《消费者行为学》学习导引 中山大学吴柏林教授 研究生课程“营销管理”绝密资料

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.。

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).。

C HAPTER 20--M ANAGING THE S ALES F ORCEOVERVIEWMost companies use sales representatives, and many companies assign them the pivotal role in the marketing mix. Salespeople are very effective in achieving certain marketingobjectives. At the same time they are very costly. Management must give careful thought to designing and managing its personal-selling resources.Sales force design calls for decisions on objectives, strategy, structure, size and compensation. Sales force objectives include prospecting, communicating, selling and servicing, information gathering, and allocating. Sales force strategy is a question of what types and mix and selling approaches are most effective (solo selling, team selling, and so on). Sales force structure is a choice between organizing by territory, product, customer, or a hybrid combination and developing the right territory size and shape. Sales force size involves estimating the total workload and how many sales hours-and hence salespeople-would be needed. Sales force compensation involves deter-mining pay level and components such as salary, commission, bonus, expenses, and fringe benefits.Managing the sales force involves recruiting and selecting sales representatives and training, directing, motivating, and evaluating them. Sales representatives must be recruited and selected carefully to hold down the high costs of hiring the wrong persons. Sales-training programs familiarize new salespeople with the company's history, its products and policies, the characteristics of the market and competitors, and the art of selling. Salespeople need direction on such matters as developing customer and prospect targets and call norms and using their time efficiency through computer-aided information, planning and selling systems and inside support salespeople. Salespeople also need encouragement through economic and personal rewards and recognition because they must make tough decisions and are subject to many frustrations. The key idea is that appropriate sales force motivation will lead to more effort, better performance, higher rewards, higher satisfaction, and therefore still more motivation. The last management step calls for periodically evaluating each salesperson's performance to help him or her do a better job. The purpose of the sales force is to produce sales, and this involves the art of personal selling. One aspect is salesmanship, which involves a seven-step process: prospecting and qualifying, preapproach, approach, presentation and demonstration, overcoming objections, closing, and fol-low-up and maintenance. Another aspect is negotiation, the art of arriving at transaction terms that satisfy both parties. The third aspect is relationship management, the art of creating a closer working relationship and interdependence between the people in two organizations.In summary, the primary variables for the sales force / management effort include the following: (1) Setting Objectives - Objectives can be general rules for guiding salespeople or more specific expectations for behavior. Regardless, the sales objectives should address the relationship between sales, customer satisfaction, and company profit; (2) Designing Strategy- Strategy requires decisions on salesforce structure, size, and compensation. Variations inthis mixture are appropriate for differing industries, markets and sales objectives; (3) Recruiting and Selecting - Knowing in advance what characteristics will always produce good salespeople is very difficult. Selection procedures should attempt to screen candidates forboth ability and retention-related issues; (4) Training Salespeople - Issues in training center onskills such as order taking and order getting, seeing customers as people who require problem solutions; (5) Supervising Salespeople - Supervision addresses problems in directing and coordinating salespeople's organization, time management, motivation, and customer relationships; (6) Evaluating Salespeople - Evaluation requires both qualitative and quantitative measures of salesforce performance.LEARNING OBJECTIVES:After reading the chapter the student should understand:∙The key factors in designing a sales force∙How one manages a sales force successfully∙The fundamental principles of personal sellingOUTLINEI.Introduction - various classifications of sales positions ranging from least to most creativetypes of selling (deliverer, order taker, missionary, technician, demand creator, solutionvendor)II.Designing the Sales ForceA.Sales Force Objectives (tasks to perform include: prospecting, targeting,communicating, selling, servicing, information gathering, and allocating)B.Sales Force Strategy - approach can be: sales rep to buyer, sales rep to buyergroup, sales team to buyer group, conference selling or seminar selling. Acompany can utilize a direct (company) or contractual (outside) sales force.C.Sales Force StructureD.Force Size and Compensation - level and appropriate combination of components(fixed, variable, expense allowances, and benefits).III.Managing the Sales ForceA.Recruiting and Selecting Sales Representative1.What Makes a Good Sales Representative?2.Recruitment Procedures3.Applicant-Rating ProceduresB.Training Sales Representatives - several goals: to know and identify with thecompany, to know the company’s products, to know the customers’ andcompetitors’ characteristics, to know how to make effective sales presentations,and to understand field procedures and responsibilitiesC.Supervising Sales Representatives1.Developing Norms for Customer Calls2.Developing Norms for Prospect Callsing Sales Time EfficientlyD.Motivating Sales Representatives - the higher the salesperson’s motivation, thegreater his or her effort.1.Sales quotas2.Supplementary Motivators (meetings, contests, etc.)E.Evaluating Sales Representatives1.Sources of Information - sales reports including activity plans and write-ups of activity reports2.Formal Evaluation of Performance (current-to-past sales comparisons,customer-satisfaction evaluation, qualitative evaluation)IV.Principles of Personal SellingA.Professionalism - major steps involved in any sales presentationB.Prospecting and Qualifying - identify and screen out leads1.Pre-approach - learning about the prospect2.Approach - greeting the prospect3.Presentation and Demonstration - tell the product “story”4.Overcoming Objections - psychological and logical resistance5.Closing - asking for the sale6.Follow-Up and Maintenance - ensure satisfactionC.Negotiation1.Negotiation Defined - in negotiated exchange, price and other terms areset via bargaining behavior, in which two or more parties negotiate long-term binding agreements.2.When to Negotiate - appropriate whenever a zone of agreement exists3.Formulating a Negotiation StrategyD.Relationship Marketing - based on the premise that important accounts needfocused and continuous attention. Main steps in establishing a relationshipmarketing program include:1.Identify the key customers meriting relationship marketing,2.Assign a skilled relationship manager to each key customer,3.Develop a clear job description for relationship managers,4.Appoint an overall manager to supervise the relationship managers,5.Have relationship managers develop long-range goals and annualcustomer-relationship plans.V.SummaryMarketing and Advertising1. Ford uses ads such as this, which appeared in Latina magazine, to bring prospects into its dealers' showrooms. Then sales representatives take over, asking about prospects' needs and discussing features and benefits of various Ford models. What kind of training do you think dealers' sales representatives n eed? How can they qualify prospects? Why are good follow-up and maintenance skills important for dealers' sales representatives?Answer: Dealers' sales representatives need training in the features and benefits of each Ford model, as well as training in customers' and competitors' characteristics, effective sales presentation methods, and appropriate field procedures. They can qualify prospects by asking about their preferences (to see whether these match with Ford models being sold), schedule for buying, and price requirements. Good follow-up and maintenance skills keep customers coming back for service at the dealership and encourage customers to buy the next vehicle from the same dealer.2. The Xerox ad shown in Figure 2 is geared toward businesses that produce marketing materials such as brochures in color. This ad directs interested readers to call a toll-free number and ask for a "Xerox Color Specialist." Which of the six types of sales representatives is this specialist likely to be? Which of the specific sales tasks is this sales rep likely to perform?Answer: The Xerox color specialist is likely to be a solution vendor who can devise a system to solve the customer's problems. This sales rep will not do prospecting, targeting, or allocating, but wil l respond to calls from customers by communicating, selling, servicing, and information gathering.Focus on TechnologyAutomated sales management software helps companies boost the productivity of their sales representatives and better integrate sales activities with overall marketing and corporate strategies. Among the leaders in this technology is Trilogy, whose Selling Chain software includes modules for managing sales compensation, contracts, pricing, proposals, and other aspects of the sales proces s.Visit Trilogy's Web site to read about its Selling Chain software(/products/selling_chain.asp). Also click on the "SC Commission" button (in the column of products at left) to read about the sales compensation portion of this program, used by sales managers at Hewlett-Packard and many other companies. With this program, what criteria might sales managers want to use to evaluate the performance of their representatives? Why would sales managers want to track the profitability as well as the volume of sales produced by a sales representative?Answer: Using the Trilogy software, sales managers might want to evaluate their sales reps on the basis of activity (including the number of sales calls made and the number of resulting proposals, contracts, and quotes generated) as well as performance in meeting sales quotas and revenue and profit goals. Customer satisfaction is not tracked directly by the Trilogy software, but should also be included in any sales performance evaluation. Profitability as well as sales should be tracked because reps who build sales volume by discounting prices can significantly hurt the company's overall profitability.Marketing for the MillenniumMany companies are using their Web sites as tool s for building long-term relationships between sales representatives and their customers. A case in point is Texas Instruments, which has created a sophisticated Web site to support its sales of multiple product lines, including calculators and semiconductors.Visit the Texas Instruments Web site (/). Click on the privacy policy (at bottom of page) to learn why information is collected from visitors. Then return to the home page and click on the TI&ME button (at top right) to see how visitors can customize what they view on this site. What does Texas Instruments do with the information it collects from visitors? Why would a customer want to customize the Web page? Why would Texas Instruments want its customers to set up customized Web pages? What effect is this likely to have on the relationship between customers and their sales representatives? Answer: Texas Instruments' privacy policy states that the company will not provide any visitor's personally identifying information to other companies or individuals without getting the visitor's consent. The company tracks the sites from which people go to the Texas Instrument site; it also retains cookies to track specific information requested by the vi sitor, such as personalized Web pages, registrations, and so on. Customers who do not want to waste time wading through mountains of irrelevant data would find customized Web pages useful and time-saving. Knowing what interests a customer can help a sales reptailor the offer of goods and services to better meet that customer's needs; thi s strengthens the relationship between the customer and the sales rep.YOU'RE THE MARKETER: SONIC MARKETING PLANMany marketers—including nonprofit and for-profit organizations—include personal selling in their marketing plans. However, because of the high cost of maintaining a sales force, many marketers are substituting mail and telephone sales for some personal sales calls.At Sonic, you are helping Jane Melody plan sales strategy for the company's line of shelf stereos. Take a few minutes to review Sonic's current situation and the marketing strategies you have already recommended. Then answer the following questions about Sonic's use of personal selling:∙Who should Sonic's sales force be calling on? How can the sales force support Sonic's marketing plan and goals? Would Sonic benefit from major account management?∙What sales objectives and quotas should Sonic set for its sales force?∙What kind of compensation would be most appropriate for the sales force?∙What training should Sonic be providing for new and existing sales representatives?Once you have answered these questions, consider the implications for Sonic's overall marketing goals and its marketing mix. Depending on your instructor's directions, type your answers and recommendations into a written marketing plan or enter them into the Marketing Strategy/Sales Force section and the Sales Forecast section of the Marketing Plan Pro software.Answer: Sonic's sales force should be calling on wholesalers and retailers as part of the distribution strategy. The goals set for the sales force should directly link with Sonic's marketing plan and goals and with the company's overall goals. Sonic would probably benefit from major account management. This would allow for the development and nurturing of longer-term relationships with retailers and other channel members who sell large quantities of Sonic stereos. Sales objectives and quotas for Sonic's sales force should include: quotas that are higher than the sales forecast presented in the marketing plan, to encourage higher performance; objectives for unit sales, revenues, and profitability; and objectives for customer satisfaction. Sonic can structure its sales compensation in several ways. If straight salary is provided, the company should add special incentives to motivate and reward sales reps for extraordinary effort or results. If straight commission is provided, the company only pays when reps perform, which encourages sales reps to meetor exceed their quotas. However, Sonic would probably do best with a combination of salary and commission, which would pay reps for handling necessary nonsales functions while rewarding them for making or exceeding their quotas. Sonic needs to train its sales reps about the company and its goals; the products and their features and benefits; customers and competitors' characteristics; sales presentation methods; and sales procedures and responsibilities.。

PART II -- ANALYZING MARKETINGOPPORTUNITIESCHAPTER4--G ATHERING I NFORMATION AND M EASURINGM ARKET D EMANDOVERVIEW:Marketing information is a critical element in effective marketing as a result of the trend toward global marketing, the transition from buyer needs to buyer wants, and the transition from price to non-price competition. All firms operate some form of marketing information system, but the systems vary greatly in their sophistication. In too many cases, information is not available or comes too late or cannot be trusted. Too many companies are learning that they lack an appropriate information system, still do not have an information system, lack appropriate information, or they do not know what information they lack or need to know to compete effectively.A well-designed market information system consists of four sub-systems. The first is the internal records system, which provides current data on sales, costs, inventories, cash flows, and accounts receivable and payable. Many companies have developed advanced computer-based internal reports systems to allow for speedier and more comprehensive information.The second market information subsystem is the marketing intelligence system, supplying marketing managers with everyday information about developments in the external marketing environment. Here a well-trained salesforce, purchased data from syndicated sources, and an intelligence office can improve marketing intelligence available to company marketing managers. The third subsystem, marketing research, involves collecting information that is relevant to specific marketing problems facing the company. The marketing research process consists of five steps: defining the problem and research objectives; developing the research plan; collecting information; analyzing the information; and presenting the findings. Good marketing research is characterized by the scientific method, creativity, multiple methodologies, model building, and cost/benefit measures of the value of information.The fourth system is the Marketing Decision Support System (MDSS marketing system) that consists of statistical and decision tools to assist marketing managers in making better decisions. MDSS is a coordinated collection of data, systems, tools and techniques with supporting software and hardware. Using MDSS software and decision models, the organization gathers and interprets relevant information from the business and the environment and turns it into a basis for marketing action. MDSS experts use descriptive or decision models, and verbal, graphical, or mathematical models, to perform analysis on a wide variety of marketing problems.To carry out their responsibilities, marketing managers need estimates of current and future demand. Quantitative measurements are essential for market opportunity, planning marketing programs, and controlling the marketing effort. The firm prepares several types of demandestimates, depending in the level of product aggregation, the time dimension, and the space dimension.A market consists of the set of actual and potential consumers of a market offer. The size of the market depends on how many people have interest, income, and access to the market offer. Marketers also must know how to distinguish between the potential market, available market, qualified available market, served market, and the penetrated market. Marketers must also distinguish between market demand and company demand, and within these, between potentials and forecasts. Market demand is a function, not a single number, and as such is highly dependent on the level of other variables.A major marketing research task is to estimate current demand. Total demand can be estimated through the chain ratio method, which involves multiplying a base number by successive percentages. Area market demand can be estimated by the market-buildup method (for business markets) and the multiple-factor index method (for consumer markets). In the latter case, geodemographic coding systems are proving a boon to marketers. Estimating industry sales requires identifying the relevant competitors and estimating their individual sales, in order to judge their relative performance.To estimate future demand, the company can use several major forecasting methods: expert opinion, market tests, time-series analysis, and statistical demand analysis. The appropriate method will vary with the purpose of the forecast, the type of product, and the availability and reliability of data.LEARNING OBJECTIVES:After reading this chapter students should:∙Understand demand measurement terminology∙Know the methods of estimating current demand∙Know the methods of estimating future demandCHAPTER OUTLINE:I.Introductionponents of a Modern Marketing Information SystemA.Consists of people, equipment, and procedures to gather, sort, analyze, evaluate,and distribute needed, timely, and accurate information to marketing decisionmakers.III.Internal Records SystemA.The Order-to-Payment Cycle - the heart of the internal records systemB.Sales Information Systems - technology has allowed sales reps to haveimmediate access to information about their prospects and customers.IV.Marketing Intelligence SystemA. A set of procedures for managers to obtain everyday information about pertinentdevelopments in the marketing environment.B.Internal records systems supplies “results” data, and the marketing intelligencesystem supplies “happenings” data.C.There are four steps to improving marketing intelligence: train the sales force,motivate intermediaries to share intelligence, purchase information from outsidesuppliers, and establish an internal marketing information center to collect andcirculate intelligence.V.Marketing Research SystemA.Marketing research -- the systematic design, collection, analysis, and reporting ofdata and findings relevant to a specific marketing situation facing the company.B.Suppliers of marketing research - can be achieved through an in-housedepartment, an outside marketing research firm, or a variety of other costefficient ways. Increasing amounts of information available via the Internet.C.The Marketing Research Process1.Define the Problem and Research Objectives2.Developing the Research Plan - decisions on data sources, researchapproaches, research instruments, sampling plan, and contact methods.3.Collect the Information - phase most expensive and prone to error.4.Analyze the Information - extract pertinent findings from the collecteddata.5.Present the Findings - pertinent to the major marketing decisions facingmanagement.D.Overcoming Barriers to The Use of Marketing ResearchVI.Marketing Decision Support System (MDSS)A.Coordinated collection of data, systems, tools and techniques with supportingsoftware and hardware by which an organization gathers and interprets relevantinformation from business and environment and turns it into a basis formarketing action. Explanation of how an MDSS works.VII.An Overview of Forecasting and Demand MeasurementA.Measures of Market Demand - see TextB.Which Market to Measure? - available market, qualified available market, targetmarket, or penetrated marketC. A Vocabulary for Demand Measurement1.Market demand2.Market forecast3.Market potentialpany demandpany sales forecastpany sales potentialD.Estimating Current Demand1.Total Market Potential2.Area Market Potentiala)Market-buildup methodb)Multiple-factor index method3.Estimating Industry Sales and Market Shares - identifying competitorsand estimating their salesE. Estimating Future Demand1.Survey of Buyers' Intentionsposite of Sales-Force Opinion3.Expert Opinion4.Past-Sales Analysis5.Market Test MethodVIII.SummaryMARKETING AND ADVERTISING1. Marriott has boosted annual revenues over $12 billion by working to identify and satisfy the differing needs and preferences of travelers. The Marriott ad shown in Figure 1 is targeted toward health-conscious business travelers. What internal data sources can the company use to identify opportunities such as this? To identify problems with a particular part of the service offering such as the health club or pool? How would a marketing intelligence system help Marriott compete against Hilton and other rivals who target the business travel market? If you were designing Marriott's marketing intelligence system, what would you include? Why?Answer: To identify opportunities such as meeting the needs of health-conscious business travelers, Marriott might examine internal data sources such as records of trends in usage of its hotels' swimming pools and other health facilities and sales by room service and hotel restaurants of foods favored by health-conscious consumers; students may suggest additional internal data sources. Internal sources of data about problems with the service offering include written complaints and responses to customer satisfaction surveys; students may suggest additional sources. Marriott might use a marketing intelligence system to find out about changes in its competitors' hotels and service offerings geared toward the business travel market (such as new offers of in-room laptops, 24-hour copy center availability, and so on). Such intelligence would allow Marriott to evaluate rivals' actions and consider suitable responses. Students may have many ideas for what to include in a marketing intelligence system for Marriott. Two ideas: Ask suppliers about unusual or large orders placed by rival hotel chains; listen to competitors' speeches and visit their exhibits at conventions and other industry events.2. Bayer Aspirin, the product featured in this ad, is locked in competitive battle with Tylenol, Advil, and a wide range of other pain-killers. In planning next year's marketing programs, the company wants to estimate future demand. Would a survey of buyers' intentions be appropriate for this product? Would you suggest using past-sales analysis or a direct market test? What effect would the unexpected introduction of a new pain-killing drug from a rival firm—supported by a high-profile, multi-million dollar campaign—be likely to have on Bayer's forecast of future demand?Answer: No, a survey of buyers' intentions would not be appropriate for Bayer aspirin, because consumers are unlikely to plan purchases of aspirin for the months ahead. A past-sales analysis would be more helpful than a direct market test, because past sales can be thoroughly analyzed as a way of projecting future sales. Direct market tests are more useful for new products or products being expanded into additional channels or areas, not for an established product such as Bayer aspirin. The unexpected introduction of a new pain-killing drug from a rival firm, supported by a major promotional campaign, would probably change actual sales results, making Bayer's forecasts of future demand inaccurate and out-dated.Focus on TechnologyEvery year since 1994, the Georgia Institute of Technology has conducted two World Wide Web user surveys to find out who is using the Web, what technology is being used, the problems users are encountering, how much individuals and companies are spending online, and how they are using on-line financial services. To learn more, point your Web browser to Georgia Tech's WWW Survey site (/gvu/user_surveys/). Look through the latest survey results. What limitations should companies bear in mind when using these survey results? What kind of sample does this survey represent,and why should marketers care? How could a company such as United Airlines apply the results of this survey in its efforts to sell more airline tickets on the Web?Answer: Companies using the results of this survey should bear in mind that the data may not be representative of a target population, since the respondents are self-selected. The results of the survey may be biased by the exclusion of people who do not use the Internet or prefer not to answer on-line surveys. This survey is a convenience sample, selecting from among an accessible population of Internet users. Knowing this helps marketers realize that they cannot measure the sampling error in such a sample. United Airlines might use the results of this survey to determine what Internet users like, dislike, want, and do not want when making on-line purchases of goods and services; it will also reveal attitudes toward privacy concerns and other problems that bother Internet users. This survey will help the airline get a sense of the demographics of Internet users for comparison with the company's targeted segments. Students may suggest other uses of this survey.Marketing for the MillenniumPrudential is one of many companies using data mining to target its marketing outreach. Through data mining, the firm has saved money and improved response by more narrowly targeting the mailing lists for specific product offers. Visit Prudential's Web site () and select one type of product, such as life insurance. Identify two ways that data mining could be applied to market life insurance. What potential problems or dangers do you see in using data mining? What additional marketing applications can you foresee for Prudential's use of data mining?Answer: Students may suggest various ways that Prudential could use data mining to market life insurance. Two sample ideas for Prudential: (1) sift its complete customer database to identify consumers who have not yet bought life insurance from Prudential to identify prospects for such products; and (2) search the database to find the average age and other demographics of Prudential's most profitable life insurance customers, then search external databases to find other prospects who match the same profile and send them offers for Prudential life insurance. Some potential problems or dangers of data mining are: consumer concerns about privacy; the need for extensive safeguards to protect such valuable data; concerns about future regulation of databases containing sensitive consumer data; students may identify additional issues. Other marketing applications for data mining within Prudential include the ability to assign sales people only to prospects with the highest potential for purchasing selected products; and the ability to rank customers in order of overall profitability so Prudential can target more profitable customers formore/better service and use less-expensive methods for less-profitable customers (students may also offer other ideas).YOU'RE THE MARKETER: SONIC MARKETING PLANMarketing information systems, marketing intelligence systems, and marketing research systems are used to gather and analyze data for various parts of the marketing plan. These systems can help marketers examine changes and trends in markets, competition, product usage, and distribution channels, among other areas. They can also turn up evidence of important opportunities and threats that must be addressed.You are continuing as Jane Melody's assistant at Sonic. Referring to Table 3-3 in Chapter 3, answer the following questions about how you can use MIS and marketing research to support the development and implementation of Sonic's marketing plan:∙For which sections will you need secondary data? Primary data? Both? Why do you need the information for each section?∙Where can you find suitable secondary data? Identify two non-Internet sources and two Internet sources, describe what you plan to draw from each source, and indicate how you willuse the data in your marketing planning.∙What surveys, focus groups, observation, behavioral data, and/or experiments will Sonic need to support its marketing strategy, including product management, pricing, distribution, andmarketing communication? Be specific about the questions or issues that Sonic should be ableto resolve using market research.As your instructor directs, enter information about Sonic's use of marketing data and research in the appropriate sections of a written marketing plan or type them in the corresponding sections of the Marketing Plan Pro software.Answer: Students should review the data about Sonic shown in Chapter 3 and look at their answers to the marketing plan questions in Chapter 3 before answering these questions. Referring to Table 3.3, students will need secondary data as well as primary data as they look at Sonic's current marketing situation, the opportunity and issue analysis, and marketing strategy. This is because they need to collect primary data from internal sources (such as historical sales figures) and from external sources (such as consumer surveys) and gather secondary data (such as competitive product specifications) as background for writing about the marketing situation, analyzing opportunities and issues facing Sonic, and developing a suitable marketing strategy.Students may offer different ideas for sources of appropriate secondary data for this marketing plan. Some sample ideas include: searching printed materials or Internet sites maintained by trade associations to learn about trends in sales of products similar to the Sonic product line; and searching government publications and Internet sites to find out about current and pending regulations that might affect Sonic's ability to buy parts from international suppliers or sell finished products in international markets.In addition, students are likely to offer various answers about surveys, focus groups, observation, behavioral data, and/or experiments Sonic needs to support its marketing strategy decisions. Evaluate their responses on the basis of how well the marketing research they describe will help Sonic answer specific questions and resolve specific issues important to the company's marketing planning process. As one example, the research should help Sonic better describe attractive, profitable market segments to be targeted.。

C HAPTER 8--D EALING WITH THE C OMPETITION OVERVIEW:In the marketplace there are many companies that develop effective products, channels, pricingand advertising. However, many of these companies lose in the marketplace. There may bemany reasons, but a critical variable may be an inability to understand the competitiveenvironment and to gather and utilize data on that environment.To prepare an effective marketing strategy, a company must consider its competitors as well as itsactual and potential customers. This is especially necessary in slow growth markets because salescan only be gained by wining them away from competitors.A company's closest competitors are those seeking to satisfy the same customers and needs andmaking similar product / service offers. A company should also pay attention to its latentcompetitors who may offer new and/or different ways to satisfy the same needs. The companyshould identify its competitors by using both an industry and market-based analysis.A company should gather information on competitor strategies, objectives, strengths, weaknesses,and reaction patterns. The company should study and understand competitor strategies in order to identify its closest competitors and take the proper steps. The company should know thecompetitor's objectives in order to anticipate further moves and reactions. Knowledge of thecompetitor's strengths and weaknesses permits the company to refine its own strategy to takeadvantage of competitor weaknesses while avoiding engagements where the competitor is strong.Understanding typical competitor reaction patterns helps the company choose and time its moves. Competitive intelligence should be collected, interpreted and disseminated 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.LEARNING OBJECTIVES:After reading this chapter students should:∙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 CHAPTER OUTLINE:I.Introduction: Porter’s Five F orces; the first three forces focus on competitors; theInternet is rapidly altering many of the existing patterns of competition, especially for the existing middleman and distribution channels.II.Identifying Competitors - four levels: brand, industry, form, and genericA.Industry Concept of Competition1.Number of Sellers and Degree of Differentiation (monopoly, oligopoly,monopolistic competition and pure competition)2.Entry and Mobility Barriers - ease of entry into market and varioussegments3.Exit and Shrinkage Barriers - ease of exit and reduction in size4.Cost Structure5.Degree of Vertical Integration6.Degree of GlobalizationB.Market Concept of Competition - in addition to companies making the sameproduct, look at companies that satisfy the same customer need.III.Analyzing CompetitorsA.Identifying Competitor StrategiesB.Determining Competitor ObjectivesC.Assessing Competitor Strengths and Weaknesses - share of market, share of mind,share of heart. Companies that make steady gains in mind share and heart sharewill inevitably make gains in market share and profitability.D.Estimating Competitor Reaction Patterns - four categories: laid-back (does notreact), selective (reacts only to certain types of attacks), tiger (reacts to anyassault), and stochastic (no predictable reaction)IV.Designing the Competitive Intelligence System -- with considerable emphasis on the Internet and competitor Web sites.A.Four Main Steps1.Setting up the system2.Collecting the data3.Evaluating and analyzing the data4.Disseminating information and respondingB.Selecting Competitors to Attack and Avoid - major steps in customer valueanalysis are:1.identify the major attributes that customers value; assess the quantitativeimportance of the different attributes; assess company and competitorperformance on the different customer values against their ratedimportance; examine how customers in a specific segment rate thecompany’s performance against a specific major competitor on anattribute-by-attribute basis; and monitor customer values over time.2.Classes of Competitors -- following customer value analysis: strong vs.weak, close versus distant, "good" versus "bad.3.Customer value analysis helps a marketer perceive company / productvalue to a customer relative to competitor product value(s).V.Designing Competitive StrategiesA.Market-Leader Strategies1.Expanding the total market, with new users, new uses and more usage2.Defending Market Share, with position, flank, preemptive,counteroffensive, mobile and contraction defensive strategies3.Expanding Market Share (note Procter & Gamble and Caterpillar casestudies) -- line-extension, brand-extension, multibrand, etc., strategies.B.Market-Challenger Strategies by defining the strategic objective and theopponents, choosing a general attack strategy, and choosing a specific attackstrategy.C.Market-Follower StrategiesD.Market-Nicher StrategiesVI.Balancing Customer and Competitor Orientations - marketers should not become so competitor-centered that they focus on customers already lost.VII.SummaryMARKETING A ND ADVERTISING1. The U.S. Postal Service uses advertising to show businesses the benefits of reaching customers through direct mail. Figure 2 is a USPS ad offering a free kit to help marketers learn how to add direct mail to their media mix. Is the industry structure for first class mail a pure monopoly, an oligopoly, monopolistic competition, or pure competition? Support your answer. What is the competitive structure for the overnight delivery industry in which Express Mail competes? What are the implications for the way the USPS markets first-class mail to the business market? For the marketing of Express Mail to the business market?Answer: First class mail is a pure monopoly, because only the U.S. Postal Service is legally allowed to provide this service in the United States. On the other hand, the competitive structure for overnight delivery is an oligopoly, with a relatively s mall number of large organizations such as FedEx, UPS, and the U.S.P.S. offering a range of products. As a result of its monopoly position, the U.S.P.S. does not have to compete on the basis of price or service when it markets first class mail to businesses. Still, the U.S.P.S. wants businesses to use its mail services rather than other media such as magazines, which is the reason for ads such as this. When marketing Express Mail to businesses, the U.S.P.S. faces a great deal of competition, so it has to compete on the basis of price, service, and other marketing mix elements.FOCUS ON TECHNOLOGYLevi Strauss is using mass-customization manufacturing technology to bring customer-size specializationto a new level in an innovative market-nicher strategy for its jeans. The program, titled Levi's Original Spin, allows customers to order jeans specially manufactured to their personal specifications. Levi's salespeople take just three body measurements, and customers get to pick the color, fabric, leg opening, fly type, and model cut. These specifications are electronically transmitted to the Levi's facto ry, where the automated equipment manufactures custom-fit jeans in two to three weeks.Visit the Original Spin pages on Levi's Web site (/originalspin/) to read about this program. How does this program help Levi's compete more effectively against Wrangler and Lee, two traditional competitors in the jeans market? Is Levi's aiming for high margin or high volume with this niche strategy? How do you know?Answer: Original Spin allows Levi's to compete more effectively against Wrangler and Lee with the powerful competitive tool of custom sizing for perfect fit. Whereas Wrangler and Lee offer jeans in standard sizes, Levi's goes further, inviting customers to have jeans made to exact body measurements—intheir choice of cut and fabric. Customers who try Original Spin and like it are far more likely to remain loyal to Levi's; in contrast, customers who buy standard sizes are likely to be less loyal to Wrangler and Lee. Levi's is aiming for high margin, because it charges higher prices for custom-made jeans and can therefore generate a higher profit than from its ready-to-wear lines. Because of the higher price and two-week minimum delay in receiving the custom-made jeans, Original Spin would have difficulty achieving the same sales volume as Levi's ready-to-wear jeans, which indicates that Levi's is not seeking high volume with this niche strategy.MARKETING FOR THE MILLENNIUMDisintermediation via the Internet is changing the competitive playing field in many industries, from tangible goods such as cars (exemplified by Auto By Tel) to intangible services such as insurance (exemplified by LifeQuote). Taking a closer look at disintermediation in the travel industry, consider the competition that a local travel agency faces from airline Web sites such as American Airlines and travel Web sites such as Microsoft's Expedia.Visit the A merican Airlines Web site () to see what is offered, including special fares, flight schedules and pricing, frequent flyer programs, information about airport acces s, and so on. Next, visit the Expedia Web site () to sample its offerings, including booking air travel, rental cars, and hotel rooms, finding information about travel destinations, maps, and more. How are these sites similar, and how are they different? What do these sites offer that traditional travel agencies do not? What do traditional travel agencies offer that these sites do not? What are the implications for the traditional agencies who compete with these online sites?Answer: In general, the A merican Airlines and Expedia Web sites are similar in that both offer information and reservations for air travel. Both also encourage online reservations and purchases and request that visitors register as members. They differ in that A merican Airlines focuses primarily on air travel, emphasizing its own flights, programs, and services, while Expedia covers a wide range of travel services and destinations. Students may go into detail about additional differences and similarities. Unlike traditional travel agencies, the AA site provides easy access to personalized frequent flyer summaries and benefits, Web-only special fares and packages, and similar "exclusives." The Expedia site offers a wealth of detail that travel agents do not, including information and maps for many travel destinations as well as the opportunity to participate in travel chat rooms/message boards.For their part, travel agencies offer the human touch, a personal quality no Web site can really match. When discussing business or leisure travel, traditional agents can detect their customers' underlying interests and concerns, then gear their advice and suggestions accordingly. They can also hand-deliver tickets and itineraries and offer other personalized services that Web sites cannot. Recognizing the strengths and weaknesses of Web-based travel sites, traditional travel agents can launch Web sites and use e-mail to keep customers updated on special fares and offers. At the same time, they should continue to emphasize the one-on-one experience of dealing with a personal travel agent, which will help build relationships with customers. Students may offer additional ideas.YOU'RE THE MARKETER: SONIC MARKETING PLANCompetitive strategy comes into play in two areas of the marketing plan. First, in assessing the current marketing situation, companies have to examine their competitors' strengths and weaknesses and competitors' reaction patterns. Second, they have to use competitive intelligence to shape their overall competitive strategy, which is supported by the marketing mix.As Jane Melody's assistant, you are analyzing Sonic's competitive situation and preparing its competitive strategy for shelf stereo systems. Assuming that Sonic is not the market leader, answer the following questions about competitive strategy (noting the need for competitive intelligence where necessary): What is the strategic group for Sonic?∙Which firm is the market leader, and what are its objectives, strengths, and weaknesses?(What additional competitive intelligence is needed?)∙As a market challenger, what competitive strategy would be most effective for Sonic?∙Given this competitive strategy, how would you define Sonic's strategic objective and attack strategy?Think carefully about how Sonic's competitive strategy will affect its marketing mix. Then summarize your findings and conclusions in a written marketing plan or type them into the Marketing Situation and Marketing Strategy sections of the Marketing Plan Pro software.Answer: The answers to this chapter's questions depend, in part, on information about Sonic that students have gleaned from Chapter 3 and from their work on marketing plan exercises in earlier chapters. The overall strategic group for Sonic, as outlined in Chapter 3, includes A iwa, Panasonic, Sony, and Philips, companies that manufacture shelf stereo systems at various prices offered in various distribution channels. More specifically, Sonic's positioning of quality and reliability at higher prices may put it in a narrower strategic group with competitors such as Sony and Philips.Although they know that Sonic is not the market leader, students may indicate that additional competitive intelligence is needed to determine exactly which firm leads the market. In earlier exercises, students investigated industry trends by accessing UHF Magazine () and similar sources, which also should have information about market leadership and about the leader's objectives, strengths, and weaknesses. Remind students that market leadership can change from year to year, which will affect Sonic's competitive strategy.As a market challenger with declining profits, Sonic has limited resources and will therefore not want to attack the market leader unless it changes its pricing and other strategies to gain a clear, compelling competitive advantage. One good approach would be to use a flank attack against the weaknesses of the market followers. Another approach might be a bypass attack aimed at segments of the business market, where key competitors may have low or no strategic interest.The competitive strategy that students choose will define Sonic's strategic objective and attack strategy. For example, Sonic might do well with an adapter strategy, improving on the smaller speakers that are gaining favor with consumers. Sonic might also consider a specific attack on the basis of product proliferation (broadening the product line), improved services, or distribution innovation. Sonic should strike a balance between being competitor-centered and being customer-centered, even as it monitors both customers and competitors to follow trends and spot emerging needs.。

C HAPTER 18–D ESIGNING AND M ANAGING I NTEGRATED M ARKETINGC OMMUNICATIONSO VERVIEWMarketing communications is one of the four major elements of the company's marketing mix. Marketers must know how to use advertising, sales promotion, direct marketing, public relations, and personal selling to communicate the product's existence and value to the target customers. The communication process itself consists of nine elements: sender, receiver, encoding, decoding, message, media, response, feedback, and noise. Marketers must know how to get through to the target audience in the face of the audience's tendencies toward selective attention, distortion, and recall.Developing the promotion program involves eight steps. The communicator must first identify the target audience and its characteristics, including the image it carries of the product. Next the communicator has to define the communication objective, whether it is to create awareness, knowledge, liking, preference, conviction, or purchase. A message must be designed containing an effective content, structure, format, and source. Then communication channels both personal and nonpersonal must be selected. Next, the total promotion budget must be established. Four common methods are the affordable method, the percentage-of-sales method, the competitive-parity method, and the objective-and-task method.The promotion budget should e divided among the main promotional tools, as affected by such factors as push-vs.-pull strategy, buyer readiness stage, product life-cycle stage and company market rank. The marketer should then monitor to see how much of the market becomes aware of the product, tries it, and is satisfied in the process. Finally all of the communications effort must be managed and coordinated for consistency, good timing, and cost effectiveness. LEARNING OBJECTIVES:After reading the chapter the student should understand:♦The nine elements of the communication process♦How to identify the target audience♦How to determine the communication objectives♦How the message should be designed♦The selection of communication channels♦How the promotion budget is determined♦How the promotion mix is established♦How to evaluate and manage the communication processCHAPTER OUTLINE:I.Introduction - the five major modes of communication (advertising, sales promotion,public relations, personal selling, and direct marketing)II. The Communication Process - communications as the management of customer buying processes over time, the nine elements of the communications model, reasons whymessage may not get through the receiver (selective attention, selective distortion, andselective recall)III.Developing Effective CommunicationsA.Identifying the Target Audience - image analysis is a major part of audienceanalysis that entails asses sing the audience’s current image of the company, itsproducts, and its competitors. First step is to measure target audience’sknowledge of the subject using a familiarity scale; second step is to determinefeelings toward the product using a favorability scale. The specific content of aproduct’s image is best determined with use of semantic differential (Five steps)B.Determining The Communication Objectives - based on seeking of a cognitive,affective, or behavioral response. Assuming the buyer has high involvementwith the product category and perceives high differentiation within the category,base objectives on the hierarchy-of-effects model.C.Designing the Message1.Message Content - choosing an appeal (rational appeal to audience’s selfinterest, emotional appeal attempt to stir up either positive or negativeemotions, moral appeals are directed to the audience’s sense of what isright and proper)2.Message Structure - one-sided presentation v. two-sided argument3.Message Format - Must be strong, based on headline, copy, "sound",nonverbal clues, color, expression, dress, etc.4.Message Source - expertise, trustworthiness and likabilityD.Selecting Communication Channels1.Personal Communication Channels - direct2.Nonpersonal Communication Channels - indirect (media, atmospheres,events)E.Establishing the Total Marketing Communications Budget1.Affordable Method2.Percentage-of-Sales Methodpetitive-Parity Method4.Objective-and-Task MethodIV.Deciding on the Marketing Communications MixA.The Promotional Tools - benefits of each tool (advertising, sales promotion, etc.)B.Factors in Setting the Promotion Mix (type of product market, push versus pullstrategy, buyer-readiness stage, product-life-cycle stage, company market rank)C.Measuring ResultsV.Managing and Coordinating Integrated Marketing Communications ( a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines andcombines these disciplines to provide clarity, consistency and maximum communications impact through the seamless integration of discrete messages.VI.SummaryMarketing and Advertising1. Figure 1, an ad geared toward the business market, describes the Bosch Corporation's century-old tradition of innovation in automotive products and includes a toll-free number for more information. What do you think Bosch wants to accomplish by placing this ad in a national business magazine? As a business marketer, would Bosch be likely to put more of its marketing communications budget toward advertising or toward other modes of communication? Why?Answer: By advertising in a national business magazine, Bosch may be trying to increase brand recognition, encourage positive audience attitudes, build goodwill among stakeholders, and attract investors' attention.Bosch is likely to put more of its budget toward other modes of communication, such as personal selling, rather than advertising. This is because business-to-business marketing often requires long-term one-to-one sales efforts to build and maintain relationships between suppliers such as Bosch and industrial customers.Focus on TechnologyWith integrated marketing communications, every brand contact, regardless of communication channel, plays a strategic role in shaping the customer's view of the company. For this reason, companies with Web sites need to be sure that their online marketing messages are aligned with messages in other media for greater sales impact.One company that is expert at this is McDonald's. Its television, radio, and print ads have a similar look, and the content is consistent across media. The current advertising theme is also carried through online. Visit the "What's New" area of the company's Web site(/whatsnew/usa/dssmcd/index.html) and note the similarity of the brief online ad to the current advertising campaign. Why would McDonald's create this special ad snippet just for its Web site? Who is the likely target audience? What results might McDonald's expect from this online message? Answer: McDonald's created this ad snipped because it knows its Web site is as much a part of its integrated marketing communication strategy as every other type of advertising. The company is smart to use its Web ad snippet to reinforce the look and content of the ads it is running in other media. The likely audience is consumers in McDonald's target audience, especially customers. In addition, students may mention stakeholder audiences such as the trade, because these audiences have an interest in the corporation. Although McDonald's would not expect sales to increase as a result of this online message, it could expect results such as reinforcement of its brand and enhancement of the synergy created by the various elements in its IMC campaign. Students may suggest other non-financial results, as well. Marketing for the MillenniumAs more marketers take their communications global at the start of the new millennium, they have to answer four questions in planning their global advertising and promotion. Are their products suitable for each country? Are their targeted market segments legal and customary? Is their advertising acceptable? And should their ads be created centrally or locally?To see how a multinational marketer is addressing these issues, point your Web browser to the "Around the World" section of the Unilever Web site (/public/unilever/around/org_arwo.htm). Click on the arrow near the right side of the screen to keep reading about the company's international focus. Then click on the "brands" link at the top left side of your screen to see a listing of the company's food brands, followed by links to local brand Web sites. Why does Unilever say it is international rather than global? How does this distinction affect its products and its online communications?Answer: Unilever stresses its international focus rather than saying it is global because it is building brands country-by-country and region-by-region. Unilever's products and brands are not available all over the world, just in selected countries and areas. Similarly, its online communications are available to consumers on a country-by-country and region-by-region basis, another example of an international rather than a global focus.YOU'RE THE MARKETER: SONIC MARKETING PLANMarketing communication planning is a critical component of every marketing plan, because it drives the way companies connect with their stakeholders, including customers and prospects.You are responsible for planning integrated marketing communications programs for Sonic's shelf stereos. Take another look at the company's current situation. Also look at the strategies and marketing mix programs you have planned so far. Then answer these questions about marketing communications for Sonic:∙What audience(s) should Sonic be targeting? What communication objectives should it set for each target audience?∙What message design and communication channel (personal or nonpersonal) is most appropriate for each target audience? Why?∙How should Sonic establish its marketing communications budget?∙Which promotional tools would be most effective in Sonic's marketing communications mix?Why?Be sure that your marketing communications plans will support Sonic's overall marketing efforts. Now, as your instructor directs, summarize your ideas in a written marketing plan or type them into the Marketing Mix/Promotion section of the Marketing Plan Pro software.Answer: Sonic should target the consumer segments it has identified for each product or product line; students may have described these segments in detail earlier in their marketing plans. In addition, Sonic should target channel members and other members of the trade. Communication objectives for consumer audiences include: building awareness of the brand and products; offering more information to build the audience's knowledge of the products; influencing the audience's liking of and preference for the product; reinforcing the audience's conviction about buying Sonic products; and leading the audience to buy Sonic products. Similar communication objectives can be set for trade audiences.Students will offer various responses for the message design and communication channel for each target audience. They should plan for a mix of personal and nonpersonal communication channels to reach different audiences. They will also suggest different promotional tools for Sonic's marketing communications mix, depending on the choices and strategies they have suggested in their marketing plans. In general, students will want to consider some advertising, some sales promotion, public relations and publicity, personal selling (especially for trade audiences), and direct marketing.。

PART ONE -- UNDERSTANDING MARKETINGMANAGEMENTCHAPTER1--M ARKETING IN THE T WENTY-F IRST C ENTURY OVERVIEWMarketing is the company function charged with defining customer targets and the best way tosatisfy their needs and wants competitively and profitably. Since consumers and business buyersface an abundance of suppliers seeking to satisfy their every need, companies cannot survive today by simply doing a good job. They must do an excellent job if they are to remain in theincreasingly competitive global marketplace. Recent studies have demonstrated that the key toprofitable company performance is knowing and satisfying target customers with competitivelysuperior offers. This process takes place today in an increasingly global, technical andcompetitive environmentMarketing has its origins in the fact that humans have needs and wants. Needs and wants create astate of discomfort in people, which is relieved through acquiring products to satisfy these needs and wants. Since many products can satisfy a given need, product choice is guided by the concepts of value, cost, and satisfaction. These products are obtainable in several ways: self-production, coercion, begging and exchange. Most modern societies work on the principle of exchange, which means that people specialize in producing particular products and trade them for the other things they need. They engage in transactions and relationship-building. A market is a group of people who share a similar need. Marketing encompasses those activities that represent working with markets and attempting to actualize potential exchanges.Marketing management is the conscious effort to achieve desired exchange outcomes with targetmarkets. The marketer's basic skill lies in influencing the level, timing, and composition ofdemand for a product, service, organization, place, person, idea or some form of information. There are five 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.Heading towards more enlightened views of the role of marketing, the marketing concept holdsthat the main task of the company is to determine the needs, wants, and preferences of a targetgroup of customers and to deliver the desired satisfactions. Its four princ iples 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 thatachieves 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”.Moving 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 is intensifying 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 re-evaluating various marketing concepts and tools focus on relationships, databases, communications and channels of distribution, as well as marketing outside and inside the organization.LEARNING OBJECTIVES:After reading this chapter students should:∙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 has been found to be critical to different types of organizations and in different environments.CHAPTER OUTLINE:I.Introduction --- Importance of Marketing in Contemporary Organizations - with rapidchanges come both challenges and opportunities, marketing allows organizations to take advantage of these opportunitiesII.Marketing TasksA.Scope of Marketing -- Involves a broadened View of Marketing - to types ofentities (goods, services, and ideas)1.Products are anything offered for sale or exchange that satisfies a need orwant.2.Products can be goods, services, ideas -- and also people, places,activities, organizations and information.B. A Broadened View of Marketing Tasks - Decisions Marketers Make -1.Consumer Markets and Business Markets - Each requires new tools andcapabilities to better understand and respond to the customer.2.Global Markets, Nonprofit and Governmental Markets - Becoming moresophisticated in recognizing and dealing with marketing challenges anddecisions.III.Marketing Concepts and ToolsA.Defining Marketing1.Marketing Defined - a social and managerial process by whichindividuals and groups obtain what they need and want through creating,offering, and exchanging products of value with others.B.Core Marketing Concepts1.Target Markets and Segmentation - Every product or service containsfeatures which a marketer must translate into benefits for a target market.It is these benefits the consumer perceives to be available in a productand directly impacts the perceived ability to meet the consumer need(s)or want(s).2.Marketers and Prospects - a marketer is someone actively seeking one ormore prospects for an exchange of values. A prospect has beenidentified as willing and able to engage in the exchange.3.Needs, Wants, and Demands - to need is to be in a state of feltdeprivation of some basic satisfaction. Wants are desires for specificsatisfiers of needs. Demands are wants for specific products that arebacked by an ability and willingness to buy them.4.Product or offering - Anything offered for sale that satisfies a need orwant. Products consist of three primary components: goods, servicesand ideas. The physical product provides the desired service or action.5.Value and Satisfaction - Value is the consumer’s estimate of theproduct’s overall capacity to satisfy his or her needs determinedaccording to the lowest possible cost of acquisition, ownership and use.6.Exchange and Transactions - exchange means obtaining a desiredproduct by offering something desirable in return. Five conditions mustbe satisfied (p.11) A transaction is the trade of values (involves severaldimensions).7.Relationships and Networks - Relationship marketing seeks long-term,“win-win” transactions between marketers and key parties (suppliers,customers, distributors) The ultimate outcome of relationship marketingis a unique company asset called a marketing network of mutuallyprofitable business relationships.8.Marketing Channels - Reaching the target market is critical. To do thisthe marketer can use two-way communication channels (media-newspapers through the Internet), versus more traditional means. Themarketer also must decide on the distribution channel, trade channels andselling channels (to effect transactions).9.Supply chain - the long channel process that reaches from the rawmaterials and components to the final product / buyers. Perceived as avalue delivery system.petition - Includes actual and potential rival offerings and substitutes.A broad view of competition assists the marketer to recognize the levelsof competition, based on substitutability: brand, industry, form andgeneric.11.Marketing Environment - Includes the task (immediate actors in theproduction, distribution and promotional environments) and the broadenvironments (demographic, economic, natural, technological, political-legal and social-cultural).12.Marketing Mix - the set of marketing tools the firm uses to pursuemarketing objectives with the target market. Involves recognition anduse of the four Ps and the four Cs in the short run and the long 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 _- Assumes:1.The key to achieving organizational goals consists of being moreeffective than competitors in integrating marketing activities towarddetermining and satisfying the needs and wants of target markets.2.Target Market - no company can operate in every market and satisfyevery need.3.Customer Needs - it’s not enough to just find the market; marketers mustalso understand their customer's needs and wants. This is not a simpletask.4.Integrated Marketing - all of a company’s departments must worktogether to serve the customer’s interests. This begins among the variousmarketing functions and carries out into other departments.5.Profitability - the ultimate purpose of marketing is to help organizationsachieve profitability goals.6.Hurdles to Adopting a Marketing Concepta)Organized Resistance - some departments see marketing as athreat to their power in the organizationb)Slow Learning - despite efforts by management, learning comesslowc)Fast Forgetting - there is a strong tendency to forget marketingprinciples7.ProfitabilityE.The Societal Marketing Concept1.Societal Marketing Concept - the organization’s task is to determine theneeds, wants, and interests of target markets and to deliver the desiredsatisfactions more effectively and efficiently than competitors in a waythat preserves or enhances the consumer’s and the society’s well-being. V.How Business and Marketing are Changingpany Responses and Adjustments - the focus here is on reengineering thefirm, outsourcing goods and services, e-commerce, benchmarking, alliances(networking), partner-suppliers, market-centered (versus product centered), localand global marketing (versus only local), and decentralization to encourageinnovative thinking and marketing.B.Marketer Responses and Adjustments - Focus on relationship marketing (versustransactional marketing), creation of customer lifetime value orientation, focuson customer share marketing versus only market share, target marketing (versusmass marketing), individualization of marketing messages and offerings,customer databases for data-mining, integrated marketing communications forconsistent images, consideration of channel members as partners, recognition ofevery employee as a marketer, and model and fact-based decision making versusintuition alone.VI.SummaryMARKETING A ND ADVERTISING1. The A ir Canada ad in Figure 1 stresses the time-saving aspect of its flights between the United States and Canada as well as the frequent flier mileage benefits. How do these two elements affect the ratio of benefits to cost in the value equation? Other than advertising lower ticket prices, how else can Air Canada use its advertising to affect the value perceived by customers? Suggest at least two specific value-enhancing approaches Air Canada might take.Answer: By reducing the amount of time needed to fly between the United States and Canada, Air Canada lowers the total costs in the denominator of the value equation, which raises the value ratio. In addition, the frequent flyer benefits add to the numerator of the value equation, again raising the value ratio. Two other ways Air Canada can use its advertising to affect the value perceived by customers are: (1) invite travelers to use specially-equipped Air Canada waiting lounges with office amenities such as e-mail access and fax machines, which boosts the benefits; and (2) invite customers to sign up for a special service that automatically notifies up to three relatives and/or business associates when a customer's plane arrives at its destination, which cuts the psychic costs and adds to the emotional benefits. Students may offer other value-enhancing ideas.2. The marketing network of Dow Chemical Company consists of a wide range of stakeholders, including customers, employees, suppliers, distributors, and volunteers and beneficiaries of nonprofit organizations such as Habitat for Humanity. Why would Dow advertise its support of Habitat for Humanity? What effect does the company expect this ad to have on its relationships with various stakeholders? How can Dow build on strong stakeholder relationships to compete more effectively in the construction industry?Answer: Dow advertises its support of Habitat for Humanity because it believes in the societal marketing concept. Some students may argue that Dow is also enhancing the emotional benefits that customers perceive in its products and enhancing its relationship marketing by creating a stronger social tie with customers and other stakeholders. In addition, Dow is putting a more human face on its corporation and products. Dow expects this ad to encourage customers (both consumers and businesses), suppliers, and other global stakeholders to choose and support Dow products because the company is conscientiously balancing profitability and customer satisfaction with concern for society's well-being.Dow can build on strong stakeholder relationships to compete more effectively in the construction industry in various ways. One suggestion: create specialized programs to attract and retain construction customers that are particularly interested in supporting social causes s uch as Habitat for Humanity. Another suggestion: expand this type of program to include the wholesale and retail companies that carry Dow products, which strengthens channel relationships and motivates channel members to do an even better job of selling Dow construction products. Students are likely to offer other creative ideas.FOCUS ON TECHNOLOGYCharles Schwab, based in San Francisco, is a giant discount brokerage firm offering a wide range of investment and financial services options. When someone visits a Schwab office or calls the company, employees can immediately bring up that customer's online records and talk knowledgeably about investments and services suited to that customer's individual situation. Schwab also invites customers to open accounts, locate financial research, place trades, and track market trends on its Web site. Browse the Schwab Web site (), looking at the offerings and the online demonstration of Schwab capabilities. How does this Web site confirm Schwab's focus on the customer? Why is employee access to complete and current customer records especially important in the brokerage business? What other parts of Schwab must be properly coordinated to ensure integrated marketing for customer satisfaction?Answer: The Schwab Web site can be customized to fit each customer's interests; it also offers a wide range of information, resources, and tools to help customers address their financial needs. In this way, Schwab confirms its focus on the customer. Brokerage employees need access to complete and current customer records because securities trading requires speedy response. Outdated or incomplete information can cost customers money and aggravation—making customers angry and ultimately driving them away.Other parts of Schwab that must be coordinated to ensure integrated marketing for customer satisfaction are: external marketing, with the marketing mix accurately reflecting Schwab's features and benefits; internal marketing, with all employees trained and motivated to provide excellent customer service; all layers of management, ready to assist the front-line people who handle customer transactions and customer service; and all company departments ready to work together to respond to and satisfy Schwab's customers.MARKETING FOR THE MILLENNIUME-commerce is growing exponentially because of its convenience, savings, selection, personalization, and information. Still, figuring out exactly how to reach the right cybercustomers can be challenging for even the largest marketers. Kraft, Kellogg, and other companies are learning to use targeted banner advertisingto reach the customer segments most likely to be interested in their products. These companies boosted online sales significantly by placing banner ads on Peapod, a Internet-based grocery shopping service. Untargeted ad banners, by comparison, are inexpensive but draw less customer response. Visit Peapod's Web site () and type in your zip code, as directed. Then sign in to take the shopping demonstration showing which products are offered and how the service operates. What types of products could potentially benefit from advertising on this site? What kind of information would these marketers want from Peapod in order to determine the value of targeted banner advertising on this site? How might Kellogg use banner advertising on Peapod to support a new cereal product? To support an existing cereal product?Answer: Branded grocery products in particular can potentially benefit from advertising on Peapod's Web site—as long as online customers can purchase these products from Peapod. This Web advertising would reinforce the messages of other marketing communications such as broadcast commercials and print ads, building consumer demand and preference for the branded products. In addition, grocery products that represent impulse purchases (such as snacks) would benefit from advertising on Peapod, because consumers can make an immediate purchase to satisfy the wants generated by these ads.Marketers would want to know how many consumers view Peapod's ads; how many consumers have responded (if this information is available) to previous ads; how many other products in the marketer's category are advertising at the same time on Peapod banners (to gauge competition); ho w long the banner will run; and how fees will be calculated (according to number of clicks, number of times page is accessed, or other method?). Students may suggest other questions, as well.Kellogg can use banner advertising on Peapod to support a new cereal product by starting with a banner that highlights the new cereal's main feature and benefit while clearly identifying the target audience ("Try Cereal X, a good tasting, low-sugar cereal for children," for example). It can also use the banner to remind consumers when to watch for the new product on Peapod's listings; when to watch for commercials andprint ads promoting the new product; when to check for special new-product pricing. Kellogg can use banner advertising on Peapod to support an existing cereal product by reinforcing the name and main feature/benefit ("Special K has all essential vitamins for healthy bodies," for example), reminding consumers to watch for the product's advertising in other media ("See ad in this week's newspaper"), urging consumers to stock up during price specials, and so on. Students will have other creative ideas for ways that Kellogg can use banner advertising on Peapod.。

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.。

CHAPTER2--BUILDING CUSTOMER SATISFACTION THROUGHQUALITY,SERVICE AND VALUEOVERVIEWToday's customers face a growing range of choice in the products and services they can buy. They are making their choice on the basis of their perceptions of quality, service, and value. Companies need to understand the determinants of customer value and satisfaction. Customer delivered value is the difference between total customer value and total customer cost. Customers will normally choose the offer that maximizes the delivered value.Customer satisfaction is the outcome felt by buyers who have experienced a company performance that has fulfilled expectations. Customers are satisfied when their expectations are met and delighted when their expectations are exceeded. Satisfied customers remain loyal longer, buy more, are less price sensitive, and talk favorably about the company.A major challenge for high performance companies is that of building and maintaining viable businesses in a rapidly changing marketplace. They must recognize the core elements of the business and how to maintain a viable fit between their stakeholders, processes, resources and organization capabilities and culture. Typically, high performing businesses develop and emphasize cross-functional skills rather than functional skills (overall project management and results versus functional strengths (best engineers, etc.). They also build their resources into core capabilities that become core competencies, distinctive abilities and competitive advantages. This, along with a corporate culture of shared experiences, stories, beliefs and norms unique to the organization, are the keys to their success.To create customer satisfaction, companies must manage their value chain as well as the whole value delivery system in a customer-centered way. The company's goal is not only to get customers but even more importantly, to retain customers. Customer relationship marketing provides the key to retaining customers and involves providing financial and social benefits as well as structural ties to the customers. Companies must decide how much relationship marketing to invest in different market segments and individual customers, from such levels as basic, reactive, accountable, proactive, to full partnership. Much depends on estimating customer lifetime value against the cost stream required to attract and retain these customers.Total quality marketing is seen today as a major approach to providing customer satisfaction and company profitability. Companies must understand how their customers perceive quality and how much quality they expect. Companies must then strive to offer relatively higher quality than their competitors. This involves total management and employee commitment as well as measurement and reward systems. Marketers play an especially critical role in their company's drive toward higher quality.LEARNING OBJECTIVES:After reading this chapter students should:∙Know what constitutes customer value and satisfaction∙Know how leading companies organize to produce and deliver high customer value and satisfaction∙Know how companies can retain customers as well as attract customers∙Know how companies can determine customer profitability∙Know how companies can practice total quality marketing strategyCHAPTER OUTLINE:I.IntroductionII.Defining Customer Value and SatisfactionA.Customer Value1.Customer delivered value - the difference between total customer valueand total customer cost, or “profit” to the customer. Total customervalue is the expected bundle of benefits.2.Total customer cost - bundle of costs consumers expect to incur inevaluating, obtaining and using the product or service.3.Customer value assessment - weighing the value against all of the costsB.Customer Satisfaction1.Perceived performance and expectations - contribute to overallsatisfaction2.Methods of tracking and measuring customer satisfaction - see Text. III.The Nature of High-Performance BusinessesA.Stakeholders - customers, employees, suppliers, distributorsB.Processes - work flows through an organization, to achieve cross functional skillsC.Resources - labor, power, materials, machines, information, energy, etc., toachieve core competence, distinctive ability(ies) and competitive advantage.anization and Organizational Culture - structures, policies. Corporate Cultureis the shared experiences, stories, beliefs, and norms that characterize anorganization.IV.Delivering Customer Value and SatisfactionA.Value Chain - used as a tool for identifying ways to create more value. Ninevalue creating activities.B.Value-Delivery Network - to be successful a firm has to look for competitiveadvantages beyond its own operations. Theme that building a better network canbe a highly successful differentiation tactic that leads to greater customersatisfaction.V.Attracting and Retaining Customersputing the Cost of Lost Customers - compute customer defection rate (4-stepprocess)B.The Need for Customer Retention - cost of attracting a new customer is 5 timesthat of retaining a satisfied current customer.C.Relationship Marketing: The Key - there is a process to attracting and retainingcustomers. There are five levels of customer relationship building, and threecustomer-value building approaches:1.Adding Financial Benefits - frequency marketing programs and clubmarketing programs2.Adding Social Benefits- individualize and personalize customerrelationships3.Adding Structural Ties -help customers manage themselves.VI.Customer Profitability: The Ultimate Test - a profitable customer is a person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling, and servicing the customer. A company should not attempt to pursue and satisfy all customers.VII.Implementing Total Quality ManagementA.Total Quality Marketing (TQM) - Most customers will no longer accept ortolerate average quality performance. There is an intimate connection amongproduct and service quality, customer satisfaction and company profitability.B.The role of Marketing now is extended beyond external marketing activities tointernal marketing roles to act as the Customer's watchdog within theorganization.VIII.SummaryMARKETING A ND ADVERTISING1. Toyota, like many automotive manufacturers, emphasizes excellent product quality and high customer satisfaction. But what exactly is quality—and how can Toyota prove that it offers excellent quality? The Toyota ad in Figure 1 shows one approach. What element of quality is the ad stressing, and how does this element satisfy customer needs? Is the ad focusing on performance or conformance quality? What are the implications for customers? For Toyota's marketing strategy?Answer: This Toyota ad is emphasizing performance quality, specifically the ability of the Sienna model to withstand a crash better than any other vehicle ever tested. This element of quality satisfies customers' needs for safety. The implications for customers are that those who worry about accidents can choose the Sienna and feel safer than they would in any other vehicle. The implications for Toyota's marketing strategy are that the company can promote the car to audiences that worry about accidents, including parents with children and anyone else who wants to feel safer when they drive, on the basis of evidence from credible third-party crash tests. This is a powerful competitive edge.2. Roadway Express wants to be the trucking firm of choice for companies that choose to outsource their shipping function, as the ad in Figure 2 indicates. What is Roadway's core competence? Why would Rawlings, the customer featured in the ad, prefer to outsource to Roadway rather than handle its own shipments? What capability does Roadway appear to be emphasizing in this ad?Answer: Roadway's core competence is its exceptional on-time delivery. Rawlings would prefer to outsource shipments because Rawlings's core competence is baseball equipment. Therefore, Rawlings wants to own and nurture its core resources and competence while outsourcing less critical activities such as delivery. Roadway is emphasizing customer linking in this ad; this is clear from its use of the Rawlings testimonial, indicating how happy Rawlings is as a Roadway customer. It is also clear from the insertion of the Rawlings URL at the bottom of the ad—equal in size to the Roadway URL—that Rawlings and Roadway consider themselves partners.FOCUS ON TECHNOLOGYHow can a company use its Web site for cost-effective customer-relationship building? Fuji Film Company maintains an extensive Internet presence for consumers and business customers. Generally, the profit margins in consumer products are too small to allow for expensive outreach beyond basic marketing. Yet Kodak, Fuji's archrival, invites consumers to become members of its Web site. Members receive Kodak information via e-mail and are able to upload their own photo images for inclusion in electronic postcards.Visit the Web sites of Kodak () and Fuji Film (), and examine how each reaches out to consumers. What can Fuji learn from Kodak's membership approach? How can Fuji use its Web site to stay in touch with consumers on a regular basis?Answer: Fuji might want to adapt Kodak's membership approach. This would allow Fuji to learn more about its consumer markets and provide consumers with value-added services that will build and strengthen relationships over the long term. Fuji might also want to use a membership approach to build relationships with the other market segments it serves, including profess ionals and businesses. Fuji can offer contests, weekly or monthly special events, and other inducements to keep consumers coming back to its Web site; this way, Fuji can stay in touch with consumers on a regular basis. Fuji can also periodically e-mail announcements to consumers who become members, another way to stay in touch. Students can use their creativity to develop ways for Fuji to use its Web site to strengthen relationships with individual consumers. MARKETING FOR THE MILLENNIUMLogistix is testing Web Agent software from Aspect Telecommunications that allows an employee and a customer to view the same Web screen simultaneously while they are having a telephone conversation. Web Agent is only one of the products Aspect offers for teleweb applications. Visit Aspect's Web site () and locate its integrated call center solutions. Try an on-line demo of one of the featured products or read the detailed description of Web Agent. How does this Aspect product deliver value to Logistix? What value does it add for the business customer who contacts Logistix through its call center? How can Logistix use this product to build relationships with its business customers? What relationship-building obstacles do you think Logistix might encounter early in the next millennium—and how should the company respond?Answer: The Aspect Web Agent software delivers value to Logistix because the program allows the firm to more conveniently communicate with and service customers who access Internet pages, a process that is more complex without Aspect's specialized software. In turn, this more convenient service and communication adds to customer satisfaction and strengthens customer relationships, ultimately boosting customer retention and slowing customer defect ions for Logistix. It also adds value for business customers who contact Logistix through the call center, because they get immediate assistance with questions or problems without having to log off the Internet, dial up Logistix, and try to put into words exactly what they need.Logistix can use this software to build relationships with business customers by encouraging them to access the company's Web site and simultaneously call the company to discuss any questions or problems they may have with products or information. Over time, business customers are likely to find this system so convenient that they will buy more from Logistix because of the value-added service. One relationship-building obstacle Logistix might encounter early in the next millennium is an evolution in Internet technology that allows every competitor to handle customer calls the way Web Agent does today—but without specialized software. This will erode Logistix's competitive edge in customer service. The company can respond to this obstacle by continuing to explore new communication methods for immediate customer service through multiple channels (Internet, telephone, and others). Students will offer various answers to question of obstacles in the new millennium.。

PART V:MANAGING AND DELIVERING MARKETING PROGRAMSC HAPTER 16--S ELECTING AND M ANAGING M ARKETING C HANNELSOVERVIEW:Marketing-channel decisions are among the most complex and challenging decisions facingthe firm. Each channel system creates a different level of sales and costs. Once a particular marketing channel is chosen, the firm must usually adhere to it for a substantial period. The chosen channel will significantly affect and be affected by the other elements in the marketing mix.Middlemen are used when they are able to perform channel functions more efficiently than the manufacturers can. The most important channel functions and flows are information, promotion, negotiation, ordering, financing, risk taking, physical possession, payment and title. These marketing functions are more basic than the particular retail and wholesale institutions that may exist at any time.Manufacturers face many channel alternatives for reaching a market. They can choose selling direct or using one, two, three or more intermediary channel levels. Channel design calls for determining the service outputs (lot size, waiting time, spatial convenience, and product variety), establishing the channel objectives and constraints, identifying the major channel alternatives (types and number of intermediaries, specifically intensive, exclusive, or selective distribution), and the channel terms and responsibilities. Each channel alternative has to be evaluated according to economic, control, and adaptive criteria.Channel management calls for selecting particular middlemen and motivating them with acost-effective trade relations mix. The aim is to build a "partnership" feeling and joint distribution programming. Individual channel members must be periodically evaluated against their own past sales and other channel members' sales. Channel modification must be performed periodically because of the continuously changing marketing environment. The company has to evaluate adding or dropping individual middlemen or individual channels and possibly modifying the whole channel system.Marketing channels are characterized by continuous and sometimes dramatic change, especially with the changes brought by the growth of the Internet as a major marketing tool and channel of distribution. For example, the new competition in retailing no longer involves competition between individual firms but rather between retail systems. Three of the most significant trends are the growth of vertical, horizontal, and multichannel marketing systems. All channel systems have a potential for vertical, horizontal, and multichannel conflict stemming from such sources as goal incompatibility, unclear roles and rights, differences in perception, and high dependence. Managing these conflicts can be sought through superordinate goals, exchange of persons, co-optation, joint membership in trade associations, diplomacy, mediation, and arbitration. Marketers should continue to explore and respond to the legal and moral issues involved in channel development decisions.LEARNING OBJECTIVES:After reading the chapter the student should understandThe role and function of intermediaries∙The issue of channel levels∙How service outputs determine channel design∙How to evaluate channel alternatives∙What are the major channel management decisions∙Channel dynamic sCHAPTER OUTLINE:I.IntroductionII.What work is performed by marketing channels? The channels include sets of interdependent organizations involved in the process of making a product or serviceavailable for use or consumption.1.Why Are Marketing Intermediaries Used? - to smooth the flows of goodsand services, and saving the manufacturer money, time and specializedeffort.B.Channel Functions and Flows - key functions of intermediaries: information,promotion, negotiation, ordering, financing, risk taking, physical possession,payment, title.C.Channel Levels - usually from zero to three levels, can be longerD. Service Sector Channels- focus is on location and minimizing levelsIII.Channel-Design DecisionsA.Analyzing Customers' Desired Service Output Levels (lot size, waiting time,spatial convenience, product variety, and service backup)B.Establishing Objectives and Constraints - based on:1.Product characteristics2.Strengths and weaknesses of intermediariespetition's channels4.Environmental changesC.Identifying Major Channel Alternatives1.Types of intermediaries2.Number of intermediariesa)Exclusive distribution - one or a select fewb)Selective distribution - more than a few, less than allc)Intensive distribution - as many outlets as possible3.Terms and responsibilities of channel membersD.Evaluating Major Alternatives1.Economic criteria - sales versus costs2.Control criteria3.Adaptive criteria - degree of intermediary commitmentIV.Channel-Management DecisionsA.Selecting Channel Members - evaluate experience, number of lines carried,growth and profit record, solvency, cooperativeness, and reputation.B.Training Channel Members - To prepare the channel member employees toperform more effectively and efficientlyC.Motivating Channel Members - coercive, reward, legitimate, expert, or referentpower. More sophisticated companies try to form partnerships, which can evolveinto long-term distribution programming.D.Evaluating Channel Members - sales quota attainment, average inventory levels,customer delivery time, treatment of damaged and lost goods, and cooperation inpromotional and training programs.E.Modifying Channel Arrangements - the system will require periodic modificationto meet new conditions in the marketplace.V.Channel DynamicsA.Vertical Marketing Systems1.Corporate VMS - under single ownership2.Administered VMS - one member emerges as dominant in channel3.Contractual VMS - program integrationa)Wholesaler-sponsored voluntary chainsb)Retailer cooperativesc)Franchise organizations4.The New Competition in Retailing - between systems, not individualsB.Horizontal marketing Systems - two or more unrelated firms put togetherresources or programs. Each firm lacks the capital, technology, marketingresources or other variables to take on the venture alone. Permanent or temporary.C.Multichannel marketing systems - when a single firm uses two or moremarketing channels to reach one or more customer segments (advantages areincreased coverage, lower cost, customized selling)1.Roles of Individual Firms in a Channel - insiders, strivers,complementers, transients, outside innovatorsD. Conflict, Cooperation, and Competition1.Types of Conflict and Competition - vertical channel, horizontal channel,multichannel2.Causes of Channel Conflict - goal incompatibility, unclear roles andrights, differences in perception, great dependence3.Managing Channel Conflict - superordinate goals, exchange of persons,co-optation, join membership in and between trade associations,diplomacy, mediation, arbitration.E.Legal and Ethical Issues in Channel Relations1.Exclusive Dealing2.Exclusive Territories3.Tying Agreements4.Dealers’ RightsVI.SummaryMarketing and Advertising1. The Radio Shack ad shown in Figure 1 pokes fun at the intensive distribution of wireless phone products. Why would makers of cell phones and similar products choose this distribution strategy? What desired service output levels on the part of customers form the foundation for this Radio Shack ad? Explain your answer.Answer: Cell phone manufacturers see intensive distribution as a way to get their products into as many outlets as possible, which is important for gaining fast acceptance of a new category o r product. However, as the ad suggests, customers want easy, convenient, uncomplicated service backup and appropriate product variety. The Radio Shack ad promises clear answers to service questions/needs and a good range of choices in communication products and programs.2. Debenhams, a leading U.K. department store, shows off holiday fashions in this ad, which appeared in British women's magazines. Is Debenhams likely to earn higher profits from national brands or store brands?What motivation would Debenhams have for showcasing national brands rather than store brands in its advertising? Why are department stores important channel partners for fashion products?Answer: Debenhams is likely to earn higher profits from store brands, because the length of th e channel is shorter and therefore fewer intermediaries must be paid from the ultimate selling price. Debenhams would therefore want to showcase store brands in its ad to build demand for these more profitable products. Still, department stores are important channel partners for fashion products because they have been in business for many years, carry other upscale merchandise attractive to the targeted customer segment, have stores in attractive locations, and have sales personnel experienced in fashion products. They also have the service backup and other service outputs needed to sell fashion products.Focus on TechnologyWeb sites that help customers compare prices and services of particular products offered by online retail sites are functioning as complementers, offering comparisons unavailable elsewhere in the channel. But many manufacturers and channel members are concerned about Web sites that facilitate comparison shopping, because these sites tend to focus customers on price rather than on other parts of the marketing mix.Several comparison shopping Web sites have sprung up for computer hardware and software products, and new sites are coming online to search other product categories, as well. A good example is Acses, a Web site that compares prices and services at 25 Internet book retailers in the United States and Europe. Visit the Acses site (/) and try a search for a particular book. Also read the FAQ to find out more about Acses. Why would consumers visit Acses before visiting well-known online book stores such as ? Why would a book manufacturer or retailer agree to be listed on Acses? What other sites would want to link to the Acses site?Answer: Consumers might visit Acses to find out quickly which online book stores have the book they want and what the prices are at each store. With this information in hand, they can make a better decision about where to make the purchase. A manufacturer or retailer is likely to get new customers and more sales from its Acses listing. Students may suggest a variety of sites that could link to Acses, such as sellers of books only available by downloading from the Web.Marketing for the MillenniumCarMax, a fast-growing outside innovator that is challenging conventional car dealers, is transforming the way used cars are sold. Point your Internet browser to the Car Max Web site (/). Click on the photo tour to see the computer kiosks and the interior and exterior of a typical CarMax store. Also click on vehicle browse to try out the company's computerized listing of vehicles. How does CarMax satisfy the service output levels desired by consumers who want to buy vehicles for personal use? Explain how CarMax's service output level performance has contributed to its rapid growth and success.Answer: CarMax satisfies service output levels by offering a number of cars for consumer consideration, by reducing the waiting time to receive a purchased car, by offering spatial convenience for customers located within easy driving distance of a CarMax store, by offering considerable product variety, and by providing service backup for the cars it sells. Customers are often worried about buying used cars, so CarMax's high level of service output reassures customers and gives them more reasons to buy from CarMax rather than other dealers.YOU'RE THE MARKETER: SONIC MARKETING PLANMarketing channels are an essential ingredient in any manufacturer's marketing plan. By planning the design, management, evaluation, and modification of marketing channels, manufacturers can ensure that their products are available when and where customers want to buy.You are Jane Melody's assistant at Sonic, and one of your duties is to manage the marketing channels for shelf stereos. Review Sonic's current situation, then respond to the following questions about your marketing channels (indicating any additional research you may need):∙What is Sonic's evaluation of current channel members?∙What channel length is most appropriate for Sonic in its forward movement of new products and its backward movement of defective products?∙In determining the number of channel members, should Sonic use exclusive, selective, or intensive distribution? Why?∙What levels of service output do Sonic customers desire? How do these levels affect Sonic's channel strategy? How can Sonic support its channel members?Think carefully about your answers to these questions and the implications for Sonic's ma rketing activities. Then, as your instructor directs, enter your comments and recommendations in a written marketing plan or type them into the Marketing Situation and the Marketing Mix/Place sections of the Marketing Plan Pro software.Answer: As stated in Chapter 3, Sonic has weak representation in mass-merchandise and discount stores, where more consumers are buying shelf stereo systems. Current dealers are well-trained and knowledgeable about Sonic products. Ideally, Sonic would want to use a one-level channel (to keep costs down), although two-level channels may be appropriate for new markets or new channel designs. Channel design for backward movement of defective products depends, in part, on Sonic's arrangements with retailers and service centers. Sonic is not collecting defective items directly, so the backward channel length is likely to be either one- or two-level. Ideally, the length of the backward channel will allow for speedy interchange of information about problems and speedy replacement of defective merchandise. Sonic should use selective distribution because it wants to sell only through channel members that are knowledgeable, offer appropriate levels of service output, and reach the targeted customer segment. Lot size is not a major consideration. However, customers will also want to avoid any delays in receiving their purchased items, so waiting time must be minimal. Spatial convenience is important to provide customers with easily accessible locations for buying Sonic products. Sonic customers probably want to be able to choose among several products and brands, so product variety is important. And service backup, especially credit and repairs, are important for Sonic's customers. When selecting channel members, Sonic must consider these levels of service output. Students will respond that Sonic can support its channel members in various ways. Some sample ideas are: motivating channel members through appropriate allowances, sales contests, and other methods.。

C HAPTER 14--DESIGNING AND MANAGING SERVICES OVERVIEW:As the United States moves increasingly toward a service economy and beyond, marketers need to know more about marketing service products. Services are activities or benefits that one party can offer to another that are essentially intangible and do not result in ownership of anything tangible. Services are intangible, inseparable, variable, and perishable. Each characteristic poses problems and requires strategies. Marketers have to find ways to make tangible the intangible; to increase the productivity of providers who are inseparable from the product; to standardize quality in the face of variability; and to influence demand movements and supply capacities better in the face of service perishability.Because services generally are intangible, customers perceive them as a more risky proposition and evaluation more difficult. Accordingly, they tend to rely more on personal references or information sources, reputation (brand name and image), and the price and / or facilities of the service provider as an indication of quality. Among the means by which the service provider can reinforce these elements and overcome the perceptions of risk is to reduce the complexity involved with the service (paperwork and bureaucracy), stress the positive elements of tangibility in the service, make all communications with the customer very clear and unambiguous, and focus constantly on service quality.Service industries have typically lagged behind manufacturing firms in adopting and using marketing concepts, but this is changing. Services marketing strategy calls not only for external marketing but also for internal marketing to motivate employees, and interactive marketing to create skills in the service providers. Further, in the future customers will use more technical and functional criteria to judge the quality of services.Even product-based companies must provide and manage a service bundle for their customers; in fact, their services bundle may be more critical than the product in winning customers. The service mix includes pre-sale services such as technical advice, dependable delivery, as well as post-sale services such as prompt repair and personnel training. The marketer has to decide on the mix, quality, and source of various product support services for customers. Service marketers, to succeed, must create competitive differentiation, offer high service quality, and find ways to increase service productivity without reducing the perceived service level.LEARNING OBJECTIVES:After reading the chapter the student should understand:∙How services are defined and classified∙The distinctive characteristics of services as opposed to goods∙How service firms can improve their differentiation, quality, and productivity∙How goods-producing companies can improve their customer-support service CHAPTER OUTLINE:IntroductionI.The Nature of Services - a service is any act or performance that one party can offer toanother that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.A.Categories of Service Mix --There are five major categories of offer: puretangible good, tangible good with accompanying services, hybrid, major servicewith accompanying minor goods and services, and pure service. The degree ofpeople and equipment based service activity provides an important variable in thegoods-to-service mix.B.Characteristics of Services and Their Marketing Implications1.Intangibility - services cannot be seen, heard, touched, tasted or felt. Acritical element here is the signs or evidence of service quality totransform intangible services into meaningful benefits2.Inseparability - services are produced and consumed simultaneously, andthe provider-client interaction is an important aspect in the outcome.3.Variability - the quality of a service depends on when, where and bywhom they are provided, with training a crucial differentiator.4.Perishability - services cannot be stored for later use. There are severalstrategies that can be used for producing a better match between servicedemand and supply.II.Marketing Strategies for Service Firms - three extra “Ps” in service marketing: people (they should be competent, caring and responsive), physical evidence (development of a look and observable style), and processes (how the service is delivered). The goal is toachieve a high level of interactive marketing between provider and client. The maintasks are:A.Managing Differentiation - through the offer, the delivery, and the imageperceived by customers, and to develop a differentiated offer, delivery or imageas the alternative to price competition.B.Managing Service Quality - one way to differentiate is through consistentlyhigher quality service that meets or exceeds customer expectations (perceivedversus expected service). There are five gaps that cause unsuccessful servicedelivery and five determinants of service quality. Various studies have shownthat excellently managed service companies share the following commonpractices:1. a strategic concept: "customer obsessed"2. a history of top-management commitment to quality3.high standards4.systems for monitoring service performance5.systems for satisfying customer complaints6.an emphasis on employee and customer satisfaction.C.Managing Productivity - There are seven approaches to improve serviceproductivity and to reduce costs. However, a goal is to avoid pushingproductivity too hard and thus reduce perceived quality ('high-tech" versus 'high-touch.")III.Managing Product Support Services - for product-based industries that must provide a service bundle to their customers, responding to three specific customer worries related to reliablity, service dependability, and maintenance.A.Post-Sale Service StrategyB.Major Trends in Customer ServiceIV.SummaryMarketing and Advertising1. Figure 1 shows a BellSouth ad geared for business and consumer audiences. How does the content ofthis ad reflect BellSouth's application of the three additional Ps for its service business? How does the ad provide evidence of service quality to reduce the uncertainty business customers have about buying an intangible product? What segments of the business and consumer markets does BellSouth seem to be targeting with this ad?Answer: The BellSouth ad reflects people, physical evidence, and process, the three additional Ps for service businesses. People are represented by the representative pictured and quoted in the ad; the physical evidence is the telephone bill, which is available in Spanish in Florida; and the process is represented by the matching of customers to service representatives fluent one of eight languages. The ad provides evidence of service quality by pointing to the way BellSouth helps its customers in "new and creative ways," as the copy states—specifically, by offering multilingual service representatives. BellSouth seems to be targeting companies and consumers that do business primarily in Spanish and other languages.2. This GMAC ad illustrates one of General Motors' product support services: affordable financing for new car buyers. Is this GMAC service being offered for presale or postsale use? Is the offering bundled or unbundled? Does it represent a facilitating service or a value-augmenting service? Explain your answers.Answer: The GMA C service in the ad is being offered for presale use—before the customer buys a new car. The offering looks unbundled but it is actually bundled, because customers cannot get the low lease rates unless they buy a General Motors vehicle. It represents a facilitating service, because it helps customers buy a GM vehicle.Focus on TechnologyThe Internet is fast becoming part of every marketer's service support strategy. Nearly any product can be differentiated through online service support—even 3M's Post-it notes, those ubiquitous removable notes available in paper and software format. "What did you ever do without them?" asks the Post-it Web site. In case consumers and business users get stuck for an answer, they can surf over to the Post-it site, which offers an ever-changing array of ideas, contests, and good-natured fun.Stop by the Post-it site (/Post-it) and look at the product section, the downloads, and the monthly feature. Why would 3M establish this relatively extensive Web presence for such a well-known product? How do you think Post-it customers are likely to react? What other basic office products for home or commercial use might benefit from similar online service support?Answer: The Post-it Web site showcases value-augmenting services to keep customers buying 3M brand removable notes. It also reinforces the brand image, differentiates the product, and offers post-sale service such as suggestions for additional uses of the product. (Students may identify additional justifications.) Post-it customers are likely to be pleased with this site and find the tips useful in home or business use of removable notes. Students may offer various ideas for other basic office products that could benefit from such online service support.Marketing for the MillenniumLifelong learning is important for career development as well as personal growth. Now computer users who want to empower themselves by learning programming, database techniques, Web site design, and other skills for today's technology can take online classes through ZD University. ZDU is an online service offered by Ziff-Davis, a company that publishes a wide variety of magazines on information technolo gy. For a flat monthly or yearly fee, students can sign up for as many ZDU courses as they like, learning at their own pace and on their own schedule.Browse the ZD University Web site (/), noting especially the course catalog, free offers, and ZDU Handbook. How does ZDU manage students' expectations of this online learning service? How does it demonstrate its service quality? Explain how ZDU delivers a winning combination of high tech and high touch to sati sfy its students.Answer: ZDU manages expectations of its online learning service by offering a free trial period so students can see for themselves. Its handbook also explains what students should expect from their online courses at ZDU. The company demonstrates its service quality by (1) offering easy sign-up, which represents responsiveness, one key determinant of service quality; (2) offering assurance through such tangible features as the privacy notice telling students that their personal data will not be shared, another key determinant of service quality; and (3) offering tangibles such as the Journal, the resource library, and other communication materials, a third determinant of service quality. Students may mention additional features that demonstrate service quality. ZDU uses both high tech and high touch to sati sfy students by delivering the latest information and courses conveniently, via the Web, yet personalizing the experience and customizing it to meet students' needs (students may offer additional responses here).YOU'RE THE MARKETER: SONIC MARKETING PLANMarketers of any type of good or service need to develop a service strategy when preparing their marketing plans. If their products are intangible, they will want to consider how to manage customers' expectations and satisfaction; if their products are tangible, they will want to create suitable support services.As Jane Melody's assistant, you are charged with planning product support services for Sonic's shelf stereo products. Start by reviewing the company's current situation and the information you previously entered in your marketing plan. Then respond to the following questions to plan your service strategy (indicating, where necessary, any additional data and research that may be needed):∙What support services do buyers of shelf stereo products want and need? (As you answer this question, look back at your customer research, Sonic's strengths, and the competitiveinformation you have gathered.)∙What postsale service arrangements should Sonic have or improve in order to satisfy customers' complaints?∙What kinds of guarantees should Sonic offer to be competitive? To beat the competition?∙What type of internal marketing will Sonic need to effectively implement the external marketing of your product service support?Consider how your service strategy will help Sonic's overall marketing efforts. Finally, as your instructor directs, summarize your recommendations and plans in a written marketing plan or type them into the Service part of the Marketing Strategy section of the Marketing Plan Pro software.Answer: Sonic knows that its customers value easy, fast, accurate repair services, so this is a key support service. Students may suggest other services, such as a good warranty offer, as well. For postsale arrangements, Sonic must be sure it has a good network of repair centers in every region where its products are sold; it should also have a Web site or local phone numbers or a toll-free central number for customers to call with complaints and questions. The kinds of guarantees Sonic offers depend on what students learn about competitive guarantees; if Sonic's products are better quality than those of its rivals, it can take a small risk and offer a better guarantee. At a minimum, the internal marketing needed to implement the external marketing of product service support includes training of company employees, distributors, and repair or service centers; students may suggest additional internal marketing programs.。