Marketing Management
Fifteenth Edition
Chapter 13
Setting Product
Strategy
Copyright © 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Learning Objectives (1 of 2)
13.1 What are the characteristics of products,
and how do marketers classify product?
13.2 How can companies differentiate
products?
13.3 Why is product design important, and
what are the different approaches taken?
13.4 How can marketers best manage luxury
brands
13.5 What environmental issues must
marketers consider in their product
strategies?
13.6 How can a company build and manage
its product mix and product lines?
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Learning Objectives (2 of 2)
13.7 How can companies combine products
to create strong co-brands or ingredient
brands?
13.8 How can companies use packaging,
labeling, warranties, and guarantees as
marketing tools?
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Product Characteristics and
Classifications
• Product
– Anything that can be offered to a market to satisfy a want
or need, including physical goods, services, experiences,
events, persons, places, properties, organizations,
information, and ideas
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Figure 13.1 Components of the
Market Offering
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Product Levels: The Customer-Value
Hierarchy
Figure 13.2 Five Product Levels
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Product Classifications
• Durability
• Tangibility
• Use
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Durability and Tangibility
• Nondurable goods
• Durable goods
• Services
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Consumer-Goods Classification
• Convenience
• Shopping
• Specialty
• Unsought
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Industrial-Goods Classification
• Materials and parts
• Capital items
• Supplies and business services
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Product Differentiation
• Form
• Reliability
• Features
• Repairability
• Performance quality
• Style
• Conformance quality
• Customization
• Durability
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Services Differentiation
• Ordering ease
• Delivery
• Installation
• Customer training
• Customer consulting
• Maintenance and repair
• Returns
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Design (1 of 2)
• Design
– The totality of features
that affect the way a
product looks, feels,
and functions to a
consumer
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Design (2 of 2)
• Is emotionally powerful
• Transmits brand meaning/positioning
• Is important with durable goods
• Makes brand experiences rewarding
• Can transform an entire enterprise
• Facilitates manufacturing/distribution
• Can take on various approaches
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Luxury brands
• Quality
• Uniqueness
• Craftsmanship
• Heritage
• Authenticity
• History
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Marketing Luxury Brands
Table 13.1 Guidelines for Marketing Luxury Brands
1
Maintaining a premium image for luxury brands is crucial; controlling that image is thus a priority.
2
Luxury branding typically includes the creation of many intangible brand associations and an
aspirational image.
3
All aspects of the marketing program for luxury brands must be aligned to ensure high-quality products
and services and pleasurable purchase and consumption experiences.
4
Besides brand names, other brand elements—logos, symbols, packaging, signage—can be important
drivers of brand equity for luxury products.
5
Secondary associations from linked personalities, events, countries, and other entities can boost
luxury-brand equity as well.
6
Luxury brands must carefully control distribution via a selective channel strategy.
7
Luxury brands must employ a premium pricing strategy, with strong quality cues and few discounts
and markdowns.
8
Brand architecture for luxury brands must be managed carefully.
9
Competition for luxury brands must be defined broadly because it often comes from other categories.
10
Luxury brands must legally protect all trademarks and aggressively combat counterfeits.
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Environmental Issues
• Environmental issues are also
playing an increasingly
important role in product
design and manufacturing
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The Product Hierarchy
1. Need family
2. Product family
3. Product class
4. Product line
5. Product type
6. Item
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Product Systems and Mixes
• Product system
• Product mix/assortment
–
–
–
–
Width
Length
Depth
Consistency
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Product Line Analysis (1 of 2)
• Sales and profits
Figure 13.3 Product-Item Contributions to a Product Line’s Total Sales and Profits
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Product Line Analysis (2 of 2)
• Market profile and image
Figure 13.4 Product Map for a Paper-Product Line
Source: Benson P. Shapiro, Industrial Product Policy: Managing the Existing Product
Line (Cambridge, MA: Marketing Science Institute Report No. 77–110). Copyright © 2003.
Reprinted by permission of Marketing Science Institute and Benson P. Shapiro.
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Product Line Length
• Line stretching
– Down-market stretch
– Up-market stretch
– Two-way stretch
• Line filling
• Line modernization
• Line featuring
• Line pruning
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Product Mix Pricing
• The firm searches for a set of prices that maximizes
profits on the total mix
–
–
–
–
–
–
Product line pricing
Optional-feature pricing
Product-bundling pricing
Captive-product pricing
By-product pricing
Two-part pricing
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Co-Branding
• Two or more well-known brands are combined into a
joint product or marketed together in some fashion
‒
‒
‒
‒
Same-company
Joint-venture
Multiple-sponsor
Retail
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Ingredient Branding
• Co-branding that creates brand equity for parts that
are necessarily contained within other branded
products
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Packaging (1 of 3)
• All the activities of designing and producing the
container for a product
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Packaging (2 of 3)
Used as a marketing tool
Packaging objectives
• Self-service
• Identify the brand
• Consumer affluence
• Convey descriptive and
persuasive information
• Company and brand
image
• Innovation opportunity
• Facilitate product
transportation and
protection
• Assist at-home storage
• Aid product consumption
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Packaging (3 of 3)
Table 13.3 The Color Wheel of Branding and Packaging
Red symbolizes excitement, energy, passion, courage, and being bold.
Orange connotes friendliness and fun. It combines the energy of red and the
warmth of yellow.
Yellow, as the color of the sun, is equated with warmth, joy, and happiness.
Green, as the color of nature, connotes health, growth, freshness, and renewal.
Blue, as the color of the sky and sea, is associated with dependability, trust,
competence, and integrity.
Purple has symbolized nobility, wealth, and wisdom. It combines the stability of blue
and the energy of red.
Pink is considered to have soft, peaceful, comforting qualities.
Brown, as the color of the earth, connotes honesty and dependability.
Black is seen as classic, strong, and balanced.
White connotes purity, innocence, and cleanliness.
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Labeling, Warranties, and Guarantees
• Labeling
– Identifies, grades, describes, and promotes the product
• Warranties
– Formal statements of expected product performance
by the manufacturer
• Guarantees
– Promise of general or complete satisfaction
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Copyright
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Marketing Management
Fifteenth Edition
Chapter 15
Introducing New
Market Offerings
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Learning Objectives (1 of 2)
15.1 How can new products be
categorized?
15.2 What challenges does a company
face in developing new products and
services?
15.3 What organizational structures and
processes do managers use to oversee
new-product development?
15.4 What are the main stages in
developing new products and services?
15.5 What is the best way to manage the
generation of new ideas?
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Learning Objectives (2 of 2)
15.6 What is the best way to manage
concept and strategy development?
15.7 What is the best way to manage the
commercialization of new products?
15.8 What factors affect the rate of
diffusion and consumer adoption of newly
launched products and services?
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New-Product Options
• Buy other companies
• Buy patents from other
companies
• Buy a license or franchise
from another company
• New-to-the-world items
• Improvine existing
products
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Challenges in New-Product
Development
• The innovation
imperative
– Continuous innovation
is a necessity
• New-product success
– Incremental innovation
vs. disruptive
technologies
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New-Product Failure
• Fragmented markets
• Social, economic, and
government constraints
• Shorter development
time
• Poor launch timing
• Development costs
• Shorter PLCs
• Capital shortages
• Lack of organizational
support
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Organizational Arrangements
• Budgeting for New-Product Development
Table 15.1 Cost of Finding One Successful New Product (Starting with
64 New Ideas)
Stage
Number of
Ideas
Pass
Ratio
Cost per Product
Idea
Total Cost
1. Idea screening
64
1:4
$1,000
$64,000
2. Concept testing
16
1:2
20,000
320,000
3. Product
development
8
1:2
200,000
1,600,000
4. Test marketing
4
1:2
500,000
2,000,000
5. National launch
2
1:2
5,000,000
10,000,000
Blank
Blank
$5,721,000
$13,984,000
Blank
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Organizing New-Product Development
• New-product development concepts
–
–
–
–
–
–
New-product department
Venture teams
Stage-gate systems
Skunkworks
Crowdsourcing
Communities of practice
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Figure 15.1 New-Product Development
Process
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Generating Ideas
• Interacting with employees
• Interacting with outsiders
• Studying competitors
• Adopting creativity
techniques
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Ways to Find New-Product Ideas
• Informal customer
sessions
• Iterative rounds with
customers
• Time off for technical
people to putter
• Keyword search to
scan trade publications
• Customer brainstorming
• Treat trade shows as
intelligence missions
• Survey your customers
• “Fly on the wall” research
• Have employees visit
supplier labs
• Set up an idea vault
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Ways to Draw New Ideas from
Customers
• Observe customers using product
• Ask customers about product problems
• Ask customers about dream products
• Use customer advisory board
• Use Web sites
• Form brand community of enthusiasts
• Challenge customers to improve product
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Adopting Creativity Techniques
• Attribute listing
• Forced relationships
• Mind mapping
• Morphological analysis
• New contexts
• Reverse-assumption analysis
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Figure 15.2 Forces Fighting New
Ideas
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Using Idea Screening (1 of 2)
Table 15.2 Product–Idea Rating Device
Product Success
Requirements
Relative
Weight (a)
Product
Score (b)
Product Rating
(c = a × b)
Unique or superior product
.40
.8
.32
High performance-to-cost
ratio
.30
.6
.18
High marketing dollar
support
.20
.7
.14
Lack of strong competition
.10
.5
.05
Total
1.00
Blank
.69
a Rating scale: .00–.30 poor; .31–.60 fair; .61–.80 good. Minimum acceptance rate: .61
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Using Idea Screening (2 of 2)
• The company can monitor and revise its estimate of
the product’s overall probability of success, using the
following formula:
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Concept to Strategy (1 of 6)
• Concept development
– Figure 15.3(a): product-positioning
map
– Figure 15.3(b): brand-positioning
map
Figure 15.3 Product and Brand Positioning
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Concept to Strategy (2 of 6)
• Concept testing responses
–
–
–
–
–
–
Communicability and believability
Perceived value
Need level
Purchase intention
Gap level
User targets, purchase occasions and frequency
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Concept to Strategy (3 of 6)
• Conjoint analysis
– Deriving the utility values
that consumers attach to
varying levels of a
product’s attributes
Figure 15.4 Samples for Conjoint Analysis
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Figure 15.5 Utility Functions in
Conjoint Analysis
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Concept to Strategy (4 of 6)
• Marketing strategy development following a
successful concept test
1. Target market’s size, structure, and behavior; the planned
brand positioning; the sales, market share and profit
goals in first few years
2. Planned price, distribution strategy, and marketing budget
for the first year
3. Long-run sales and profit goals and marketing-mix
strategy over time
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Concept to Strategy (5 of 6)
• Business analysis
– Estimating total sales
Figure 15.6 Product Life-Cycle Sales
for Three Types of Products
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Concept to Strategy (6 of 6)
• Estimating costs and profits
Table 15.3 Projected Five-Year Cash Flow Statement (in thousands of dollars)
Blank
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
$0
$11,889
$15,381
$19,654
$28,253
$32,491
2. Cost of goods sold
0
3,981
5,150
6,581
9,461
10,880
3. Gross margin
0
7,908
10,231
13,073
18,792
21,611
−3,500
0
0
0
0
0
5. Marketing costs
0
8,000
6,460
8,255
11,866
13,646
6. Allocated overhead
0
1,189
1,538
1,965
2,825
3,249
−3,500
−1,281
2,233
2,853
4,101
4,716
0
0
0
0
0
0
9. Net contribution
−3,500
−1,281
2,233
2,853
4,101
4,716
10. Discounted contribution (15%)
−3,500
−1,113
1,691
1,877
2,343
2,346
11. Cumulative discounted cash flow
−3,500
−4,613
−2,922
−1,045
1,298
3,644
1. Sales revenue
4. Development costs
7. Gross contribution
8. Supplementary contribution
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Development to Commercialization (1 of 4)
• Product development
– Physical prototypes
– Customer tests:
alpha & beta testing
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Development to Commercialization (2 of 4)
• Market testing
– Consumer-goods market
testing
– Business-goods market
testing
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Methods of Consumer-Goods Market
Testing
• Sales-wave research
• Simulated test marketing
• Controlled test marketing
• Test markets
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Development to Commercialization (3 of 4)
• Commercialization: When (Timing)
• First entry
• Parallel entry
• Late entry
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Development to Commercialization (4 of 4)
• Commercialization
– Where (Geographic
Strategy)
– To Whom (Target-Market
Prospects)
– How (Introductory Market
Strategy)
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The Consumer-Adoption Process
• Adoption
– An individual’s decision to become a regular user of a
product
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Stages in the Adoption Process
• Awareness
• Interest
• Evaluation
• Trial
• Adoption
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Factors Influencing the Adoption
Process (1 of 3)
• Readiness to try new products and personal influence
Figure 15.7 Adopter Categorization on the Basis of Relative Time
of Adoption of Innovations
Source: Tungsten, http://en.wikipedia.org/ wiki/Everett_Rogers. Based on E. Rogers,
Diffusion of Innovations (London: Free Press, 1962)
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Factors Influencing the Adoption
Process (2 of 3)
• Characteristics of the innovation
‒
‒
‒
‒
‒
Relative advantage
Compatibility
Complexity
Divisibility
Communicability
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Factors Influencing the Adoption
Process (3 of 3)
• Organizations’ readiness to adopt innovations
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Copyright
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Chapter
8
Tapping into Global
Markets
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7-1
Competing on
a Global Basis
• Global industry
– Competitors’ strategic positions in major
geographic or national markets are affected
by their overall global positions
• Global firm
– Operates in more than one country and
captures R&D, production, logistical,
marketing, and financial advantages not
available to purely domestic competitors
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7-2
Figure 8.1
Decisions In International Marketing
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7-3
Deciding Whether
to Go Abroad
• Factors that draw companies into the international
arena
– Some international markets present better profit
opportunities than domestic market
– Firm needs larger customer base to achieve
economies of scale
– Firm wants to reduce dependence on any one market
– Firm counterattacks global competitors in home
markets
– Customers going abroad require international service
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Deciding Whether
to Go Abroad
• Before making a decision to go abroad, the company
must also weigh several risks
– Firm might not understand foreign preferences, failing
to offer competitively attractive product
– Firm might not understand foreign country’s culture
– Firm might underestimate foreign regulations and
incur unexpected costs
– Firm might lack managers with international
experience
– Foreign country might change commercial laws,
devalue currency, or expropriate foreign property
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Internationalization Process
Stage 1: No export activities
Stage 2: Export via
independent representatives
Stage 3: Establishment of
sales subsidiaries
Stage 4: Establishment of
production facilities abroad
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Deciding Which
Markets to Enter
• How many markets to enter
Waterfall Approach
Sprinkler Approach
Born Global
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Evaluating
Potential Markets
• Neighboring countries
• Psychic
proximity/cultural
distance
• Fewer countries
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7-8
Succeeding in Developing Markets
• BRICS
– Brazil, Russia, India,
China, and South Africa
• CIVETS
– Columbia, Indonesia,
Vietnam, Egypt, Turkey,
and South Africa
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7-9
Succeeding in Developing Markets
• Brazil
✓ Biggest economy in Latin America
✓ Sixth largest economy in the world
✓ Fifth-largest country of digital users
✓ High cost of transporting products
✓ Crime and corruption exist
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Succeeding in Developing Markets
• Russia
✓ Largest exporter of natural gas
✓ Second-largest exporter of oil
✓ Third-largest exporter of steel/aluminum
✓ Make heavy use of social media
✓ Dwindling workforce/poor infrastructure
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Succeeding in Developing Markets
• India
✓ Lively democracy/youthful population
✓ World’s second most populous nation
✓ One of the youngest large economies
✓ Has fully embraced mobile technology
✓ Poor infrastructure/public services
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Succeeding in Developing Markets
• China
✓ Largest auto market in the world
✓ Emerging urban middle class
✓ World’s top consumer of luxury goods
✓ Fierce competition among foreign firms
✓ Opaque and arbitrary bureaucracy
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Succeeding in Developing Markets
• South Africa
✓ Access point to the African region
✓ Increasing discretionary income
✓ Consumers are brand conscious
✓ Increasing reliance on mobile phones
✓ Logistical/infrastructure problems
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Succeeding in Developing Markets
• Indonesia
✓ Increasing political stability
✓ Increasing economic growth
✓ Largest Muslim country
✓ Consumers are brand conscious
✓ Distribution/infrastructure limitations
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Figure 8.2
Modes of Foreign Market Entry
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Deciding How to Enter the
Market
• Indirect exporting
– Working through independent intermediaries
Domestic-based export
merchants
Domestic-based export
agents
Cooperative
organizations
Export-management
companies
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Deciding How to Enter the
Market
• Direct exporting
– Handling one’s own exports
Domestic-based export
department
Overseas sales branch
Traveling export sales
representatives
Foreign-based
distributors
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7-18
Deciding How to Enter the
Market
• Licensing
– Licensor issues a license
to a foreign company to
use a manufacturing
process, trademark,
patent, trade secret, or
other item of value for a
fee or royalty
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7-19
Deciding How to Enter the
Market
• Joint ventures
– Foreign investors have often joined local
investors in a joint venture company in which
they share ownership and control
• Direct Investment
– The foreign company can buy part or full
interest in a local company or build its own
manufacturing or service facilities
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Deciding How to Enter the
Market
• Acquisition
– Acquiring local brands for their brand portfolio
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Deciding on the Marketing
Program
Advantages
• Economies of scale
• Lower marketing costs
• Power and scope
• Consistency in brand
image
• Ability to leverage good
ideas
• Uniformity of marketing
practices
Disadvantages
• Differences in
consumer needs,
wants, usage patterns
• Differences in
consumer response to
marketing programs
• Differences in brand
development process
• Differences in legal
environment
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Deciding on the Marketing
Program
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7-23
Deciding on the Marketing
Program
• Global similarities and differences
– The Internet, cable and satellite TV, and
global linking of telecommunications networks
have led to a convergence of lifestyles
• Hofstede four cultural dimensions
– Individualism versus collectivism
– High versus low power distance
– Masculine versus feminine
– Weak vs. strong uncertainty avoidance
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7-24
Marketing Adaptation
•
•
•
•
•
•
Product features
Labeling
Colors
Materials
Sales promotion
Prices
•
•
•
•
•
Advertising media
Brand name
Packaging
Advertising execution
Advertising themes
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Marketing adaptation
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Global product strategies
• Product standardization
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Figure 8.3
Product & Communication Strategies
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Global product strategies
• Product invention
– Backward invention: reintroduces earlier
product forms well adapted to a foreign
country’s needs
– Forward invention: creates a new product to
meet a need in another country
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Global Pricing Strategies
• Companies have three choices for setting
prices in different countries
Uniform price everywhere
Market-based price
Cost-based price
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Global Pricing Strategies
•
•
•
•
•
Transfer price
Dumping
Arm’s-length price
Gray markets
Counterfeit products
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GLOBAL DISTRIBUTION
STRATEGIES
• Channel entry
– Figure 8.4: Whole-Channel
Concept for International
Marketing
• Channel differences
– Various distribution
systems
– Size and character of retail
units
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Country-of-Origin Effects
• Mental associations and beliefs triggered by a
country
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7-33
Chapter
7
Analyzing
Business Markets
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7-1
Learning Objectives
1.
What is organizational buying?
2.
What buying situations do business buyers face?
3.
4.
5.
6.
7.
Who participates in the business-to-business buying
process?
How do business buyers make their decisions?
In what ways can business-to-business companies develop
effective marketing programs?
How can companies build strong loyalty relationships with
business customers?
How do institutional buyers and government agencies do
their buying?
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7-2
What is
Organizational Buying?
• Business market
– Consists of all the organizations that acquire
goods and services used in the production of
other products or services that are sold,
rented, or supplied to others
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Business markets
• Fewer, larger buyers
• Close supplier–customer
relationships
• Professional purchasing
• Multiple buying
influences
•
•
•
•
•
Multiple sales calls
Derived demand
Inelastic demand
Fluctuating demand
Geographically
concentrated buyers
• Direct purchasing
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7-4
Buying situations
Straight Rebuy
Modified Rebuy
New Task
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7-5
The buying center
✓ Initiators
✓ Users
✓ Influencers
✓ Deciders
✓ Approvers
✓ Buyers
✓ Gatekeepers
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7-6
Targeting within the Business
Center
• Who are the major
decision participants?
• What decisions do they
influence, and how
deeply?
• What evaluation criteria
do they use?
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7-7
The Purchasing/
Procurement Process
• Business buyers seek the highest benefit
package (economic, technical, service, and
social) in relationship to a market offering’s
costs
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Stages in the Buying Process
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Stages in the Buying Process
• Problem recognition
– Someone in the company recognizes a
problem or need that can be met by acquiring
a good or service
• General need description and product
specification
– Next, the buyer determines the needed item’s
general characteristics, required quantity, and
technical specifications
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Stages in the Buying Process
• Supplier search
Catalog
sites
Vertical
markets
“Pure Play”
auction
Buying
alliances
Private
exchanges
Spot & barter
markets
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E-procurement
• Vertical hubs
• Functional hubs
• Direct extranet links
to major suppliers
• Buying alliances
• Company buying
sites
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Stages in the Buying Process
• Proposal solicitation
– The buyer next invites qualified suppliers to
submit written proposals
• Supplier selection
– Before selecting a supplier, the buying center
will specify and rank desired supplier
attributes
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A supplier-evaluation model
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Supplier selection
• Overcoming price
pressures
– Solution selling
– Risk and gain sharing
• Number of suppliers
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Stages in the Buying Process
• Order-routine specification
– After selecting suppliers, the buyer negotiates
the final order, listing the technical
specifications, the quantity needed, the
expected time of delivery, return policies,
warranties, etc.
• Performance review
– The buyer periodically reviews the
performance of the chosen supplier(s)
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Developing Effective b2b
Marketing Programs
• Communication and
branding activities
• Systems buying and
selling
– Total problem solution
from one seller
(turnkey solution)
• Role of services
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Buyer–supplier relationships
• Basic buying and selling
• Bare bones
• Contractual transaction
•
•
•
•
•
Customer supply
Cooperative systems
Collaborative
Mutually adaptive
Customer is king
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Managing b2b
Customer Relationships
• Risks and Opportunism in Business
Relationships
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Institutional and Government
Markets
• Institutional market
– Schools, hospitals, nursing homes, prisons,
etc. that must provide goods and services to
people in their care
• Government organizations
– Are a major buyer of goods and services in
most countries
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Chapter
6
Analyzing Consumer
Markets
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Learning Objectives
1.
2.
3.
4.
How do consumer characteristics influence buying
behavior?
What major psychological processes influence
consumer responses to the marketing program?
How do consumers make purchasing decisions?
In what ways do consumers stray from a
deliberative, rational decision process?
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What Influences Consumer
Behavior?
• Consumer behavior
– The study of how individuals, groups, and
organizations select, buy, use, and dispose of
goods, services, ideas, or experiences to
satisfy their needs and wants
– Influenced by cultural, social, and personal
factors
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What Influences Consumer
Behavior?
• Cultural factors
– Culture
– Subcultures
– Social classes
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What Influences Consumer
Behavior?
• Social factors
Reference groups
Cliques
Family
Roles and status
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Reference Groups
• Membership groups
– Primary vs. secondary
• Aspirational groups
• Dissociative groups
• Opinion leader
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Family
• Family of orientation vs. family of procreation
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What Influences Consumer
Behavior?
• Personal factors
– Age/stage in life cycle
– Occupation and
economic
circumstances
– Personality and selfconcept
– Lifestyle and values
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Key Psychological Processes
Motivation
Memory
Perception
Emotions
Learning
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Figure 6.1
Model Of Consumer Behavior
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Key Psychological Processes
• Motivation
– A need becomes a motive when it is aroused
to a sufficient level of intensity to drive us to
act
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motivation
Freud’s
Theory
Maslow’s
Hierarchy
of Needs
Herzberg’s
Two-Factor
Theory
Behavior
is guided by
subconscious
motivations
Behavior
is driven by
lowest,
unmet need
Behavior is
guided by
dissatisfiers
and
satisfiers
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Figure 6.2
Maslow’s Hierarchy Of Needs
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Key Psychological Processes
• Perception
– The process by
which we select,
organize, and
interpret information
inputs to create a
meaningful picture
of the world
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perception
Selective attention
Selective distortion
Selective retention
Subliminal perception
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Key Psychological Processes
• Learning
– Induces changes in our behavior arising from
experience
– Drive and cues
– Generalization and discrimination
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6-16
Key Psychological Processes
• Emotions
– Many different
kinds of emotions
can be linked to
brands
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Key Psychological Processes
• Memory
– Short-term vs. long-term memory
– Associative network memory model
– Brand associations
– Memory encoding
– Memory retrieval
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The Buying
Decision Process
• The consumer typically passes
through five stages
– Problem recognition
– Information search
– Evaluation of alternatives
– Purchase decision
– Postpurchase behavior
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The Buying
Decision Process
• Problem recognition
– The buyer recognizes a problem/need
triggered by internal/external stimuli
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The Buying
Decision Process
• Information search
✓ Personal sources
✓ Commercial sources
✓ Public sources
✓ Experiential sources
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Figure 6.5
Sets Involved In Decision Making
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The Buying
Decision Process
• Evaluation of alternatives
– Expectancy-value model
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The Buying
Decision Process
• Purchase decision
– Compensatory vs. noncompensatory models
Conjunctive heuristic
Lexicographic heuristic
Elimination-by-aspects heuristic
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Intervening factors
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Types of perceived risk
Functional
risk
Physical risk
Financial
risk
Time risk
Psychological
risk
Social risk
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The Buying
Decision Process
• Postpurchase behavior
– Postpurchase
satisfaction
– Postpurchase actions
– Postpurchase uses
and disposal
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Figure 6.7
Customer Product Use/Disposal
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Moderating Effects on Consumer
Decision Making
• Low-involvement Consumer Decision Making
• Variety-Seeking Buying Behavior
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Behavioral Economics
• Decision Heuristics
– Availability heuristic
– Representativeness heuristic
– Anchoring and adjustment heuristic
• Framing
– Mental accounting
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