(BQ) Part 2 book Marketing an introduction has contents: Retailing and wholesaling, personal selling and sales promotion, direct, online, social media, and mobile marketing, the global marketplace,... and other contents.
www.downloadslide.net Part 1: Defining Marketing anD the Marketing Process (chaPters 1–2) Part 2: UnDerstanDing the MarketPlace anD cUstoMer ValUe (chaPters 3–5) Part 3: Designing a cUstoMer ValUe-DriVen strategy anD Mix (chaPters 6–14) Part 4: extenDing Marketing (chaPters 15–16) Pricing Understanding and capturing customer Value chaPter roaD MaP objective outline objectiVe 9-1 identify the three major pricing strategies and discuss the importance of understanding customervalue perceptions, company costs, and competitor strategies when setting prices What Is a Price? (264–265); Major Pricing Strategies (265–272) objectiVe 9-2 identify and define the other important external and internal factors affecting a firm’s pricing decisions Other Internal and External Considerations Affecting Price Decisions (272–277) objectiVe 9-3 Describe the major strategies for pricing objectiVe 9-4 explain how companies find a set of prices that maximizes the profits from the total product mix Product Mix Pricing Strategies (278–280) objectiVe 9-5 Discuss how companies adjust their prices to take into account different types of customers and situations Price Adjustment Strategies (280–288) objectiVe 9-6 Discuss the key issues related to initiating and responding to price changes Price Changes (288–291); Public Policy and Pricing (291–293) new products New Product Pricing Strategies (277–278) Previewing the concepts in this chapter, we look at the second major marketing mix tool—pricing if effective product development, promotion, and distribution sow the seeds of business success, effective pricing is the harvest firms successful at creating customer value with the other marketing mix activities must still capture some of this value in the prices they earn in this chapter, we discuss the importance of pricing, dig into three major pricing strategies, and look at internal and external considerations that affect pricing decisions finally we examine some additional pricing considerations and approaches for openers, let’s examine the importance of pricing in online retailing in case you haven’t noticed, there’s a war going on—between Walmart, by far the world’s largest retailer, and amazon, the planet’s largest online merchant each combatant brings an arsenal of potent weapons to the battle for now, the focus is on price but in the long run, it’ll take much more than low prices to win this war the spoils will go to the company that delivers the best overall online customer experience and value for the price www.downloadslide.net First Stop Amazon versus Walmart: A Price War for Online Supremacy “Walmart to Amazon: Let’s Rumble” read the headline Ali had Frazier Coke has Pepsi The Yankees have the Red Sox And now, the two retail heavyweights are waging a war all their own The objective? Online supremacy The weapon of choice? Prices, at least for now—not surprising, given the two combatants’ long-held low-cost positions Each side is formidable in its own right Walmart dominates offline retailing It’s price-driven “Save money Live better.” positioning has made it far and away the world’s biggest retailer, and the world’s largest company to boot In turn, Amazon is the “Walmart of the Web”—our online general store Although Walmart’s yearly sales total an incredible $487 billion, more than 5.3 times Amazon’s $89 billion annually, Amazon’s online sales are 7.5 times greater than Walmart’s online sales By one estimate, Amazon captures a full one-third of all U.S online buying Why does Walmart worry about Amazon? After all, online sales currently account for only about percent of total U.S retail sales Walmart captures most of its business through its 11,000 brick-andmortar stores—online buying accounts for only a trifling 2.7 percent of its total sales But this battle isn’t about now, it’s about the future Although still a small market by Walmart’s standards, online sales are growing at three times the rate of physical-world sales Within the next decade, online and mobile buying will capture as much as a third of all retail sales Because Amazon owns online, its revenues have soared 20 percent or more annually over the past three years Meanwhile, Walmart’s earthbound sales have grown at less than 5 percent a year during that period At that rate, Amazon’s revenues will reach $100 billion within the next year, reaching that mark faster than any other company in history Amazon has shown a relentless ambition to offer more of almost everything online It started by selling only books but now sells everything from books, movies, and music to consumer electronics, home and garden products, clothing, jewelry, toys, tools, and even groceries Thus, Amazon’s online prowess now looms as a significant threat to Walmart If Amazon’s expansion continues and online sales spurt as predicted, the digital merchant will eat further and further into Walmart’s bread-and-butter store sales But Walmart isn’t about to let that happen without a fight Instead, it’s taking the battle to Amazon’s home territory—the Internet and mobile buying It started with the tactics it knows best—low costs and prices Through aggressive pricing, Walmart is now fighting for every dollar consumers spend online If you compare prices at Walmart com and Amazon.com, you’ll find a price war raging across a broad range of products In a price war, Walmart would seem to have the edge Low costs and prices are in the company’s DNA Through the years, Walmart has used its efficient operations and immense buying power to slash prices and thrash one competitor after another But Amazon is not like most other competitors Its network is optimized for online shopping, and the Internet seller isn’t saddled with the costs of running physical stores As a result, Amazon has been able to match or even beat Walmart at its own pricing game online The two giants now seem Walmart versus Amazon online: Achieving online supremacy will take more than just waging and winning an online price war The spoils will go to the company that delivers the best overall online customer experience and value for the price (top) Andrew Harrer/Bloomberg/Getty Images; (bottom) Digitallife/Alamy pretty much stalemated on low prices, giving neither much of Walmart, the world’s an advantage there In fact, largest retailer, and in the long run, reckless Amazon, the world’s largest price cutting will likely online merchant, are fighting more damage than good a war for online supremacy The to both Walmart and weapon of choice? Prices, at Amazon So, although least for now But in the long low prices will be crucial, run, winning the war will they won’t be enough to take much more than win over online buyers low prices Today’s online shoppers want it all, low prices and selection, speed, convenience, and a satisfying overall shopping experience For now, Amazon seems to have the upper hand on most of the important nonprice buying factors Its made-for-online distribution network speeds orders to buyers’ homes quickly and efficiently— including same-day delivery in some markets Amazon’s online assortment outstrips even Walmart’s, and the online and mobile shopping wizard is now moving into groceries, an area that currently accounts for 55 percent of Walmart’s sales As for Amazon’s lack of physical stores—no problem Amazon’s heavily used mobile app lets customers shop Amazon.com even as they are browsing 263 www.downloadslide.net Walmart’s stores Finally, Amazon’s unmatched, big data–driven customer interface creates personalized, highly satisfying online buying experiences Amazon regularly rates among the leaders in customer satisfaction across all industries By contrast, Walmart came late to online selling It’s still trying to figure out how to efficiently deliver goods into the hands of online shoppers As its online sales have grown, the store-based giant has patched together a makeshift online distribution network out of unused corners of its store distribution centers And the still–mostly store retailer has yet to come close to matching Amazon’s online customer buying experience So even with its impressive low-price legacy, Walmart finds itself playing catch-up online To catch up, Walmart is investing heavily to create a next-generation fulfillment network Importantly, it’s taking advantage of a major asset that Amazon can’t match—an opportunity to integrate online buying with its massive network of brick-and-mortar stores For example, Walmart now fulfills more than a fifth of Walmart.com orders more quickly and cheaply by having workers in stores pluck and pack items and mail or deliver them to customers’ homes Two-thirds of the U.S population lives within five miles of a Walmart store, offering the potential for 30-minute delivery And by combining its online and offline operations, Walmart can provide some unique services, such as free and convenient pickup and returns of online orders in stores (Walmart.com gives you three buying options: “online,” “in-store,” and “site-to-store”) Using Walmart’s Web site and mobile app can also smooth instore shopping They let customers prepare shopping lists in advance, locate products by aisle to reduce wasted shopping time, and use their smartphones at checkout with preloaded digital coupons applied automatically Customers who pick up online orders in the store can pay with cash, opening up online shopping to the 20 percent of Walmart customers who don’t have bank accounts or credit cards For customers who pay online, Walmart is testing in-store lockers where customers can simply go to an assigned locker for pickup Who will win the battle for the hearts and dollars of online buyers? Certainly, low prices will continue to be important But achieving online supremacy will involve much more than just waging and winning an online price war It will require delivering low prices plus selection, convenience, and a world-class online buying experience—something that Amazon perfected long ago For Walmart, catching and conquering Amazon online will require time, resources, and skills far beyond its trademark everyday low prices As Walmart’s president of global e-commerce puts it, the important task of winning online “will take the rest of our careers and as much as we’ve got [to invest] This isn’t a project It’s about the future of the company.”1 ompanies today face a fierce and fast-changing pricing environment Valueseeking customers have put increased pricing pressure on many companies Thanks to tight economic times in recent years, the pricing power of the Internet, and value-driven retailers such as Walmart, today’s more frugal consumers are pursuing spend-less strategies In response, it seems that almost every company has been looking for ways to cut prices Yet cutting prices is often not the best answer Reducing prices unnecessarily can lead to lost profits and damaging price wars It can cheapen a brand by signaling to customers that price is more important than the customer value a brand delivers.Instead, in both good economic times and bad, companies should sell value, not price In some cases, that means selling lesser products at rock-bottom prices But in most cases, it means persuading customers that paying a higher price for the company’s brand is justified by the greater value they gain c What is a Price? Pricing: no matter what the state of the economy, companies should sell value, not price Magicoven/Shutterstock Price The amount charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service 264 In the narrowest sense, price is the amount of money charged for a product or a service More broadly, price is the sum of all the values that customers give up to gain the benefits of having or using a product or service Historically, price has been the major factor affecting buyer choice In recent decades, however, nonprice factors have gained increasing importance Even so, price remains one of the most important elements that determine a firm’s market share and profitability Price is the only element in the marketing mix that produces revenue; all other elements represent costs Price is also one of the most flexible marketing mix elements Unlike product features and channel commitments, prices can be changed quickly At the same time, pricing is the number-one problem facing many marketing executives, and many companies not handle pricing well Some managers view pricing as a big headache, preferring instead to focus on other marketing mix elements www.downloadslide.net chapter 9: Pricing: Understanding and capturing customer Value 265 However, smart managers treat pricing as a key strategic tool for creating and capturing customer value Prices have a direct impact on a firm’s bottom line A small percentage improvement in price can generate a large percentage increase in profitability More important, as part of a company’s overall value proposition, price plays a key role in creating customer value and building customer relationships So, instead of shying away from pricing, smart marketers are embracing it as an important competitive asset.2 author comment Setting the right price is one of the marketer’s most difficult tasks A host of factors come into play But as the opening story about Walmart and Amazon illustrates, finding and implementing the right pricing strategy is critical to success author comment Like everything else in marketing, good pricing starts with customers and their perceptions of value customer value-based pricing Setting price based on buyers’ perceptions of value rather than on the seller’s cost Major Pricing strategies The price the company charges will fall somewhere between one that is too low to produce a profit and one that is too high to produce any demand figure 9.1 summarizes the major considerations in setting prices Customer perceptions of the product’s value set the ceiling for its price If customers perceive that the product’s price is greater than its value, they will not buy the product Likewise, product costs set the floor for a product’s price If the company prices the product below its costs, the company’s profits will suffer In setting its price between these two extremes, the company must consider several external and internal factors, including competitors’ strategies and prices, the overall marketing strategy and mix, and the nature of the market and demand Figure 9.1 suggests three major pricing strategies: customer value-based pricing, costbased pricing, and competition-based pricing customer Value-based Pricing In the end, the customer will decide whether a product’s price is right Pricing decisions, like other marketing mix decisions, must start with customer value When customers buy a product, they exchange something of value (the price) to get something of value (the benefits of having or using the product) Effective customer-oriented pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value Customer value-based pricing uses buyers’ perceptions of value as the key to pricing Value-based pricing means that the marketer cannot design a product and marketing program and then set the price Price is considered along with all other marketing mix variables before the marketing program is set figure 9.2 compares value-based pricing with cost-based pricing Although costs are an important consideration in setting prices, cost-based pricing is often product driven The company designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit Marketing must then convince buyers that the product’s value at that price justifies its purchase If the price turns out to be too high, the company must settle for lower markups or lower sales, both resulting in disappointing profits Value-based pricing reverses this process The company first assesses customer needs and value perceptions It then sets its target price based on customer perceptions of value The targeted value and price drive decisions about what costs can be incurred and the figure 9.1 considerations in setting Price If customers perceive that a product’s price is greater than its value, they won’t buy it If the company prices the product below its costs, profits will suffer Between the two extremes, the “right” pricing strategy is one that delivers both value to the customer and profits to the company Product costs Price floor No profits below this price Competition and other external factors Competitors’ strategies and prices Marketing strategy, objectives, and mix Nature of the market and demand $ Consumer perceptions of value Price ceiling No demand above this price $$ Price 266 www.downloadslide.net Part 3: Designing a customer Value-Driven strategy and Mix figure 9.2 Value-based Pricing versus cost-based Pricing Costs play an important role in setting prices But like everything else in marketing, good pricing starts with the customer Cost-based pricing Design a good product Determine product costs Set price based on cost Convince buyers of product’s value Set target price to match customer perceived value Determine costs that can be incurred Design product to deliver desired value at target price Value-based pricing Assess customer needs and value perceptions resulting product design As a result, pricing begins with analyzing consumer needs and value perceptions, and the price is set to match perceived value It’s important to remember that “good value” is not the same as “low price.” For example, some owners consider a luxurious Patek Philippe watch a real bargain, even at eye-popping prices ranging from $20,000 to $500,000:3 Perceived value: some owners consider a luxurious Patek Philippe watch a real bargain, even at eye-popping prices ranging from $20,000 to $500,000 every Patek Philippe watch is handmade by swiss watchmakers and can take more than a year to make Fabrice Coffrini/AFP/Getty Images Listen up here, because I’m about to tell you why a certain watch costing $20,000, or even $500,000, isn’t actually expensive but is in fact a tremendous value Every Patek Philippe watch is handmade by Swiss watchmakers from the finest materials and can take more than a year to make Still not convinced? Beyond keeping precise time, Patek Philippe watches are also good investments They carry high prices but retain or even increase their value over time Many models achieve a kind of cult status that makes them the most coveted timepieces on the planet But more important than just a means of telling time or a good investment is the sentimental and emotional value of possessing a Patek Philippe Says the company’s president: “This is about passion I mean—it really is a dream Nobody needs a Patek.” These watches are unique possessions steeped in precious memories, making them treasured family assets According to the company, “The purchase of a Patek Philippe is often related to a personal event—a professional success, a marriage, or the birth of a child—and offering it as a gift is the most eloquent expression of love or affection.” A Patek Philippe watch is made not to last just one lifetime but many Says one ad: “You never actually own a Patek Philippe, you merely look after it for the next generation.” That makes it a real bargain, even at twice the price A company will often find it hard to measure the value customers attach to its product For example, calculating the cost of ingredients in a meal at a fancy restaurant is relatively easy But assigning value to other measures of satisfaction such as taste, environment, relaxation, conversation, and status is very hard Such value is subjective; it varies both for different consumers and different situations Still, consumers will use these perceived values to evaluate a product’s price, so the company must work to measure them Sometimes, companies ask consumers how much they would pay for a basic product and for each benefit added to the offer Or a company might conduct experiments to test the perceived value of different product offers According to an old Russian proverb, there are two fools in every market—one who asks too much and one who asks too little If the seller charges more than the buyers’ perceived value, the company’s sales will suffer If the seller charges less, its products will sell very well, but they will produce less revenue than they would if they were priced at the level of perceived value We now examine two types of value-based pricing: good-value pricing and valueadded pricing www.downloadslide.net chapter 9: Pricing: Understanding and capturing customer Value 267 good-Value Pricing The Great Recession of 2008 to 2009 caused a fundamental and lasting shift in consumer attitudes toward price and quality In response, many companies have changed their pricing approaches to bring them in line with changing economic conditions and consumer price perceptions More and more, marketers have adopted the strategy of good-value pricing—offering the right combination of quality and good service at a fair price In many cases, this has involved introducing lessexpensive versions of established brand name products or new lower-price lines For example, Walmart launched an extremevalue store brand called Price First Priced even lower than the retailer’s already-low-priced Great Value brand, Price First offer thrift-conscious customers rock-bottom prices on grocery staples Good-value prices are a relative thing—even pregood-value pricing: even premium brands can launch good-value mium brands can launch value versions Mercedes-Benz versions the Mercedes cla class gives customers “the art of seduction recently released its CLA Class, entry-level models starting at at a price reduction.” $31,500 From its wing-like dash and diamond-block grille to Courtesy of Daimler AG its 208-hp turbo inline-4 engine, the CLA Class gives customers “The Art of Seduction At a price reduction.”4 good-value pricing In other cases, good-value pricing involves redesigning existing brands to offer more Offering just the right combination of quality for a given price or the same quality for less Some companies even succeed by quality and good service at a fair price offering less value but at very low prices For example, the ALDI supermarket chain has established an impressive good-value pricing position by which it gives customers “more ‘mmm’ for the dollar” (see Marketing at Work 9.1) ALDI practices an important type of good-value pricing at the retail level called everyday low pricing (EDLP) EDLP involves charging a constant, everyday low price with few or no temporary price discounts Other retailers such as Costco and Lumber Liquidators practice EDLP However, the king of EDLP is Walmart, which practically defined the concept Except for a few sale items every month, Walmart promises everyday low prices on everything it sells In contrast, high-low pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily Value-added pricing on selected items Department stores such as Kohl’s and Macy’s practice high-low pricAttaching value-added features and ing by having frequent sale days, early-bird savings, and bonus earnings for store creditservices to differentiate a company’s card holders offers and charging higher prices Value-added Pricing Value-based pricing doesn’t mean simply charging what customers want to pay or setting low prices to meet competition Instead, many companies adopt value-added pricing strategies Rather than cutting prices to match competitors, they attach value-added features and services to differentiate their offers and thus support their higher prices For example, even as frugal consumer spending habits linger, some movie theater chains are adding amenities and charging more rather than cutting services to maintain lower admission prices:5 Value-added pricing: rather than cutting services to maintain lower admission prices, premium theaters such as aMc’s cinema suites are adding amenities and charging more “once people experience it, they don’t want to go anywhere else.” Courtesy of AMC Theaters Some theater chains are turning their multiplexes into smaller, roomier luxury outposts The premium theaters offer valueadded features such as online reserved seating, high-backed leather executive or rocking chairs with armrests and footrests, the latest in digital sound and super-wide screens, dine-in restaurants serving fine food and drinks, and even valet parking For example, AMC Theatres (the second-largest American theater chain) operates more than 75 theaters with some kind of enhanced food and beverage amenities, including Fork & Screen (upgraded leather seating, seat-side service, extensive menu including dinner offerings, beer, wine, and cocktails) and 268 www.downloadslide.net Part 3: Designing a customer Value-Driven strategy and Mix Marketing at Work 9.1 alDi: impressively high Quality at impossibly low Prices, every Day When asked to name the world’s largest grocery chains, you’d probably come up with Walmart, the world’s largest retailer; and maybe Kroger, the largest U.S grocery-only merchant One name that probably wouldn’t come to mind is Germanybased discount grocer ALDI Yet, surprisingly, with more than $81 billion in annual revenues and more than 10,000 stores in 17 countries, ALDI is the world’s eighth-largest retailer overall and the second-largest grocery-only retailer behind Kroger What’s more, ALDI is taking the United States and other country markets by storm, growing faster than any of its larger rivals How does ALDI it? Its simple formula for success is no secret In fact, it’s almost a cliché: Give customers a basic assortment of good-quality everyday items at everyday extra low prices These days, many grocers brag about low prices But at ALDI, they are an absolute fact The rapidly expanding chain promises customers “Simply Smarter Shopping,” driven by a long list of “ALDI Truths” by which it delivers “impressively high quality at impossibly low prices.” (ALDI Truth #1: When deciding between eating well and saving money, always choose both.) ALDI has redesigned the food shopping experience to reduce costs and give customers prices that it claims are up to 50 percent lower than those of rival supermarkets To keep costs and prices down, ALDI operates smaller, energy-saving stores (about one-third the size of traditional supermarkets), and each store carries only about 1,800 of the fastest-moving grocery items (the typical supermarket carries about 40,000 items) Almost 95 percent of its items are ALDI store brands So, ALDI claims, customers are paying for the product itself, not national brand advertising and marketing Also, ALDI does no promotional pricing or price matching—it just sticks with its efficient everyday very low prices (ALDI Truth #12: We don’t match other stores’ prices because that would mean raising ours) In trimming costs and passing savings along to customers, ALDI leaves no stone unturned Even customers themselves help to keep costs low: They bring their own bags (or purchase them from ALDI for a small charge), bag their own groceries (ALDI provides no baggers), return shopping carts on their own (to get back a 25-cent deposit), and pay with cash or a debit card (no credit cards accepted at most ALDI stores) But to ALDI fans, the savings make it all worthwhile (ALDI Truth #14: You can’t eat frills, so why pay for them?) Whereas ALDI cuts operating costs to the bone, it doesn’t scrimp on quality With its preponderance of store brands, ALDI exercises complete control over the quality of the products on its shelves, and the chain promises that everything it sells is certifiably fresh and tasty ALDI Truth #60—We make delicious cost a lot less—makes it clear that the chain promises more than just low prices ALDI backs this promise with a Double Guarantee on all items: “If for any reason you are not 100-percent satisfied with any product, we will gladly replace the product AND refund your money.” To improve the quality of its assortment, ALDI has progressively added items that aren’t usually associated with “discounted” groceries Beyond the typical canned, boxed, and frozen food basics, ALDI carries fresh meat, baked goods, and fresh produce It also carries an assortment of regular and periodic specialty goods, such as Mama Cozzi’s Pizza Kitchen Meat Trio Focaccia, Appetitos Spinach Artichoke Dip, and All Natural Mango Salsa ALDI even offers a selection of organic foods With such items, and with its clean, bright stores, ALDI targets not just low-income customers, but frugal middle-class and upper-middle-class customers as well None of this is news to German shoppers, who have loved ALDI for decades In Germany, the chain operates more than 4,200 stores, accounting for more than 28 percent of the market That might explain why Walmart gave up in Germany just good-value pricing: alDi keeps costs low so that it can offer customers “impressively high quality at impossibly low prices” every day Keri Miksza www.downloadslide.net chapter 9: Pricing: Understanding and capturing customer Value nine years after entering the market Against competitors like ALDI, Walmart’s normally low prices were just too expensive for frugal German consumers ALDI’s no-frills basic approach isn’t for everyone Whereas some shoppers love the low prices, basic assortments, and simple store atmosphere, others can’t imagine life without at least some of the luxuries and amenities offered by rivals But most people who shop at ALDI quickly become true believers Testimonials from converts litter the Internet “I just recently switched to ALDI from a ‘premium’ grocery store and the savings blow me away!” proclaims one customer “Shoot, I wish I had some pom-poms, because I am so totally team ALDI!” Says another fervent fan: I will probably never grocery shop anywhere else! As a family of three on a very strict budget, I usually scour the sale papers and coupons looking to save I usually make two or three different stops on my grocery trips and my shopping every two weeks We budget $200 a month for groceries and I usually come in right under that amount Today at ALDI I got everything on my list, plus about 20 extra items not on the list, and my total was only $86! I cannot believe how much I saved! ALDI is now my immediate goto grocery store! Many customers also wax enthusiastic about their favorite ALDI products, items they can’t live without and can’t get anywhere else 269 With tradition behind it and its can’t-lose operating and marketing model, ALDI plans for rapid U.S expansion The company has quickly grown to more than 1,300 stores in 32 states That’s a huge accomplishment compared with, say, British discount chain Tesco, the world’s second-largest retailer, which exited the U.S market with heavy losses after only seven years ALDI still has plenty of room for more growth It has a $3 billion plan to open 130 U.S stores a year, expanding by 50 percent to 1,950 stores by 2018 With its proven everyday extra low pricing strategy, ALDI will likely accomplish or even exceed that goal That’s good news for the company but also for customers When ALDI comes to your neighborhood, “Your wallet and taste buds are in for a treat” (ALDI Truth #34) Sources: Walter Loeb, “Why Aldi and Lidl Have What It Takes to Beat the Best and the Biggest,” Forbes, October 30, 2013, www.forbes.com/sites/ walterloeb/2013/10/30/why-aldi-and-lidl-have-what-it-takes-to-beat-the-bestand-the-biggest/; Leslie Patton, “Aldi Plans to Expand U.S Store Count by 50% in Next Five Years,” Businessweek, December 20, 2013, www businessweek.com/news/2013-12-20/aldi-plans-to-expand-u-dot-s-dot-storecount-by-50-percent-in-next-five-years; Bill Bishop, “ALDI Offers the Thrill of Discovery,” Supermarket News, October 20, 2014, http://supermarketnews com/limited-assortment/aldi-offers-thrill-discovery; “Top 250 Global Powers of Retailing 2015,” Deloitte, https://nrf.com/2015/global250-table; and www aldi.us, www.aldi.us/en/new-to-aldi/aldi-truths/, and www.aldi.us/en/new-toaldi/switch-save/, accessed October 2015 Cinema Suites (additional upscale food offerings in addition to premium cocktails and an extensive wine list, seat-side service, red leather reclining chairs, and eight to nine feet of spacing between rows) So at the Cinema Suites at the AMC Easton 30 with IMAX in Columbus, Ohio, bring on the mango margaritas! For $9 to $15 a ticket (depending on the time and day), moviegoers are treated to reserved seating, a strict 21-and-over-only policy, reclining leather seats, and the opportunity to pay even more to have dinner and drinks brought to their seats Such theaters are so successful that AMC plans to add more “Once people experience it,” says a company spokesperson, “more often than not they don’t want to go anywhere else.” cost-based Pricing cost-based pricing Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk Whereas customer value perceptions set the price ceiling, costs set the floor for the price that the company can charge Cost-based pricing involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company’s effort and risk A company’s costs may be an important element in its pricing strategy Some companies, such as Walmart or Spirit Airlines, work to become the low-cost producers in their industries Companies with lower costs can set lower prices that result in smaller margins but greater sales and profits However, other companies—such as Apple, BMW, and Steinway—intentionally pay higher costs so that they can add value and claim higher prices and margins For example, it costs more to make a “handcrafted” Steinway piano than a Yamaha production model But the higher costs result in higher quality, justifying an average $87,000 price To those who buy a Steinway, prices is nothing; the Steinway experience is everything The key is to manage the spread between costs and prices—how much the company makes for the customer value it delivers types of costs fixed costs (overhead) Costs that not vary with production or sales level A company’s costs take two forms: fixed and variable Fixed costs (also known as overhead) are costs that not vary with production or sales level For example, a company must pay each month’s bills for rent, heat, interest, and executive salaries regardless www.downloadslide.net 270 Part 3: Designing a customer Value-Driven strategy and Mix Variable costs Costs that vary directly with the level of production total costs The sum of the fixed and variable costs for any given level of production author comment of the company’s level of output Variable costs vary directly with the level of production Each PC produced by HP involves a cost of computer chips, wires, plastic, packaging, and other inputs Although these costs tend to be the same for each unit produced, they are called variable costs because the total varies with the number of units produced Total costs are the sum of the fixed and variable costs for any given level of production Management wants to charge a price that will at least cover the total production costs at a given level of production The company must watch its costs carefully If it costs the company more than its competitors to produce and sell a similar product, the company will need to charge a higher price or make less profit, putting it at a competitive disadvantage cost-Plus Pricing The simplest pricing method is cost-plus pricing (or markup pricing)—adding a standard markup to the cost of the product For example, an electronics retailer might pay a manufacturer $20 for a flash drive and mark it up to sell at $30, a 50 percent markup on cost The retailer’s gross margin is $10 If the store’s operating costs amount to $8 per flash drive sold, the retailer’s profit margin will be $2 The manufacturer that made the flash drive probably used cost-plus pricing, too If the manufacturer’s standard cost of producing the flash drive was $16, it might have added a 25 percent markup, setting the price to the retailers at $20 Does using standard markups to set prices make sense? Generally, no Any pricing method that ignores consumer demand and competitor prices is not likely to lead to the best price Still, markup pricing remains popular for many reasons First, sellers are more cost-plus pricing (markup pricing) certain about costs than about demand By tying the price to cost, sellers simplify pricing Adding a standard markup to the cost Second, when all firms in the industry use this pricing method, prices tend to be similar of the product and price competition is minimized Another cost-oriented pricing approach is break-even pricing, or a variation break-even pricing (target return called target return pricing The firm tries to determine the price at which it will pricing) break even or make the target return it is seeking Target return pricing uses the concept Setting price to break even on the costs of a break-even chart, which shows the total cost and total revenue expected at different of making and marketing a product or sales volume levels figure 9.3 shows a break-even chart for the flash drive manusetting price to make a target return facturer discussed previously Fixed costs are $6 million regardless of sales volume, and variable costs are $5 per unit Variable costs are added to fixed costs to form total costs, which rise with volume The slope of the total revenue curve reflects the price Here, the price is $15 (for example, the company’s revenue is $12 million on 800,000 units, or $15 per unit) figure 9.3 break-even chart for At the $15 price, the manufacturer must sell at least 600,000 units to break even Determining target return Price and (break-even volume = fixed costs ÷ [price – variable costs] = $6,000,000 ÷ [$15 – $5] = break-even Volume 600,000) That is, at this level, total revenues will equal total costs of $9 At the break-even point, million, producing no profit If the here 600,000 units, total revenue equals total cost flash drive manufacturer wants a tarTotal revenue get return of $2 million, it must sell Target return 12 at least 800,000 units to obtain the ($2 million) $12 million of total revenue needed 10 Total cost to cover the costs of $10 million plus the $2 million of target profits In To make a target contrast, if the company charges a return of $2 million, the company must sell higher price, say, $20, it will not need Fixed cost 800,000 units But to sell as many units to break even or will customers buy that many units to achieve its target profit In fact, the at the $15 price? higher the price, the lower the manu2 facturer’s break-even point will be The major problem with this analysis, however, is that it fails to 200 400 600 800 consider customer value and the relaSales volume in units (thousands) tionship between price and demand Dollars (millions) Costs set the floor for price, but the goal isn’t always to minimize costs In fact, many firms invest in higher costs so that they can claim higher prices and margins (think back about Patek Philippe watches) The key is to manage the spread between costs and prices—how much the company makes for the customer value it delivers www.downloadslide.net Chapter 9: Pricing: Understanding and Capturing Customer Value 271 As the price increases, demand decreases, and the market may not buy even the lower volume needed to break even at the higher price For example, suppose the flash drive manufacturer calculates that, given its current fixed and variable costs, it must charge a price of $30 for the product in order to earn its desired target profit But marketing research shows that few consumers will pay more than $25 In this case, the company must trim its costs in order to lower the break-even point so that it can charge the lower price consumers expect Thus, although break-even analysis and target return pricing can help the company to determine the minimum prices needed to cover expected costs and profits, they not take the price–demand relationship into account When using this method, the company must also consider the impact of price on the sales volume needed to realize target profits and the likelihood that the needed volume will be achieved at each possible price Author Comment In setting prices, the company must also consider competitors’ prices No matter what price it charges—high, low, or in between—the company must be certain to give customers superior value for that price Competition-based pricing Setting prices based on competitors’ strategies, prices, costs, and market offerings Competition-Based Pricing Competition-based pricing involves setting prices based on competitors’ strategies, costs, prices, and market offerings Consumers will base their judgments of a product’s value on the prices that competitors charge for similar products In assessing competitors’ pricing strategies, the company should ask several questions First, how does the company’s market offering compare with competitors’ offerings in terms of customer value? If consumers perceive that the company’s product or service provides greater value, the company can charge a higher price If consumers perceive less value relative to competing products, the company must either charge a lower price or change customer perceptions to justify a higher price Next, how strong are current competitors, and what are their current pricing strategies? If the company faces a host of smaller competitors charging high prices relative to the value they deliver, it might charge lower prices to drive weaker competitors from the market If the market is dominated by larger, lower-price competitors, a company may decide to target unserved market niches by offering value-added products and services at higher prices Importantly, the goal is not to match or beat competitors’ prices Rather, the goal is to set prices according to the relative value created versus competitors If a company creates greater value for customers, higher prices are justified For example, Caterpillar makes high-quality, heavy-duty construction and mining equipment It dominates its industry despite charging higher prices than competitors such as Komatsu When a commercial customer once asked a Caterpillar dealer why it should pay $500,000 for a big Caterpillar bulldozer when it could get an “equivalent” Komatsu dozer for $420,000, the Caterpillar dealer famously provided an analysis like the following: Pricing versus competitors: Despite Caterpillar’s premium prices, customers believe that Caterpillar gives them a lot more value for the price over the lifetime of its machines Kristoffer Tripplaar/Alamy $420,000 the Caterpillar’s price if equivalent to the competitor’s bulldozer $50,000 the value added by Caterpillar’s superior reliability and durability $40,000 the value added by Caterpillar’s lower lifetime operating costs $40,000 the value added by Caterpillar’s superior service $20,000 the value added by Caterpillar’s longer parts warranty $570,000 the total value-added price for Caterpillar’s bulldozer −$70,000 discount $500,000 final price 630 www.downloadslide.net Subject Index Universal Pictures, 440, 461 UPS, 81, 167, 190, 195, 317, 318 UPS Business Solutions, 326 Upton, Kate, 175 Urban Decay, 459 Urban Outfitters, 508 U.S Census Bureau (www.census gov), 124 U.S Congress, 453, 493 U.S Department of Defense, 199, 333 U.S Department of Justice, 166, 292 U.S Department of Transportation, 194, 323, 330 U.S Forest Service, 136, 439 U.S Government, 29 U.S government, 375 U.S Navy, 450 U.S Patent Office and Trademark, 106 U.S Postal Service, 29, 195, 220, 274, 317, 400, 447 U.S Small Business Administration, 124 USAA financial, 199, 313 USG Corporation, 158 V Vans, 61, 173 Vapur, 510 Vapur Anti-Bottles, 510 Vaseline, 288 Velcro, 224 Velti, 186 Vendor Flex (Amazon/P&G), 316–318 Vera Wang, 343 Vergara, Sofia, 383 Verizon Wireless, 79, 88, 203, 280 Verizon Wireless Smart Stores, 203 Versace, 338 Vertu Concierge, 273 Vertu phones, 273 Vespa, 222 Vevo, 309 VF Corporation, 61, 82, 173 Vicks NyQuil, 388 Vicks ZzzQuil, 230–231 Victoria’s Secret, 350, 439, 469 Victorinox, 240, 242 Vidalia Onion Committee (VOC), 148 Viking range, 208 Vimeo, 202 Vine, 9, 18, 19, 413, 432, 437, 443 Vine video, 371–372 Virgin America, 199 Visa, 391, 421, 457 Vivienne Westwood, 388 Volkswagen, 383, 473 Volvo, 29, 229 Volvo Car Group, 309 W Wag.com, 318 Walgreens, 17, 182, 302, 307, 316, 374, 419, 450, 496 Walgreens Balance Rewards program, 17 Walmart, 4, 11, 17, 28, 59, 76, 78, 84, 112, 136–137, 141, 161, 171, 180, 190, 192, 210, 223, 258, 262–264, 267, 268–269, 276, 283, 285, 301, 307, 313, 316, 323–326, 332–335, 337, 341–342, 346–348, 350, 352–353, 362–363, 366, 374, 406, 416, 420, 430, 450, 460, 462–463, 469, 482, 492, 494, 496, 509 Walmartblows.com, 93 Walmart.com, 352, 436 WalmartLabs, 353 Walmart Supercenter, 320 Walt Disney Animation, 311 Walt Disney Company, 43, 44, 46–47, 84, 117, 172, 182, 203, 222, 224, 227, 231, 252, 473 See also Disney entries Walt Disney Pictures, 47 Walt Disney World Resort, 7, 84 Walton, Sam, 333 Wanamaker, John, 378 Warby Parker, 88, 509 Ward, Hines, 392 Warner Brothers, 130, 253 Washington, DC, 105 Washington Nationals, 209 Washington Square Park, 421 Washio, 300 Waze app, 445 Weave (IOT), 64 Weber, 18 Weber Nation, 18 WebEx, 78, 405, 413 Wegmans, 190, 217 Weight Watchers, 377, 388 Weinberg, Gabriel, 54, 55 Welding Systems Company, 405 Wella, 48, 215 Wells Fargo, 78, 105, 250 Wendy’s, 52, 70, 211, 220, 297 West Elm, 448 Western Auto, 339t, 340 Westin Stamford Hotel, Singapore, 191 Westminster Kennel Club Dog Show, 384 Wheaties, 154 Wheels, Inc., 427 Which Wich Superior Sandwiches, 342 Whirlpool, 403 Whistle and Voyce, 234 Whole Foods Market, 109, 141, 180, 276, 336, 348, 383, 442, 496, 508 Whoosh Fitting Room, 198 Wikipedia, 54, 222 Williams, Pharrell, 388 Williams-Sonoma, 282, 335, 336, 350, 352 WinCo, 336–337 Windex, 503, 512 Winfrey, Oprah, 26 Winsor, Harry, 92–93 Winsor, John, 93 Winston, 315 WNBa, 44 Wong Fu Productions, 137 Woodman, Nick, 201–202 World Bank, 512 World Cup soccer, World Health Organization (WHO), 510 World Trade Organization (WTO), 463 WPP advertising, 390 Wrangler, 61, 173 Wrigley, 274 X Xerox, 333 Xfinity, 311 X Games, 44 Xiaomi, 289 Y Yahoo!, 54, 211, 224, 237, 433, 436, 453 Yahoo! Shopping, 287 Yamaha, 133, 269 Yankelovich MONITOR service, 108 Yaris (Toyota), 210 Yelp, 93, 114, 150, 182, 312, 362 YETI Coolers, 14 Yogi Stress Relief tea, 89 Yogi Sweet Tangerine Positive Energy tea, 89 Yogi Tea Company, 89 Yoplait yogurt, 154 Young & Rubicam’s BrandAsset Valuator, 222 YouTube, 3, 18, 19, 24, 27, 29, 35, 55, 92–93, 114, 126, 139, 140, 141, 147, 162, 163, 201–202, 216, 237, 274, 310, 311, 346, 350, 352, 358, 368, 370, 372, 379, 380, 381, 384, 387, 389, 392, 394, 397, 405, 412, 430, 433, 434, 437, 439, 440, 442, 443, 450, 508 YoYo.com, 318 Y&R advertising, 390 Z Zappos.com, 15, 115, 122, 189, 217–219, 224, 326, 352 Zara, 306 Zara fashions, 460 Zeel, 300 Zenhabits, 139 Ziploc, 224, 503, 512 Zippo, 230 Zombie Farm (app), 445 Zoom, 413 ZoomShops, 450 ZoomSystems, 450–451 Zulily, 349 ZUUL extranet (Zappos Unified User Login), 122 Subject Index In this index f indicates figures, p indicates photos, and t indicates tables A Acquisition of competitors, 498–499 Actual product, 203, 204f Adaptability criteria, in channel design, 314 Adapted global marketing, 475 Administered VMS, 307 Adoption, 152 Adoption process, buying new products, 152, 153f Adoption rate, product characteristic influence on, 153 Advertising brand-building, 378 budget, 377–378 communication adaptation and, 477–479 communication effects, 388–390 consumer-generated content, 384 as content marketing, 369–370 as cultural pollution, 498 direct-response television, 449–450 entertainment and, 380 GEICO and, 364–366 high cost of, 492 history, 375 major decisions in, 375f objectives, setting, 375–377 organizing for, 390–391 POES channels, 369 promotion mix, 366, 372–373 return on investment, 388–390 search-related, 436 spending, 367–368 strategy, 379–388 See also Advertising strategy Super Bowl ads, 373, 389–390 Advertising Age magazine, 145, 452 Advertising agency, 390–391 Advertising appeals, 382 Advertising media media types, 385, 386t media vehicles, 387 reach, frequency, impact, engagement, 384–385 timing, 387–388 Advertising message, 379–384 Advertising objectives, setting, 375–377 Advertising option icon, 453 Advertising specialties, 420 Advertising strategy, 379–388 Advertising-to-sales ratios, 397 Advocate, The, 79 Affordable Care Act, 426 Affordable method, advertising, 377 African Americans, 78, 136 Age consumer buying behavior and, 142–143 www.downloadslide.net Subject Index consumer privacy and, 451–452 market segmentation and, 172 See also Children; Demographic entries Age and life-cycle segmentation, 172 Agents, wholesalers and, 357t Age structure of population, changing, 73–76 AIO (activities, interests, opinions) dimensions of consumer lifestyles, 143 Air carriers, supply chain distribution and, 324 Airtruck (transportation), 324 Allowance pricing, 280t, 281, 422 Alternative evaluation, consumer buying behavior and, 150 Alternative media, advertising, 386 American Dream, 497 American Idol, 241 American pop culture, 469 Americans with Disabilities Act (1991), 86t Amount of service retailers, 335–336 Approach step, in selling process, 415 Asian Americans, as consumer subculture, 137 Aspirational group, 138 Assortment building, 355 Atmosphere, of store, 343 Attack advertising, 376 Attitudes, consumer buying behavior and, 148 Attraction, 18 Audiovisual materials, PR and, 394 Augmented product, 204 Automated warehouses, 359 Automobile Information Disclosure Act, 293 B Baby boomers, 73–74 Bad Samaritans, 121 Barnacles (customer group), 23f Barriers to entry, marketing practices and, 498–499 Barter, 467 Basic relationships, 17 Basing-point pricing, 284 Battle of the brands, 226 Behavioral segmentation, consumer market, 174–176 benefits sought, 174–175 loyalty status and, 175–176 occasions, 174 usage rate, 175 user status, 175 Behavioral targeting, 115 Beliefs, consumer buying behavior and, 148 Benefit segmentation, consumer market, 174–175 Beyond greening, environmental sustainability and, 501f, 504 Big Bang Theory, The, 379, 460 Big-box discounters, 337–338 Big data analyze use, CRM and, 118–119 customer insights, marketing and, 101 marketing analytics and, 118–122 Big idea, advertising, 382 Black Friday, 285, 490 Blogosphere, 439 Blogs online marketing and, 438–439 See also Social media entries Bloomberg’s, 387 BoJack Horseman, 121 BOOM! Magazine, 73 Boston Consulting Group (BSG) approach, to portfolio analysis, 45–46 Boycotts, globalization and, 469 Branches, manufacturers’/retailers’, 357t Brand ambassadors, 139 Brand-building advertising, 378 Brand content, advertising and, 379–384 Brand development brand extensions, 228–229 line extension, 227–228 multibrands, 229 new brands, 229 strategies, 228f Branded community websites, online marketing and, 435 Branded entertainment, 380–381 Brand equity, 222–223 Brand experience, Brand extensions, 228–231 Branding global, 475 product, 209–210 Branding strategies brand development, 227–229 brand equity/value, 222–223 brand name selection, 224–225 brand positioning, 223–224 brand sponsorship, 225–227 defining, 221–222 major strategy decisions, 223f Brand integrations, 380–381 Brand managers, 402 Brand name hall of shame, 477 Brand names, localizing, 478–479 Brand name selection, 224–225 Brand personality, 145 Brand positioning, 223–224, 231 Brand(s) American, in international marketplace, 469–470 managing, 229, 231 product life-cycle and, 250 shopper marketing and, 334–335 websites, 393 word-of-mouth, 140–141 Brand sponsorship, 225–227 co-branding, 227 licensing, 226–227 national v store brands, 225–226 Brand tribes, 174 Brand value, 222–223 Break-even chart, 270 Break-even pricing, 270, 297 Bribes, 512–513 Brick-and mortar retailers, 309, 345 Brokeback Mountain, 79 Brokers, wholesalers and, 357t Browsing, in-store/at-home, 352–353 Bulk breaking, wholesalers and, 355 Bundling, pricing and, 280 Business, marketing impact on, 498–499 Business analysis, 245 Business buyer behavior influences on, 158–159f participants in process, 157–158 types of buying situations, 156, 157f Business buyer decision process general need description, 160 order-routine specification, 161 performance review, 161 problem recognition, 159–160 product specification, 160 proposal solicitation, 161 supplier search, 160 supplier selection, 161 Business buyers, digital/social marketing and business-to-business, 162–163 e-procurement/online purchasing, 161 Business markets, 72 buyer behavior See Business buyer behavior buying unit, nature of, 155 decision types/process, 155–156 market structure and demand, 155 segmentation and, 176–177 Business norms, culture and, 468 Business portfolio, designing, 43 See also Portfolio analysis Business promotions, 417–418, 423 Business-to-business e-procurement, 161 selling, social selling and, 411–412 telemarketing, 449 Businessweek, 387 Butterflies (customer group), 23f Buyer decision process information search, 149–150 need recognition, 149 Buyer decision process, new products, 151–153 adoption process, 152 innovativeness, individual differences in, 152 rate of adoption, product characteristics influence on, 153 Buyers direct and digital marketing and, 431–432 omni-channel, 334 power of, 179 price changes, reactions to, 289 Buying, wholesalers and, 355 Buying center, 158 631 Buying unit, in business markets, 155 Buy one give one away concept, 508–509 BuzzFeed, 381 Buzz marketing, 139–141 By-product pricing, 279–280 C Call objectives, 415 Call plan, 409 Call reports, 410 CAN-SPAM Act (2003), 86t Capital items, 206 Captain America, 381 Captive-product pricing, 279 Care and Training of Your Pet Rock, The (Dahl), 251 Cars, 227 Cash-and-carry wholesalers, 356t Cash cows, 45 Cash discount, 281 Cash rebates, 283 Cash transactions, international trade and, 467 CASRO Code of Standards and Ethics for Survey Research, 127 Catalog Age magazine, 448 Catalog marketing, 448–449 Category killers, 337 Causal research, 107 Cause-exploitative marketing, 88 Cause-related marketing, 87–88 Central American Free Trade Agreement (CAFTA-DR), 464 Cents-off deals consumer promotions and, 420 Channel behavior, 304–305 Channel conflict, 304 Channel design consumer needs, analyzing, 311–312 evaluate economic/control/ adaptability criteria, 314 intermediaries, type/number of, 313–314 international distribution, 314–315 objectives, setting channel, 312–313 responsibilities of channel members, 314 Channel differentiation, 190 Channel (direct marketing), 303 Channel levels pricing across, public policy and, 293 pricing within, public policy and, 292 Channel management, 315–318 evaluate members, 318 manage/motivate members, 316 members, selecting, 315–316 Channel members evaluate, 318 motivate/manage, 316 select, 315–316 Channel partnering, 316–318 632 www.downloadslide.net Subject Index Channels between nations, 481 Channels within nations, 481 Chief marketing officers (CMO), 60 Chief privacy officer (CPO), 126 Children Child Protection Act (1966), 86t Children’s Online Privacy Protection Act (2000), 86t, 453 Children’s Television Act (1990), 86t online privacy and, 451–452 social media privacy and, 515 targeted marketing and, 184–185 Citizen-action publics, 71 Class-action lawsuits, 257 Clayton Act (1914), 86t, 291, 319 Closing, selling process, 416 Club marketing programs, 18 Cluster (area) sample, 116t Codes of conduct, ethical, 512–513 Cognitive dissonance, 151 Cold calling, 414 Colors, in-store experience, 343 Commercialization, new product development and, 247 Commercial online databases, 108 Commercials, as cultural pollution, 498 Commercial sources, of information, 149 Commission, salespeople and, 408 Commission merchants, 357t Common Threads Initiative, Patagonia, 489–490 Communicability, adoption rate and, 153 Communication adaptation, 477 Communication channels, 368 Communication effects, of advertising, 388–390 Communication strategies, global marketing and, 476–477 Community shopping center, 347 Companies, PR and, 392 Company buying sites, 161 Company environment macroenvironment, 72–91 microenvironment, 68–69f See also entries for individual environments Company to customer, personal selling and, 402 Comparative advertising, 376 Compatibility, adoption rate and, 153 Compensation, of salespeople, 408 Competence, personality trait, 145 Competition channel conflict and, 305 global, 461 in marketing plan, 58f Competition-based pricing, 271–272 Competitive advantage, 189–191 Competitive marketing, unfair, 498–499 Competitive marketing intelligence, 103, 105–106 Competitive party method, advertising, 378 Competitors acquisition of, 498–499 in company microenvironment, 70 as idea source, 240 market strategies of, 184 powerful, 179 price changes, reaction to, 290 Complexity, adoption rate and, 153 Complex sales force structure, 403 Concentrated marketing, 180–181 Concept development, 243–244 Concept testing, 244 Conformance quality, 208 Congestion tolls, 498 Conscious consumption, 489 Conspicuous spending, 497 Consumer consumerism, 499–501 engagement, tracking, 384–385 environmentalism and, 501, 503–505 marketing communications and, 367 planned obsolescence, 495 poor service to disadvantaged, 495–496 social costs and, 498 telemarketing and, 449 See also Customer entries Consumer, marketing impact on deceptive practices, 493–494 high-pressure selling, 494 high prices, 492–493 planned obsolescence, 495 poor service, to disadvantaged consumers, 495–496 product safety, 494–495 Consumer behavior buying decision process See Buyer decision process cultural factors and, 135–139 evaluation of alternatives, 150 factors influencing, 135f model of, 134–135f personal factors, 142–146 post-purchase behavior, 151 psychological factors, 146–148 purchase decision, 150–151 social factors, 138–142 Consumer buyer behavior, 134 See also Consumer behavior Consumer expressions, 385 Consumer-generated content, advertising, 384 Consumer-generated video, 19 Consumer impressions, 385 Consumerism, 499–501 Consumer market, 72 defined, 134 segmentation variables for, 171f segmenting, 171–176 See also Market segmentation, consumer Consumer-oriented marketing, 506 Consumer privacy direct and digital marketing and, 452 See also Privacy entries Consumer privacy marketing research ethics and, 125–127 Consumer products, 204–205 Consumer Product Safety Act (1972), 86t, 257 Consumer promotions, 417–420, 422 Consumer protection, legislation/ regulations and, 85–87, 86t Consumer spending, retailers and, 348 Consumer’s Reports, 194 Consumer value-driven market strategy, 170f Consumption, conscious, 489–490 Contact methods, for research, 111–113 Content marketing, 368–371 Content marketing managers, 369 Contests, consumer promotions and, 420 Contextual advertising, 436 Continuous inventory replenishment systems, 325 Contract logistics, 326–327 Contract manufacturing, 473 Contractual VMS, 306–307 Control issues, in channel design, 314 Controlled test markets, 246 Convenience products, 205 Convenience sample, 116t Convenience stores, 337 Conventional distribution channels, 305 vertical marketing systems v., 305f Conventions, business promotions and, 423 Cookies online tracking and, 453 Copy, advertising, 383 Core beliefs/values, 88–89 Core customer value, 203, 204f Corporate chain retailer, 339t Corporate culture, customercentered, 16, 17 Corporate giving, 88 Corporate identity materials, PR and, 394 Corporate image marketing, 206 Corporate marketing ethics policies, 511 Corporate VMS, 306 Cosmopolitan, 441 Cost-based pricing, 265, 266f, 269–271 cost-plus, 270–271 types of costs, 269–270 Costs, types of, 269–270 Costs-plus pricing, 270–271 Coupons, consumer promotions, 419, 437 Cradle-to-cradle practices, 504 Creative concept, advertising, 382 Creative selling, 401 CRM See Customer relationship management (CRM) Cross-company teams, logistics management and, 326 Cross-functional teamwork, logistics management and, 325, 326 Cross-market segmentation, 177–178 Cross-shopping, digital devices and, 351 Crowdsourcing, idea generation and, 240–243 Cues, 148 Cultural behaviors, global trade and, 468 Cultural environment, 88–91 cultural values, persistence of, 88–89 secondary, shifts in, 89–91 Cultural pollution, marketing and, 498 Cultural shifts, consumer behavior and, 136 Cultural values persistence of, 88–89 secondary, 89–91 Culture consumer behavior and, 135–139 international marketing and, 467–470 international marketing research and, 125 language, global marketing and, 477–479 localizing brand names and, 478–479 market segmentation and, 177 Currency restrictions, 465 Current business portfolio, 43 Customer brand engagement/experience, 231 brand extensions and, 230–231 branding and, 222 in company microenvironment, 72 direct/digital marketing, issues with, 451–452 as idea source, 240 insights, marketing information and See Marketing information needs, channel design and, 311–312 needs/wants/demands, personal selling and, 401–402 selecting, serving or stalking, 186–187 share of, 21–22 shopper marketing and, 334–335 See also Consumer entries Customer Business Development (CBD) teams, 406 Customer care, employees and, 218–219 Customer-centered corporate culture, 16–17 www.downloadslide.net Subject Index Customer-centered logistics, 319–320 Customer-centered new product development, 247–248 Customer-centricity program, 103 Customer coproduction, 216 Customer-driven companies, 11 Customer-driving marketing, 11 Customer engagement online retailing and, 350–352 real-time marketing and, 26–27 social media marketing and, 442 Customer-engagement marketing, 18–19 Customer equity branding and, 223 defining, 22 right customer/right relationship, 23 Customer experiences, 202–203 Customer insights, marketing information and, 101–102 Customer insights teams, 101 Customer lifetime value, 21 Customer loyalty, 21 Customer-managed relationships, 18 Customer management organization, 59 Customer-perceived value, 13 Customer Relationship Groups, 23f Customer relationship management (CRM), 13–18, 49, 399–400 analyze/use customer data, 118–119 benefits of, 121–122 customer satisfaction, 14–17 customer value, 13–14 levels and tools, 17–18 loyalty/retention, 21 personal selling process and, 416–417 share of customer, 21–22 software systems, 316 systems for, 122 Customer relationships, planning/ building, 48–50 Customer retention, 21 Customer reviews, 114 Customer sales force structure, 403 Customer satisfaction, 14–17, 217 Customer-segment pricing, 281 Customer service managing quality of, 220–221 marketing logistics and, 322 product support, 212–213 Customer-solution approach, 415 Customer value, 13–14 Customer value-based pricing, 265–266 Customer value delivery network, 311 See also Marketing channels Customer value-driven marketing strategies, 51–53 Customer value marketing, 506–507 Cyber Monday, 429, 489 D Dancing with the Stars, 79, 421, 470 Data consumer insight, 101 consumer privacy and, 452 marketing analytics and, 118–122 misuse of, 127 primary data collection, 109–117 See also Primary data collection public policy, privacy, ethics and, 125–127 secondary, gathering, 108–109 See also Marketing information entries Databases, commercial online, 108 Data mining, online privacy and, 453 See also Privacy entries Deadliest Catch, 202 Deception, marketing and, 451–452 Deceptive practices, in marketing, 493–494 Deceptive pricing, 293 Decision making, in business markets, 155–156 Decline stage, of product life-cycle, 250f, 255–256 Deficient products, 509–510 Delivery, service differentiation and, 220 Demand, business market structure and, 155 price elasticity and, 275 Demand, pricing and, 274–275 Demand chain, 300 Demand curve, 274–275 Demographic environment, of companies, 72–80 age structure of population, 73–76 baby boomers, 73–74 diversity and, 78–80 education and, 78 family, changing American, 76–77 generational marketing, 76 Generation X, 74 Generation Z, 75–76 geographic shifts, in population, 77–78 Millennials, 75 See also Age; Children Demographics, global market potential and, 472t Demographic segmentation, 172–173 age/life cycle, 172 gender, 172–173 income, 173 Demography, 72 Demonstration, selling process, 415 Department stores, 336 Derived demand, 155 Descriptive research, 107 Design for environment (DFE), 504 Desirable products, 509–510 Development, PR and, 392 Differentiated marketing, 180 Differentiation, 170 branding and, 222 channel, 190 managing service, 219–220 product, 53 retailer, 341–342 services, 189 strategy, choosing, 189–195 wholesaler, 357–358 Digital advertising, 386t, 431 See also Direct and digital marketing Digital and social media marketing, 24–28 Internet, marketing, digital age and, 433–434 mobile marketing, 443–447 online advertising, 435–436 online marketing, 434–439 social media marketing, 439–443 Digital catalogs, 448 Digital coupons, 419 Digital in-store experience, 344–345 Digital marketing, 373 Amazon.com and, 429–430 business-to-business, 162–163 promotion mix and, 366–367 See also Digital and social media marketing; Direct and digital marketing Digital media, customer engagement and, 18–19 Digital price tags, 285 Digital promotion, 368 Digital sales, social selling, 410–413 Digital shopping, 349–352 Digital technology advertising and, 379–380 consumer-generated advertising content, 384 marketing communications and, 367 social selling and, 410–413 Direct and digital marketing, 430–432 benefits of, buyer/seller, 431–432 forms of, 432f model for, 430–431 public policy and, 451–453 rapid growth of, 431 Direct exporting, 473 Direct investment, international market and, 474–475 Direct mail, advertising, 386t Direct-mail marketing, 447–448 Direct marketing, 303, 373, 430–431 Amazon.com and, 429–430 catalog marketing, 448–449 consumer privacy, 452 direct-mail, 447–448 direct-response television (DRTV), 449–450 kiosk marketing, 450–451 promotion mix and, 366–367 telemarketing, 449 633 See also Direct and digital marketing Direct-response television (DRTV), marketing and, 449–450 Direct retailing, 349–352 Disabilities, diversity and, 78–80 Discount pricing, 280–282, 422 Discount stores, 337–338 Disintermediation, 308–311 Distribution, 58f automated, 333 flows, 303 high costs of, 492 intensive/exclusive/selective, 313–314 international channel design for, 314–315 marketing channels and See Marketing channels public policy and, 319 wholesaling and, 358 Distribution centers, 322 Distribution channels, 300 in global marketplace, 481–482 See also Channel entries Distributors, as idea source, 240 Diversification, 47f, 48 Diversity, in populations, 78–80 Divisibility, adoption rate and, 153 Dogs, in portfolio analysis, 46 Doha Round, 463 Do-Not-Call Implementation Act (2003), 86t Do Not Call Registry, 404, 452–453 Do Not Track system, 115 Double bottom line, of values/profits, 509 Downsizing, strategies for, 47–48 Drive, consumer buying behavior and, 146, 148 Drones, use of, 396 Drop shippers, 356t Duties on imports, 288, 462 Dynamic pricing, 284, 286–287, 299–300 E Early adopters, 152, 153f Early mainstream adopters, 152, 153f Earned media, 369, 386 E-commerce, 309, 334, 485 Economic communities, 463–464 Economic criteria, channel design and, 314 Economic environment business buying and, 159 changing, 28 of international trade, 464–465 macroenvironment and, 80–81 Economic factors in global marketplace, 472t market segmentation and, 177 Economics global pricing and, 481 international target marketing and, 466–467 634 www.downloadslide.net Subject Index Economic situation, consumer buying behavior and, 143 Economy consumer spending retailing and, 359 pricing and, 275–276 retailing, consumer spending and, 348 See also Great Recession entries EDLP (everyday low pricing), 267, 346 Education, demographics and, 78 E-learning, 407–408 Electronic data interchange (EDI), 324 Electronic transfer order, 320 Elementary, 380 Email marketing, 436–437 Emerging economies, 464 Empathy, sales and, 399 Employees, customer care and, 218–219 Encyclopedia Britannica, 433 Endorsements, advertising and, 383 Engagement, advertising and, 384–385, 442 Engaging customers See Customer engagement entries Entertainment global movie market, 470 merge with advertising, 380 Environment changing economic, 28 sustainable marketing and, 30–31 Environmental footprint, 491 Environmental forces, 8f Environmentalism consumers, marketing and, 501, 503–505 ethics and, 512 Environmental sustainability, 82–84, 501–503 E-procurement, business buyers and, 161 ESPN The Magazine, 43, 44, 387 Esteem needs, 146, 147f E-tailers, 433 Ethical behavior, 491 Ethics marketing, 510–513 marketing research and, 125–127 morally difficult marketing situations, 511t Ethnic diversity, in populations, 78–80 Ethnicity, subcultures, consumer behavior and, 136–138 Ethnographic research, 109–110 Evaluation, of sales promotions, 423–424 Event marketing, consumer promotions and, 420–422 Event sponsorships, consumer promotions and, 420, 422 Everything Zoomer, 73 Excessive markups, 492 Exchange controls, 462 Exchanges, 7–8 Excitement, personality trait, 145 Exclusive dealing, 319 Exclusive distribution, 313, 319 Exclusive territorial agreements, 319 Execution style, of advertising, 382–383 Expectations v post-purchase performance, 151 Expense reports, 410 Expenses, compensation and, 408 Experiences, consumer, market offering and, 202–203 Experiential retailing, 343, 345 Experimental research, 111 Experimental sources, of information, 150 Exploratory research, 107 Export department, global marketing, 483 Exporting, to foreign markets, 472–473 External idea sources, 240 External marketing, 217f External publics, 71 External stimuli, 149 Extranet links, suppliers and, 161 F Factory outlet malls, 338 Factory outlets, 338 Fair Packaging and Labeling Act (1966), 86t, 212 Fair-trade, 12 False advertising, 376 False wants, 496–497 Family changing structure of American, 76–77 consumer buying behavior and, 141–142 Family-planning marketers, 89 Fantasy advertising, 382 Farmed and Dangerous, 84 Fashion, product life-cycle and, 250, 251f Fast Company, 507 Fast-food, health and, 491, 494–495 Federal Cigarette Labeling and Advertising Act (1967), 86t Federal Food, Drug, and Cosmetic Act, 257 Federal Food and Drug Act (1906), 86t Federal Trade Commission Act (1914), 86t, 212 Feedback, social media marketing and, 442 Field sales force, 404–405, 457 Fifty & Fabulous, 73 Fighter brand, 291 Financial intermediaries, 70 Financial publics, 71 Financial Reform Law (2010), 86t Financing, wholesalers and, 356 Fishyback (transportation), 324 Fit factor, brand extensions and, 230 Fixed amount compensation, 408 Fixed costs, 269 Fixed fee, 279 Flash sales, 349 Flow of ownership, 303 Fluctuating demand, 155 FOB (free on board)-origin pricing, 284 Focus group interviewing, 112 Follow-up, selling process, 416 Food deserts, 496 Forbes, 387, 396, 399, 507 Foreign markets, international research and, 124–125 See also International entries Format elements, in advertising, 383 Fortune 100, 453 Fortune 500, 326, 333 Fortune 1000, 162 Fortune magazine, 16, 218 Forums online, marketing and, 438–439 Four Ps of marketing, 12, 53f, 134 Fragrance, in-store experience and, 343, 345 Franchise organization, 306–307 Franchises contractual VMS and, 306–307 distribution channels and, 304–305 organization, retail sales and, 339t, 340 retailer franchise system, manufacturer-sponsored, 306–307 service-firm-sponsored retailer franchise system, 307 wholesaler franchise system, manufacturer-sponsored, 307 Franchisor, 306–307 Fraud Internet, 451 marketing and, 451–452 See also Ethics entries Free goods, trade promotions, 423 Free on board, 284 Free trade zones, 463–464 Freight-absorption pricing, 284 Frequency, advertising and, 384–385 Frequency marketing programs, 17 loyalty cards, 418 See also Loyalty programs Fringe benefits, compensation, 408 Frozen, 252 Full-line forcing, 319 Full partnerships, 17 Full-service retailers, 336 Full-service wholesalers, 356t Functional discount, 281 Functional organization, 59 Future business portfolio, 43 Futurists, 91 G Games, consumer promotions and, 420 Gender, diversity and, 78–80 Gender segmentation, consumer market, 172–173 General Agreement on Tariffs and Trade (GATT), 463 General need description, in business buying process, 160 General public, 71 Generational marketing, 76 Generation X, 74 Generation Y, 75 Generation Z, 75–76 Generic brands, 225–226 Geocosmetics, 459 Geographical markets, 48 Geographical organizations, 483 Geographical pricing, 283–284 Geographic characteristics, global markets and, 472t Geographic location, market segmentation and, 177 Geographic organization, 59 Geographic shifts, in population, 77–78 Geolocation information, 453 Geopolitical conflicts, 467 Global brands, international advertising, 391 Global expansion of major retailers, 354 Netflix, 486 Global firm, 461 Globalization backlash against American, 469 company decision to go global, 470 international research and, 124–125 marketing and, 461–462 rapid, 29–30 See also International entries Global–local balance, international marketing, 459–460 Global marketing, 460–462 choosing a market, 471–472 decision to go global, 470 market potential, indicators, 472t Global marketing environment cultural, 467–470 See also Culture, international marketing and economic, 464–465 entering, 472–475 See also International marketplace, entering international trade system, 462–464 See also International trade system political-legal, 465, 467 Global marketing organization, 483 Global marketing program, 475–476 distribution channels, 481–482 price and, 479–481 product adaptation/extension/ invention, 476–477 promotion, 477–478, 479 Global movie market, 470 Global organizations, 483 Global pricing, 480–481 Global value delivery network, 481 www.downloadslide.net Subject Index Goals, setting company, 42–43 Good-value pricing, 267 Government, pricing and, 276 Government intervention, in resource management, 81–82 Government markets, 72 Government publics, 71 Graphic segmentation, consumer markets, 171 Great Recession advertising expenditures and, 378 economy and, 28 gross domestic product and, 460 layoffs in, 90 materialism, spending and, 497 price–value equation and, 275 retailers and, 348 sales and, 80 shopping malls and, 347 Greening, environmental sustainability and, 501f, 504 Greenlist process, S.C Johnson, 503 Green retailing, 353–354 Green supply chains, 321 Gross-domestic product (GDP), 460, 465 Group interviewing, 112 Groups, customer behavior and, 138–141 Growth, strategies for, 47–48 Growth-share matrix, 45–46 Growth stage, of product life-cycle, 250f, 253 Guides Against Deceptive Pricing (FTC), 293 Guiding philosophy, 49 H Handling objectives, selling process and, 416 Hashtags, 19 Headline, advertising and, 383 Hemlock Grove, 121, 311 High-k, 346 High-low pricing, 267 High-pressure selling, 494 High prices, consumers and, 492–493 Hispanics, as consumer subculture, 136–137 Horizontal conflict, channel, 304 Horizontal marketing systems, 307–308 House of Cards, 121, 311, 470 Huffington Post, 381, 396 Hybrid sales rep, 405 Hydrofluorocarbons (HFCs), 504 Hypertargeting, 185, 186–187 I Idea generation, 239–243 crowdsourcing, 240–243 external idea sources, 240 internal sources for, 239 product concept, 243–244 See also Product concept Idea marketing, 207 Ideas, Idea screening, 243 Identity theft, 451 Illustration, advertising and, 383 Image advertising, 382–383 Image differentiation, 190 Images, service differentiation and, 220 IMC See Integrated marketing communications (IMC) Immersion groups, 112 Impact, of advertising, 384–385 Import quotas, 465 Inbound logistics, 320 Inbound toll-free numbers, marketing and, 449 Incentive size, sales promotion, 423 Income distribution, 80–81, 465 Income segmentation, consumer market, 173 Incredible Hulk, The, 25 Independent off-price retailers, 338 Indirect exporting, 473 Indirect marketing channels, 303 Individual factors, in business buying process, 159 Individual interviewing, 112 Individual marketing, 183 Individual needs, Individual product and service decisions branding, 209–210 labeling, 211–212 packaging, 210–211 product/service attributes, 207–209 product support services, 212–213 Individual products, 207–209 Indoor positioning systems, 352–353 Industrial distributors, 356t Industrial economies, 464 Industrialized nations, 465 Industrializing economies, 464 Industrial products, marketing, 206 Industrial structure, of countries, 464–465 Inelastic demand, 155 Influentials, 138 Infomercials, 449–450 Information, 6, 149–150 See also Data entries Information flow, 303 Information search, buying decision process, 149–150 Information technology automated distribution and, 333 retailing and, 352–353 wholesaling and, 359 Information technology, supply chain logistics and, 320–321 Informative advertising, 376t Innovation crowdsourcing and, 241–242 Google and, 237–238 idea generation and, 239–243 See also Idea entries new product development and, 238–239 Innovation management system, 248–249 Innovative marketing, 507 Innovators, 152, 153f Inside-out perspective, 10 Inside sales force, 404–405 In-store experience, digitizing, 344–345 Integrated logistics management, 325–327 Integrated marketing mix, develop, 54–56 plan/program, 12–13 Integrated marketing communications (IMC) need for, 370–372 new marketing communications model, 367–368 promotion mix, shaping, 372–374 See also Promotion mix, IMC and promotion tools, 371f Integrated social media marketing, 443 Intelligence See Competitive marketing intelligence Intensive distribution, 313 Interactive advertising, 444 Interactive marketing, 217f, 219, 442 Interactive TV (iTV), 450 Intermarket segmentation, 177–178 Intermediaries, type/number of marketing channel, 313–314 Intermediary levels, distribution channels, 303 Internal databases, marketing information and, 102–103 Internal idea sources, 239 Internal marketing, 217 Internal publics, 71 Internal service quality, 217 Internal stimuli, 149 International advertising, 391 International distribution channels, 314–315 International divisions, of companies, 483 International marketing environmentalism, ethics and, 512–513 global-local balance, 459–460 major decisions in, 462f research, 124–125 target marketing, economics and, 466–467 whole-channel concept for, 481f See also Global entries International marketplace, entering, 472–475 direct investment, 474–475 entry strategies, 472f exporting to, 472–473 joint venturing, 473 International marketplace, pricing strategies and, 277–278 635 International markets, 72 International market segmentation, 177–178 International pricing, 287–288 International product and services marketing, 257–258 International subsidiaries, 483 International trade system, 462–464 regional free trade zones, 463–464 World Trade Organization (WTO), 463 Internet Do Not Track system, 115 dynamic real-time price adjustments, 285–286 e-learning, 407–408 fraud on, 451 marketing communications and, 367 mobile marketing and, 443–447 Netflix, disintermediate and, 310–311 netnography research and, 110 online behavioral/social tracking/ targeting, 114–115 online marketing research, 113–114 online sales, 262–263 price comparisons using, 275, 286–287 privacy and, 452 sales leads and, 404 social selling and, 410–413 Super Bowl advertising and, 389–390 supply chain distribution and, 324 See also Digital and social media marketing; Direct and digital marketing; and Online and Social media entries Internet-based logistics systems, 320 Internet marketing, issues with, 451–452 Internet search engines, 108 See also Search engines Interpersonal factors, in business buying process, 159 Interpretive consumer research, 146 Interpret research, 117–118 Intranet, 122 Intrapreneurial programs, 239 Introduction stage, of product life-cycle, 250f, 251, 253 Intrusion, 18 Inventory control, 359 See also RFID entries Inventory management, supply chain and, 323 Inventory turnover, 362 Investor relations, PR and, 392 J J-14 magazine, 76 Joint ownership, international trade and, 474 636 www.downloadslide.net Subject Index Joint venturing, international markets and, 473 contract manufacturing, 473 joint ownership, 474 licensing, 473 management contracting, 474 Judgment sample, 116t Junk mail, 448 Junk phone calls, 449 Just-in-time logistics system, 323 K Kickbacks, 512–513 Kiosk marketing, 450–451 Kraft Food & Family magazine, 119 L Labeling decisions, 211–212 Lagging adopters, 152, 153f Language global marketing and, 477–479 global trade and, 468–469 international marketing research and, 125 localizing brand names, 478–479 subcultures, marketing and, 136–137 Lanham Trademark Act (1946), 86t Late mainstream adopters, 152, 153f Law, marketing decisions and, 506f Leading adopters, 138 Learning, consumer buying behavior and, 148 Legal factors, in market segmentation, 177 Legal-political environment, international trade, 465, 467 Legislation, regulating businesses, 85–87, 86t LEGO MOVIE, The, 26, 381 Less for much less value proposition, 192–195 Lexus and the Olive Tree, The: Understanding Globalization (Friedman), 469 Liability, product, 257 Licensed characters, 227 Licensing, 226–227, 473 Life-cycles, short, retailers and, 348–349 Life stage consumer buying behavior and, 142–143 market segmentation and, 172 Lifestyle advertising, 382 consumer buying behavior and, 143–145 Lifestyle centers, 347 Lillyhammer, 121, 311 Limited-service retailers, 336 Limited-service wholesalers, 356t Limited-time offers, 283 Line extensions, brand development and, 227–228 Line filling, 213 Line stretching, 213 Litigation, product, 257 Lobbying, PR and, 392 Localizing brand names, 478–479 Local marketing, 181–182 Local publics, 71 Locate-compare-select process, 336 Location-based pricing, 281 Location decisions, retailers and, 347–348 Logistics, supply chain management and, 319–327 See also Marketing logistics, supply chain management and Logistics information management, 324–325 Logos colors, 343, 345 PR and, 394 product differentiation and, 190 product labeling and, 211–212 roll over ads and, 436 trade promotion and, 423 Long-run welfare, 11 Los Angeles Times, 508 Lovemarks, branding and, 224 Low-interest financing, 283 Loyalty brand equity and, 223 cards, 418 customer, 21, 217 salesperson-owned, 402 status, consumer market segmentation and, 175–176 See also Frequency marketing programs M Macroenvironment, 68 cultural environment, 88–91 demographic, 72–80 See also Demographic environment, of companies economic environment, 80–81 major forces in, 72f natural environment, 81–82 political/social environment, 85–88 technological environment, 82, 84–85 Madison & Vine, 380 Magazines, advertising, 386t Magnuson-Moss Warranty Act (1975), 86t Mail-order wholesalers, 356t Mail surveys, 111–113 Maintenance, 283 Make-and-sell philosophy, 10, 300 Management contracting, joint venturing and, 474 Managing marketing See Marketing management Manufacturers’ and retailers’ branches and offices, 357t Manufacturer-sponsored retailer franchise system, 306–307 Manufacturer-sponsored wholesaler franchise system, 307 Manufacturers’ representatives, 357t Manufactures’ agents, 357t Marco Polo, 121, 311 Market description, 58f Market development, 47f–48 Market growth rate, 45–46 Marketing consumer products, 204–205f defined, expanded model of process of, 31f four Ps of, 13 industrial products, 206 organizations, persons, places, ideas, 206–207 societal criticisms of, 492–499 what is?, 4–5 Marketing 3.0, 11 Marketing, impact on society, 496–498 cultural pollution, 498 false wants, materialism and, 496–497 social goods, too few, 497–498 Marketing analysis, 56–57 Marketing analytics, 118–122 Marketing at Work big data/marketing analytics (Netflix), 120–121 brand extensions, 230–231 B-to-B sales, 411–412 buy-one-give-one concept, 508–509 channel partnering, 317–318 Chipotle, environmental sustainability, 83–84 customer care, 218–219 customers, serve/stalk, 186–187 digitizing in-store experience, 344–345 disintermediate, 310–311 DuckDuckGo, 54–55 ESPN, brand portfolio, 44–45 events, consumer promotions and, 421–422 international marketing, 466–467 JetBlue, 15–16 less for less value positioning, 194–195 lifestyle, Taco Bell, 144–145 mobile marketing, smartphones and, 445–446 pricing, value and, 268–269 product life-cycle, 252–253 real-time marketing, 26–27 social media, corporate message backlash, 92–93 social media, engaging customers, 104–105 word-of-mouth, brand conversations, 140–141 Marketing budget, 57 Marketing channels, 300 channel behavior, 304–305 channel design, 311–315 See also Channel design channel management, 315–318 See also Channel management channel organization, changing, 308–309 consumer and business, 303f distributors reduce number of channel transactions, 302f horizontal marketing systems, 307–308 key functions, 302 levels, number of channel, 303 multichannel distribution systems, 308 public policy and, 319 value added, by members, 301–303 vertical marketing systems and, 305–307 Marketing communications model, 367–368 Marketing concept, 10–11, 490–491 Marketing control, 60 Marketing dashboards, 61 Marketing decision areas, law and, 506f Marketing department organization, 59–60 Marketing environment, 68, 91–92 Marketing impact, on business, 498–499 Marketing implementation, 57–59 Marketing information assess need for, 102 big data and, 101 competitive marketing intelligence, 103, 105–106 customer insights and, 100 distribute/use, 122 internal databases, 102–103 See also Data Marketing information, analyze/use big data/marketing analytics, 118–122 customer relationship management (CRM), 118–119 Marketing information system (MIS), 101, 102f Marketing intermediaries, 70, 303 Marketing logistics, supply chain management and, 319–327 goals of logistics systems, 321–322 integrated logistics management, 325–327 See also Integrated logistics management inventory management, 323 logistics information management, 324–325 nature/importance of, 319–321 partnerships, build logistics, 326 sustainable supply chains, 321 third-party logistics (3PL), 326–327 transportation and, 323–324 warehousing, 322–323 Marketing management, analysis, planning, implementation, control, 56f market department organization, 59–60 www.downloadslide.net Subject Index marketing analysis, 56–57 marketing concept, 10–11 marketing control, 60 marketing implementation, 57–59 planning, marketing, 57 product concept, 10 production concept, 10 selling concept, 10 societal marketing concept, 11 Marketing mix, 12 develop integrated, 54–56 four Ps of, 53f integrated, 51 marketing strategies and, 51f modify, 254 pricing decisions and, 272–273 products, services, experiences, 202–203 wholesaler, 358–359 Marketing myopia, Marketing niche, 54–55 Marketing plan, contents of, 58f Marketing process, Marketing regulation, public actions, 505–506 Marketing research international, 124–125 interpret/report findings, 117–118 misuse of data, 127 primary data collection, 109–117 See also Primary data collection problem definition/research objectives, 107 process of, 106f public policy, ethics and, 125–127 research plan, develop, 107–108 research plan, implement, 117 secondary data collection, 108–109 in small business and nonprofits, 123–124 Marketing return on investment (marketing ROI), 60–61f Marketing services agencies, 70 Marketing stimuli, 134, 135 Marketing strategies cultural impact of, 468–470 culture, global trade and, 467–468 defined, 51, 57 development, new product, 244–245 differentiation/positioning, 52–53 marketing communications and, 367 marketing mix and, 51f market segmentation, 51–52 market targeting, 52 pricing decisions and, 272–273 Marketing strategy development, 244–245 Marketing strategy statement, 245 Marketing websites, online marketing and, 434–435 Market management organization, 59 Market offerings, 6–7, 202–203 Market-oriented business, productoriented business v., 41f Market penetration, 47–48, 47f Market-penetration pricing, 277–278 Market pioneer, 253 Markets, Market sales force structure, 403 Market segment, 52, 179 Market segmentation, 9, 51–52 business, 176–177 effective, requirements for, 178 international, 177–178 segmentation bases, using multiple, 176 Market segmentation, consumer, 170 behavioral, 174–176 demographic, 172–173 graphic, 171 psychographic, 173–174 Market-skimming pricing, 277 Market structure, demand and, 155 Market targeting, 52, 170 concentrated, 180–181 customers: serve or stalk?, 186–187 differentiated, 180 market segments, evaluating, 179 micromarketing, 181–183 products, services, experiences, 202–203 selecting targets, 179–185 socially responsible, 184–185 strategies, 179f, 183–184 undifferentiated, 179–180 See also Target market Market variability, 184 Markup pricing, 270–271 Marvel Super Heroes, 99 Mashable, 381 Maslow’s Hierarchy of Needs, 146, 147f Mass customization, 183 Mass marketing, 179–180 Mass-media marketing, 367 Mass mingling, 89 Mass-promotion, public relations and, 392–394 Materialism, 91, 496–497 Materials and parts, 206 Matrix approach, to portfolio analysis, 46–47 Maturity stage, of product lifecycle, 250f, 254–255 Maxim magazine, 387 McDomination, 469 Meat space, tracking in, 456 Mechanical instruments, for research, 116–117 Media, select advertising, 384–385 Media availability, international advertising and, 479 Media impact of advertising, 385 Media multitaskers, 387 Media planner, 387 Media publics, 71 Media timing, 387–388 Media types, choosing, 385, 386t Media vehicles, 387 Megaretailers, 349 Membership group, 138 Membership warehouses, 339 Merchant wholesalers, 356t Message strategy/execution, advertising and, 381–383 Microenvironment of company, 68–69f competitors, 70 customers, 72 marketing intermediaries, 70 public, 71–72 suppliers, 69 Micromarketing, 181–183 individual, 183 local marketing, 181–182 Millennials, 75, 440 Minorities, diversity in populations and, 78–80 Mission statement, strategic planning and, 41–42 Mobile advertising, 386t, 387 Mobile apps consumer promotions and, 419 flash sales, 349 marketing and, 426 mobile marketing and, 443–447 online retailing and, 349–352 shopping and, 335 social selling and, 413 Mobile marketing, 25–28, 443–447 Mobile payments, 296 Mobile sales, social selling, 410–413 Modern Family, 76, 79, 381, 387, 393 Modified rebuy, 157 Monetization, social media, marketing and, 440–441 Monopolistic competition, 274 Mood advertising, 382–38 Morally difficult issues, in marketing, 511t More for less value proposition, 193 More-for-more positioning, 191–192 More for the same value proposition, 192 Morning Joe, 380 Motivating salespeople, 409–410 Motivation research, 146 Motive, consumer buying behavior and, 146 Movies, global market for, 470 Multibrands, 229 Multichannel distribution systems, 308 Multimodal transportation, 324 Multinational companies, 468 Multitasking, media, 387 Music advertising and, 383 in-store experience, 343 My Little Pony, 420 637 N National brands, 225–226 National Enquirer, 387 National Environmental Policy Act (1969), 86t National Geographic, 441 National Traffic and Safety Act (1958), 86t Native advertising, 381, 396 Natural environment, 81–82 Nature, changing attitudes about, 90–91 Need recognition, 149 Needs, 6, 146, 147f Neighborhood shopping center, 347 Netnography research, 110 Neuromarketing, 117 New brands, 229 New clean technology, 504 New entrants, to market, 179 New marketing, 18 New product development, 238–239 business analysis, 245 commercialization, 247 customer-centered, 247–248 idea generation, 239–243 See also Idea entries marketing strategy development, 244–245 product development, 245–246 systematic, 248–249 team-based, 248 test marketing, 246–247 New product pricing strategies market-penetration, 277–278 market-skimming pricing, 277 New products, buying decision, 151–153 News, PR and, 393 Newspapers, advertising, 386t New task, 157 New York Times, The, 381, 433, 489 Niche marketing, 180–181 DuckDuckGo, 54–55 social networks and, 441 No-name brands, 225–226 Nonprofits, marketing research in, 123–124 Nontariff trade barriers, 462 North American Free Trade Agreement (NAFTA), 464 Not-for-profit marketing, 28–29 Nothing but the Truth So Help Me God: 51 Women Reveal the Power of Positive Female Connection (Bronstein), 329 Nutrition Labeling and Education Act (1990), 86t, 212 O Objective-and-task method, advertising, 378 Objectives pricing decisions and, 272–273 setting company, 42–43 Observational research, 109–110 Occasion segmentation, consumer market, 174 638 www.downloadslide.net Subject Index Occupation, consumer buying behavior and, 142 Offer, service differentiation and, 219–220 Office, The, 400 Offices, manufacturers’/ retailers’, 357t Off-invoice trade promotions, 422 Off-list trade promotions, 422 Off-price retailers, 338 Old marketing, 18 Oligopolistic competition, 274 Omni-channel retailing, 335, 350–352 One-stop shopping, 347 Online advertising, 435–436 email marketing, 436–437 online videos, 437–438 Online advertising vehicles, 387 Online and digital security, 451 Online behavioral research, 114–115 Online display ads, 435–436 Online dynamic price adjustments, 285–286 Online focus groups, 114 Online marketing, 434–439 advertising, 435–436 mobile marketing, 25–28 research, 113–114 social media, 24–25, 433 websites/branded community, 434–435 See also Digital and social media marketing Online price tracking, 296 Online promotions, 346–347 Online purchasing, business buyers and, 161 Online retailing, 349–352 Online sales flash sales, 349 price wars, 262–263 social selling and, 410–413 Walmart, 334 Online sellers, 404 Online shopping, showrooming, 351–352 Online social networks, consumer buying behavior, influences, 139–141 Online videos, Digital and social media marketing and, 437–438 Omni-channel buyers, 334 Omni-channel retailing, 434 Open-ended questions, 116 Operating characteristics, 176 Operating control, 60 Opinion leaders, 138 Opt-in calling systems, 449 Optional-product pricing, 279 Orange Is the New Black, 121, 311 Order getter, 401 Order-routine specification, in business buyer process, 161 Order taker, 401 Organic farming, 516 Organizational climate, 409f Organizational factors in business buying, 159 in pricing decisions, 273 Organization marketing, 206 Organizations, 6, 90 Others, view of, 89–90 Ouija (film), 440 Outbound logistics, 320 Outbound telephone marketing, 449 Outdoor advertising, 386t Out magazine, 79 Outside-in perspective, 10 Outside sales force, 404–405 Outsourced logistics, 326–327 Out Traveler, 79 Overhead, 269 Overselling private goods, v public goods, 497–498 Owned media, 369, 370, 386 P Packaging deceptive, 493 decisions, 210–211, 504 green, 354 Paid media, 369, 370, 386 Parents magazine, 387 Partnership relationship management (PRM), 19, 49, 316 Partnerships, building logistics, 326 Payment data, 320 Payment flow, 303 Peer-to-peer car sharing, 445 People differentiation, 190 People magazine, 441 Perceived obsolescence, 495 Perceived performance, 151 Percent-of-sales method, advertising, 377 Perception, consumer buying behavior and, 146–147 Perceptual positioning maps, 188–189 Performance quality, 208 Performance review, in business buyer process, 161 Perks of Being a Wallflower, The, 79 Permission-based marketing direct, 448 email, 437 Personal characteristics, 176 Personal factors, consumer buying behavior and, 142–146 age/life stage, 142–143 economic situation, 143 lifestyle, 143–145 occupation, 142 personality/self-concept, 145–146 Personal interviews, research and, 111–113 Personality, consumer buying behavior and, 145–146 Personality symbol, advertising and, 383 Personality variables, 174 Personalized content, 429 Personal selling, 373 company to customer and, 401–402 coordinating marketing/sales and, 402 nature of, 400–401 promotion mix and, 366 sales force, role of in, 401–402 Personal selling process approach, 415 closing, 416 customer relationship management, 416–417 follow-up, 416 handling objectives, 416 preapproach, 414–415 presentation/demonstration, 415 prospecting/qualifying, 414 Personal sources, of information, 149 Person marketing, 207 Persons, Persuasive advertising, 376t PET plastic bottles, 504 Phishing, 451 Physical distribution, 319–321 Physical distribution firms, 70 Physical flow, of product, 303 Physical needs, Physician Payment Sunshine Act, 426 Physiological needs, 146, 147f Piggyback (transportation), 323, 324 Pipelines, supply chain distribution and, 324 Place marketing, 207 Place(s), 6, 13 Planned obsolescence, 495 Planning, marketing and, 49, 57, 58f PlantBottle packaging, 504 Pleasing products, 509–510 POES channels, 369 Point-of-purchase (POP) promotions, 420 Point-of-sale scanners, 320 Polar vortex, 81 Political environment, legislation regulating business, 85–87, 86t See also Public policy entries Political factors, in market segmentation, 177 Political-legal environment, of international trade, 465, 467, 472t Pollution, 81 Pollution prevention, 501f, 503, 505 Polyvinylidene chloride (PVDC), 512 Pop culture, 469 Population changing age structure of, 73–76 diversity in, 78–80 education and, 78 geographic shifts in, 77–78 See also Demographics entries Portals, digital and social media marketing, 433 Portfolio analysis, 43–47 Boston Consulting Group Approach to, 45–46 ESPN, 44–45 matrix approach, issues with, 46–47 Positioning, 170 communicate/deliver chosen, 195–196 maps, 188–189 retailer, 341–342 strategy for, choosing, 189–195 wholesaler, 357–358 Positioning, product, 52–53 Positioning statement, 193, 195 Positive incentives, 410 Postpurchase behavior v expectations, 151 Power centers, 347 PR See Public relations (PR) Preapproach, selling process, 414–415 Predatory pricing, 293 Premiums, consumer promotions and, 420 Presentation, selling process, 415 Press agency, 392 Press relations, 392 Price, 13 defining, 264–265 high, impact on consumer, 492–493 international target marketing, economics and, 466–467 relative, retailers and, 337–339 setting, considerations in, 265f setting international, 480–481 wholesalers and, 358 Price adjustment strategies discount allowance pricing, 280–281 dynamic and online pricing, 284–287 geographical pricing, 283–284 international pricing, 287–288 promotional pricing, 282–283 psychological pricing, 282 segmented pricing, 281 strategies, descriptions, 280t Price bundling, 280 Price changes buyer reaction to, 289 competitor reaction to, 290 initiating price cuts, 289 responding to, 290–291 Price comparison, using Internet, 286–287 Price cuts, initiating, 289 Price decisions, internal/external factors in marketing strategy, objectives, mix, 272–273 organizational considerations, 273 Price–demand relationship, 274–275 Price discrimination, 293 Price elasticity, 275 Price escalation, 288, 480 www.downloadslide.net Subject Index Price fixing, 292 Price gouger, 289 Price increases, initiating, 289 Price-off trade promotions, 422 Price packs, consumer promotions and, 420 Price promotions, 346 Price reduction, 297 Price skimming, 277 Price-value equation, economy and, 275–276 Price war, 262–263, 297 Pricing across channel levels, public policy and, 293 within channel levels, public policy and, 292 competition-based, 271–272 cost-based, 269–271 customer value-based, 265–266 deceptive, 293, 493 dynamic, 284, 286–287, 299–300 economy and, 275–276 external factors, 276–277 good-value, 267 high-low, 267 high quality/low price, 268–269 market, demand and, 274–275 predatory, 293 product mix, 278–280 See also Product mix pricing strategies public policy and, 291–293 retailer decisions, 345–346 strategies for See New product pricing strategies surge, 299–300 value-added, 267, 269 value-based v cost-based, 266f Primary data, 108 Primary data collection, 109–117 experimental research, 111 mail survey, telephone/personal interviewing, 111–113 observational research, 109–110 online behavioral/social tracking/ targeting, 114–115 online marketing research, 113–114 planning, 109f research, 116–117 sampling plan, 115–116t survey research, 110–111 Principles before profits, 509 Privacy, consumer, marketing research, ethics and, 125–127 Privacy online children and, 451–452, 515 Children’s Online Privacy Protection Act (2000), 86t consumer, 452 DuckDuckGO, 55 of Generation Z, 76 legislative action and, 452–453 Private brands, 225–226 Private goods v public goods, 497–498 Private labels, 225–226 Proactive marketing stance, 91–92 Probability Sample, 116t Problem definition, market research and, 107 Problem recognition, in business buying process, 159–160 Producer’s cooperatives, 356t Product adaptation, 476–477 Product and service attributes, 207–209 product features, 208 product quality, 208 product style and design, 209 Product assortment, retailer, 342–343, 345 Product attributes, 223 Product bundle pricing, 280 Product class, 250 Product concept, 10 concept testing, 244 development, 243–244 Product decisions, social responsibility and, 256–257 Product development, 47f, 48 new 245–246, 249, 250f testing, 246–247 Product differentiation, 53, 189 choosing/promoting, 190–191 value proposition and, 191–193 Product features, 208 Product form, 250 Product form pricing, 281 Product invention, 477 Production concept, 10 Productivity, managing service, 221 Product liability, 257 Product licensing, 226–227 Product life-cycle (PLC) strategies, 249–256 decline stage, 255–256 fads, 251 fashion, 250, 251f growth stage, 253 introduction stage, 251, 253 Mattel, 252–253 sales/profits over product’s life, 250f summary of characteristics, objectives, strategies, 256f sustainability and, 504 Product line, retailers and, 336–337 Product line decisions, 213–214 Product line filling, 213 Product line length, 213 Product line pricing, 278–279 Product line stretching, 213 Product/market expansion grid, 47f–48 Product marketing, international, 257–258 Product mix decisions, 214–215 Product mix pricing strategies, 278–280 by-product pricing, 279–280 captive-product pricing, 279 optional-product pricing, 279 product bundle pricing, 280 product line pricing, 278–279 Product performance, 14 Product portfolio, 214–215 Product position, 52–53, 188–189 See also Positioning entries Product publicity, 392 Product quality, 208 Product review, 58f Product(s), 6, 13 attributions of individual, 207–209 characteristics, adoption rate and, 153 classification, 204–205 consumer, marketing, 204–205 defining, 202 See also Market offering five global product and communication strategies, 476f industrial, 206 levels of services and, 203–204 marketing consumer, 205f post-purchase behavior, consumers, 151 societal marketing and, 509–510 three levels of, 204f Product safety, 494–495 Product sales force structure, 403 Product specification, in business buying process, 160 Product stewards, 257 Product stewardship, 501f, 504 Product style and design, 209 Product support services, 212–213 Product testing, 246–247 Product-oriented business, market-oriented business v., 41f Product value analysis, 160 Promotion, 13 deceptive, 493–494 global marketplace and, 477–479 high cost of, 492 public relations and, 392–393 wholesalers and, 358 Promotional allowances, 281 Promotional pricing, 282–283 Promotional products, 420 Promotion clutter, 418 Promotion decisions, retailers and, 346–347 Promotion flow, 303 Promotion mix, 366–367 Promotion mix, IMC and, 372–374 advertising, 372–373 direct and digital marketing, 373 personal selling, 373 public relations, 373 push v pull promotion strategy, 374f sales promotions, 373 strategies, 373–374 Proposal solicitation, in business buyer process, 161 Pro Publica, 426 Prospecting, selling process, 414 Psychographic segmentation, 173–174 Psychological factors, in consumer buying behavior, 146–148 beliefs/attitudes, 148 639 learning, 148 motivation, 146 perception, 146–147 Psychological pricing, 282 Public actions, marketing regulation and, 505–506 Public actors, in company microenvironment, 71–72 Public affairs, PR and, 392 Public goods v private goods, 497–498 Public policy direct and digital marketing and, 451–453 distribution decisions and, 319 ethics, marketing research and, 125–127 pricing and, 291–293 Public relations (PR), 373, 392–394, 437 promotion mix and, 366–367 role/impact of, 393 tools, 393–394 Public service activities, PR and, 394 Public sources, of information, 149 Puffery, 494 Pull strategy, promotion mix, 374 Purchase decision, 150–151 Purchasing agents, 357t Purchasing approaches, 176 Purchasing offices, 357t Pure competition, 274 Pure monopoly, 274 Pure services, 202–203 Pure tangible goods, 202–203 Purpose-driven marketing, 11 Push money, trade promotions, 423 Push strategy, promotion mix, 373, 374f Q QSCV (quality, service, cleanliness and value), 50 Qualifying leads, selling process, 414 Qualitative research, 114 Qualitative value, of advertising, 385 Quality, managing service, 220–221 Quality level, product, 208 Quantitative research, 113 Quantity discount, 281 Question marks, in portfolio analysis, 46 Questionnaires, 116 Questions, research and, 116 Quotas, 465 Quota sample, 116t R Race consumer subcultures and, 136–138 diversity in populations, 78–80 See also Demographics entries Rack jobbers, 356t 640 www.downloadslide.net Subject Index Radio, advertising, 386t Radio-frequency identification (RFID) transmitters, 82, 84–85 Railroads, supply chain logistics and, 323 Raw material exporting economies, 464 Raw materials, 81, 206 Reach, advertising and, 384–385 Real Simple magazine, 387 Real-time marketing, 25–27, 432, 442 Real-time price adjustments, 285–286 Rebates, consumer promotions and, 419–420 Recruiting salespeople, 406–407 Recycling, 504, 505 Redlining, 496 Reference groups, 138 Reference prices, 282 Regional free trade zones, 463–464 Regional shopping center, 347 Regional shopping mall, 347 Regulating business, legislation, 85–87, 86t Regulating marketing, public actions, 505–506 Reinforcement, 148 Relationship building, 401, 416–417 Relationships, 7–8 Relative advantage, adoption rate and, 153 Relative market share, 45–46 Religion, changing views of, 91 Reminder advertising, 376t, 377 Report research, 117–118 Resale price maintenance, 293 Research and development, 238–239, 461 Research approaches contact methods, 111–113 experimental, 111 observational, 109–110 online marketing research, 113–114 survey, 110–111 Research instruments mechanical, 116–117 questionnaires, 116 Research objectives, market research and, 107 Research plan develop, 107–108 implement, 117 Reseller markets, 72 Resellers, 70, 276 Resources, natural environment and, 81–82 Retail convergence, 349 Retailer, world’s largest, 333–334 Retailer cooperative, 339t, 340 Retailers amount of service, 335–336 discount stores, 337–338 location decisions, 347–348 major store types, 335t marketing strategies, 341f omni-channel, 350–352 organizations, types of retail, 339t price decisions, 345–346 product assortment/services decisions, 342–343, 345 product lines and, 336–337 promotion decisions, 346–347 segmentation, targeting, differentiation, positioning, 341–342 trends/developments, 348–354 See also Retailing trends Retail forms, new, 348–349 Retailing online, 349–352 shopper marketing, 334–335 Retailing trends, 348–354 consumer spending, tight, 348 direct, online, mobile, social media, growth of, 349–352 global expansion of major retailers, 354 green retailing, 353–354 megaretailers, 349 new retail forms, 348–349 retail technology, growth of, 352–353 Retail price maintenance, 293 Retail technology, 352–353 Retention, customer, 21 Return on advertising investment, 388–390 Return on investment (ROI), 60–61f Return-on-quality, 208 Reverse auctions, 161 Reverse logistics, 320 RFID inventory tracking, 352 RFID tags, 320, 323 Right customer, 23 Right relationship, 23 Risk bearing, wholesalers and, 356 Robinson-Patman Act (1936), 86t, 291, 293 Roles family, shifting, 141–142 status, buying behavior and, 142 Ruggedness, personality trait, 145 S Safety, product, 494–495 Safety needs, 146, 147f Safety standards, 486 Sales and profit effects, of advertising, 388 Sales assistants, 404 Sales branches and offices, 357t Sales contests, 410, 423 Sales force, 399–402 compensating salespeople, 408 evaluating salespeople, performance and, 410 motivating salespeople, 409–410 outside/inside, 404–405 salespeople, recruiting, 406–407 size, 404 steps in sales force management, 403f structure, 403 supervising salespeople, 409 team selling, 405–406 training salespeople, 407–408 Sales force automation systems, 409 Sales force promotions, 417–418 Sales meetings, 410 Salespeople compensating, 408 high-pressure selling and, 494 motivating, 409–410 recruiting, 406–407 salesperson, defined, 401 supervising, 409 time management of, 409f training, 407–408 Salesperson-owned loyalty, 402 Sales promotion, 366, 373 business promotions, 423 consumer promotions, 419–420, 422 objectives, 418–419 program development, 423–424 rapid growth of, 417–418 trade promotions, 422–423 Sales quotas, 410 Sales reports, 410 Salutary products, 509–510 Same for less value proposition, 192 Samples, consumer promotions, 419 Sampling plan, 115–116t Satellite tracking, 320 Scarecrow, The, 84 Scientific evidence, advertising and, 383 Search engines, 433, 499 data collection and, 108 DuckDuckGO, 54–55 Search-related advertising, 436 Seasonal discount, 281 Secondary beliefs/values, 88–91 Secondary data collection, 108–109 Security, online, 451 Segmentation retailer, 341–342 wholesaler, 357–358 Segmented marketing, 180 Segmented pricing, 281 Selective attention, 147 Selective distortion, 147 Selective distribution, 313–314 Selective retention, 147 Self, view of, 89 Self-actualization needs, 146, 147f Self-concept, consumer buying behavior and, 145–146 Self-image, 145–146 Self-publishing, 329 Self-service retailers, 336 Sellers direct and digital marketing and, 431–432 wholesalers and, 355–356 Selling, high pressure, 494 Selling agents, 357t Selling and Marketing Concepts contrasted, 11f Selling concept, 10 SellingPower magazine, 411 Sense-and-respond philosophy, 10, 300 Sense-of-mission marketing, 489, 507–509 Sequential product development, 248 Service firms, marketing strategies for, 216–217 Service-firm-sponsored retailer franchise system, 307 Service inseparability, 215f, 216 Service intangibility, 215–216 Service perishability, 215f, 216 Service productivity, managing, 221 Service products, 55 Service profit chain five links of, 217 managing service differentiation, 219–220 productivity, managing, 221 quality, managing service, 220–221 Service quality, 215–216, 220–221 Service recovery, 220 Service retailers, 337 Services, classification, 204–205 levels of, product and, 203–204 market offering and, 202–203 poor, to disadvantaged consumers, 495–496 product support, 212–213 public, 497–498 Services differentiation, 189 Services marketing four characteristics of, 215f international, 257–258 nature/characteristics of, 215–216 three types of, 217f Services mix, retailer, 342–343, 345 Service variability, 215f, 216 Sesame Street, 25, 172, 227 Sexual orientation, diversity and, 78–80 Shared digital content, PR and, 393 Shared media, 369, 370, 386 Shared projects, 326 Shared value, 11 Share of customer, 21–22 Share Our Strength’s No Kid Hungry program, 88 Shark Tank, 241 Sherman Antitrust Act (1890), 86t, 291 Shopper marketing, 334–335 Shopping center, 347 Shopping movement, 497 Shopping products, 205 Short-run wants, 11 Showrooming digital devices and, 351–352 online retailing and, 350 pricing and, 287 Simple random sample, 116t Simulated test markets, 246–247 Sincerity, personality trait, 145 Site-to-store, 263 Situational factors, 176 www.downloadslide.net Subject Index 60 Minutes, 396 60 Minutes Overtime, 396 Slice of life, advertising, 382 Small-box discounters, 337–338 Small business, marketing research in, 123–124 Smart kiosks, 450 Smartphones apps, in-store experience, 344–345 consumer promotions, coupons and, 419 media multitasking and, 387 mobile marketing and, 443–447 omni-channel retailing and, 351–352 online retailing and, 349–352 product line filling and, 213–214 promotions and, 346 shop-Beacon app, 352–353 shopping research and, 334–335 showrooming and, 287 target marketing and, 186–187 Uber app, 299–300 See also Mobile entries Smart shelves, 323 Smart tag, 323 Smells, in store experience, 343 Social class, as consumer subculture, 138 Social concerns, pricing and, 277 Social environment cause-related marketing, 87–88 socially responsible behavior, 87 Social factors, of consumer behavior, 138–142 family, 141–142 groups/social networks, 138–141 role/status, 142 Social goods, marketing, impact on society, 497–498 Social ideas, 207 Socially responsible behavior, 87 Social marketing, 207 Social media advertising, 386t backlash to corporate messages, 92–93 business-to-business marketing and, 162–163 consumer buying behavior, influences, 139–141 consumer-generated advertising and, 384 consumer-generated marketing and, 18–19 data mining, ethics and, 125–127 engaging customers in, 104–105 event marketing and, 421–422 hypertargeting and, 186–187 JetBlue and, 16 marketing, 24–25 marketing communications and, 367 monetization, marketing and, 440–441 online behavior/social tracking/ targeting and, 114–115 online marketing research and, 113–114 online retailing and, 349–352 PR and, 393 PR channels, 394 privacy and, 451–452, 515 sales leads and, 404 social selling and, 410–413 Super Bowl advertising, 389–390 Social media marketing advantages/challenges, 442–443 integrated, 443 monetization, 440–441 using, 439, 441 See also Digital and social media marketing Social mission, marketing and, 507–509 Social needs, 6, 146, 147f Social networks, customer behavior and, 138–141 Social responsibility product development and, 256–257 sustainable marketing and, 30–31 Social selling, 401, 410–413 Social sharing, social media marketing and, 442 Social targeting, 115 Social tracking research, 114–115 Social welfare, 491 Societal criticisms, of marketing, 492–499 See also Marketing, societal criticisms of Societal marketing concept, 11, 12f, 491, 509–510 Society attitudes toward, 90 marketing impact on, 496–498 See also Marketing, impact on society protection of, legislation/ regulation, 85–87, 86t Sociocultural factors, in international markets, 472t Software channel member management and, 316 retail technology, 352–353 supply chain management and, 325 virtual meeting, 405 SoLoMo (social+local+mobile) marketing, 182 Solutions selling, 157, 400 Sophistication, personality trait, 145 Spam, email and, 437 Special-event pricing, 282–283 Special events, PR and, 393 Specialty advertising items, trade promotion and, 423 Specialty products, 205 Specialty stores, 336 Spending, conspicuous, 497 Spend-now-pay later, 494 Spirituality, changing vies of, 91 Sports Illustrated, 44, 252 Standardization, in advertising, 391, 477–479 Standardized global marketing, 475 Star magazine, 387 Stars, in business portfolios, 45 Star Trek, 25 Star Wars, 99, 227, 253 Static price tags, 285 Status, consumer buying behavior and, 142 STEM education, 396 Stimulus object, 148 Stimulus-response model, of buyer behavior, 134, 135f Stockturn rate, 362 Storage warehouse, 322 Store brands, 225–226 Storytelling, sales and, 400 Straight product extension, 476 Straight rebuy, 156–157 Strangers (customer group), 23f Strategic business units (SBUs), 43 Strategic control, 60 Strategic planning, 40 business portfolio, designing, 43 growth/downsizing, strategies for, 47–48 marketing and, 49 mission statement, 41–42 objectives/goals, setting company, 42–43 portfolio analysis, 43–47 See also Portfolio analysis steps in, 40f sustainable marketing and, 491 Stratified random sample, 116t Strip mall, 347 Style, product life-cycle and, 251f Subcultures, consumer behavior and, 136–138 African Americans, 136 Asian Americans, 137 Hispanics, 136–137 Subliminal advertising, 147 Subsistence economies, 464 Substitute products, 179 Sunday Night Football, 379 Supercenters, 337 Supermarkets, 336–337 Superstores, 337 Supplier development, 156 Suppliers business buying-decision process and, 160–161 in company microenvironment, 69 as idea source, 240 power of, 179 Supplies and services, 206 Supply chain, 19 international distribution, 314–315 management, marketing logistics and, 319–327 See also Marketing logistics, supply chain management and value delivery network and, 300–301 641 Supply chain management (SCM), 19, 320 Supply chain management (SCM) software, 316 Survey research, 110–111 Sustainability, cost of, 516 Sustainability vision, 501f, 504–505 Sustainable company, 513 Sustainable Living Plan (Unilever, 502–503 Sustainable marketing, 11, 30–31, 490–492 concept, 491f consumer-oriented marketing, 506 customer value marketing, 506–507 ethics and, 510–513 innovative marketing and, 507 principles of, 506–509 sense-of-mission marketing, 507–509 societal marketing, 509–510 sustainable company, 513 Sustainable marketing, consumers and consumerism, 499–501 environmentalism, 501, 503–505 public action, to regulate marketing, 505–506 Sustainable Product Index, 354 Sustainable supply chains, 321 Sustainable value/environmental sustainability, 501f Sweepstakes, consumer promotions and, 420 SWOT (strengths, weaknesses, opportunities) analysis, 56–57f Systematic new product development, 248–249 System selling, 157 T Targeted online ads, 453 Targeting retailer, 341–342 wholesaler, 357–358 Targeting research, 114–115 Target market, 179 See also Market targeting Target marketing, 9, 179–185 economics and, 466–467 in marketing plan, 58f See also Market targeting Target return pricing, 270 Tariff, 462 Taxes on imports, 462 Team-based new product development, 248 Team selling, 405–406 Teamwork, 325 Technical expertise, advertising and, 383 Technical sales-support, 404 Technological environment, 82, 84–85 642 www.downloadslide.net Subject Index Technology digital See Digital entries planned obsolescence and, 495 retail, 352–353 Telecommute, 77–78 Telemarketers, 404 Telemarketing, 449, 457 Telephone, telemarketing and, 449 Telephone Consumer Protection Act (1991), 86t Telephone interviews, research and, 111–113 Television advertising, 372–373, 379, 386t Television marketing, directresponse, 449–450 Territorial agreements, 319 Territorial sales force structure, 403 Testimonials, advertising and, 383 Test marketing, 246–247 Third-party logistics (3PL), 326–327 Time-and-duty analysts, 409 Time-based pricing, 281 Time magazine, 387 Timing, new product introduction and, 247 Tone, advertising and, 383 Total costs, 270 Total market strategy, 137 Total quality management (TQM), 208 Touch point, 118 Toy Story, 227 Tracking, in meat space, 456 Tracking online, 115, 453 Trade associations, PR and, 392 Trade barriers, 462, 464 Trade discount, 281 Trade-in allowance, 281 Trade promotions, 417–418, 422–423 Trade shows, business promotions and, 423 Trade system, 462 Trading exchanges, 161 Training, salespeople, 407–408 Trainship (transportation), 324 Transaction oriented selling process, 416 Transportation channels supply chain logistics and, 323–324 urban, reshaping, 299–300 wholesalers and, 356 Trucks, supply chain logistics and, 323 Truck wholesalers (truck jobbers), 356t True friends (customer group), 23f Twist magazine, 76 Two-part pricing, 279 Tying agreements, 319 U Undifferentiated marketing, 179–180 Unfair competitive marketing, 498–499 Unfair marketing, 451–452 Uniform-delivery pricing, 284 Unique selling proposition (USP), 190–191 Unsought products, 205 Uruguay Round, 463 Usage rate, 175 USA Today, 19, 383, 390 User status, 175 V Value-added pricing, 267, 269 Value-added resellers, 313 Value Added Tax (VAT), 296 Value-added wholesaling, 359 Value-based pricing, 265, 266f Value chain, 49 Value delivery network, 49, 50, 300–301 Value differences, 189–190 Value for the money, 276 Value marketing, 80 Value proposition, 9, 187, 191–193 less for much less, 192–193 more for less, 193 more for more, 191–192 more for the same, 192 possible propositions, 192f same for less, 192 Value-retail centers, 338 Values, core/secondary, 88–89 Value selling, 416 Variable amount compensation, 408 Variable costs, 270 Variable usage rate, 279 Vendor Flex program (Amazon/ P&G), 316–318 Vendor-managed inventory (VMI), 161, 325 Vertical conflict, channel, 304 Vertical marketing systems (VMS), 305–307 administered VMS, 307 contractual, 306–307 conventional distribution channel v., 305f corporate VMS, 306 Video convergence, 371 Video marketing, online, 437–438 Videos, made-for-the-Web, 367 Viral marketing, 437–438 Virtual instructor training (VILT), 407 Virtual meeting software, 405 Vogue magazine, 387 Voluntary chain retailer, 339t, 340 W Wall Street Journal, The, 381, 387, 456 Wants, 6, 496–497 Warehouse clubs, 338, 339 Warehousing supply chain logistics and, 322–323 wholesalers and, 355 Warranties, 283 Washington Post, 145, 209 WatchBoom, 73 Water carriers, supply chain distribution and, 324 Webinar, 413 Web logs, marketing online and, 438–439 Webrooming, online retailing and, 350 Websites omni-channel retailing and, 351–352 online marketing and, 434–435 personalized content, 429 social selling and, 412 See also Digital and social media marketing; Direct and digital marketing Web wholesalers, 356t Wheeler-Lea Act (1938), 86t, 493 Whole channel concept, for international marketing, 481f Wholesale clubs, 339 Wholesale merchants, 356t Wholesaler marketing decisions marketing mix, 358–359 segmentation, targeting, differentiation, positioning, 357–358 Wholesalers, 355, 356t–357t Wholesaling, 355–360 defining, 355 marketing strategies, 358t sellers, importance to, 355–356 trends in, 359–360 types of wholesalers, 356t–357t Word-of-mouth influence, consumer behavior and, 138–141 Word-of-Web, online consumer buying behavior, 139 Words, attention-getting, in advertising, 383 Workload approach, sales force size and, 404 World product groups, 483 Written materials, PR and, 394 Written proposal, 108 Y Yell and sell presentations, 494 Z Zone pricing, 284 www.downloadslide.net This page intentionally left blank www.downloadslide.net This page intentionally left blank ... items they can’t live without and can’t get anywhere else 26 9 With tradition behind it and its can’t-lose operating and marketing model, ALDI plans for rapid U.S expansion The company has quickly... include sales managers, production managers, finance managers, and accountants 27 4 www.downloadslide.net Part 3: Designing a customer Value-Driven strategy and Mix the Market and Demand As noted... Understanding and capturing customer Value 27 5 Price and demand are related—no big surprise there Usually, higher prices result in lower demand Price figure 9.4 Demand curve P2 P1 Q2 Q1 Quantity