,.
BAMK 360 EXAM 1 NOTES
~HA~TE~
1 An
Q~erview
of Strategic Marketing
8-27-93
*Fundamental reason for marketing is economics; amount of
marketing depends on supply & demand of the economy.
*Buss word in industry now is TQM(Total Quality Management).
*Key to success is "customer satisfaction"; good marketing is
going after that goal of "customer satisfaction".
8-30-93
*Marketing: consists of individual and organizational activities
that facilitate and expedite satisfying exchange relationships in
a dynamic environment through the creation, distribution,
promotion, and pricing of goods, services, and ideas.
*Marketing Strateqv: a plan or blueprint for selecting and
analyzing a target market and creating and maintaining a
marketing mix.
*Marketing Mix involves four areas:(called the 4 Ps of marketing)
(controllable)
l.products(R&D, testing)
2.promotion(advertising, personal selling, sales promotion)
3 .place or distribution(physical, channels)
4.pricing
*Target Market: a group of people for who a firm creates and
maintains a marketing mix.
*Four Basic Management Functions:
l.planning
(used in marketing)
2.organizing
3.directing
4.controlling
*Marketing Strategy has 2 elements:
l.target market
2.market mix
Page 1
Si C~tl
yctt rnaki:" t.:t1c:
c:nv i r·-cJn.ff:c: n t
is very, very dynari11c(cor1 tantly cliar1g1r1g)
' . ( "U.ll.C(J::n_t:t"G-11 al:;1 c)
3 ,. Lf:quJ atory
4-, z;uci0t;_J.l
6, tecb.r1olo9i.cal
figt1ri::~
0
..........
1. 6
Oil
pg· 16 .
.
*companies can't control the marketing environment but can
ix1fluencc sometimes.
·;..:cornpar1ie2.i can. con.tco]
t.11e rnarket:.ing rn:i.x,
old
( existin.\J)
n.r~~v1
++++0+++++++++++++++++++++++++++·~+
+
+
+
+
+
+
+
Pr·ocit1ct
+
+
+
+
A
+
B
+
+
+
+
+
++++++++++++++++++++++++++++++++++
+
+
+
+
+
+
+
+
c;
+
+
I}
1--
+
+
new
'
+++++·t++~+t++++++++·+t+~-1-~~+-++1-++++
Page 2
Market Penetration Strategy(old prod1ct old
marl~et):
ir1q t.L1e c::u.::.t.orr:c._.
a.repositioning a product(
c;f a p:r:od.ti.ct).
b.provide more uses tor the pr·oduct.
Marlzet Development Strategy(old product. new rr1aYket):
l.develop a new rnarket(inside
/o~
outsiae the US).
Product Development Strategy(new product-·old market):
l.develop a
ne~r
product in a existing market that
the
company is involved in already.
[);
flive:cs.ificatj_or1 Strategy(n(::·VJ prodll.Ct .r1e\.<J rnarkc;t:):
l.a company goes into a different market that it wasn't
involved with before; this i.s done eitt1er through
acusit1.on or starting a new company.
*a company can make a move
market strategies.
coul.d use more than one of t.hP
9-l
93 & 9-3 93 & 9--8 93
*Mar·ket Envir·onment: consists of 11ncontrollable set of variables
but a company can influence it(ie: parents can influence their
children but can't control them); companies must react very
quickly to the changes in the environment
1. Political forces(ie: different political party in the
14111 tf:llOl-l.~32)
2. Economic forces(ie:
j_nflation rate, interest rates)
Societal focces(ie: environmental movement, healthier
lifestyles, consumer rr1ovement, cultural diversity, more women
3.
the: <ilC)l"){force)
Sllrner
"'Value
: . : r: 1J . '· J
:<i.
·c ·
(draft8d
>:>tart
the
i)f
Consumers(Bil
Pre2ider1t
cur1:~:.1...;1Tiet
Marl~etinq
c1f
F'.:i.gbt~::.
John E'. Kenn
rnovcrner1t)
right tt1 safety: a con1pany has ar1 obligation not to
rnarke 'k:.1')ov1i.n9l y a pr:oclt1ct that c:ou.l c1 b.a.rrn c1.):n::--:;-, rner.:;,
l
1
2.tight to be heard: consumers will receive full &
sympathetic consideration in the formulatiorl of govt.
policy and promises consumers fair treatment when they
complain even to a court of law .
. right. to choose:
consumers must the access to a variety of
products and services at cornpetj.tive prices.
4.l:ight LO be inforrned·
consumers should have access to and
the opportunity to review all relevant infor·mat:ion about a
product before buying it.
4. Legal Forces;
r of laws that influerice marketing
decisions and activities.
*More important acts that affect marketir1g decisions:
l.. Shermar1 Antitrust Act(l890): prohibits contracts.
combinations, or conspiracies to restrain trade and
pLohibits monopolies or atten\pts by businesses t.o
monopolize a particul.ar market or industry.
2. Clayton Act.(J.914): prohibits specific practices such as
pri.ce discrin1inatj.on exclusive dealer ar~angements, and
stoclc acquisit:ions in which the effect may notably lessen
competition or tend to create a monopoly.
1
3.Robinson-Patman Act(l936}: prohibits price
that lessens competition among wholesalers
(intermediaries); prohibits producers from
disproportionate services 01· facilities to
discriminat.ion
or retailers
giving
large buye s
S. Regulatory Forces~ enforcement of laws and regulations a1:e
done by regulatory agencies(governmental & nongoJernmental)
*Feder-al Regulatory Agencies(governmental)
1~
Fedetal rrr::1d.E:: (.:ornrn:L;:2s:Lon(F'l2(~)): er1forces
ar~d qu.id_,:-.
lines regarding business practices; takes action to stop
acl.ve:ct:i..sj.r:19
p,39·e "i
;ind part1ctilarJy
~.
Consun~er
.::~on1pl
consume
haza1rtotl~
Prodtict Sa
:i anct::' v.ii th. tb.e Cun.s1.1rnet Pi..:·odi.1ct Se,tet:1 l-\ci·
. .
,.
lr::::
.r:i..sk of :trl_:Jttr.Y
prut;·C't:.·.
I
consumer product not covered by other regulatory
aiJer1c1 es ..
4.
Interstate Commerce Commission(ICC): regttlatEc: frar1ch:Lse,
rates, and finances of interstate rail, bus/ t~uck, and
V-Jate:c
carrier·,,:;, .
F'(.:de.t:a1 (:ornrn1Jn.ica.tion..
0
:.:
ConnTl::i..,ss:i.on.(f'C~c:) ~·
regt:~} at(~:J
communication by wire, radio, and televisj_on in
ir1terstate and foreign commerce.
G. Erivironmental Ptotectior1
ency(EPA): develops and
enforces environmental protection standards and conducts
research into the adverse effects of pollutio11.
?
F'eclera1. Power
C'.ornm.i.s.~;:i.on.(FPC) ~
rc~9111ate.·::;
t~;;.t.es
a.:nct .sal;:.:;;s
of natural gas products, thereby affecting the supply
and vrice of gas
~vailable
to
consumers~
also regulates
wholesales rates for electricity and gas, pj_peline
construction,
and U.S.
orts and exports of natural
gas and electricity.
er;. c. :.L 1-:
'·'-'
.Better Business Bureaus:
local businesses.
6.
local
regulatory agency supported
Competitive Forces:
c;~.- -·-1 J_\')
I:.J\1t·e<"
et.itior1
l'1or1opo l. i. : :.-.; t :i_ c
c~t
.it i or1
().l
igopoly
A.Pure Competi1·icn:
nt!,yer.c3
ar-;-· Gell er«:·;
1. No barriers tn
0n
,,.,
'-Ji
1n1niinal inarketing
6
.
,.,
•'
,...
i"lOflC•fiU
J
'>
J.
f\1ar1y
.J
'
-1.
::.
t:~titior1:
('
Lr;
l'1an_1/ ,:·;el lers
fr·oduct di.ff0rer1tiation
a.(l:i.ffe:cc~11tiated
})y:
:1.19i:.-ed:LeiJ.t;:.'
Lita:nd
n.arn(::~;_:.,
r;:(J.Ce,.
packa9J. r19.
1. Few barriers to entry
5. More knowledge tha11 oligopoly but less than monopo 1 ''
Lots of ma~keting
7 I'.1:t:~pos.itio11ing
8. a growth industry(rate of growth very hi
*ie: Levi Strauss
et:Lticn:
1
Mar1y· Btlyer,c.;,;
.L.-
F'c-hi S(:.cllerE,'.
Homogeneous Product at Differ·er1tiated Product
a. brand differentiatior1
4. ,;>u1ri<.:' Liar:cier;;.s to en.tt·y
1
Imperfect ltnowl
~
e of the market
6. Lots of marlteting
*ie: Philip Morris
D. Monc>Poly
.l . lvJ:an y
etit1on:
e L" .'.:~
Sel 1 et
Unique Pr·oduct
··-"
C)r1e
3
4.
b.
barriers to entry
l?eL~fi:.;;c~t
kn.ow}
6. verv little marketing
kie: gas co1npany, power company
-.Technological Forces
9-10-93 & 9-13-93 & 9 ]5 93
~)1;est.ions
to aslt yourself when face witll a ethic!a] s1 uatio1·l
l. What is morally good or bad?
Pr::~9e
t:;
>T}-_\;·
to others what you wot11u
nave tl1err1 do unto you.
,.<dn.t:i.an t iod;::J (by Ernrn;J.r.i.u;Jl
1
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b
c.,
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e
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R.i
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t c
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)\
J< -.:r1t l - t'.vei:y perso11 b.:-:i._;.:_; basic
c
b.t::;.
\11·::L:-~e.
..
f i-·c:e ,..:on;:.~"---;r1r
pt·i vacy
freedom of conscience
fre
of £f,eech
dti.e r:.1r·oce:::1z.>
*action is morally correct if it minimizes the violation of tlle
r1
ts of others.
3.Enlighteri Self-rnterest Model: Action is morally correct if it
increases b0nefits for the individtial in a way that it does riot
:i.r1tc~11t:i.orJ.::::111y
l-~t1t:t
otl"Ier.'3 ar1d. if these }:;0r1efj_t.s ;_1re bcJ; -"::v(_'d to
counter balance or· offset any unintentional harms that came
a))O'!Jt,.
>Business is responsible to three stakeholders, they are:
2,
3,
stockb.olcler·s
f;;:np 1 oy(~1 es
COl"l$1)lTlt:-c:r·s
I.Consumer Movement: l\cti.vi ties undertaken by independent
zations to 9rotect their Lights
to
const1rners. ( ie: rig1-1t to sa.fety / i::ight to be :i.n.-fo:crned, r.i
t to be) }1ea rel)
cb.oose, arid r:i
indi.viduals; groups,
?
Corn.Ynttni.ty F:elat:ior1::-;:
Sc'.:>ci.ety
ar~xio·u;::l.
to }1ave rnaLketer·:-'-
contributute to its well being, wishing to know what businesses
do to help solve social problems.(ie: equality issues.
disadvantaged members of society, safety & health, and education
' ,,'
\')el I: 3. L C'c }
Green Marketing: Consumers insisting not only on the 0 ual:i y
of life but also on a healthful environment so that they can
maintai.n a high standard of livirlg during their lifetimes.(ie
conservation, wat.er pol.lution air pollution, and ].and pollt1tion)
1
>Fotlr baE1c strategi02 foi- systematically dealing with social
ractics are iegaJ maneuvering, seeking the support of trade
uriions, and government
:i.ng:.
lt~00
Accommodatio11 St1:ategy: a ])Usir1ess ass11rr1es responsibility fo1
its actions.
Example is when a special interest group encourages
a parti.cular action or when Congress passes a 1aw to ensur0
compliance when a business fails to react ..
4. Proactive Strategy: a business assumes respan;·~bility for
actions and responds to accusations make against it without
c:,~.:sutc:.·-
c11
>Five Basic Parts of
Lbe· tb.:cc-::21t of.
Ma~keting
2.ptod\1c:.ing products t
t
i;JC)\}1:':~r:n.rner1t
:i.:ot.erven.ti()Ilo
Concept
s2tisfy those needs and desi.res
ey
4.acL social.ly
responsible.
5. use a systen1s approach(orgariize the presentation to the
consumer); proper mechanism for product safety, consumer·
t·c0searcb.r etc,
*r1ote· wants or desj.res is how yo11
exp~ess
your needs.
>Types of Target Marl{ets:
Total or
b.
c.
Undiffe~entiated
Target Market:
one target market
or1e marketing mix
effective under two conditions:
l.large p1·0r0rtion of custome~s ir1 the to•.di marllet must
-·· ...
the r>roclt:tct,
have similar needs l..Ul.
~;
2.the organization must be able to develop and maintair1
:i single macketing mix that satisfies customers' needs
*i~·
dairy
industry
j1
r~~
the segments the custon1P
characterir·-
a~e
1-l"
j
or1e taLget ma ket
!-,
u:ne
rnarki,:;~t:!
n_q rn1x
c. focuses on one segment of the market
or Differentiated Target MarJ:et:
a. going after the er1tire market
b the entire market i s se
ed
c many target ma~kets
a marketing mix for each market
*ie:
Jockey Underwear(use to b0 only rner• but
n0~0
women G
cb.i 1 clr c~r1)
4.
Partial Segmentation Target M0iket
a. onJ.y go after part of the market.
t lie;
*see fig.
4.G or1 pg lJ.4.
nc'In<'lGY
ic \iar·:i.at>Ic::
Lace
income,
education,
:3tt1dy of- t.}:1e:
a9e,
E;1::-:x.,
c Variable: deals w/ physical locatj_on of the
r:a:
(;lirnate, ter:t·air1 . r1at.t1i:·aJ
density, mar1tet der1sity).
co:c1stJrnc:;r('
po1)u.l<:ttio:n.(iE.~:
religion).
'.
l.f':'.:;;,0-urc(:E.'1
popul<:J-.t:ion
:ca:t?hic: Va:cia}:>le: d_(_:_·a. .l:::; \'i/ 1:Lfest.y1(~, <'" 1:iersc)nc_:,__J
*Karen Horney's Types of Personalities:
a. compliant(go
the flow)
aggressive(go against the flow, rebe1s
go-getter)
(~_'-/.:
1
rnoving away from the flow)
B
vioristic Variable
Iooh:s at volurne usage,
Joyalty,
*Market segment2tion allows you to practice the
cox:i.cept
r_:_~n.d
u.;sc:,
ma 1 ~keting
*~~omentqtion
1
s very costly and car1 be bad of too segmented_
C(:irnpeti ti on t·,r. 1.1. ,'.'1.• +··
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.S.(:.~f:':J;'I
U.p;
the competition goes afte1 anotl1er segarnent doesn't
mean yo11r company goes after the sarrie segament
4. Stage in the Product Life Cycle(PLC):
what type of segamention to do.
life cycle determines
9·-·l~
D(:-:c.i.sio:n 1'·1
-93 & 9 20 93
:1r1g
high
low
fJ·f+++++-~+++++t+i++++++i·+++++++
1
·I
+
+
,,.
J3
Po
·I
+
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'·
+·t+++++++~·+·++++0·i·++++++++t·}+++++
I
i·
+·
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,,,. ,
+
}J
+
low
+
+
+
+
++++++++++++·~t·i++++++++++++++++·l
/:,~
ex. Dec::i_,3io:r.i. 11.ak:i.rlt;J( . .:.:igh .siq:.i.nificant br2r1d cliff ar1d b.i
ir1volvemer1t)· spending time to evaluate the different brands; gJ
after a brand name i.f there isn't much time to eva.luate
D.
Variety Seeking(
i.::·:volv(-:::rnen.t):
gh siginificat brand diff and low
expc~t·irnen.t;
:-,,._,,o:l\/r_:_'.Hlc::c:.t); rn:i.:o.i
Zl'::- tb.e
(:Le:
pt~1.-f\1rnes).
::;trc~s3
10'.'vel
u±:
t:l."::.e cit'.:'c::l::.-;1(1'1;
similai· job offers but will have high involvment level
(.i.e·
in
d.c:<."::i.c'l:.i.nJ) _
.Ln.c::tt:.i..:-;;.( 0;4 .si.g:i.r1:i.f:Lcc:1:nt b:ca.n.d d.if.t :J.nri lo\·d ir1\ro'Iv1_.;,_,_,,,:-~l1\
brand selection process; (loyalty occurs oi1 spJY r~,
t 1 a:~~ive
rnoniert t )
1·_lie
~consumer
Buyinq Decision Process
sio.
making;
or.l
a1scove
that there is a neetl
Sea1."C'};1:
R2t:sfy the need; d
P·
!
ooL:. at
q1J;3l
Four~
S1:age
~luation
of alt0 11atives ii1 t}1e
ev1Jk~1
i ty
Purchase
2g0 Five~ Postpurchase Evaluatior1; in expensive pt1rc}1aes tl1ere
may result cognitive dissonance(doubts that occur because the
er questions whether the r1
de c: i ;:_-; J.._ on. i/f a..c:.! rn c.1
tf}C:' procl1Jct: l
Possible
Influen~es
011 the Decisio11 PLocess
Personal Influences
a. .Dc~rnoqr apl"1i c
Ir~f l lter1ce;:.'.
a. Per·cept.on: process of selecting,
interpreting events in a environment.
c
Atilitv and Knowledge
d
At.ti tudes
organizing,
a~d
a. Roles and Family: role is a set of actions arid activitie2
that a person in a particular position is supposed to perform.
~vidual
so much that he takes on many of the values
l·)ehaviors of group niembcrs.
So~ial
2"·:11·il.2:i:
::::-ocia.1
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Classes.
t·an.k.
,'~l:c1"·'
-;;1.""'~p::::
i:·)
an op0n
g~oup
identifies ~;ith it
attitudes, or
of individuals who hav
3-u:bcu} ttlre.s" ct1:L tu:ct:-:: :t::.; co11;::.i:::-;.ten::·.'y in
peor,le a.:n.d ct~lt\1re, is t.otali1:1 lr::z.·1t:i.-:i.c;d .
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':::'C·-
·'· ,_,_-'-
·:u::1ly
,_,
!::·' 1 ·-.-':' 1. \C'
-- i--.
'.
Eithei·
·--1
CC:·.<.~;.~-,
('-1the:·1
or0~J·
,,,:.t_.· \
lvJ.a.te1 :)_;_:,-: ""'
fini~
ed j_t2rr1s ready
··i·1tc:-l J.3.!
I;"l."()d_1,r:,_,::_,,
sations use(i.e·
financial
-'.-
':er,,·,-.-
pr·c.JJ\J.c
loyalty
l\i;1
!
d_cn
+-_\j
\(
r,
tC.·'
IO 1
- )>'(1
.)_ \
·---
pi ci<.iu
to
for
ornc\·
:c
})a:.1~--
o(_uct·
:Lnti-·()C .,....
··b
.:;,j_'j_i.
··t :inc
'. i
. . ·:co.r····,
sliq·ht ch.ar19e)
(..
SCOO}'.:'~:~
Of
a
,_:l.]. ~·"'· t~ n·:(· n
~.,
.,., ,J;::;,ve)
(,(\
'
'
'
'
c);:·Lrir::0rc1a,.l 12:2t ·
L J
t (''
r
r n .) ...
c qan.izat
tl1e product and
i1
thP
reasonabl0
~ina}
tc:::1
'er·-
r-~ice
it can be
prcducr-~
cost~
at
·i'\}"J<
j (j(_
fu1:\
.,
.,
j
'i'
:--~
sea.le
c-,-
commercial 1 ~rodv~t
czpf;'t.1
() f
l:'
(,:d
lrJ
c: °:/ ,- ..
c
cc;;
\ L
Leat.1.1r
,_ E::'..'
'.~:onda
oduct
r·\'
""
._.,.,, 1
r;
a}:)'.')\)
f:
:nd_iff-
t
,__::lSJ e:
·- \-.,
·--1-'C-:
r:in.'
t {)(·'..,.·
Ol.l t
iT·,·.
,·t·
~i.
r1c
:;_:,
,-) ;:-,;_n_d
e ?. t er'!.·.·.:;
-- . 1 on
\!'
q ("!hlt ''l
91. i)\,)"tb
'' ,,J
h. c: .
''h_:.3 .,.
. 1.;.i.q (
.;,,
-
\
;
-··~.":··
'.C,J:
10 18
'-l- ,_ ./.
C; ·; \i
r--
.!. fl
te:C\t~--r
, )_
.:/ciu:c
~
s~
1
L 1:?\/ .;
.. ' ' - ' \ 0 '
nt
.-·~ < i·;
})t <.inc
(;
cc rnpar1
'
LC•
t ·i f .; ,:>r-:'
Di:
oductr:;
''
cr.n.ex·
\
..
,
s:
& J.O
20·-q~
(; ,--i' --- t
t. v
sical attributes
11Jte
eel'''
\}
-a~u
allo~s
l-~
em to furlction
eff~--tively
rnJ. dd 1 C'n en_
f lJrict
:i c,n
}) ('.'
.--,
• "! ·.;:: (''"
t :L ("' -
,\
!~
{
l t
rn;_:;;_t;:.)
u.<:3f:-
{
{
')
I
-
9 ,r
(v
-' ()
) >i
~; .j
l
i'
J.
of
0
e11t and Broker Middleman:
tate title at the goods and
ar0 c:ompensated w/ ~omm1ssions for negotiating 0xc
s0 lers and buyers.
lvie:rc.ba:nt ! 1.idd.lerner1:
1
ttlke
title of
t}J(;
goods;
r:L:=.~\<'
dSS\1n1e
usually involved in buying and reselling products to other·
whoJ.esa1ers. industrial customers, or retailers.
i;<!b
>
e.s
( p_g
l. Ful]-·service wholesalers: middlemen who offer the widest
possible rar1ge of wholesaling functior1s; relied llpOrl for product
availabi1.i.ty, suit.able assortments bulk br·eaking, financia}
assi.s~ance,
technical advice, service, and marketing services.
a. general-merchandise wholesaler: carry a wide product
iiut offer liYnited depth within the product lines (ie: drugs,
hardware, nonperishable foods,
to})a.cco) ,.
cosmetics, detergents,
m1~
and
b, limited-line wholesaler: carry a narrower product mix bu~
more depth(ie: groceries
lighting fixtures or 011-well drilling
cq"LJi:p . ),
~. specialty···line wholesaler: carry the narrowest range of
products with usually a single product line or a few items with
pr:or:i1Jct
l:Lr1e:(ie~
sh_el1fis11,
fruit
1
ot· food c1e.L:i.cacies),.
* racJ~ jobbers: specialty line wholesalers that own and maintain
their own display racks i.n supermarkets and drugstores; usually
nonfood items and operaLe on consignment & take back unsold
J?LOd\3.CtE',
·1
Limitsd service wholesalers: provide only same marketing
services and specialize in a few functions; take title but ir1
many cases do not deliver merct1andise, grar\t ctedit. provide
marketing information, and store inventory.
~'t
a ri. E p
casn-and-carry wholesalers:
C) J~ t. 2'_'!
t. i c::, r:( ,.
pay cash and furnish
a
orae1· wholesaiers:
U2P
~atalogs
instead of
s~J0~
i:ndtJ::'_1tr"taJ
r:::
rs ,
J..
ents: represen~ either buyer or seller usually on a
perrna.n.ent basi.:;
a. manufacturers' agent: independent business person who
sells complementary products of several pr
rs i11 assigned
terLitor:Lc:s ar1d is cornper1.sa.t(::~d tl"1roL191-1 conwn1,c-_:;;::;1on,~::,,
i'::i. sell:Lr1g aqents: hrl10 rnal:k('.:'~t al] of a specified. pr-ocl1Jct
line or the entire out
of a manufacturer; have control ave
the manufacturer 1 s marketing effort and may be used in place of a
marketing department.
c. commission merchant
often used in agricultural marketing
who usually exercises physical control over products, negotiates
saJ.es and is given btoad powers regardir1g prices and terms of
Sell CO,
Brokers: bring buyers and sellers together on a temporary
basis; has fewer functions than other ir1termediaries(ie: food
brokers, real estate llrokers, brokers in securities & insuranceJ.
2H,,OO
*
average ma1g1n
at Whlilesale is
~-10%
,:~s"' ·'.i
1n%
1
l
Goods
~
Services Mix:
Cornrn1)ri:i.c;:1t}~on
1~1iI"
b_O\AJ
/
looks at Lhe types ot goods or· services
tb_1,'::.:
~:::r_ore
c::ornrnu11.icat.es
to
th<:::
ct1.::::t:-:irnct·
Distributi.on Mix: the actual
·=c.,:1.1. tJ0 ,1 (1t
products from manufacture to the consumer
provides time & place
utiljtyt ime is inveritory or when the customer needs the prodti<:t
AND place is movement or where the custome1~ needs the prodt;ct).
;,
P
r1ca
1
* See figure 13.6 on pg. 420 for relationships between
merchandise breadth and depth for a typi.cal discot1nt st.ore,
department store. and specialty store.
Retail Posi.tioning: j_nvolves identifying an unserved or
undeserved market niche or segment and serving the s
throt1gh a strategy that distinguishes tl1e retai.J.er from others
the minds of the persons in that s
Lr1
* Scrarnbled Merchandising: additior1 of unrelated pr
ts and
prodtlct lines to an existing product. mix, par·ticula~ly fast
moving items that can be sold in l.arge volume.
*
Wheel of Retailing: l1ypothesis tt1at holds that new types o
retailers usually enter the market as
1 ow
-,. r :t. ( e
(;(_:;,c;,;t' h,i.
price operators but eventually evolve
merchants(see figure 13.8 on pg. 426).
inventory cor1t1ol
2.
t~ansportati.on
4.
order processing
~~.
matetiais handling
s
ve~y
important
t!ecause represf11ts 30
inventory ievel and purchase ptodt.ct
tl1ey ;::re: l\(~e~dz.::cl 1~c:.r: urci<:.u.cr.::i..c1IJ,
£<a.i 1 ~<Ja.ys
t <J {"\} C'h:i. C :J.
r:i :L p <:'' 1 i .n r:::; ,~-::
f'iC1
A.
C:S
Inland Waterways
P":i r:w·a y s
*Refer to figure 14.6 on pg.
*Refer t.o Tabl.e
l.
2.
l4.~
on pg.
450.
454.
!osts: 1s the more expensive mode worth the higher
'rrans1.~
Time:
total
costs.
time a carrier nas possession of the
qood;:_;.
~.
Reliability:
the consistency of service provided.
r.j,.
c:a.pa.l::i:i. l i ty;
ility of a transportation mode to provide
he
appropt ate eqt.ipmer1t ai1d conditions for moving specj.fic· ki.r1ds or
900Cis.
').Accessibility: abiJity to move goods over a specific rouEe 01
,-_,'c'>Jork .-
b. Security: what is the
ysical condition of goods upon
dc,].j__ \!Cl'.y,
7 '11 raceao1lity: relative ease with
located and transferred.
ich a shiprnent can be
11-3-93 & 11-5 93 & 11 8-93 & 11 10 93 & 11
*
or
Prornotion: communication with individuals, grotlps
organizations to directly or ~
irect].y facilitate ex
an organiza·tior1 s
in.flt1encing a11dience members to ace
prod.l.1cts
1
l~
q~
ic
Hea~ons
to do Promotion
y
1\·
i~:Lope
curve i.s a ft1nct:ior1 of the elastLcity of
of d
d.c'.rnar1d,
tity demanded is different for each
pLic
ct1~ve
level) then the demand
shifts.
/'""'
:.>:
f)erna:ncl : .: : F
}price of other products
(;n v _'1, r cinrner1 t
~
1~~~~=g~t:r~~::::ces
ot
co:r1slitnr~rs
\ _ ~1ark.:::tir1g effcJ_:·t.':; of
*
P1:omote products to
e the demand curve; must continue to
*
Promotion is attempts to communicate
un_c1ers.tar1d. tbr::.: c
cat..:Lo:n p1:o(;e.ss,
7wo MaJol
w/ your customers; must
Players: ser1der and recei.ver
2. Serider uses encoding in a
where th2 receiver will
fo~rr1
\}r:it:ierstar1d_,
ng to receive the message
.1se
Dc:.-c odi n<J
En.codi11g
Sen_dE:-t"
Rece:i.vf;r
F·ee(l}:)ack
*
z11Jise: anythiz1g t}1?t prevents or irnpeads the
0rz1cess
from being completed.
c?l
·1 '(\
communic~atiox1
ommunication proc0ss
riot_.:
rn<1J. J;;c.,T.·Lr1t;.J
fc~edb{Jck
J ;:;\
~
,'')
:LnC'.L'( a,'.(::tl
('.
')
'';a.t r'.:oE-;.
'k
~21
5.
~~romotion~
ar1ytl1ing that
persona1 selling: face
4
1~o
can~t
be catorizea in
tl1e
r)
l;
face attempt to communicate.
licity/PR: nonpaid fcrm of impersonal mass median
communication; public relati(JDS are within an
,-;\1t~::,~1dt.::
orgar1iz~tio11
ar1 orgar1izatior1; ttsu.a11y b.<:"J.Ve n.o cor1t.ro}
an•
ove'.r pu}:;1.:i.ci.ty.
S o:n pg_, __1.1<3 3)
2
interest: ccnsum0L are motivated to get information about the
features, uses, a(ivantage disadvar1
product'~
:! ocation.
1
?
evalttation: consume1 cc1nsider whether the produc'.t will sat~·isfy
certain crit.eri_a that are cruc:ial for meeting their specific
consumec uses or experier1ces the pr0duct tor th
purchasing a srnal] quantity or free samp}
d ;:·:rnont.:,; t :r '·'*ti on
bo~rowing product f rorn someone
ti.Nie
Oi
1
t :i.. ()rJ.
*
:.
:ne,.- -: l
consumer chooses the specific product
tl1at general type.
r0jection can occur at any stage.
on
try a product as soon as it comes out
i;).}:'(
f1J.:1 .l. -'{ .:·
j
·3·i},
;:) (/(·'
,-:>t
on tt0
n:n
rvi.119
r10\~
war
proau~t-S'.
-·n
(;
~ev
U('
~av0
kept1c sm;
Liggards: driven
':' u ::·~;
c .i o u ::.~> , f
p ,_: :.::: r. .
'L\i·v-:i;;_,,x d
1:-ir:i,.c;,·nte:·:d
O }/ '\1
_!
t.
! ;:±
L
i
Cr n
-;
,
like tl1e produce li.fe
cvc10
CU} \1 C:':.
,,_··a.r;d
ife cyc·le: r1eY.AJ i
vi.dual. b~and of a li.ne of products
can have sales increasing ever1 thr
the pr·oduct co\1ld be
declining on the prod11ct life c1.1rve(ie: ,~jgarettes a e i.n 4·}-0
decline stage of the product life cycle ))ut a new })rand ~iil1 hav
b~and Life cycle that will have increasing sales).
·i
1. Prima~y Dema11d Stimulation: advertisi11g to stin1t1late demarici
for a produc category rather than a specific brand of the
'JLOd'U(:'t,
a) Pioneer adver·tising:
ir1forms people about. a product(what
it is
what it does, how it can be used, & where L~ car1 be
p1..:i)_·c:t_-,_ased.), oftt.-::r:t t),secl ·j n. t.}1e :i.r1troc:t1Jc·t.cry :::;ta_q
of
b.e _pLoci"t.)c--'·
life cycle when there are no competitive brands.
S
.-,,,~:t:i.\/C-' .De111a.rJ_r.J :::~t:Lrn"t.J:t a.ti on:. :J_dver·c.1;:.:_;:truJ:
rct a Epecific brand .
2,
j
t;J
::;t:LrnuI <::tte: _-·-ic'ff1ar1d
.i. t.ive
a)
f:r:::~aturcE~,
advantages ove1· other brands but doesn t mention
(:'.OfllP<-J.td°l.°i.\IC>
specifiei
brand~
d.1JV(~J:"t:_i_t:3:i.it~J:
a.d\J(':·,--··· i.;::'.Jt1g
are compaied on the basi.s
brands are n1entioned
··
1n whicl1 two
1)r
n1r11
on_c-; ot: 11orc.' pLod.uct
advertisj.ng the goodw~ll of the particulaJ·
:i.cle;,1s / or
(JrganizatLon; promoting organizational
a the Advertising
\· \--,
a s ta:cJ.dard per cc::1it J'(' cf .F'-i .'.'::.-:: ·:'.d .L <:'::·''.
sa1ss.~. g:rowtl·1 oi:· dE:'.c;'lin(:.
])d.:: 0 c~d t;,por: t".11,..
pl\1s a fac~or for pl
.i nq·· or:.
company traditional
averages; major flaw is th.e :i.r1coy·re··c;t c1-;:-;,~_,u;.~:i;·_·io:c! "'"'·::;, ;:;,;-_-;;_:te,::·
eates advertisirig wl12 A it should be advertising ·reates sale
most widely accepted approach because i t is easy t~ us0 and less
1
d:i.«~-"-ruptive
c:ornpet 11
\/E-?.!
y
d
f)bje~tive ar1d Tasl<
rcacli: deteLmiue the objectives t}121 the
adv0rtising ca1npa1g0 sl1ould achi.ev~
ther1 attempt to list the
ac::c:C)Yt:pJ. isb t:
calculated anc~ added together to get a a1nount: u1 t})0 ota]
*Public RelatJuns: spreadirig goodw·i 1 1 ·~ithi,, the orgar1J.zation
and outside the organization(ie: company cl1ildcar0 g1·ants ti~
1)0..i\/('L::3it-:i.e.r.:!.).
*Refer to Tabl0 16.4 011 pg.517 Ear Characterist
and Disadvantages of Major Adver·tising Media.
arison Indicator: compares t}10 costs a
venJc·les within a specific medium(ie: CPM(co2 pe·
c·o;::;t cornp;::tr <;<:";f!. incl.i r:·f-.c>:c fu.t n·1;0,q3.z·1 .c':;~.)
s~v
i-·21
0
og_ t
]
Effecti.veness of t
evaluation can occu1
\';(;\ff)})()_ i
before. during, and afte
2 adver·tising
JTJ. ,
1
lncludcs pretest., posttes1:
te.st
and aided Lecall test which are done
or experiments which are very expensive
2notb.ei::
'}:
.t
r_:.n d.
0).'
1 l in;;::- :
rt),t:.; nqs
'(\ '! l
,·,,,c
;:-;{
t.'/}JC
a)
~efe~ral
·'·-'/
c'.i:i~rc:c·r
ber1efit
approach
n:;- ccJ.d
c,.~_,
approa~h·
,;:1J;>f1 l."OSC·b
b_ !")\cf t :h (:'-'· ·:·: l). E.i t Orne l_·
pt·c cJuct
a) canned presentation
\J
:::y
nfox:·rna.l x;_;ri:,::::::~1-."'nt ati.c;n
r:; some structure combi
1°).\
t j_ CJrt.c::;
6. Closirg
t~10
sale
J. .i.
::)
'-l
(
. .•
h/
t·
:~
b
' '
('
(lfJ.
(j
J lJC t
t; corn1)(:·t.·i t:.t.c:in. ··>
is a price taker.
*
c·::tst<.:;rn(-::,
l)tl
·(1T1ar:kt:.'t
alJgopoiy-> uniform pricir1g structure
3, monopoly-> sear·ch for a cr1ce }.evel: seller is a price
C,_;~:;t.<:::
Total
''P (''
price x g\1antitv
'PR
____ ,-- ,,,--,··---·-·-··--,* c1ern;:CJ.n d ;:; c Lti:::c1ti 1 c: :i.. ;'.'.> the
p:c:i.Cf::
}(:\IC:}
r·elationship between
price and quant1tv
q U.3.11 ti. 'C )'
d.ei:na.:n.d.
*
elasri~i1:y:
how sensitive the quar1tity demanded
jr~
to pi···
c r1a119 e,
.
.
1n pr·.I.cc
n.
scLeciu. e.
fl t tV.J,.,JX:o
(' w
[J(
/I
dO >·'
c:,xhi J)·i. t
pr ces usually at: th0
kinked part. of demand
(; l.l :c v (:'.
pr-icing Strategi2s
PS
a; MatKup:
0
percertag
')
the
c~ost
cost
t"f'·?td.1 .I.
15090
(rnarJ.;:tlF'
2
S\
p
:i
c;,
so
1.00
SO
or r·etai
,_,,
c:o.st)
"()
60~~
~
most
(rna
retail stores llse the per·centage of retail
* keystone(fl.1llstor1e
price.
ma
doubl0 the cost a? the retail
::_i'.f, ot co;_; t. rna
1/7 stone 1s 50% of
cost
(\I\
rro±-:.:·
10 0
~
RP
11'1.:
Ir1it:i.::_:i.1 rna.Lk.up
RR:
retail
eduction(employee di
count, stealing, breaKage
.(J.poi 1 a9e)
100 +
cos
is $100 so what is retail price?
reta:i_ !
pr·:i.(:::e ::.:
c
J.
I J'!i
····:.:;
'TF'(~
'l't ·
~.i9c,
.l
E:~U
.333.3
'}'f<:.:·
TC'
+ 'T'\/ c·
cosLs that does not vary with c}1211ges in the nurnbe1· or
urits prodt1ced
I
1
01
sold with
,...,.,,
__
i'
er ( r-
uvc· is tl1e
cor1t~ibution
c) R01(Retttrn on Jnvestment:):
:i. n v e~·:; tYnen t ,
upon what the
]J)
c~ompetition
rnargin
expected amount of proftt tor
st price the 1narket wil
is ch)tging ar1d/or teccver investme1·i
penetration'. price the product below competitions rr1ce
('
I,-'r>_yc.'}101 oqica.·.l
th.at
pr1c~ng
rnetiiods designed to enc:oui:age
i1·.
purcha~G-~
than
ernot :i
odd even pricing: assumes that more of a product will b0
sold at: $99.99 than at Sl00.00 indicating that an odd
nrice ·1s a better value; even prices ct£~· userl to give
r_:ii:·cJd.tJ.ct 2In. e>zc:i\J.s:iv;_::'. Ol ·up;;.;(:ale :Jrna1;,:t1.?:.
prest~~c
level
pricing: prices are ser at an
to pEovide pr·e31L1ge
selected !1nes of products(ie: suits
.4on·~7C())
Cf,_~---
l
ar~JficiaJ
e-
20()
I
y
hi_gh
0
250·-3)!5
i
r c-;
b. SEtup a mi2s1on statement
0 i
[:J
A. ftoduct-Portfolio Analysis
J:'.· L 06 tlC T. -· lTl<·)
9.LCr\,1tY.r
r J{ E: l
(pcrc::,::_~:nt
ca.~~'-h
COV/
ow
high
Relative n1arket
1;
f
gure
~n
4
on pg.
0)~.
~
are