a companyhassegmentedthe market,chosen itstargetcustomergroupsandidentifiedtheirneeds, and
determineditsdesiredmarketpositioning,itisready todevelopandlaunchappropriate new productsand services.
Marketingshouldparticipate withotherdepartments ineverystage of new-productdevelopment.
28)Strategies to Enter Global Markets:
There are several marketentrymethodsthatcanbe used.
Exporting
Exportingisthe directsale of goodsand / or servicesinanothercountry.Itis possiblythe best-knownmethodof
enteringaforeignmarket,aswell asthe lowestrisk.Itmayalso be cost-effectiveasyouwill notneedtoinvestin
productionfacilitiesinyourchosencountry –all goods are still producedinyourhome countrythensentto foreign
countriesforsale.However,risingtransportationcostsare likelytoincrease the costof exportinginthe nearfuture.
Licensing
Licensingallowsanothercompanyinyourtargetcountry touse yourproperty. The propertyinquestionisnormally
intangible –forexample,trademarks,productiontechniquesorpatents.The licensee will payafee inorderto be
allowedthe righttouse the property.
Licensingrequiresverylittle investmentandcan provide ahigh returnon investment.The licenseewillalsotake care of
any manufacturingandmarketingcostsinthe foreignmarket.
Franchising
Franchisingissomewhatsimilartolicensinginthatintellectualpropertyrightsare soldtoa franchisee.However,the
rulesforhowthe franchisee carriesoutbusinessare usuallyverystrict –for example,anyprocessesmustbe followed,
or specificcomponentsmustbe usedinmanufacturing.
Joint venture
A jointventure consistsof twocompaniesestablishingajointly-ownedbusiness.One of the ownerswillbe alocal

26. business(local tothe foreignmarket).The twocompanieswouldthenprovidethe new businesswithamanagement
teamand share control of the jointventure.
There are several benefitstothistype of venture.Itallowsyouthe benefitof local knowledgeof aforeignmarketand
allowsyoutoshare costs.However,there are some issues –there canbe problemswithdecidingwhoinvestswhatand
howto splitprofits.
Foreigndirect investment
Foreigndirectinvestment(FDI)iswhenyoudirectlyinvestinfacilitiesinaforeignmarket.Itrequiresalotof capital to
covercosts such as premises,technologyandstaff.FDIcan be done eitherbyestablishinganew venture oracquiringan
existingcompany.
Whollyownedsubsidiary
A whollyownedsubsidiary(WOS) issomewhatsimilartoforeigndirectinvestmentinthatmoneygoesintoaforeign
companybut insteadof moneybeinginvestedintoanothercompany,withaWOS the foreignbusinessisbought
outright.Itis then upto the ownerswhetheritcontinuestorunas before ortheytake more control of the WOS.
Piggybacking
Piggybackinginvolvestwonon-competingcompaniesworkingtogethertocross-sell the other’sproductsorservicesin
theirhome country.Althoughit isa low-riskmethodinvolvinglittle capital,some companiesmaynotbe comfortable
withthismethodasit involvesahighdegree of trustaswell asallowingthe partnercompanytotake a large degree of
control overhowyour productis marketedabroad
29)Marketing Programs in the International Program:
Changingmarketingcommunicationsforeachlocal marketisa processcalled communication
adaptation. If itadapts boththe product andthe communications,the companyengagesin dual
adaptation
Companiesmanage theirinternational marketingactivitiesinthree ways:throughexportdepartments,
international divisions,oraglobal organization.
Export Department
A firmnormallygetsintointernational marketingbysimplyshippingoutitsgoods.If itsinternational salesexpand,it
organizesanexportdepartmentconsistingof asalesmanageranda few assistants. Assalesincrease,the export
departmentexpandstoincludevariousmarketingservicesso the companycango afterbusinessmore aggressively.If
the firmmovesintojointventuresordirect investment,the exportdepartmentwill nolongerbe adequatetomanage
international operations.
International Division
Sooneror later,companiesthatengage inseveral international marketsandventurescreate aninternational
divisiontohandle all thisactivity.The unitisheadedbyadivisionpresidentwhosets goalsandbudgetsandis
responsible forthe company’sinternational growth. The international division’scorporate staff consistsof functional
specialistswhoprovide servicestovariousoperatingunits.Operatingunitscanbe geographicalorganizations. Reporting
to the international-divisionpresidentmightbe regionalvice presidentsforNorthAmerica, LatinAmerica,Europe,
Africa,the Middle East,and the Far East. Reportingtothe regional vice presidentsare countrymanagersresponsible for
a salesforce,salesbranches,distributors,and licenseesinthe respectivecountries.Orthe operatingunitsmaybe world
productgroups, eachwithaninternationalvice presidentresponsible forworldwide salesof eachproductgroup.The
vice presidentsmaydrawoncorporate-staff areaspecialistsforexpertise ondifferentgeographical areas.Finally,
operatingunitsmaybe internationalsubsidiaries, eachheadedbya president whoreportstothe presidentof the
international division.
Global Organization

27. Several firmshave become trulyglobalorganizations.Theirtopcorporate managementandstaff planworldwide
manufacturingfacilities,marketingpolicies,financialflows,andlogistical systems. The global operatingunitsreport
directlytothe chief executive orexecutive committee,nottothe headof an international division.The firmtrainsits
executivesinworldwideoperations,recruits managementfrommanycountries,purchasescomponentsandsupplies
where itcan obtainthem at leastcost,and makesinvestmentswhereanticipatedreturnsare greatest.
30) Internal Marketing:
Internal marketing requiresthateveryone inthe organization acceptthe conceptsandgoalsof
marketingandengage inchoosing,providing,andcommunicatingcustomervalue.
internal marketing an elementof holisticmarketing,isthe taskof
hiring,training,andmotivatingable employeeswhowanttoserve
customers well