中山大学吴柏林教授基于消费者洞察的广告策略,绝密资料网络视频版01aPPT课件

C HAPTER 11--D EVELOPING N EW M ARKET O FFERINGSOVERVIEW:Most firms recognize the necessity for and advantages of regularly developing new products and services. Mature and declining products eventually must be replaced with newer products. New product development strategy thus is one of the most important activities for any firm in the contemporary marketplace. If the firm does not obsolete its own products, sooner or later someone else will, and all firms should remember that a good idea may not be a good investment. New products can fail, and the risks of innovation are as great as the rewards. The key to successful innovation lies in developing better organizational arrangements for handling new product ideas and developing sound research and decision procedures at each stage of the new-product-development process.The new-product-development process consists of eight stages: idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, market testing, and commercialization. The purpose of each stage is to decide whether the idea should be further developed or dropped. The company should minimize thechances that poor ideas will move forward and good ideas will be rejected.With regard to the adoption of new products, consumers and/or organizations respond at different rates, depending on their characteristics and the product's characteristics. Manufacturers try to bring their new products to the attention of potential early adopters, particularly those with opinion leader characteristics.LEARNING OBJECTIVES:After reading the chapter the student should understand:∙The main risks in developing new products.∙The organizational structures used in managing new-product development.∙The new-product-development process.∙The consumer-adoption process.CHAPTER OUTLINE:I.IntroductionII.Challenges in New-Product Development - companies that fail to develop new products put themselves at risk; at the same time new product development is risky.III.Effective Organizational Arrangements - successful new-product development requires top management commitment and planning.IV.Managing the New-Product Development Process - eight stage processA.Idea Generation - ideas come from a variety of sources. Idea generatingtechniques include: attribute listing. forced relationships, morphological analysis,need/problem identification, brainstorming, and synectics.B.Idea Screening - not all ideas can be pursued, but must be sent to a committeewhere they are considered either: promising, marginal, or a reject. In this stagethe company runs the risk of either accepting a bad idea or rejecting a good one. V.Managing the Development Process: Concept to StrategyA.Concept Development and Testing - attractive ideas must be refined into testableproduct concepts.1.Concept Development- A product concept is an elaborate version of theidea expressed in meaningful consumer terms.2.Concept Testing - product concepts should be presented to an appropriategroup of target consumers to gauge their reactions. Customer-drivenengineering is an engineering effort that attaches high importance toincorporating customer preferences in the final design. Consumerpreferences can be measured through conjoint analysis.B.Marketing-Strategy DevelopmentC.Business Analysis - Performing sales, cost and profit projections on the proposedproduct to determine satisfaction of company objectives.1.Estimating Sales - sum of three different types of sales (first-time,replacement, repeat) Must yield a satisfactory profit.2.Estimating Costs and Profits - Illustrated in the Text.VI.Managing the Development Process: Development to CommercializtionA.Product Development - represents a substantial jump in investment. Productcontinues to move through functional and consumer tests.1.Techniques for measuring consumer preferences - simple rank-ordermethod, paired comparison, and monadic-ratingB.Market TestingC.Consumer-Goods Market Testing - least costly to most costly1.Sales-wave research - consumers who initially try the product at no costare reoffered the product, or a competitor’s product, at slightly reducedprices.2.Simulated store technique - consumers are questioned about brandfamiliarity and preferences, shown advertisements, given a small amountof money and sent to a mock store where there purchases are recordedand analyzed.3.Controlled test marketing - organizations work with a panel of storeswilling to test market a product for a fee.4.Test markets - organizations choose entire market areas in which tointroduce their products.D.Business-Goods Market Testing - testing also offers benefits. Examples oftesting are alpha, beta and trade show.mercialization1.When (Timing) - first entry, late entry, parallel entry2.Where (Geographical Strategy), single market, many markets, national3.To Whom (Target-Market Prospects) - identifying prime prospects4.How (Introductory Market Strategy) - involves many activitiesVII.The Consumer-Adoption Process - How do potential customers learn about new products, try them, and adopt or reject them? Followed by a consumer-loyalty process.A.Stages in the Adoption Process (awareness, interest, evaluation, trial, adoption)B.Factors Influencing the Adoption Process1.People differ markedly in their readiness to try new products2.Personal influence plays a large role in the adoption of new products3.The characteristics of the innovation affect its rate of adoption4.Like people, organizations vary in their readiness to adopt an innovation VIII.SummaryMarketing and Advertising1. Orville Redenbacher markets a number of popcorn products for consumers. The firm recently introduced Double Feature microwave popcorn, shown in the ad in Figure2. How could this idea have been described as a product concept during the product development process? Suggest an appropriate concept statement. What forms of consumer testing would be appropriate for this popcorn product? Why? Would you have used controlled test marketing or test markets to gauge consumer reaction prior to launching this product? Explain your answer.Answer: One way this product concept might have been described during the product development process is "Double Feature microwave popcorn comes with extra-large kernels and extra sauce with real butter. The packet goes into the microwave for three minutes, then you pour the butter sauce over the kernels. This product comes in a carton of three packets priced at $2.89 per box." (Students may offer other concept statements.)The company should have consumers test the product, in a test kitchen or in their homes, by following all the directions and then eating the popcorn. This will help Orville Redenbacher determine whether the product is attractive and appealing to the target market. Students who argue for controlled test marketing may say that this approach allows the company to try out different marketing mixes in a limited way, without the expense and risks of a full test market approach. Students who argue in favor of test markets may say that this is the best way to test consumer and trade ma rketing mixes and forecast future sales more reliably.Focus on TechnologyDuring the new-product-development process, marketers can use conjoint analysi s to analyze offers, identify the most appealing, and learn how customers see the relative importance of each attribute. Because the most appealing offer is not necessarily the most profitable, marketers must also estimate the potential market share and profits to be gained from the top alternatives. Because of the complexity of this technique, marketers use sophisticated software to score the results.For a hands-on demonstration of how conjoint analysis looks from the respondents' perspective, point your Web browser to SurveySite (/), the home page of an online market research firm. Click on "demos" to locate the conjoint analysis sample. After you have completed this sample, click on the explanation of conjoint analysis. Based on this sample conjoint analysis, what attributes are being tested?Why would the automaker want to test these attributes? Which of the product concepts do you think would prove most appealing to those being surveyed? Why?Answer: Attributes being tested in the sample include: model look; price; transmission options; warranty options; audio options; safety options; and interior features. An automaker would test these attributes to find out which combination of attributes would most appeal to the segment being targeted for a particular car. Students' answers about the most appealing product concept will vary, depending on personal preferencesMarketing for the MillenniumAt the start of the new millennium, turbulent business environments and extreme competitive pressures are everyday phenomena for companies with a pres ence on the Web. To stay ahead of the curve, these marketers are taking the new product development process two steps at a time, overlapping concept development and implementation as they continue to gather information on the fly.To see new product development on the fast track, look at Microsoft, which has a special place on its Web site () for program previews (translation: beta versions of soon-to-be-released software). Months before its Office 2000 software was introduced, the company offered preview versions for the bargain price of $19.95. A disclaimer noted the beta version "is not at the level of performance and compatibility of the final, generally available, product offering." The entire r isk of the use or results of the use of this software remains with the user, and Microsoft Corporation makes no warranties, either express or implied." Why would users want to participate in this beta testing—and pay for the privilege? What does Microsoft stand to gain? How early in the development process should Microsoft start beta testing? Answer: Users would participate in beta testing of Office 2000 and similar products because they want to offer their feedback about the program and have a chance to evaluate it before they consider buying the completed product at a considerably higher price. Students may identify additional reasons, as well. Microsoft, for its part, gains input from a large pool of potential purchasers; this input will help the company fix problems and add features before the actual commercial release. Microsoft should start beta testing after the program is fully functional but well in advance of the actual release date, so there is sufficient time to find and fix problems.YOU'RE THE MARKETER: SONIC MARKETING PLANProduct strategy is based on the choices companies make as they segment their markets, identify target audiences and research their needs, and create an appropriate market positioning. With this foundation, marketers are ready to plan for new-product development and management.Now you are considering Sonic's new-product-development options. Look back at the company's situational analysis and the parts of the marketing plan you have developed so far. Then answer these questions (noting the need for additional research where necessary):∙What kinds of new products would help Sonic achieve its goals and compete more effectively in the marketplace—while meeting the needs of its targeted segments? Be specific.∙Working alone or with other students, generate four or five ideas for new products, and indicate how you can screen these ideas.∙Develop the most promising idea into a product concept and indicate how you plan to test this concept. What dimensions must be tested?∙Assuming that this idea has tested well, develop a marketing strategy for the introduction of the new product. Include a description of the target market; your positioning for the product;the estimated sales, profit, and market-share goals for the first two years; your price strategy;your channel strategy; and the marketing budget you will set for this new product introduction. As your instructor directs, summarize your product-development and management ideas in a written marketing plan or type them into the Product Development/Management section of the Marketing Plan Prosoftware. Be sure to include long-range estimates of sales, profits, and budget requirements for each new product you plan to introduce.Answer: Students may suggest various new products to help Sonic meet its sales goals and compete more effectively. For example, they may suggest developing new systems with s maller but more powerful speakers, to improve product performance and fit with customers' need for space-saving systems. New product ideas can be screened through an idea committee and by rating against preset criteria. Students may say that new product concepts can be tested by asking consumers in the targeted segment to read a description, look at a picture, handle a prototype, or even through virtual reality. Conjoint analysis might also be used. Dimensions to be tested include: communicability and believability; need level; gap level; perceived value; purchase intention; and user targets, purchase occasions, purchasing frequency. The marketing strategy suggested by students should fit with the overall goals and ideas proposed in their marketing plans.。

C HAPTER 12--D ESIGNING G LOBAL M ARKET O FFERINGS OVERVIEW:Companies no longer can focus only on their domestic market, no matter how large the market.Many industries are global industries, and their leading firms achieve lower costs and higherbrand awareness. Protectionist measures can only slow down the invasion of superior goods; the best company defense is a sound global offense. At the same time, global marketing is risky dueto shifting borders, unstable governments, foreign exchange problems, technological pirating,high product- and communication-adaptation costs, and other factors. The steps in goinginternational include:1)understand the international marketing environment, particularly the international tradesystem. In considering a particular foreign market, the firm must assess the economic,political, legal, and cultural characteristics.2)consider what proportion of foreign to total sales to seek, whether to do business in a fewor many countries, and what types of countries to enter.3)decide which particular markets to enter, and this calls for evaluating the probable rate ofreturn on investment against the level of risk.4)decide how to enter each attractive market. Many companies start as indirect or directexporters and then move to licensing, joint ventures, and finally direct investment; thiscompany evolution has been called the internationalization process.5)decide on the extent to which the product, promotion, price, and distribution should beadapted to individual foreign markets.6)develop an effective organization for pursuing international marketing. Most firms startwith an export department and graduate to an international division. A few become globalcompanies, which means that top management plans and organizes on a global basis. LEARNING OBJECTIVES:After reading the chapter the student should understand:∙The importance of international markets∙The riskiness of international markets∙How to make international marketing decisions∙Differing entry strategies∙Differing marketing organizationsCHAPTER OUTLINE:I.IntroductionII.Deciding Whether to Go Abroad - there are several factors that might draw a companyinto the international arenaIII.Deciding which Markets to Enter - a company must define its international objectives andpoliciesIV.Deciding How to Enter the MarketA.Indirect Export - work through independent intermediaries to export productsB.Direct Export - a company handles its own exports, through a domesticdepartment, overseas sales branch, traveling reps, or foreign-baseddistributors/agents.C.Licensing - sell a foreign company the rights to your manufacturing processD.Joint Ventures - join with local investors to share ownership and controlE.Direct Investment - direct ownership of foreign-based operationsF.The lntemationalization Process: no regular export activities, export viaindependent reps, establishment of one or more sales subsidiaries, establishementof production facilities abroad.V.Deciding on the Marketing ProgramA.Product - straight extension, product adaptation, product inventionB.Promotion - communication (promotion) adaptation, dual (product andpromotion) adaptationC.Price - uniform price, market-based price, cost-based priceD.Place (Distribution Channels) - links include seller’s international marketin gheadquarters, channels between nations, and channels within nationsVI.Deciding on the Marketing OrganizationA.Export Department -firm ships goods to other countries.B.International Division - firm becomes involved in several international marketsand venturesC.Global Organization - firm no longer thinks of itself as a national marketer. Allmanagement and staff are involved in worldwide pursuits.VII.SummaryMarketing and Advertising1. A BC Carpet, which is headquartered in New York City, placed this ad to let U.S. consumers know that its carpets and floor coverings are also sold in the main branch of the Harrods department store in London, England. Why would A BC want to announce this arrangement to consumers in New York City? Is this an example of exporting, a joint venture, or direct investment? How would A BC benefit from entering the UK market in this way?Answer: ABC may have two reasons for announcing that its carpets are sold in London as well as in New York City. First, it can enhance its own image by connection with the prestigious Harrods department store. Second, it may have found through research that some U.S. consumers also travel to London, so it wants to let these consumers know that ABC carpets can be purchased there, as well. This is an example of exporting, because ABC is sending its carpets to be sold at Harrods; it is not setting up a special business jointly with Harrods, nor is it directly investing in facilities in Harrods or in London. ABC would benefit from this arrangement by avoiding the expense, risk, and commitment that joint ventures and direct investment entail while testing sales opportunities through exporting.Focus on TechnologyDetails, details—the exporter's day is filled with details, including a blizzard of government paperwork. Now technology is helping exporters cut through the federal paper chase. The U.S. Customs Service, U.S. Department of Commerce, and other federal agencies have jointly developed the Automated Export System (AES), an electronic version of the multiple forms exporters used to have to complete by hand for several government agencies. With AES, exporters input data only once, using the Electronic Data Interchange (EDI) format, then transmit the form to the U.S. Customs Service. This system streamlines the exporting process, saving time and improving the accuracy of the data collected.Visit the U.S. Customs Service Web site (/). Follow the Importing/Exporting link to the Exporting section, then click on Automated Export System to read a little about AES. Does thissystem affect the distribution channels between nations or the channels within foreign nations? Why do you think the U.S. government developed AES? Who benefits from exped iting the paperwork associated with exporting? Explain your answers.Answer: The Automated Export System affects the distribution channels between nations, because it deals with the way products are exported from the United States to distributors in other countries. Once products leave the United States, the AES has no influence on the channels within foreign nations. The U.S. government probably developed this system to speed up the detailed, complex process of exporting products while gathering more accurate data about the products being exported. Both exporters and the government benefit from needing fewer people to handle the paperwork and to check the accuracy of the data.Marketing for the MillenniumMarketers participating in global e-commerce need to speak the languages of their target customers. Two good examples are the Web sites of Reebok (/) and Nestlé(/html/network.html). The Reebok home page is a gateway for specialized Web sites designed for consumers in Europe, France, Germany, Italy, Spain, the United Kingdom, Hong Kong, and Korea. The Nestlé site links to company sites for Taiwan, Australia, Brazil, Chile, New Zealand, Switzerland, Spain, Germany, France, Japan, Sweden, Greece, and the United Kingdom.Point your Web browser to either the Reebok or the Nestlé Web site, then follow two of the links to company sites in other languages. What visual differences and similarities do you notice between the sites in other languages? Which of the sites (if any) allow online purchases? How do the sites encourage consumers to contact the company? Why are local contact points (phone, mail, address) important for local customers?Answer: Students' answers will vary according to their choice of Web sites. In general, sites based in other countries or using other languages will have some visual differences. Few if any of these sites allow online purchases because Nestlé and Reebok both emphasize distribution through retail channels. Many of the sites invite feedback via e-mail, although some also provide addresses and phone numbers of regional offices. Local contact points allow local customers to get help with problems or have qu estions answered in their own language.YOU'RE THE MARKETER: SONIC MARKETING PLANGlobal marketing offers a way for companies of all sizes to grow by expanding their customer base beyond the domestic market. However, the complexities of global marketing demand careful planning and proper execution.As Jane Melody's assistant, you are researching the global market for Sonic's shelf stereo systems. Review the company's current situation and the research you have already gathered for your marketing plan. Then answer these questions about Sonic's global marketing strategy (noting the need for additional research where necessary):∙If Sonic wants to start marketing its products in other countries, should it use exporting, licensing, joint ventures, or direct investment? Why?∙What international markets seem most promising for Sonic? For data about international trade and marketing in specific countries, visit the Web site of the U.S. Department of CommerceInternational Trade Administration (); also check the links on the Web site ofthe University of Michigan Center for International Business Education and Research(/busres.htm).∙Is global standardization or adaptation most appropriate for Sonic? To answer, you will have to research electronics standards in your chosen market(s) as well as consumer behavior andcompetitive products. How can you collect such data?What marketing-mix strategy and tactics are most appropriate for Sonic to use in other countries?After you have examined potential global markets and marketing mix-strategies and tactics, summarize your ideas in a written marketing plan or them into the appropriate sections of th e Marketing Plan Pro software, including Markets, SWOT and Issue Analysis, and Marketing Strategy.Answer: To get started in global commerce, Sonic should begin by exporting its products to other countries. This minimizes the investment, risk, and commit ment and allows the company to fairly easily change its mind and stop selling in other countries. Sonic may want to first investigate Canada and Mexico as potential markets for its products, if local economies are sound and competition is not too fierce. Shipping products to those markets is less expensive than shipping to overseas markets. Also, Canada and Mexico are major trading partners with the United States, so much assistance is available to exporters targeting those countries. Through research, students may identify additional countries that seem promising.Some global adaptation is a must for Sonic, because of the variation in electrical standards around the world. Also, consumers in different markets may have different needs and preferences; and the competition can vary widely from country to country, which will affect Sonic's marketing strategy. Sonic may be ableto obtain this kind of information from distributors in other countries as well as from U.S. agencies that assist companies with exporting. Students will have many different ideas for marketing mix strategy and tactics; these should be consistent with Sonic's overall goals and mission and with all the other strategy elements.。

PART IV – SHAPING THE MARKET OFFERING CHAPTER13--M ANAGING P RODUCT L INES,B RANDS, ANDP ACKAGINGOVERVIEW:Product is the first and most important element of the marketing mix. A product is anything thatcan be offered to a market for attention, acquisition, use, or consumption and that might satisfy awant or need. Products can be physical objects, services, persons, places, organizations, andideas. Product strategy calls or making coordinated decisions on product mixes, product lines,brands, packaging, and labeling.A product can be considered on five levels. The core benefit is the essential use-benefit, problem-solving service that the buyer primarily buys when purchasing a product. The generic product is the basic version of the product. The expected product is the set of attributes and conditions thatthe buyer normally expects in buying the product. The augmented product is additional servicesand benefits that the seller adds to distinguish the offer from competitors. The potential product isthe set of possible new features and services that might eventually be added to the offer.All products can be classified according to their durability (nondurable goods, durable goods, andservices). Consumer goods are usually classified according to consumer shopping habits(convenience, shopping, specialty, and unsought goods). Industrial goods are classified according to how they enter the production process (materials and parts, capital items, and supplies and services).Most companies handle more than one product, and accordingly product mix can be described aspossessing a certain width, length, depth, and consistency. These four dimensions are the tools fordeveloping the company's product strategy. The various lines making up the product mix have tobe periodically evaluated for profitability and growth potential. The company's better lines shouldreceive disproportionate support; weaker lines should be phased down or out; and new lines should be added to fill the profit gap.Each product line consists of product items. The product-line manager should study the sales andprofit contributions of each item in the product line as well as how the items are positionedagainst competitors' items. This provides information for making several product-line decisions.Line stretching involves the question of whether a particular line should be extended downward,upward, or both ways; line filling, whether additional items should be added within the present range of the line; line modernization raises the question of whether the line needs a new look and whether the new look should be installed piecemeal or all at once; line featuring, which items to feature in promoting the line; and line pruning, how to detect and remove weaker product items from the line.Companies should develop brand policies for the individual product items in their lines. Theymust decide on product attributes (quality, features, design), whether to brand at all, whether to do producer or distributor branding, whether to use family brand names or individual brand names, whether to extend the brand name to new products, whether to create multiple brands, and whether to reposition any of them.Physical products require packaging decisions to create such benefits as protection, economy, convenience, and promotion. Marketers have to develop a packaging concept and test it functionally and psychologically to make sure it achieves the desired objectives and is compatible with public policy. Physical products also require labeling for identification and possible grading, description, and promotion of the product. Sellers may be required by law to present certain minimum information on the label to inform and protect consumers.LEARNING OBJECTIVES:After reading the chapter the student should understand:∙The levels of the product∙How a company can build and manage its product mix and product lines∙How a company can make better brand decisions∙How packaging and labeling can be used as a marketing toolCHAPTER OUTLINE:I.Introduction What Is a Product? - Definition. - Anything that can be offered to a marketto satisfy a want or need.II.The Product and the Product MixA.Five Levels of a Product - core benefit, basic product, expected product, augmentedproduct (beyond expectations, where most competition takes place), and potentialproduct (future augmentation possibilities)B.Product Hierarchy - seven levels of product hierarchy: need family, product family,product class, product line, product type, brand, and itemC.Product Classifications1.Durability and Tangibility - nondurable goods, durable goods, services2.Consumer-Goods Classification - convenience, specialty, shopping,unsought3.Industrial-Goods Classification - materials and parts, capital items,supplies and business servicesD.Product-Mix Decisions - a product mix is the set of all products and items that aparticular sellers offers for sale to buyers. Marketer must consider width, length,depth, and consistency.III.Product-Line Decisions - a product line is a group of products that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channels, or fall within given price ranges.A.Product-Line Analysis - sales and profits of each item1.Product-line sales and profits2.Product-line market profile - positioning against competitorsB.Product-Line Length - a line is too short if the manager can increase profits byadding items; the line is too long if the manager can increase profits by droppingitems.1.Line-stretching decisiona.Downward stretch - enter on the low endb.Upward stretch - enter on the high endc.Two-way stretch - both directionsd.Line-filling decision - adding more itemsC.Line Modernization - update to reflect current trends, themesD.Line-Featuring - select one or a few items in the line to featureE.Line-Pruning - when a product is depressing profits, or a company is short ofproduction capacity.IV.Brand Decisions - traditionally, market power has rested with brand-name companies.A.What is a brand? a name, term, sign, symbol, or design, or a combination of them,intended to identify the goods or services of one seller or group of sellers and todifferentiate them from those of the competition. A brand has six levels of meaning.B.The Concept and Measurement of Brand Equity - brand awareness, brandacceptibility, brand preference, brand loyalty. High brand equity provides a numberof competitive advantages.C.Challenges in Branding1.Branding Decision: To Brand or not to Brand?2.Brand-Sponsor Decision - manufacturer’s, distributor’s, or licensedbrand name3.Brand-name decision - individual, blanket family, separate family, orcombination. Desirable qualities in a brand name, p. 451 of text.4.Brand--strategy decisiona.Line extensions - additional items in the same product categoryb.Brand extensions - existing brand name in a new productcategoryc.Multibrands - additional brand names in the same productcategoryd.New Brands - new brand names in a new product categorye.Cobrands - two well-known brand names combine in oneproduct offeringf.Brand-repositioning decision - however well the brand ispositioned in the market, it may have to be repositioned later. V.Packaging and Labeling DecisionsA.Packaging requires decision on concept, size, shape, materials, color, text, and brandmark. Many marketers have called packaging the 5th P. Various factors havecontributed to packaging’s growing use as a marketing tool: self-service, consumeraffluence, company and brand image, and innovation opportunity.bels are a subset of products which can be used to identify, grade, describe orpromote the product.VI.SummaryMarketing and Advertising1. The toothpaste products made by Tom's of Maine are positioned as environmentally friendly, with natural rather than artificial ingredients. The ad in Figure 1 is for the company's fluoride toothpaste. Whatis the core benefit of this product? What are the basic, expected, and augmented products? Analyze this ad, and explain what elements of product and packaging strategy are incorporated into the ad's theme and copy. Answer: The core benefit of Tom's fluoride toothpaste is healthy teeth. The basic product includes fluoride, the main ingredient in fighting cavities. The expected product includes good taste, whitening agents, and an easy-to-squeeze container. The augmented product includes natural ingredients and earth-friendly packaging. The potential product may contain numerous attributes, such as more effective cavity-fighting ingredients, a more convenient tube or dispenser, and so on. One key element of the product strategy incorporated into this ad's theme and copy is the use of only natural ingredients rather than artificial additives; students may identify additional elements. One key element of the packaging strategy incorporated into this ad is the use of earth-friendly packaging materials; students may identify additional elements.2. Figure 2 shows a Zippo ad aimed at business markets. Based on this ad and your knowledge of Zippo, discuss the company's product mix. Why would Zippo put its brand name on the three products shown in the ad? How would you categorize the brand strategy represented by this ad? What does this strategy imply about Zippo's perception of its brand equity? Explain your answer.Answer: Zippo is using a brand extension strategy to put its name on flashlights, pens, and pocket knives. This gives the new products immediate brand recognition and smoothes the way for earlier acceptance. Zippo perceives that it has high brand equity and it wants to use that equity to expand into new product categories.Focus on TechnologyWhat's in a name? For marketers, brand names are valuable assets that must be selected with care. Some companies hire a specialized marketing research firm to create and test potential brand names, whereas others prefer to handle the process internally. Now "do-it-yourself" marketers can use brand-name-development technology offered by Namestormers.The company's Web site () explains how its NamePro software can be used to generate brand names and offers a free downloadable demonstration. Also on the Web site is an explanation of NameWave, a Web-based service that presents up to 40 brand-name ideas for products in categories selected by the user. What are the advantages of using NamePro or NameWave? What are the disadvantages? If you were responsible for developing a product's brand name, would you choose one of these options? Why or why not?Answer: The major advantage of using NamePro or NameWave is the availability of a convenient, structured, controlled system for generating potential brand names. One major disadvantage is that neither system fully integrates an individual product's benefits or qualities or customer perceptions of the product. Students may identify other advantages and disadvantages. Students may suggest using either NamePro or NameWave as a preliminary first step in the process of developing a brand name, because the cost is relatively reasonable and the systems can generate numerous ideas for further study and evaluation. On the other hand, students may not want to use these options because they prefer to use a more customized, individualized process of choosing a brand name.Marketing for the MillenniumAs noted earlier, Pampers is an aggressive brand builder on and off the Internet. In addition to its traditional advertising schedule, Pampers maintains a value-added Web site () offering advice and answers to parents' questions about child development and—what else?—toilet training.Visit the Pampers site and browse the "What's New" section to see the kind of information parents can find here. Next, go to the "Pampers Diapers" section and click on the two links that lead to information about having Pampers delivered to your home and buying Pampers in your local area. After you enter your zip code, you will see banner ads for several retailers. Why would these retailers want links to the PampersWeb site? Why would Procter & Gamble highlight these links? How does this site contribute to brand building for all participating retailers as well as for Pampers?Answer: Retailers want to link to the Pampers site because they hope visitors to that site will buy the diapers at their stores. Procter & Gamble is building stronger relationships with channel members by highlighting retailer links on its Web site. Because the site contains an enormous amount of authoritative information, it should give consumers a positive image of Pampers and the retailers, contributing to brand building for all involved.YOU'RE THE MARKETER: SONIC MARKETING PLANDecisions about products and branding are critical to the success of any marketing plan. During the planning stages, marketers must consider a variety of issues related to product-mix, product-line length, brand equity, and brand strategies.At Sonic, you are helping Jane Melody manage product lines and branding for the company's shelf stereos. Look again at the company's current situation, the target market, and the product strategy data already in the marketing plan. Then answer these questions to plan Sonic's product programs (noting the need for additional research where necessary):∙What is the core benefit of your product? What elements of the potential product should you consider incorporating?∙Analyze your current product mix and your current product line. What specific changes do you recommend—and why?∙What are the attributes and benefits suggested by the Sonic brand?∙What specific line and brand extensions, new brands, or other brand strategies do you recommend for Sonic—and why?Consider how your answers to these questions will influence Sonic's marketing efforts. Then, as your instructor directs, summarize your recommendations in a written marketing plan or type them into the Marketing Strategy and Program sections of the Marketing Plan Pro software.Answer: The core benefit of Sonic's shelf stereo system is a space-saving way to enjoy music. Students may suggest variations on this core benefit; they may also have many ideas for the potential product, including a longer warranty period, a more decorative speaker design, and a smaller chassis. Sonic has a product line of shelf stereos that range in price from $150 to $400, somewhat below competing brands. It is planning to stretch the line by adding one lower-priced model and two higher-priced models. Its product mix is narrow and getting longer, with the addition of the three new models. Students should offer a variety of changes to the product strategy. The Sonic brand suggests attributes such as reasonable price and well-made products, with related benefits such as value for the money and product reliability.Students may offer various suggestions for line and brand extensions, new brands, and other brand strategies. Evaluate these suggestions in the context of how they fit with the target market's needs, the company's strengths, and the competitive situation (as discussed by students in their marketing plans).。

Case Research50市场观察・广告主／２００７．１０案例研究２００７年８月１日，联想集团（Ｌｅｎｏｖｏ）首款在上盖带有Ｌｅｎｏｖｏ标志的ＴｈｉｎｋＰａｄ皮壳版笔记本电脑正式发售，中国国内售价高达５万元；与此形成鲜明对比的是，８月２日，联想在北京推出的“天福”系列电脑，价格最低的一款只有１４９９元。

同出一门，价格天地差异，可以看出联想在Ｌｅｎｏｖｏ和Ｔｈｉｎｋ上不同的品牌诉求。

但为了淡化ＩＢＭ和产品品牌Ｔｈｉｎｋ之间的联系，联想不断促进企业品牌Ｌｅｎｏｖｏ和Ｔｈｉｎｋ之间的融合，而这最终有可能导致双品牌危机的爆发。

企业并购导致双品牌现象频频出现企业之间的大规模并购，促使双（多）品牌现象频频出现。

世界经济稳步增长、产业加速整合等多种因素促使企业并购、大宗并购案正逐渐增多。

通过并购，大型企业之间可以迅速的形成强强联合体，短时间内迅速做大。

２００２年，惠普（ＨＰ）斥资２４０亿美元收购康柏（Ｃｏｍｐａｑ）；经过３年的整合期之后，惠普２００６财年收入达到了９１７亿美元，首次超过ＩＢＭ成为全球最大的ＩＴ公司。

跨国并购也成为中国内资企业实现技术跨越式发展，以及全球市场的重要途径。

２００７年８月７日，联想集团宣布正在就收购欧洲ＰＣ厂商Ｐａｃｋａｒｄ　Ｂｅｌｌ进行磋商。

联想主要目的就是得到其品牌的基础上，利用其在欧洲的渠道与售后服务网点。

２００７年８月２４日，全球最大的硬盘供应商希捷（Ｓｅａｇａｔｅ）公司首席执行官Ｗｉｌｌ－ｉａｍ　Ｗａｔｋｉｎｓ表示，一家中国科技公司近日表达了收购该公司的意愿。

在大型企业的并购发生之后，在同一企业之下双产品品牌共存现象普遍，双品牌战略重要性凸显。

企业通过收购得到被收购方的品牌之后，利用该品牌的知名度，可以进军新市场。

联想通过收购ＩＢＭ的ＰＣ业务以及Ｐａｃｋａｒｄ　Ｂｅｌｌ不仅可以进入北美和欧洲市场，更可以在一定程度上利用其渠道使Ｌｅｎｏｖｏ品牌走向世界。

双品牌运作规则企业的品牌策略有两个层次：一个是企业品牌层次；一个是产品品牌层次。

Part I Understanding Marketing ManagementChapter 1 – Defining Marketing for the Twenty-First CenturyI. Chapter Overview/Objectives/OutlineA. OverviewMarketing is the organizational function charged with defining customer targets and the best way to satisfy needs and wants competitively and profitably. Since consumers and business buyers face an abundance of suppliers seeking to satisfy their every need, companies and nonprofit organizations cannot survive today by simply doing a good job. They must do an excellent job if they are to remain in the increasingly competitive global marketplace. Many studies have demonstrated that the key to profitable performance is to know and satisfy target customers with competitively superior offers. This process takes place today in an increasingly global, technical, and competitive environment.Marketing management is the conscious effort to achieve desired exchange outcomes with target markets. The marketer’s basic skill lies in influencing the level, timing, and composi tion of demand for a product, service, organization, place, person, idea, or some form of information.There are several alternative philosophies that can guide organizations in their efforts to carry out their marketing goal(s). The production concept holds that consumers will favor products that are affordable and available, and therefore management’s major task is to improve production and distribution efficiency and bring down prices. The product concept holds that consumers favor quality products that are reasonably priced, and therefore little promotional effort is required. The selling concept holds that consumers will not buy enough of the company’s products unless they are stimulated through a substantial selling and promotion effort.The marketing concept moves toward a more enlightened view of the role of marketing. The marketing concept holds that the main task of the company is to determine the needs, wants, and preferences of a target group of customers and to deliver the desired satisfactions. The four principles of the marketing concept are: target market, customer needs, integrated marketing, and profitability. The marketing concept places primary focus on the needs and wants of customers who comprise the target market for a particular product.Rather than coax customers into purchasing a product they may not find satisfying, the emphasis is on determining the types of markets to be satisfied, and creating the product that achieves this satisfaction objective. Choosing target markets and identifying customer needs is no small task; a marketer must dig beyond a customer’s stated needs. Once this is accomplished, a marketer can offer for sale the products that will lead to the highest satisfaction. This encourages customer retention and profit, which is best achieved when all areas/departments of a company become “customer-focused.”Beyond the marketing concept, the societal marketing concept holds that the main task of the company is to generate customer satisfaction and long-run consumer and societal well being as the key to satisfying organizational goals and responsibilities.Interest in marketing continues to intensify as more organizations in the business sector, the nonprofit sector, and the global sector recognize how marketing contributes to improved performance in the marketplace. The result is that marketers are reevaluating various marketing concepts and tools that focus on relationships, databases, communications and channels of distribution, as well as marketing outside and inside the organization.B. Learning Objectives∙Know why marketing is important to contemporary organizations.∙Understand the core concepts of marketing.∙Know the basic tasks performed by marketing organizations and managers.∙Understand the differences between the various orientations to the marketplace.∙Know the components of the marketing concept and why they are critical to successful marketing practice.∙Know why marketing is critical to different types of organizations and in different environments.C. Chapter OutlineIntroductionI.The New EconomyA.Focus on the digital revolution (Internet and related) and the impact onbusinesses and consumers in terms of capabilities.1.For Consumers - Multiple new capabilities related to increases in buyingpower, variety of goods and services available, information, interactivity,and product comparability.2.For Companies - Enhanced marketing reach, direct connectivity,information on all of the stakeholders and competitors, communications(internal and external), customized services and products, enhancedlogistics, and enhanced training.B.The Information Age Versus the Industrial Age1.Management has to recognize the potential quickly2.Marketing - “Meeting needs profitably”II.Marketing TasksA.Radical Marketing - Breaking the Existing Marketing Rules1.Firms are moving closer to the customer versus expensive research andmass marketing.2.Stages in marketing practice - entrepreneurial, formulated, andintrepreneurial.3.Focus on formulated marketing versus creative marketing.B.Scope of Marketing - Involves a Broadened View of Marketing1.Products - Anything offered for sale or exchange that satisfies aneed or want.2.Products can be goods, services, and ideas.3.Includes people, places, activities, organizations, and information.C.The Decisions That Marketers Make1.Focus on demand states and marketing tasks, along with the questionsthat marketers ask to remain aware and focused.2.Consumer markets and business markets each requires new tools andcapabilities to better understand and respond to the customer.3.Global Markets, Nonprofit markets, and governmental marketsbecoming more sophisticated in recognizing and dealing with marketingchallenges and decisions.III.Marketing Concepts and ToolsA.Defining Marketing1. A social and managerial process by which individuals and groups obtainwhat they need and want through creating, offering, and exchangingproducts of value with others.B.Core Marketing Concepts1.Target Markets and Segmentationa)Every product or service contains features that a marketer musttranslate into benefits for a target market.b)The consumer perceives these benefits to be available in aproduct and directly impacts the perceived ability to meet theconsumer need(s) or want(s).2.Marketplace, Marketspace, and Metamarketa)Marketplace - physicalb)Marketspace - digitalc)Metamarket - cluster of complementary goods and servicesacross diverse set of industries. Includes metamediaries.3.Marketers and Prospectsa) A marketer is someone actively seeking one or more prospectsfor an exchange of values.b) A prospect is willing and able to engage in the exchange.4.Needs, Wants, and Demandsa)To need is to be in a state of felt deprivation of some basicsatisfaction.b)Wants are desires for specific satisfiers of needs.c)Demands are wants for specific products backed by an abilityand willingness to buy them.5.Product or offeringa)Value proposition - Benefits companies offer to satisfycustomer needs.b)Brand - An offering from a known source. Brand image isthe associations that are connected to the brand.6.Value and Satisfactiona)Customer value triad - Combination of quality, service, and price(QSP).b)Value is the consumer’s estimate of the product’s overallcapacity to satisfy his or her needs.c)Marketers respond by changes in the triad.7.Exchange and Transactionsa)Five conditions must be satisfied.b)An exchange means obtaining a desired product by offeringsomething desirable in return.c) A transaction is the trade of values (involves several dimensions).8.Relationships and Networksa)Relationship marketing seeks long-term, “win-win” transactionsbetween marketers and key parties (suppliers, customers,distributors).b)The ultimate outcome of relationship marketing is a uniquecompany asset called a marketing network of mutually profitablebusiness relationships.9.Marketing Channelsa)Reaching the target market is critical.b)Achieved via two-way communication channels (media-newspapers through the Internet), and physical channels (productand service).c)The marketer also must decide on the distribution channel, tradechannels, and selling channels (to effect transactions).10.Supply chaina)Refers to the long channel process that reaches from the rawmaterials and components to the final product/buyers.b)Perceived as a value delivery system.petitiona)Includes actual and potential rival offerings and substitutes.b) A broad view of competition assists the marketer to recognizethe levels of competition based on substitutability: brand,industry, form, and generic.12.Marketing Environmenta)The task environment includes: immediate actors in theproduction, distribution, and promotional environmentsb)The broad environments include: demographic, economic,natural, technological, political-legal, and social-cultural.13.Marketing Programa)Marketing mix - The set of marketing tools the firm uses topursue marketing objectives in the target market.b)Involves recognition and use of the four Ps (product, price, place,and, promotion) and the four Cs (customer solution, customercost, convenience, and communication) in the short run and thelong run.pany Orientations Toward the MarketplaceA.The Production Concept - Assumes consumers will favor those products that arewidely available and low in cost.B.The Product Concept - Assumes consumers will favor those products that offerthe best combination of quality, performance, or innovative features.C.The Selling Concept - Assumes organizations must undertake aggressive sellingand promotion efforts to enact exchanges with otherwise passive consumers.D.The Marketing Concept - Assumesthe key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets.1.Target Market - No company can operate in every market and satisfyevery need.2.Customer Needs - It is not enough to just find the market.a)Marketers must also understand their customer’s needs andwants. Not a simple task.b)Key marketer actions: Responsive marketing, anticipativemarketing, and creative marketingE.Integrated Marketing - When all a firm’s departments must work together toserve customer interests(a company-wide activity).1.Involves external and internal marketing.2.Profitability - The ultimate purpose of marketing is to help organizationsachieve their objectives.3.Hurdles to Adopting a Marketing Orientationa)Organized Resistance - Some departments see marketing as athreat to their power in the organizationb)Slow Learning - Despite efforts by management, learning comesslowly.c)Fast Forgetting - There is a strong tendency to forget marketingprinciples.4.The Customer Concept - Moving beyond the marketing concept—especially for firms with considerable customer informationF.The Societal Marketing Concept1.The organization’s task is to determine the needs, wants, andinterests of target markets.2.Also to deliver the desired satisfactions more effectively andefficiently than competitors.3.And in a way that preserves or enhances the consumer’s and thesociety’s well-being.a)Cause-related marketing - Firms with an image act to enhancetheir reputation, etc., via causes.V.How Business and Marketing are ChangingA.Major new forces changing the way marketing process1.Customers expect more and better2.Rising brand competition3.Store-based retailers sufferingB.Trends of Company Responses and Adjustments1.Reengineering key processes versus functional depts.2.Outsourcing everything3.e-commerce trend4.Benchmarking based on world-class performers5.Alliances, supplier-partnerships, market-centered, global/local anddecentralized.C.Marketer Responses and Adjustments1.Focus on relationship marketing (versus transactional marketing)2.Creation of customer lifetime value orientation3.Focus on customer share marketing versus only market share4.Target marketing (versus mass marketing)5.Individualization of marketing messages and offerings6.Customer databases for data-mining7.Integrated marketing communications for consistent images8.Consideration of channel members as partners9.Recognition of every employee as a marketer10.Model and fact-based decision making versus intuition aloneVI.SummaryII. LecturesA. “Marketing Enters the 21st Century”The focus in this discussion is on the increasingly important role of the marketing processin the ever-changing domestic and global business environment.Teaching Objectives∙To explain the concepts related to understanding the role and potential of marketing in the larger business environment.∙To provide students a new and possibly different perspective on the role of marketing in business and society.∙To indicate areas where the marketing process and concept will be useful to the student in assessing business developments.DiscussionI NTRODUCTIONMany observers argue that all new or important directions in management thought and practice are marketing oriented. Marketing is no longer something done when a company has extra revenue to invest. It must be implemented for a business to survive.The marketing concept has changed dramatically over the last several decades, and recently the focus increasingly has moved to customers (versus products and selling), marketing globally, and the various technology issues that impact the market. In addition, there is renewed emphasis in marketing on creating and innovating with new and better products and services rather than just competing against other firms and following the marketing patterns established by competitors.The marketing concept is a matter of increased marketing activity, but it also implies better marketing programs and implementation efforts. In addition, the internal market in every company (marketing your company and products to and with the employees of the company) has become as challenging as the external marketplace due to diversity and many other social/cultural issues.C HANGES IN C ONSUMER B EHAVIORThere have been many major marketing shifts during the last few decades that have shaped marketing in the 21st century. There is a view among professional marketers that there is no longer the substantial product loyalty that existed over the last few decades. Product and brand loyalty, many argue, has been replaced by something more akin to a consumer decision that is based on the absence of a better product or service. In addition, there are major changes in the way customers look at market offerings. During the 1980s customers were optimistic, and in the early 1990s they were pessimistic. Later in the 1990s, consumers appeared rather optimistic, but still cautious at times. The following chart demonstrates some of the major shifts that have occurred to the present:1980s 1990s PresentConspicuous consumer Frugal consumer, becomingmore well-off Suspicious but generally well-off consumerImage driven Value and quality driven Highly eclecticTrusting Skeptical and cynical A “prove it” attitudeBrand loyal Does not exhibit loyalty Believes that there is alwayssomething betterEmotional buyer Informed buyer Highly informed and specialized Dreamers Escapists Focused on personal needs Overindulgent Health, wellness-conscious Health, wellness and someoverindulgence, withoutexpectation of costs orconsequencesOverworked Burnt-out, stressed out andplacing tremendous value onconvenience and time Reliant on technology and telecommunications to save time in making purchase decisionsIndustrious Baby Boomer Responsible Baby Boomer Unconvinced Generation Xer Increasingly it is clear that while the 4 Ps (product, price, promotion, and place) have value for the consumer, the marketing strategies of the 21st century will use the four “4 Cs” as added critical marketing variables:1.Care: It has replaced service in importance. Marketers must really care about theway they treat customers, meaning that customers are really everything.2.Choice: Marketers need to reassess the diversity and breadth of their offeringsinto a manageable good-better-best selection.munity: Even national marketers must be affiliated, attached toneighborhoods wherever they operate stores.4.Challenge: The task of dealing with the ongoing reality of demographic change.E ND OF THE M ASS M ARKETDuring the late 1990s, we witnessed the death of the concept of mass market. Regardless, some marketers continue to argue that database marketing will never replace mass marketing for most products. The view is that communicating with users by e-mail, Web site, mail, telephone, or fax will never become cost-efficient enough to justify the return. However, the success of the Internet provides considerable evidence that one-to-one marketing is and will be appropriate for many packaged goods and other high- and low-involvement products that in the past sold almost exclusively with brand advertising.Through the 1970s, only high-end retailers and personal-service firms could afford to practice one-to-one marketing. For the most part, they did it the old-fashioned way with personal selling and index-card files. In the 1980s, as the mainframe computer became more practical, airlines got into the act with a proliferation of frequent flyer programs. Frequency marketing programs such as these relied on monthly statement mailings and large, batch-processed databases of customer records.During the 1990s, bookstore chains, supermarkets, warehouse clubs, and even restaurants began to track individual purchase transactions to build their “share of the customer.”Many of these programs now run on PC platforms or workstation environments much more powerful than the most capable mainframes of the 1970s. It is possible today to track 5 or 6 million customers for the same real cost as tracking a single customer in 1950. With Internet-based databases and remote access, this capability literally has exploded in the last few years. The situation will become even more interesting as one-to-one marketing becomes even increasingly pervasive. With an increasingly powerful array of much more efficient, individually interactive vehicles, the options are virtually unlimited, including on-site interactivity, Web site connections, fax-response, e-mail, and interactive television.Most households today either have direct Internet access, or with TV sets that also provide real-time interactivity through the Internet. We are closing rapidly on the time where individuals will interact with their television and/or computer simply by speaking to it. Via various Web sites, computers work for us to enable us to remember transactions and preferences and find just the right entertainment, information, products, and services. Likewise, online capabilities enable providers to anticipate what a consumer might want today or in the future. Unfortunately, the system has been slower to protect consumers from commercial intrusions that they may not find relevant or interesting.The increasing level of market definition and refinement (and resulting opportunities for marketers) is possible through the massive social, economic, and technological changes of the past three decades. There is no longer a U.S. mass market because lifestyles have changed so dramatically. Some of the important demographic shifts have been:∙Increasing diversity of the population. The United States has always been an immigrant nation. However, large numbers of immigrants from Latin Americaand Asia have increased the proportion of minorities in the country to one inthree, up from one in five in 1980. This diversity is even more noticeable in theyounger market.∙Changing family and living patterns. There has been a substantial rise in the divorce rate, cohabitation, non-marital births, and increased female participationin the labor force. In addition, married couples with one earner make up only 15percent of all households. Dual-earner households have become much morecommon—the additional income is often necessary for the family to pay theirbills. Thus, the stereotypical family of the 1950s has been replaced by two olderand harried, working parents with much less time available.∙Emergence of a new children’s market. Minorities are over-represented in the younger age brackets due to the higher fertility and the younger populationstructure of many recent immigrants. The result is that one in three children inthe United States is black, Hispanic, or Asian. In addition, nearly all of today’schildren grow up in a world of divorce and working mothers. Many are doingthe family shopping and have tremendous influence over household purchases.In addition, they may simply know more than their elders about productsinvolving new technology such as computers.∙Income and education increases are two other important demographic factors impacting the marketing management arena. Generally, incomeincreases with age, as people are promoted and reach their peak earning years, and the level of education generally has increased over the last fewdecades. Family units today often have higher incomes because they may havetwo earners. Accordingly, there is an increased need for products and servicesbecause they likely have children and are homeowners.In sum, the need for market analysis and marketing decision-making, and managers to perform those tasks has never been greater. But, as the course will demonstrate, the complexities of, and analytical tools required for, these activities have never been greater. Be prepared for a challenging experience.B. “The Changing Image of Marketing”Focus: the changing perceptions of marketing in the contemporary business environment.Teaching Objectives∙To explain the concepts related to understanding the role and potential of marketing in the larger business environment.∙To provide students a new and possibly different perspective on the role of marketing in business and society.∙To indicate areas where the marketing process and concept will be useful to the student in assessing business developments.DiscussionI NTRODUCTIONWhat image comes to mind when you hear the word “marketing”? So me people think of advertisements or brochures, while others think of public relations (for instance, arranging for clients to appear on TV talk shows). The truth is, all of these—and many more things—make up the field of marketing. The Knowledge Exchange Business Encyclopedia defines marketing as “planning and executing the strategy involved in moving a good or service from producer to consumer.”With this definition in mind, it’s apparent that marketing and many other business activities are related in some ways. In simplified terms, marketers and others help move goods and services through the creation and production process; at that point, marketers help move the goods and services to consumers. But the connection goes even further: Marketing can have a significant impact on all areas of the business and vice versa.M ARKETING B ASICSIn introductory marketing you learned some basics—first the four P’s, and then the six P’s: ∙Product—What are you selling? (It might be a product or a service.)∙Price—What is your pricing strategy?∙Place or distribution—How are you distributing your product to get it into the marketplace?∙Promotion—How are you telling consumers in your target group about your product?∙Positioning—What place do you want your product to hold in theconsumer’s mind?∙Personal relationships—How are you building relationships with your target consumers?The sum of the above is called the marketing mix. It is important to have as varied a mix as possible in marketing efforts, since each piece plays a vital role and boosts the overall impact. Let’s take a closer look at the basic P’s of marketing and particularly at how they might affect what you do in business.▪ProductMarketers identify a consumer need and then provide the product or service to fill that need. The marketer’s job is to pinpoint and understand existing needs, expand upon them, and identify new ones. For example, because there are more singles and small families these days than in years past, marketers might see a need for products to be sold in smaller quantities and offered in smaller packages.How can this impact other professionals in the business/marketing process? Let’s say your company has developed a new product that generates enormous consumer demand. Your marketing department may ask you to find a way to speed up the workflow in order to crank out more products faster. A year after the product is introduced, however, the market might be flooded with cheap imitations. Since one marketing strategy is to keep products price-competitive, a marketer may then ask you to find a way to make the product less expensively. This relationship works both ways. There may be production and industrial engineers who may see a way to change the work process that would create additional options for consumers. Those engineers will also be instrumental in design and development of products for which human factors and ergonomics are important considerations. Maybe there’s room to add another product line. For instance, that product X is still blue but new product Y is red. You can suggest this to your marketing department; it, in turn, would do research to gauge potential consumer demand for the new line.▪PriceIdeally, a marketer wants to be proactive in setting price rather than simply react to the marketplace. To that end, the marketer researches the market and competition and plots possible price points, looking for gaps that indicate opportunities. When introducing a new product, the marketer needs to be sure that the price is competitive with that of similar products or, if the price is higher, that the consumers perceive they’re getting more value for their money.Various other technical professionals can have an important impact on marketers’ pricing decisions. Again, you may be asked to determine if productivity can be enhanced so that the product can be manufactured and then sold—for a lower price.▪Place or distributionWhat good is a product if you can’t get it to people who want to purchase it? When marketers tackle this issue, they try to figure out what the optimum distribution channels would be. Forexample, should the company sell the product to distributors who then wholesale it to retailers or should the company have its own direct sales force?Marketers also look at where the product is placed geographically. Is it sold regionally, nationally, and internationally? Will the product be sold only in high-end stores or strictly to discounters? The answers to all of these questions also help shape how a product can be distributed in the best way.Such distribution questions are potentially of great significance to many professionals, including industrial and other types of engineers in a company. For instance, whether a product will be marketed regionally or internationally can have enormous implications for package design as well as obvious areas of the supply chain: logistics, transportation, distribution, and warehousing.▪PromotionPromotion encompasses the various ways marketers get the word out about a product—most notably through sales promotions, advertising, and public relations.Sales promotions are special offers designed to entice people to purchase a product. These can include coupons, rebate offers, two-for-one deals, free samples, and contests.Advertising encompasses paid messages that are intended to get people to notice a product. This can include magazine ads, billboards, TV and radio commercials, Web site ads, and so forth. Perhaps the most important factor in advertising success is repetition. We’re all bombarded with an enormous number of media messages every day, so the first few times a prospective customer sees an ad, it usually barely makes a dent. Seeing the ad over and over is what burns the message into people’s minds. That’s why it’s good to run ads as frequently as possible.Public relations refers to any non-paid communication designed to plant a positive image of a company or product in consumers’ minds. One way to accomplish this is by getting the company or product name in the news. This is know n as media relations, and it’s an important aspect of public relations.As with price, changes in demand created by promotions can have a direct impact on the work of many other professionals.▪PositioningBy employing market research techniques and competitive analysis, the marketer identifies how the product should be positioned in the consumer’s mind. As a luxury, high-end item? A bargain item that clearly provides value? A fun product? Is there a strong brand name that supports how the image is fixed in the consumer’s mind? Once the marketer answers these kinds of questions, he or she develops, through a host of vehicles, the right image to establish the desired position.This, too, can affect the work you do. If an upscale image is wanted, the materials used in the product and packaging are likely to be different from those used in a bargain product—a fact that could make the workflow significantly more complex. On the other hand, with your engineering knowledge, you may be able to suggest alternative materials that would preserve the desired image but be easier or less expensive to use.。

CHAPTER7--A NAL YZING B USINESS M ARKETS AND B USINESS B UYINGB EHAVIOROVERVIEW:Business markets consist of individuals and organizations that buy goods for purposes of furtherproduction, resale, or redistribution. Businesses (including government and nonprofitorganizations) 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 tothose of the consumer buyer in some ways but very different in others. In general, the businessbuyer is generally much more technical, price-oriented, educated for the job, and risk averse thanthe consumer buyer. Also, with the business buying environment there is more concern for thestatus and power of potential vendors, and persuasiveness and empathy play relatively lower roles. The industrial market buys goods and services for the purpose of increasing sales, cutting costs,or meeting social and legal requirements. Compared with the consumer market, the industrialmarket consists of: fewer buyers, larger buyers, close supplier/customer relationships,geographically concentrated buyers, derived demand that is relatively inelastic and fluctuating;professional purchasing with several more buying influences involved, direct purchasing,reciprocity, and leasing. Industrial buyers make decisions that vary with the buying situation orbuyclass. Buyclasses comprise three types: straight rebuys, modified rebuys, and new tasks. Thedecision-making unit of a buying organization, the buying center, consists of persons who playany of seven roles: initiators, users, influencers, deciders, approvers, buyers and gatekeepers.The industrial marketer needs to know: Who are the major participants? In what decisions do theyexercise influence? What is their relative degree of influence? And what evaluation criteria doeseach decision participant use? The industrial marketer also needs to understand the majorenvironmental, organizational, interpersonal, and individual influences operating in the buyingprocess. The buying process itself consists of eight stages called buyphases: problem recognition,general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification, and performance review. As industrial buyers become more sophisticated, industrial marketers must upgrade their marketing capabilities.The institutional and government market shares many practices with the business market and hassome additional characteristics. Institutional buyers are less concerned with profit than with otherconsiderations when they define the products and services to buy for the people under their care.Government buyers tend to require many forms and favor open bidding and their own nationalswhen they choose their suppliers. Suppliers must be prepared to adapt their offers to the special needs and procedures found in institutional and government markets.LEARNING OBJECTIVES:After reading this chapter students should:∙Know the who, what, and how of the business market∙Know the who, what, and how of the institutional and government markets CHAPTER OUTLINE:I.IntroductionII.What is Organizational Buying?A.The Business Market versus the Consumer Market. Characterized by:1.Fewer buyersrger buyers3.Close supplier-customer relationship4.Geographically concentrated buyers5.Derived demand6.Inelastic demand7.Fluctuating demand8.Professional purchasing9.Several buying influences10.Direct purchasing11.Reciprocity12.LeasingB.Buying Situations - Straight rebuy (reorder on a routine basis), Modified rebuy(product specs, prices, delivery requirements, or other terms may be modified),New task (a purchaser buys a product or service for the first time with majorsubdecisions involved in the buying decision)C.Systems Buying and Selling - many purchasers prefer to buy a total solution totheir problem from one seller.D.Participants in the Business Buying Process - initiators, users, influencers,deciders, approvers, buyers, gatekeepersE.Major Influences on Business Buyers1.Environmental factors - level of demand, economic outlook, interest rateanizational factors - objectives, policies, procedures, structures,systems. There are several organizational trends about which businessmarketers should know.3.Interpersonal factors - everyone in the buying center has differinginterests, authority, status, empathy, and persuasiveness.4.Individual factors - every business buyer is an individualF.The Purchasing/Procurement Process1.Problem recognition2.General need description3.Product specifications - search for ways to lower costs4.Supplier search - seek the most appropriate bidders5.Proposal solicitation - Request for Proposal (RFP)6.Supplier selection - each bidder rated on specified criteria7.Order routine specification - final negotiations8.Performance review - through both internal and external methodsIII.Institutional and Government Markets - institutions tend to have low budgets and captive clienteles. Government is also a major buyer of goods and services. Decision topurchase is usually based on cost. Paperwork is considerable.IV.SummaryMARKETING A ND ADVERTISING1. Marketers of milk and other products can choose between a number of materials for use in containers and other packaging. This American Plastics Council ad describes the latest advances that make plastic containers a better choice. Where should the industry group place ads like this? What other methods might the industry group use to convince its markets of the value of using plastic for packaging food s and other products?Answer: The market for this American Plastics Council ad includes beverage marketers such as Hood (milk), Evian (water); supermarket chains that sell private label beverages; and supermarket chains that buy plastic grocery bags. Therefore, this ad should be placed in publications that reach the target audience, such as Supermarket News, as well as in general business publications such as Business Week that reach executives in these business organizations. Other methods the council might use to convince its markets of the value of using plastic include: making speeches to meetings of the target audience, such as supermarket executives; preparing press releases with information about the cost-benefits of using plastic packaging and bags; hosting exhibits at trade shows attended by the targeted groups; sending out periodic newsletters to educate members of the target audience about the benefits of using plastic; posting detailed information and studies on the council's Web site; mounting a consumer campaign as a "pull" strategy to encourage marketers and retailers to use more plastic packaging. Students may suggest additional methods.2. This Kinko's ad targets businesses of all sizes. Is the information in this ad geared toward a straight rebuy, a modified rebuy, or a new task? Would buyers, approvers, or initiators be most likely to respond to this ad? How does the ad relate to problem recognition and supplier selection in the business purchasing process? What kind of performance review might a business buyer apply to its purchasing of Kinko's color duplication services?Answer: This Kinko's ad is probably geared toward a modified rebuy, since the ad copy refers to previously created "dull, dingy business materials" that need brightening. Initiators would be most likely to respond to this ad, since they would recognize the need for brighter, more colorful business materials. In this case, the initiators would often be the users of the color materials, which is why they are aware that better color would give the company's materials more impact. A business buyer might review the performance of the purchase of Kinko's color copying services by contacting the end users to ask for their evaluations. If the users believe that Kinko's color materials are making the company look better and having other positive effects, the buyer will give Kinko's performance a good rating and continue to buy.FOCUS ON TECHNOLOGYTechnology is changing the way government organizations buy goods and services. For e xample, the city of Fort Collins, Colorado buys all kinds of products, such as computers and flooring. These days, the purchasing agent announces the city's needs and requests for proposals on a special page on its Web site (/CITY_HA LL/PURCHASING/bidlist.htm). Another page (/CITY_HA LL/PURCHASING/index.htm) explains the city's purchasing process and offers standard documents for downloading by suppliers.Visit both of these pages and see what Fort Collins requires of its suppliers. How does this technology benefit the city? How does it benefit suppliers who want to provide goods and services to the city? What other information about the city's purchasing process might a supplier want to see on these pages? Answer: Fort Collins benefits in several ways from the use of Internet technology to post and solicit proposals for purchasing goods and services:∙Lower costs due to less paper and postage and fewer personnel needed to handle the solicitation and processing of proposals and bids;∙Ability to efficiently reach suppliers of all sizes and types, which widens the pool of potential bidders;∙Higher productivity due to use of standardized forms downloaded from the Web site. Suppliers who want to provide goods and services to the city also benefit in several ways: ∙Lower costs due to less paper and postage and fewer personnel needed to handle the preparation and submission of proposals and bids;∙Ability to quickly and efficiently identify opportunities to submit proposals and bid for purchases made by Fort Collins;∙Ability to compete more effectively with suppliers of any size for purchases made by Fort Collins.A supplier reviewing the Fort Collins Web site might want to see additional information about the city's purchasing process, such as: supplier selection criteria; decision and notification dates for projects up for bid; and any prerequisites for successful bidders, such as performance bonds. Students may have other suggestions, as well.MARKETING FOR THE MILLENNIUMThe "cyberbuying bazaar" is busier than ever before as more businesses go online in search of MRO (maintenance, repair, and operations) materials. Business-to-business electronic commerce can streamline the purchasing process for MRO items, saving time and money for both parties.GE Information Services (GEIS) is a leader in helping businesses use the Internet to buy from and sell to other businesses. Visit the Electronic Marketplaces page on the GEIS Web site(/html/emindx..html), where you will see various products for business-to-business buying and selling. Then click on the link to TPN Register Buyer Services, a service specifically designed for MRO items. Why would a business buyer want to access information about suppliers usin g the Thomas Register Classification System? Why is reducing cycle time important for MRO items? Why would a supplier want to participate in this service? What potential disadvantages can you see for suppliers? Answer: The Thomas Register Classification System shows information about a large number of suppliers in a given classification, widening the potential pool of sellers from whom the buyer can purchase goods and services. Reducing cycle time for MRO items allows companies to maintain lower inventory levels of these fairly routine purchases and avoid delays in delivery that can disrupt operations. Suppliers would want to participate because they will be introduced to a wider market of potential customers. Two potential disadvantages for suppliers are:∙Lower loyalty on the part of purchasers, who can more easily locate competing suppliers; and ∙More competition from competing suppliers who are listed in the system. (Students may cite additional disadvantages, as well.)YOU'RE THE MARKETER: SONIC MARKETING PLA NLike consumer marketers, business-to-business marketers need to understand their markets and the behavior of members of the buying center in order to develop appropriate marketing plans.At Sonic, you have decided to investigate the business market for the company's shelf stereo systems, such as small restaurants and stores that want to play music for their customers. Given Sonic's current situation and your knowledge of business marketing, answer the following questions:∙In addition to restaurants and stores, what other types of businesses might want to buy a shelf stereo system?∙How can you find out the overall size of business markets such as small restaurants? (Check the U.S. Census Web site listing of businesses by SIC—eating places are SIC 5812, forexample—at /epcd/cbp/view/us94.txt; also check state Web sites for morestati stics, as well as other sources.)∙What specific needs could Sonic's product address for these businesses?∙What type of purchase would a Sonic system represent for these businesses? Who would participate in and influence this type of purchase? What are the implications for yourmarketing strategy?Think about the opportunities, threats, and issues represented by the business markets you have researched. Summarize your findings and conclusions in a written marketing plan or type them into the Marketing Situation, SWOT/Issue Analysis, and Target Markets/Positioning sections of the Marketing Plan Pro software.Answer: How students draft the business-to-business part of Sonic's marketing plan depends on the results of the research they conduct. Looking up all retail establishments on the U.S. Census Web site, for example, they will find under the 52 SIC for retail trade: 1.56 million total retail stores, 1.32 million stores with 1-19 employees, 216,800 stores with 20-99 employees, 25,376 stores with 100-499 employees, and 738 stores with 499+ employees. Under SIC 5400 food stores, they will find 182,512 total stores, 149,648 stores with 1-19 employees, 25,720 stores with 20-99 employees, 7,128 stores with 100-499 employees, and 25 with 499+ employees. In addition, under SIC 5812 eating places, students will find 367,205 total restaurants, 252,954 with 1-19 employees, 110,332 with 20-99 employees, 3,872 with 100-499 employees, and 47 with 499+ employees.In addition, students may choose to target businesses state by state, researching the market on the Internet by accessing state Web sites. On the Connecticut Web site, for example, the Research Division of the Department of Economic and Community Development (/ecd/research/) contains links to statewide retail statistics and other data, as well as details about consumer markets.At first glance, the statistics seem to indicate a sizable business market for shelf stereo systems. However, not every store or restaurant is likely to be interested in such products. Larger establishments may already have sound systems or may be part of chains that use a central purchasing process. Smaller establishments, on the other hand, may be a better—and potentially larger—market if Sonic can reach them with an appropriate marketing strategy.Students should identify the specific needs that shelf stereos will address for such businesses. These might include: providing background music throughout the establishment during business hours to make the shopping or dining experience more pleasant for consumers and providing background music for workersin non-public areas, which can enhance productivity. More research may be needed to ascertain whether these businesses are interested in shelf stereos and exactly how the buying process works in these establishments.Buying a Sonic sound system would be a new task buying situation, because these establishments have probably never purchased a stereo system before. Research will reveal the role of owners or managers, who are likely to be deciders and buyers (and may play other roles, as well). Sonic should consider the behavior and attitudes of these key buying center members when developing targeting and marketing mix strategies for the business market.。

Chapter 8 – Dealing with the CompetitionI. Chapter Overview/Objectives/OutlineA. OverviewIn the marketplace, many companies develop effective products, channels, pricing, and advertising. However, many of these companies lose in the marketplace. There may be many reasons, but a critical variable may be an inability to understand the competitive environment and to gather and utilize data on that environment.To prepare an effective marketing strategy, a company must consider its competitors as well as its actual and potential customers. This is especially necessary in slow growth markets because firms generally gain sales by wining them away from competitors.A company‘s closest competitors seek to satisfy the same customers and needs and make similar product and service offers. A company should also pay attention to its latent competitors that may offer new and/or different ways to satisfy the same needs. The company should identify its competitors by using both an industry and market-based analysis.A company should gather information on competitor strategies, objectives, strengths, weak-nesses, and reaction patterns. The company should study and understand competitor strategies in order to identify its closest competitors and take appropriate action. The company should know the competitor‘s objectives in order to anticipate further moves and reactions. Knowledge of the competitor‘s strengths and weaknesses permits the company to refine its own strategy to take advantage of competitor weaknesses while avoiding engagements where the competitor is strong. Understanding typical competitor reaction patterns helps the company choose and time its moves.The firm should collect, interpret, and disseminate competitive intelligence continuously. Company marketing executives should be able to obtain full and reliable information about any competitor that could have bearing on a decision. As important as a competitive orientation is in today‘s markets, companies should not overdo their focus on competitors. Changing consumer needs and latent competitors are more likely to hurt a firm than the existing competitors. Companies that maintain a good balance of consumer and competitor considerations are practicing effective market orientation.B. Teaching Objectives∙Know the difference between the industry and market concepts of competition.∙Understand how to identify competitor strategies.∙Understand how to determine competitor objectives.∙Understand how to estimate competitor reaction patterns.∙Know how to design competitive intelligence systems.∙Know how to select competitors to attack or avoid.Understand what it means to balance a customer and competitor orientation.C. Chapter OutlineI.Introductionpetitive Markets and CompetitorsA.Market Attractiveness - Porter‘s Five Forces determine the attractiveness of themarket1.Three of the Porter forces emanate from threats related to competitors:intense segment rivalry, new entrants and substitute products.2.The other two forces respond to threats connected to the firm‘s moreimmediate market environment: Buyer bargaining power and supplierbargaining power.III.Identifying Competitors -Four levels: brand, industry, form, and genericA.Industry Concept of Competition - Changing with the Internet1.Number of Sellers and Degree of Differentiation (monopoly, oligopoly,monopolistic competition, and pure competition)2.Entry, Mobility, and Exit Barriersa)Ease of entry into market and various (existing and new)segmentsb)Exit and Shrinkage Barriers - Ease of exit and reduction in size.3.Cost Structure - Reducing largest costs and most cost efficient plant(s)4.Degree of Vertical Integrationa)Backward and forwardb)Integration from source through retail (degree of)c)Outsourcing to specialists to lower costs5.Degree of GlobalizationB.Market Concept of Competition1.Many companies make the same product2.Many companies pay attention to other companies that satisfy the samecustomer need.petitor AnalysisA.Strategies: Strategic groups – differs, depending on various key variables in anindustry.B.Objectives: What drives the competitors – constant monitoring.C.Strengths and Weaknesses – competitive positions in the market:1.Dominant, strong, favorable, tenable, weak, nonviable.2.The basis for evaluation of strengths and weaknesses:a)Share of marketb)Share of mindc)Share of heartd)Result: Those that make steady gains in mind and heart shareinevitably make gains in market share and profitability.D.Reaction Patterns1.Depends on competitive equilibrium2.Single factor critical and multiple competitive factorspetitive Intelligence SystemA.Designing the Competitive Intelligence System1.Four Main Steps:a)Setting up the systemb)Collecting the datac)Evaluating and analyzing the datad)Disseminating information and respondingB.Selecting competitors to attack and to avoid - major steps in customer valueanalysis are:1.Customer Value Analysis - Evaluating major attributes that customersvalue.a)Assess quantitative importance of the different attributes.b)Assess company and competitor performance on the differentcustomer values against their rated importance.c)Examine how customers in a specific segment rate thecompany‘s performance against a specific major competitor onan attribute-by-attribute basis.d)Monitor customer values over time.2.Classes of Competitors - following customer value analysis:a)Strong versus weakb)Close versus distantc)Good versus badd)Customer value analysis helps a marketer perceivecompany/product value to a customer relative to competitorproduct value(s).VI.Designing Competitive StrategiesA.Market-Leader Strategies1.Expanding the total market, with new users, new uses, and more usage.2.Defending market share, with position, flank, preemptive,counteroffensive, mobile, and contraction defensive strategies.3.Expanding market share (note Procter & Gamble and Caterpillar casestudies) - Line-extension, brand-extension, multibrand, etc., strategies.B.Market-Challenger Strategies1.Defining the strategic objective snd the opponents2.Choosing a general attack strategy (frontal, flank, encirclement, bypass,guerrilla)a)Marketing Skills: Guerrilla Marketing - Creative Thinking(maximum customer attention with minimal investment)3.Choosing a specific attack strategy (Price-discount, lower-price goods,prestige goods, product proliferation, product innovation, improvedservices, distribution innovation, manufacturing cost reduction, andintensive advertising promotion)C.Market-Follower Strategies1.Levitt: product imitation might be as profitable as product innovation2.Broad strategies: counterfeiter, cloner, imitator, adapterD.Market-Nicher Strategies1.The key is specialization2.They must constantly create new niches, expand and protect.3.High margin versus high volumeE.Balancing Customer and Competitor Orientations1. A firm should not become consumed by a competitor-centered strategy.2. A customer-centered company relies on customer developments andresearch and can better identify new opportunities and long runmarketing strategies.VII.SummaryII. LecturesA. “Competitive Intelligence”This discussion focuses on the uses of various sources of information for marketing. It is useful to update the examples so that students will be able to identify readily with this concept based on their general knowledge of the techniques, companies, and products involved in the lecture/discussion. There are many different approaches to competitor research. Marketers should consider the process and implications.Teaching Objectives∙To stimulate students to think about the need for and value of competitive analysis.∙To present points to consider in proceeding with development of a competitive analysis program.∙Recognize some of the better sources of information for various marketing questions.DiscussionI NTRODUCTIONIn the marketplace, many companies do a first class job of developing a great product, great channels, great pricing, and great advertising. You might say—Wow! That is great. However, many of these companies not only lose in the marketplace, but they lose big.The reasons may be management, financial, etc., but when we get right down to it the answer may be much more interesting. The critical variable may be the competitive intelligence that the firm failed to get at the right time, with the right detail. In this discussion, we will look at some of the issues and questions behind choosing the right sources as well as approaches that might be useful in preparing the competitive intelligence program that will do the job.First, the Kotler text gives some excellent examples of how to scan the competitive environment. As part of this framework, it also is useful to determine where to get the information, that the analyst is able to determine where and how to use the questions asked, and that the data developed is based on the marketing and strategic plans, not just collected in a random manner. This requires knowledge of a number of variables and then bringing it all together to be utilized in the firm‘s marketing positioning effort. Remember, to achieve an effective competitive analysis it is essential to place the process in perspective.C OMPETITIVE A NALYSISThe logical starting point for the strategy analysis is to understand effectively the competitive structure and attractiveness of the industry. It is important to recognize that some industries are and will be more profitable than others. It is important also to know the real strengths of the industry, and the firms within the industry, not only in overall terms but also in specific detail. Many times appearances can be deceiving. Consider, for example, companies that project a great public relations image but in reality are quite the opposite. (Enron could serve well as an example).A logical overview of this process comes from Porter‘s five basic forces of competition:∙Threat of new entrants∙Rivalry among existing competitors∙Bargaining power of suppliers∙Bargaining power of buyers∙Threat of substitutesWhat determines the strength of each of these five forces in the industry? The process is shaped by a number of underlying structural determinants. It is important to remember that any of the forces that undermine the structure of an industry likely will cause profitability to decline. A good example is the dot-coms that raced to steal markets from the existing well-organized physical retailers but had little to offer except investor hype. Their inability to show quality and superior results led to investor disenchantment and the loss of confidence that they could produce a profit against the existing competition. This, in turn, led to massive dot-com failures, consolidation in the industry, and finally the successful entrance of many major retailers with name, cash, and ability to stay the course.To begin this process, the firm should develop a complete evaluation of the competitive framework and the specific competition. This would include a detailed compilation of the competitors, both real and potential, along with their products, marketing capability,service, production strength, financial strength, and management. Next, you must detail where each firm, including your own, fits into the industry in terms of products, marketing capability, service, production strength, financial strength, and management. At this point, you should be able to develop a thorough analysis of the following, for the past, present, and future:∙Degree of industry concentration∙Changes in type and mix of products∙Market ―segments‖ in the firm and industry (and changes)∙Companies that have left and/or entered the industry (and why)∙Industry market share changes (and why – technology, substitution, etc.)∙Company market shares and share changes∙New technology substitution∙Each firm‘s vulnerability to new technologyIn addition to these specific competitive characteristics, the firm should focus on the various financial, economic, technological, and socio-political factors in the industry environment. This information is available through a variety of sources, including: ∙Company Web sites and literature∙Industry trade show observation and contactsOnline databases, including Lexis-Nexis, EBSCO, First Source, PROMPT, Trade & Industry, and Investext, along with various other online sources, such as the TV networks, Hoover, investment houses (Schwab, Merrill Lynch, etc.), The Wall Street Journal (WSJ), BusinessWeek (BW), etc.It is import ant to understand each firm‘s position within the industry. Companies in large or small industries have varying levels of profitability, and it is important to understand what it takes to be a superior performer in industry. Information that may assist in this process might include some or all of the following:∙How the industry might change, in the short to long term.∙How the competing firms within an industry differ in the way in which the competitive forces influence each of the competitors.∙Identify the companies that have the power to shape the industry. These companies could either make the industry or cause the demise.∙New product development potential within the industry and which firms have the ability to make it happen.This analysis should first provide a detailed and technical description of the products and services offered, including product mix, depth, and breadth of product line.This should lead to a clear understanding and listing of market position by product, citing product strengths and weaknesses individually and in the overall product line.Among the sources for this information are company Web sites, company product literature, WSJ, BW, and online databases including DIALOG, LEXIS-NEXIS, and Hoover.Another important area is R&D expenditures (industry and by company), analysis of each company‘s research and development expenditures and capabilities, along with a run down on technical personnel and expertise. Sources for this information include EBSCO, LEXIS-NEXIS, DIALOG, Hoover, PROMPT, Trade & Industry, and Investext.Next, it is important to understand clearly who holds which patents (current and pending), the product standards and specifications, including a quality and technical analysis. Some of the better sources for this could include: Claims, World Patent Index, Derwent, and IFI/Plenum Claims. Company Web sites and trade show industry contacts also can provide valuable clues in this part of the effort.The last piece of information needed in this section of the competitive intelligence analysis includes a new product introductions analysis (past, present, and expected). Some good sources for this information include press releases (company/industry Web sites), Predicast New Product Announcements, and sales force contacts. In addition, EBSCO, LEXIS-NEXIS, DIALOG, and various investor sources can provide valuable insight.M ARKETSOften, firms have a good overall understanding of the markets they are in or wish to compete in, but they tend to operate with the same attitude and perspectives that have existed in the company and industry for many years. To truly understand the market, the potential new competitor should have a solid grasp of the factors that make and drive the market for the product or service. For example, the firm should have a detailed compendium of the following, by firm within the industry:∙Market segmentation∙Customer base (markets targeted, regional sales analysis, penetration, importance to each firm)∙Profiles of markets and customers (including product mix and sales data by product line)∙Market growth and potential for future growth∙Market share by product line∙Market and geographic areas targeted for expansion∙Marketing tactics and strategies (4 Ps, especially price and promotion)∙Distribution network/channels of distribution∙Advertising/marketing/sales efforts including budgets and advertising / marketing firms usedAmong the sources that could be used on this activity are: PTS MARS, magazine ads, Prompt, Investext, Trade & Industry, SEC reports, Newspapers, Newswires, BW, Fortune, WSJ, company Web sites, etc.I NTERNATIONAL/G LOBALDepending on the expected competition and market activity, it is essential that the competitive intelligence effort include a foreign trade analysis. Without access to some expensive databases that provide specific product sales and market share information, it would be best to look at and evaluate recent order information, government contracts, and individual sales forces overseas (performance, experience, compensation, etc.). For U.S. firms, StatUSA provides an excellent data source, along with PIERS Exports & Imports, Commerce Business Daily, Newspapers (especially WSJ, NYT, BW), LEXIS-NEXIS, and DIALOG.S TRATEGY/D ECISION M AKINGIdentification of marketing and corporate strategies probably is one of the more important requirements of any competitive analysis. For this, most firms need experienced professional input, along with extensive use of the Internet, DIALOG, and other similar tools noted above. Below, we have established for each firm in the industry several important the intelligence needs, followed by selected sourcing:∙Apparent strategic (long-range) plans, including details of acquisition and divestiture strategy, etc. (SEC filings)∙New products on the horizon—with indications of a new direction for the company. (PROMPT, press releases, newspapers)∙Apparent strategic objectives: corporate/divisional/subsidiary company priorities; business unit/segment goals; basic business philosophy/targets.(Suppliers, employees, wholesalers)∙Analysis of company‘s decision-making process. Overall company image and reputation. Company‘s ability to change. How will the companylook/perform in the future? Anti-takeover measures instituted; the firm‘skey success factors? The key objective: Why has the firm been successful,overall? (Shareholder lawsuits pending, LEXIS-NEXIS)∙Corporate attitudes toward risk. (legal databases, employees, suppliers)∙Statements of plans to enter new markets, improve market position, and/or increase market share. (Trade journals, top executive speeches, PROMPT,marketing analysts).Following this exercise, the analysis should provide a clear understanding of the operation of the industry, and the competing firm should be able to utilize this information to provide an overall planning framework, strategy plan, and marketing plan to take advantage of current and future market opportunities.B. “Does Preemptive Marketing Work?”The focus here is on Porter‘s framework for preemptive strategy in a marketing settin g, and the role and value of this concept in the overall marketing process and strategy for the company. Many students will be able to identify readily with this concept based on their general knowledge of the companies and products involved in the lecture/discussion.The discussion begins by considering why a leader firm would consider preemptive strategy as a means of maintaining or increasing the firm‘s market position. This leads into a discussion of the implications for the introduction of a preemptive strategy for other firms in the industry in the medium and long-term.Teaching Objectives∙Stimulate students to think about the critical issues, pro and con, for a firm when it moves toward adoption of a preemptive strategy approach.∙To consider how to proceed with a preemptive strategy.∙To discuss the role of preemptive strategies in helping the firm achieve a position in the industry.DiscussionI NTRODUCTIONPreemptive marketing involves many different possibilities for the leader to assume a defensive or offensive position in the market and with competitors. The primary elements for a firm to consider in a preemptive action are that delay and/or position are critical and that nothing is forever. The firm must recognize that eventually it will be essential to conduct some type of preemptive action if it is to maintain control or partial control of the niche or share position.There are many reasons for a leader to adopt a preemptive strategy approach, but often it is a consequence of product maturity. The leader firm recognizes that another firm(s) has developed a superior capability in product or service. While it is possible for a challenger or other strategic planning firm to develop a preemptive position, the reasons tend to be more to disrupt the course of the industry in order to gain advantage against an entrenched leader. While this can be a very beneficial move, it has a tendency to convey a message to other firms in the industry that the firm could be posing a serious threat to all others in the industry. Firms that have done this, such as People Express, often find they are able to ride the crest of the wave of success only so far and so long, unable to sustain against the retaliatory moves of the industry in general. The primary preemptive objective of the leader or challenger is to maintain or occupy more of the critical or prime positions in the industry. This could include positioning their company or product in the mind of the consumers or distributors, preemptive control of the physical locations for retail facilities, preemptive control of critical raw materials, and/or preemptive control of other resources critical to success in the industry.IDENTIFYING PREEMPTIVE OPPORTUNITIESThere are many ways to succeed to achieve a preemptive advantage, but identification of a weak link in the commitment from one or more firms in the industry is a good starting point. Among the various positions that Porter demonstrates is the attempt to secure access to rawmaterials or components. This ploy has worked primarily in those industries where raw or primary industries are critical to operations or success.In like manner, programs to preempt production equipment have worked effectively. This situation works best where the production equipment involves proprietary processes or patents. Efforts to dominate supply logistics, such as brokers, transportation, or similar settings, have made an impact. (Note to the Instructor: There are many current examples of these and other preemptive approaches. Current examples, or examples the students may know, will enhance the discussion).Moving to the various functional area activities, in products and/or services, a number of other preemptive methods are utilized. For example, introducing new product lines and expanding production aggressively, such as IBM and many other firms have done, a competitor attempting to follow the lead of the leader can find it a very expensive and likely losing proposition.In the area of production systems, there have been in recent years some very good examples of firms able to develop proprietary production methods, expand capacity aggressively, and secure scarce and critical production skills. In addition, in the production systems area, firms that achieve some level of vertical integration with key suppliers can create a considerable barrier for competitors without the same economies of scale.In the 1980s, IBM, among others, applied the principle that if a firm provides the dominant product design in the industry it will be able to constantly keep the competitors as followers. Constantly expanding the scope of the product is another variation on this theme. A classic example of this approach is Merrill Lynch with the Cash Management Account of the late 1970s, and many others more recently.―Positioning‖ the product more effectively also can be an effective preemptive strategy. This can be an effective and relatively inexpensive strategy, given that there are many different types of positioning in the marketplace, including positioning in the mind of the consumer, distributors, suppliers, and others. (Note to the Instructor: There are and will be many current examples where firms have successfully achieved both challenger and leader positions with various positioning and re-positioning efforts).Other examples of preemption relate to situations where a firm is able to secure accelerated government agency approval because of strong technical capabilities and/or market recognition. This situation obviously occurs most often in medical and pharmaceutical products or other related areas where there are health and safety concerns.Keeping the competitors off balance by constantly adding to the market segments in the marketplace is another useful preemptive action. Coke achieved this effectively with New Coke. Even though the company had to return to the earlier formula and publicly back down from the decision, they were able to further fragment the market and take more share from the smaller competitors with fewer resources.Lastly, it is useful to consider the role of the preemptive in working with distributors. It is appropriate for the leader firm engaging in preemptive marketing to capture key accounts, occupy prime locations, develop preferential access/key distributors, control supply systems and distribution logistics, and insure access to superior service systems. In addition, one of the most important areas for great potential is to engage in educational and promotional activitiesthat are designed to develop the skills of the distributors. This could include a number of activities designed to enhance the capabilities for the distributors to better serve their customers. Note to the Instructor: In all of these examples there are many firms both winning and losing with this strategy. Clearly among the best examples are firms winning, but there are many situations where those losing can provide an interesting story.III. Background Article(s):Issue: Marketing in the High Tech EnvironmentA. Source:―Oracle vs. IBM,‖ BusinessWeek, May 28, 2001, p. 65.Ask Oracle Corp. CEO Lawrence J. Ellison what keeps him up at night, and the answer might surprise you. It‘s not his longtime nemesis, Microsoft Corp. It‘s not up-and-comer Siebel Systems Inc. It‘s IBM, the awakening tech giant that is vying for the No. 1 spot in the corporate-software world. ―He has stopped with that ‗Microsoft is the devil‘ stuff,‖ says Steve Mills, IBM‘s software head. ―He has moved on to us.‖With Good ReasonWhoever wins in this face-off will grab the lion‘s share of the $50 billion corporate-software market for years. For every Oracle product, IBM has a counterpunch: Databases, applications, and e-business foundation software. At the same time, the companies‘ philosophies are strikingly different. Oracle‘s strategy is to off er customers a complete and tightly integrated package of software—everything a company needs to manage its financials, manufacturing, sales force, logistics, e-commerce, and suppliers. In contrast, IBM top management backed a ―best-of-breed‖ approach in w hich it stitched together a quilt of business software from various companies, including itself.The outcome of this battle had huge implications for the software industry. If IBM‘s partnering strategy carries the day, it means there will be plenty of breathing room for major application makers such as SAP, Siebel, and PeopleSoft, and for countless upstarts that are bringing Internet programs to market. If Oracle gains the upper hand, it will be pushing its own applications, leaving less room for other players.To get ahead, IBM is targeted what it sees as Oracle‘s chief vulnerability: The Silicon Valley company competes in the applications market with the same software makers it relies on to help sell its databases. IBM has an advantage because it doesn‘t s ell applications of its own. So, by setting itself up as a neutral party, IBM is able to gain those companies as allies. That boosts its database sales, since application companies often recommend to customers which database they think should be used with their software. IBM‘s consultants then sew the software together.Analysts are split on whether the Oracle or IBM strategy will succeed long-term. They expect both companies to remain among the strongest players in the market. But competitive juices are flowing. Ellison has only disdain for the idea of corporations buying major software components from different suppliers and then hooking them together. ―You would never buy a car that way,‖ he says.。

Chapter 3: Market SegmentationMultiple Choice Questions:1.The more _____ there is in the marketplace, the more _____ is required.a. similarity; segmentationb. diversity; mass marketingc.diversity; segmentationd.none of the above(c; Difficulty 1, p. 49)2.All of the following are necessary conditions for successful segmentation of anymarket, except:a. a large enough population.b. the ability to spend money on the product (general affluence).c. sufficient diversity among the segments.d. segmentation occurrence in developed countries.(d; Difficulty 3, p. 49)3.The process of dividing a market into distinct subsets of consumers with commonneeds or characteristics is known as:a. target marketing.b. market segmentation.c. mass marketing.d. the marketing concept.(b; Difficulty 1, p. 50)4.Henry Ford offering the Model T automobile to the public “in any color theywanted as long as it was black” is at the basis of:a. market segmentation.b. mass marketing.c. target marketing.d. the marketing concept.(b; Difficulty 2, p. 50)5.All of the following are advantages of the mass marketing approach except:a. one advertising campaign is needed.b. one product is offered.c. satisfies the needs of the majority.d. one marketing strategy is required.(c; Difficulty 2, p. 50)6.Any marketing strategy is a three step process that includes:a. market segmentation, marketing mix and positioning.b. market segmentation, targeting and positioning.c. market targeting, positioning and repositioning.d. price, place and promotion.(b; Difficulty 2, p. 50)7.According to our text, Star Gazers and Fun Express are two segments in:a. the automobile industry.b. campus dining segments.c. athletic shoes segments.d. travel segments.(b; Difficulty 3, p. 51, table 3-1)8.When The Gap, Inc opened its baby and kids stores, as well as Banana Republicand Old Navy, it was adopting a ____ strategy.a. targetingb. segmentationc. mass marketingd. blanket marketing(b; Difficulty 2, p. 51)9.Marriott operates 13 lodging brands, such as Fairfield Inn, Residence Inn, andMarriott Resorts. This is an example of Marriott adopting a _____ strategy.a. targetingb. segmentationc. mass marketingd. blanket marketing(b; Difficulty 2, p. 51)10.A firm’s customers can be groupe d into at least four major segments: LoLows,HiLows, LowHighs, and HiHighs. The Low and High measurements referto_____ and _____ respectively.a. current share; financial capabilityb. risk; financial capabilityc. current share; consumptiond. consumption; risk(c; Difficulty 3, p. 52)11.A firm’s customers can be grouped into at least four major segments, LoLows,HiLows, LowHighs, and HiHighs. The firm, should “starve” the LowLows,“tickle” the HiLows, “chase” the LowHighs, and _____ the HiHighs.a. strikeb. strokec. patd. cheer(b; Difficulty 3, p. 52)12.In addition to filling product gaps, segmentation research is regularly used bymarketers to:a. generate ideas for new promotional campaigns.b. generate ideas for product improvements.c. identify the most appropriate media to place advertising.d. all the above(c; Difficulty 2, p. 52)13.There are nine major categories of consumer characteristics as the bases forsegmentation. The include all of the following except:a. geographic factors.b. physiological factors.c. benefits sought.d. sociocultural variables.(b; Difficulty 1, p. 53)14.Another term for psychographic characteristics is:a. age.b. lifestyle.c. benefits sought.d. use-situation factors.(b; Difficulty 1, p. 53)15.When two types of market segmentation are used, it is called:a. combination segmentation.b. hybrid segmentation.c. dual segmentation.d. cross segmentation.(b; Difficulty 1, p. 53)16.People who live in the same area share some similar needs and wants. This is thetheory behind which segmentation basis?a. demographicb. geographicc.psychographicd.sociocultural(b; Difficulty 1, p. 53)17.“Birds of a feather flock together” is the theory behind which type ofsegmentation?a. demographicb. geographicc.psychographicd.none of the above(d; Difficulty 3, p. 53)18.The fact that Salsa outsells ketchup in the southwest, and that Jif peanut butter ispreferred in the Midwest over Skippy, is an example of why _____ segmentation is used.a. demographicb. geographicc.psychographicd.sociocultural(b; Difficulty 2, p. 53)19._____ segmentation includes: needs motivation, personality, perception, andattitudes.a. Demographicb. Psychographicc.Psychologicald.Benefit(c; Difficulty 2, p. 54, table 3-2)20.Professional, blue-collar, white-collar and military are all forms of _____segmentation.a. demographicb. geographicc.psychographicd.psychological(a; Difficulty 3, p. 54, table 3-2)21.Convenience, social acceptance, long lasting, economy and value for the moneyare all forms of _____ segmentation.a. demographicb. benefitc. use-relatedd. psychographic(b; Difficulty 3, p. 54, table 3-2)22.Economy-minded, couch potatoes, outdoor enthusiasts and status-seekers are allforms of _____ segmentation.a. psychologicalb. psychographicc. socioculturald. demographic(b; Difficulty 2, p. 54, table 3-2)23.African Americans, Caucasians, Asians and Hispanics are all forms of _____segmentation.a. demographicb. geographicc. psychographicd. sociocultural(d; Difficulty 3, p. 54, table 3-2)24.When a company decides to put its catalog on the Internet, it is bringing down_____ segmentation boundaries.a. demographicb. geographicc.socioculturald.psychographic(b; Difficulty 2, p. 53)25.Campbell’s Soup uses geographic segmentation dow n to the local retailer level, inwhich it works with individual stores on displays and promotions. This is a form of _____ practice.a.macromarketingb.micromarketingc.private marketingd.individual marketing(b; Difficulty 2, p. 55)26.The greatest success story in the world of retailing is how _____ used geographicsegmentation to place stores in locations that other operations were ignoring.a.Starbucksb.Wal-Martc.McDonald’sd.Walgreen’s(b; Difficulty 2, p. 55)27.Age, sex, marital status, income and occupation are all forms of _____segmentation.a.demographicb.socioculturalc.psychologicald.physiological(a; Difficulty 1, p. 55)28._____ information is often the most accessible and cost-effective way to identifya target market.a.Demographicb.Socioculturalc.Psychologicald.Physiological(a; Difficulty 2, p. 55)29.Trends in the markets, such as shifts in age, gender, and income distribution, areoften detected through _____ information.a.demographicb.socioculturalc.psychologicald.physiological(a; Difficulty 3, p. 55)30.Radio is a highly selective medium and can be employed to reach different agegroups efficiently. Approximately _____ percent of U.S. teens listen to FM radio averaging more than 10 hours a week.a.50b.65c.82d.95(d; Difficulty 3, p. 56)31.Respectively, _____ effects are occurrences due to chronological age, and _____effects are occurrences due to growing up during a specific period of time.a.age; cohortb.time; agec.cohort; aged.seniority; priority(a; Difficulty 2, p. 56)32.The fact that people gain an interest in leisure travel and golf in their late fiftiesand early sixties is an example of:a.age effects.b.cohort effects.c.seniority effects.d.retirement necessities.(a; Difficulty 2, p. 57)33.In 2010, many rock and roll fans will be over the age of 55. What is the reason?a.older people will have a sudden change in tasteb.due to cohort effectc.due to age effectd.it will be back in style and everyone will be a fan(b; Difficulty 2, p. 57)34.Slackers, whiners, and a generation of aging Bart Simpsons are characteristicsoften used to describe which of the six American adult cohorts?a.Depression cohortsb.Post-war cohortsc.Boomers II cohortsd.Generation X cohorts(d; Difficulty 3, p. 58 , table 3-4)35.Much of the change in gender roles has occurred mainly because of:a.single parent families.b.dual-income households.c.the integration of cultures.d.the digital revolution.(b; Difficulty 3, p. 57)36.Because many women are working women, all the following are becoming morepopular types of venues to shop except:a.catalogs.b.the Internet.c.800 numbers.d.strip malls.(d; Difficulty 1, p. 57)37.Singles with incomes greater than $50,000 comprise a market segment that tendsto be above average in the usage of products such as _____.a.peanut butterb.loose teac.breakfast cereald.ketchup(b; Difficulty 2, p. 59)38.Product usage of males and females differs; females tend to use the Internet for allof the following except:a.fighting for causes.b.job productivity.c.role playing.d.helping family and friends.(d; Difficulty 3, p. 59, table 3-5)39.Product usage of males and females differs; males tend to use the Internet for allof the following except:a.helping family and friends.b.job productivity.c.connecting with the world.d.personal productivity.(a; Difficulty 3, p. 59, table 3-5)40._____ has been a long time segmentation basis because it is a strong indicator ofthe ability to pay for a product or a specific model of the product.cationb.Incomec.Occupationd.Lifestyle(b; difficulty 1, p. 59)41.Of the following four variables, which of the following is least related?a.incomeb.genderc.occupationcation(b; Difficulty 1, p. 59)42.Research shows that consumers with lower incomes, lower education and blue-collar jobs tend to spend _____ time online at home than those with higherincomes, educations and white-collar occupations.a.moreb.lessc.same amount ofd.no research has been able to come up with evidence in this regard(a; Difficulty 3, p. 60)43.One reason that blue-collar workers spend more time online at home than white-collar workers do is because:a.blue-collar workers work shorter hours and have more time at home.b.blue-collar workers who want to trade stock cannot afford a broker.c.blue-collar workers do not have access to the Internet at work.d.none of the above(c; Difficulty 2, p. 60)44.If consumers are segmented based on their motivations, personality, perceptions,learning and attitudes, then a _____ segmentation approach has been implemented.a.demographicb.socioculturalc.psychologicald.psychographic(c; Difficulty 2, p. 60)45._____ research is a form of consumer research that has proven to be a valuablemarketing tool that helps identify promising consumer segments that are likely to be responsive to specific marketing messages.a.Psychologicalb.Psychographicc.Socioculturald.Benefit(b; Difficulty 3, p. 60)46.When using psychographic segmentation, AIOs are _____, _____ and _____.a.actions; interests; optionsb.activities; interests; opinionsc.activities; ideas; opinionsd.actions; ideas; options(b; Difficulty 2, p. 60)47.Techno-road-warriors are businesspeople who spend a high percentage of theirworkweek on the road, equipped with laptops, pagers and cell phones. What kind of research was used to result in this market segment?a.socioculturalb.physiologicalc.psychographicd.demographic(c; Difficulty 3, p. 60)48.Centrum Performance vitamins target _____ seg ments by stating, “You’reworking out instead of eating out because there aren’t enough hours in the day.”a.socioculturalb.physiologicalc.psychographicd.demographic(c; Difficulty 3, p. 61 and figure 3-1)49.The traditional family life cycle stages start out with bachelorhood and endin_____.a.empty-nesterb.post-parenthoodc.dissolutiond.demise(c; Difficulty 2, p. 61)50.Social class is usually measured by all of the following except:a.income.cation.c.lifestyle.d.occupation.(c; Difficulty 1, p. 62)51.An ad for Merrill Lynch stating “Patricia and Dan are always searching for thebest of everything. Their money behaves in a similar fashion” would be targeting people according to their_____. (choose the best answer)a.incomeb.occupationc.social classd.lifestyle(c; Difficulty 2, p. 63)52.In the U.S., African Americans, Hispanic Americans and Asian Americans are allimportant_____ segments.a.culturalb.marketc.consumerd.subcultural(d; Difficulty 2, p. 63)e-related segmentation categorizes consumers in terms of level of usage, levelof awareness, and _____.a.benefits soughtb.degree of brand loyaltyc.brand knowledged.social class(b; Difficulty 2, p. 64)54.Research has shown that 25 to 30 percent of beer drinkers account for more than70 percent of al beer consumed. This is an example of_____ segmentation.a.benefite-relatedc.psychographicd.lifestyle(b; Difficulty 2, p. 64)55.Consumer innovators tend to:a.not be brand loyal.b.be brand loyal.c.be older.d.be less educated.(a; Difficulty 3, p. 64)56.Relationship programs, such as the Hilton Honors program and Hertz Number 1Club, mostly reward:a.customers who are brand loyal.b.brand switchers.c.consumer innovators.d.all of the above(a; Difficulty 1, p. 64)57.The greeting card industry capitalizes on occasions to sell products; this is aperfect example of_____ segmentation.a.lifestyleb.benefitage situationd.demographic(c; Difficulty 3, p. 66)58.Hefty One Zip Bags emphasize “piece of mind.” Eclipse gum stresses “freshbreath.” They are two companies trying to attract customers on the bas is of _____ segmentation.e-relatedb.benefitc.lifestyled.sociocultural(b; Difficulty 2, p. 68)59.The classic case of successful _____ segmentation is the market for toothpaste. Ifconsumers are socially active, they want a toothpaste that can deliver white teeth and fresh breath; if they smoke, they want one that fights stains; if they want to prevent disease, they want one that will fight germs.e-relatedb.benefitc.lifestyled.sociocultural(b; Difficulty 2, p. 68)60.______ profiling has been widely used in the development of advertisingcampaigns to answer the questions, “Whom should we target?” “What should we say?” and “Where should we say it?”a.psychographic-demographicb.geo-demographicc.socio-demographicd.VALS(a; Difficulty 3, p. 68)61.“Birds of a feather flock together” is the theory behind which type ofsegmentation?a. demographicb. geographicc.psychographicd.geo-demographic(b; Difficulty 2, p. 71)62.Claritas, the leading company in creating consumer clusters based on lifestyle,uses zip codes that cluster people throughout the country. Its most famous tool is known as:a.VALSb.PRIZMc.SRId.ZIP(b; Difficulty 3, p. 71)63.The _____ system used by SRI Consulting classifies the American populationinto eight segments.a.VALSb.PRIZMc.Mindbase segmentationd.Geo-demographic(a; Difficulty 2, p. 73)64.SRI Consulting’s VALS system categorizes people into eight segments based onthree horizontal self-orientations: Principle, Status, and _____.a.Resourcesb.Actionc.Achievementd.Social Class(b; Difficulty 3, p. 73, figure 3-7)65._____ tend to buy American-made products and are slow to alter theirconsumption-related habits.a.Actualizersb.Strugglersc.Believersd.Makers(c; Difficulty 3, p. 73, figure 3-7)66.To be an effective target, a market segment should be: identifiable, sufficient,stable or growing, and _____.a.modernb.internationalc.accessibled.desirable(c; Difficulty 3, p. 75)67.Teens are an attractive market except for one factor that makes them risky—thefact that teen segments are_____.a.hard to identifyb.fairly smallc.instabled.not accessible(c; Difficulty 2, p. 77)68.Targeting several segments using individual marketing mixes for each is called_____.a.concentrated marketingb.differentiated marketingc.coutersegmentationd.local marketing(b; Difficulty 2, p. 77)69.Targeting just one segment with a unique marketing mix is called _____.a.concentrated marketingb.differentiated marketingc.countersegmentationd.local marketing(a; Difficulty 2, p. 78)70.When your business college decides to cancel courses due to lack of interest, andcombines two majors due to inadequate registration in both, that is usually known as_____.a.concentrated marketingb.differentiated marketingc.countersegmentationd.local marketing(c; Difficulty 2, p. 78)True/False Questions:71.The essence of segmented marketing was summed up by Henry Ford whenoffering the Model T car to the public “in any color as long as it was black”. (False; Difficulty 2, p. 50)72.One advantage of segmented marketing is that it costs less in terms of advertisingcampaign costs and a standardized product.(False; Difficulty 1, p. 50)73.The fact that Toyota offers its small sporty Celica, and its much larger Avalon, isevidence that Toyota uses market segmentation.(True; Difficulty 1, p. 50)74.Once a product is initially positioned and promoted, it will reflect poorly on acompany to change its position somewhere down the line.(False; Difficulty 2, p. 52)75.The theory behind geographic segmentation is that people who live in the samearea have the same values and beliefs(False; Difficulty 3, p. 53)76.By placing their catalogs on the Internet, marketers hope to overcomepsychological boundaries.(False; Difficulty 2, p. 53)77.Campbell’s Soup is known for following a highly segmented marketing strategyby dividing the U.S. into more than 20 regions.(True; Difficulty 3, p. 55)78.The best example of successful segmentation based on demographics is the giantWal-Mart operation, in which the strategy is to locate their stores in small towns. (False; Difficulty 3, p. 55)79.Demographics help to locate a target market, whereas psychological andsociocultural characteristics help to describe how its members think and feel. (True; Difficulty 3, p. 55)80.Demographic studies show that the mature adult market (the 50 plus market) has asmaller disposable income than the younger population.(False; Difficulty 2, p. 55)81.When segmenting the market, it is important to realize the difference between ageeffects, occurrences due to growing up during a specific period of time, andcohort effects, occurrences due to chronological age.(False; Difficulty 2, p. 57)82.The changes in gender roles in today’s society are largely due to the continuedimpact of dual-income households.(True; Difficulty 3, p. 57)83.Research has shown that men and women differ in terms of the way they look attheir Internet usage. While men are information hungry, women expectcommunications media to entertain and educate.(True; Difficulty 3, p. 59, table 3-5)84.Campbell’s Soup to Go! and Maxwell House’s coffee Singles and two-cup coffeemakers are an attempt to target people according to their demographics. (True; Difficulty 3, p. 59)cation, income and gender tend to be closely correlated in almost a cause-andeffect relationship.(False; Difficulty 2, p. 59)86.Research reveals that people with higher income, education, and white-collaroccupations tend to spend more time online at home than people with lowerincomes, educations, and blue-collar jobs.(False; Difficulty 2, p. 59)87.Psychographic research is commonly referred to as lifestyle analysis.(True; Difficulty 1, p. 60)88.The psychographic profile of a consumer segment can be thought of as acomposite of consumers’ measured activities, ideas and opinions (AIOs). (False; Difficulty 3, p. 60)89.The traditional family life cycle will go through the following stages:bachelorhood, honeymooners, parenthood, post-parenthood and dissolution. (True; Difficulty 3, p. 61)90.A family’s financial needs tend to be constant even as they progress through thevarious life stages.(False; difficulty 2, p. 61)91.Social class is best measured by a weighted index of education, occupation,income and gender.(False; Difficulty 1, p. 62)92.Some marketers segment their markets on the basis of cultural heritage, becausemembers of the same culture tend to share the same values, beliefs and customs. (True; Difficulty 1, p. 63)93.It is safe to assume that if a product is successful locally it will be acceptedinternationally.(False; Difficulty 3, p. 63)94.In the U.S., some examples of important subcultures include African Americans,Hispanic Americans and the elderly population.(True; Difficulty 3, p. 63)95.One of the easiest market segments to reach globally with similar marketingcampaigns, regardless of cultural background, is the teenage market.(True; Difficulty 3, p. 63)96.Often marketers target consumers who are known to be brand switchers, in beliefthat such people represent greater market potential than consumers who are loyal to competing brands.(True; Difficulty 3, p. 64)97.Relationship programs are an excellent way to reward consumer innovators. (False; Difficulty 2, p. 64)98.Psychographic and geographic profiles are highly complimentary segmentationapproaches that work best when used together.(False; Difficulty 3, p. 68)99.“Birds of a feather flock together” is the basis of geographic segmentation. (False; Difficulty 3, p. 71)100.SRI Consulting developed a segmentation scheme of the American population, known as VALS, that segments people into 32 different categories.(False; Difficulty 2, p. 73)Essay Questions:101.Talk about how marketing segmentation evolved from mass marketing to micromarketing, citing examples for each level of segmentation.Historically, marketers followed mass marketing strategies, which meant creating one product, one marketing strategy, and one marketing campaign to all its customers. Henry Ford’s Model T is an example, in that he stated that he will offer a car to anyone “in any color they wanted as long as it was black.”The second level is market segmentation, by identifying the different market segments, and targeting each segment individually with its own strategy, campaign, and unique product design. Most automobile companies today follow this strategy, such as GM by offering their wide range of vehicle sizes and prices to “match every purse and personality”.The lowest form of segmentation could be at the local level or the individual level. Campbell’s Soup works closely with its 209 regional managers to create special display and promotional campaigns to suit local needs. On the individual level, or what is known as one2one marketing, companies such as use the Internet and current technology to reach their customers at an individual basis by sending personalized messages. They can also use current technology by customizing products; an example would be Dell computers, who can create a unique computer based on consumer’s individual requests.(Difficulty 3; p. 50)102.What is product positioning and repositioning?Positioning the product means that the marketer must place it in a way for customers to perceive it to satisfy their needs better than any of the competitors on any one competitive advantage. The marketer must communicate the message appropriately to the customers to make them believe it will be the best option for their needs.Many companies decide to reposition their products to include a wider customer base without losing their core customers, or by adding a new feature or option that might be appealing and communicating the message to their existing and new customers. (Difficulty 3; p. 50 and 52)103.Talk about The Gap, Inc and their use of market segmentation.The Gap targets different age, income, and lifestyle segments in a diverse set of retail outlets. The Gap and Super Gap stores are designed to attract a wide range of consumers who seek a casual and relaxed style of dress. Gap targets upscale consumers through its Banana Republic stores, and some downscale consumers with its Old Navy Clothing stores. It also targets young parents with Baby Gap and Gap Kids stores. With this, The Gap is able to appeal to a variety of segments. (Difficulty 2; p. 51)104.How was Wal-Mart successful in using geographic segmentation?Wal-Mart did what other retailers were not interested in. They followed a strategy of opening stores in rural areas and small towns where there were no competitors and there was a need for such large discount retailers.(Difficulty 1; p. 55)105.Explain the difference between age effects and cohort effects.Age effects are occurrences due to chronological age, such as heightened interest in leisure travel and golf, that often occurs when people reach middle age.Cohort effects are occurrences due to growing up during a specific period of time, such as if growing up while listening to rock and roll means you will be a rock and roll fan regardless of your age. One stresses the impact of aging while the other stresses the influence of the period when one was born.(Difficulty 2; p. 57)106.Explain how gender roles have blurred. What are marketers doing to overcome this change in roles?Women are no longer the traditional users of cosmetics—many men are increasingly spending more money on skin care and hair products, and women are becoming an important segment in the repair tools market. The main reason behind this change in roles is due to the fact that more women are working, which has created more dual-income household that led to changing and sharing all responsibilities.Marketers are trying to overcome the change in gender roles by changing the ways they target women, such as offering magazines like Working Woman or Working Mother, and by increasing their pressure on women to use catalogs, 800 numbers and the Internet for shopping rather than going to the mall.(Difficulty 3; p. 57)107.Why is Family Life Cycle an important basis for segmentation?Because many families pass through similar phases in their formation, growth and financial dissolution, at each phase the family unit needs differ.Young singles going through the bachelorhood stage will need basic furniture for their apartments, and a small, inexpensive vehicle to start them off. Once singles get married and move into the honeymooners stage, their focus becomes buying a new home and furnishing it, then when they become parents, the majority of their disposable income will be spent on their children’s needs.(Difficulty 2; p. 61)108.How is brand loyalty used as a basis for segmentation?Marketers try to identify the characteristics of their brand loyal customers so that they can direct their promotional efforts to people with similar characteristics in larger populations. They try to increase their loyalty by offering them types of relationship programs which reward them for being continuous users of the product or service. (Difficulty 2; p. 64)109.Geo-demographic segmentation is one of the more popular bases for segmentation. What tools have been developed for it?This type of segmentation is based on the notion that people who live close to one another are likely to have similar financial means, tastes, preferences, lifestyles and consumption habits, similar to the saying “birds of a feather flock together”.A company called Claritas developed a tool, PRIZM, in which clusters are created based on the lifestyle of people scattered throughout the country. It identifies these clusters through zip codes, and reveals a description of the segment based on research done through the company.(Difficulty 3; p. 71)110.What is countersegmentation?Countersegmentation occurs when companies find that some segments have contracted over time to the point that they do not warrant an individually designed marketing program. In this case a company will seek to discover a more generic need that would apply to two or more segments and recombine those segments into a larger segment that would be targeted with one promotional campaign.(Difficulty 2; p. 78)。

Frank.R.Kardes．消费者行为与管理决策．北京：清华大学出版社．2003.6第二章消费者的注意和理解导言从直接经验获取产品知识从间接经验获取产品知识注意力限制在日常生活中，消费者可能遇到很多直接和间接信息，太多的信息使他们不可能逐个处理或思考所有与产品相关的数据。

如果消费者不得不仔细思考每一个广告、每一个包装的标签以及他们看到或听到的每一个市场营销方面的信息，那么他们就几乎不会有时间来处理其他事情。

这也就是说，消费者具有注意力限制（limits of attention）。

对于市场上提供的营销信息，他们仅对他们遇到的很少一部分信息注意。

准确地讲，人们能够处理多少信息？根据哈佛大学心理学家George Miller（1956）的理论，人们可以同时注意7个（加或减2个）单位的信息。

一个信息单位可以很小——例如单个数字、字母、词汇或概念，也可以很大——例如一连串的数字、字母、词汇或概念（Newell，Simon，1972）。

信息单位的大小取决于一个人的知识水平或经验水平：当知识增加的时候，信息单位也随之增加（Newell，Simon，1972）。

所以，与新手相比，专家注意并思考更大单位的信息。

由于人们只能同时注意7个左右单位的信息，太多的信息很容易使人们不知所措。

例如，杂货店可能销售12种或更多不同品牌的洗碟用清洁剂，而且清洁剂的包装可以是大包装（如32盎司）、中等包装（如16盎司）和小包装（如8盎司）。

如果这12种不同品牌的清洁剂都有大中小3种包装，消费者就会面对36种不同的选择。

将这36种选择尽其可能进行成对比较，消费者将不得不进行1 200多次比较[361／（36—2）!＝1 260]!大多数消费者是不愿意花费如此多的时间和精力，从36种可选商品中选出其中的一种晶牌。

但是，如果信息是以一种容易比较的方式提供，那么，对36种不同品牌的洗碟用清洁剂进行比较就会非常容易。

例如，可以将36种选择列成“汇总表”，最好的商品排在开始，较好的商品排在其后，接着排列第三好的商品，如此等等（Russo，1977；Russo，Staelin，Nolan，Russell，Metcalf，1986）。

CHAPTER 16Consumer Decision Making and BeyondLEARNING OBJECTIVESAfter studying this chapter students should be able to:1.Describe a decision.2.Enumerate the three levels of consumer decision making.3.Explain the four models of consumer decision making discussed in the text.4.Outline a model of consumer decision-making.5.Discuss the three stages of consumer decision making in the process component of thedecision-making model.6.Outline the rules consumers use in decision making.7.Discuss purchase and postpurchase behavior as part of the consumer decision process.8.Explain consumer gifting behavior.9.Describe the elements of the consuming and possessing process.10.Explain the importance of relationship marketing.SUMMARYThe consumer’s decision to purchase or not to purchase a product or service is an important moment for most marketers. It can signify whether a marketing strategy has been wise, insightful, and effective, or whether it was poorly planned and missed the mark. Thus, marketers are particularly interested in the consumer’s decision-making process. For a consumer to make a decision, more than one alternative must be available. (The decision not to buy is also an alternative.)Theories of consumer decision making vary, depending on the researcher’s assumptions about the nature of humankind. The various models of consumers (economic view, passive view, cognitive view, and emotional view) depict consumers and their decision-making processes in distinctly different ways.An overview consumer decision-making model ties together the psychological, social, and cultural concepts examined in Parts II and III into an easily understood framework. This decision model has three sets of variables: input variables, process variables, and output variables.Input variables that affect the decision-making process include commercial marketing efforts, as well as noncommercial influences from the consumer’s sociocultural environment. The decision process variables are influenced by the consumer’s psychological field, including the evoked set (or the brands in a particular product category considered in making a purchase choice). Taken as a whole, the psychological field influences the consumer’s recognition of a need, prepurchase search for information, and evaluation of alternatives.The output phase of the model includes the actual purchase (either trial or repeat purchase) and postpurchase evaluation. Both prepurchase and postpurchase evaluation feed back in the form of experience into the consumer’s psychological field, and serve to influence future decision processing.The process of gift exchange is an important part of consumer behavior. Various gift-giving and gift-receiving relationships are captured by the following five specific gifting classification scheme: (1) intergroup gifting (a group gives a gift to another group); (2) intercategory gifting (an individual gives a gift to a group or a group gives a gift to an individual); (3) intragroup gifting (a group gives a gift to itself or its members), (4) interpersonal gifting (an individual gives a gift to another individual), and (5) intrapersonal gifting (a self-gift).Consumer behavior is not just making a purchase decision or the act of purchasing; it also includes the full range of experiences associated with using or consuming products and services. It also includes the sense of pleasure and satisfaction derived from possessing or collecting “things.” The outputs of consumption are changes in feelings, moods, or attitudes; reinforcement of lifestyles; an enhanced sense of self, satisfaction of a consumer-related need: belonging to groups; and expressing and entertaining oneself.Among other things, consuming includes the simple utility of using a superior product, the stress reduction of a vacation, the sense of having a “sacred” possession, and the pleasures of a hobby or a collection. Some possessions serve to assist consumers in their effort to create “personal meaning” and to maintain a sense of the past.Relationship marketing impacts consumers’ decisions and their consumption satisfaction. Firms establish relationship marketing programs (sometimes called loyalty programs) to foster usage loyalty and a commitment to their products and services. At its heart, relationship marketing is all about building trust(between the firm and its customers), and keeping promises made to consumers. Therefore, the emphasis in relationship marketing is almost always on developing long-term bonds with customers by making them feel special and by providing them with personalized services.CHAPTER OUTLINEINTRODUCTION1.This chapter takes a broader perspective and examines consumer decision making in thecontext of all types of consumption choices, ranging from the consumption of new products to the use of old and established products.2.It also considers consumers’ decisions not as the end point, but rather as the beginning pointof a consumption process.WHAT IS A DECISION?1.In the most general terms, a decision is the selection of an option from two or morealternative choices.2.If the consumer has no alternatives from which to choose and is literally forced to make aparticular purchase or take a particular action (e.g., use a prescribed medication), then this does not constitute a decision and is commonly referred to as a “Hobson’s choice.”b)In actuality, no-choice purchase or consumption situations are fairly rare.LEVELS OF CONSUMER DECISION MAKING1.Not all consumer decisions receive or require the same amount of effort in the informationsearch.2.Researchers have identified three specific levels of consumer decision making: extensiveproblem solving, limited problem solving, and routinized response behavior.Extensive Problem Solving1.When consumers have no established criteria for evaluating a product, or have not narrowedtheir choices, then they are in extensive problem solving.2.At this level, the consumer needs a great deal of information to establish a set of criteria onwhich to judge specific brands and a correspondingly large amount of information concerning each of the brands to be considered.Limited Problem Solving1.At this level consumers have already established the basic criteria for evaluating the productcategory but haven’t established preferr ed categories.2.Their search for additional information is more like “fine-tuning;”they must gatheradditional brand information to discriminate among the various brands.Routinized Response Behavior1.At this level, consumers have some experience with the product category and a well-established set of criteria with which to evaluate the brands they are considering.a)They may search for a small amount of additional information.2.Just how extensive a consumer’s problem-solving task is depends on how well establishedhis or her criteria for selection are, how much information he or she has about each brand being considered, and how narrow the set of brands is from which the choice will be made.3.Routinized response behavior implies little need for additional information.MODELS OF CONSUMERS: FOUR VIEWS OF CONSUMER DECISION MAKING1.The term models of consumers refer to a general view or perspective as to how and whyindividuals behave as they do.2.Four views will be examined:a)An economic view.b) A passive view.c) A cognitive view.d)An emotional view.An Economic View1.The consumer has often been characterized as making rational decisions.a)This model, called the economic man theory, has been criticized by consumerresearchers for a number of reasons.b)To behave rationally in the economic sense, a consumer would have to:i)Be aware of all available product alternatives.ii)Be capable of correctly ranking each alternative in terms of its benefits and its disadvantages.iii)Be able to identify the one best alternative.c)This perspective is unrealistic because:i)People are limited by their existing skills, habits, and reflexes.ii)People are limited by their existing values and goals.iii)People are limited by the extent of their knowledge.2.Consumers operate in an imperfect world, therefore the economic view is often rejected astoo idealistic and simplistic.A Passive View1.The opposite of the economic view is the view of the consumer as basically submissive to theself-serving interests and promotional efforts of marketers (i.e., the passive view).2.Consumers are perceived as impulsive and irrational purchasers, ready to yield to the armsand aims of marketers.3.The principal limitation of this model is that it fails to recognize that the consumer plays anequal, if not dominant, role in many buying situations by seeking information about product alternatives and selecting the product that appears to offer the greatest satisfaction.4.This view is largely unrealistic.A Cognitive View1.This view portrays the consumer as a thinking problem solver.2.The cognitive model focuses on the processes by which consumers seek and evaluateinformation about selected brands and retail outlets.3.Consumers are viewed as information processors, and this leads to the formulation ofpreferences, and ultimately, purchase intentions.4.In contrast to the economic view, this view recognizes that the consumer is unlikely to seekall possible information, but will only seek information until he/she has what is perceived as sufficient information to make a satisfactory decision.5.Consumers are presumed to use heuristics—short-cut decision rules to facilitate decisionmaking.a)They also use decision rules when exposed to too much information—informationoverload.6.This model depicts a consumer who does not have complete knowledge, and therefore cannotmake perfect decisions, but who actively seeks information and attempts to make satisfactory decisions.An Emotional View1.Although aware of the emotional or impulsive side of consumer decision making, marketershave preferred the economic or passive models.2.In reality, when is comes to certain purchases or possessions, deep feelings or emotions arelikely to be highly involved.3.Possessions may also serve to preserve a sense of the past and help with transitions in timesof change.4.When a consumer makes what is basically an emotional purchase decision, less emphasistends to be placed on searching for prepurchase information and more on the current mood or feelings.5.Unlike an emotion, which is a response to a particular environment, a mood is more typicallyan unfocused, pre-existing state—already present at the time a consumer “experiences”an advertisement, a retail environment, a brand, or a product.6.Mood is important to consumer decision making in that it impacts when consumers shop,where they shop, and whether they shop alone or with others.a)Some retailers attempt to create a mood for shoppers.b)Individuals in a positive mood recall more information about a product than those in anegative mood.A MODEL OF CONSUMER DECISION MAKING1.The model looks at cognitive processes, problem solving, and to some degree, the emotionalaspects of consumer decision making as well.2.This is not an exhaustive review but a synthesis and coordination of relevant concepts into awhole.Input1.The input component draws on external influences that provide information or influence aconsumer’s product-related values, attitudes, and behavior.Marketing Inputs1.The firm’s marketing activities are a direct attempt to reach, inform, and persuade consumersto buy and use its products.2.The impact of a firm’s marketing efforts is governed by the consumer’s perception of theseefforts.3.Marketers should be alert to consumer perceptions by sponsoring consumer research, ratherthan to rely on the intended impact of their marketing messages.Sociocultural Inputs1.Sociocultural inputs consist of a wide range of noncommercial influences—comments of afriend, an editorial in the newspaper, a family member, and direct noncommercial sources of information.2.The unwritten codes of conduct communicated by culture indicate right and wrongconsumption behavior.3.The cumulative impact of each firm’s marketing efforts, the influence of family, friends, andneighbors, and society’s existing code of behavior are all likely to affect the how and what of consumer purchases.Process1.The process component of the model is concerned with how consumers make decisions.2.Psychological field—represents the internal influences—motivation, perception, learning,personality, and attitudes—that affect consumers’ decision-making processes.3.The consumer decision consists of three states: need recognition, prepurchase search, andevaluation of alternatives.Need Recognition1.Recognition of a need occurs when a consumer is faced with a problem.2.Among consumers there seem to be two different problem recognition styles.a)Actual state types—consumers who perceive that they have a problem when a productfails to perform satisfactorily.b)Desired state types—the desire for something new may trigger the decision process.Prepurchase Search1.Prepurchase search begins when a consumer perceives a need that might be satisfied by thepurchase and consumption of a product.a)The consumer usually searches his or her memory first.b)If no experience is present then he/she may engage in an extensive search of the outsideenvironment.c)Past experience is considered an internal source of information.i)The greater the relevance of past experience, the less of an external search.ii)The degree of perceived risk can also influence this stage.iii)High risk situations will lead to complex information gathering, low-risk, simple search and evaluation.2.The act of “shopping” is an important form of external information.a)According to a recent consumer study there is a big difference between men and womenin terms of their response to shopping.b)In addition to gender differences, research reveals that price considerations can alsoplay a role in determining the extent of the search process.3.An examination of the external search effort associated with the purchase of different productcategories (e.g., TVs, VCRs, or personal computers) found that, as the amount of total search effort increased, consumer attitudes toward shopping became more positive, and more time was made available for shopping.a)The less consumers know about a product category and the more important the purchaseis to them, the more time they will make available and the more extensive their prepurchase search activity is likely to be.4.The Internet has had a great impact on prepurchase search.a)Web sites can provide consumers with much of the information they need about theproducts and services they are considering.5.How much information a consumer will gather also depends on various situational factors.Evaluation of Alternatives1.When evaluating potential alternatives, consumers tend to use two types of information:a) A “list” of brands (the evoked set).b)The criteria they will use to evaluate each brand.2.Evoked set—evoked set refers to the specific brands the consumer considers in making apurchase in a particular product category.a)The inept set consists of brands the consumer excludes from purchase consideration asunacceptable.b)The inert set is those brands to which the consumer is indifferent because they areperceived as having no advantage.c)The evoked set consists of the small number of brands the consumer is familiar with,remembers, and finds acceptable.3.The five terminal positions in the model that do not end in purchase would appear to haveperceptual problems. For example:a)Brands may be unknown because of the consumer’s selective exposure to advertisingmedia and selective perception of advertising stimuli.b)Brands may be unacceptable because of poor qualities or attributes or inappropriatepositioning in either advertising or product characteristics.c)Brands may be perceived as not having any special benefits and are regardedindifferently by the consumer.d)Brands may be overlooked because they have not been clearly positioned or sharplytargeted at the consumer market segment under study.e)Brands may not be selected because they are perceived by consumers as unable tosatisfy perceived needs as fully as the brand that is chosen.4.The implication for marketers is that promotional techniques should be designed to impart amore favorable, perhaps more relevant product image to the target consumer.5.Criteria used for evaluation brands—the criteria consumers’ use for evaluating brands areusually expressed in terms of important product attributes.a)When a company knows that consumers will be evaluating alternatives, they sometimesadvertise in a way that recommends the criteria that consumers should use in assessing product or service options.b)Research shows that when consumers discuss such “right products,” there is little or nomention of price; brand names are not often top-of-mind; items often reflect personality characteristics or childhood experiences; and it is often “love at first sight.”6.Consumer decision rules—consumer decision rules are referred to as heuristics, decisionstrategies, and information-processing strategies, and are procedures used by consumers to facilitate brand choices.a)These rules reduce the burden of decision making.b)Compensatory decision rules—a consumer evaluates brand options in terms of eachrelevant attribute and computes a weighted or summated score for each brand.i)The computed score reflects the brand’s relative merit as a potential purchasechoice.ii)The assumption is that the consumer will choose the brand with the highest score.iii) A unique feature of a compensatory decision rule is that it allows a positive evaluation of a brand on one attribute to balance out a negative evaluation on someother attribute.c)Noncompensatory decision rules do not allow consumers to balance positiveevaluations of a brand on one attribute against a negative evaluation on some other attribute. Forms include:i)Conjunctive decision rule—the consumer establishes a minimally acceptable levelthat is established as a cutoff point for each attribute.a)If any particular brand falls below the cutoff point on any one attribute, thebrand is eliminated from consideration.ii)Disjunctive rule—this rule mirrors the conjunctive rule.a)The consumer establishes a minimally acceptable level as a cutoff point foreach attribute.b)In this case if a brand alternative meets or exceeds the cutoff established forany one attribute, however, it is accepted.iii)Lexicographic decision rule—the consumer first ranks the attributes in terms of perceived relevance or importance.a)The consumer then compares the various brand alternatives in terms of thesingle attribute that is considered most important.b)If one brand scores sufficiently high on this top-ranked attribute, it isselected, and the process ends.c)The highest-ranked attribute may reveal something about the individu al’sconsumer orientation.7. A variety of decision rules appear common. Nine out of ten shoppers who go to the store forfrequently purchased items have a specific shopping strategy for saving money.a)Practical loyalists—look for ways to save on those brands and products that they wouldbuy anyway.b)Bottom-Line Price Shoppers—buy the lowest-priced item, with little or no regard forbrand.c)Opportunistic Switchers—use coupons or sales to decide among brands and productsthat fall within their evoked set.d)Deal Hunters—look for the best “bargain” and are not brand-loyal.8. A synthesized decision rule, the affect referral decision rule, is the simplest, and is theconsumer remembering past evaluations from his/her evoked set and selecting the brand with the highest perceived overall rating.9.Going online to secure assistance in decision making—for the past several years researchershave been examining how using the Internet has impacted the way consumers make decisions.a)Three factors that have been researched are:i)Task complexity(number of alternatives and amount of information available foreach alternative).ii)Information organization (presentation, format, and content).iii)Time constraint (more or less time to decide).10.Lifestyles as a consumer decision strategy—a n individual’s or family’s decisions to becommitted to a particular lifestyle impacts their consumer behavior.a)Research suggests that 15 percent of Baby Boomers will be seeking a simpler lifestyle.11.Incomplete information and noncomparable alternatives—in many situations consumers faceincomplete information. They cope with this missing information in a number of ways.a)They may delay decision making until the missing information is available.b)They may ignore the missing information and work with available information.c)Consumers may change their decision-making strategy to accommodate the missinginformation.d)Consumers may infer or construct the missing information.e)Consumers may conclude that none of their choices offer sufficient benefits to warrantpurchase.f)Sometimes consumers use decision rules to compare dissimilar alternatives.12.A series of decisions—a purchase can involve a number of decisions rather than a singledecision.13.Decision rules and marketing strategy—an understanding of which decision rules consumersapply in selecting a particular product or service is useful to marketers concerned with formulating a promotional program.14.Consumption vision—a study found the attitudes and search behavior of a vision, “a mentalpicture or visual image of specific usage outcomes and/or consumption consequences.”a)Such visions allow consumers to imagine or vicariously participate in the consumptionof the product or service prior to making an actual decision.OUTPUT1.The output portion of the consumer decision-making model concerns two closely associatedkinds of postdecision activity: purchase behavior and postpurchase evaluation.2.The objective of both activities is to increase the consumer’s satisfaction with his or herpurchase.Purchase Behavior1.Consumers make three types of purchases: trial purchases, repeat purchases, and long-termcommitment purchases.a)Trial is the exploratory phase of purchase behavior in which consumers attempt toevaluate a product through direct use.i)When a trial is satisfactory, consumers are likely to repeat the purchase.b)Repeat purchase behavior is similar to brand loyalty.i) A repeat purchase usually signifies that the product meets with the consumer’sapproval and that the consumer is willing to use it again and in larger quantities.ii)This form is closely related to brand loyalty.c)Trial is not always feasible, such as with big-ticket items and durable goods. In that casethe consumer moves from evaluation directly to long-term commitment.Postpurchase Evaluation1.As consumers use a product, they evaluate its performance in light of their own expectations.2.There are three possible outcomes of such evaluation.a)Actual performance matches the standard, leading to a neutral feeling.b)Positive disconfirmation when the performance exceeds the standard.c)Negative disconfirmation when the performance is below the standard.3.An important aspect of the purchase process is reducing postpurchase cognitive dissonance,when consumers try to reassure themselves that their choice was a wise one.4.The degree of postpurchase analysis relates to the importance of the product decision and theexperience acquired in using the product.5.The consumer’s postpurchase evaluation feeds back as experience to the consumer’spsychological field and serves to influence future related decisions.CONSUMER GIFTING BEHAVIOR1.The amount of money spent and feelings generated by gifts make them an interesting part ofconsumer behavior.2.Gifting behavior is the process of gift exchange that takes place between a giver and receiver.a)It includes gifts given to (and received from) others and gifts to oneself, or self-gifts.3.Gifting is symbolic communication with implicit and explicit meanings.4.One of the models of gifting reveals the following five gifting subdivisions:a)Intergroup gifting.b)Intercategory gifting.c)Intragroup gifting.d)Interpersonal gifting.e)Intrapersonal gifting.5.Intergroup gifting occurs when one group exchanges gifts with another.6.Intercategory gifting is an individual giving a group a gift, or a group giving an individual agift.7.An intragroup gift is a gift that a group gives itself.8.Interpersonal gifts occur between two individuals.9.An intrapersonal gift is a self-gift.BEYOND THE DECISION: CONSUMING AND POSSESSING1.Historically consumer behavior studies have focused on the product, service, or brandchoices.2.We now see that the experience of possessing, collecting, or consuming things contributes toconsumer satisfaction and overall quality of life.3.Consumer choices might be viewed at the beginning of the consumption process rather thanat the end.a)The choice or purchase decision is the input of the process.b)The input stage includes a consumption set and a consumption style.c)The process stage consists of using, possessing, collecting, and disposing of things andexperiences.d)The output stage would include changes in feelings, attitudes, and behaviors, as well asreinforcement of a lifestyle.Products Have Special Meaning and Memories1.Consuming is a diverse and complex process.2.It includes utility of a product, the psychological use of the product, memories, etc.3.As a consequence, some possessions create personal meaning for consumers and/or helpthem maintain a sense of the past.4.Some people maintain their identity after major changes in their life by linking to their past.Relationship Marketing1.Many firms are pursuing relationship marketing in order to build loyal usage and acommitment to their company’s products and services.a)It is built on trust that grows from keeping promises.2.The goal of relationship marketing is to build strong, lasting relationships with a core groupof customers.3.The emphasis is on developing long-term bonds, making consumers feel good about thecompany, and giving the consumer some kind of personal connection to the business.4. A review of the composition of 66 consumer relationship marketing programs revealed threeelements shared by more than 50 percent of the programs.a)Fostering ongoing communication with customers (73 percent of the programs).b)Furnishing loyalty by building extras like upgrades and other perks (68 percent of theprograms).c)Stimulating a sense of belonging by providing a “club membership” format (50 percentof the programs).5.Like personal relationships between individuals who are willing to do favors for each other,“relationship”marketers offer loyal customers special services, discounts, increased communications, and attention beyond the core product or service, without expecting an immediate payback.a) A new form of relationship marketing has resulted as Internet usage has increased. Theterm used on the Internet is “permission marketing.”6.Although direct marketing, sales promotion, and general advertising may be used as part of arelationship marketing strategy, relationship marketing stresses long-term commitment to the individual customer.7.Ultimately, it is to a firm's advantage to develop long-term relationships with existingcustomers, because it is easier and less expensive to make an additional sale to an existing customer than to make a new sale to a new consumer.8.Research indicates that consumers today are less loyal than in the past, due to six majorforces:a)The abundance of choice.b)Availability of information.c)Entitlement (consumers repeatedly ask “What have you done for me lately?”).d)Commoditization (most products/services appear to be similar—nothing stands out).e)Insecurity (consumer financial problems reduce loyalty).f)Time scarcity (not enough time to be loyal).DISCUSSION QUESTIONS1. Compare and contrast the economic, passive, cognitive, and emotional models ofconsumer decision making.The economic view portrays consumers as making rational decisions. Clearly, this model is not characteristic of most consumption situations because consumers are rarely aware and knowledgeable of all the product alternatives in any given situation, and of all the features and benefits of the product offerings they can choose from. Thus, they are often unable to make rational decisions. The passive view depicts the consumer as basically submissive to the self-serving interests and promotional efforts of marketers. Consumers are perceived as impulsive and irrational purchasers, ready to yield to the arms and aims of marketers. The cognitive view depicts consumers as problem solvers where they cognitively process information, seek out products and services that fulfill their needs, form preferences, make choices, and engage in postpurchase evaluations of their selections. Such decision making is characteristic of consumption situations where consumers are highly involved with purchases and experience high levels of perceived risk. The emotional view states that consumers often have deep emotions or feelings regarding many purchases. This is typical of consumption situations where consumers place more emphasis on their current moods and feelings and less emphasis on prepurchase information. In such cases, a product is bought on an impulse。