designing and managing services

shaping the market offerings -- Chapter 13 -- summary



A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. It may or may not be tied to a physical product.



Services are in tangible, inseparable, variable, and perishable. Each characteristic poses challenges and require certain strategies. Marketers must find ways to give tangibility to intangibles; to increase the productivity of service providers; to increase and standardize the quality of the service provided; and to match the supply of services with market demand.



In the past service industries lagged behind manufacturing firms in adopting and using marketing concepts and tools, but the situation has not changed. Service marketing must be done holistically. It calls not only for external marketing but also for internal marketing community employees, and interactive marketing to emphasize the importance of both high-tech and high-touch.



Customers expectations play a critical role in their service experiences and evaluations. Companies must manage service quality by understanding the effects of each service encounter.



Top service companies excel at the following practices:

• a strategic concept
• history of top management commitment to quality
• hi standards
• self-service technologies
• systems for monitoring service performance and customer complaints
• emphasis on employee satisfaction

To brand a service organization effectively, the company must differentiate its brand through primary and secondary service features and develop appropriate brand strategies. Effective branding programs for services often employ multiple brand elements. They also develop brand hierarchies and portfolios and establish an image dimensions to reinforce or complement service offerings.



Even product-based companies must provide post purchase service. To provide the best support, and manufacturer must identify the services customers value most and the relative importance. The service mix includes both pre-sale services (facilitating and value augmenting services) and post sales services (customer service departments, repair and maintenance services).





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setting product strategy

shaping the market offerings -- chapter 12-- summary



Product is the first and most important element of the marketing mix.Product strategy calls for making coordinated decisions on product mixes, product lines, brands, and packaging and labeling.



And planting its market offering, the marketer needs to think through the five levels of the product:

• the core benefit
• the basic product
• the expected product
• the augmented product
• the potential product

Products can be classified in several ways. In terms of durability and reliability, products can be non-durable goods, durable goods, or services. In the consumer goods category, products are convenience goods, shopping goods, specialty goods, or unsought goods. In the industrial goods category, products fall into one of three categories: materials and parts, capital items, or supplies and business services.



Brands can be differentiated on the basis of a number of different product or service dimensions;

• product form
• features
• performance
• conformance
• durability
• reliability
• repair ability
• style and design
• service dimensions
• delivery
• installation
• customer training
• customer consulting
• maintenance and repair

Most companies sell more than one product. In product mix can be classified according to wait, length, death, and consistency. These four dimensions are the tools for developing the company's marketing strategy and deciding which product lines to grow, maintain, harvest, and divest. To analyze a product line and decide how many resources should be invested in that line, product line managers need to look at sales and profits and market profile.



A company can change the product component of its marketing mix by lengthening its product via line stretching or line filling, by modernizing its products, by featuring certain products, and by pruning its products to eliminate the least profitable.



Brands are often sold or marketed jointly with other brands. Ingredient brands and co-brands can add value assuming they have equity and are perceived as fitting appropriately.



Physical products have to be packaged and labeled. Well-designed packages can create convenience value for customers and promotional value for producers. In effect, they can act as "five second commercials" for the product. Warranties and guarantees can offer further assurance to the consumer.

How to derive fresh consumer insights

How to derive fresh consumer insights to differentiate products and services.

If companies examined customers and tire experience with a product or service -- the consumption chain -- they can uncover opportunities to position their offerings in ways that neither they nor their competitors thought possible. Here is a thought provoking list of questions marketers can use to help them identify new, customer base points of differentiation.

• How do people become aware of their need for your product and service?
• How do consumers find your offering?
• How do consumers make their final selection?
• How do consumers order and purchase your product or service?
• What happens when your product or service is delivered?
• How is your product installed?
• How is your product or service paid for?
• How is your product stored?
• How is your product moved around?
• What is the consumer really using your product for?
• What do consumers need help with when they use your product?
• What about returns or exchanges?
• How is your product repaired or service?
• What happens when your product is disposed of or no longer used?

Tapping into global markets

creating successful long-term growth -- Chapter 21 -- summary

Despite the many challenges in the international arena:

• shifting borders
• unstable government
• foreign exchange problems
• corruption
• technological pirating
  
  

Companies selling in global industries need to internationalize their operations. Companies cannot simply stay domestic and expect to maintain their markets.

In deciding to go abroad, a company needs to define its international marketing objectives and policies. The company must determine whether to mark and the few countries or many countries. They must decide which countries to consider. In general, the candidate countries should be rated on three criteria: market attractiveness, risk, and competitive advantage. Developing countries offer a unique set of opportunities and risks.

Once accompanied his side to a particular country, it must determine the best mood of entry. Its broad choices are indirect exporting, direct exporting, licensing, joint ventures, and direct investment. Each succeeding strategy involves more commitment, risk, control, and profit potential.

In deciding on the marketing program, a company must decide how much to adapt its marketing program (product, communications, distribution, and price) to local conditions. At the product level, firms can pursue a strategy of straight extension, product adaptation, or product invention. At the communication level, firms may choose communication adaptation or dual adaptation. At the price level, firms may encounter price escalation in gray markets. At the distribution level, firms need to take a whole channel view of the challenge of distributing products to the final users. In creating all elements of the marketing program, firms must be aware of the cultural, social, political, technological, environmental, and legal limitations they face in other countries.

Country of origin perceptions can affect consumers and businesses alike. Managing this perceptions and the most advantageous way possible is an important marketing priority.

Depending on the level of international involvement, companies manage their international marketing activity in three ways: through export departments, international divisions, or a global organization.

Introducing new market offerings

creating successful long-term growth -- Chapter 20 -- summary



Once the company has stagnated the market, chosen its target customer groups and identified their needs, and determine its desired market positioning, it is ready to develop and launch appropriate new products. Marketing should participate with other departments and every stage of new product development.



Successful new product development requires the company to establish an effective organization for managing the development process. Companies can choose to use product managers, new product managers, new product committees, new product departments, or new product venture teams. Increasingly, companies are adopting cross functional teams and developing multiple product concepts.



Eight stages are involved in the new product development process:

• idea generation
• screening
• concept development and testing
• market strategy development
• business analysis
• product development
• market testing
• commercialization.
  
  

At each stage, the company must determine whether the idea should be dropped or move to the next stage.



The consumer adoption process is the process by which consumers learn about new products, try them, and adopt or reject them. Today many marketers are targeting heavy users and early adopters of new products, because both groups can be reached I specific media and tend to be opinion leaders. The consumer adoption process is influenced by many factors beyond the marketers control, including consumers and organizations willingness to try new products, personal influences, and the characteristics of the new product or innovation.

dealing with competition

Chapter 11 -- summary



To prepare an effective marketing strategy, a company must study competitors as well as actual potential customers. Companies need to identify competitors strategies, objectives, strength, and weaknesses.



A company to close its competitors are they seeking to satisfy same customers and needs and making similar offers. A company should also pay attention to latent competitors,

who may offer new or other ways to satisfy the same needs. A company should identify competitors by using both the industry and market based analysis.

A market leader has the largest market share in the relevant product market. To remain dominant, the leader looks for ways to expand total market demand, attempts to protect its current market share, and perhaps tries to increase its market share.

A market challenger attacks the market leader and other competitors in an aggressive bid for more market share. Challengers can choose from five types of general attack; challengers must also choose specific attack strategies.

A market follower is a runner up firm that is willing to maintain its market share and not rock the boat. A follower can play the role of counterfeiter, cloner, imitator, or adapter.

A market nicher serves small market segment not being served by larger firms. The key to nichemanship is specialization. Nichers develop offerings to fully meet a certain group of customers needs, commanding a premium price in the process.

As important as a competitive orientation is in today's global market, companies should not ever do the emphasis on competitors. They should maintain a good balance of consumer and competitor monitoring.

crafting the brand positioning

Chapter 10 -- summary

Deciding on positioning requires the determination of a frame of reference -- identifying the target market and the nature of the competition -- and the ideal point of parity and points of difference brand associations.to determine the proper competitive frame of reference, one must understand consumer behavior in the considerations consumers use in making brand choices.

Point of difference are those associations unique to the brand that are also strongly held and favorably evaluated by consumers.

Point of parity are those associations not necessarily unique to the brand but perhaps shared with other brands.

Category point of parity associations are associations consumer view as being necessary to a legitimate incredible product offering within a certain category.

Competitive point of parity associations are designed to negate competitors points of difference.

The key to competitive advantages product differentiation. A market offering can be differentiated along five dimensions:

1. product
   
2. services
3. personnel
4. Channel
5. image

Because economic conditions change and competitive activity varies, companies normally find it necessary to be formulate their marketing strategy several times during a product's lifecycle. Technologies, product forms, and brands also exhibit lifecycles with distinct stages. The general sequence of stages in a lifecycle is introduction, growth, maturity, and decline. The majority of products today or in the maturity stage.

Each stage of the product lifecycle calls for different marketing strategies. The introduction stage is marked by slow growth in minimal profits. If successful, the product enters a gross stage marked by rapid sales growth and increasing profits. There follows a maturity stage in which sales growth slows and profits stabilize. Finally, the product enters a decline stage. The company's task is to identify the truly weak products; develop a strategy for each one; and phase out weak products in a way that minimizes the hardship to company profits, employees, and customers.

Like products, markets evolve through four stages:

1. emergence
2. growth
3. maturity
4. decline
   
   

creating brand equity

Chapter 9 -- summary

A brand is a name, term, signed, symbol, or design, or some combination of these elements, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors. The different components of a brand -- brand names, logos, symbols, etc. are brand elements.

Brands offer a number of benefits to customers and firms. Brands are valuable intangible assets that need to be managed carefully. The key to branding is that consumers perceive differences among brands in a product category.

Brand equity should be defined in terms of marketing affects uniquely attributed to a brand. That is, brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand, as compared to the results if that same product or service was not identified by that brand.

Building brand equity depends on three main factors:

1. the initial choices for the brand elements or identities making up the brand
2. the way the brand is integrated into the supporting marketing program
3. associations and directly transferred to the brand by linking the brand to some other entity

Brand equity needs to be measured in order to be managed well. Brand audits are in-depth examinations of the health of a brand and can be used to set strategic direction for the brand. Tracking studies involve information collected from consumers on a routine basis over time and provide valuable tactical insights into the short-term effectiveness of marketing programs and activities. Brand audits measure "where the brand has been," and tracking studies measure "where the brand is now" and whether marketing programs are having the intended effect.

A branding strategy for a firm identifies which brand elements a firm chooses to apply across the various products it sells. And a brand extension, a firm uses an established brand name to introduce a new product. Potential extensions must be judged by how effectively they leverage existing brand equity to a new product, as well as how effectively the extension, in turn, contributes to the equity of the existing parent brand.

Brands can play a number of different roles within the brand portfolio. Brands may expand coverage, provide protection, extended image, or fulfill that it a variety of other roles for the firm. Each brand-name product must have a well-defined positioning. In that way, Brands can maximize coverage and minimize overlap and us optimize the portfolio.

Identifying market segments and targets

-- Continued...



Sequential segmentation

business buyers seek different benefit bundles based on their stage in the purchase decision process.

1.first time prospects

2. Novices

3.sophisticates



One proposed segmentation scheme classifieds business buyers into three groups, each warranting a different type of selling:

1. price oriented customers (transactional selling) -- wanting value through lowest price

2.solution oriented customers (consultants selling) -- want value through more benefits and advice

3.strategic value customers (price selling) -- want value through the supplier tell investing in purchasing and the customers business



Market targeting

once the firm has identified its market segment opportunities, and it has to decide how many and which ones to target.



Effective segmentation criteria

to be useful, market segments must rate favorably on five key criteria:



Measurable -- the size, purchasing power, and characteristics of the segments can be measured

substantial -- the segments are large and profitable enough to serve

accessible -- the segments can be effectively reached and served

differentiable -- the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs

actionable -- effective programs can be formulated for tracking and serving the segments



Evaluating and selecting the market segments



When evaluating different market segments, the firm must look for two factors: the segments overall attractiveness and the company's objectives and resources.

After evaluating different segments, the company can consider the five patterns of target market selection:

single segment concentration

selective specialization

product specialization

market specialization

full market coverage in paragraph

Major segmentation variables for business markets

Major segmentation variables for business markets



Demographic

1. industry: which industries should we serve?

2. Company size: what size company should we serve?

3. Location: what geographical area should we serve?



Operating variables

4. Technology: what customer technology should be focused on?

5. User a nonuser status: should we serve heavy users, medium users, light users, or new users?

6. Customer capabilities: should we serve customers needing many or few services?



Purchasing approaches

7. purchasing function organization: should we serve companies with highly centralized or decentralized purchasing organizations?

8. Power structure: should we serve companies that are engineering dominated, financially dominant, and so on?

9. Nature of existing relationships: should we serve companies with which we have strong relationships or simply go after the most desirable companies?

10. General purchase policies: should we serve companies that prefer leasing? Service contracts? Systems purchases? Sealed bidding?

11. Purchasing criteria: should we serve companies that are seeking quality? Service? Price?



Situational factors

12. Urgency: should we serve companies that need quick and sudden delivery or service?

13. Specific application: should we focus on certain applications of our product rather than all applications?

14. Size of order: should we focus on large or small orders?



Personal characteristics

15. Buyer seller similarity: should we serve companies whose people and values are similar to ours?

16. Attitudes toward risk: should we serve risk-taking or risk avoiding customers?

17. Loyalty: should we serve companies that show high loyalty to their suppliers?

Levels of market segmentation

Massmarketing -- seller engages in the mass production, mass distribution, and mass promotion of one product for our buyers.



Argument for massmarketing -- creates largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins

argument against massmarketing -- increasing splintering of the market. Diverse advertising and distribution channels increases difficulty and expense is to reach mass audiences.



Most companies are turning to micro marketing at one of four levels:

• segments
• niches
• local areas
• individuals
  
  

Marketers do not create the segments -- the marketers task is to identify the segments and decide which ones to target.



Flexible market offering -- consists of two parts: a naked solution containing the product and service elements at all segment members value, and discretionary options that some segment members value



Market segments can be defined in many different ways.

Identify preference segments.

Homogeneous preferences -- market where all the consumers have roughly the same preferences

diffused preferences -- consumers vary greatly in their preferences

clustered preferences -- market reveals distinct preference clusters, called natural market segments



Niche marketing -- narrowly define customer group seeking a distinctive mix of benefits. Globalization has facilitated niche marketing.



Marketers usually identify niches by dividing a segment into sub segments. As marketing efficiency increases, niches that were seemingly too small may become more profitable.



Local marketing -- marketing programs tailored to the needs and wants of local customer groups such as trading areas, neighborhoods, and individual stores.



Local marketing reflects a growing trend called grassroots marketing. Marketing activities concentrate on getting as close and personally relevant to individual customers as possible. A large part of local, grassroots marketing is experimental marketing, which promotes a product or service not just by communicating its features and benefits, but also connecting it with unique and interesting experiences.



Customerization -- ultimate level of segmentation leads to segments of one, customized marketing for one-to-one marketing. Combines optionally driven mass customization with customized marketing in a way that empowers consumers to design a product and service offering of their choice.



Segmenting consumer markets



Geographic segmentation -- geographical units such as nations, states, regions, counties, cities, neighborhoods

demographic segmentation -- variables such as age, family size, family lifecycle, gender, income, occupation, education, religion, race, generation, nationality, and social class

psychographic segmentation -- the science of using psychology and demographics to better understand consumer. Buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values

behavioral segmentation -- buyers are divided in groups on the basis of their knowledge of, attitude toward, use of, or response to product



Bases for segmenting business markets

business markets can be segmented with some of the same variables used in consumer market segmentation, but business marketers also use other variables.



cont ....

Connecting with the customer

Identifying market segments and targets



Marketing concepts -- Chapter 8



Target marketing involves three activities:

• market segmentation
• market targeting
• market positioning
  
  

Markets can be targeted at four levels:

• segments -- large, identifiable groups within a market
• niches -- narrowly defined groups
• local areas -- grassroots marketing for treating areas, neighborhoods, and individual stores
• individuals
  
  

More companies now practice individual and Mass customization. The future is likely to see more self marketing, a form of marketing in which individual consumers take the initiative and designing products and brands.



There are two bases for segmenting consumer markets:

• consumer characteristics
• consumer responses
  
  

Major segmentation variables for consumer markets are geographic, demographic, psychographic, and behavioral. These variables can be used singly or in combination.



Business marketers use all these variables along with operating variables, purchasing approaches, and situational factors.



To be useful, market segments must be measurable, substantial, accessible, differentiable, and actionable.



A firm has to evaluate the various segments and decide how many and which ones to target:

• a single segment
• several segments
• specific product
• a specific market
• full market
  
  

If it serves the full market, it must choose between differentiated and undifferentiated marketing. Firms must also monitor segment relationships, and seek economies of scope and the potential for marketing to super segments. They should develop segment by segment and invasion plans. Marketers must choose target markets in a socially responsible manner.

marketing concepts unit 1 - summary

Global Marketing Management -



Today's marketplace is driven by a variety of factors --your customers, your
competition, technology, and the market forces affecting your industry
on a global scale. To survive, you must constantly rethink and reinvent
your company's approach to and relationship with its critically
important customers.

Global Marketing Management focuses on competitive strategy,
particularly in a global context. Issues include understanding
customers, value delivery, relationship management, and communication
strategy.

Strategic Market Planning

A major challenge for marketing-oriented companies as they respond
to the rapidly changing marketplace is to engage continuously in
market-oriented strategic planning. They must learn how to develop and
maintain a viable fit among their objectives, resources, skills, and
opportunities. Corporate strategic planning involves four planning
activities.

1. Develop a clear sense of the company's mission in terms of its
   industry scope, products and applications scope, competence scope,
   market segment scope, vertical scope, and geographical scope.
   
2. Identify the company's strategic business units (SBUs).
   
   
3. Allocate resources to the various SBUs based on their market attractiveness and business strength.
   
   
4. Expanding present businesses and develop new products to fill the strategic planning gap.

Marketing plans focus on a product/market and consist of the
detailed marketing strategies and programs for achieving the product's
objectives in a target market. The marketing planning process consists
of five steps: analyzing market opportunities; researching and
selecting target markets; designing market strategies; planning
marketing programs; and organizing, implementing, and controlling the
marketing effort. The resulting document consists of and executive
summary, current market situation, opportunity and issue analysis,
objectives, marketing strategy, action programs, projected profit and
loss statement, and controls.

Measuring Demand & Scanning the Environment

Marketing information is a critical element in effective marketing
as a result of the trend toward global marketing, the transition from
buyer needs to buyer wants, and the transition from price to non-price
competition. All firms operate some form of marketing information
system that may consist of four subsystems: an internal records system,
a marketing intelligence system, marketing research, and a Marketing
Decision Support System (MDSS marketing system). These systems allow
marketing managers to estimate current and future demand.

Change in the macroenvironment is the primary basis for market
opportunity. Organizations/firms must start the search for
opportunities and possible threats with their macroenvironment. The
macroenvironment consists of all the actors and forces that affect the
organization's operations and performance. They need to understand the
trends and megatrends characterizing the current macroenvironment. This
is critical to identify and respond to unmet needs and trends in the
marketplace. The macroenvironment consists of six major forces:
demographic, economic, natural, technological, political/legal, and
social/cultural.

Analyzing Consumer and Business Markets' Buyer Behavior

In addition to a company's marketing mix and factors present in the
external environment, a buyer is also influenced by personal
characteristics and the process by which he or she makes decisions. A
buyer's cultural characteristics, including values, perceptions,
preferences, and behavior learned through family or other key
institutions, is the most fundamental determinant of a person's wants
and behavior. The buyer's behavior is influenced by four major factors:
cultural, social, personal, and psychological.

Business markets consist of individuals and organizations that buy
goods for purposes of further production, resale, or redistribution.
Businesses (including government and nonprofit organizations) are a
market for raw and manufactured materials and parts, installations,
accessory equipment, and supplies and services. The variables impacting
the business buyer are similar to those of the consumer buyer in some
ways but very different in others. In general, the business buyer is
much more technical, price-oriented, educated for the job, and
risk-averse than the consumer buyer. In addition, with the
business-buying environment, there is more concern for the status and
power of potential vendors, and persuasiveness and empathy play
relatively lower roles. Consumer and business markets and buying
behavior have to be understood before sound marketing plans can be
developed.

Analyzing business markets

Marketing concepts -- Chapter 7 -- summary



Organizational buying is the decision-making process by which formal organizations establish the need for purchased products and services, then identify, a vitally, and choose among alternative brands and suppliers. The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied others.



Compared to consumer markets, business markets generally have fewer and larger buyers, a closer customer supplier relationship, and more geographically concentrated buyers. Demand in the business market is derived from demand in the consumer market and fluctuates with the business cycle. Nonetheless, the total demand for many business goods and services is quite price-inelastic. Business marketers need to be aware of the role of professional purchasers and their influencers, the need for multiple sales calls, and the importance of direct purchasing, reciprocity, and leasing.



The buying center is the decision-making unit of a buying organization. It consists of:

• initiators
• users
• influencers
• deciders
• approvers
• buyers
• gatekeepers
  
  

To influence these parties, marketers must be aware of environmental, organizational, interpersonal, and individual factors.



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.



The institutional market consists of schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care. Buyers for government organizations tend to require a great deal of paperwork from their vendors and to favor open bidding and domestic companies. Suppliers must be prepared to adapt their offers to the special needs and procedures found in institutional and government markets.

Analyzing consumer markets

Marketing concepts -- Chapter 6 -- summary



Consumer behavior is influenced by three factors:

• cultural -- culture, subculture, and social class
• social -- reference groups, family, and social roles and statuses
• personal -- age, stage in life cycle, occupation, economic circumstances, lifestyle, personality, and his self-concept
  
  

Research into all these factors can provide marketers with clues to reach and serve consumers more effectively.



Four main psychological processes affect consumer behavior:

• motivation
• perception
• learning
• memory
  
  

To understand how consumers actually make buying decisions, marketers must identify who makes and has input into the buying decision; people can be inhibitors, influencers, deciders, buyers, or users. Different marketing campaigns might be targeted to each type of person.



The typical buying process consists of the following sequence of events:

• problem recognition
• information search
• evaluation of alternatives
• purchase decision
• post purchase behavior
  
  

The marketers job is to understand the behavior at each stage. The attitudes of others, unanticipated situational factors, and perceived risk may all affect the decision to buy, as will consumers level of post-purchase satisfaction and post purchase actions on the part of the company.

Conducting marketing research and forecasting demand

Marketing concepts -- Chapter 4



Summary



Companies can conduct their own marketing research or hire other companies to do it for them. Good marketing research is characterized by:

• the scientific method
• creativity
• multiple research methods
• accurate model building
• cost-benefit analysis
• healthy skepticism
• ethical focus
  
  

The marketing research process consists of:

• defining the problem and research objective
• developing the research plan
• collecting the information
• analyzing the information
• presenting the findings to management
• making the decisions
  
  

In conducting research, firms must decide whether to collector and data or use data of the arty exists. They must also decide which research approach and which research instruments to use.

Research approaches -- observational, focus group, survey, behavioral data, experimental

research instruments -- questionnaires, mechanical instruments

in addition, they must decide on a sampling plan or contact method.



Analysis should ensure that the company achieves the sales, profits, and other goals established in its annual plan.

The main tools are:

• sales analysis
• market share analysis
• marketing and expense to sales analysis
• financial analysis of the marketing plan
  
  

Profitability analysis seeks to measure and control the profitability of various products, territories, customer groups, trade channels, and order sizes. An important part of controlling for profitability is assigning costs and generating profit and loss statements.



There are two types of demand: market demand and company demand.



To estimate current demand, companies attempt to:

• determined total market potential
• area market potential
• industry sales
• market share
  
  

To estimate future demand:

• Company survey buyer's intentions
• solicit their sales force input
• gather expert opinions
• engage in market testing.
  
  

Mathematical models, advanced statistical techniques, and computerized data collection procedures are essential to all types of demand and sales forecasting.

Capturing market insights

Marketing information systems (MIS) -- consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision-makers.



Components of a modern marketing information system

• internal records and marketing intelligence
• the order to payment cycle 
• sales, inventory, and restocking information systems
• databases, data warehousing, and data mining
  
  

The marketing intelligence system -- is a set of procedures and sources for managers use to obtain everyday information about developments in the marketing environment.



A company can take several steps to improve the quality of its marketing intelligence:

• train and motivate the sales force to spot and report new developments
• motivate distributors, retailers, and other intermediaries to pass along important intelligence
• external networking
• customer advisory panels
• take advantage of government data resources
• purchase information from outside suppliers
• online customer feedback systems to collect competitive intelligence
  
  

Four main ways marketers can find relevant online information:



Independent customer goods and service review forums such as:

epinions.com

rateital.com

consumerreview.com

bizrate.com



distributor or sales agent feedback sites such as:

Amazon.com

elance.com



commerce sites offering customer reviews and expert opinions:

zdnet.com



customer complaint cites:

planetfeedback.com

complaints.com

Marketing concepts -- Chapter 3 summary

To carry out their analysis, planning, implementation, and control responsibilities, marketing managers need a marketing information system (MIS). The role of the MIS is to assess the managers information needs, develop the needed information, and distribute the information in a timely manner.

An MIS has three components:

* an internal records system -- which includes information on
the order to payment cycle and sales reporting systems
* a marketing and intelligent system -- set of procedures and
sources used by managers to obtain everyday information about pertinent
developments in the marketing environment
* marketing research systems -- that allow for the systematic
design, collection, analysis, and reporting of data and findings relevant to a
specific marketing situation.

Within the rapidly changing global picture, marketers must
monitor six major environmental forces:

* demographic
* economic
* social/cultural
* natural
* technological
* political/legal

And the demographic environment, marketers must be aware of:

* worldwide population growth
* changing mixes of ages
* ethnic composition
* educational levels
* rise of nontraditional families
* large geographic shifts in population
* the steady increase in micro marketing

In the economic arena, marketers need to focus on income
distribution and levels of savings, debt, and credit availability.

And the social/cultural arena, marketers must understand
people's view of themselves, others, organizations, society, nature, and the
universe. In this market products that
correspond to society's core and secondary values, and address the needs of
different subcultures within a society.

In the natural environment, marketers need to be aware of
raw material shortages, increased energy costs and pollution levels, and the
changing role of governments and environmental protection.

In the technological arena, marketers should take account of
the accelerated pace of technological change, opportunities for innovation,
varying R&D budgets, and the increased governmental regulation brought
about by technological change.


And the political/legal environment, marketers must work
within many laws regulating business practices and with various special
interest groups.

Marketing Management - Chapter 2 - Summary

Strong companies develop superior capabilities and managing core business processes such as new product realization, inventory management, and customer acquisition and retention. Managing these core processes effectively means creating a marketing network in which the company works closely with all parties in the production and distribution chain, from suppliers of raw materials to retail distributors. Companies no longer compete -- marketing networks do.



According to one view, holistic marketing maximizes value exploration by understanding the relationships between the customer's cognitive space, the company's competence space, and the collaborators resource space; maximize its value creation by identifying new customer benefits from the customer's cognitive space, utilizing core competencies from its business domain, and selecting and managing business partners from collaborated networks; and maximizes value delivery by becoming proficient at customer relationship management, internal resource management, and business partnership management.



Market oriented strategic planing is the managerial process of developing and maintaining a viable fit between the organization's objectives, skills, and resources and its changing market opportunities. The aim of strategic planning is to shape the company's businesses and products so that they yield target profits and growth. Strategic planning takes place at four levels: corporate, division, business unit, and product.



The corporate strategy establishes the framework within which the divisions and business units prepare their strategic plans. Setting a corporate strategy and tails for activities: defining the corporate mission, establishing strategic business units, assigning resources to each SBU based on its market attractiveness and business strength, and planning new businesses and downsizing older businesses.



Strategic planning for individual businesses entails the following activities: defining the business mission, analyzing external opportunities and threats, analyzing internal strengths and weaknesses, formulating goals, formulating strategy, formulating supporting programs, implementing the programs, and gathering feedback and exercising control.



Each product level within a business unit must develop a marketing plan for achieving its goals. The marketing plan is one of the most important outputs of the marketing process.

Marketing management -- Chapter 2

Value creation and delivery sequence

• choose the value
• customer segmentation
• market selection/focus
• value positioning
• provide the value
• product development
• service development
• pricing
• sourcing/making
• distributing/servicing
• communicate the value
• salesforce
• sales promotion
• advertising
  
  

The value chain -- a tool for identifying ways to create more customer value. The value chain identifies nine strategically relevant activities that create value and cost a specific business. These nine value creating activities consist of five primary activities and four support activities.



The primary activities cover the sequence of:

• inbound logistics -- bringing materials into the business
• operations -- converting them into final products
• outbound logistics -- shipping out final products
• marketing and sales -- marketing the products
• service -- ongoing service activities
  
  

The support activities are handled in certain specialized departments, these activities include:

• procurement
• technology development
• human resource management
• firm infrastructure
  
  

A firm success depends not only on how well each department performs its work, but on how well the various departmental activities are coordinated to conduct core business processes. These core business processes include:

• the market sensing process -- all the activities involved in gathering market intelligence, coordinating it within the organization, and acting on information
• new offering realization process -- all the activities involved in researching, developing, and launching new high-quality offerings quickly and within budget
• customer acquisition process -- all the activities involved in defining target markets and prospecting for new customers
• customer relationship management process -- all the activities involved in building deeper understanding, relationships, and offerings to individual customers
• the fullfillment management process -- all the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment
  
  

Core competency has three characteristics:

• it is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits
• it has applications in a wide variety of markets
• difficult for competitors to imitate
  
  

The holistic marketing framework is designed to address three key management questions:

• value exploration -- How can a company identify new value opportunities?
• Value creation -- How can a company efficiently create more promising new value offerings?
• Value delivery -- How can a company used its capabilities and infrastructure to deliver the new value offerings more efficiently?
  
  

Value exploration

developing a strategy requires an understanding of the relationships and interactions among three spaces:

• the customer's cognitive space -- reflects existing and latent needs and includes dimensions such as the need for participation, stability, freedom, and change
• the company's competence space -- described in terms of breadth, broad versus focused scope of business; and depth, physical versus knowledge-based capabilities
• the collaborators resource space -- involves horizontal partnerships, where companies choose partners based on their ability to exploit related market opportunities, and vertical partnerships, where companies choose partners based on their ability to serve their value creation
  
  

Value creation

marketers need to:

• identify new customer benefits from the customers view
• utilize core competencies from its business domain
  
  
• select and manage business partners from its collaborative of networks
  
  

Business realignment may be necessary to maximize core competencies. It involves three steps;

• (re) defining the business concept (the big idea)
• (re) shaping the business scope (the lines of business)
• (re) positioning the company's brand identity (how customers see the company)
  
  

Value delivery

company must become proficient at:

• customer relationship management -- allows company to discover who they are, how they behave, what they need and want
• internal resource management -- allows company to respond effectively, and a great major business processes, such as order processing, General ledger, payroll, production
• business partnership management -- allows company to handle complex relationships with trading partners to sores, process, deliver products
  
  

Strategic planing -- calls for action in three key areas:

• managing a company's businesses as an investment portfolio
• assessing each business is stirring by considering the market's growth rate and companies position in that market
• establishing the strategy -- developing the game plan for achieving its long-run objectives
  
  

Four main organizational levels:

• corporate level
• division level
• business unit level
• product level
  
  

Corporate headquarters -- responsible for designing a corporate strategic plan to guide the whole enterprise; decision making for allocation of resources into divisions

division level -- establishes plans covering the allocation of funds to each business unit within the division

business unit level -- develop strategic plans to carry out the business unit into a profitable future

product level -- product lines, brands, business unit develops marketing plans for achieving its objectives in the product market



Marketing plan -- the central instrument for directing and coordinating the marketing effort. The marketing plan operates at two levels: strategic and tactical.



The strategic marketing plan -- lays out the target markets and the value proposition that will be offered, based on analysis of the best market opportunities

the tactical marketing plan -- specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service.



Corporate and division strategic planning



Corporate headquarters undertake before planning activities:

• defining the corporate mission
• establishing strategic business units
• assigning resources to each SBU
• assessing growth opportunities
  
  

To define its mission, the company should address these classic questions:

what is our business?

Who is the customer?

What is of value to the customer?

What will I business be?

What should our business be?



Mission statements -- guides geographically dispersed employees to work independently and yet collectively toward realizing the organizational goals, to be shared with managers, employees and in some cases customers. Provides a shared sense of purpose, direction, and opportunity.



Good Mission statements have three major characteristics:

• focus on a limited number of goals
• stress the company's major policies and now use
• define major competitive spheres within which the company will operate
  
  

A business can be defined in terms of three dimensions:

• customer groups
• customer needs
• technology
  
  

Strategic business units (SBUs) have three characteristics:

• it is a single business or collection of related businesses that can be planned separately from the rest of the company
• it has its own set of competitors
• it has a manager who is responsible for strategic planing and profit performance and controls most of the factors affecting profit
  
  

Assessing growth opportunities -- involves planning new businesses, downsizing, terminating older businesses

intensive opportunities -- further growth within current businesses

integrative opportunities -- identifying opportunities to build or acquire businesses that are related to the current business

diversification opportunities -- identifying opportunities to add attractive businesses that are on related to current businesses



Intensive growth

Market penetration strategies -- the company first considers whether it could gain more market share with its current products and their current markets

market development strategy -- company considers whether it can find or develop new markets for its current products

product development strategy -- company considers whether it can develop new products of potential interest to its current markets

diversification strategy -- company reviews opportunities to develop new products for new markets



Organization and organizational culture

organization -- consists of its structures, policies, and corporate culture

corporate culture -- the shared experiences, stories, police come and norms that characterize an organization



Scenario analysis -- consists of developing plausible representation of a firm's possible future that make different assumptions about forces driving the market and include different uncertainties





The business mission

each business unit needs to define its specific mission within the broader company mission.

• External and internal opportunities and threats analysis
• goal formulation
• strategy formulation
• program formulation
• implementation
• feedback and control
  
  

SWOT analysis -- but overall a violation of a company strengths, weaknesses, opportunities, and threats. It involves monitoring the external and internal marketing environment

external environment analysis -- the business unit has to monitor key macro environment forces such as:

• demographic
• economic
• natural
• technological
• legal
• social
• cultural
  
  

micro environment actors consist of:

• customers
• competitors
• suppliers
• distributors
• dealers
  
  

For each trend or development, management needs to identify the associated opportunities and threats.



Marketing opportunity -- is an area of buyer need an interest in which there is a high probability that a company can profitably satisfy that need.

There are three main sources of market opportunities:

• fulfilling supply of products with high demand/short supply
• supply existing products or services in a new or superior way
• creating new products or services
  
  

To evaluate opportunities, companies can use the market opportunity analysis (MOA) to determine the attractiveness and probability of success:

• can the benefits involved in the opportunity be articulated convincingly to a defined target market(s)?
• Can the target market relocated and reached with cost-effective media and trade channels?
• Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits?
• Can a company deliver the benefits better than any actual or potential competitors?
• Will the financial rate of return meet or exceed the companies required threshold for investment?
  
  

Environmental threat -- challenges posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to lower sales or profit



Internal environment analysis can identify strengths and weaknesses, performance, and importance in the areas of marketing, finance, manufacturing, and organization skills.



Goal formulation -- managers use the term goals to describe objectives that are specific with respect to magnitude and time. Most business units pursue a mix of objectives including:

• profitability
• sales growth
• market share improvement
• risk containment
• innovation
• reputation
  
  

The business unit sets these objectives and then manages by objectives (MBO). For an MBO system to work, the units objectives must meet for criteria:

• arranged hierarchically from most to least important
• objectives should be stated quantitatively whenever possible
• goals must be realistic
• objectives must be consistent
  
  

Trade-offs to consider --

• short-term profit versus long-term growth
• deep penetration of existing markets versus developing new markets
• profit goals versus nonprofit goals
• high growth versus low risk
  
  

Strategic formulation

Porters generic strategies

• overall cost leadership
• differentiation
• focus on narrow market segments
  
  

Strategic alliances

product or service alliances -- 1 company licenses another to produce its product, were two companies jointly market their complementary products or new product

promotional alliances -- 1 company agrees to carry a promotion for another company's product or service

logistics alliances -- 1 company offers logistical services for another company's product

pricing collaborations -- 1 a more companies join a special pricing collaboration



Marketing plan -- is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives



Contents of the marketing plan:

• executive summary and table of contents
• situation analysis
• marketing strategy
• financial projections
• implementation controls
  
  

In The value delivery process involves choosing (or identifying), providing (or delivering), and communicating with superior value. The value chain is a tool for identifying key activities that create value and costs in the specific business.