Marketing Strategy and Planning

All Chapters

All Chapters
Prepared by Feras

Hello everyone. In this guide, I included all the chapters that are required in only 15 pages! It includes very important topics that are discussed both in lecture and revision. I came to the doctors office yesterday, I asked him if the contents in revision lecture were enough, he said and I quote YEA YEA THATS EVERYTHING and he told me that whats more important is to apply the marketing concepts (i.e give tons of examples). And the ability to relate chapters with each other. The exam will be 3 questions, choose only 2. And one of the 3 questions is subdivided into 2 questions. So this means that its possible for the exam to come from topics other than discussed in revision, because he gave you the option to choose questions. Thats why I believe that 2 of questions are from the revision lecture, and the third is from outside revision lecture. Dont forget to give examples and relate to other chapters! Good luck

Ch.1 What are different definitions for marketing? According to Kotler The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more Effectively and ef ciently than competitors do. According to Ferrel Marketing is the process of planning and executing the conception, pricing, planning and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives

According to Felton A corporate state of mind that exists on the integration and coordination of all the marketing functions which, in turn, are melded with all other corporate functions, for the basic objective of producing long-range pro ts.

What is the new marketing concept? 1 Create customer focus throughout the business. 2 Listen to the customer. 3 De ne and nurture the organizations distinct competencies. 4 De ne marketing as market intelligence. 5 Target customers precisely. 6 Manage for pro tability, not sales volume. 7 Make customer value the guiding star. 8 Let the customer de ne loyalty. 9 Measure and manage customer expectations. 10 Build customer relationships and loyalty. 11 De ne the business as a service business. 12 Commit to continuous improvement and innovation.

13 Manage culture along with strategy and structure. 14 Grow with partners and alliances. 15 Destroy marketing bureaucracy.

What is resource based marketing? An approach, where firms instead of only mainly focusing on the market needs or mainly focusing on the capability of the organization. Instead it focuses on both equally. Resource based marketing seeks a long term fit between the requirements of the market and the abilities of the organization. The resource profile of the company must be continually developed to enable it to compete and take advantage of opportunities. Where resources could be having enough money, enough man power, skilled employees and so on

What is Corporate Strategy and marketing Strategy? A corporate strategy is the overall direction of a corporation and the ways in

which various business operations work together to achieve a certain goal. whereas

marketing strategy is an operational strategy which is related to product identification,advertising,selling etc. corporate strategy set up the objectives for the organization within the consideration of every single department not only marketing section such as accounting, and Finance. Conventionally corporate strategy is supposed to be determined before marketing strategy. The marketing strategy should not oppose the corporate strategy.

CH.2

Marketing Strategy Process There are 3 levels for developing marketing strategy; the establishment of a core strategy, the creation of The companys competitive positioning, and the implementation of the strategy. The establishment of an effective marketing strategy starts with a detailed, and Creative, assessment both of the companys capabilities its strengths and weak-nesses relative to the competition and the opportunities and threats posed by the Environment. On the basis of this analysis the core strategy of the company will be selected, identifying marketing objectives and the broad focus for achieving them. At the next level, market targets (both customers and competitors) are selected and/or identi ed. At the same time the companys differential advantage, or com-petitive edge, in serving the customer targets better than the competition is de ned. Taken together the identi cation of targets and the de nition of differential advantage constitute the creation of the competitive positioning of the organization and its offerings. At the implementation level a marketing organization capable of putting the strategy into practice must be created

Establishing Core Strategy To establish the core strategy requires a detailed analysis of both the resources available and the market in which the organization will operate, both within the context of achieving the overall business purpose or mission.

For analysis of markets served, it helps focus on opportunities and threats for a company that come from both the customers and competitors (ch.4, ch.5), market segmentation helps provide insights into customer requirements. In computers, for example, there are several ways in which the total market could be segmented. A simple, product-based segmentation is between mainframe, mini-computers and PCs. IBM has long dominated the mainframe market. Recognizing the dif culties in tackling such a giant head-on, competitors sensibly focused their efforts on the minicomputer market.

Competitive Positioning Positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Positioning is done to achieve objectives of core strategy.

How to achieve competitive positioning? First is choosing target market. An attractive market would be a large market, growing, its contribution margins are high. Competitive rivalry is low, there is high entry and low exist barriers, and the market is not vulnerable to uncontrollable events.

Second is by differential advantage, which can be created with companys strength or distinctive competencies differential advantage could be through cost leadership or differentiation (Ch,11 Generic Routes).

CH.3

External Analysis PEST analysis is a management tool used for external environment analysis. By analyzing Political, Economic, Social, Technological factors that might affect a company. In order to react correctly to the changes that occurs. Political Involves the actions of the government in economy. Such as tax policy, labor law. Some laws may prevent production of certain goods. Economic Includes changes interest and exchange rate, inflation. Where interest rate affects the cost of capital of a company. And exchange rates affect the cost of exporting and price of importing goods. Social Includes the changes population growth rate, age distribution, population health or education, as well as trends in social factor affect the demand for a product, same way for changes in fashion. Technological The rate of technological changes determines the barriers of entry, for example its so difficult to start a company like Vodafone, mobile and etisalat. Impact of reduction in communication costs, for example people use skype to call people internationally rather than use traditional and expensive call through a phone.

Five Forces of competition Porters five forces of competition is a strategic tool used to analyze the attractiveness of an industry structure. Entry of Competitors How difficult it is for new entrants to compete, what barriers exist in the industry? For example barriers for entry of making a restaurant is low. Patents and branding fall into this category Threat of substitutes The chance that a product can be substituted, especially when substitute is cheaper. For example email had an impact an postal service, Bargaining power of buyer Buyers are people who create demand in an industry. How strong is the position of buyers? The bargaining power is higher when there are standardized products and many sellers. Buyers can work together to order large Bargaining power of supplier Suppliers supply raw materials for the industry. If there are few suppliers then their bargaining power is high. Sometimes conflicts occur between suppliers and a company, thats why for example KFC Rivalry among existing players Is there strong competition among existing players, is there a certain player who is dominant? Or all players are equal in size and strength? If cost of exist is high , this would result more rivalry

volumes to squeeze a companys profit margin

has its own farms. To avoid issues for supplying.

Space Matrix (Strategic Position and action evaluation matrix) A management tool that focuses of strategy formulation especially as related to competitive advantage. The outcome of this matrix is 1 out of 4 quadrants, each suggests a different strategy. 1- Aggressive (if space matrix for a company advices it should follow aggressive tactics, this means that company has a strong competitive position in market, and it should develop market penetration, product development, acquisitions, and so on.) 2- Conservative ( are Companies in mature market, they should seek to defend their existing product to ensure a continued ash flow and in the mean time they should seek new market opportunities) 3- Defensive (are vulnerable companies, they need to foster resources by operating efficiently and be prepared to retreat from competitive markets) 4- Competitive (are companies in an attractive industry but they need more financial resources to maintain their competitive position)

To determine the outcome shown in space matrix for a firm, an analysis is done for 2 external (environmental stability, industry strength) and 2 internal (financial strength, competitive advantage) strategic dimensions 1- Financial strength analysis includes the return on investment, liquidity of a company, cash flow, working capital

2- Competitive advantage includes the speed of innovation, product quality, and customer loyalty. 3- Environmental Stability involves inflation rate, Technological advancements, demand and elasticity, Taxation condition (Very Similar to PEST) 4- Industry analysis involves barriers to entry, growth potential of industry.

Advantage Matrix Is a strategy model created by a famous consulting firm known as BCG. This model looks at 2 factors, the number of different approaches to competitive advantage available, and the potential size of competitive advantage. This model gives a good feeling about best strategy and the likely profits, but it doesnt show any feel for the cash flow. The results of this model are one of four categories: 1- Stalemate (few advantages available, and they are small) (example : textile business, shipbuilding)(strategies involved is reducing factor costs, by moving to areas/countries where costs are low) 2- Volume (few advantages but they are large) (there are high economies of scale, which allows organizations to become the volume and cost leader.)(Examples: Volume cars, software, electronics) 3- Fragmented (many advantages but are small)(organizations gain benefit from differentiation)(example: restaurants)(therefore innovation strategies work well in this category) 4- Specialized (many advantages that can be large)(business gain benefits from economies of scale and differentiation, its main strategies are focus, and segment leadership.(examples: branded food)

Ch.4 The more information a company has about customers, the better they can serve them, there are key questions for understanding customers; what are their choice criteria? Why do they buy a certain product? Where do they buy it? And son on Marketing research Commercial research organizations will conduct studies for clients that cost at least 2000 sterling pounds, depending on the research, o The starting point for gathering marketing data is through the effective use of companys records. The data obtained can be used for marketing decisions. The value of data relies on how well it was collected in the first place; therefore its best to collect data on a routine and detailed basis .company records includes sales records and accounts records. Where sales records could be used to determine or identify the product life cycle. Sales records should be kept by customer customer type, product, product line, sales territory, detailed time of purchase. Therefore aqueduct sales records should reveal frequencies of purchase. TESO, a British super market (something like awlad ragab, but 100x better XD) uses its loyalty card (club card) in order to build profile of its customers, and know how they think. o Second step is to design a tailor made research, which could be quantitative research or qualitative research. 1- Qualitative is research based on opinion and judgment, such as unstructured, semi structured in depth interviewing , group discussions among 7-9 respondents along with a group leader to ensure that discussion does not deviate from its purpose. Qualitative research helps provide insights to the problem, generate more ideas, hear customer description of things, getting reactions to new ideas.

2- Quantitative research includes surveys, observation, and Experiments. Surveys could be 3 types: personal interview (face to face), Telephone Interview, and postal surveys by sending selfcompletion questionnaire to respondents. (we took it in dissertation , so relate to it). Survey helps determine customer behavior, determine requirements and expectations, determine customers opinions, provide data for segmentation of markets. Observation would be useful when respondents seem unwilling to give answers (observation example: observing shopper behavior in malls). Experimentation can be carried on field on in labs. for example test market(field) for a new product in a limited geographic area and test their reactions before officially launching it.for example Cadbury flake made a marketing test, results were good at first until suddenly sales dropped because customers found that the product is too messy. Overall experimentation helps estimating market potential, establish causation, test elements of strategy, test customer reactions to alternative strategies.

Off the Peg: research involves tapping into existing research

services, and using existing data. There are 3 types of off peg research according to crouch, first is research of very large body of already published data (aka desk/secondary research), second is research using available data from regular market surveys from syndicated research, third is use of research instruments such as omnibus surveys.

CH 5

Competitor analysis is an assessment of the strength and weakness of current and potential competitors. It provides offensive and defensive strategic context. (Ch.11). basically companies should know what customers want or care about or whats important to them, such as price, quality, and safety. And based on these information we compare against competitors who best deliver these criteria.

Competitive benchmarking is a process of measuring your companys strategies and operations against best in class companies both inside and outside your own industry in order to identify the best practices that can be adopted to improve the performance. There are 4 steps for benchmarking 1- Identify who to benchmark against (industry leaders are obvious firms to compare with) (Xenon wanted to improve its order processing so it benchmarked against LL beans) 2- Identify aspects of business to bench mark (all aspects of business across the complete value chain are candidates, the initial focus would be on the processes that account for cost, customer satisfaction) 3- Collect data relevant to enable processes (from public sources like company reports. And data sharing which takes place in conferences. and data interview from customers, industry experts) 4- Comparison with own process (final stage, where a comparison is made between a firms own process against the identified best in class to identify the actions needed to take place)

Components of Competitor analysis

1- Asses competitors current & future objectives (understanding what the competitor is setting out to achieve, can give a clue on the direction to be taken and aggressiveness with which it will pursue that direction) a- What are they trying to achieve? b- Why are they trying to achieve it? c- Are they satisfied with their achievements? 2- Asses competitors current strategy (this can identify opportunities and threats rising from competitors) a- What target market are they pursuing? b- What is their strategic focus? (their competitive advantage) (Ch.2) c- What marketing mix do they use? (4Ps) d- How do they organize their marketing? 3- Asses competitors resource profile(the assets and capabilities of competitors , gives us an idea of what they are currently able to do) a- How is their financial resource? b- How is their production and operation capability? c- How is their marketing assets? (Ch.6) 4- Predict competitors future strategy (by combining the above analysis, we could predict the firms actions in the future) a- How will competitors react to our actions? b- What underutilized resources do they have?

CH 6 Companys resources and capabilities must change regularly to fit with market needs. Companys should create value to customers by either having a product leadership, developing customer intimacy, or having operational excellence (trying to be better in what they do)

Resources could be tangible such as: money, vehicles, shops, equipment They could be intangible like: brand, skills, experience. Companies must make use the best of their resources to create a competitive advantage,

RBV (Resource Based View) is a management tool used to determine the strategic resources available to the company. It explains its ability to deliver competitive advantage; basically it is a reality check is it possible to create things with current resources?

Dynamic Capabilities: the capacity for an organization to create, extend or modify its resource base. This view recognizes that as markets change, and become more globally integrated, more forms of competition emerge, new technologies are employed, and thus firms cannot rest on their existing capabilities alone. Some researchers suggested that dynamic capabilities are idiosyncratic and highly dependable on the specific firm market context.

Creating Marketing assets: are resources, normally intangible, that can be used to take advantage. A variety of company properties can be converted into marketing assets. 1- Customer based assets: are assets valued by current or potential customers, such as the reputation of the company, like SONY, they have high reputation for quality. Another thing is country of origin like the Coffee where Colombia is the best country that has premium coffee beans. 2- Supply Chain Assets. Involves the manner in which a product/service is conveyed to the customer. It includes distribution network for example Vodafone where you can pay bills for several places in Cairo. The delivery leads time such as McDonalds as they claim to have fastest delivery in Egypt. 3- Internal marketing support assets, such as cost advantages where using up to date technology and achieving better capacity utilization can be

translated into lower prices for products. Information system is another asset that keep the company informed about its customers and competitors 4- Alliance based marketing assets: where assets could be held by a firm or through an alliance or partnership. Such as exclusivity where partnerships create monopolistic conditions just like the relationship between McDonalds and coca cola as it denies access to outlets for other cola producers. Developing marketing capabilities are the processes that deploy marketing assets. They are the ability to implement marketing mix activities such as promotions, price deals. One of main operational marketing capabilities are: 1- Product and service managements: marshaling all resources to deliver customer value. For example Mercedes cars are positioned as luxury vehicle. 2- Advertising and promotion: it includes sponsorship, the same way large companies sponsor football team. Managing communication process and campaigns are important marketing capabilities. 3- Distribution: the ability to employ existing channels or develop new methods. The logistics can be critical issue. For example amazon has the ability to accurately and consistently deliver goods bought online to customers though agents like FedEx 4- Pricing: it is a difficult decision, because if prices are high the sales can be low and firm may not be able to survive. (Ch.12 Price Consideration)

Dynamic Marketing Capabilities the ability to create new resources in changing markets, to respond to change. there are 3 types:

1- Absorptive capabilities: are processes that enable firms to recognize the value of new information from the market. The capacity for understanding whats happening in external environment with respect to demand, customers, and competitors are essential to design a strategy in changing market. In addition to that, learning process enable firms to have long term competitive advantage and essential for surviving in dynamic environment. 2- Adaptive Capabilities: centre on the firms ability to identify and capitalize on emergence marketing opportunities. Alternative opportunities could be identified could be done if company has market target and market positioning capabilities, 3- Innovative marketing capabilities: the ability to innovate and develop the next generation of goods. It requires a good R&D department.

CH 8 Market Segmentation: how marketers divide the market into groups of similar customers, where there are important differences between those groups. Segmentation is important because the resources rely on it, if a company does not have enough resources (money, capital), the it should not serve a large segment. After segmentation comes choice of target markets (evaluating the attractiveness of different market segments, parts of segments, and choosing which should be targets for our marketing. After Choice of Target Market Comes Positioning the essential principle of competitive positioning is that it is concerned with how customers in different

parts of the market perceive the competing companies (in UK the major grocery retailing include Tesco, and Asda. Positioning is based on those identities) or products/services (positioning applies to the level of product) or brands (positioning is most frequently discussed in terms of brand identities such as coca cola vs. Pepsi) Segmenting in consumer markets vs. Segmenting in Business markets Segmenting in consumer market Three variables are used in segmenting: Segmenting in business market Three variables are used in segmenting: 1- Company Background includes industry type, company size (small companies have different needs than larger ones, size has a significant impact
(thats what she said: D sorry I

1- Customer background which

includes the Gender (m/f), Age, geographic location (some companies want to market only locally), subculture (based on racial, ethnic religious similarity), the income levels of people, peoples occupations (manager? Skilled worker? Unemployed?), their social class(upper, middle lower class), lifestyle of people (involves 3 elements, 1- activity like sports, hobbies, 2- interaction with other like self-perception, 3- opinions about political, technological, environmental issues. ), family life cycle (single? Couple with no children? Old married couple? )

had to say it xD),

on issues like

average order size.), customer location (has an impact on sales, distribution costs. Product preferences may differ by location internationally). 2- Attitude segmenting business on the basis of benefits being sought by the purchasers, for example the urgency for of a customers need to keep a plant in operation may change both purchase process and criteria used.

2- Customer attitude by studying

perception and preferences (focusing on identifying segments of respondents who view products in a similar way) and examining the benefits sought by customers (it could be applied in banking, where

people seek higher interest rates). The drawbacks of this technique it that it requires costly primary research and complicated data analysis techniques.

3- Behavioral business goods market can be segmented by buyerseller similarity (comparability in technology and size are good ways to distinguish between customers), buyer risk perception (the personal style of the individual, self-confidence may provide leverage), the product volume (identifying the major purchasers for products through volume purchased can be useful, in paint market for example the ultimate product use dictates the type of paint and its properties and is a basic method for segmentation)

3- Customer Behavior by studying

purchase behavior (Volkswagen used loyalty to segment customers into: first time buyers and replacement buyers), study the use of elasticity (of response change in marketing mix variables is a basis for segmentations however there could be methodological problems when identifying responsiveness to change) , Communication Behavior (markets could be segments based on information seeking behavior, where information seekers is an attractive segment for companies who base their strategies on promotional material with heavy information content) Benefits of Segmenting market

1- A useful approach for smaller companies. It allows target market to be matched with competencies (ch.6 RBV) 2- Identifies gaps in the market (unserved segments) which can serve as target for new product development 3- In declining market, it is possible to identify certain segments that are growing

4- Allows marketer to match product/service closer to needs of target market, thus improving the competitive position.

CH 10 Factors to determine market segment attractiveness 1- Market Factors : includes the size of the segment (high volume markets offer greater potential for sales expansion), Segment growth rate (cola market has declined in some western areas, so its less attractive), predictability( the more predictable the market, the less prone it is to turbulence) , bargaining power of supplier (when buyers have the higher power, the segment is less attractive) 2- Economic and Technical Factors: includes barriers to entry(markets that have substantial barriers to entry like technology and high switching costs is attractive for incumbents, & unattractive for aspirants),barriers to exist (if it is high, it will be less attractive because companies can be locked into uneconomic positions) bargaining power of supplier (if there is monopoly in supply, market is less attractive) 3- Competitive factors: includes competitive intensity (is market dominated by one monopoly? or few oligopoly like mobinil, Vodafone or none?aka perfect competition, which requires many small players, with standardized products) , threat of substitution (the increasing rate of technology will make it more probable that the products will be become substituted) 4- General Business Environment includes exposure to economic fluctuations (some markets are more vulnerable than other, in new Zealand, the wool export industry was badly affected in 1990s), exposure to political and legal factors ( the more prone to political, legal factors, the less attractive, unless those factors affect companies positively),

Degree of regulation (less regulated market, results more freedom in its actions, however the more regulation can be beneficial for some , for example, the protection of European car manufactures from Japanese car imports by quota)

Determining Current and Potential Strength now we reached to a point where we want to know how can the resources, capabilities, competencies can be deployed in a certain market/segment. We should divide the this evaluation into 3 issues 1- Current Market Position includes the relative market share (higher share = better performance in serving customer needs, the market share also can confer an advantage in further penetrating the marking such as high share brands), Exploitable marketing resources (in target markets, where marketing assets have potential for further exploitation, the company has potential strength from which to build), Unique products/services ( superior products has a potential for stronger competitive position) 2- Economic and Technological Position includes relative cost decision (low relative production costs, trough technological leadership, gives the financial edge to a company in a certain market), Technological

position (matching technology to customers requirements is important) 3- Capacity profile includes management strength (the more skilled the working staff are, the more opportunities can be exploited, the skills of managers is important for service organizations like consultancy companies), Forward and backwards integration (the level of control of supply of raw materials backward integration and the level of control in distribution channels forward can affect the strength of a company in serving a target)

Ch. 11

Using organizational resources to create a sustainable competitive advantage the characteristics of resources should be 1- Contribution to creating customer value (value creation maybe direct through better service, brand reputation, and could be done indirectly like effective cost controlling systems.)The value of resource in creating customer value should be assessed relative to the resources of competitors, for example a strong brand name like Nike may convey more value to customers than a less known sporting brand. 2- Uniqueness (for an advantage to be sustainable, the rarity of resources used must be sustained over time) 3- Inimitability (even if resource are unique, there is chance that they can be imitated or substituted) there are some resources that cant be imitated like unique location , some resources are hard to imitate like customer loyalty , other resources are easy to imitate like unskilled workforce, machinery)

Generic Routes to competitive advantage Porter has identified 2 main routes in creating a competitive advantage Cost leadership There are several factors that affect organizational costs, the factors are known as costs drivers 1- Economies of Scale (single most effective cost driver, it refers to the cost advantages that an enterprise obtains due Differentiation Several factors affect differentiation are known as uniqueness drivers, they are: 1- Product Differentiation products can be seen at 4 levels; 1- core offer (the differentiation here can be by developing new ways

to expansion. It makes the average cost per unit decrease as output increase. It affects the manufacturing sector more than the service sector. Sources f it can be from bulk buying of materials through long term contract or spreading the cost of advertising over greater range of output in media markets) 2- Experience further cost reductions could be done by hiring experienced staff and be enhanced with training. 3- Location (geographic locations to take advantage of lower distribution, assembly, raw materials cost 4- Policy Choices Decisions regarding product or product line affect the cost. However the general rule is to reduce cost but not to significantly affect valued uniqueness and invest in technology to achieve low cost process automation

of delivering the basic benefits) 2- the expected offer ( differentiation here can be done by improvements in features like warranties, packaging) 3augmented offer (differentiation here could be new benefits not normally offered like credit facilities) 4- potential offer ( anything else used to differentiate from competitors) 2- Distribution (by having different networks or coverage of a market , like shopping by phone through TV based catalogues) 3- Price differentiation (lower prices is a differentiation that is appropriate for companies who have cost advantage) 4- Promotional (using different message with normal media advertising. For example most beer ads are promoted by showing a group of people having fun. However Heineken ads added humor to the ads and a caption in its ad.

Sustaining a Competitive Advantage The most important way in creating defensible positions are:

1- Unique and valued Products (which stems from employing superior technology, utilizing superior raw materials . however unique products do not stay forever, therefore companies should innovate continually) 2Clear definition of target markets to keep the products valued, monitoring of customers, understanding who they are, and how to access them are required. 3- Enhanced customer Linkages (by creating closer bonds with customers through enhanced service , creating switching costs makes it less likely to shop around for other sources of supply) 4- Established Brand Credibility (Brand reputation are among the most defensible assets a company assets, thats why customers all over the world prefer Nike, Mercedes, SONY, Rolex. As they want to buy the maker not the product.

Offensive and Defensive strategies Offensive Includes but not limited to: 1- Frontal Attack a direct attack, meeting competitors with the same product line, price, promotion. It focuses on attacking the competitors strength, therefore this is very risky. 2- Flanking Attack attacking the weak points in the competitors defense. It is achieved by attacking geographic areas where the competitor is under Defensive Includes but not limited to: 1- Position Defense static defense of current position, retaining current product markets by increasing barriers to copy and entry. This can be achieved using differentiation. 2- MobileDefence it is achieved by continually updating companys offering to the market place, same way Persil in UK was successful by constant attempts to keep the product line with changing

presented.

customer requirements

CH 12 Product choice Criteria to understand why people choose certain products over other, 2 main sets should be distinguished the rational & overt and Emotional & Covert o

Emotional reasons could be purchasing goods based on the

reassurance that a well-known brand can bring. Or choosing a product because it fits the life style of a customer, or it expresses his/her identity, that why some people spend thousands of dollars on a Rolex. Some people only fly by planes even if the trip is very short because they feel that its not in their nature to travel by car like normal people. More in depth quantitiave and projective research is used to uncover the emotional & covert motivations

Rational is when customers makes comparison of perceived

benefits, for example people might consider traveling by car rather than a plane, due to comparison of costs involved). Quantitate market research is used to uncover the rational decisions.

However most purchases are combination of rational and emotional , the balance between the 2 will vary among brands,

thats why marketers need to understand that balance for their market,

Diffusion of Innovation the rate of diffusion in any innovation depend on a number of factors: 1- Relative advantage of innovation over previous solutions 2- The comparability of innovation with existing values 3- A lack of complexity in innovation 4- Divisibility to facilitate trial 5- The communicability of advantages of innovation.

According to roger there are 5 adopter groups: 1- Innovators the first to adopt a new technology or product, they are technology enthusiasts, they wish to be up to date, however some innovations fail because they are technology driven and not meeting the real needs of a customer. (relate to CH 1 marketing Concepts) 2- Early Adopters are similar to innovators, but often demonstrate a more visionary reason for adopting new technology. For example Jeff Bezos at Amazon.com saw the use of internet as a new way for retailing books and other products.

3- Early Majority are more pragmatic than early adopters, they are
more likely to see the incremental possibilities for improvement. They are efficiency driven for example, using internet technology to improve an aspect of supply chain efficiency.

4- Late majority are conservatives who often adopt technology, because others in market have done so, and fear being left behind. 5- Laggards are sceptics who dont really see the potential for new technology, and will attempt to resist adoption.

Pricing Consideration: the factors that need to be taken into account for setting price levels are: 1- Production costs (simplest pricing method used, the less the production costs, the less the prices, thus sufficient quantities are sold, and a given level of profitability is ensured.) 2- Competitor price level (if 2 product having similar characteristics, the choice determinant for customers would be price, thus firms may either set price higher than competitor (signal for superior quality) or setting price the same as competitor or lower to attract customers) 3- Price Elasticity which is the responsiveness in demand when prices change. It is calculated by the percentage of change in demand divided by percentage of change in price. If demand is elastic (percent change in demand is higher than percent change in price) and the company increases the price, the quantity will fall significantly thus the total revenue would fall even though the price was higher. Inelastic demand means that the percentage of change In price is lower, thus if companies increase the price, the quantity of purchased products will decrease a little but overall the revenue will go higher.

4- Corporate objectives (does the company want to harvest? Or maximize profit? Which would indicate marginal cost pricing. Relate this to CH.1 in corporate strategy.

People

The Use of extended marketing Mix (additional 3ps) Processes Refers to the systems involved in delivering the product/service CRM (customer relationship management) cover all methods used by companies to manage their relationships with customers. An effective CRM system should help organizations to acquire customers, build closer relationships with them, provide better customer service Physical Evidence Refers to elements within store. For example when you go to Pull and Bear, the Clothing store that has a branch in City Stars. Unlike traditional clothing stores, Pull and Bear deliberately plays music inside the store that is of interest for customers of their target segment, also the effect of lighting on the mood.

Refer to the employees of a company. There are certain strategies in for staffing. 1- Job design and

description: by
having a clear idea of job role and tasks needed to be done 2- Selection: selecting the best candidate for a job. In nightclubs, if a bouncer needed to be hired then the job description will be the ability to defend himself and others and keep trouble outside the night club 3- Training: even if employee is very skilled, additional training is

important as well to ensure skills are maintained and enhanced. 4- Appraisal: monitoring and giving feedback to staff on their performance. In order to avoid certain mistakes.

CH 13 What are the Pressures and Spurs (Stimuli) for Innovation Basically what are the reasons to innovate? o They include the Internal Pressures to exploit existing and new technologies, with the desire to use organizational resources, assets and capabilities as effectively as possible. o External Pressures include the push from intense competition, increasingly demanding customers, and the technological drive of shortening product life Cycle

The new product development process 1- Idea Generation(finding novel ideas that come out of inspiration . a company may facilitate the generation of new ideas by creating an environment that will induce and facilitate creativity) 2- Screening (selecting the best idea) screening could be based on initial screen where new idea may hit a legal, technical, marketing barrier. Another way of screening is formalized screening, where new ideas are

evaluated logically and within a systematic structure, and it is less impressionistic than initial screening. 3- Business analysis (considers the attractiveness of the market for the proposed idea)(evaluating if sales, cost, and profit projections satisfy the companys objectives) 4- Product development (at this stage R&D convert the idea into a physical product)(developing a product prototype is in this stage)

5- Market testing Techniques used are simulated sale using carefully selected
customers and a full test market in one or more regions of a country. It is useful for forecasting new product sales, and tests effectiveness of marketing plan 6- Commercialization (most new products fail because marketing launch strategy was poorly executed)

Want more things to study? You are too smart? Dont think the content is not enough? Difference between radical, rational, robust strategies Components of market orientation Strategic fit Strategic focus Industry evolution Environmental turbulence Choosing good competitors Resource portfolio Alternative marketing strategy Product life cycle and how to integrate the 4ps in it Causes of new product failure