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Page concepts Explanation

no.
1. DEFINING MARKETING FOR THE 21st CENTURY
6. Marketing Meeting needs profitably Marketing is an organizational function and a set of
processes for creating, communicating, and delivering value to customers and for
managing customer relationships in ways that benefit the organization and its
stake holders.
6. Marketing Art and science of choosing target markets and getting, keeping, and growing
Management customers through creating, delivering, and communicating superior customer
value.
7. Exchange The process of obtaining a desired product from someone by offering something
in return.
7. Transaction Trade values between two or more parties.
8. What is marketed?
Goods Physical goods constitute the bulk of most countries production and marketing.
E.g. cars, trucks, industrials chemicals etc.
Services E.g. work of airlines, hotels, car rental firms, barbers and beauticians, bankers,
lawyers, engineers, doctors etc.
Events Marketers promote time-based events, e.g. trade shows, artistic performances and
company anniversaries.
Experiences By orchestrating several services and goods, a firm can create stage and market
experiences. E.g. amusement park.
Persons Celebrity marketing is a major business. E.g. film stars have agents, personal
managers and use the services of public-relations agencies.
9. Places Place marketers include economic development specialists, real estate agents,
commercial banks local business associations and advertising and public relations
agencies. Bangalore is called silicon valley of India.
Properties Properties are intangible rights of ownership of either real property or financial
property.
Organizations Organizations actively work to build a strong, favorable, and unique image in the
minds of their target publics. E.g. Philips, the Dutch electronics co. puts out ads
with the tag line Lets Make thing better.
Information Information can be produced and marketed as a product.
Ideas Every market offering includes a basic idea. E.g. Promoting awareness about
awareness about Aids.
9. Marketer A marketer is some one who seeks a response from another party called
prospect.
9. Demand
Negative Consumers dislike the product and may even pay a price to avoid it.
demand
Nonexistent Consumers may be unaware or uninterested in the product.
demand
Latent demand Consumers may share a strong need that cannot be satisfied by an existing
product.
10. Declining Consumers begin to buy the product less frequently or not at all.
demand
Irregular Consumers are adequately buying all products put into the marketplace.
demand
Overfull More consumers would like to buy the product than can be satisfied.
demand
Unwholesome Consumers may be attracted to products that have undesirable social
demand consequences.
10. Markets A collection of buyers and sellers who transact over a particular product or
product class.
1. Government markets, 2. Resource markets, 3. Manufacturer markets, 4.
Intermediary markets and 5.consumer markets.
11. Key customer markets
Consumer Companies selling mass consumer goods and services such as soft drinks,
markets cosmetics, air etc.
Business Companies selling business goods and services often face well-trained and well-
Markets informed professional buyers who are skilled in evaluating competitive offerings.
Global markets Companies selling goods and services in the global market-place face additional
decisions and challenges.
13. Nonprofit & Companies selling their goods to nonprofit organizations such as churches,
governmental universities, charitable organizations etc.
Markets
13. Marketplace Is physical as when you shop in a store.
Marketspace When you shop on the internet
Metamarket Describe a cluster of complementary products and services that are closely related
in the minds of consumers but are spread across a diverse set of industries.
13. How business & marketing are changing
Changing technology, globalization, deregulation, privatization, customer
empowerment, customization, heightened competition, industry convergence,
retail transformation & disintermediation.
15. Production Consumers will prefer products that are widely available and inexpensive.
concept
16. Product concept Consumers will favor those products that offer the most quality, performance, or
innovative features.
Selling concept Consumers & business, if left alone, will ordinarily not buy enough of the
organizations products. The org. must therefore, undertake an aggressive selling
& promotion effort.
Marketing Business shifted to a customer-centered, sense and-respond philosophy.
concept Instead of hunting, marketing is gardening.
17. Holistic Is based on the development, design, and implementation of marketing programs,
marketing processes and activities that recognizes their breadth and interdependencies.
Components of 1. Relationship marketing, 2. Integrated marketing, 3. Internal marketing and 4.
holistic Social responsibility marketing.
marketing
18. Relationship Building mutually satisfying long-term relationships with key parties customers,
marketing suppliers, distributors, and other marketing partners. Marketing network consists
of the company and its supporting stakeholders (customers, employees, suppliers,
distributors, retailers, ad agencies, university scientists, and others) with whom it
has built mutually profitable business relationships.
19. Integrated marketing
19. Marketing Mix Product, Target market (Price, Promotion) and Place.
Product 1. Product variety, 2.Quality, 3.Design, 4. Features, 5. Brand name, 6. Packaging,
7. Sizes, 8. Services, 9. Warranties and 10.Returns.
Price 1. List price, 2. Discounts, 3. Allowances, 4. Payment period and 5. Credit terms.
Promotion 1. Sales promotion, 2. Advertising, 3. Sales force, 4. Public relations and 5. Direct
marketing.
Place 1. Channels, 2. Channels, 3, Coverage, 4. Assortments, 5. Locations, 6. inventory,
and 7.Transport
20. 4 Cs 1. Customer solution, 2. Customer cost, 3. Convenience and 4. Communication.
20. Internal Ensuring that everyone in the organization embraces appropriate marketing
marketing principles, especially senior mgt. internal marketing is the task of hiring, training,
and motivating able employees who want to serve customer well.
20. Social Ethical, environmental, legal, and social context of marketing activities and
responsibility programs. The cause and effects of marketing clearly extend beyond the company
marketing & the consumer to society as a whole.

22. Core Concepts


Needs Basic human requirements. E.g. people need food, air, water, clothing, and shelter
to survive.
Wants When needs are directed to specific objects that might satisfy the need. E.g. an
American needs food but may want a hamburger, French fries, and a soft drink.
Demands Wants for specific products backed by an ability to pay.
23. Offering Combination of products, services, information and experiences.
Brand Offering form a known source.
Value The perceived tangible and intangible benefits and costs to customers. Value can
be seen as primarily a combination of quality, service, and price (QSP), called the
customer value triad.
Satisfaction Persons comparative judgments resulting from a products perceived
performance in relation to his or her expectations.
2. DEVELOPING MARKETING STRATEGIES AND PLANS
36. Value chain Tool for identifying ways to create more customer value. Companies today have
partnered with specific suppliers and distributors to create a superior value
delivery network also called a supply chain
37. Core 1. It is a source of competitive advantage in that it makes a significant
competencies contribution to perceived customer benefits. 2. It has applications in a wide variety
of markets, and 3. It is difficult for competitor to imitate.
38. Value exploration: How can a company identify new value opportunities?
Cognitive space Reflects existing and latent needs and includes dimensions such as the need for
participation, stability, freedom, and change.
Competency Described in terms of breadth-broad versus focused scope of business; and depth-
space physical versus knowledge-based capabilities.
Resource space Horizontal partnerships, where companies choose partners based on their ability to
exploit related market opportunities, and vertical partnerships, where companies
choose partners based on their ability to serve their value creation.
38. Value creation: how can a Co. efficiently create more promising new value offerings?
Customer Marketers must understand what the customer thinks about, wants, does, and
benefits worries about.
Business 1. Redefining the business concept 2. Reshaping the business scope 3.
realignment Repositioning the companys brand identity.
39. Value delivery: How can a company use its capabilities and infrastructure to deliver the new value
offerings more efficiently?
Customer Allows the company to discover who their customers are, how they behave, and
relationship what they need or want.
management
Internal Integrate major business processes (e.g. order processing, general ledger, payroll,
resource mgt. and production) within a single family of software modules.
Business The company to handle complex relationships with its trading partners to source,
partnership process, and deliver products.
mgt.
41. Marketing plan Central instrument for directing and coordinating the marketing effort.
Strategic Lays out the target markets and the value proposition that will be offered, based
marketing plan on an analysis of the best market opportunities.
Tactical Specifies the marketing tactics, including product features, promotion,
marketing plan merchandising, pricing, sales channels, and service.
41. Corporate and Division Strategic planning
Planning 1. Defining the corporate mission, 2. Establishing strategic business units, 3.
Activities Assigning resources to each SBU and 4. Assessing growth opportunities.
44. Strategic 1. It is a single business or collection of related businesses that can be planned
business unit separately from the rest of the company. 2. It has its own set of competitors. 3. It
(SBU) has a manager who is responsible for strategic planning and profit performance
Characteristics and who controls most of the factors affecting profit.
46. Corporate The way people are dressed, how they talk to one another, the way they greet
culture customers.
47. Business unit strategic planning
48. Business Specific mission within the broader company vision.
mission
SWOT External environment(opportunity & Threat) internal environment (strengths and
weakness)
50. Goal Develop specific goals for the planning period
formulation
55. Mckinsey & Hardware: 1. Strategy, 2. Structure, and 3. Systems. Software: 1. Style, 2. Skills,
Co.(Strategy 3. Staff, and 4. Shared values
success)
3. GATHERING INFORMATION AND SCANNING THE ENVIRONMENT
66. Data warehouse A collection of current data captured, organized, and stored in a companys
contact center.
Database The process of building, maintaining, and using customer databases and other
marketing databases for the purpose of contacting, transacting, and building customer
relationships.
Data mining Extracting of useful information about individuals, trends, and segments from the
mass of data.
64. Marketing Consists of people, equipment, and procedures to gather, sort, analyze, evaluate,
information and distribute needed, timely, and accurate information to marketing decision
system makers.
68. Fad Unpredictable, short-lived, and without social, economic, and political
significance.
Trend Direction or sequence of events that has some momentum and durability. Trends
are more predictable and durable than fads.
Mega trends Described as large social, economic, political and technological changes are slow
to form, and once in place, they influence us for some time between 7 and 10
years, or longer.
4. CONDUCTING MARKETING RESEARCH & FORECASTING DEMAND
86. Marketing The systematic design, collection, analysis, and reporting of data & findings
research relevant to a specific marketing situation facing the company.
87. Marketing research process
Step1: Define the problem & the research objectives: 1. What is to be researched? & 2. Why is it
to be researched?
Step2: Develop the Research plan:
Data sources Primary data: data freshly gathered for a specific purpose or for a specific research
project.
Secondary data: data that were collected for another purpose and already exist
somewhere.
88. Research Observational Research: Fresh data can be gathered by observing the relevant
Approaches actors & settings.
Focus Group Research: a focus group is a gathering of 6-10 people who are
invited to spend a few hours with a skilled moderator to discuss a product, service,
organization or other marketing entity.
Survey research: surveys are best suited for descriptive research.
E.g. questionnaire
Behavioral data: Observations have shown that many high-income group
customers do not buy expensive consumer goods, while some low-income
consumers end up buying expensive products, contrary to their stated preferences
in surveys.
Experimental research: is to capture cause and effect relationships by
eliminating competing explanations of the observed findings.
88. Research Questionnaires: used to collect primary data. 1. Closed end questions specify all
instruments the possible answers and provide answers that are easier to interpret and tabulate.
2. Open-end questions allow respondents to answer in their own words & often
reveal more about how people think.
Qualitative measures: Qualitative research techniques are relatively unstructured
measurement approaches that permit a range of possible responses, and they are
creative means of ascertaining consumer perceptions that may otherwise be
difficult to uncover.
Shadowing Observing people using products, shopping using their cell
phones.
90. Behavior Photographing people within a space, such as a hospital
mapping waiting room, over 2 or 3 days
Consumer Keeping track of all the interactions a consumer has with a
Journey product, service or space.
Camera journals Asking consumers to keep visual diaries of their activities &
impressions relating to a product.
Extreme user Talking to people who really know- or know nothing about
interviews a product or service and evaluating their experience using it.
storytelling Prompting people to tell personal stories about their
consumer experiences.
Unfocus groups Interviewing a diverse group of people.
Mechanical Mechanical devices are occasionally used in marketing research. E.g.
devices galvanometers, eye cameras, skin sensor, brain wave scanners, etc.
92. Sampling plan 1. Sampling unit: who is to be surveyed? 2. Sample size: how many people should
be surveyed? 3. Sampling procedure: how should the respondents is chosen?
93. Contact 1. Mail questionnaire: is the best way to reach people who would not give
methods personal interviews. 2. Telephone interview: best method for gathering
information quickly. 3. Personal interview: most versatile method. 4.Online
interview
95. Step3: Collect the information
96. Step 4: Analyze the information
Step 5: Present the Findings
Step 6: Make the decision Marketing decision support system (MDSS) is a coordinated
collection of data, systems, tools, and techniques with supporting software and hardware by which an
org. gathers and interprets relevant information from business and environment and turns it into a
basis for marketing action.
97. Measuring marketing productivity
98. Marketing The set of measures that helps firms to quantify, compare and interpret their
Metrics marketing performance. Marketing metrics can be used by brand managers to
design marketing programs and by senior management to decide on financial
allocations.
100. Measuring marketing plan performance
Sales analysis Consists of measuring and evaluating actual sales in relation to goals.
Sales- variance Measures the relative contribution of different factors to a
analysis gap in sales performance. Almost 2/3 rd of the variance is
due to failure to achieve the volume target.
Microsales analysis Looks at specific products, territories, and so forth that
failed to produce expected sales.
Market share Overall market Company sales expressed as a percentage of total market
analysis share sales.
Served market Sales expressed as a percentage of the total sales to its
share served market.
Served market All the buyers who are able and willing to buy its products.
Relative market Expressed as market share in relation to its largest
share competitor.
101. Overall market Customer penetration * customer loyalty * Customer selectivity * price selectivity
share
Customer Percentage of all customers who buy from the company.
penetration
Customer loyalty Purchases from the company by its customers expressed as
a percentage of their total purchases from all suppliers of
the same products.
Customer Size of the average customer purchase from the company
selectivity expressed as a percentage of the size of the average
customer purchase from an average company.
Price selectivity Average price charged by the company expressed as a
percentage of the average price charged by all companies.
102. Profitability analysis
Profit margin Net profits/Net sales
Asset Turnover Net sales / Total assets
Return on Net profits / Total assets
Assets
Financial Total assets / Net worth
Leverage
Rate of return Net profits / Net worth
on net worth
103. Marketing- 1. Identifying Functional Expenses. 2. Assigning Functional Expenses to
profitability Marketing Entities and 3. Preparing a profit & loss Statement for each marketing
analysis entity.
106. Forecasting and demand measurement
107. Potential The set of consumers who profess a sufficient level of interest in a market offer.
market
Available The set of consumers who have interest, income, and access to a particular offer.
market
Target market The part of the qualified available market the company decides to pursue.
Penetrated The set of consumers who are buying a companys product.
market
A vocabulary for demand measurement
107. Market demand The total volume of a product that would be bought by a defined customer group
in a defined geographical area in a defined time period in a defined marketing
environment under a defined marketing program.
108. Market forecast Market demand corresponding to the level of industry marketing expenditure.
Market A comparison of the current level of market demand to the potential demand level.
penetration
index
Market The upper limit to market demand whereby increased marketing expenditures
potential would not be expected to stimulate further demand.
Share A comparison of a companys current market share to its potential market share.
penetration
index
110. Total market Potential number of buyers * average quantity purchased by a buyer * the price.
potential
111. Forecasting The art of anticipating what buyers are likely to do under a given set of conditions.
5. Creating customer value, satisfaction, and loyalty.
119. Customer The difference between the prospective customers evaluation of all the benefits
perceived value and all the costs of an offering and perceived alternatives.
(CPV)
Total customer The perceived monetary value of the bundle of economic, functional, and
value psychological benefits customers expect from a given market offering.
Total customer The bundle of costs customers expect to incur in evaluating, obtaining, using , and
cost disposing of the given market offering, including monetary, time, energy, and
psychic costs.
121. Loyalty A commitment to re-buy or re-patronize a preferred product or service.
Value The whole cluster of benefits the company promises to deliver; it is more that the
proposition core positioning of the offering.
Value delivery The experiences the customer will have on the way to obtaining and using the
system offering.
Satisfaction Persons feelings of pleasure or disappointment resulting from comparing a
product are perceived performance in relation to his or her expectations.
124. Quality Totality of features & characteristics of a product or service that bear on its ability
to satisfy stated or implied needs.
TQM Organization wide approach to continuously improving the quality of all the
organizations processes, products, and services.
126. Competitive Companys ability to perform I one or more ways that competitors cannot or will
advantage not match.
Customer Describes the net present value of the stream of future profits expected over the
lifetime value customers lifetime purchases.
127. Customer Equity
Customer The total of the discounted lifetime values of all of the firms customers. More
equity loyal the customers, the higher the customer equity.
Value equity Customers objective assessment of the utility of an offering based on perceptions
of its benefits relative to its costs. The sub drivers of value equity are quality,
price and convenience.
Brand equity Customers subjective and intangible assessment of the brand, above and beyond
its objectively perceived value. The sub-drivers of brand equity are customer
brand awareness, customer attitude toward the brand, and customer perception of
brand ethics.
128. Relationship Customers tendency to stick with the brand, above & beyond objective &
equity subjective assessments of its worth. Sub-drivers of relationship equity include
loyalty programs, special recognition & treatment programs, community building
programs & knowledge building programs.
Relational The cumulative value of the firms network of relationships with its customer,
equity partners, suppliers, employees, and investors.
Cultivating customer relationships
Mass Ability of a company to each customers requirements-to prepare on a mass basis
customization individually designed products, services, programs, & communications.
132. Building loyalty
Basic Salesperson simply sells the product.
marketing
Reactive Salesperson sells the product and encourages the customer to call if he or she has
marketing questions, comments, or complaints.
Accountable Salesperson phones the customer to check whether the product is meeting
marketing. expectations.
Proactive Salesperson contacts the customer from time to time with suggestions about
marketing improved product uses or new products.
Partnership Company works continuously with its large customer to help improve their
marketing performance.
134. Frequency Designed to provide rewards to customers who buy frequently and in substantial
programs amounts. Frequency marketing is an acknowledgment of the fact that 20 percent
of a companys customers might account for 80 percent of its business.
136. Customer Collection comprehensive information about individual customers or prospects
databases that is current, accessible, and actionable for such marketing purposes as lead
generation, lead qualification, sale of a product or service, or maintenance of
customer relationships.
Database The process of building, maintaining, and using customer databases and other
marketing databases (products, suppliers, resellers) for the purpose of contacting, transacting,
and building customer relationships.
6. ANALYZING CONSUMER MARKETS
146. Cultural Factors
Culture The fundamental determinant of a persons wants and behavior. The growing
child acquires a set of values, perceptions, preferences, and behaviors through his
or her family and other key institutions.
Subcultures Provide more specific identification and socialization for their members.
Subcultures include nationalities, religions, racial groups, and geographic regions.
148. Reference Groups that have a direct or indirect influence on his/her attitudes or behavior.
group Direct influence on a person membership groups primary groups (family,
friends) & secondary groups religious, professional.
Aspirational groups a person hopes to join, Dissociative groups those values
or behavior an individual rejects.
149. Opinion leader The person in informal, product-related communications who offers advice or
information about a specific product category, such as which of several brands is
best or how a particular product may be used.
150. Role The activities a person is expected to perform.
Status Each role carries a status. E.g. a senior vice president of marketing has more status
than a sales manager.
151. Personality A set of distinguishing human psychological traits that leads to relatively
consistent and enduring responses to environmental stimuli. E.g. self confidence,
dominance, autonomy, deference, sociability
Brand The specific mix of human traits that may be attributed to a particular brand.
personality
Jennifer 1. Sincerity (honest, cheerful etc.), 2. Excitement (daring, imaginative etc.), 3.
Aakers 5 brand Competence (reliable, intelligent, etc.), 4. Sophistication (upper-class &
personality charming) & 5. Ruggedness (outdoorsy & tough)
traits
152. Lifestyle Persons pattern of living in the world as expressed in activities, interests, and
opinions. Lifestyle portrays the whole person interacting with his or her
environment.
153. Multitasking Doing 2 or more things at the same time.
Key psychological processes
Motive Need that is sufficiently pressing to drive the person to act.
154. Freud theory Psychological forces shaping peoples behavior are largely unconscious, and that
a person cannot fully understand his or her own motivations. Laddering can be
used to trace a persons motivations from the stated instrumental ones to the more
terminal ones.
Maslows Human needs are arranged in a hierarchy, from the most pressing to the least
theory pressing. 1. Physiological needs, 2. Safety needs 3. Social needs, 4. Esteem needs,
and 5. Self-actualization needs.
Herzbergs The absence of disssatisfiers is not enough; satisfiers must be present to motivate
theory a purchase. Two implications of this theory are: 1. sellers should do their best to
avoid dissatisfiers. Although these things will not sell a product, they might easily
unsell it. 2. The seller should identify the major satisfiers or motivators of
purchase in the market and then supply them.
155. Perception The process by which an individual selects, organizes, and interprets information
inputs to create a meaningful picture of the world.
Selective Marketers have to work hard to attract consumers notice. The real challenge is to
attention explain which stimuli people will notice.
Selective The tendency to interpret information in a way that will fit our preconceptions.
distortion Consumers will often distort information to be consistent with prior brand and
product beliefs.
156. Selective Remember good points about a product we like and forget good points about
retention competing products. Selective retention again works to the advantage of strong
brands.
Subliminal Selective perception mechanisms require active engagement and thought by
perception consumers. Consumers are not consciously aware of these messages; but yet they
affect their behavior.
Learning Changes in an individuals behavior arising from experience. Learning is
produced through the interplay of 1. Drives, 2. Cues, 3. Discrimination
Drive A strong internal stimulus impelling action.
Cues Minor stimuli that determine when, where, and how a person
responds.
Discrimination The person has learned to recognize differences in sets of
similar stimuli and can adjust responses accordingly.
Memory Short-term A temporary repository of information
memory (STM)
Long-term A more permanent repository.
memory (LTM)
Brand associations All brand-related thoughts, feelings, perceptions, images,
experiences, beliefs, attitudes, and so on that become linked
to the brand node.
Memory encoding How and where information gets into memory. Memory
encoding can be characterized according to the amount or
quantity of processing that information receives at encoding
and the nature or quality of processing that information
receives at encoding.
158. Memory retrieval Refers to how information gets out of memory. According to
the associative network memory model, the strength of a
brand association increases both the likelihood that
information will be accessible and the ease with which it can
be recalled by spreading activation.
159. Buying Decision Process
160. Problem The buying process starts by identifying the problem.
recognition
Information An aroused consumer will be inclined to search for information. 1. Heightened
search attention and 2. active information search:
These information sources fall into four groups:
Personal Family, friends, neighbors, acquaintances.
Commercial Advertising, web sites, salespersons, dealers, packaging,
displays
Public Mass media, consumer-rating organizations
Experiential Handling, examining, using the product
161. Evaluation of There are several processes, the most current models of which see the process as
alternatives cognitively oriented.
Belief A descriptive thought that a person holds about something.
Attitude A persons enduring favorable or unfavorable evaluation, emotional
feeling, and action tendencies toward some object or idea.
164. Purchase Consumer forms preferences among the brands in the choice set.
decisions Noncompensatory models
Heuristics are rules of thumb or mental shortcuts in the decision process.
Conjunctive Consumer sets a minimum acceptable cutoff level for each
heuristic attribute and chooses the 1st alternative that meets the minimum
standard for all attributes.
Lexicograph Consumer chooses the best brand on the basis of its perceived
ic heuristic most important attribute.
Elimination- Consumer compares brands on an attribute selected
by-aspects probabilistically it may be positive or negative.
heuristic
166. Postpurchase After the purchase the consumer might experience dissonance that stems from
behavior noticing certain disquieting features or hearing favorable things about other
brands, and will be alert to information that supports his or her decision. 1.
Postpurchase satisfaction, 2. Postpurchase actions and 3. Postpurchase use and
disposal.
7. ANALYSZING BUSINESS MARKETS
178. Organizational The decision-making process by which formal organizations establish the need for
buying purchased products and services and identify, evaluate, and choose among
alternative brands and suppliers.
Business market versus the consumer market
Business Consists of all the organizations that acquire goods and services used in the
market production of other products or services that are sold, rented, or supplied to others.
Business markets & its characteristics
Fewer, larger buyers Business marketer normally a deal with far fewer, much larger buyers than
the consumer marketer does.
Close supplier- Customize the needs of individual customer because of large buying
customer relationship power. Business buyers often select suppliers who also buy from them
Professional Business goods are purchased by the trained agents & they follow the
purchasing Co.s policies, constraints, and requirements.
Several buying Business committees will influences buying decision as they have several
influences experts and experience senior managers.
Multiple sales calls More people are involved in the selling process, it takes multiple sales
calls to win most business orders & some sales cycles takes years.
Derived demand Business goods are derived from the needs of the consumers.
Inelastic demand Here demand is not affected by the price changes.
Fluctuating demand Demand for business goods & services tend to be more volatile than the
demand for consumer goods & services.
Geographically Different types of industries tend to get concentrated in specific regions of
concentrated buyers different states.
Direct purchasing Business buyers often buy directly from manufacturers rather than through
intermediaries.
179. Buying Buying decisions depends on the buying situation: complexity of the problem
situations being solved, newness of the buying requirement, and number of people involved,
& time required. ( buying situations: straight rebuy, modified rebuy & new task)
180. Systems buying Business buyers prefer to buy a total solution to a problem from one seller.
Systems selling A single supplier provides the buyer with his or her entire requirement of MRO
(maintenance, repair, operating) supplies.
181. Participants in the business buying process
Buying center Decision-making unit of a buying organization. Buying centre includes all
members
Initiators Those who request that something be purchased.
Users Those who will use the product or service.
Influencers People who influence the buying decision.
Deciders People who decide on product requirements or on suppliers.
Approvers People who authorize the proposed actions of deciders or buyers.
Buyers People who have formal authority to select the supplier & arrange
the purchase terms.
Gatekeepers People who have the power to prevent sellers or information from
reaching members of the buying center.
Buying center Each member of the buying center is likely to give priority to very different
influences decision criteria.
182. Buying center Who are the major decision participants? What decisions do they influence? What
targeting is their level of influence? What evaluation criteria do they use?
Target segments are 4 types of business customers:
Price-oriented customers Price is everything.
Solution-oriented Want low prices but will respond to arguments about lower total cost or
customers more dependable supply or service.
Gold-standard customers Want the best performance in terms of product quality, assistance, and
reliable delivery.
Strategic-value Want a fairly permanent sole-supplier relationship with your company.
customers
Purchasing/procurement process
184. Purchasing orientation
Buying Commoditizati Buyers imply that the product is a commodity and care only about
orientation on price.
Multisourcing Buyers use several sources and make them compete for shares of the
companys purchases.
Procurement orientation Buyers simultaneously seek quality improvements and cost reductions.
The materials requirement planning (MRP) group makes sure supplies
arrive on time.
Supply chain It is more strategic, value adding operation where the purchase of raw
management orientation materials to the on-time arrival of finished well to the end users.
Types of purchasing Routine Customers will seek the lowest price & emphasize routine
process (Peter Kraljic 4 products ordering. E.g. office supplies
product-related Leverage These product have high value & cost of the customer &
purchasing processes) products also involve little risk of supply because many Co.s make
them. E.g. engine pistons
Strategic These products have high value and cost to the customer
products and also involve high risk. E.g. Mainframe computers
Bottleneck These products have low value and cost to the customer
products but they involve some risk. E.g. spare parts.
185. Stages in the buying 1. Problem recognition, 2. General need description and product
process specification, 3. Supplier Search, 4. E-procurement, 5. Proposal
solicitation, 6. Supplier selection, 7. Order-routine specification and 8.
Performance review.
192. Managing business-to-business customer relationships
Benefits of vertical Vertical coordination between buying partners & sellers so that they
coordination. ( Cannon & transcend mere transactions to engage in activities that create more value
Perreault buyer-supplier for both parties.
relationships) Buyer consumer 1. Availability of alternatives,
relationship 2. Importance of supply,
differed 4 factors 3. Complexity of supply, and
4. Supply market dynamism.
Based on the 4 factors, buyer supplier relationships into 8 categories:
Basic buying & Routine exchanges with moderately high levels of
selling cooperation & information exchange.
Bare bones Similar to basic buying & selling but more adaptation
by the seller & less cooperation & information
exchange.
Contractual Low levels of trust, cooperation, & interaction;
transaction exchange is defined by formal contract.
Customer Custom supply situation where competition rather
supply than cooperation is the dominant form of governance.
Cooperative Coupled closely in operational ways, either party
systems demonstrates structural commitment through legal
means or adaptation approaches.
collaborative Trust & commitment leading to true partnership.
Mutually Relationship-specific adaptation for buyer & seller,
adaptive but without necessarily strong trust or cooperation.
Customer is Cooperative relationship, the seller adapts to meet the
king customers needs without expecting much adaptation
8. IDENTIFYING MARKET SEGMENTS AND TARGETS
202. Levels of market segmentation
Mass marketing Seller engages in the mass production, mass distribution, & mass
promotion of one product for all buyers.
micromarketing 1. Segments, 2. Niches, 3. Local areas and 4. Individuals
Segment marketing Offers key benefits over mass marketing. The Co. can presumably better
design, price disclose and deliver the product or service to satisfy the
target market.
Flexible market 1. Naked solution containing the product & service
offering elements that all segment members value and 2.
Discretionary options that some segment value.
One way to carve up a market is to identify preference segments
Homogeneous Market where all the consumers have roughly the
preferences same preferences.
Diffused Consumer preferences may be scattered throughout
preferences the space.
Clustered Market might reveal distinct preference clusters,
preferences called natural market segments.
204. Niche Marketing A niche is a more narrowly defined customer group seeking a distinctive
mix of benefits. Customers in the niche have a distinct set of needs.
206. Local marketing Marketing programs tailored to the needs & wants of local customer
groups.
Pine & Gilmore If you charge for stuff, then you are in the commodity
business.
If your charge for tangible thing, then you are in the
goods business
If you charge for the activities you perform then you
are in the service business.
If you charge for the time customers spend with you,
then & only then are you in the experience business.
Customerization Combination of operationally driven mass customization with
customized marketing in a way that empowers consumers to design the
product and service offering of their choice.
208. Segmenting consumer markets
Geographic segmentation Segmenting the market based on geographical units such as nations,
states, regions countries.
Demographic Segmenting the market based on the variables such as age, family size,
segmentation family life cycle, gender, income, occupation, education, religion, race,
generation, nationality, & social class.
213. Psychographic Buyers are divided into different groups on the basis of
segmentation psychological/personality traits, lifestyle, or values.
The major tendencies of the 4 groups with higher resources are:
Innovators Successful, sophisticated, active, take-charge people with high self-
esteem.
Thinkers Mature, satisfied, and reflective people who are motivated by ideals and
value order, knowledge, and responsibility.
Achievers Successful goal-oriented people who focus on career & family
Experiencers Young, enthusiastic, impulsive people who seek variety and excitement.
The major tendencies of the 4 groups with lower resources are:
Believers Conservative, conventional, & traditional people with concrete beliefs.
Strivers Trendy & fun-loving people who are resource-constrained.
Makers Practical, down-to-earth, self-sufficient people who like to work with their
hands.
Survivors Elderly, passive people who are concerned about change.
214. Behavioral Buyers are divided into groups on the basis of their knowledge of, attitude
Segmentation toward, use of, or response to a product.
216. Buyer Hard-core loyals Consumers who buy only one brand all
brand the time.
loyalty Split loyals Consumers who are loyal to two or three
status brands.
Shifting loyalsConsumers who shift loyalty from one brand
to another.
Switchers Consumers who show no loyalty to any brand.
Attitude 5 attitude groups enthusiastic, positive, indifferent,
negative, & hostile.
217. Bases for segmenting business markets
Sequential Business buyers seek different benefit bundles based on their stage in the
segmentation purchase decision process
First-time Customers who have not yet purchased but want to buy
prospects from a vendor who understands their business, who
explains things well and who they can trust.
Novices Customers who are starting their purchasing relationship
want easy-to-read manuals hot lines, a high level of
training, & knowledgeable sales reps.
Sophisticates Established customers want speed in maintenance &
repair, product customization, & high technical support.
Segmentation scheme classifies business into 3 groups, each warranting a
different type of selling:
Price oriented customers (transactional selling): they want value through
lowest price.
Solution-oriented customers (enterprise selling): They want value through
more benefits & advice.
Strategic-value customers (enterprise selling): They want value through the
supplier coinvesting f& participating in the customers business.
219. Market Targeting
Effective 1. Measurable, 2. Substantial, 3. Accessible, 4. Differentiable, &
segmentation Criteria 5.Actionable

Evaluating & Single- Concentrate on a particular product or market.


selecting the market segment
segments Selective A firm selects a number of segments, each objectively
specialization attractive & appropriate.
Product The firm makes a certain product that it sells to several
specialization different market segments.
Market The firm concentrates on serving many needs of a
specialization particular customer group.
Full market The firm attempts to serve all customer groups with all the
coverage products they might need.
Undifferentiated marketing: the firm ignores segment
differences & goes after the whole market with one offer.
Differentiated marketing: the firm operates in several
market segments and design different products for each
segment.
223. Megamarketing The strategic coordination of economic, psychological, political, & public
relations skills, to gain the cooperation of a number of parties in order to
enter or operate in a given market.
224. Market partitioning One way to discover new segments is to investigate the hierarchy of
attributes consumers examine in choosing a brand if they use phased
decision strategies.
9. DEALING WITH COMPETITION
230. Competitive forces
Michael porters 5 1. Threat of intense segment rivalry, 2. Threat of new entrants, 3. Threat of
competitive forces substitute products, 4. Threat of buyers growing bargaining power, and 5.
Threat of suppliers growing bargaining power.
231. Industry concept of competition
Industry A group of firms that offer a product or class of products that are close
substitutes for one another
Pure monopoly Only one firm provides a certain product or service
232. Oligopoly A small number of large firms produce products that range from highly
differentiated to standardized.
Monopolistic Many competitors are able to differentiate their offers in whole or in part.
competition
Pure competition Competitors offer the same product & service.
234. Analyzing Competitors
Strategic group A group of firms following the same strategy in a given target market.
235. 3 monitor variables Share of market Competitors share of the target market.
Share of mind Percentage of customers who named the competitor in
responding to the statement, Name the 1st company that
comes to mind in this industry
Share of heart Percentage of customers who named the competitor in
responding to the statement, Name the company from
which you would prefer to buy the product.
236. Selecting After the customer value analysis & examined competitors companies can
Competitors attack the competitors by the following classes 1. Strong versus weak,
2. Close versus distant, and 3. Good versus bad.
Competitive strategies for market leaders
237. Expanding the total New customers 1. Market-penetration strategy, 2. New-market segment
market strategy and 3. Geographical expansion strategy.
More usage Usage can be increased by increasing the level or
quantity of consumption or increasing the frequency of
consumption.
239. Defending the Defending the market share is very difficult as they have heavy competition
market share so they must use continuous innovation.
Position defense Building superior brand power, and making brand
almost impregnable.
Flank defense Market leader should also erect outposts to protect a
weak front or possibly serve as an invasion base for
counterattack.
Preemptive A more aggressive maneuver is to attack before the
defense enemy starts its offense.
Counteroffensive Most market leaders will respond with a counterattack.
defense
Mobile defense Here the leader stretches its domain over new territories
that can serve as future centers for defense & offense
through market broadening & market diversification.
Contraction Giving up weaker territories & reassigning resources to
defense stronger territories.
241. Expanding market Companies increase their profitability by increasing their market share.
share
Other competitive strategies
Market challenger Defining the Markers must decide whom to attack 1. Market
strategies strategic objective leader, 2. Firms of its own sizes that are not doing the
& opponents job & underfinanced & 3. Small local & regional firms.
Choosing a Frontal attack: attacker marches its opponents product,
general attack advertising, price, & distribution
strategy Flank attack: 2 strategic dimensions 1. Geographic
attack: challenger spots areas where the opponent is
underperforming. & 2. Segmental attack: fill the gaps &
develop them into strong segments.
Encirclement attack: capture wide slice of the enemys
territory through a blitz. Launching a grand offensive
on several fronts.
Bypass attack: indirect assault strategy is the bypass.
Bypassing the enemy & attacking easier markets to
broaden ones resource base.
Guerrilla warfare: Waging small, intermittent attacks to
harass & demoralize the opponent & eventually secure
permanent footholds. Normally practiced by a smaller
firm against a larger one.
Choosing a Price discount, Lower price goods, value-priced goods
specific attack & services, prestige goods, product proliferation
strategy product innovation, improved services, distribution
innovation, manufacturing-cost reduction & intensive
advertising promotion.
244. Market follower Counterfeiter duplicates the leaders product & package & sells it on the
strategies black market or through disreputable dealers
Cloner Emulates the leaders products, name, & packaging, with
slight variations.
Imitator Copies some things from the leader but maintains
differentiation in terms of packaging, advertising, pricing, or
location.
Adapter Takes the leaders products & adapts or improves them.
10. CREATING BRAND EQUITY
254. 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 & to
differentiate them from those of competitors.
255. Branding Endowing products & services with the power of a brand.
256. Brand equity The added value endowed to products & services. This value may be
reflected in how consumers think, feel, & act with respect to the brand.
257. Brand knowledge All the thoughts, feelings, images, experiences, beliefs, and so on that
becomes associated with the brand.
258. Brand promise The marketers vision of what the brand must be & do for consumers.
259. Brand equity models Brand asset 4 key components of brand equity
valuator (Yong & Brand Strength Differentiation: which brand
Rubicam) seen as different from others
Relevance: measures the
breadth of a brands appeal.
Brand Stature Esteem: measures how well
the brand is regarded &
respected
Knowledge: measure how
familiar & intimate
consumers are with the brand.
Aaker model 5 assets & liabilities Brand loyalty
(David aaker) Brand awareness
Perceived quality
Brand associations
Other proprietary assets like
patents, trademark etc.
Aaker sees brand Brand-as-product
identity in 4 Brand-as-organization
perspectives Brand-as-person
Brand-as-symbol
Brandz (Millward Created brand dynamics pyramid & the objectives
Brown) follows in the ascending order. Presence, Relevance,
Performance, Advantage, & Bonding.
Brand Resonance Views brand building as an ascending, sequential series
of steps:
1. ensuring identification of the brand with customers,
2. Totality of brand meaning in the minds of customer
3. Eliciting the proper customer responses in terms of
brand related judgment & feelings
4. Converting brand response to create an intense, active
loyalty relationship between customers & the brand.
Building Brand Equity
262. Choosing brand Brand elements are those trade markable devices that sere to identify &
elements differentiate the brand.
Brand element choice criteria: Brand building (memorable, meaningful, &
likable) & Defensive(Protectable, adaptable, & transferable)
264. Designing Holistic Brand contact: any information-bearing experience a customer or prospect
Marketing Activities has with the brand, the product category, or the market that relates to the
marketers product or service.
Personalization Making sure that the brand & its marketing are as relevant
as possible to as many customers as possible.
Integration Integrating Mixing & matching marketing activities to
marketing maximize their individual & collective
effects.
Brand Consumers ability to identify the brand
awareness under different conditions.
Brand The perception & beliefs held by consumers.
image
Internal Activities & processes that help to inform & inspire
branding employees.