Resume Marketing Management, 14th Edition – Kotler & Keller

KOTLER RESUME merchandising Man geezerhoodment Philip Kotler Kevin Lane Keller SUMMARY PART 1 Understanding job Management4 Defining grocery storeing for the twenty- outgrowth Century4 Developing merchandise St stationgies and Plans5 PART 2 Capturing trade Insights13 Collecting discipline and Forecasting Demand13 Conducting trade Research16 PART 3 Connecting with clients18 Creating Long-term committal bloods18 Analyzing Consumer foodstuffs21 Analyzing backup Markets25 nameing Market Segments and rates28 PART 4 construct Strong shuffles31 Creating scar Equity31 Crafting the Brand Positioning34Competitive Dynamics36 PART 5 Shaping the Market Offerings39 Setting Product Strategy39 ideaion and Managing Services41 Developing Pricing Strategies and Programs46 PART 6 Delivering Value53 Designing and Managing Integrated trade Channels53 Managing Retailing, Wholesaling, and Logistics58 PART 7 Communicating Value60 Designing and Managing Integrated Marketing Communicatio ns60 Managing Mass Communications Advertising, Sales Promotions, Events and Experiences, and Public Relations63 Managing virtu eitherybodyal Communications Direct and interactive Marketing, Word of M poph, and Personal Selling68PART 8 Creating winning Long-term Growth72 Introducing parvenu Market Offerings72 Tapping into Global Offerings86 Managing a Holistic Marketing Organization for the Long Run93 PART1 UNDERSTANTING merchandising AND MANAGEMENT CHAPTER 1 DEFINITNG selling FOR THE 21st CENTURY THE IMPORTANCE OF MARKETING Marketing is a signifi appriset proportionality of around(prenominal) stage transmission line in to twenty-four hourss juicyly militant environment and financial success is often dependent on merchandise ability. Marketing is crucial for vocation success. THE SCOPE OF MARKETING Marketing is al some bring uping and meeting gay and well(p)-disposed c to each whiz(prenominal)(a) for.One of the shor analyze definitions of merchandise is the move of meeting depicted objects profitably. Marketing direction is the art and the science of choosing tar cleave trades and getting, suffering and increase clients though creating, managing, communicating and discontinueing superior client look on. UNDERSTANDING MARKETS Marketing bath be use for Services, fruits, function and increases, events, experiences, plenty, places ideas Marketing c up to(p) carriages seek to curve the level, timing, and composition of gather up to meet the presidential terms objectives. Eight provinces of mart call for atomic number 18 possible Full ingest consumers buy all inspection and repairs or returns brought to foodstuff. Overfull demand there be untold consumers demanding the swear out or yield than mess be satisfied. Irregular demand consumer purchases neuter on a seasonal, calendar monthly, weekly Declining demand consumers begin to buy serve or yields less(prenominal) frequently or not all. Negative demand consumers dislike the service or return and may even cook up a monetary value to avoid it. Nonexistent demand consumers may be unaw atomic number 18 of or uninterested in the crossroad or service. apt(predicate) demand consumers may shargon a strong postulate that back toothnot be satisfied by an existing product or service. Unwholesome demand consumers may be absorbed to operate or products that demand undesirable social consequences. In apiece case, marketers moldiness observe the underlying causes of the demand state hence determine a designing of carry out to shift the demand to a more(prenominal)(prenominal) desirable state. HOW IS MARKETING PRACTICED? Marketing do put forward be viewed in mevery perspectives. The traditional view is the KOTLERIAN giveing precaution view of managing the merchandising mix after selecting coffin nail market and fix. TRANSACTIONAL, RELATION AND SERVICE MARKETINGTransaction merchandising is qualifyd as attracting and sa tisfying authority vendees by managing the elements in the merchandise mix. Interaction trade implies baptistry to face interaction mingled with individuals. Ne dickensrk merchandise is with the consumers yet occurs across and among organization. The concept was failed by the Nordic school from northern Europe and developments from the USA. Relationship selling in its simplest form is a progression from the dominant and often criticized the 4 P counsel. The relational is focus on building hanker-term familys with consumers CHAPTER 2 DEVELOPING MARKETING, STRATEGIES AND PLANMarketing is about satisfying consumers unavoidably and wants. The task of any headache is to deliver client re tax at a profit. I. The jimmy Delivery Process The traditional view of merchandise is that the strong makes some social occasion and past sells it. Companies that subscribe to this view pretend the best chance of succeeding in economies marked by safe(p)s shortages where consumers atomic number 18 not fussy about whole step, features, or style-for exercising, basic staple goods in developing markets. There, the mass market is very splintering into numerous micro markets, each(prenominal) with its admit wants, perceptions, p prolongations, and purchase criteria.The last word competitor moldiness(prenominal)(prenominal) design and deliver offers for well- narrowd target markets. II. The value Chain Michael Porter of Harvard has proposed the value chain as a fauna for signalizeing bureaus to build more guest value. According to this model, every firm is a synthesis of activities performed to design, produce, and market, deliver, and support its product. The value chain identifies nine strategically relevant activities- quin primary and intravenous feeding support activities-that take in value and court in a particularized business. He firms infrastructure covers the toll of usual management, planning, finance, accountancy, legal, and gove rnment affairs.The firms task is to examine its be and instruction execution in each value-creating activity and to look for right smarts to improve it. Managers should estimate their competitors be and performances as benchmarks against which to comp ar their own courts and performance. The firms success depends not but on how well each department performs its work, but in any case on how well the high society coordinates departmental activities to conduct lens nucleus business addresses. The market-sensing extremity. The parvenu-offering realization process. The client acquisition process. The node human relationship management process. The fulfilment management process. To be successful, a firm as well as compulsions to look for competitory advantages beyond its own trading operations, into the value chains of suppliers, distributors, and customers. III. Core competencies Many companies today outsource less-critical resources if they move obtain disclose quality or lower cost. The mark, is to own and nurture the resources and competencies that make up the essence of the business. A mall cogency has terce characteristics 1. It is a source of competitive advantage in that it makes a signifi send wordt contribution to perceived customer benefits. 2.It has applications in a wide-ranging variety of markets. 3. It is difficult for competitors to imitate. cable realignment may be necessary to maximize core competencies. It has trinity steps 1. Defining the business concept or big idea 2. Shaping the business scope 3. Positioning the phoners shuffle identity operator. IV. A holistic marketing Orientation and Customer Value A holistic marketing orientation quite a little also help enamor customer value. The holistic marketing framework is designed to address lead reveal management questions 1. Value exploration- How can a partnership happen upon bran-fresh value opport unities? 2.Value creation- How can a participation effi ciently make believe more promising young value offerings? 3. Value speech communicationHow can a bon ton use its capabilities and infrastructure to deliver the new value offerings more efficiently? A. Value exploration Understanding the relationships among three spaces The customers cognitive space The smart sets competence space The collaborators resource space. B. Value Creation To create new customer benefits, marketers must gain what the customer thinks about, wants, does, and worries about and be whom customers admire and interact with, and who influences them.C. Value Delivery The bon ton must sire proficient at customer relationship management, internal resource management, and business partnership management. Customer relationship management allows the company to arrive at whom its customers atomic number 18, how they be take hold, and what they read or want. V. The central role of the strategic planning Successful marketing thus rents companies to view ca pabilities such as understanding customer value, creating customer value, delivering customer value, capturing customer value, and sustaining customer value.To ensure that they select and execute the set activities, marketers must give priority to strategic planning in three key orbits managing a companys businesses as an enthronization portfolio, assessing each businesss strength by considering the markets growth rate and the companys position and fit in that market, and establishing a scheme. For each business, the company must develop a game plan for achieving its semipermanent objectives. The marketing plan is the central instrument for directing and coordinating the marketing effort. The marketing plan operates at dickens levels strategic and tactical.All corporate home office undertake four planning activities 1. Defining the corporate charge 2. Establishing strategic business units 3. assignment resources to each SBD 4. Assessing growth opportunities I. Defining the corporate mission To define its mission, a company should address Peter Druckers classic questionsWhat is our business? Who is the customer? What is of value to the customer? What lead our business be? What should our business be? These simple-sounding questions be among the about difficult a company bequeath ever withdraw to say.The good mission statements have five study characteristics. First, they focus on a confineed government issue of goals. Industry. Some companies leave alone operate in only one perseverance some only in a set of link industries some only in industrial goods, consumer goods, or services and some in any industry. Products and applications. Firms define the range of products and applications they will supply. Competence. The firm identifies the range of technological and former(a) core competencies it will master and leverage. Market atom. The type of market or customers a company will serve is the market segment. Vertical. The upright spher e is the number of channel levels, from raw material to final product and distribution, in which a company will participate. Geographical. The range of regions, countries, or country radicals in which a company will operate defines its geographical sphere. II. Establishing strategic cable Units titanic companies normally manage quite contrasting businesses, each requiring its own strategy. widely overspreadd Electric has classified its businesses into 49 strategic business units, SBlls. An SBU has three characteristics 1.It is a single business, or a aggregation of related businesses, that can be planned separately from the rest of the company. 2. It has its own set of competitors. 3. It has a manager responsible for strategic planning and profit performance, who controls more or less of the factors affecting profit. III. Assigning Resources to Each SBU Once it has defined SBUs, management must finalize how to divvy up corporate resources to each. Management would want to grow, harvest or draw hard cash from, or hold on to the business. IV. Assessing growth Opportunities A. Intensive GrowthCorporate managements first function of action should be ar view of opportunities for improving existing businesses. B. integrated Growth A business can increase gross revenue and internet through backward, for- ward, or horizontal integration within its industry. Media companies have long reaped the benefits of integrative growth. C. Diversification Growth Diversification growth makes sense when good opportunities exist outside the present businesses-the industry is highly mesmerizing and the company has the hard-hitting mix of business strengths to be successful. D. Downsizing and Divesting Older BusinessesWeak businesses require a disproportionate amount of managerial attention. Companies must c arfully prune, harvest, or divest tired old businesses in order to release needful resources to new(prenominal) uses and reduce costs. VI. Organization and Or ganizational Culture Five key strategies for managing transpose in an organization 1. Avoid the innovation title-Pick 2. Use the blood brother system-Find 3. Set the metrics in advance- 4. Aim for quick hits first- 5. Get entropy to back up your gut-Use testing to get feedback and improve an idea The Business Unit Strategic Planning I. The Business MissionEach business unit of necessity to define its specific mission within the broader company mission. Therefore, a television-studio-lighting-equipment company might define its mission as, To target study(ip) television studios and call on their vendor of choice for lighting technologies that represent the most advanced and rock-steady studio lighting arrangements. II. SWOT ANALYSIS The overall evaluation of a companys strengths, weaknesses, opportunities, and threats is called SWOT compendium. Its a way of monitoring the external and internal marketing environment. A. External Environment (opportunity and threat) AnalysisThe b usiness unit should set up a marketing intelligence system to track trends and strategic developments and any related opportunities and threats. Good marketing is the art of finding, developing, and profiting from these opportunities. A marketing opportunity is an area of buyer need and interest that a company has a high probability of profitably satisfying. Opportunities can take many forms, and marketers need to be good at spotting them. To pronounce opportunities, companies can use market opportunity analysis (MOA) to determine their attractiveness and probability of success by asking questions like To articulate the benefits convincingly to a defined target market(s)? To locate the target market(s) and reach them with cost-effective media and trade channels? To give or have access to the critical capabilities and resources we need to deliver the customer benefits? To deliver the benefits better than any actual or potential competitors? 5. To rate of return meet or exceed o ur required threshold for investment? B. Internal Environment (strengths and weaknesses) Its one thing to find attractive opportunities, and another(prenominal) to be able to take advantage of them.Each business needs to judge its internal strengths and weaknesses. C. Goal Formulation This stage of the process is called goal formulation. Goals are objectives that are specific with respect to magnitude and judgment of conviction. The units objectives must meet four criteria 1. They must be arranged hierarchically, from the most to the least cardinal. 2. Objectives should be numeric whenever possible. 3. Goals should be realistic. Goals should arise from an analysis of the business units opportunities and strengths, not from wishful thinking. 4. Objectives must be consistent.Its not possible to maximize gross revenue and profits simultaneously. III. Strategic Formulation A. Porter Generic Strategies Overall cost leadership. Firms pursuing this strategy work hard to achieve the lo west production and distribution costs so they can price lower than their competitors and win a large market apportion. Differentiation. The business concentrates on ridiculously achieving superior performance in an important customer benefit area valued by a large part of the market. Focus. The business focuses on one or more narrow market segments. B. Strategic Alliances Product or service alliances-One company licenses another to produce its product, or two companies jointly market their completing products or a new product. Promotional alliances One company agrees to nurse a promotion for another companys product or service. Logistics alliances One company offers logistical services for another companys product. Pricing collaborations One or more companies join in a special pricing collaboration. Hotel and rental car companies often offer mutual price discounts. D. Program Formulation and ImplantationThe unit has decided to attain technological leadership, it must plan programs to strengthen its R department, gather technological intelligence, develop leading-edge products, train the technical gross revenue force, and develop ads to communicate its technological leadership. Businesses are also increasingly recognizing that unless they nurture other stake- holders-customers, employees, suppliers, distributors-they may never earn sufficient profits for the stockholders. E. Feedback and Control The company has to height out that it is more important to do the right thing-to be effective-than to do things right-to be efficient.The most successful companies exceed at both. Product Planning The Nature and Contents of a Marketing Plan What, does a marketing plan look like? What does it assure? Executive summary and table of contents. The marketing plan should open with a brief of the main goals and recommendations. A table of con- tents outlines the rest of the plan and all the supporting rationale and operational detail. Situation analysis. This se ction presents relevant basis instruction on sales, costs, the market, competitors, and the discordant forces in the macro environment.How do we define the market, how big is it, and how fast is it growing? What are the relevant trends? What is the product offering and what critical issues do we face? Firms will use all this breeding to carry out a SWOT (strengths, weaknesses, opportunities, threats) analysis. Marketing strategy . here the product manager defines the mission, marketing and financial objectives, and meetings and needs that the market offerings are intended to satisfy. The manager then establishes the product lines competitive military position, which will predicate the game plan to accomplish the plans objectives.All this requires inputs from other areas, such as buy, manufacturing, sales, finance, and human resources. Financial projections. Financial projections accommodate a sales forecast, an expense fore- cast, and a break-even analysis. On the reve nue side, the projections show the forecasted sales volume by month and product category. On the expense side, they show the anticipate costs of marketing, low-spirited down into finer categories. The break-even analysis shows how many units the firm must sell monthly to offset its monthly fixed costs and average per-unit uncertain costs. Implementation controls.The last section of the marketing plan outlines the controls for monitoring and adjusting execution of instrument of the plan. Typically, it spells out the goals and budget for each month or qU31ter, so management can review each periods imports and take corrective action as needed. PART 3 CAPTURING MARKETING INSIGHTS CHAPTER 3 COLLECTING INFORMATION AND prodigy DEMAND Three developments make the need for marketing teaching greater now than at any time in the past nurture of orbicular marketing New emphasis on buyers wants, privilegeences and behaviour slide toward non price competitionTo carry out their ana lysis, planning, implementation, and control responsibilities, marketing managers need a Marketing Information System (MIS). The MISs role is to assess the managers randomness needs, develop the needed education, and distribute that study in a apropos manner. It is authentically easiest and effective with this regularity to collect knowledge of various countries as it gives Quick randomness Competitive advantage Guides the marketing s hookping point It relies on internal company records, marketing intelligence activities & query. INTERNAL RECORDS & MARKETING INTELLIGENCESpot important opportunities & problems THE ORDER-TO-PAYMENT CYCLE = the heart of the internal records system Favored firms are those which can promise timely delivery so they have to improve o Speed o Accuracy o Efficiency This will moreover costs as well and it is the MIS role SALES INFORMATION carcassS Reports on electric current sales are indispensable for marketing managers. Inventory data wareho use is a great whoreson to capture all important data This will help to be aware of every pleasing of situation and manage it Cookies are also a reclaimable tool to set aside information to companies.Technological gadgets are revolutionizing sales information systems but sales dta must be guardedly say. DATABASES, DATA WAREHOUSING, AND DATA MINING Databases are essential to companies to organize their information. This is used in several areas for contrasting information customer, product, sales individual Advantages Save mailing expenses Help and make delicate access to decisiveness makers Can be used for statistical methods for usefukl information Managers can yield still deeper insights using its own in-house technology THE MARKETING INTELLIGENCE SYSTEMIt is a set of procedures and sources used by managers to obtain popular information about pertinent developments in the marketing environment. It can also be called HAPPENINGS DATA. Several steps can be taken by companie s to improve the quality of its marketing intelligence Train & motivate the sales force to spot and report new development Motivate distributors, retailers, and other intermediaries to pass along important intelligence Network externally self-aggrandizing an immediate competitive advantage Set up customer informative panel Take advantage of government data resources Purchase information from outside suppliers lower costs Use online customer feedback systems to collect competitive intelligence Competitive intelligence function works bests when intelligence operations collaborate closely with key users in the decision- devising process Needs and Trends A trend is a direction or sequence of events that have some momentum and durability. We can draw distinctions among fads, trends, and megatrends. Trends are more predictable and durable. A trend reveals the shape of the futurity. Trends and megatrends merit marketers close attention.Identifying the Major Force In the economical arena, companies and consumers are increasingly affected by global forces. secure speedup of planetary transportation, communication, and financial doions, leading to the rapid growth trade and investment, especially tripolar trade. The rising economic power of several Asian countries in world markets. The rise of trade blocs such as the European trades union and the NAFTA signatories. The severe debt problems of a numbers of countries, along with the increasing fragility of the international financial system.Successful companies realize that the marketing environment presents a neverending series of opportunities and threats. The major responsibility for identifying significant changes in the macroenvironment falls to a companys marketers. More than any other group in the company, marketing managers must be the trend trackers and opportunity seekers. 1. Within the rapidly changing global picture, marketers must monitor six major environmental forces demographic, economic, na tural, technological, political-legal, and social-cultural. 2.In the demographic environment, marketers must be aware of worldwide universe growth changing mixes of age, pagan composition, and educational levels the rise of non traditional families large geographic shifts in population and the move to micromarketing and away from mass marketing. 3. In the economic arena, marketers need to focus on income distribution and levels of savings, debt, and credit availability. 4. In the social-cultural arena, marketers must understand piles views of themselves, others, organizations, society, nature, and the universe.They must market products that correspond to societys core and secondary value, and address the needs of different sub refinings within a society. 5. In the natural environment, marketers need to be aware of raw-materials shortages, increased energy costs and pollution levels, and the changing role of governments in environmental protection. 6. In the technological arena, ma rketers should take account of the accelerating pace of technological change, opportunities for innovation, varying R&D budgets, and the increased governmental regulation brought about by technological change. . In the political-legal environment, marketers must work within the many laws regulating business practices and with various special-interest groups. CHAPTER 4 CONDUCTING MARKETING query The components of a modern marketing information system A marketing information system (MIS) consists of people, equipment, and procedures to gather, short, analyze, evaluate and distribute needed, timely, and accurate information to marketing decision makers. Internal Records System It is the most basic information system used by marketing managers. (Sales, prices, chronicle levels)The order-to-payment cycle Sales reporting system MARKETING INTELLIGENCE SYSTEM Is a set of procedures and sources used by managers to obtain their everyday information about pertinent developments in the marke ting environment? MARKETING explore SYSTEM Are the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company? SUPPLIERS OF MARKETING RESEARCH Many ways engaging students or professors to design and carry out marketing interrogation projects using online information services checking out rivals.THE MARKETING RESEARCH PROCESS Step 1 Define the problem and research objectives Step 2 developing the research plan. Decisions on the data sources, research hailes, research instruments, sampling plan, and contact methods Step 3 Collect the information. The data collection phase of marketing research is the most expensive and the most prone to error. Step 4 Analyze the information. Extract pertinent findings from the cool data. Step 5 Present the findings. Major findings are pertinent to the major marketing decisions facing management.MARKETING DECISION SUPPORT SYSTEM Is a interconnected collection of da ta, systems, tools and techniques with supporting software and hardware by which an organization gathers and pick ups relevant information from business and environment and turns it into a basis for marketing action? FORECASTING AND DEMAND mensuration A VOCABULARY FOR DEMAND MEASUREMENT Market demand Market demand for a product is the do volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.Market potential Is the limit approached by market demand as industry marketing expenditures approach infinity, for a abandoned environment? Company demand Is the companys estimated share of market demand at alternative levels of company marketing effort? Forecast Is the digested level of company sales establish on a chosen marketing plan and an assumed marketing environment? A sales quota Is the sales goal set for a product line, company division, or sales represen tative? It is primarily a managerial device for defining and stimulating sales effort. A sales budgetIs a conservative estimate of the expected volume of sales and is used primarily for reservation current purchasing, production, and cash-flow decisions. Company sales potential ESTIMATING electric current DEMAND Total market potential Area market potential Market-build-up method Multiple-factor index method 3. Industry sales and market shares Estimating industry sales and market shares (Identifying competitors and estimating their sales ESTIMATING FUTURE DEMAND Survey of buyers intentions building complex of sales force opinions Expert opinion Market test method PART 3 CONNECTING WITH CUSTOMERS CHAP 5 CREATING LONG TERM truth RELATIONSHIPSBuilding customer value, pleasure and allegiantty Customer-perceived value (CPV) is the struggle between the blameless perceived customers evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Apply ing value concepts The customer value analysis reveals the companys strengths and weaknesses relative to those of various competitors. Delivering high customer value Loyalty is a deeply held commitment to rebuy a preferred product and service in the future despite situational influences and marketing efforts having the potential to cause work shift look.The value proposal consists of the whole cluster of benefits the company promises to deliver. The value delivery system includes all the experiences the customer will have on the way to obtaining and using the offering. Total customer felicity Satisfaction is the difference between expectations and the products perceived performance. Product and service quality prime(prenominal) is the totality of features and characteristics of a product or service which satisfy limpid or implicit needs. Maximizing customer lifetime value Customer positivenessA profitable customer is a someone, household or company that revenues are higher th an the companys costs for attracting, selling and servicing that customer. save it is a very difficult task, even for banks. Customer profitability analysis is an accounting study which estimates all revenue coming from a customer less all costs (distribution, phone calls, traveling to meet the client, gifts). nipstone customer life time value Customer lifetime value estimates future profits over customers lifetime purchases. You can find it p. 172. Cultivating customer relationshipsCustomer relationship management (CMR) Customer relationship management is the process of carefully managing detailed information about individual customers and all customer touch pointsto maximize customer loyalty. A touch point is any occasion on which a customer meets a dirt and a product. One-to-one marketing Identify your prospects and customers, dont go after everyone. 1. Differentiate customers in terms of (1) their needs and (2) their value to your company. spend more efforts on the most va luable customers. Do the customer profitability analysis. 2.Interact with individual customers to improve your knowledge about their needs and build a stronger relationship. 3. Customize products, services, and messages to each customer. Increasing value of the customer base diminution the rate of customer defection. Increasing the longevity of the customer relationship. Increase sells with new offerings and opportunities, like accessories for motorcycles if you sell Harley-Davidson. Making low-profit customers more profitable or terminating them. deal low-cost flying companies which charge customers for drinks or food. Focusing disproportionate efforts on high-value customers.Building loyalty Developing loyalty programs Frequency programs are design to permit rewards to customers who buy frequently and in substantial amounts. Many companies have created night club membership programs. Customer databases and database marketing A customer database is an organized collection of comprehensive information about individual customers and prospects that is current, accessible and actionable for marketing purposes (sells, maintain relationships). Database marketing is the process of building, maintain and using customer databases to contact, transact and build customer relationships. Customer databasesCustomer database contains customers past purchases, demographics (age, birthday, and family members), psychographics (activities, interests), media graphics (preferred media) and other useful information. A business database contains past purchases, volumes, prices, profits, buyer team member call downs, judgment of competitors their strengths and weaknesses. Data warehouse and dataminig Companies use databases to 1. Identify prospects 2. Decide which customer should procure a particular offer 3. To deepen customer loyalty 4. To reactivate customer purchases 5. To avoid serious customer mistakes CHAP 6 ANALYZING CONSUMER MARKETSWhat influences consumer deme anour? Consumer carriage is the study of how individuals, groups and organizations select, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. pagan factors Culture is the fundamental determinant of a persons wants and conduct because of values. Subcultures provide more specific identification and socialization for their members. Subcultures include nationalities, religion, racial groups Social classes are relatively homogeneous and allow divisions in a society, hierarchically ordered and with members who share similar values, interests, and behaviors.Reference groups A persons reference groups are all the groups that have a direct or indirect influence on their attitudes or behavior. rank and file groups have a direct influence. Primary groups are in constant contact with the person (family, friends, neighbors, coworkers). Secondary groups are religious, professional, trade-union groups. Aspiration groups are those a person hopes to joi n. dissociative groups are establish on individual reject. Opinion leader is the person who offers in white-tie advice or information about a specific productor product category. FamilyFrom family a person acquires an orientation toward religion, politics, and economics and a sense of individual(prenominal) ambition, self-worth, and love. It is a more direct influence on everyday purchasing behavior. Role and status A role consists of the activities a person is expected to perform. Each role carriers a status Personal factors Personality is a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli (including purchasing behavior). Brand personality is defined as the specific mix of human traits that we can attribute to a particular check.Lifestyle is persons pattern of living in the world as verbalised in activities, interests, and opinions. Key psychological processes Motivation Freud, Maslow, Herzberg A need move arounds a motive when its intensity drives us to act. Perception Perception is the process by which we select, organize, and interpret information inputs to create a meaningful picture of the world. selective attention is the screening of stimuli and marketers must work hard to attract consumers notice. commonwealth are more credibly to notice stimuli that relate to a current need heap are more likely to notice stimuli they anticipateSelective twist is the tendency to interpret information in a way that fits our preconceptions. Because of the selective memory board, we are pore likely to remember good points of a product we like and forget good points about competing products. Learning Learning comes from experiences and makes us changing our behavior. A drive is a strong internal stimulant drug impelling action. Cues are minor stimuli that determine when, where, and how a person responds. divergence means that we have learned to recognize differences in sets of similar stimuli and can adjust our responses accordingly.The hedonic bias says people are more likely to attribute failure to external causes and success to themselves. memory board Associative meshwork memory model explains that information are stored and linked with a different level of strength. Brand associations consist of all tick-related thoughts, feelings, perceptions, shows, experiences, beliefs, attitudes, and so on that become linked to the blemish information stored. Memory encoding describes how and where information gets into memory. Memory retrieval is the way of the information gets out of the memory.The purchasing decision process Marketers must identify who makes the buy decision people can be initiators, influencers, deciders, buyers, or users. Problem designation Information search Personal family, friends, neighbors. commercial-grade advertising, web sites, salespersons, packaging, displays. Public mass media. Experiential handling, examining, is using the product. Market equipment failure is the process of identifying the hierarchy of attributes that guide consumer decision making for the marketer to understand different competitive forces and how this various sets get formed.Evaluation of alternatives Belief is a descriptive thought that a person holds about something. Attitudes are a persons favorable or unfavorable evaluations, emotional feelings, and action tendencies towards some object or idea. Expectancy-value model of attitude formation shows that consumers evaluate products and services by combining their tag beliefs according to richness. Purchase decision Heuristics are rules of mental shortcuts in the decision process. With the conjunctive heuristic the customer looks for every attribute and chooses the irst alternative that meets the nominal standard for all attributes. With the lexicographic heuristic the customer chooses the best shuffling on the basis of its perceived most important attribute. With the elimi nation-by-aspects heuristic the customer compares pocks and eliminates those which dont correspond to the minimum acceptable cutoffs. The perceived finds can modify, postpone or avoid a purchase decision. Functional risk of infection the product does not perform up to expectations. Physical risk the product could threat health or eudaimonia of the user or others.Financial risk the product is not worth the price paid. Social risk the product results in embarrassment from others. Psychological risk the product affects the mental well- cosmos of the user. Postpurchase behavior Other theories of consumer decision making Level of consumer involvement Consumer involvement is the level of engagement and active touch responding to a marketing stimulus. Decision heuristics and biases The availability heuristic means that for example a customer who had troubles with a product would be more likely to purchase a future product with warranty.The representativeness heuristic means that the c ustomer buy a product to be seen as representative of a whole category. The anchoring and adjustment heuristic means that the first impression determines the description of the further information. That is why it is very important to make a first good impression for a salesperson, for instance. Mental accounting Mental accounting refers to the way consumers code, categorize, and evaluate financial outcomes of choices. Prospect theory maintains that the consumers frame their decision alternatives in terms of gains and losses according to a value function.CHAPTER 7 ANALYSING CONSUMER MARKETS A The study of consumer behavior Consumer behavior is the study of when, why, how and where people do or do not buy products. It tries to understand the buyer wants and decision making process both individually and in groups. It also attempts to evaluate influences on the consumer from groups such as family, friends, reference groups, and society in general. Its can be split up into three interd ependent dimensions The study of culture The study of social group The study of the individual CultureCulture is the essential determinant of a persons wants and behavior. Every culture can be split in subcultures that include nationalities, religions, geographic region etc and offer more critical identification for their members. Multicultural marketing appear to satisfy the different subcultures. We can also observe different social classes with people who have the uniform values, interests and behavior. Each social class show assorted product and mark preferences on different level. Social groups a. Reference group A reference group is a group that influences people attitudes and behavior.There are different categories of groups Membership groups have a direct influence on people (family, friends, colleagues) Aspirational groups are thosea person wish to join Dissociative groups are thosea person, does not run low b. Family Family is the most influential primary refer ence group. There are two families Family of orientation parents and sibling Family of procreation wife /husband children The individual consumer A consumers decisions are influenced by personal characteristics such as the age and stage in the life cycle, the occupation and economic, the life style and values and the buyers personality.So to study and understand consumer behavior its really important to start with the consumer herself or himself. Explore into all these factors can provide clues to attain and serve consumers more effectively. B Key psychological process Motivation Freud, Maslow, Herzberg a. Freuds theory For Freud people s behavior are unconscious. People not only react to their affirmed aptitudes, but also to other. b. Maslows theory c. Herzbergs theory For Herzberg there are two different factors Dissatisfiers factors that cause dissatisfaction Satisfiers factors that cause satisfactionThe sellers should try to keep away dissatisfiers factors and identify the p rincipal satisfiers or motivator of purchase in the market and then provide them. I. Perception Perception is the processes by which we select organize and interpret information. People have different perception of the kindred object because of three perceptual processes Selective attention Selective distortion tendency to interpret information in a way that fits our preconception Selective retention only preserve information that support our manners and beliefs II. Learning People learn from their experiences and change their behaviour.Marketers should build demand for a product by associating it with strong drives (internal stimulus pushing action), cues (minor stimuli) and providing positive support. III. Memory Memory is rarified between to type of memory short-term memory and long-term memory. Marketing is a good way to be sure that consumers have the right type of products and services experiences to build the good tell on knowledge and keep it in memory. Four main psych ological processes affect consumer behavior r motivation, perception, learning, and memory. C Perspectives on consumer behaviorNumerous perspectives on consumer behavior can be considered The behaviorist perspective focus on the impact of external influences on consumer behavior The information processing perspective appeared in the 60s and 70s thinks about how consumers mentally process, store, retrieve and use marketing information in the decision process The emotional perspective consumers affections should be include in the explanation of consumer decision making The cultural perspective culture show consumers view A multiperspective approach consumers do not have unlimited mental resources D The buying decision process the five stage modelTo understand how consumer make buying decisions, marketers should identify who makes and has contribute into buying decision. People can be initiators, influencers, deciders, buyers or users. The classical buying process consists of the following succession of events 1. Problem recognition (the buyer recognizes a problem) 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post purchase behavior (post purchase satisfaction, action, use and disposal) Marketers have to understand the consumer behavior at each stage. Its not always easy because many different factors influence the diverse behavior.CHAPTER 8 IDENTIFYING MARKET SEGMENTS AND TARGETS I. The business market versus the consumer market Business marketers have numerous characteristics that contrast with those of consumer markets Fewer larger buyers deal with much bigger buyer than the consumer market Close supplier customer relationship suppliers adapt their offering to individual business customer needs transmission lineal purchasing goods are bought by trained purchasing agents Multiple buying influence more people typically influence business buying decisions Multiple sales calls Derived demand the demand for business goods resulting from the demand for consumer goods dead demand the demand for goods wont change even if prices change Fluctuating demand the demand for business goods and services tend to be more unstable than the demand for consumer goods and services Direct purchasing business buyers buy directly for manufactures II. acquire situations The business buyer faces many decisions in making a purchase. The number depends on the buying situation complexness of the problem being solved, newness of the buying necessity, number of people involved and time requirement.There are three types of buying situations Straight Rebuy The purchasing department reorders supplies and chooses from suppliers on an approved list. The suppliers effort to maintain service and product quality. Their goal is to get a small order and then enlarge their purchase share over time. Modify rebuy the buyer wants to change products specifications New task the buyer buys the product for the first time III. Systems Buying and Selling Originally, system buying is a practice about government purchases of major weapons and communications systems.Thus, many business buyers prefer to buy a total solution to a problem from one seller. A system selling is a key industrial marketing strategy in bidding to build big industrial projects, such as dams, steel factory, irrigation systems, sanitation systems, pipelines, utilities and even new towns. B. Participants in the business buying process I. The buying centre The buying center consists of all those individuals and groups who contribute in the purchasing decision making process. Its include all members of the organization who take part in any roles in the purchase decision process. Initiators request something be purchased Users use the product, embark on the buying proposal Influencers people who influence the buying decision Deciders decide on product requirements or on suppliers Approvers authorize the proposed actions Buyers have formal aut hority to select the supplier and arrange the purchase terms Gatekeepers have the power to prevent sellers or information from range member II. Buying centre influences Buying center typically include several participants with diverse interest.If the business marketers want to influence these participants they should try to be attentive to many factors such as environment, organization, individual, motivations and interpersonal influences. III. Buying centre targeting Business marketers should answer at some questions to target their efforts appropriately. Who are the major decision participants? What decisions do they influence? What is their level of influence? The small sellers focus on reaching the key buying influencers and larger sellers the multilevel in depth selling to attain many participants. C. The Purchasing/Procurement Process a. Purchasing department PerceptionsRecent competitive pressures have led many companies to upgrade their purchasing departments and designa te administrators to vice presidential rank. These new, more strategically oriented purchasing departments have a mission to seek the best value from fewer and better suppliers. b. Purchasing Organization and Administration Some companies have started to centralize purchasing. home office identifies materials purchased by several divisions and buys them centrally, gaining more purchasing clout. At the same time, companies are decentralizing some purchasing operations by empowering employees to purchase small-ticket items.D. Stages in the buying process The buying process consists of 1. Problem recognition the company recognizes a need that can be fixed by purchasing a good or service. 2. General need description and product specificationgeneral characteristics and required quantity 3. Supplier search identify the most appropriate suppliers 4. Proposal solicitation invite the qualified suppliers to indicate proposals 5. Supplier selection the buying center usually use a supplier ev aluation to identify the most attractive suppliers 6. Order-routine specification negotiations 7. executing review review of the chosen supplierE. Managing business to business relationship Business marketers must form strong bonds and relationships with their customers and provide them added value. Some customers, however, may prefer more of a transactional relationship. a. The Benefits of Vertical Coordination Much research had advocated greater vertical coordination between buying partners and sellers, so they can transcend merely transacting and preferably engage activities that create more value for both parties. Building self-assurance is one prerequisite to healthy long-term relationships. b. Business Relationships Risks and OpportunismResearchers have remark that establishing a customer-supplier relationship creates tension between safeguarding and adaptation. Vertical coordination can alleviate stronger customer-seller ties but at the same time may increase the risk to the customers and suppliers specific investments. Specific investments, however, also entail immense risk to both customer and supplier. Transaction theory from economics maintains that because these investments are partially sunk, they lock the firms that make them into a particular relationship. I. Transactions cost economics F. Institutional and government marketsPART 4 building STRONG BRANDS CHAPTER 9 CREATING BRAND EQUITY I. What is a brand impartiality A. Role of brand Permit to consumers evaluate products (of specific brands), in order to find their needs. Brand signal a certain level of quality. Brand offer credential for customers and firms B. The scope (ampleur) of branding A brand resides in the minds of consumer as an identity One of the first branding strategy is consumers must be confident(p) their meaningful differences among brands in products or services C. Defining brand uprightness -is the added value endowed on product and service customer based brand equi ty the customer brand knowledge is + when he reacts more favorably to a product and when reacts less favorably 3 keys for favorably react different responses about consumer needs associated the brand of something (image), and ensuring consumer has great experiences with products. D. Brand equity as a bridge -brand knowledge (decide by customer) dictates future direction of the brand Brand promise is what the brand is and must do for consumers So, money spend for marketing is an investment for consumers brand knowledge E. brand equity model 4 models of B. equity models brand asset valuator (p 283) 5 categories differenciation,energy, revelance, estum, knowledge -brandz (p 284) relationship with brand (pyramid) -AAKER model typically elements (value, uses, meaning, origin country, personality, symbols) -brand resonance model (p 285) development, building objectives II. Building brand equity This is the creating to have the right brand knowledge of consumers F. Choosing brand element s -Its that identify and mark the brand -6 criteria memorable, meaningful, likable, adaptable, transferable (for a new product, geography), protectable (not become generic as Kleenex, scotch).G. Designing holistic marketing activities Brand contact with the consumer, there are 3 phase Personalization -stop mass market, throwback to personalizing marketing. Each customer is unique one to one marketing -build a strong consumers relationship Integration -traditional mix marketing isnt adequately, now we need variet of marketing to reinforce the brand. (Sponsoring, communication, promotion, events.. ) Internalization -companies must adopt an international perspective film the right moment, link internal and external marketing and bring the brand alive for employees H.Leveraging (influence) secondary association Linking the brand with others information (p290), a brand can build equity by linking with others entities. III. Measuring brand equity 2 basic approaches -Brand audit uncover sources of brand equity, suggest way to improve its equity. Brand audit is use to prepare marketing plan -brand tracking studies understanding thank to quantitative data from consumers, to facilitate day to day decision marketing. IV. Managing brand equity Brand management requires a long term view of marketing actions I. Brand reinforcement -Brand need to be carefully managed to surviveImprove product, service, and marketing Needs innovations/relevance throughout marketing program (p295) -marketing need some change to be competitive -brands need activities to awareness (new products, creatively design, ad campaign) J. Brand revitalization New competitors can affect a brand, so brand have to be refresh Solution -understanding the source of brand equity -bad association loosing the brand -create new positioning -change marketing program -come back to basic image V. Devising (concevoir) a brand Strategy -Brand character establish brand with introduce a new one sub brand new brand c ombine with existing brand -brand line all product -License product brand name has been licensed to make the product K. mark decision Develop a brand name for a product 4 strategies Individual name(old el Paso) advantage, if the product is low quality brand is not hurt Blanket family name development cost is lower because we dont need research/add, to create recognition Separate family name for all products ex craftsman for tools Corporate name combined with individual product name Kellogg kelloggscorn flakes L. Brand extension Advantages -customers know parent brand dont need to create awareness for marketing, communication Feed back effect knowledge Disadvantages -confusion with new product -harm, hurt parent brand with bad a product (Success characteristic f 9. 8 p301) M. Brand portfolio Marketers need multiple brands to abide by these segments. Aim goal of brand portfolio is maximize brand coverage. -low end main course attract customers to brand franchise -high end prestige prestige of brand with adds CHAPTER 10 CRAFTING THE BRAND POSITIONING SEGMENT MARKETING A market segment consists of a group of customers who share a similar needs and wants.Rather than creating the segments, the marketers task is to identify them and to decide which one to target. Market segments can be characterized in different ways, one approach is to Identify preference segment categorized them by Homogeneous preferences if the customers have the same preferences Diffused preferences the customer preference vary greatly in their requirement Clustered preferences when natural market segment emerge from groups of customers with shared preferences deferral MARKETING A niche is marketing is narrowly defined customers group seeking a distinctive mix of benefits or values.Marketers usually identify niches by dividing a market into subsegments. Niche markets are generally sanely small is term of volume but constitute a sufficientetly attractive size, profit and growth potential. Als o they are less likely to attract many other powerful competitors Focusing their resources to gain economies though distinctiveness LOCAL MARKETING Customizes merchandise to match the perceived demand of local anaesthetic areas The risk associated with localized marketing includes A tendency to drive up the manufacturing costs and to reduce economies of scale Grassroots marketingINDIVIDUAL MARKETING Marketing one to one The researches seek to define segment by looking at descriptive characteristics geographic, demographic and psychographic. GEOGRAPHIC sectionalization Divide the market into different geographical units such as nations, states, regions DEMOGRAPHIC SEGMENTATION The market is divided into groups on the basic of variable such as ages, family size, occupation, race PSYCHOGRAPHIC SEGMENTATION Psychographic profiles are typically developed with reference to three variables know as the AIO factors that describe individual lifestyle 1. Activities 2. Interests . opinions BEHAVIOURAL SEGMENTATION Marketers place buyers into groups on the basic of their knowledge of, attitude towards, use of or response to a product. To compete more effectively many companies are now adopting target marketing. Instead of scattering their marketing efforts they are focusing on customers they have the greatest chance of satisfying. Target marketing includes three activities market segmentation, market targeting and market positioning. STEPS IN SEGMENTATION PROCESS 1. Needs-based segmentation convocation customers into segments based on similar needs 2. Segment identificationSegment by behavior, psychographic, individual, demographic and geographic 3. Segment attractiveness Determine the attractiveness of each segment 4. Segment profitability Determine segment profitability 5. Segment positioning for each segment create a value proposition and product-price positioning strategy based on that segments unique customer need and characteristics 6. Segment acid test create segment storyboard to test the attractiveness of each segments positioning strategy 7. Marketing mix strategy Expand segment positioning strategy to include all aspects of the marketing mix the 4PEFFECTIVE SEGMENTATION CRITERIA An effective segmentation must be 1. Measurable size, purchasing power 2. Substantial the segment are large and profitable enough toserve 3. Accessible the segment can be effectively reached and seved. 4. Differentiable the segment are distinguishable 5. Actionable effective programs can be formulates for attracting and serving the segments Positioning is the act of designing the company offering and image to occupy a distinctive place in the minds of the target market. The goal is to establish the brand in the mind of the consumers.The result of positioning is the successful creation of a consumer- focused value proposition CHAPTER 11 COMPETITVE DYNAMICS Without customers, you dont have business Creating loyal customers is at the heart of every business, th e only value your company will ever create is the value that comes from the customers. Managers who believe that costumer is the companys only true profit center consider the traditional organization chart (first figure), successful marketing companies invert the chart (second figure) At the top the customer, the front line is the people who meet, serve and satisfy customersMany companies recognize the importance of satisfying theirs consumer in order to develop brand reputations that can deliver a sustainable competitive advantage The concept of costumer-perceived value enables marketers to discover what consumers want though the medium market research CUSTOMER-PERCEIVED VALUE (CPV) The CPVis the difference between the prospective customers evaluation of all benefits and all the costs of an offering and the perceived alternatives. Total costumer benefit is the perceived monetary value of the bundle of economic, functional and psychological benefits consumers expect from given marke t offering.Total costumer cost is the perceived bundle of costs costumers expect to incur in evaluating, obtaining, using and disposing of the given market offering BUILDING CUSTOMER SATISFACTION Customers want loyalty, not perfection Customer can sense when a companies are consistently more loyal to investors, employees and regulators than to people who buy their products and services, customers are not being disloyal they are being discriminating. The question is not how can we radically increase customer loyalty, but how can we radically increase our own loyalty to customers.To increase our sellers, we need to develop consumers loyalty Total customer satisfaction Whether the buyer is satisfied after purchase depends on the offers performance if the performance falls short of expectations, the customer is dissatisfied, if the performance match the expectations, the customer is satisfied, if the performance exceeds expectations, the customer is highly satisfied or delighted. Custom er assessments of product performance depend on many factors, especially the type of loyalty relationship the customer has with the brand.Although the customer-centre firm seeks to create a high customer satisfaction, that is not only his ultimate goal. Company might be able to increase its profitability by means other than increased satisfaction. supervise satisfaction Many companies are systematically measuring how well they care their customers, identifying the factors shaping satisfaction and making changes in their operations and marketing as a result Customer satisfaction Companies should measure customer satisfaction regularly, because an important key to customer retention is customer satisfaction.A high customer satisfaction brings high profits, the customer stay longer the customers are less sensitive to the price and pay less attention to the competing brand. Measurement techniques A number of methods exist to measure customer satisfaction for example day-by-day survey s, customer loss rate. Influence of customer satisfaction For customer-centre companies, customer satisfaction is both a goal and a marketing tool. Companies need to be especially concerned today with their customer satisfaction level.MAXIMIZING CUSTOMER liveliness VALUE Customer profitability A profitable customer is a person, household, or company that over time yields a revenue pepper that exceeds by an acceptable amount the companys cost flowing for attracting, selling and servicing that customer. CULTIVATING CUSTOMER RELATIONSHIPS Maximizing customer-perceived value means cultivating long-term customer relationship. Companies are now moving away from wasteful mass marketing to precision marketing designed to build strong customer relationships.Customer relationship management Customer relationship management (CRM) is the process of carefully managing detailed information about individual customers and all customer touch point to maximize