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FREQUENTLY

ASKED

QUESTIONS

MARKETINg

  • 1. What is marketing?

There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs.

Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably –"Kotler".

The Chartered Institute of Marketing (CIM). The CIM definition (in common with Barwell’s definition of the marketing concept) looks not only at identifying customer needs, but also satisfying them (short- term) and anticipating them in the future (long-term retention).

The right product, in the right place, at the right time, at the right price.

  • 2. Differentiate Between sales and Marketing?

Marketing and selling Selling Marketing Emphasis is on the product. Emphasis is on consumer needs and
Marketing and selling
Selling
Marketing
Emphasis is on the product.
Emphasis is on consumer
needs and wants
Management is sales volume
oriented
Management is profit oriented
View businesses as a goods
producing processes
View business as consumer
satisfying processes
Company manufactures the
product first and then decides
to sell it
Company first determines
customers needs and wants
and then decides on how to
deliver a product to satisfy
these wants
See customer as the last link
in the business
Views customer as the very
purpose in business. 16
  • 3. Define Needa wants and Desires

Needs–state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am hungry.

Wants–form that a human need takes as shaped by culture and individual personality. i.e. I want a hamburger, French fries, and a soft drink.

• Demands–human wants backed by buying power. i.e. I have money to buy this meal.

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4.

What is the marketing mix?

The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P’s, the marketing mix elements are price, place, product, and promotion. Read on for more details on the marketing mix. Packaging (Given by Mc carthy).

5.

Marketing and Core Competences

A core competence is the result of a specific unique set of skills or production techniques that deliver value to the customer.

Three tests of core competence.

Provides potential access to a wide variety of markets.

Should make a significant contribution to the perceived customer benefits of the end product.

Should be difficult for competitors to imitate.

6.

Value Chain Analysis

The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organisation.

PriMAry ACTiViTies

Inbound Logistics

Here goods are received from a company’s suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organisation.

Operations.

This is where goods are manufactured or assembled. Individual operations could include room service in an hotel, packing of books/videos/games by an online retailer, or the final tune for a new car’s engine.

4. What is the marketing mix? The marketing mix is probably the most famous marketing term.
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Outbound Logistics.

The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer.

Marketing and Sales.

In true customer orientated fashion, at this stage the organisation prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix.

service

This includes all areas of service such as installation, after-sales service, complaints handling, training and so on.

suPPorT ACTiViTies

Procurement

This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. They will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organisations), and ePurchasing (using IT and web-based technologies to achieve procurement aims).

Technology Development

Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments.

Human Resource Management (HRM)

Employees are an expensive and vital resource. An organisation would manage recruitment and s election, training and development, and rewards and remuneration. The mission and objectives of the organisation would be driving force behind the HRM strategy.

Firm Infrastructure

This activity includes and is driven by corporate or strategic planning. It includes the Management Information System (MIS), and other mechanisms for planning and control such as the accounting department.

7. Market research and Marketing research

Are often confused. ‘Market’ research is simply research into a specific market. It is a very narrow concept. ‘Marketing’ research is much broader. It not only includes ‘market’ research, but also areas such as research into new products, or modes of distribution such as via the Internet. Here are a couple of definitions.

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8. What is Consumer Behavior?

To define consumer behavior: it is the study of consumers and the processes they use to choose, use (consume), and dispose of products and services. A more in depth definition will also include how that process impacts the world. Consumer behavior incorporates ideas from several sciences including psychology, biology, chemistry and economics.

“All marketing decisions are based on assumptions and knowledge of consumer behavior,” (Hawkins and Mothersbaugh, 2007). Researching consumer behavior is a complex process, but understanding consumer behavior is critical to marketers-they can use it to:

Provide value and customer satisfaction.

Effectively target customers.

Enhance the value of the company.

Improve products and services.

Create a competitive advantage.

Understand how customers view their products versus their competitors’ products.

Expand the knowledge base in the field of marketing.

Apply marketing strategies toward a positive affect on society (encourage people to support charities, promote healthy habits, reduce drug use etc.)

  • 9. What is meant by ‘Quality?’

Quality is a product or service’s ability to meet the customers’ need or want. Quality is difficult to define, and varies with each consumer.

  • 10. What are the components of quality for products and services?

Products

Performance – The product does what it is supposed to do.

Features – The product includes all the specifications that it says it has or that are required, this includes safety measures.

Reliability – The product performs consistently.

Durability – When the product is being used it has to last under the conditions of normal use.

Serviceability – The product is easy to maintain or repair either by the consumer or by providing

a warranty which says the company will provide repairs. Aesthetics – This is important to consumers, products have to look good, and this contributes to a brand equity and identity.

Perception – Even if the product has good quality, if the customer does not think so, then it won’t sell. The customer has to have positive feelings about the product, the company, the brand name and the employees.

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services

Responsiveness – Services are performed in a prompt manner.

Reliability – The service is performed right, the first time, and all subsequent times.

• Assurance – Knowledgeable and friendly employees are essential as customers will equate employees behavior with the entire company. If a customer has a bad experience with an employee, they will be less likely to purchase from the entire company’s offerings. Customers expect technical competence and professionalism from salespeople.

Empathy – Providing individualized attention to customers will make them feel special and keep them coming back.

Tangibles – Some services provide physical evidence that they occurred, for example a restaurant cooks (service) and provides the food (product).

  • 11. Value and relationship Quality

Consumers choose goods and services based on the assumption that they will be rewarded with value and satisfaction. Consumption is the process by which goods and services are used and assigned a level of value by the consumer.

Quality + Price + Customer Service = Value and Satisfaction.

  • 12. segmentation, Demographics and Behavior

Segmentation is the process of breaking down the intended product market into manageable groups; it can be broken down by:

Product Use.

Buying Situation.

Purchasing Method.

• Behavior.

Geographic Location. • Demographics.

• Psychographics.

Product use

How customer’s use product installation, components, accessories, raw material, eaten, professional service.

Buying situation

Buying situation rebuy, modified rebuy, new purchase.

Purchasing Method

Purchasing methods – Internet, long term contract, warranty, financing, cash on demand.

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Behavior

Needs – economic, functional, psychological, social. Benefits – quality, service, economy, convenience, speed. Attitude toward product – Enthusiastic, positive, indifferent, negative, hostile. User status – Nonuser, ex user, potential user, first time user, regular user. Loyalty status – None, medium, strong, absolute. Brand Familiarity – Unaware, aware, informed, interested, desirous, intending to buy. Occasion – Regular occasion; special occasion, convenience, comparison shopping, unsought product. Type of problem solving needed – routine, limited, extensive. Information required – low, medium, high.

Geographic Location

Region of world, country – North America, South America, Africa, Asia, Europe. Regions within that country – (For Example USA) Pacific Northwest, South, Midwest, New England. Size of city – population under 5,000 people to 4 million or more. Urban vs. rural – country, city, large city = more resources, more independence; country=more dependence on neighbors and pooling resources. Climate – cold, hot, rainy, desert, beaches, mountains.

Demographics

Income – under $5,000 to $250,000+ a year. Gender – male, female, neither, both. Age – Infant, toddler, preschool, tween (age 8 to 12), teen, college age, 20, 30, 40, 50, 60, 70-90. Family size – 1 person, 2, 3, 4, 5 or more. Family life cycle – young, single, engaged, DINKS (double income no kids), SINKS (single income no kids), married with kids (babies, toddler, elementary school age, teen, older), recently divorced, empty nester (children have moved out), same-sex couples, single parents, extended parents (grandparents raising their grandchildren), retired (either wealthy or Medicare dependent/poor). There are also Boomerang Kids (adult children have moved back home), Cougar/Silver Fox (Cougar is a 40-60 year old weathly, single, career driven woman seeking a younger man; Silver Fox is a 40-60 year old wealthy, single, career driven man seeking a younger woman). Job – unemployed, housewife, part-time, full-time, student, professional, craftsperson, farmer, retired. Education– grade school or less, some high school, high school graduate, some college, college graduate, graduate degrees. Religion – Christian, Jewish, agnostic, atheist, Muslim, Islam etc.

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Race – White, Black, Asian, Hispanic, Native American, mixed race, etc. Culture/nationality – American, French, English, African, Russian, Indian etc.

Generation (For Example USA) GI Generation, Silent, Matures, Baby Boomer, Gen X, Gen Y, Boomlets.

Psychographics

Lifestyle interests, hobbies, activities, interests, opinions, values, media preferences. Everyone has two lifestyles, the one they are in now, and the one they desire to be in, which is usually better than the current one. Almost all decisions are influenced by the buyer’s current and desired lifestyle.

Personality traits

Sincerity.

Excitement.

Competence.

Sophistication.

Ruggedness.

social class Lower, middle-low, middle, middle-upper, upper, upper-upper, working class, blue collar.

Targeting is the second stage of the SEGMENT “Target” POSITION (STP) process. After the market has been separated into its segments, the marketer will select a segment or series of segments and ‘target’ it/them. Resources and effort will be targeted at the segment.

Positioning is all about ‘perception’. As perception differs from person to person, so do the results of the positioning map e.g what you perceive as quality, value for money, etc, is different to my perception. However, there will be similarities.

Products or services are ‘mapped’ together on a ‘positioning map

  • 13. Five Levels of a Product.

Race – White, Black, Asian, Hispanic, Native American, mixed race, etc. Culture/nationality – American, French, English,

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14.

The Product Life Cycle (PLC)

The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline).

In theory it’s the same for a product. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilises and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn.

14. The Product Life Cycle (PLC) The Product Life Cycle (PLC) is based upon the biological

strategies for the differing stages of the Product Life Cycle.

introduction

The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.

Growth.

Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise.

Maturity.

Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media.

Decline.

At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.

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Problems with Product Life Cycle

In reality very few products follow such a prescriptive cycle. The length of each stage varies enormously. The decisions of marketers can change the stage, for example from maturity to decline by price-cutting. Not all products go through each stage. Some go from introduction to decline. It is not easy to tell which stage the product is in. Remember that PLC is like all other tools.

  • 16. Pricing & Pricing strategies

There are many ways to price a product. Let’s have a look at some of them and try to understand the best policy/strategy in various situations.

Premium Pricing

Use a high price where there is a uniqueness about the product or service. This approach is used where a a substantial competitive advantage exists. Such high prices are charge for luxuries such as Cunard Cruises, Savoy Hotel rooms, and Concorde flights.

Penetration Pricing

The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom and Sky TV.

economy Pricing

This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.

Price skimming

Charge a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and pricing approaches are implemented.

  • 17. Define Place in Marketing Mix

Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer.

  • 18. There are six basic ‘channel’ decisions:

Do we use direct or indirect channels? (e.g. ‘direct’ to a consumer, ‘indirect’ via a wholesaler).

Single or multiple channels.

Cumulative length of the multiple channels.

Types of intermediary (see later).

Number of intermediaries at each level (e.g. how many retailers in Southern Spain).

Which companies as intermediaries to avoid ‘intrachannel conflict’ (i.e. infighting between local distributors).

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Selection Consideration–how do we decide upon a distributor?

Market segment – the distributor must be familiar with your target consumer and segment.

Changes during the product life cycle – different channels can be exploited at different points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold via a few specific stores.

Producer – distributor fit–Is there a match between their polices, strategies, image, and yours? Look for ‘synergy’.

Qualification assessment – establish the experience and track record of your intermediary.

How much training and support will your distributor require?

  • 20. Types of Channel intermediaries

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. The main modes of distribution will be looked at in more detail.

  • 21. Channel Intermediaries–Wholesalers

They break down ‘bulk’ into smaller packages for resale by a retailer.

They buy from producers and resell to retailers. They take ownership or ‘title’ to goods whereas agents do not (see below).

They provide storage facilities. For example, cheese manufacturers seldom wait for their product to mature. They sell on to a wholesaler that will store it and eventually resell to a retailer.

Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service costs, or sales force costs.

A wholesaler will often take on the some of the marketing responsibilities. Many produce their own brochures and use their own telesales operations.

i. Channel Intermediaries–Agents

Agents are mainly used in international markets.

An agent will typically secure an order for a producer and will take a commission. They do not tend to take title to the goods. This means that capital is not tied up in goods. However, a ‘stockist agent’ will hold consignment stock (i.e. will store the stock, but the title will remain with the producer. This approach is used where goods need to get into a market soon after the order is placed e.g. foodstuffs).

Agents can be very expensive to train. They are difficult to keep control of due to the physical distances involved. They are difficult to motivate.

ii. Channel Intermediaries–Retailers

Retailers will have a much stronger personal relationship with the consumer.

The retailer will hold several other brands and products. A consumer will expect to be exposed to many products.

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Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel agents.

Products and services are promoted and merchandised by the retailer.

The retailer will give the final selling price to the product.

Retailers often have a strong ‘brand’ themselves e.g. Ross and Wall-Mart in the USA, and Alisuper, Modelo, and Jumbo in Portugal.

iii.Channel Intermediaries–Internet

The Internet has a geographically disperse market.

The main benefit of the Internet is that niche products reach a wider audience e.g. Scottish Salmon direct from an Inverness fishery.

There are low barriers low barriers to entry as set up costs are low.

Use e-commerce technology (for payment, shopping software, etc)

• There is a paradigm shift in commerce and consumption which benefits distribution via the Internet

  • 22. sWoT Analysis

strengths, Weaknesses, opportunities and Threats (sWoT)

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.

A strength could be:

Your specialist marketing expertise.

A new, innovative product or service.

Location of your business.

Quality processes and procedures.

• Any other aspect of your business that adds value to your product or service.

simple rules for successful sWoT analysis.

Be realistic about the strengths and weaknesses of your organization when conducting sWoT

analysis. SWOT analysis should distinguish between where your organization is today, and where it could

be in the future. SWOT should always be specific. Avoid grey areas.

Always apply SWOT in relation to your competition i.e. better than or worse than your competition.

Keep your SWOT short and simple. Avoid complexity and over analysis • SWOT is subjective.

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Once key issues have been identified with your SWOT analysis, they feed into marketing objectives. sWoT can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter’s Five-Forces analysis. So SWOT is a very popular tool with marketing students because it is quick and easy to learn. During the SWOT exercise, list factors in the relevant boxes. It’s that simple.

  • 23. What is PesT Analysis?

It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning.

The organization’s marketing environment is made up of:

  • 1. The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc.

  • 2. The micro-envronment e.g. our external customers, agents and distributors, suppliers, our competitors, etc.

  • 3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PesT factors.

Political Factors

The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as:

  • 1. How stable is the political environment?

  • 2. Will government policy influence laws that regulate or tax your business?

  • 3. What is the government’s position on marketing ethics?

  • 4. What is the government’s policy on the economy?

  • 5. Does the government have a view on culture and religion?

  • 6. Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others?

economic Factors.

Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at:

  • 1. Interest rates.

  • 2. The level of inflation Employment level per capita.

  • 3. Long-term prospects for the economy Gross Domestic Product (GDP) per capita, and so on.

sociocultural Factors.

The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:

  • 1. What is the dominant religion?

  • 2. What are attitudes to foreign products and services?

  • 3. Does language impact upon the diffusion of products onto markets?

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How much time do consumers have for leisure?

  • 5. What are the roles of men and women within society?

  • 6. How long are the population living? Are the older generations wealthy?

  • 7. Do the population have a strong/weak opinion on green issues?

Technological Factors

Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points:

  • 1. Does technology allow for products and services to be made more cheaply and to a better standard of quality?

  • 2. Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc?

  • 3. How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc?

  • 4. Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?

    • 24. Analyzing the environment–Five Forces Analysis

Five Forces Analysis helps the marketer to contrast a competitive environment. It has similarities with other tools for environmental audit, such as PEST analysis, but tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. For example, Dell would analyse the market for Business Computers i.e. one of its SBUs.

Five forces analsysis looks at five key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.

The threat of entry.

Economies of scale e.g. the benefits associated with bulk purchasing.

The high or low cost of entry e.g. how much will it cost for the latest technology?

Ease of access to distribution channels e.g. Do our competitors have the distribution channels

sewn up? Cost advantages not related to the size of the company e.g. personal contacts or knowledge that

larger companies do not own or learning curve effects. Will competitors retaliate?

Government action e.g. will new laws be introduced that will weaken our competitive position?

How important is differentiation? e.g. The Champagne brand cannot be copied. This desensitises

the influence of the environment. This is high where there a few, large players in a market e.g. the large grocery chains.

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If there are a large number of undifferentiated, small suppliers e.g. small farming businesses supplying the large grocery chains.

The cost of switching between suppliers is low e.g. from one fl eet supplier of trucks to another.

The power of suppliers.

The power of suppliers tends to be a reversal of the power of buyers. Where the switching costs are high e.g. Switching from one software supplier to another.

Power is high where the brand is powerful e.g. Cadillac, Pizza Hut, Microsoft.

There is a possibility of the supplier integrating forward e.g. Brewers buying bars.

Customers are fragmented (not in clusters) so that they have little bargaining power e.g. Gas/ Petrol stations in remote places.

• If there are a large number of undifferentiated, small suppliers e.g. small farming businesses supplying

The threat of substitutes

Where there is product-for-product substitution e.g. email for fax Where there is substitution of need e.g. better toothpaste reduces the need for dentists.

Where there is generic substitution (competing for the currency in your pocket) e.g. Video suppliers compete with travel companies.

• We could always do without e.g. cigarettes.

Competitive rivalry

This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers and buyers in the market attempt to control. This is why it is always seen in the center of the diagram.

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integrated Marketing Communications

  • 25. What are marketing communications?

Marketing communications is a subset of the overall subject area known as marketing. Marketing has a marketing mix that is made of price, place, promotion, product (know as the four P’s), that includes people, processes and physical evidence, when marketing services (known as the seven P’s).

  • 26. Why are marketing communications ‘integrated?’

Integrated means combine or amalgamate, or put simply the jigsaw pieces that together make a complete picture. This is so that a single message is conveyed by all marketing communications. Different messages confuse your customers and damage brands. So if a TV advert carries a particular logo, images and message, then all newspaper adverts and point-of-sale materials should carry the same logo, images or message, or one that fits the same theme. Coca-Cola uses its familiar red and white logos and retains themes of togetherness and enjoyment throughout its marketing communications.

  • 27. Marketing communications has a mix.

Elements of the mix are blended in different quantities in a campaign. The marketing communications mix includes many different elements, and the following list is by no means conclusive. It is recognised that there is some cross over between individual elements (e.g. Is donating computers to schools, by asking shoppers to collect vouchers, public relations or sales promotion?) Here are the key of the marketing communications mix.

Personal Selling. Sales Promotion. • Public Relations (and publicity). • Direct Marketing.

  • 28. Brands and Branding

Branding is a strategy that is used by marketers. Pickton and Broderick (2001) describe branding as Strategy to differentiate products and companies, and to build economic value for both the consumer and the brand owner.

Brand occupies space in the perception of the consumer, and is what results from the totality of what the consumer takes into consideration before making a purchase decision (Pickton and Broderick

2001).

So branding is a strategy, and brand is what has meaning to the consumer.

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There are some other terms used in branding. Brand equity is the addition of the brand’s attributes including reputation, symbols, associations and names. Then the financial expression of the elements of brand equity is called Brand Value.

There are a number of interpretations of the term brand (De Chernatony 2003). They are summarized as follows:

A brand is simply a logo e.g. McDonald’s Golden Arches.

A brand is a legal instrument, existing in a similar way to a patent or copyright.

A brand is a company e.g. Coca-Cola.

A brand is shorthand–not as straightforward. Here a brand that is perceived as having benefits in the mind of the consumer is recognised and acts as a shortcut to circumvent large chunks of information. So when searching for a product or service in less familiar surroundings you will conduct an information search. A recognised brand will help you reach a decision more conveniently.

A brand is a risk reducer. The brand reassures you when in unfamiliar territory.

A brand is positioning. It is situated in relation to other brands in the mind of the consumer as better, worse, quicker, slower, etc.

A brand is a personality, beyond function e.g. Apple’s iPod versus just any MP3 player.

A brand is a cluster of values e.g. Google is reliable, ethical, invaluable, innovative and so on.

A brand is a vision. Here managers aspire to see a brand with a cluster of values. In this context vision is similar to goal or mission.

A brand is added value, where the consumer sees value in a brand over and above its competition e.g. Audi over Volkswagen, and Volkswagen over Skoda–despite similarities.

A brand is an identity that includes all sorts of components; depending on the brand e.g. Body Shop International encapsulates ethics, environmentalism and political beliefs.

A brand is an image where the consumer perceives a brand as representing a particular reality e.g. Stella Artois Reassuring Expensive.

A brand is a relationship where the consumer reflects upon him or herself through the experience of consuming a product or service.

Marcoms tool that a marketer can employ for branding decision-making is the Four Banding Alternatives (Tauber 1981). Four Branding Alternatives is a strategic marketing communications technique.

It is a fun and creative approach that can add value to any class that likes to discuss brands and how they could be innovatively developed. It is used when an organization considers adding a product to its portfolio and its associated brand name. The two variables for this matrix are Product Category (Existing or New) and Band Category (Existing or New).

New Product – a new product is developed with a series of new brand ideas and meanings to the consumer.

Flanker Brand – a new brand is introduced into a category where the organization already has established products.

Line extension – a current brand name is introduced into a category where the organization already has established products.

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Franchise extension – a familiar brand is taken to a product category where it is unknown. Here’s an example. Firstly let’s recall that Four Branding Alternatives is a strategic tool, so you need to base it upon a very large organisation which is likely to own a number of brands. Examples would include car manufacturers, large IT companies, and conglomerates. You get the idea. An example for the Japanese company, Sony Inc is as follows:

New Product–Sony enters the market for music downloads under a new sub-branding idea and concept.

Flanker Brand–Sony introduces the Sony Vaio laptops (as it indeed has).

Line Extension–Sony enter the market for digital HD TV’s (as it has).

Franchise Extension–Sony enters the market for innovative environmentally friendly small cars that run on solar power.

29.

Loyalty Ladder

The loyalty ladder is a tool for marketing communicators. The idea is that consumers can be moved along a continuum of loyalty using a number of integrated marketing communications techniques (it is also referred to as a branding ladder).

Essentially, consumers become loyal to a brand which has meaning to them in relation to a product, service, solution or experience.

• New Product –Sony enters the market for music downloads under a new sub-branding idea and

30.

Advertising

Advertising is an important element of the marketing communications mix. Put simply, advertising directs a message at large numbers of people with a single communication. It is a mass medium.

31.

Benefits of Advertising

Advertising has a number of benefits for the advertiser. The advertiser has control over the message.

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The advert and its message, to an extent, would be designed to the specifications of the advertiser. So the advertiser can focus its message at a huge number of potential consumers in a single hit, at a relatively low cost per head. Advertising is quick relative to other elements of the marketing communications mix (for example personal selling, where an entire sales force would need to be briefed–or even recruited). Therefore an advertiser has the opportunity to communicate with all (or many of) its target audience simultaneously.

29. Advertising Media

Outdoor (Posters or transport)

New Media–Mobile devices

New Media Internet–websites and search engines

Newspapers (Local and National)

Television

Magazines

Radio

Cinema

Others ...

  • 32. Planning for advertising

Advertising agencies and their clients plan for advertising. Any plan should address the following stages:

Who is the potential TARGET AUDIENCE of the advert? WHAT do I wish to communicate to this target audience? Why is this message so IMPORTANT to them? What is the BesT MeDiuM for this message to take (see some of the possible media above)? What would be the most appropriate TIMING? • What resourCes will the advertising campaign need? • How do we CONTROL our advertising and monitor success?

There are two key categories of advertising, namely ‘above-the-line’ and ‘below-the-line.’ The definitions owe a lot to the historical development of advertising agencies and how they charge for their services. In a nutshell, ‘above-the-line’ is any work done involving media where a commission is taken by an advertising agency, and ‘below-the-line’ is work done for a client where a standard charge replaces commission. So TV advertising is ‘above-the-line’ since an agency would book commercial time on behalf of a client, but placing an advert in a series of local newspapers is ‘below-the-line,’ because newspapers tend to apply their own costing approach where no commission is taken by the agency i.e. instead the agency charges the client a transparent fee. There are many facets and elements to advertising–too many to be covered in this short lesson. Try some of the other lessons to build your knowledge

  • 33. Public relations as part of the marketing communications mix

Public relation is a single, broad concept. It is broad since it contains so many elements, many of which will be outlined in this lesson. Public Relations (PR) are any purposeful communications between an organisation and its publics that aim to generate goodwill.

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34.

Describe some of the approaches that are often considered under the Pr banner

interviews and photo-calls.

It is important that company executives are available to generate goodwill for their organisation. Many undertake training in how to deal with the media, and how to behave in front of a camera. There are many key industrial figures that proactively deal with the media in a positive way for example Bill Gates (Microsoft) or Richard Branson (Virgin). Interviews with the business or mass media often allow a company to put its own perspective on matters that could be misleading if simply left to dwell untended the public domain.

speeches, presentations and speech writing

Key figures from within an organisation will write speeches to be delivered at corporate events, public awards and industry gatherings. PR company officials in liaison with company managers often write speeches and design corporate presentations. They are part of the planned and coherent strategy to build goodwill with publics. Presentations can be designed and pre-prepared by PR companies, ultimately to be delivered by company executives.

Corporate literature e.g. financial reports

Corporate literature includes financial reports, in-house magazines, brochures, catalogues, price lists and any other piece of corporate derived literature. They communicate with a variety of publics. For example, financial reports will be of great interest to investors and the stock market, since they give all sorts of indicators of the health of a business. A company Chief Executive Officer CEO will often write the forward to an annual financial report where he or she has the opportunity to put a business case to the reader. This is all part of Public Relations.

  • 35. What is an advertising agency?

An advertising agency handles part or all marketing communications activities on behalf of a client organization. The agencies themselves tend to vary in size from small, perhaps a handful of people, to vast–where many thousands of employees make up the company. A commission is generally taken by the agency which tends to be taken from the media purchases of the client organisation.

  • 36. Client releationsgip agency?

This is done rather like a theatrical agent would take a percentage of the income of an actor for whom employment had been found. The agency may also take payment from the media owners (i.e. sometimes take a discount and do not pass it on to the client). More transparent means of payment are becoming more popular, with some agencies being paid-by-results.

There are many types of agency, but it is generally accepted that the main ones are include full-service agency, a la carte agency, or specialist agency. A full-service agency will take on the whole project or campaign. An a la carte agency will offer some aspects of a campaign such as media buying, rather like buying items from a menu. A specialist agency tends to be small and more focused on a specific aspect of marketing communications and/or a specific market such as Internet Marketing.

A Full-service Agency will offer:

Account management.

• Creative. • Media. • Traffic and production.

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Account planning.

Account management.

• Account managers work for an agency with the client (an agency’s customers are called ‘clients’). Very often they will spend a lot of time with the client working as part of their marketing team. This is one way in which an agency works closely with its client and why the ‘chemistry’ between a client and its agency needs to be right. The account manager makes sure that the correct information is passed from the client to the other members of the agency. He or she is a co-ordinator and time manager. The account planner will work on a brief that is fed back to the agency team.

Creative Team

The first internal agency team members to see the brief tend to be the creatives and the media planners. The brief contains a ‘proposition’ that the client wishes to communicate to the target audience. The creative team will transform the proposition into something exciting and attractive to the target audience. The creative team decide upon the ‘creative concept.’ This will be a motivational idea. The words used to express the creative concept are called ‘copy.’ The images, pictures and diagrams are created i.e. the ‘design’ or ‘layout.’ This is done by ‘designers’ and ‘copywriters.’ Beware some creatives! Creatives tend to be artistic and innovative. Hence their advice should be highly regarded and any criticism should be constructive.

Traffic and Production Team

The traffic and media team are in charge of the production of the physical and artistic output, i.e. the marketing communication. In the case of a TV advert, they would commission scripts, recruit a ctors (mainly via agents), film crews and supporting activities (such as costumes and catering). All ads are different and so the specifics will vary. In the case of print advertising, the traffic and production team would commission and sign-off all printed advertising material such as direct marketing materials, magazine ads or posters.

Account Planning Team

The account planning team work on the ‘customer’s’ perspective, and take an outward look at the world. They support the creative teams by supplying data and opinion on what I actually occurring in the marketing in which advertising is to be placed. They tend to use secondary data to support decisions, and would rarely commission original research. However, with material supplied my organisations such as Mori, Datamonitor, ACORN, and other–the account planning team can build an image of segments to help the creatives.

Media Team

The media team will organise the timing and scheduling of the marketing communications campaign. They will look at the range of media to be exploited, and then look at the best slots in which to run advertising. They will help a client to decide upon the duration of and individual slot, and how many of them to run. Here the expense and return to the client are key factors that influence decision-making. The two main skills of the media team are media planning and media buying. Today there is a wealth of data on which media buying can be based. There is software for planning and simulation.

  • 37. What is Direct Marketing?

Direct marketing is a channel free approach to distribution and/or marketing communications. So a company may have a strategy of dealing with its customers ‘directly,’ for example banks (such as CityBank) or computer manufacturers (such as Dell). There are no channel

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intermediaries i.e. distributors, retailers or wholesalers. Therefore–‘direct’ in the sense that the deal is done directly between the manufacturer and the customer.

38.

What are the different types of Direct Marketing?

There are a number of direct marketing media other than direct mail. These include (and are by no means limited to):

Inserts in newspapers and magazines.

Customer care lines.

Catalogues.

Coupons.

Door drops.

TV and radio adverts with free phone numbers or per-minute-charging.

...

and

finally–and most importantly–The Internet and New Media.

39.

sales Promotion

What is sales promotion?

Sales promotion is any initiative undertaken by an organisation to promote an increase in sales, usage or trial of a product or service (i.e. initiatives that are not covered by the other elements of the marketing communications or promotions mix). Sales promotions are varied.

40.

What are the different types of sales Promotion?

  • (a) Buy-one-Get-one-Free (BoGoF)–which is an example of a self-liquidating promotion. For example if a loaf of bread is priced at $1, and cost 10 cents to manufacture, if you sell two for $1, you are still in profit–especially if there is a corresponding increase in sales. This is known as a PREMIUM sales promotion tactic.

  • (b) Customer relationship Management (CrM) incentives such as bonus points or money off coupons. There are many examples of CRM, from banks to supermarkets.

  • (c) New media–Websites and mobile phones that support a sales promotion. For example, in the United Kingdom, Nestle printed individual codes on KIT-KAT packaging, whereby a consumer would enter the code into a dynamic website to see if they had won a prize. Consumers could also text codes via their mobile phones to the same effect.

  • (d) Merchandising additions such as dump bins, point-of-sale materials and product demonstrations.

  • (e) Free gifts e.g. Subway gave away a card with six spaces for stickers with each sandwich purchase. Once the card was full the consumer was given a free sandwich.

  • (f) Discounted prices e.g. Budget airline such as EasyJet and Ryanair, e-mail their customers with the latest low-price deals once new flights are released, or additional destinations are announced.

  • (g) Joint promotions between brands owned by a company, or with another company’s brands. For example fast food restaurants often run sales promotions where toys, relating to a specific movie release, are given away with promoted meals.

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  • (h) Free samples (aka. sampling) e.g. tasting of food and drink at sampling points in supermarkets. For example Red Bull (a caffeinated fizzy drink) was given away to potential consumers at supermarkets, in high streets and at petrol stations (by a promotions team).

  • (i) Vouchers and coupons, often seen in newspapers and magazines, on packs.

  • (j) Competitions and prize draws, in newspapers, magazines, on the TV and radio, on The Internet, and on packs.

  • (k) Cause-related and fair-trade products that raise money for charities, and the less well off farmers and producers, are becoming more popular.

  • (i) Finance deals–for example, 0% finance over 3 years on selected vehicles.

Many of the examples above are focused upon consumers. Don’t forget that promotions can be aimed at wholesalers and distributors as well. These are known as Trade sales Promotions.

SERVICE MARKETING

  • 41 What is services marketing?

A service is the action of doing something for someone or something. It is largely intangible (i.e. not material). A product is tangible (i.e. material) since you can touch it and own it. A service tends to be an experience that is consumed at the point where it is purchased, and cannot be owned since is quickly perishes. A person could go to a café one day and have excellent service, and then return the next day and have a poor experience.

  • 42. Characterstics of services as:

inseparable–from the point where it is consumed, and from the provider of the service. For example, you cannot take a live theatre performance home to consume it (a DVD of the same performance would be a product, not a service).

intangible–and cannot have a real, physical presence as does a product. For example, motor insurance may have a certificate, but the financial service itself cannot be touched i.e. it is intangible.

Perishable–in that once it has occurred it cannot be repeated in exactly the same way. For example, once a 100 metres Olympic final has been run, there will be not other for 4 more years, and even then it will be staged in a different place with many different finalists.

Variability- since the human involvement of service provision means that no two services will be completely identical. For example, returning to the same garage time and time again for a service on your car might see different levels of customer satisfaction, or speediness of work.

right of ownership–is not taken to the service, since you merely experience it. For example, an engineer may service your air-conditioning, but you do not own the service, the engineer or his equipment. You cannot sell it on once it has been consumed, and do not take ownership of it.

Western economies have seen deterioration in their traditional manufacturing industries, and a growth in their service economies.

  • 43. People’ as part of the marketing mix

People are the most important element of any service or experience. Services tend to be produced and consumed at the same moment, and aspects of the customer experience are

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altered to meet the ‘individual needs’ of the person consuming it. Most of us can think of a situation where the personal service offered by individuals has made or tainted a tour, vacation or restaurant meal. Remember, people buy from people that they like, so the attitude, skills and appearance of all staff need to be first class. Here are some ways in which people add value to an experience, as part of the marketing mix–training, personal selling and customer service.

  • 44. Process as part of the marketing mix

Process is another element of the extended marketing mix, or 7P’s.There are a number of perceptions of the concept of process within the business and marketing literature. Some see processes as a means to achieve an outcome, for example–to achieve a 30% market share a company implements a marketing planning process.

  • 45. Physical evidence as part of the marketing mix

Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues.

  • 46. Customer releation ship Management

The Customer Life Cycle (CLC) and CrM

The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC). However, CLC focuses upon the creation of and delivery of lifetime value to the customer i.e. looks at the products or services that customers NEED throughout their lives.

It is marketing orientated rather than product orientated, and embodies the marketing concept. Essentially, CLC is a summary of the key stages in a customer’s relationship with an organisation. The problem here is that every organisation’s product offering is different, which makes it impossible to draw out a single Life Cycle that is the same for every organisation.

Let’s consider an example from the Banking sector. HSBC has a number of products that it aims at its customers throughout their lifetime relationship with the company. Here we apply a CLC. You can start young when you want to save money. 11-15 year olds are targeted with the Livecash Account, and 16-17 year olds with the Right Track Account. Then when (or if) you begin College or University there are Student Loans, and when you qualify there are Recent Graduate Accounts.

When you begin work there are many types of current and savings account, and you may wish to buy property, and so take out a mortgage. You could take out a car loan, to buy a vehicle to get you to work. It would also be advisable to take out a pension. As you progress through your career you begin your own family, and save for your own children’s education. You embark upon a number of savings plans and schemes, and ultimately HSBC offer you pension planning (you may want to insure yourself for funeral expenses–although HSBC may not offer this!).

This is how an organization such as HSBC, which is marketing orientated, can recruit and retain customers, and then extend additional products and services to them–throughout the individual’s life. This is an example of a Customer Life Cycle (CLC).

Another important point is that a lifetime CLC is made up many shorter CLC’s. So, for example, Volkswagen Cars retains a customer for many years and one can predict the products that meet a customers needs throughout his or her family lifetime. However the purchase of each car, will in itself be a CLC with many Customer Touch Points. The consumer may need a bigger vehicle as his or her family expands–so they visit VW’s website and register.

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The customer reviews models and books a test-drive with her or his local dealer. He or she decides to buy the car and arranges finance. The car is then delivered from the factory, and returns every year for its annual service. Then after three years, the customer decides to trade in his or her car, and the cycle begins again. The longer-term life cycle is simply the shorter-term life cycles viewed consecutively.

  • 47. Business strategy and CrM

We now consider the Business Strategy Perspective on CRM. Here, we propose a model, which is a hybrid, and typical of many of the models and diagrams of CRM that you will find on The Internet and in popular books on the topic of eMarketing/eCommerce. The model has three key phases and three contextual factors:

Three key phases:

  • 1. Customer Acquisition.

  • 2. Customer Retention.

  • 3. Customer Extension.

Three contextual factors:

  • 4. Marketing Orientation.

  • 5. Value Creation.

  • 6. Innovative IT.

  • 1. Customer Acquisition–This is the process of attracting our customer for the first their first purchase. We have acquired our customer. Growth–Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase from us for the first time.

  • 2. Customer retention–Our customer returns to us and buys for a second time. We keep them as a customer. This is most likely to be the purchase of a similar product or service, or the next level of product or service. Growth–Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase from us regularly.

  • 3. Customer extension–Our customers are regularly returning to purchase from us. We introduce products and services to our loyal customers that may not wholly relate to their original purchase. These are additional, supplementary purchases. Of course once our loyal customers have purchased them, our goal is to retain them as customers for the extended products or services. Growth–Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase additional or supplementary products and services.

  • 4. Marketing Orientation–means that the wholes organisation is focused upon the needs of customers. Customer needs are addressed by the Three Levels of a Product whereby the organisations not only supplies the actual, tangible product, but also the core product and its benefit, and also the augmented product such as a warranty and customer service. Marketing orientation will focus upon the needs of consumers for all three levels of a product. (N.B. ‘market’ orientation and ‘marketing’ orientation are not the same).

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5.

Value Creation–centres on the generation of shareholder value based upon the satisfaction of customer needs (as with marketing orientation) and the delivery of a sustainable competitive advantage.

  • 6. innovative iT–is exactly that–Information Technology must be up-to-date. It should be efficient, speedy and focus upon the needs of customers. Whilst IT and/or software are not the entire story for CRM, it is vital to its success. CRM software collects data on consumers and their transactions. Huge databases store data on individuals and groups of individuals. In some ways, CRM means that an organisation is dealing with a segment of one person, since every consumer displays different purchasing habits and preferences. Organisations will track individuals, and try to market products and services to them based upon similar buyer behaviour seen in other individuals (e.g. When Amazon tells you that customers that viewed/bought the same product as you, also bought another product). CRM is a term that is often referred to in marketing. However, there is no complete agreement upon a single definition. This is because CRM can be considered from a number of perspectives. In summary, the three perspectives are:

    • 48. CrM and information Technology

As we have discussed, CRM is more than just software. For the purposes of this introduction– Information Technology (IT) and CRM have three key elements, namely Customer Touch Points, Applications, and Data Stores. This section is based loosely upon Raisch (2001) The eMarketplace.

Customer Touch Points are vital since your business has a marketing orientation and focuses upon the customer and his or her current and future needs. This is the interface between your organisation and its customers. For example you buy a new car from a dealership, and you enter a showroom.

The dealership is a contact point. You meet with a salesperson whom demonstrates the car. The salesperson is a contact point. You go home and look at the car manufacturer’s website, and then send the company an e-mail. Both are contact points. Other contact points include 3G telephone, video conferencing, Interactive TV, telephone, and letters.

Applications are essentially the software and programmes that support the process. Incidentally, this is what some would call CRM–but we know better. Applications serve Marketing (e.g. data mining software* and permission marketing**), Sales (e.g. monitoring Customer Touch Points), and Service (e.g. customer care).

Data stores contain data on every aspect of the customer, and the Customer Life Cycle (CLC). For example, an organisation keeps data on the products you buy, when you buy them, and where they are sent. Data is also kept on the web pages that you visit and the products that you consider, but then do not buy. Leads are stored here. Data on the life time value of individual customers is stored here, as well as details of how and when the customer was recruited, how–and for how long–individuals have been retained, and details of any products that have been extended to individuals are also stored. The data is analysed using Applications.

  • 49. Personal selling

Personal selling occurs where an individual salesperson sells a product, service or solution to a client. Salespeople match the benefits of their offering to the specific needs of a client. Today, personal selling involves the development of longstanding client relationships.

In comparison to other marketing communications tools such as advertising, personal selling tends to:

• Use fewer resources, pricing is often negotiated.

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Products tend to be fairly complex (e.g. financial services or new cars).

There is some contact between buyer and seller after the sale so that an ongoing relationship is built.

Client/prospects need specific information.

The purchase tends to involve large sums of money.

  • 50. Personal selling involves a selling process

Is summarised in the following Five Stage Personal Selling Process. The five stages are:

  • 1. Prospecting.

  • 2. Making first contact.

  • 3. The sales call.

  • 4. Objection handling.

  • 5. Closing the sale.

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  • 1. Above the line:

short Questions

“Above the Line” is the term commonly used for advertising for which a payment is made and for which commission is paid to the advertising agency. Methods of above the line advertising include television and radio, magazines, newspapers and Internet.

  • 2. Ad hoc market research:

Ad-hoc research focuses on specific marketing problems. It involves the collection of data at one point in time from one sample of respondents.

  • 3. Added value:

Added value refers to the increase in worth of a product or service as a result of a particular activity. In the context of marketing, the added value is provided by features and benefits over and above those representing the “core product”.

  • 4. Advertising:

Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor.

  • 5. Advertising budget

The total amount of money that a marketer allocates for advertising over a period of time

  • 6. After-sales service

The services received after the original goods or services have been paid for. Often this service is provided as part of a warranty or guarantee scheme.

  • 7. Agent

Part of the distribution channel. An agent is effectively a wholesaler who represents buyers and sellers on a relatively permanent basis, performs only a few functions and does not take title to goods

  • 8. Ambush marketing

A deliberate attempt by a business or brand to associate itself with an event (often a sporting event) in order to gain some of the benefits associated with being an official sponsor without incurring the costs of sponsorship. For example by advertising during television coverage of the event.

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9.

Ansoff matrix

A model used in strategic marketing planning. The Ansoff Product/Market matrix model links marketing strategy with the general strategic direction of a business. It maps four potential product-market strategies - e.g. market penetration, product development, market development and diversification - on a matrix showing new versus existing products along one axis and new versus existing markets along the other.

  • 10. Augmented brand

The additional customer services and benefits (“added value”) that are built around the core product or service offering.

  • 11. Available market

The total groups of customers who have an interest in an interest in a product or service, have access to it, and have the ability to buy it.

Awareness

Advertising or other promotional activity (e.g. public relations) whose primary purpose is to increases general knowledge of the company, and to make people feel more positive towards it.

Behavioral segmentation

Behavioral segmentation divides customers into groups based on the way they respond to, use or know of a product.

  • 12. Below the line:

“Below the line” is a term commonly used to refer to non-media advertising or promotion when no commission has been paid to the advertising agency. This includes direct mail, point of sale displays, and other sales promotions.

  • 13. Benchmarking:

The process of comparing the products and services of a business against those of competitors in a market, or leading businesses in other markets, in order to find ways of improving quality and performance.

  • 14. Benefit segmentation:

Benefit segmentation relates to the process of dividing a market based on the specific benefits consumers seek from a product. For example, some car buyers want safety and security from their car, while others look for comfort or speed. A car manufacturer, therefore, has to decide which benefits to offer – and how these benefits should be communicated to the customer.

  • 15. Boston Group Matrix

A means of analyzing and categorizing the performance of business units in large diversified firms by reference to market share and growth rates. It was developed by the Boston Consultancy Group (BCG).

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16.

Brand

A brand is the specific type of the product form. A brand – represented by a brand name, symbol, design, logo, packaging – is the identity of a particular product form that customers recognise as being different from others.

  • 17. Brand building:

Developing a brand’s image and standing with a view to creating long term benefits for brand awareness and brand value.

  • 18. Brand equity

Brand equity refers to the value of a brand. Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations. Brand equity also includes other “intangible” assets such as patents, trademarks and channel relationships.

  • 19. Brand extension:

Brand extension refers to the use of a successful brand name to launch a new or modified product in a new market. Virgin is perhaps the best example of how brand extension can be applied into quite diverse and distinct markets.

  • 20. Brand image

Brand image refers to the set of beliefs that customers hold about a particular brand. These are important to develop well since a negative brand image can be very difficult to shake off.

  • 21. Brand loyalty

A strongly motivated and long standing decision to purchase a particular product or service.

  • 22. Brand recognition

A customer’s awareness that a brand exists and is an alternative to purchase.

  • 23. Breakeven

Breakeven is achieved when total contribution is equal to total fixed costs. Addition contribution earned after this point becomes profit.

  • 24. Break-even pricing

Setting a price to achieve break-even on the costs of making and marketing a product (direct costs). Breakeven is achieved when the total contribution from sales priced in this way at least equal the fixed costs of the business.

  • 25. Build share

A strategy based on the Boston Matrix. Here the company can invest to increase market share (for example turning a “question mark” into a star).

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26.

Business portfolio

The business portfolio is the collection of businesses and products that make up the business.

  • 27. Business to business

Marketing activity directed from one business to another (as opposed to a consumer). This term is often shortened to “B2B”.

  • 28. Buying behavior

Buying behavior concerns the process that buyers go through when deciding whether or not to purchase goods or services. Buying behavior can be influenced by a variety of external factors and motivations, including marketing activity.

  • 29. Cash Cows

A term used in the Boston Group Matrix. Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars.

  • 30. Channel conflict

Disagreement among members of a distribution channel about who should be paid what and what roles each should play. Channel conflict often occurs when a business uses a multi-channel approach to distribution.

  • 31. Cognitive dissonance

Cognitive dissonance is an customer effect commonly observed after a major purchase whereby the customer feels uncertainty about whether the purchase should have been made. Post-purchase promotion (particularly advertising) has a role to play to reduce the incidence and effect of cognitive dissonance.

  • 32. Combination brand:

A combination brand name brings together a family brand name and an individual brand name. The idea here is to provide some association for the product with a strong family brand name but maintaining some distinctiveness so that customers know what they are getting.

  • 33. Competitive advantage:

A competitive advantage is a clear performance differential over the competition on factors that are important to customers.

  • 34. Competitor benchmarking

Competitor benchmarking compares customer satisfaction with the products, services and relationships of the business with those of key competitors.

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35.

Consumer buyers

Consumer buyers are those who purchase items for their personal consumption.

  • 36. Consumer durables

Consumer durables have low volume but high unit value. Consumer durables are often further divided into White goods (e.g. fridge freezers; cookers; dishwashers; microwaves) and Brown goods (e.g. DVD players; games consoles; personal computers).

  • 37. Consumer markets

Consumer markets are the markets for products and services bought by individuals for their own or family use.

  • 38. Continuous market research

Continuous research involves interviewing the same sample of people, repeatedly.

Contribution

Contribution per unit can be defined as selling price less variable costs. Overall contribution is the difference between total sales revenues and variable costs.

  • 39. Core product

The set of problem-solving or need-meeting benefits that customers are buying when they purchase a product. Customers are rarely prepared to pay a premium for these elements of a product.

  • 40. Cost leadership

A strategy of producing goods at a lower cost than the competition. This usually requires the business to enjoy higher economies of scale or have some kind of productivity advantage.

  • 41. Cross-selling

Using a customer’s buying history to select them for related offers, e.g.a car alarm for new car buyers.

  • 42. Customer demand

Consumer demand is a want for a specific product supported by an ability and willingness to pay for it.

  • 43. Customer loyalty

Feelings or attitudes that incline a customer either to return to a company, shop or outlet to purchase there again, or else to re-purchase a particular product, service or brand.

  • 44. Customer need

A need is a basic requirement that an individual wishes to satisfy.

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45.

Customer satisfaction

The provision of goods or services which fulfill the customer’s expectations in terms of quality and service, in relation to price paid.

  • 46. Customer wants

A want is a desire for a specific product or service to satisfy the underlying need.

  • 47. Decline stage

The last stage of a product’s life cycle, during which sales fall rapidly.

  • 48. Demographic segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality.

  • 49. Depth interview

A lengthy, one-to-one structured interview, examining in detail a consumer’s views about a product.

  • 50. Differentiation

A marketing strategy aimed at ensuring that products and services have a unique element to allow them to stand out from the rest.

  • 51. Direct mail

The delivery of an advertising or promotional message to customers or potential customers by mail.

  • 52. Direct marketing

The planned recording, analysis and tracking of customer behavior to develop a relational marketing strategies.

  • 53. Direct response advertising

Direct response advertising is that which incorporates a contact method such as a phone number, address and enquiry form, web site URL or email address. This is done with the intention of encouraging the recipient to respond directly to the advertiser by requesting more information, placing an order etc. The use of this technique on television is commonly referred to as DRTV advertising.

  • 54. Distribution channel

The network of organizations necessary to distribute goods or services from the manufacturers to the consumers; the distribution channel therefore potentially consists of manufacturers, distributors, wholesalers, and retailers.

  • 55. Distributors

Companies that buy and sell on their own account but tend to deal in the goods of only certain specified manufacturers.

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  • 56. Divest

A strategy based on the Boston Matrix. Here the company can divest the SBU by phasing it out or selling it - in order to use the resources elsewhere (e.g. investing in the more promising “question marks”).

  • 57. Dogs

A term used in the Boston Group Matrix. Unsurprisingly, the term “dogs” refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.

  • 58. early adopters

People who choose new products carefully and are often consulted by people from the remaining adopter categories.

  • 59. early majority

People who adopt products just prior to the average person.

  • 60. e-commerce

The use of technologies such as the Internet, electronic data exchange and industry extranets to streamline business transactions.

  • 61. endorsement

The promotion of some kind of product recommendation or affirmation, usually from a celebrity, implying to the potential customer that a product is good.

  • 62. expansionistic pricing:

Expansionistic pricing is a more exaggerated form of penetration pricing and involves setting very low prices aimed at establishing mass markets, possibly at the expense of other suppliers. Under this strategy, the product enjoys a high price elasticity of demand so that the adoption of a low price leads to significant increases in sales volumes.

  • 63. extinction pricing

Extinction pricing has the overall objective of eliminating competition, and involves setting very low prices in the short term in order to ‘undercut’ competition, or alternatively repel potential new entrants.

  • 64. Family brand name

A family brand name is used for all products. By building customer trust and loyalty to the family brand name, all products that use the brand can benefit.

  • 65. Family life cycle

The stages of family life based on demographic data that are useful in defining the markets for certain goods and services. Each group has its own specific and distinguishable needs and interests.

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  • 66. Fast-moving consumer goods

Fast-moving consumer goods are those that sell in high volumes, with low unit value, and have fast consumer repurchase. Good examples include ready meals, baked beans, newspapers etc.

  • 67. Focus group

A small group of sample customers who are brought together into a group discussion to measure their response to a marketing stimulus such as a new brand or product.

  • 68. Forecasting

The process of estimating future demand by anticipating what buyers are likely to do under a given set of marketing conditions (e.g. economic confidence, disposal income, pricing levels).

  • 69. Franchising

The selling of a license by the owner (franchisor) to a third party (franchisee) permitting the sale of a product or service for a specified period. In business format franchising the agreement will involve a common brand and marketing format. Many service businesses are operated under franchise include well-known brands such as Burger King, KFC and KwikPrint.

  • 70. Full cost pricing

Full cost plus pricing seeks to set a price that takes into account all relevant costs of production.

  • 71. Gender segmentation

The segmentation of markets based on the sex of the customer. The cosmetic industry is a good example of widespread use of gender segmentation.

  • 72. Geographic segmentation:

Geographic segmentation divides markets into different geographical units.

  • 73. Going-rate pricing

A pricing strategy that sets price largely based on the prices of competitors.

  • 74. Growth stage

The stage at which a product’s sales rise rapidly and profits reach a peak, before leveling off into maturity.

  • 75. Harvest

A strategy based on the Boston Matrix. Here the company reduces the amount of investment in order to maximize the short-term cash flows and profits from the SBU. This may have the effect of turning Stars into Cash Cows.

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  • 76. Hold

A strategy based on the Boston Matrix. Here the company invests just enough to keep the SBU in its present position.

  • 77. impulse buying Behavior

that involves no conscious planning but results from a powerful, persistent urge to buy something immediately.

  • 78. income elasticity of demand

Income elasticity of demand measures the relationship between a change in quantity demanded and a change in income.

  • 79. industrial buyers

Industrial buyers are those who purchase items on behalf of their business or organization.

  • 80. industrial market

Industrial markets involve the sale of goods between businesses. These are goods that are not aimed directly at consumers.

  • 81. inferior goods

Inferior goods have a negative income elasticity of demand. Demand falls as income rises.

  • 82. Influencer

A person in a group buying situation (e.g. a family) who exerts significant influence in the final buying decision.

  • 83. initiator

A person in a group buying situation (e.g. a family) who first suggests buying a particular product or service.

  • 84. innovators

Innovators are those who adopt new products first. They are usually relatively young, lively, intelligent, socially and geographically mobile. They are often of a high socioeconomic group (“AB’s”).

  • 85. intensive distribution

Intensive distribution aims to provide saturation coverage of the market by using all available outlets.

  • 86. internal marketing

The process of eliciting support for a company and its activities among its own employees, in order to encourage them to promote its goals. This process can happen at a number of levels, from increasing awareness of individual products or marketing campaigns, to explaining overall business strategy.

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  • 87. introduction stage

A product’s first appearance in the marketplace, before any sales or profits have been made.

  • 88. involvement

The level of interest, emotion and activity which the consumer is prepared to expend on a particular purchase.

  • 89. Labeling

Packaging information that can be used for a variety of promotional, informational and legal purposes.

  • 90. Laggards

The group of consumers who are typically last to buy a new product.

  • 91. Late majority

People who are quite skeptical about new products but eventually adopt them because of economic necessity or social pressure.

  • 92. Lifestyle

Lifestyle is a person’s pattern of living as expressed in his or her activities, interests and opinions.

  • 93. Lifestyle segmentation

Lifestyle segmentation of a market is based on identifying lifestyle characteristics of customers that enable target customer groups to be identified. Many businesses now segment their markets by lifestyles, as these are increasingly seen as good predictors of consumer behavior.

Most companies use off-the-shelf research-agency classifications (such as the Target Group Index), because of the high cost and complexity of developing their own.

  • 94. Logo

A graphic, usually consisting of a symbol and/or group of letters that identifies a company or brand.

  • 95. Macro forecasting

Macro forecasting is concerned with forecasting markets in total. This is about determining the existing level of Market Demand and considering what will happen to market demand in the future.

  • 96. Mail panels

Groups of consumers selected to represent a market or market segment who agree to be regularly interviewed by mail.

  • 97. Manufacturer brand

Manufacturer brands are created by producers and bear their chosen brand name. The producer is responsible for marketing the brand. The brand is owned by the producer. By building their brand

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names, manufacturers can gain widespread distribution (for example by retailers who want to sell the brand) and build customer.

  • 98. Marker leader

The business in a market with the largest market share. The market leader, particularly one with a dominant market share, is often “followed” by competitors in terms of pricing and product strategy.

  • 99. Market

A market is the demand for a particular product or service, often measured by sales during a specified period.

  • 100. Market challenger

A business in a market that is fighting hard to increase its market share.

  • 101. Market concentration

Market concentration is the proportion of market value that is owned by the leading brands or products/ companies in the market. Where the market leaders own a large part of the overall market, the market is said to be highly concentrated. By contrast, where the market leader has a relatively small market share and there are many other competitors, a market is said to be “fragmented”.

  • 102. Market development

The process of growing sales by offering existing products (or new versions of them) to new customer groups (as opposed to simply attempting to increase the company’s share of current markets).

  • 103. Market entry

The launch of a new product into a new or existing market. A different strategy is required depending on whether the product is an early or late entrant to the market; the first entrant usually has an automatic advantage, while later entrants need to demonstrate that their products are better, cheaper and so on.

  • 104. Market follower

A firm that is happy to follow the leaders in a market place without challenging them, perhaps taking advantages of opportunities created by leaders without the need for much marketing investment of its own - see also ‘market challenger’ and ‘market leader’.

  • 105. Market positioning

A marketing strategy that will position a business’ products and services against those of its competitors in the minds of consumers. To achieve positioning success it is suggested that there are four basic competitive strategies that a company can follow (based on work by Porter):

  • - Cost leadership - the company tries to achieve lowest costs of production and distribution.

  • - Differentiation - making use of specific marketing mixes - Focus - paying attention to a few market segments The fourth strategy is a losing strategy in which a business pursues a middle-

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of-the-road path. Businesses that try to be good at everything are rarely particularly good at anything.

  • 106. Market research

The systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services.

  • 107. Market segment

A customer group within the market that has special characteristics which are significant to marketing strategy.

  • 108. Market segmentation

Segmentation involves subdividing markets, channels or customers into groups with different needs, to deliver tailored propositions which meet these needs as precisely as possible.

  • 109. Market share

Market share can be defined as the percentage of all sales within a market that is held by one brand / product or company.

  • 110. Market targeting

Market targeting is the process of evaluating each market segment and selecting the most attractive segments to enter with a particular product or product line.

  • 111. Marketing

The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time”.

  • 112. Marketing audit

A systematic examination of a business’s marketing environment, objectives, strategies, and activities with a view to identifying key strategic issues, threats and opportunities.

  • 113. Marketing concept

The marketing concept is about matching a business’ capabilities with customer wants.

  • 114. Marketing intelligence

The composite of all data and ideas available within an organization that assists in decision-making.

  • 115. Marketing plan

A detailed statement (usually prepared annually) of how a company’s marketing mix will be used to achieve its market objectives. A marketing plan is usually prepared following a marketing audit.

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  • 116. Maturity stage

The stage during which a product’s sales curve peaks and starts to decline, and profits continue to decline.

  • 117. Media analysis

Media analysis is a term used in advertising. It refers to an investigation into the relative effectiveness and the relative costs of using the various advertising media in an advertising campaign.

  • 118. Micro forecasting

Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future.

  • 119. Mission

A mission describes the organization’s basic function in society, in terms of the products and services it produces for its customers.

  • 120. Mission statement

A mission statement is a formal description of the mission of a business.

  • 121. Multi-channel marketing

When a business distributes its products through more than one distribution channel, this is known as multi-channel marketing. Retail chains, for example Argos, besides using the shops to distribute their products, quite often also use catalogue selling. The main purpose of multi-channel marketing is to more effectively reach different customer segments.

  • 122. Multi-segment strategy

A strategy by which a business directs its marketing efforts towards two or more market segments by developing a marketing mix for each New product A new product can be defined as a good, service or idea that is “perceived” by some potential customers as new. It may have been available for some time, but many potential customers have not yet adopted the product nor decided to become a regular user of the product.

  • 123. Niche marketing

Niche marketing refers to the exploitation of comparatively small market segments by businesses that decide to concentrate their efforts. Niche segments exist in nearly all markets – for example the self- build sports car segment of the motor industry.

  • 124. Non-personal communication

Methods of promotion that do not generate any personal feedback. Advertising is the best example of this.

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  • 125. Normal goods

Normal goods have a positive income elasticity of demand so as income rise more is demand at each price level.

  • 126. objectives

Measurable aims of a business set for a given period (e.g. marketing objectives for the next year).

OCCASION

  • 127. segmentation

A basis of segmenting a market based on occasions when buyers get the idea to make a purchase, actually buy, or use a purchased item.

  • 128. opportunities

Opportunities are any feature of the external environment which creates conditions that a business can exploit to its advantage. If the business is successful in exploiting opportunities, then it will be better placed to achieve its objectives.

  • 129. own-label brand

Own-label brands are created and owned by businesses that operate in the distribution channel – often referred to as “distributors”. Often these distributors are retailers, but not exclusively. Sometimes the retailer’s entire product range will be own-label. However, more often, the distributor will mix own- label and manufacturers brands.

  • 130. Packaging

The activities of designing and producing the container or wrapper for a product.

  • 131. Penetration pricing

Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share.

  • 132. Penetration strategy

A marketing strategy based on low prices and extensive advertising to increase a product’s market share. For penetration strategy to be effective the market will have to be large enough for the seller to be able to sustain low profit margins.

  • 133. Personal selling

Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale.

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  • 134. Porter’s Five Forces Model

An analytic model developed by Michael E. Porter. The five forces in terms of which the model analyses businesses and industries are: Buyers, Suppliers, Substitutes, New Entrants and Rivals.

  • 135. Portfolio planning

Portfolio planning is the process of managing groups of brands and product lines.

  • 136. Positioning

Positioning is how a product appears in relation to other products in the market.

  • 137. Pre-emptive pricing

Pre-emptive pricing is a strategy involves setting low prices in order to discourage or deter potential new entrants to the suppliers market. It is especially suited to markets in which the supplier does not hold a patent, or other market privilege and entry to the market is relatively Straight forward.

  • 138. Prestige pricing

Prestige pricing refers to the practice of setting a high price for an product, throughout its entire life cycle – as opposed to the short term ‘opportunistic’, high price of price ‘skimming’. This is done in order to evoke perceptions of quality and prestige with the product or service.

  • 139. Price

The price of a product may be seen as a financial expression of the value of that product.

  • 140. Price discrimination

Price discrimination occurs when a firm charges a different price to different groups of consumers for an identical good or service, for reasons not associated with costs.

  • 141. Price elasticity of demand

Price elasticity of demand measures the responsiveness of a change in demand for a product following a change in its own price.

  • 142. Price sensitivity

Price sensitivity is the effect a change in price will have on customers.

  • 143. Price skimming

Price skimming involves charging a relatively high price for a short time where a new, innovative, or much-improved product is launched onto a market.

  • 144. Primary research data

Primary market data is data collected specifically for the market research project and obtained directly from the relevant source.

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145.

Problem/Need recognition

The first stage in the buying process where the potential customer recognizes that a problem or a need can be met by buying a product or a service.

146.

Product

A product is defined as anything that is capable of satisfying customer needs.

147.

Product class

Product class is a broad category of product such as cars, washing machines, newspapers.

148.

Product form

Within a product class, there are different forms that the product can take. For example, people carriers or two-seater sports cars are product forms within the motor cars product class.

149.

Product group

A product group (or product line) is a group of brands that are closely related in terms of their functions and the benefits they provide.

150.

Product life cycle

The course of a product’s sales and profitability over its lifetime. The model describes five stages, each of which represents a different opportunity for the marketer:

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Development

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Introduction

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Growth

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Maturity

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Decline

151.

Product map

A product map defines the market in terms of the way buyers perceive key characteristics of competing products.

152.

Product mix

The set of all product lines and items that a particular business offers for sale to buyers.

153.

Product quality

The ability of a product to perform its functions (“fit for purpose”). Quality is a function of several factors including reliability and ease of use.

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  • 154. Promotion

One of the four “P’s” of the marketing mix. Promotion is all about businesses communicating with customers.

  • 155. Promotional mix

The promotional mix consists of a blend of five main kinds of promotional tools: advertising; direct marketing; personal selling; sales promotion and public relations.

  • 156. Psychographic segmentation

Psychographic (or “lifestyle”) segmentation seeks to classify people accordingly to their values, opinions, personality characteristics and interests.

  • 157. Public relations

The planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics.

  • 158. Publicity

Promotional activities designed to promote a business and its products by obtaining media coverage not paid for by the business.

  • 159. Pull promotion

Pull promotion, in contrast to Push promotion, addresses the customer directly with a view to getting them to demand the product, and hence “pull” it down through the distribution chain. It focuses on advertising and above the line activities. See also ‘push promotion’.

  • 160. Purchase decision

The stage in the customer buying process when the purchase decision is actually made.

  • 161. Push promotion

Push promotion relies on the next link in the distribution chain - e.g. a wholesaler or retailer - to “push” out products to the customer. It revolves around sales promotions - such as price reductions and point of sale displays - and other below the line activities. See also ‘Sales Promotion’.

  • 162. Qualitative forecasting

Qualitative forecasting is based on experience and judgment. Examples include general surveys of customers, distributors and the sales force.

  • 163. Qualitative research

Research that deals with information too difficult or expensive tool direct marketing in which the telephone is used to contact potential customers in order to reduce the time spent in making personal visits. Traditionally, products such as double glazing and central heating have been marketed using this technique.

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  • 164. Telephone surveys

Surveys in which respondents’ answers to a questionnaire are recorded by interviewers on the phone.

  • 165. Test marketing

Test marketing occurs when a new product is tested with a sample of customers, or launched in a restricted geographical area, to judge customers’ reactions. If the product is unsuccessful, the business will have minimized its costs and can either make changes before the main launch or decide to discontinue the product. Test marketing has a disadvantage in that competitors learn about the new product before its full launch.

  • 166. Threats

Threats are any aspect of the external environment which cause problems and which may prevent achievement of objectives. Almost by definition, what presents a threat to one business offers an opportunity to other businesses.

  • 167. Trademark

Legal designation indicating that the owner has exclusive use of a brand.

  • 168. undifferentiated marketing

Undifferentiated marketing is the marketing of a product aimed at the widest possible market. For example, in the holiday market, the sale of short-haul summer-sun package holidays to the Mediterranean is an undifferentiated mass-market product.

  • 169. unique selling proposition

A unique selling proposition (“USP”)is a customer benefit that no other product can claim.

  • 170. Vision

The long-term aims and aspirations of the company for itself.

  • 171. Weaknesses

Weaknesses are any aspect of the business which may prevent the business from achieving its objectives. Weaknesses are a source of competitive disadvantage. Management should seek ways to reduce or eliminate weaknesses before they are exploited further by the competition.

  • 172. Wholesaler

Often part of the distribution channel; involves the selling of goods in large quantities to be retailed by others quantify, such as subjective opinions and value judgments, typically unearthed during interviews or discussion groups.

  • 173. Quantitative forecasting

Quantitative forecasting is based on facts. Good examples include time-series analysis and statistical surveys of customer purchasing behavior.

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  • 174. Quantitative research

Market research that concentrates on statistics and other numerical data, gathered through opinion polls, customer satisfaction surveys and so on. Compare ‘qualitative research’.

  • 175. Question marks

A term used in the Boston Group Matrix. Question marks are businesses or products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors.

  • 176. Questionnaire

Base document for research purposes, providing the questions and structure for an interview or self- completion and providing space for respondents’ answers.

  • 177. Quota sampling

A sampling method in which the final choice of respondents is left to the interviewers, who base their choices on two or three variables (such as age, sex and education).

  • 178. random sampling

A sampling method in which all the units in a population have an equal chance of appearing in the sample.

  • 179. retailers

Retailers operate outlets that trade directly with household customers.

  • 180. sales forecast

The sales forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.

  • 181. sales promotion

Sales promotion refers to any activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telephone-selling, personal letters on other methods.

  • 182. sample

A small group of items selected from a larger group to represent the characteristics of the larger group. Samples are often used in marketing research because it is not feasible to interview every member of a particular market; however, conclusions about a market drawn from a sample always contain a sampling error and must be used with caution. The larger the sample, in general, the more accurate will be the conclusions drawn from it.

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  • 183. secondary research data

Secondary market data is data that has already been obtained, analyzed and used for other purposes or for general reference.

  • 184. segmentation variables or bases

The dimensions or characteristics of individuals, groups or businesses that are used for dividing a total market into segments.

  • 185. selective distribution

Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products.

  • 186. soft goods

Soft goods are similar to consumer durables, except that they wear out more quickly and therefore have a shorter replacement cycle. Examples include clothes and shoes.

  • 187. sponsorship

Supporting an event, activity or organization by providing money or other resources that is of value to the sponsored event. This is usually in return for advertising space at the event or as part of the publicity for the event.

  • 188. star

A term used in the Boston Group Matrix. Stars are high growth businesses or products competing in markets where they are relatively strong compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth will slow and, assuming they maintain their relative market share, will become cash cows.

  • 189. strapline

A slogan often used in conjunction with a brand name, advertising and other promotional methods (e.g. “Guinness is good for you”).

  • 190. strategic business unit (sBu)

A SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organized.

  • 191. Stratified sampling

A sampling method in which the population of interest is divided according to a common characteristic or attribute and a probability sampling is then conducted within each group.

  • 192. strengths are a particular skill, resource or distinctive competence which the business possesses and which will enable it to achieve its stated objectives. Strengths are a source of competitive advantage. As such they should be protected and built upon.

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  • 193. Target market

The group of potential customers sharing common needs and characteristics that a business decides to serve.

  • 194. Telemarketing

Telemarketing (sometimes also referred to as “telesales”) is a method of direct marketing in which the telephone is used to contact potential customers in order to reduce the time spent in making personal visits. Traditionally, products such as double glazing and central heating have been marketed using this technique.

  • 195. Telephone surveys

Surveys in which respondents’ answers to a questionnaire are recorded by interviewers on the phone.

  • 196. Test marketing

Test marketing occurs when a new product is tested with a sample of customers, or launched in a restricted geographical area, to judge customers’ reactions. If the product is unsuccessful, the business will have minimized its costs and can either make changes before the main launch or decide to discontinue the product. Test marketing has a disadvantage in that competitors learn about the new product before its full launch.

  • 197. Advertising agency young and rubicam (y&r) developed a model of brand equity called Brand Asset Valuator (BAV). What is the intent of the BAV model? List and briefly characterize the five key components (pillars) of brand equity.

Answer: The BAV model is based on research of almost 500,000 consumers in 44 countries. BAV provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. There are five key components—or pillars—of brand equity. These pillars are: (1) differentiation—measures the degree to which a brand is seen as different from others; (2) energy— measures the brand’s sense of momentum; (3) relevance—measures the breadth of a brand’s appeal; (4) esteem—measures how well the brand is regarded and respected; and (5) knowledge—measures how familiar and intimate consumers are with the brand. For additional information on the BAV model, see chapter section.

  • 198. The creation of significant brand equity involves reaching the top or pinnacle of the brand pyramid. List and briefly characterize the six components of the brand resonance pyramid.

Answer: The six components of the brand resonance pyramid include brand: (1) salience—relates to how often and easily the brand is evoked under various purchase or consumption situations; (2) performance—relates to how the product or service meets customers’ functional needs; (3) imagery— deals with the extrinsic properties of the product or service, including the ways in which the brand attempts to meet the customers’ psychological or social needs; (4) judgments—focus on consumers’ own personal opinions and evaluations; (5) feelings—customers’ emotional responses and reactions with respect to the brand; and, (6) resonance—refers to the nature of the relationship that customers have with the brand and the extent to which customers feel that they are “in sync” with the brand. For additional information on the brand resonance pyramid, see chapter material.

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  • 199. There are six criteria used in creating brand elements. The first three can be characterized as “brand building” in terms of how brand equity can be built through the judicious choice of a brand element. The latter three are more “defensive” and are concerned with how the brand equity contained in the brand element can be leveraged and preserved in the face of different opportunities and constraints. List and briefly characterize the six criteria.

Answer: The six elements are: (1) memorable, (2) meaningful, (3) likable, (4) transferable, (5) adaptable, and (6) protectible. For characterizations, see chapter materials.

  • 200. Describe the meaning and function of a brand audit.

Answer: To better understand their brands, marketers often need to conduct brand audits. A brand audit is a consumer-focused exercise that involves a series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity. The brand audit can be used to set strategic direction for the brand. As the result of this strategic analysis, the marketer can develop a marketing program to maximize long-term brand equity. Marketers should conduct a brand audit whenever they consider important shifts in strategic direction.

  • 201. identify and describe the four value stages of the brand value chain.

Answer: The brand value creation process begins when the firm invests in a marketing program targeting actual or potential customers. Next, customers’ mindsets are assumed to change as a result of the marketing program. This change affects the way the brand performs in the marketplace through the collective impact of individual customers deciding how much to purchase and when, how much they’ll pay, and so on. Finally, the investment community considers market performance and other factors such as replacement cost and purchase price in acquisitions to arrive at an assessment of shareholder value in general and the value of a brand in particular.

  • 202. The decision as to how to brand new products is especially critical. When a firm introduces a new product, it has three main choices. What are those choices?

Answer: The firm can: (1) develop new brand elements for the new product, (2) apply some of its existing brand elements, or (3) use a combination of new and existing brand elements.

  • 203. in what ways can brand extensions improve the odds of new-product success?

Answer: Consumers make inferences and form expectations about the composition and performance of a new product based on what they already know about the parent brand and the extent to which they feel this information is relevant to the new product. By setting up positive expectations, extensions reduce risk and may make it easier to convince retailers to stock and promote a brand extension because of increased customer demand. From a marketing communications perspective, an introductory campaign for an extension doesn’t need to create awareness of both the brand and the new product, but instead can concentrate on the new product itself.

  • 204. There are a number of specific roles brands can play as part of a brand portfolio. List and briefly describe the four roles described in the text.

Answer: The four roles are: (1) flankers—or fighting brands. These are positioned with respect to competitors’ brands so that more important (and more profitable) flagship brands can retain their desired positioning; (2) cash cows—some brands may be kept around despite dwindling sales because

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they still manage to hold on to a sufficient number of customers and maintain their profitability with virtually no marketing support. These “cash cow” brands can be effectively “milked” by capitalizing on their reservoir of existing brand equity; (3) low-end entry-level—the role of the relatively low-priced brand in the portfolio often may be to attract customers to the brand franchise. Retailers like to feature these “traffic builders” because they are able to “trade up” customers to a higher-priced brand; and, (4) high-end prestige—the role of a high-priced brand in the brand family often is to add prestige and credibility to the entire portfolio. For additional information on the four roles, see chapter materials.

  • 205. Assume you are a marketing manager that wishes pursue a process of strategic brand management. List the four main steps that you would most likely go through to accomplish this task.

Answer: The steps would be: (1) identifying and establishing brand positioning; (2) planning and implementing brand marketing; (3) measuring and interpreting brand performance; and, (4) growing and sustaining brand value.

  • 206. How does the American Marketing Association define the term brand?

Answer: A brand, according to the AMA, is “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 to differentiate them from those of competitors.”

  • 207. What valuable functions can brands perform for the firm?

Answer: Brands simplify product handling and tracing and help to organize inventory and accounting records. They also offer the firm legal protection for unique features or aspects of the product. Brand loyalty provides predictability and security of demand for the firm, and it creates barriers to entry that make it difficult for other firms to enter the market. Loyalty can also translate into customer willingness to pay higher prices.

  • 208. your company desires to have positive customer-based brand equity. What has to occur for this to happen?

Answer: A brand is said to have positive customer-based brand equity when consumers react more favorably to a product and the way it is marketed when the brand is identified as compared to when it is not.

  • 209. Volvo has a strong brand association with respect to brand knowledge when consumers perceive it as a very safe care (safety). explain the concept of brand knowledge.

Answer: Brand knowledge consists of all the thoughts, feelings, images, experiences, beliefs, and so on that become associated with the brand. In particular, brands must create strong, favorable, unique brand associations with customers.

  • 210. List five advantages shared by other strong brands that you will most likely need to emulate to accomplish this objective.

Answer: Strong brands have the following advantages: (1) improved perceptions of product performance; (2) greater loyalty; (3) less vulnerability to competitive marketing actions; (4) less

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vulnerability to marketing crises; (5) larger margins; (6) more inelastic consumer response to price increases; (7) more elastic consumer response to price decreases; (8) greater trade cooperation and support; (9) increased marketing communications effectiveness; (10) possible licensing opportunities; and, (11) additional brand extension opportunities. Students are to pick five advantages.

  • 211. Daily activity report?

Answer : a record of a salesperson’s activities on a day-by-day basis, showing prospects or customers visited, products presented and results, it may also include reasons for the failure to sell.

  • 212. Deceptive pricing

Answer: the pricing of goods and services in such a way as to cause a customer to be misled, an example of deceptive pricing is bait-and-switch pricing.

  • 213. Derived Demand

Answer: demand for raw materials in a producer market which is based on the demand for consumer products, see primary demand.

  • 214. Meaning of the Word ‘rural’.

Answer: Definition of a Rural Area (by planning commission, Insurance Regulatory Development Association {IRDA}): “That which is not urban”.

Population of less than 5000. At least 75% of the male workforce is engaged in agricultural activities. • Absence of a municipality/ corporation. • Density of population is less than 400 per sq km.

  • 215. What is Dumping?

Answer: The selling of goods or services in a buying country at less than the production unit price in the selling country, or the difference between normal domestic price and the price at which the product leaves the exporting country.

  • 216. Convenience Product

A consumer good and/or service (such as soap, candy bar, and shoe shine) that is bought frequently, often on impulse, with little time effort spent on the buying process. A convenience product usually is low-priced and is widely available. For a public library this type of material might be newspapers or magazines, or perhaps a quick selection of other materials with little browsing or research. These materials or services are usually located within facility for easy and quick access.

  • 217. Customer

The actual or prospective purchaser of products or services. The library user is the library’s customer.

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  • 218. Demarketing

The process of reducing the demand for a product--or decreasing consumption. For example, the library discontinues offering income tax assistance and forms.

  • 219. Diffusion of innovation

The spread of innovation with a market group in stages--innovators (2-5%), early adopters (10- 15%), early majority (next 35%), late majority(next 35%), and laggards (final 5-10%.) Fair amount of disagreement about the percentages.

  • 220. Family Life Cycle

A sociological concept that describes changes in families across time, emphasizing effects of marriage, divorce, births and deaths on families and changes in income.

  • 221. Market share

A proportion of the total sales/use in a market obtained by a given facility or chain. Branch A has 35% of the system’s circulation.

  • 222. Point-of-Purchase

Promotional materials placed at the contact sales point designed to attract user interest or call attention to a special offer.

  • 223. Product

A bundle of attributes or features, functions, benefits and uses capable of exchange, usually in tangible or intangible forms. The library’s products include materials to use, questions answered, story hours, online searching, etc.

  • 224. Promotion mix

The various communication techniques such as advertising, personal selling, sales promotion, and public relations/ product publicity available to the marketer to achieve specific goals. A library may use a combination of newspaper editorial, public service announcements (PSAs) on radio and possible television, if no budget is available for advertising.

  • 225. Public relations

The form of communication management that seeks to make use of publicity and other nonpaid forms of promotion and information to influence feelings, opinions or beliefs about the agency/library and its offerings. This is a traditional form of communication for library management, as paid advertising media is rarely used.

  • 226. reach

The number of people or households exposed to a particular advertising media or media schedule during a specified time.

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  • 227. reference group

A group that the individual tends to use as the anchor point for evaluating his/her own beliefs and attitudes. Teenagers influence their peers regarding library use.

  • 228. self-concept

The ideas, attitudes, and perceptions people have about themselves.

  • 229. selling orientation

A company-centered rather than a client-centered approach to conduct of business. This orientation tends to ignore what the customer/user really wants and needs.

  • 230. shopping good

Goods and products can be classified as convenience, shopping or specialty. A shopping good is one that more time is spent selecting (browsing) than a quick convenience good. Example, a certain type of mystery book.

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