Customer Targeting

Customer Profiles
According to Reaves, its not enough to describe your customers as satisfied or dissatisfied. He identifies six customer types and where they fit into the customer hierarchy. These include: 1. Endorsers (5 percent of customer base) Endorsers are customers who tell other people about your company. Typically, the new customer comes in as an endorser, which you should capitalize on. 2. Buyers (15 percent) A buyer will continue to buy from you, often exclusively, but no longer aggressively endorses your company. Maybe an invoice was incorrect or a shipment was incomplete. If one negative incident moves your customer from endorser to buyer, it may take 15 positive incidents to get him or her back as an endorser. 3. Satisfied mutes (30 percent) These customers dont talk to you and you dont talk to them. If you ask one of them how the business is doing and they answer, Fine, thats all you know. 4. Dissatisfied mutes (30 percent) This customer has migrated from the ranks of satisfied mutes, but you dont know it. Thats because no one is talking to anyone else. At this stage, it will take 60 positive incidents to make this person an endorser again. 5. Grumblers (15 percent) You know these customers: no matter what happens, you cant do anything right for them. Theyve experienced too many negative incidents. In essence, they have become martyrs. 6. Complainers (5 percent) Though small in numbers, this type of customer can be deadly. They make a point of telling everyone how badly your company has treated them. They are not your friends. For every dollar spent retaining an account, it takes six dollars to close a new one, Reeves notes. No wonder its more profitable to retain customers. If you resolve problems to their satisfaction, theyll continue to buy from you 75 percent of the time. If you resolve the problem immediately, that figure rises to 96 percent. How to Keep Customers for Life By TEC Associate Rob Engelman The more value a business offers its customers, the stronger the relationship and bond customers have with that business. Along with strong relationships comes customer loyalty (as well as dramatic shifts in sales and profitability). So how do you cultivate loyalty with your many different customers? Using a results-driven strategy Customers are not all alike Stages of customer behavior Sales and marketing strategies Target customers based on data and information Using a results-driven strategy I use a strategic approach called Customer Lifecycle Management (CLM) that identifies and segments customers based on their behaviors, attitudes and experiences with a company. When

implemented successfully, this results-driven strategy also helps companies reduce wasted marketing expense and uncover hidden revenue. Identifying and managing the needs of each customer segment is critical in determining the amount and types of communications spent for each group. For example, new customers typically need to be welcomed and educated about the range of products and services an organization has to offer, whereas current customers (who have bought products and/or services in the past) benefit more from cross-sell messages. Similarly, a portion of customers who are at risk of switching allegiances to a competitor might be well served with some sort of retention intervention, while others who remain devoted to an organization, regardless of competitive forces, should be rewarded with a loyalty message. Customers are not all alike Treating all customers in the same manner, without regard to the customer lifecycle, is a sure-fire way to limit potential revenue and profitability. As an example, look at two customers at a health club: Customer A is very active at the club. She typically uses the facilities five times a week, often buys supplies and apparel in the pro shop, and has referred four people to the club in the past six months. Customer B, on the other hand, has not been seen since the day he joined the club nine months ago. Membership renewal fees for both Customer A and B are due in three months. If the club uses the same marketing strategy to encourage Customers A and B to renew their memberships, it will probably spend more money than is necessary for Customer A, while not communicating enough benefit to Customer B, eventually losing this customer anyway. Either way, utilizing the same marketing approach will cause a decrease in potential sales and profitability. Thus, a more segmented and targeted approach to sales and marketing is needed. Stages of customer behavior The first step is identifying and defining the five stages within the customer lifecycle: Prospects are non-customers who fit the profile of a target customer. They range in their level of interest and involvement from never been contacted to about ready to buy. First-time buyers have purchased something from your company before. Still, theyre in a trial stage, and need to have a good experience in order to maintain a steady relationship with your organization. Limited buyers have made repeated purchases, but they dont always buy from your company. This reluctance can be traced to issues of trust, being unaware of the full line of products/services offered, and/or not internalizing their own needs as regular customers. Full buyers are customers who buy only from you. They might spend $100 or $1 milion, yet their buying patterns are consistent and predictable. Full buyers look to you for advice and guidance, and most importantly, they speak highly of your company to their friends and associates.

At risk customers have become dissatisfied with or lost faith in the products or services you offer. As such, they have the potential of defecting, and moving their business elsewhere. Some at risk customers show themselves in an open manner (by a large decrease in spending) while others are more passive and covert in their approach. Then, all of a sudden, theyre gone. Understanding these five customer stages is essential to developing effective marketing and communication strategies to better manage your customer relationships. Sales and marketing strategies Each of these five customer segments has its own unique set of experiences, expectations, needs and desires from an organization. In order to fully maximize the revenue and profit potential each segment holds, different sales and marketing strategies should be applied to each of the five customer types. Acquisition strategies encompass sales and marketing ideas designed to acquire new customers. The goal behind acquisition efforts is encouraging prospects to try a product/service and become first-time buyers. Activation strategies move first-time buyers to limited buyers. The core objectives include welcoming new customers, educating them to what you have to offer, and persuading them to purchase as many times as possible in order to create a consistent buying pattern. Up-sell/cross-sell strategies move customers from limited buyers to full buyers. At this point, you can encourage customers to try new product lines and/or provide incentives to reach higher spending levels. The more hooks there are into a given customer, the stronger his or her relationship becomes with your organization. Loyalty strategies recognize, reward, and say thank you to your most valuable (not necessarily highest-spending) customers. Customers with marquee names and those who refer business to you can also be most valuable, even if they dont spend the most money. Retention strategies cover sales and marketing efforts that reinforce the customer value proposition when it has been lost. Key warning indicators declining sales volume, customer complaints often signal dissatisfaction and predict the likelihood of attrition. Armed with this information, you can handle problems early, save your customers, and put them back onto the perfect-world path. Target customers based on data and information There are many situations where this approach can be appropriate and successful. Here are three general scenarios: 1. Do your customers make repeat purchases and have the option to choose from multiple products/services? The catalog, retail and travel industries are all good examples where this approach can be implemented effectively. Purchase information is collected and used to

customize and send communications that add value to the customers experiences. 2. Companies with large upfront acquisition costs such as credit cards, magazine subscriptions and medical supplies are also good candidates to implement a customer lifecycle program. Since these organizations spend so much money acquiring customers, they need to build long-term relationships in order to achieve customer profitability. 3. How effectively do you obtain and retain information about your customers purchasing behaviors? If data collection is possible, and you have the ability to communicate with customers via traditional direct marketing methods (mail, e-mail, catalog, etc.), then planning a lifecycle approach is appropriate as well. When you build your acquisitions strategy with an eye towards retention, you acquire more targeted customers and actually spend less money trying to acquire or retain customers. By following the concept of Customer Lifecycle Management, youll develop and implement activation, upsell/cross-sell and loyalty programs that focus on building solid relationships with your customers thus uncovering many hidden sources of incremental revenue. The Four Ps of Marketing: The Marketing Mix Product: What Sets You Apart Price: The Strategy Promotion: Spreading the Word Place: Channels of Distribution The role of marketing is to carefully examine customers needs and wants, then design a product or service that satisfies those needs, offer it at a fair price, make it available through various channels of distribution and create promotions or communications to establish interest. This process is referred to as the 4 Ps: Product: Anything relating to the product (color, size, shape, etc.), as well as what the customer perceives as the product Price: Identifying the cost to the user and determining a pricing strategy Promotion: Using an array of communications tools (advertising, sales promotions, public relations, etc.) to reach customers and prospects Place: The channel of physical distribution (the products actual movement through a means of distribution) and sales (how the product is sold, whether through wholesalers, retailers, direct mail, etc.) These four elements represent the marketing mix, according to TEC experts Mitch Gooz and Jack Harms. Being successful means learning to manipulate the marketing mix in a proactive manner, rather than merely reacting to what your competitors do. Winning organizations understand the need to constantly change and move. Other organizations just react. Product: What Sets You Apart You may have a specialty product (something thats highly unique) or a commodity product (virtually indistinguishable from what competitors offer); each category requires different marketing strategies, but the focus should always be on the products benefits, not on its features.

Its easy to describe your products features, but sometimes its benefits are more intangible. The most forceful benefits are those that offer customers emotional or financial rewards. Its not fresher breath that mouthwash has to offer its what the fresher breath brings you (popularity, better job offers, etc.). All kinds of possible emotional rewards exist, but the fundamental value lies in making the customer feel better in some way. Products that bring financial rewards translate into the customer saving money, making money, or gaining time and convenience. The job of marketing is to design intangibles into the product and use them to make the product unique, Gooz says. In addition to the tangible things you sell, customers buy the intangible. For example, the more service-oriented your business is, the more the customer is buying. Its crucially important, therefore, that your salespeople communicate the value of such intangibles to the customer. According to Harms, product isnt just the physical entity of what you deliver; it includes all the advantages bundled up with the product. In the vast majority of cases, the physical entity is the least important part of the bundle, he says. Thats because its the most easily compared element. Customers can usually find a substitute for the product, which in turn leads to shopping and price objections. Harms cautions that the needs of retail customers differ from those of business-to-business (B2B) customers. Business customers are buying products and services to improve the profitability of their business, he notes. Retail consumers buy things to enhance their lifestyles. Its precisely when B2B companies start trying to solve retail needs, i.e., reducing the buyers pain or providing them with peace of mind, that they lose the ability to truly differentiate themselves. The TEC experts suggest asking these basic questions: Does our marketing approach sufficiently differentiate the product from the customers point of view? Boasting, for example, that your product offers better quality or leading technology isnt enough to distinguish itself in the customers eyes.

Can we defend our products distinguishing characteristic against our competitors? And for how long? Can we set ourselves apart by how we distribute the product? If youre currently distributing your product through more outlets than your competition, youre delivering a genuine benefit to your customers. How can we make our customer service efforts different than our competitors? If you offer free customer service in an industry where everyone else charges for service, youre a big step ahead.

Its the additional stuff that gets bundled around the physical product that adds value and enables your company to differentiate itself from the others.

Price: The Strategy Obviously, your pricing strategy has a great effect on how well your product does in the marketplace. But basing your marketing approach primarily on the element of price can undermine your entire business, warn the TEC experts. In general, companies operating within the same industry in a specific locale use a similar cost structure. When one competitor cuts prices, others usually follow. The result is that any advantage gained by the first competitor is quickly lost. Any long-term strategy based on reduced prices entails very real risks. Lower-than-average margins can damage a companys ability to invest in advertising, attract and retain employees, carry on new research and development, or hold on to adequate cash reserves. It can eventually drive a company out of business. Remember that, despite any profits from additional sales, service and support costs remain the same, Gooz says. Unless you find a way to reduce the cost structure itself, pursuing higher market share with lower prices often ends up in a reduction of total profit. Not only that, but lowering price on one product may threaten to cannibalize your companys other, higher-priced products. Youre still offering customers the same benefits as before, but without the profit margin to support them. Before defending yourself against a competitors pricing strategy, Gooz suggests addressing these questions:

Are we a low-cost leader in our industry? Your companys standing will determine whether you can dictate prices that undercut weaker competitors, or whether your own policies are shaped by high costs of overhead, labor and raw materials. Is our competitors price reduction permanent or a one-time sales gimmick to dump inventory? Before making any rash counter-move, assess whether your competitor has a genuine cost advantage or is betting on an all-or-nothing strategy. What other options do we have besides lowering prices? Lower prices dont necessarily equate with higher volume, Gooz says. Your customers may value other qualities connected with the product beyond its cost things like greater selection, better service, superior reliability, etc. Some alternatives to price reductions include incorporating other value-added benefits, such as faster delivery, extended warranty or a free trial period.

Still other alternatives range from boosting your advertising efforts and introducing a new and/or improved product line to revamping your cost structure to accommodate price cuts in the industry. Harms contends that the fundamental responsibility of a companys marketing department is making it possible for the business to raise prices. If marketing people are doing their jobs correctly, theyll be adding value to the companys product/services. The company will know how much of such value has been added through the customers willingness to pay a premium price. If the customer doesnt pay a premium price, it doesnt matter how much they say your

offerings are better. Theyre shouting with their wallets that they really think youre a commodity. Promotion: Spreading the Word Promotion refers to all the tools available to communicate to your customers and prospects. The primary channels include: Advertising: In this non-personal promotional activity print ads, billboards, radio and television commercials the seller has no direct contact with customers. Public relations: Any endeavor to generate a positive image or message for your product is considered public relations. Tools include press kits, press releases and PSAs (public service announcements), and maintaining contact with reporters in print and electronic media. Sales promotions: Commonly used sales promotions include in-store demonstrations and displays; contests and price incentives (buy one, get one free), sponsorship of special events, trade shows, coupons and free samples. Direct marketing: This type of advertising aims directly at targeted customers, with a mechanism for them to take action inviting them to order a product, clip a coupon, call an 800 number or visit a store location. Most frequently used forms of direct marketing include letters, catalogues and coupon mailers. E-mail: E-mail marketing is an increasingly effective means for promoting your product. Says Harms: E-mail ads are a great supplement to traditional direct marketing methods because they are, in essence, free; they can be changed quickly; and theyre not confined in shape or length. Personal selling: This describes activities where there is face-to-face contact between buyer and seller. Each of these promotional activities can be tailored for a specific product or service, but, as with other marketing efforts, a promotional mix is often most effective. CEOs greatly increase their odds of reaching the targeted audience by delivering a message in a variety of ways. Harms adds: Useful results come when you efficiently combine various elements of the promotional mix and develop an integrated program of marketing communication. Place: Channels of Distribution You can have the best product on the market at the most reasonable price with the best PR and advertising money can buy but if customers cant find your product, you may as well close up shop. To succeed, your organization must be able to manage your products physical distribution (getting from design and development to the sales outlet) and the sales channel (who sells the product, including distributors, wholesalers, retailers, sales force, etc.). Gooz suggests asking these questions:

How many products does our company generate during an average sales cycle? Can that number be increased if necessary? What is our companys inventory capacity? Do we use sales forecasts to determine what our inventory levels should be? How often do we replenish our inventory? How does this compare with standards in our industry? What seasonal changes or fluctuations in sales cycles affect demand for our product? Are we equipped to meet these changes in demand?

The product is never just the thing youre selling, Harms concludes. Its the bundle of that thing and all the other stuff your customers buy. Price, promotion and place all follow from your customers perceived value of the product. Stay focused on that and youll ensure that consumers dont regard your product as just another commodity. Only the Crme de la Crme Although the Founding Fathers would disagree, not everyone is created equal at least not in business anyways. Dont take every client who walks through the door. Choosing the right clients can enhance the speed and quality of your ultimate success. When looking at potential clients, ask yourself these questions: Do they have realistic expectations of your product and service? Is there good chemistry? Is the work challenging? Do they pay on time? Do they have additional needs? Do they have referrals for future work? Netflix: There are three types of customers at Netflix. One group likes the convenience of free home delivery, the movie buffs want access to the widest selection of, say, French New Wave or Bollywood films, and the bargain hunters want to watch 10 or more movies for 18 bucks a month. We need to keep all the audiences happy because the more someone uses Netflix, the more likely they are to stay with us. How do you perform the market and competitive studies that are necessary to equip your team with the information it needs to make good decisions? So you have finally held your first strategic planning meeting: Congratulations! You have now set the stage for the many potential benefits of disciplined analysis and decision-making. Expectations from your management team are high. Whether you are a first time strategic planner or you are a veteran of many cycles of the process, you realize that you need good information if you are going to make good decisions. Then comes the biggest challenge: How do we perform the market and competitive studies that are necessary to equip the team with the information it needs to make good decisions? Few of us in management have ever had the task (not to mention the job description) of a market research specialist. In spite of the ever-increasing access we have to information today, it is still a daunting challenge for the uninitiated to find the sources and quickly distill the information required for good planning. In this article, we will identify the easiest and most direct ways to get your research off the ground. You ve Got to Pay to Play (Well, Probably) A recent visit to the Management Library at the University of Rochester put me in touch with Suzanne Bell, a management data librarian. She assured me that when it comes to market and competitive research, the amount of available information is truly staggering, but (like a triedand-true formula for an old joke), there s some good news and some bad news. The good news is that many useful sources of information are available on the Internet. This is good news if you enjoy the prospect of conducting this effort from the comfort of your office chair. For many of us, just the thought of doing research is enough to ruin several workdays

merely anticipating the sub-optimally productive time we might spend in the unfamiliar aisles of our nearest local business library. The bad news is that many of the best sources, like the best things in life, are not free. For the most part, the most complete sources of information on the web are available through subscription services. Almost all of the sites will provide basic information teasers for free, but to get the good stuff, one has to either sign up for a year s worth of usage or pay on a per use basis. The favorites in this category are among a list of prominent, long-standing information providers: Dow Jones Interactive, Hoover s Online, Lexis/Nexis, FISonline, Value Line, Investext and S& P s Industry Surveys. It is no big surprise to discoverthat most of the information from these services concerns public companies and their markets. It may be well within your company s resources to join one or several of these services. Subscription rates typically run a few thousand dollars per service per year. Fees for single use depend on the level of detail that you seek. For example, on Dun & Bradstreet s CommerceInc Research Center, the price for a single report for a small private company ranged from $25 for a simple Business Background Report on up to $105 for a Comprehensive Report. Industry and product category reports from services like FISonline and S& P Industry Surveys can run from a few hundred dollars on up to several thousand. For some companies, this would not be too much to pay if it provided them with a few critical pieces of information about an important direct competitor or market opportunity. The price tag becomes high, however, if you take this approach for a dozen competitors and a handful of market segment analysis. If all of this is beyond your budget, do not despair: Contact your nearest university s business library and inquire about their policies concerning use of their subscriptions to these fee-based databases. If you are lucky, they will allow a limited amount of use of their subscriptions through a community membership arrangement. Armed with a list of your major competitors and market segments, a volunteer from your firm could gather a significant amount of information in a single afternoon for free! For competitor analysis, the first logical step is to go right to the source: the company s home page. It is safe to say that, today, most companies have established their own Internet presence. To find them, try the online Yellow Pages or use any number of Web Directories (Google and Northern Light are good options). If all else fails, try guessing the address using the format www.companyname.com. Even the most basic Web site usually contains information about the company s location, business background and most exciting new product or service offerings. Beyond this, of course, one may find all sorts of other interesting data (e.g., descriptions of their various office or plant locations with the products and/or services offered there, sales revenue, number of employees, product specifications, pricing, etc.). Of course, one must keep in mind that the information provided there is primarily for marketing purposes. Claims that the company makes on its own behalf concerning product superiority or outstanding customer service should be measured against indicators from other, more objective sources.

To ask and answer those questions well, entrepreneurs need to be willing to be told theyre wrong. Often people have not taken the time needed to know their customers cold. Its not surprising that the entrepreneurs who are most successful are those who visit as many potential customers as possible with two critical, if conflicting, outcomes in mind. First, they try to sell the prospect the notion that they are right and the prospect should become a customer. Second, they listen to the prospect to learn why they are wrong and why the prospect shouldnt be a customer. The successful entrepreneur is listening from the very beginning, in order to change and adapt more quickly to real market needs. Entrepreneurs who spend a lot of time trying to understand why they dont have it right are very likely to be selling a lot more of their product, a year later, than those who only try to prove they are right and insist that the customer is wrong. Good Research Doesnt Have to Be Expensive Market research is often lacking in entrepreneurial endeavors because it can seem difficult and expensive. The trick to avoiding the trap is to apply dogged determination to the task. That means subjecting yourself to sometimes harsh market feedback. Though it may be unpleasant, its the only way, short of getting lucky, to actually succeed. Some entrepreneurs in emerging markets rely on secondary market research because its an easy solution but dont do it! If you are starting a new business in a previously untapped market, there is no substitute for primary research. All the secondary market research statistics in the world wont get you funded, but hard data from real prospects just might. Ive found over the years that even entrepreneurs without much of a budget can successfully perform quality research if they are creative, resourceful, and brave. Entrepreneurs on a budget may feel unable to apply formal market research techniques, but a simple four-step process can be effective: 1. Determine how to perform the research (one-on-one interviews, focus groups, surveys). 2. Develop the research instrument (interview questions, survey questionnaire, hands-on tasks). 3. Identify and recruit participants. 4. Understand what will be done with the results of the research. The type of business youre in will dictate the most appropriate approach. If your product is for a highly targeted market, and direct sales calls will be your method of selling, start by identifying the type of person you expect to sell to and engage in a mock sales call to understand what such people find interesting. If your product is aimed at a mass market, it may be more beneficial to recruit small numbers of people for focus groups until you have a feel for the market, and then validate it further using a survey. Research Enables Decision Making

Market research is a prelude to selling. It teaches you a great deal about what you will need to know to develop your offering for the market and whether your offering is even worth developing. A positive and aggressive attitude toward market research enables entrepreneurs to make that most critical of decisions: Should I spend the next several years of my life on this business? If you have decided to become an entrepreneur, then also decide to become a market researcher. Ultimately, the two are inseparable. Let the Customer Define the Value A company recently asked us to help them better understand how their target market is likely to respond to a new computer software product under development. But, when we talked about the timing of this work, they indicated that they wanted to get past some technical hurdles, first, and then they could think about the market research. Since they were calling us for the first and only market research work on this proposed new product, we advised them that they were doing it in the wrong sequence. Numerous studies and many experts have repeatedly concluded that the most common cause of new product development failure is market research that is too little, too late. Good market research very early in the development process is actually an insurance policy against spending a lot of money on a product or product features for which customers wont pay. In the case described above, what if there is not a sufficient market for the new software even if the technical hurdles are overcome? Wouldnt it be better to know that before resources are expended to solve those technical problems? Or, on the positive side, what if the features causing the technical problems arent highly valued by prospective customers? Perhaps those hurdles dont have to exist at all! There is simply no good reason to fail to listen to the marketplace for guidance in developing a new product before those significant development costs are incurred. The rule that prudent and savvy managers follow regarding market research is, If the result of our decision will impact the customer, then we should ask the customer for input into our decision before we make it. Here are a few examples of how that rule applies: Business Strategy At its essence, business strategic planning consists of defining an offering for a specified, target market. Like so many other business decisions, the objective of this effort is to generate ideas for which customers will pay a profitable price. That being the case, its hard to imagine how a management team could effectively make those kinds of decisions without the benefit of good market research. The starting place for effective strategic planning is to hypothesize how customers perceive value in the realm of the proposed business unit. You should ask:

How do customers perceive the problem the offering is intended to solve?

How serious do they believe the problem is? What benefits of the proposed offering would be of most importance to them? How do they solve the problem today? What costs do they incur now to solve the problem?

These are all questions that can be answered by good market research, and all questions that are fundamental to making the important strategy decisions connected with What business do we want to be in? Contrary to what we might hope, customers are not all the same. They come in many shapes and sizes, and their needs and wants are varied as well. The strategy for coping with the broad array of customer desires, according to Vistage experts Mitch Gooz and Jack Harms, is known as segmentation. Segmenting aims to break down the specific traits of the people who purchase your companys product. If the product has multiple benefits, different parts of the marketplace will value those benefits. Once you fully understand what those benefits are, its easier to identify the right customers. In general, companies start out with an undifferentiated strategy blanketing the entire market with one product and hoping everyone will buy it. Gradually they develop a differentiated strategy, targeting different parts of the marketplace. More sales are generated by differentiated strategy than by a blanket approach. Some segmentation can be generic, Harms notes, citing large, medium and small customer bases as examples. A smart business focuses its attention on specific customer segments, rather than on the big picture. Once they get that down, they can always try to expand into other markets. A careful analysis of the individuals who purchase your products will most likely indicate groups of customers who share common desires, needs and buying practices. If you deliver what they want and need in a way thats better than your competitors, youre already on the right track. Make your marketing mix as simple as possible, Gooz advises. There are groups of customers out there that all need the same thing from you and want to buy it in the same way. Are you getting it right? Does everyone in your company fully understand this? The next step is determining if your customers have other needs that you can satisfy. See where you can add products or services to your line that dont dramatically increase costs. Pinpoint what additional services you can sell them and still stay within your cost structure. You already have a relationship going with these people. Build on it and profit on it. Finding the Right Niche Whats the best way to break down the large customer base youre serving? The Vistage experts advise these categories:

Demographic: Grouping customers by age, income level, gender, etc.

Geographic: Grouping customers by regions Psychographic: Grouping customers into cultural groups, social sets, etc. Decision makers: Grouping customers based on who decides to purchase your product Distribution: Grouping customers based on where they go to purchase your product

Says Gooz: Most companies first make a product, then ask themselves, Who do I sell it to? Their focus is on the product, rather than on what the customer wants to buy. Look closely at the needs the customer is trying to satisfy when he or she buys your product. This helps to isolate customer groups and then make educated decisions on which segments offer the most attractive opportunities. Remember, every customer interaction represents a chance to gather valuable customer information. The act of purchasing your product should always yield helpful data. The Vistage experts advise CEOs to get creative. Include frequent-buyer programs, warranty and registration cards, contests and consumer surveys to your information-gathering arsenal. Its surprising how much there is to learn about the people who buy your products. The decision of which segments to choose is perhaps one of the most difficult challenges for a firm. The reason? Firms often identify a greater number of attractive segments that they are capable of pursuing, given their limited resources. It is tempting to enter all segments (see the tutorial on segment coverage), especially those that are growing and represent potentially great profits. In marketing, while we recognize these possibly profitable segments, we take into consideration all parts of the analysis to make sure the firm doesnt enter into segments which ultimately requires resources the firm doesnt possess (in particular, with respect to satisfying customer needs and not being overwhelmed by the resources of competitors). While there are many ways to think about which segments to enter, a simple but powerful way is to draw on the analysis in the previous tutorials. This can be represented as follows: In essence, for each segment you examine your customer analysis. Look at the perceptual map and what the customer in the segment wants. Do customers perceive your product (or could they, if you dont currently have a product) as better on on the benefits they care about? Can the competition match by offering benefits that customers will perceive as better? Look at your competitor analysis. Are you better than the competition? Are they improving or neglecting abilities to offer benefits that customers in the segment care about? If you played out a game with the competitors, who would win? Think carefully about your company analysis. Dont focus only on your competencies, but focus as well on you weaknesses. If you choose to compete in this segment, do you have weaknesses that need to be improved, and can you improve them? Think broadly about this, including the culture of the firm. Is the culture consistent with entering this segment (this improves the possibility of resources being devoted to this segment). In addition, there are a number of other factors that make a segment attractive that must be considered when making this decision. These might include the following: Segment Size: The

sales potential of the segments, in terms of number of units of your product that can be sold, might be important in making segments attractive. This might be because a firm requires a large potential customer base to take advantage of cost reductions through volume sales. Segment Profitability: How profitable the segments are, in terms of how much money can be quickly made, might be important in making segments attractive. Perhaps this is because a company requires cash in the near term. Note that profitability (in this case short term profitability) is not a necessary condition for entering a segment. Segment Sales Growth Rate: The growth rate might be important in making segments attractive. Perhaps this is because a firm requires high-growth areas to ensure future profitability. Low Bargaining Power of Customers: Segments might be attractive because customers do not have power to bargain over such things as price and service. This might be attractive to a firm that is not good at providing service and can not reduce costs. Seasonality and Cyclicality: Segments might be attractive because the production schedules and/or allocation of resources give a firm great freedom in responding to seasonal or cyclical conditions. The key point to remember when making this decision is that all parts of the analysis are relevant. Dont just focus on the companys competencies. While important, this doesnt indicate anything about what customers care about. But just focus on what customer care about since this doesnt inform you about competitive reactions. Finally, now is also a good time to ask the what-if questions that challenge the assumptions you needed to make in your analysis. Does entering this segment rely on a key assumption you needed to make in your analysis. If so, then the decision to enter the segment is probably not robust. If the analysis indicates entering a segment, you are ready to position your product. If it indicates otherwise, then youll need to think hard about the obvious challenges you will definitely meet when entering this segmentbe prepared to lose. Requirements for effective segmentation- there numerous ways to segment a market, but not all are effective. To be useful, the segment must be:

Measurable Accessible Substantial Differentiable Actionable

Market targeting- evaluation of various segments and selection of best alternatives.

Segment size and potential growth

Segment structural attractiveness. Company objectives and resources.

Segment your customers: All customers are not created equal so you cant give them all the same level of attention. Sales knows this and has already segmented customers for its purposes. But a sales model wont work for you. Just because a customer represents high revenue doesnt make them a top tier reference. So figure out which criteria are important from a referencing perspective and segment your customers into three to four tiers, then define the following for each: typical customer profile, primary customer activities, rules of engagement and program value to customers. At its essence, strategy (the how) is a way to accomplish an objective (the what). In terms of a marketing strategy, if the objective of marketing is to select, serve and satisfy customers in a profitable manner, then a marketing strategy is the way a company accomplishes those objectives, which may include segmentation studies, competitive analysis, and the tactical 4 Ps (Promotion, Place, Product, Price). The Demise of the 4 Ps Has Been Greatly Exaggerated by Paul A. Barsch June 7, 2005 A recent book by a popular CRM expert declared the era of the 4 Ps effectively over. The author argues that product, promotion, price and place are no longer key to providing sustainable differentiation. In addition, he says, the use of this marketing mix merely keeps the enterprise at par with the competition. And while the author makes many compelling points, the key question remains: has the oligarchy been dethroned and is the reign of the 4 Ps over? Simply stated, No; or, to paraphrase Mark Twain, rumors of their demise have been greatly exaggerated! The global economy has changed the game for all players. Competition has emerged from lowcost-labor Asia/Pacific countries and contract manufacturers. Outsourcing has spanned the globe-from Ireland to Russia to India. Powerful global brands like Samsung, Nokia and Lenovo are emerging and taking dominant form. Consumers, once satisfied to take whatever products and services the market produced, are now more savvy, information-driven and have more choices than ever. Many companies and industries under threat from these forces yearn for simpler times. Yet some companies are not only surviving in global economy, theyre thriving. Some are regional players and others span worldwide empires.

A common denominator for these companies is that they leverage the power of the marketing mix (4 Ps) to achieve new heights, capture new markets and grow revenues at astronomical rates. Some are mastering one aspect of the marketing mix, some are attempting to be dominant in all of them. But one thing is certain-differentiation can still be squeezed from the 4 Ps. Product While the global economy has made rapid time-to-market an imperative, especially since lowcost producers are quick to copy good ideas, theres still competitive advantages to be found in innovative products. The consumer is looking for products that capture the imagination, or sometimes just plain work better than alternatives. One of the last bastions of differentiation might be product design. Todd Moses, founder of the Paper Pro stapler, would probably agree. In a recent Business 2.0 story, Moses was looking for a better stapler-one that could staple through 19 pages without jamming. Seeing nothing on the market that could fit his needs, Moses designed a stapler with a compact recoil spring that could staple 20 pages with seven pounds of force. (Typical staplers took 30 pounds.) Now that over one million Paper Pro staplers have been sold, its clear that the innovative product wins in the marketplace. In another example, Apple computer has emerged from a has-been to one of the hottest product companies in the past 10 years. One need look no further than the iPod for a dominant product. According to NPD Group, the iPod has 92.7% market share in the MP3 player market. Incredibly, the closest competitor struggles with a mere 3% of the market. With a simple-to-use operating system that is truly intuitive, and small ear-bud headphones that could be considered the best on the market, the iPod is far and away not only the market leader but also the market favorite. Apple doesnt win because it has a product that no one can copy. Indeed, Dells DJ, Creatives RIO and other MP3 players are arguably very similar in features. Industry watchers also see a challenge to the iPods dominance with cellular phones that play MP3 files. While competitive devices swarm into the marketplace, Apple will keep winning in the marketplace because the iPod captures our imagination. It brings the universality of music into a compact device thats so easy to use-the owners manual can be thrown in the trash. This year alone, according to the Apple Insider, Apple is challenging its retailers to move over 100,000 iPods a week! Two simple examples, the Paper Pro Stapler and the red-hot iPod, prove that Product can still win in the marketplace. Promotion

Love him or hate him, theres probably no one on the planet better at promotion than Donald Trump. Whether its blatant and shameless self-promotion, or promotion for his hotels, casinos or golf courses, Trump has mastered the art of public relations, branding and personal selling. If you ever visit New York City, you cant get away from Trump. As you tour the city youll run into Trump Tower, Trump Park Avenue and Trump World Tower, just to name a few. Every Trump property has his name prominently displayed-branded, if you will-on the front of every building. Taxi cabs across NYC show the face of Trump and his NBC television show, The Apprentice. Even if you dont tour NYC, Trumps empire is ubiquitous. Theres now Trump Ice bottled water, Trump tailored suits and five books on how to think like Trump and become a billionaire. And its impossible to forget: two words that have been etched into our collective psyche from The Apprentice-Youre fired. Trump critics keep wondering when the populace will tire of his endless self-promotion. Perhaps in the near future the Trump brand will reach the point of saturation, but its not there yet. Anything with the Trump name sells. In Florida, the Trump Tower Tampa condominium highrise had 70% of its units sold a month before the sales office even opened. And Trump golf courses on the East Coast still command $300,000 membership fees and annual dues of $15,000. Trump succeeds in the art of promotion for a few reasons. The first reason is the sheer force and personality of Donald Trump. He is absolutely shameless in his self-promotion. Everything is the biggest, or (h)uge-with a New York emphasis on the u. Is every Trump property the biggest or the best? Certainly not-look no further than his struggling three casinos. Yet Trump, during every press conference, every interview and every taping of The Apprentice keeps reminding us that he works with only the best and that quality and the name Trump are synonymous. Reminded enough times, pretty soon we begin to believe it. The second reason that Trump is a master of promotion is that he realizes every moment and every interaction is an opportunity for promotion. During job interviews, Trump reminds candidates that they would be working for the best company in the world. During meetings with vendors he reminds them that to work with Donald Trump means instant cachet. Customers pay a premium to acquire a Trump condominium or golf membership. Employees, vendors and customers all want to work with Trump. Even if its widely held that Trump is a little bit over the top with his promotional abilities, it doesnt matter. Hes a billionaire. Businesses small and large can learn from him. Price Pricing decisions are rarely easy, and in fact are most often complex. In the airline industry, for example, dynamic pricing software changes prices based on seat availability and flight demand. Hotel chains often adjust their pricing in real time based on levels of occupancy. And in

consumer industries, retailers often hope for an across-the-board margin, say 20% across the store-but competitive forces often adjust pricing by the aisle and item. One company, Planalytics, even helps retailers like The Home Depot and J.C. Penney manage risk and forecast demand for their products based on weather patterns. The more data (past sales, seasonality, weather patterns, etc.) made available to pricing decision makers, the more pricing can be adjusted in near real time to maximize revenues. Pricing can take on a new dimension when seeking new market opportunities. Lets turn again to Apple Computer: Marketing professionals at Apple saw that the price point of $299 for an iPod, or $249 for the iPod mini, was reasonable for most consumers. Market research, however, showed that a whole new segment of buyers would jump on board at $99 for an Apple MP3 player. Hence, the Apple iPod Shuffle was born. Small, sleek and hip, the Shuffle is a flash player that gives users the ability to hear music files in order of download or in a random format. Walt Mossberg of the Wall Street Journal notesthat the Shuffle is a good product that will enlarge the iPods appeal, especially with kids, people on low budgets, or people who work out. I imagine some existing iPod owners will also buy Shuffles as sort of add-on players. And the iPod juggernaut will roll on. In the marketing mix, price does not necessarily mean cheapest. There are plenty of enterprises across the globe selling products and services at premium prices. One of the most outrageous examples is Juicy Couture jeans. A recent BusinessWeek article titled To Live and Thrive in LA pointed out that the founders of Juicy Couture are getting $178 for a ripped pair of jeans and $395 for a hooded sweatshirt lined with rabbit fur. In this age of commoditization and cost reduction, companies are feverishly trying to figure out how to lower their costs and in many instances are turning to the outsourcing of labor, production and even design. And while those might be good strategies to stay competitive on cost, pricing strategies should not be overlooked. Companies should be asking their customers more than just at what price will you buy my product/service? Instead, the better question is what product/service would you want to buy from me-and at what price? Place While many enterprises have long looked at product, pricing and promotion as ways to expand revenues, one of the strongest strategies in the marketing mix is place. There are many companies that have mastered the art of distribution, although few of them have achieved competitive advantage. Dell Computer, with its direct to consumer model and high-powered Internet sales strategy, is commonly cited as one of the best examples of dominating a channel. Another company bent on expanding its brand, ubiquity and availability is Starbucks. A recent Wall Street Journal article titled Cautiously, Starbucks Puts Lobbying on Corporate Menu says that Starbucks boasts

9,100 stores, up from 676 a decade ago and opens an average of four stores and hires 200 employees each day. Theres a Starbucks in just about every city, often two or three. And many grocery stores are either selling Starbucks coffee by the bag or have a coffee kiosk at the front entrance. Not stopping at coffee, Starbucks has entered the music business, offering private-label CDs in its stores. And aiming to get its product in the hands of as many consumers as possible, Starbucks also recently struck a deal with Jim Beam to market coffee liqueur. Starbucks is after nothing short of market and channel dominance. All told, according the article, Starbucks plans to open a total of 30,000 coffee houses, from the 6,500 today. Smaller companies are also learning how to squeeze competitive advantage out of place. A Business 2.0 article estimates that Curves, a gym for women only, has surpassed 8,000 locations through the power of franchising. McDonalds took nearly 25 years to open 6,000 outlets, so 8,000 Curves properties in 10 years is phenomenal. Curves, like Starbucks, has found that market dominance can be found through expanding (profitably) faster than the competition. In the marketing mix, place is much broader than simply mastering channel sales. Its also optimizing the supply chain. An effective supply chain can be the difference between a barely profitable company and one that dominates. Getting the right product to the right place at the right time (and at the right price) ultimately increases customer satisfaction and prevents money from being left on the table. Placement is still a winning strategy. Going forward, those companies who have mastered distribution channels and can supply those channels with a high performance supply chain will enjoy the upper hand in the battle with competitors. Mastery of the 4 Ps Some of the enterprises profiled in this article have mastered one of the 4 Ps; others, such as Apple, are enjoying advantage in two or more aspects of the marketing mix. Success does not come easily, however. The strategy, while plain and simple, is difficult to execute. The winning strategy, and mastery of the 4 Ps, requires for an enterprise to know the customer. Curves, Starbucks, Apple and even Donald Trump know their customer. Customers need and want the self-esteem that Curves gives them, the exclusivity of the Trump brand, the quality of a cup of Starbucks and the innovation that Apple delivers. Products and services must tug on our heartstrings, cater to our emotions, fulfill our desires. Connecting to customers needs to be more than lip service. It needs to be more than an investment in CRM software. Customer connectedness is a pervasive attitude across the enterprise that is genuine, real and consistent. Its not enough to have the lowest price, the most outlets, the fanciest product or the best promotional strategies. Mastery of the 4 Ps requires deep customer intimacy. Mastery involves asking which of the 4 Ps is most important to the customer and then assessing what can be

delivered-profitably. For Starbucks customers, low prices are not the issue. After all, a latte can cost $3 or more. Customers care about quick service, convenient locations and a quality product. Recently, when Starbucks raised prices 10 cents across the board, coffee drinkers didnt blink and sales are stronger than ever. The 4 Ps arent dead-not even close. Differentiation can still be squeezed from the marketing mix. To win in the marketplace, an intense and intimate knowledge of the customer is required in a way that no competitor can match. That understanding must then be applied in a relentless focus on the elements identified by the customer as most important. Talk to customers, engage customers, live and breathe them. Then use the marketing mix to satisfy them. The seldom-used path of competitive advantage beckons. Walk it. With knowledge in these five areas, the marketing plan should come together easily. The following checklist will help round out the marketing plan and ensure its completeness. The marketing plan should address these questions:

Who is being served? Who are the right sets of customers? What are their needs and priorities? What is a meaningful value proposition and brand promise? How can quality product/service be provided cost effectively? Are outside conditions right for the companys product/service? What is the most convenient way to bring the product/service to the market? How can the product/service be best delivered to fulfill the brand promise? What are the best ways to inform the market about the products/services? How will the company measure if the market is satisfied? What can the company do to make things even better? How can the company become the customers first choice?

To be effective, a marketing plan identifies options, prioritizes resources and selects the best opportunities. It serves as the foundation for the activities that create and nurture a promise of value to the customer. Properly created, the marketing plan is a living document; it is anchored to the overall business goals and focuses on customer value, growth and profitability. Information about Products and Services * Comparison of existing products in the market (e.g. price, features, costs, distribution) * Likely customer acceptance (or rejection) of new products * Technologies that may threaten existing products * New product development * Use and effectiveness of distribution channels The benefits of creating customer segments include:

* Matching your customers needs * Increasing your sales and decrease your marketing expenses * Allowing better opportunities for growth * Retaining more customers * Focusing your communications * Gaining more market share Five Serious Considerations (and a Checklist) for Your Next Marketing Plan by Laura Patterson November 30, 2004 Most businesspeople intuitively know that the key to successful marketing is having a marketing plan-a blueprint for action. However, many companies operate without one, focusing instead on the issues of the moment without committing to a long-term strategy. A marketing plan does not need to be complex, but it does require several elements to be effective. The plan should include market research to understand the customer, defensible positioning to own a space in the customers mind, strategies and tactics to meet the companys marketing goals, and metrics to track progress toward those goals. Most importantly, a marketing plan must be aligned with the companys business plan. Dont even think of waging a battle or producing marketing materials without a plan, advises Jay Conrad Levinson, president of Guerilla Marketing, International. Most businesspeople understand that such a road map enables the organization to achieve business outcomes-often related to increased market share, improved customer lifetime value, and enhanced profitability. There are a multitude of reasons for creating a marketing plan: to provide strategic direction, create a dialogue with senior management, communicate priorities, obtain buy-in from other parts of the organization and request resources. An effective plan can positively impact the bottom line. Research shows that companies with a marketing plan experience a 24-30% improvement in sales over those without. A marketing plan must be relevant and actionable. It should gather and distill the learning of the organization into one document that charts a course of action. A well-constructed marketing plan answers the following questions:

What economic and business environment are you experiencing? What opportunities and problems/challenges are you facing? What business objectives do you expect to achieve? What exactly do you sell? Who specifically are your customers/targets? Why should these people buy your products or services rather than your competitors? How will you communicate your product or service to your customers/targets? Who will do what, when? How are you going to measure and report your progress?

Every company should address and include five areas when developing their plan:

1. Market Research If marketers are to accomplish the task of creating and keeping customers, they must conduct research to understand their markets and the shifts in the marketplace. Through research and evaluation of their products or services, companies learn what customers value most and what barriers exist to marketing their offerings. This knowledge guides decision-making and can reduce the number of projects to be undertaken and increase the usefulness of those that are. Market research provides the input necessary to analyze your companys situation. It provides the rationale for the decisions being recommended in the plan. Market research should examine the macro environment, market size, internal trends, competitive situation, market requirements, product/service purchasing attributes and supplier-evaluation criteria. As you conduct research and analyze the market, you should consider a number of questions, include these:

What market are you trying to serve? How big is your market? Are there segments in your market? What are the overall trends and developments in your industry? What is the rate of market growth or shrinkage over time? Are there any differences in market growth by time of year? How big are you competitors? What companies have what portions of the market? What products or services do your competitors offer? How do they differ from yours? How does competitors pricing compare with yours? What marketing strategies and tactics does the competition use, and to what degree of success? What are the competitors strengths and weaknesses? How will you defend and exploit each of these? What are the key factors for success in the market you are trying to serve?

It is important to view market research as an investment, not an expense. Even on a small budget, companies can search on the Internet and in libraries, purchase reports and conduct focus groups and electronic surveys. It is also crucial to conduct research regularly and periodically, as markets change very rapidly in todays dynamic environment. 2. Positioning A defensible market position and clear value proposition form the foundation for the creation of a marketing plan. Marketing initiatives within the plan should be anchored to the companys positioning to create a consistent dialogue with the customer. Using market research, companies can better understand what their customers value about the company and its offerings. This

information can guide the positioning of the company, locating a defensible position in the market and owning that space in the mind of the customer. They must also make sure that the companys pricing and offerings are aligned with the value perceived with the customer. Good positioning occurs within a competitive framework, which is often a result of a complete analysis of strengths, weaknesses, opportunities and threats, also known as SWOT. SWOT may have its own section in a plan, but the SWOT analysis serves as a good foundation for positioning. Its purpose is to assess your organizations capabilities and that of your competitors within the context of four questions: 1. What internal strengths do your organization or product/service have-compared with your competitions-that will improve sales? 2. What internal weaknesses do your organization or products/services have-compared with competitions-that will hinder sales? 3. What external opportunities are available to your organization or product/service that will improve sales? 4. What external threats, over which your organization may have no control, are confronting your organization or product/service that you may have to react to? 3. Strategies and Tactics Moving a prospective client from a stage of awareness to one of consideration takes a sound marketing strategy designed to drive demand and influence purchasing behavior. According to famed business strategist Michael Porter, a strategy creates a companys position, making tradeoffs and forging fit among activities. Marketing strategies are often formed around selling existing products in existing markets, extending existing products to new markets, or introducing new products to new markets. Strategies often include the expected results; they also provide the how and the direction for the course of action. Strategies describe the broad direction that the organization will take to achieve the stated objectives. Strategies define how the organization will compete in the market, reach target customers, position the product/service and motivate customers to buy. With clear strategies in place, a logical set of tactical operations and actions follow. It is from these tactics that the timelines, resources and budget for the marketing plan are derived. Tactics are the specific actions you use to implement the strategies. The tactics section of a plan defines exactly what you plan to do, why and how the action will improve the organization, who will be responsible for each action, how long each action will take, when it will be done, and what the cost will be for each action. 4. Metrics

Providing a means to assess progress, metrics are an essential part of any marketing plan. By constantly measuring actual performance against the metrics, companies can determine whether they are meeting the objectives of the plan and whether an adjustment is required. The objectives of a marketing plan are typically stated around one of three strategic metrics: market share, lifetime value and brand equity-the three areas of marketing responsibility. Choose metrics and the appropriate key performance indicators that you have a method of measuring. Like market research, metrics must be taken periodically to remain effective as markets change. Metrics tend to reveal more information when taken regularly over a long period of time, showing which initiatives are most successful and efficient. This can rally support for the plan, as metrics demonstrate accountability and provide evidence for undertaking certain marketing projects. 5. Business Plan Alignment Most importantly, the marketing plan must be in synch with the companys business plan. Marketing goals must be prioritized in line with the companys business goals. Marketing strategies should be based on how the company can best provide value. Demand-generation tactics must be aligned with the sales pipeline and the goals of the sales organization. Some people create their marketing plan in a vacuum and are surprised when they find little support and success in their plan.

Personalization Strategies to Attract and Retain Customers

Overview With recent changes in consumer shopping habits, many companies are adopting sales and marketing strategies that reflect a more personalized approach to servicing their customers. This article focuses on personalization and on ways you can gear your business to provide products and services individualized to your customers' tastes and needs. The steps outlined in this discussion are designed to help you increase customer traffic and realize larger profits whether you operate in the retail sector or in the realm of e-commerce. By citing specific cases, this article reveals how you can establish an individualized approach through marketing strategy and product offerings, and it provides assessments that will help you determine if your company is a good candidate for customization. It also explains how to best handle implementing a strategy, which particular strategy is best for you, and whether your personalization plan is ready for the Internet. Outline:

I. II. III. IV. V. VI. VII. VIII.

Going One-to-One With Products Going One-to-One Through Marketing Plan Your Strategy Personalization and the Web Putting Online Personalization Into Action What Your Personalized Site Should Include When Personalization Works, and When It Doesn't Resources

I. Going One-to-One With Products With people so overextended with family, work and general life demands, it's no surprise that consumers are forcing corporate America to provide products, services, and information in a fast, easy and personal manner. No longer are consumers willing to spend hours browsing shopping malls and department stores at inconvenient hours to find generic goods. They want customized solutions that are easily accessible and available when they're ready to buy. The result? The birth of personalization, a strategy being adopted by more and more companies that address this widespread consumer desire. Think about it. If you were standing in your local mall, surrounded by hundreds of stores, wouldn't you be more apt to re-enter a store where the salespeople already know what styles you like? In addition, wouldn't you prefer to shop at a store that alerts you of discounts on the types of products you're likely to need? Likewise, if you were shopping on the Internet, wouldn't you be drawn to sites that catered to your individual needs? Wouldn't you prefer sites that offered products and services that were tailored to your particular preferences? If you're like most consumers, your answer to these questions is a resounding "yes!" These days, salespeople, clerks and customer service reps are attempting to build one-to-one relationships through such personalization measures because they lead to repeat customers and higher profits two difficult things to achieve. However, effective relationship-building doesn't end with providing personalized products and services to clients. It is also necessary to personalize your marketing strategy

 an ongoing process that takes a great deal of effort and planning, whether you're doing it in the traditional retail sector or online world of e-commerce. In either case, if done properly, the results can be a big boost in traffic and profits. Retail salespeople and Internet e-retailers both rely on personalization, but they do so in very different manners. The reason for the differences is mostly due to the different technologies and personalization avenues available to each. However, the consistency between both is that they both practice the art of building long-term relationships by providing individualized service. In the fast-moving, crowded worlds of retail and e-commerce, managers have quickly learned how to use these strategies to their advantage, and they've proven to be the difference between the success and failure of their organizations. So what exactly is personalization? Generally speaking, personalization is the strategy of establishing an individualized approach to servicing customers through products and services (which we will address in this section) and through your marketing strategy (which we will address in the next one). Personalizing products and services is a very effective way to build loyalty among customers. After all, if your company is providing tangible offerings that match clients' specific needs and your competitors aren't your organization will have a solid competitive advantage. Regardless of the methods you use, the goal of personalization is to find out what products and services individual customers will be willing to spend money on and to boost your sales by tailoring your offerings to them. Products that work especially well with personalization include clothing, footwear, food services, entertainment, travel, and so on. And almost all services can be tailored in one way or another to meet clients' individual needs. "Personalization is a range of things," says Richard Dean, strategic planner at Organic and an expert on personalization marketing strategies. It can be something as simple as making recommendations based on a client's purchase history or allowing a shopper to say, "These are the kinds of products and services I like. Tell me more about them and show me more like them," he says. Prescriptives Cosmetics follows a similar one-to-one premise for its line of makeup and skin care products. The company produces customized color-printed foundations rather than blends for general skin types. Customers can create custom shades right at the store counter that complement their skin tones. There is no guessing, as the match is made perfectly and immediately. A similar case of customized product offerings is illustrated in the case of Bed Bath & Beyond, a kitchen and bath retail chain. The retailer has set up a showroom and design center to help its customers find the products that fit their specific needs. No longer do shoppers simply search for basic features of a product; they look for what will fit into their specific home decorating plans. "They want customized products," says Jeff Burton, Bed, Bath & Beyond's CEO. "They want refrigerators that can be set up so when the styles of doors change, they can just change it instead of buying a whole new [refrigerator]." In fact, with networked homes popular once again, home equipment retailers have activated customized programs. At Bed Bath & Beyond, store associates walk customers through different arrangements for kitchens and baths and find out what future decorating plans the customer may have. Then, they sell products that can be changed later to accommodate fast changing styles and technologies. The result: repeat customers. Self-Assessment

Personalization works best when you either have a large number of different types of products and services to sell, or your customers come from many different walks of life. For example, personalization greatly aids a bookstore or a music store because customers are young and old, male and female, and have different tastes in genres, subjects and authors. Meanwhile, a company that sells highly specialized items to a distinctive audience may find the effort and expense of personalization less beneficial. Take this test to find out if you should be using personalization:

1. Do you offer a large selection of products or services?

Yes Yes Yes No No No

2. Do you have multiple target audiences with diverse demographic profiles? 3. Do your customers have multiple buying motives, and do you know what they are? 4. Can you satisfy those motives with different approaches?
Yes No 5. Do different customers use your products for different purposes? Yes Yes No No

6. Can you adapt your products to adapt to address those uses? 7. Do you currently have or could you develop a means for gathering and analyzing
personalized information about your customers? Yes No

8. Do you currently have or could you develop a way to offer different products and services to
different customer groups? Yes Yes No No

9. Do you have a budget for personalizing your offerings?

If you answered yes to all of the above questions, your company is a likely candidate for personalization. So get ready to get personal. Back to Outline II. Going One-to-One Through Marketing Personalizing your marketing strategy not only allows you to tailor promotional messages to customers, but it also allows you to identify key customer traits so you can more easily make sales to particular clients. It allows you to reach individual customers directly and on a one-to-one basis rather than hoping to reach an entire group at once, as with mass marketing techniques. In the traditional retail sector, this can simply involve a carefully crafted conversation between a sales representative and a client, or it can be through technical means that determine what products or styles interest a specific customer. One-to-one marketing targets individuals within a particular audience and uses various methods and technologies to deliver customized messages to them. The process varies from traditional target marketing, which typically involves sending uniform messages to a particular audience.

Radio Shack is an example of a retailer that utilizes this strategy through the use of direct-mail sales circulars. Remember all of those advertising brochures you've found in your mailbox over the years from them? Those are the results of a one-to-one personalized marketing strategy. Most likely your relationship with Radio Shack began when you walked into one of their locations and purchased a stereo. At that point, personalized information about you, including what you bought and how much money you spent, is entered into a database for future reference. Then, the store identifies a pattern in your buying habits and makes assumptions based on your personality and interests. Finally, you receive notices for sales on woofers and tweeters and other stereo-related equipment. Meanwhile, circulars that are sent to someone who bought a camera might include sales on video equipment instead. For more information see Create a Direct Mail Package. A similar strategy works for catalog retailer Fingerhut. The company sends out a general merchandise catalog once a month. When a customer buys an item, his or her buying habits are logged into an extensive database and analyzed for potential future buying habits. Then, the company sends the customer up to 25 different catalogs featuring products that were identified as potential items of interest based on his or her past purchases. "Say they buy cookware; then we send them our specialized cookbook catalog," says Fingerhut's president Will Lansing. "If they buy tools, we send them our home improvement catalog. Once we understand their purchase profile, we send them more specialized books with a broader assortment of products." Over time, and with more purchases, Fingerhut's database can help narrow the individual's preferences and continually personalize the company's strategy toward that person. The constant interaction involved in personalized marketing strategies, whether it is through conversation, database management, customer input or software tools, provides you with benefits that your competitors won't have if they are employing mass marketing strategies. These benefits include: 1. A loyal and long-lasting relationship - With so many options to choose from, loyalty among shoppers is fleeting, at best. However, because you can customize your sales pitch to reflect the interests and personality of individual buyers, you can make them feel as if your store is their own. Therefore, the chances of that person coming back to your company, rather than your competitors, greatly increase. 2. A rich collection of customer information - Because personalization tactics can track the movements and habits of an individual, you can receive valuable data on your customers that you wouldn't be privy to if they remained anonymous. This interaction allows you to make a more effective sales pitch. With this information, you can direct customers to the merchandise they will most likely buy, or you can market merchandise that might be of interest that the customer might not have otherwise seen. 3. Valuable insights on your company -- Information gained from tracking customers can be valuable information for you in determining what works and what doesn't, as well as what sells and what doesn't. By knowing the interests and habits of the people who find their way into your store, you may uncover other important information about their opinions and preferences for your products and services.

Back to Outline

III. Plan Your Strategy Before you decide to implement a one-to-one marketing strategy, there are a few important questions to consider. To begin thinking about that decision and how you will handle implementation, ask yourself the following questions: 1. What behavior from my customers am I hoping to enable (increased purchases, repeat visits, heightened trust, etc.)? _______________________________________________________________________ 2. What message about my business do I want to send to people? _______________________________________________________________________ 3. What technical resources do I have that will complement one strategy over another? _______________________________________________________________________ 4. Do I have enough manpower to implement the preferred strategy? _______________________________________________________________________ 5. Does the plan require a short- or long-term obligation? _______________________________________________________________________ Once you have chosen a plan for personalization and know what you want to accomplish, it's time to set up your program. You can begin by identifying and becoming familiar with one-on-one marketing techniques and when to use them. Techniques for gathering information for personalization strategies include: Written mail surveys and questionnaires Written in-store surveys and questionnaires In-store kiosks Informal discussions Formal discussions/focus groups Anonymous suggestion/feedback boxes Online questionnaires email

Keep in mind that long, drawn-out questionnaires, forms and interrogations tend to drive people away. The secret to successful information gathering is to gain as much value as you can in as little amount of questions as possible. It's often wise to begin with only a simple question or two whose answers can be used to influence the direction of the subsequent questions. Back to Outline IV. Personalization and the Web As important and as basic as personalization is for retailers, it is even more vital for e-retailers, where the chances of online stores being lost in the shuffle are great. And in light of the recent e-commerce boom, building relationships and getting to know customers can mean the difference between survival and failure. With e-commerce sales hitting $209.6 billion in 2009, sites that provide the best online shopping experience for Web customers stand to grab a large chunk of that pie. And personalization is universally accepted as one of the best means to that end.

Why is personalization the latest trend in "Netonomics"? Because, similar to traditional retailing, it establishes customer loyalty, which leads to repeat visitors, which leads to repeat sales, and ultimately, to higher profits. In fact, several studies have shown that Web sites providing personalization are five times more likely to attract repeat visitors than non-customized sites. "It can be the difference between a static site or a successful one," says Mike Porter, marketing director for NetPerceptions, a personalization system developer. "Personalization takes information and makes recommendations to pitch products that have a 70 to 90 percent likelihood of being a match [with the interest of the customer.]" Furthermore, a customized approach allows you to get to know your customers in the impersonal online atmosphere and to tailor your offerings to them. It can utilize direct input from the customer, or it can be done without the customer even realizing what's happening. For example, Web sites can now identify a particular customer through registered contact information, and then present products and services in a manner that fits his or her interests and personality. It can also allow the customer to dictate what content and information he or she sees while visiting the site. "That's what e-commerce on the Web is all about," says Dean. "If you're not providing personalized service, then you're not using the Web to its full advantage." How It Works The good news is that the Web and its burgeoning technologies allow e-retailers to take their personalization strategies to an even higher, more sophisticated level. There are a few basic approaches for Web-based personalization that have emerged, and all are derived from traditional retail marketing strategies. The two main categories are rules-based filtering and collaborative filtering. Keep in mind that while these are the current standard approaches, e-retailers are consistently pioneering new ideas for personalization. Rules-Based Filtering - Rules-based personalization generates a profile of each customer, which is stored in a database and used to identify patterns of behavior. The patterns are transformed into assumptions, or rules, which are then used to predict a shopper's future likes and dislikes. Then, the retailer or e-retailer can customize his or her content accordingly and tailor sales and advertising efforts. There are several ways to accumulate this data. The most basic collection process is the use of a registration form, which requires visitors or shoppers to fill out a questionnaire and submit it to the store or Web site before they can shop. Requested information might include age, occupation, address, household income level, hobbies, interests, and so on. One of the more common strategies you see today is the use of clickstreams, which track the path that users take through a Web site. An example of this method is Accipiter AdManager software developed by Engage Technologies, which allows companies to track the number of times viewers click on advertising banners, giving them the data they need to customize advertising campaigns to their viewers' preferences. This practice is similar to what traditional retailers do when they log in purchases for future direct marketing campaigns. Another strategy growing in popularity is the use of if/then scenarios, in which e-retailers attempt to direct the movements of users by basing the user's options on what they've done in the past. Collaborative Filtering - This is the process by which retailers and e-retailers track customers' likes and dislikes and look for patterns similar to other customers. This concept is designed to simulate a "word-ofmouth" campaign. "Personalization isn't just looking at one person's behavior," explains Porter. "It's looking at the behavior of people who are alike. And it's making a set of suggestions based on what a particular group of similar people [think is] popular."

The more times a person visits and makes purchases from your site or store, Porter explains, the more likely you will be to make helpful purchasing suggestions to that person. Self-Assessment Ask yourself these questions to help you decide which strategy is best suited to your Web marketing plan. Once you have the answers to these questions, you can begin to analyze what approach seems best for you. 1. How much do I know about the visitors coming to my site? _______________________________________________________________________ 2. How much information am I comfortable asking those customers for? _______________________________________________________________________ 3. What do I plan to do with the information after I receive it? _______________________________________________________________________ 4. How much money can I spend to track visitors? _______________________________________________________________________ 5. Will I be able to implement a database system? _______________________________________________________________________ 6. Do I want to keep the process simple, or can I afford to be more elaborate? _______________________________________________________________________ 7. Am I going to program it myself or can I hire someone to do it for me? _______________________________________________________________________ If you currently don't know much about your visitors, then you might want to think about a collaborativefiltering approach since it allows you to use minimal information to infer that a customer is interested in a particular subject matter. However, collaborative filtering is a complicated process, and it normally takes an experienced hand to program such a system. Collaborative filtering is also a relatively expensive technique. Luckily, software vendors, such as Broadvision, Epiphany, Teradata, IBM and ATG can do most of the work for you and thereby cut costs. Using these software packages can be a week long project or take several months. "It really depends on the complexity of the plan," says Porter. "In many cases, more sophisticated sites take a great deal of planning, and the more complicated it becomes, the more expensive it's going to be." Additionally, at online bookseller Amazon.com, referencing tools allow the site to automatically suggest books of similar subjects to the ones a customer is already looking at. Should the customer stop and look at books on boating, the site offers up information on other books on the same topic that might be of interest. Therefore, the possibility of impulse sales increases, and on the Web, impulse sales are important revenue boosters. A slightly different customization approach is employed by online grocer Peapod. Peapod's personalization tools are designed to get to know you so well that they do your food shopping for you a very personal task, indeed. The site's system learns the items on your personal shopping list, then scours the aisles of real grocery stores to find the best price for your groceries, selecting products that meet your needs and delivering them to your home.

Furthermore, the site allows shoppers to store information on their favorite foods, favorite butcher, and so on, enabling the site to identify and deliver meats, cheeses and produce just the way you like them continuously over time. Finally, the site offers specialized features, such as electronic coupons and sales advertisements, through the use of custom-designed software called the Universal Event Processor. These features, when combined, contribute to the creation of an atmosphere of trust and increase the likelihood of increased purchases. If you're leaning toward a simpler strategy, companies such as BroadVision have developed programs that run rules-based programs. This may be a dollar better spent for the starter in a personalization plan. Issues to Consider Planning is important when dealing with personalization on the Web. Just as you wouldn't want to waste a retail customer's time with irrelevant products and services, you won't want to waste online viewers' time with time-consuming and ineffective personalization features and functions. You'll also want to remember that personalization, if it is right for your company, should become an integral feature of your existing sales and marketing plan. This will help you discover additional important opportunities for reaching your target audience. "The problem is people think of these things as features to add to marketing," argues Dean. "They're not. This is what the personalization is supposed to be about. If you're thinking about it as a separate effort, then you're thinking about it the wrong way." In order to identify whether your personalization plan is ready for the Web, ask yourself these questions: 1. Does the Internet normally provide the type of people that I need to reach? _______________________________________________________________________ 2. What personalized products and services do my customers typically want off-line that I could offer online? _______________________________________________________________________ 3. What do I want my Web site to accomplish in terms of marketing? _______________________________________________________________________ 4. What standards do I want my plan to meet? _______________________________________________________________________ 5. How can I measure the results of my online personalization plan? _______________________________________________________________________ 6. Will I get more "hits" by marketing my site on a one-to-one basis? _______________________________________________________________________ 7. Will I get more "hits" by offering information that is of interest to individual visitors on a regular basis? _______________________________________________________________________ 8. What customizable attraction(s) do I have to offer? _______________________________________________________________________

9. What technology is available to help me accomplish this feat? _______________________________________________________________________ 10. Can I do this in a cost-effective method, or will it require too many added costs? _______________________________________________________________________

Back to Outline

V. Putting Online Personalization Into Action On the Web, it's important to set up your personalization tools while keeping the mindset of a typical salesperson. As most salespeople know, helpful information can be gained from such simple information as the user's Zip code, which allows you to localize information and product offerings that may be pertinent to the user's local area. For example, a sporting goods retailer may want to concentrate a South Florida user's offerings on water sports equipment, while opting for skis and snowboards for a user in Maine in December. However, a good salesperson and a good personalized Web site always delves deeper into a person's personality. "It's easy to say something like, 'Anybody who likes Eric Clapton is going to like Johnny Lange.' But that's based on an arbitrary assumption," warns Porter. "You have to look at the whole database." Also, keep in mind your sales approach when setting up your program. For example, some salespeople sell a complex product on its features and introduce the price late in the sales process. Another company selling the exact same product might compete on price, so they want to get that up front to pull the prospect in, then talk about how many customers they have and give a few features that separate them from the competition. Your Web site should be set up to reflect your personal style. It is also important to remember that personalized Web sites should strive to retain serendipity. One of the big mistakes made by many sites is that they don't try to emulate the "on-the-fly" thinking that live salespeople do. For example, a salesperson can use the knowledge they gain to offer up other products and services that the customer might not even know that they want yet. "A lot of people buy music or books because they just happen to see it in the store and decide they like it," argues Dean. It's not that Web sites can't be programmed for serendipity, either; a lot of them just aren't. However, implementing this strategy can help the company generate sales that it wouldn't normally get had it been narrow-sighted. But how do e-retailers actually set up a personalized Web site and gain information in the first place? In truth, most turn to help from one of the many software developers listed in Section IV that specialize in the subject. These software developers are constantly upgrading their tools to include such things as artificial intelligence and open protocols. But no matter what technology you choose, technically receiving the information usually requires one of at least two basic features: log-ins or "cookies." What are these? Log-ins are simply input fields, user names and passwords that allow you to have users register with your site. Once they are registered, your site can then personalize information on the user and store it in a database. Then, any time a user signs on to your site, the software immediately recognizes the user and shows content relevant to that user. Log-ins are simple and inexpensive, but often disrupt the seamless

nature of your personalization strategy. "You can actually see the technology at work," says Dean. "Personalization should be seamless." The second way to track identities online is through the use of cookies, which are a little more high-tech and a little more controversial. Cookies are files sent to the user's computer that secretly live on the customer's hard drive. These little buggers are often maligned because many question their moral standing in regards to privacy issues. But as Dean points out, cookies only know as much about a user as the user tells them. What's more, this technology adds a seamless element to your personalization. And the server that sends out a cookie is the only thing that can read it, so security is not an issue. The cookie stores information on the user, and whenever a person visits your site, the artificial intelligence and learning agents in the cookies recognize the user and store useful information as he or she goes. Then, the information that the cookie produces can be analyzed by the system to reflect which type of personalization strategy (rules-based filtering, collaborative filtering) that you choose. Back to Outline VI. What Your Personalized Site Should Include While there are no set standards for personalization, and everyone finds different ways to approach the process, there are a few things that your personalization program should include to make it effective. First, Web sites should start people off with a generic version of their site and allow users to customize it gradually as they see fit. Second, they should watch what users are doing and actively recommend personalized ideas. Third, they should combine personalized services with a generalized segment where readers can keep in touch with the rest of the community, read about new ideas and get recommendations from expert editors. Here are few examples of Web sites that are using personalization effectively. You may want to use these sites as models for your personalization strategy, as they have proven to be some of the most effective personalization methods on the Internet. NetGrocer, an online food and gift retailer, offers up the best of both worlds. First-time visitors are shown a generic home page, but offered a sign-up option. Once signed in, they are given a password, which the system uses to recognize the shopper. During ensuing visits, users are shown foods that they liked in the past, but also offered products that may increase their appetite for additional purchases. But there's more: NetGrocer shoppers can make recurring orders that the system automatically ships on a regular basis. And it learns what they like, so customers can always keep their cupboards stocked full. Dell Computers, one of the most successful online computer retailers on the Internet, has designed its personalization tools to make it easier for shoppers to customize their own product specifications. The system guides customers through a range of choices in RAM, hard drives and peripherals, helping them avoid compatibility conflicts along the way. This is a case of not overdoing it with personalization and increasing serendipity. Dell doesn't waste users' time with needless features; instead, it personalizes only what the user needs to get a good computer. At the same time, the same referencing tool that steers the customers to compatible products also steers them to products they might not know about, such as different manufacturers' equipment, etc. Musicmaker, an online music store, has taken personalization to new heights with a program designed to allow users to customize their own products. At MusicMaker, users can select specific songs to burn onto a custom-made CD. The reference tool helps find songs that might interest them and suggests songs based on their movements around the site.

Back to Outline

VII. When Personalization Works, and When It Doesn't Typically, most off-line offerings can be personalized and customized in one way or another to increase the value of a shopper's experience. That could include customized service, colors, sizes, shapes, packaging, delivery and so on. It is important to realize, however, that some products might not lend themselves well to the personalized online approach. For example, books and CDs, which are the biggest selling items on the Web, are perfectly suited products for personalization because they are usually purchased as people are searching for a specific title, subject or author, or in the case of music, a specific title, artist or genre. However, products such as calendars might not be a good fit, since people generally like to browse through them and usually do not know exactly what they want before they do their browsing. Although there are cases where someone may be looking for a specific calendar, in general, the only information people are certain of when they buy a calendar is the year. In this case, personalization can only take you so far. It is also important to remember that creating a successful personalization plan is challenging, and you should not take the effort lightly. Just as any advertising plan relies on repetition for success, so, too, does personalization. When developing your personalization plan, it is important to implement features that will keep people coming back on a regular basis. You will need them to come back regularly in order to track their habits. Web portals and news organizations have adopted this strategy very well. Google, Yahoo! and Go.com all have designed strategies to keep regular visitors coming back day-to-day and, in some case, more than once a day. How? Although the basis for their revenues is to sell advertising, and their main product is their search engine, these sites have turned to personalized news and information as one of their main draws for traffic. The information they supply isn't just daily news; instead, it is targeted, constantly updated news. And when a visitor registers with any of the three portals, he or she is able to personalize the page they view each subsequent time they log on. For example, the regular Excite home page is general in content, including top news articles, general links, and so on. However, the personalized My Excite home page asks users to select specific types of news, such as technology, science, sports and business articles. It also allows users to localize their news to reflect their home state or select specific sports teams that the site will track. Excite does the same with personalized television listings and weather, based on the user's zip code. The benefit of personalization for each of these sites is that these users will return regularly for their personal updates and then use the site's search engine as opposed to one of the competitors'. With the added visits, the sites' hits rise dramatically and attract additional advertising revenues. The strategy has paid off handsomely for these sites, as it can for yours if you do the proper research and implement the concept correctly.

Marketing

Part 1 An Overview of Marketing Management

Module 1 Marketing and the Marketing Management Process - Content Questions:
1.1 1.1 Define marketing.
Marketing is a social process involving the activities necessary to enable individuals and organizations to obtain what they need and want through exchanges with others and to develop on going exchange relationships.

1.2
1. 2. 3. 4. 5.

1.2

What conditions are necessary for an exchange to take place?

1. At least two parties 2. Both parties must offer something of value (e.g. money, goods, services) 3. Both parties aware of the existence of the other; capable of communication and delivery 4. Both parties free to accept or reject the others offer 5. Both parties must be willing and able to negotiate terms of exchange that they find acceptable. Both parties must believe that the exchange creates benefits or value.

1.3

1.3

Distinguish between a need and a want

Needs Basic physical needs critical to our survival i.e. food, drink, warmth shelter sleep - Social and emotional needs critical to our psychological well being, such as security, belonging love, esteem and self-fulfillment

Wants Persons desires or preferences for specific ways of satisfying a basic need,

1.4

1.4

What is a market

Consists of

1. 1. Individual and organizes 2. 2. Interested and willing to buy a particular product to obtain a benefit that will satisfy a s specific need or want 3. 3. Have resources (time \, money) to engage in such a transaction.

1.5

1.5

What does strategic marketing involve

Strategic marketing involves a seller trying to determine the following points in an effort to define the target market: 1. 1. Which customer needs and wants are currently not being satisfied by competitive products offerings 2. 2. How desired benefits and choice criteria vary among potential customers and how to identify the resulting segments by demographic variables such as age, sex, lifestyle. 3. 3. Which segments to target, and which product offerings and marketing programmers appeal most to customers in those segments. 4. 4. How to position the product to differentiate it from competitors offerings and give the firm a sustainable competitive advantage.

1.6 1.7

1.6

What flows are necessary for an exchange to take place?

1.7 What functions/activities are necessary for exchange transactions and relationships to occur?

Flow
Information Feedback Title

Functions / Activities
Marketing communication Advertisement, personal selling, sales promotion, publicity Marketing research, Environmental scan, Competitive intelligence Selling Identification of potential customers negotiation Buying Identification and evaluation of suppliers, negotiation

Physical product

Transportation Storage

Credit and Payment Service

Financing credit policies, billing, collection Customer service Installation, repair, training, alterations, complaint handling

1.8

1.8

What is the role of a marketing manger?

Responsible for:

1.9 1.9 Evaluating the needs, wants, and purchasing patterns of a customer segment 1.10 1.10 Developing an integrated plan to facilitate purchase transactions by that segment 1.11 1.11 Design marketing channel system to carry out those activities, 1.12 1.12 Coordinate and monitoring the effectiveness of those activities over time. The above planning and co-ordination responsibilities, even though actual performance falls outside the scope of their authority.

1.9

1.9

Describe what is involved in marketing management

Marketing Management is the process of analyzing, planning, implementing, coordination and controlling programs involving the conception, pricing, promotion and distribution of products, services, and ideas designed to create and maintain beneficial exchanges with target markets for the purpose of achieving organizational objectives.

1.10 1.10

What is the difference between a corporate and a business strategy?

The corporate or business strategy is the direction for the companys mission, the business it chooses to be in and its growth policies.

1.11 1.11 What are the three interrelated decisions needed to design an objective strategic marketing program?
1. 1. set specific objectives to be accomplished within the target market, such as sales volume, 2. 2. Decide on an overall marketing strategy to appeal to customers 0 and to gain a competitive advantage in the target market. Consistent with firms capabilities, its corporate and business unit strategies and the product market objectives. 3. 3. Make decisions about each element of the tactical marketing program used to carry out the strategy. Internally consistent and integrated across all elements of the marketing program.

1.12 1.12 What are the major recent developments affecting marketing management?
Globalization Increased Importance of Service International markets account for a large and growing portion of the sales of many organizations Defined as any activity or benefit that one party can offer another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. Change the nature of marketing management in tow important ways 1) 1) New technologies are making it possible for firms to collect and analyze more detailed information about potential customers and their needs, preferences and buying habits. 2) 2) Impact has been to open new avenues for

Information Technology

communication and transacting exchanges with a firms customers.

Module 2 The Strategic Role of Marketing -Content Questions:

2.1 Define strategy.
A strategy is a fundamental pattern of present and planned objectives, resource deployments and interactions of an organization with markets, competitors, and other environmental factors. Specifies 1) 1) what (objectives to be accomplished) 2) 2) where (on which industries and product markets to focus) 3) 3) how ( which resources and activities to allocate to each product market to meet environmental opportunities and threats and to gain a competitive advantage)

2.2 What are the five components of strategy?

Scope Goals and objectives

Number and types of industries, product line market segments it competes in or plans to enter Strategies should also detail desired levels of accomplishment on one or more dimensions or performances i.e. volume growth, profit contribution return on investment Deciding how resources are to be obtained and allocated, across businesses product markets functional departments and activities How the organization will compete in each business and product market within its domain. Position itself to develop and sustain a differential advantage over current and potential competitors.

Resource deployments Identification of a sustainable competitive advantage Synergy

Business, product markets, resource deployments and competencies complement and reinforce one another, total performance are greater than in it would be in parts.

2.3 How do the three levels of strategy differ in terms of the issues on which they focus?

Strategy components Scope

Corporate strategy

Business strategy

Marketing strategy

Corporate domain: Which business should we in ? Corporate development strategy: Conglomerate diversification (expansion into unrelated businesses) Vertical integration Acquisition and divestiture polices

BUSINESS DOMAIN: WHICH PRODUCT MARKETS SHOULD WE BE IN WITHIN THIS BUSINESS OR INDUSTRY? Business development strategy: Concentric diversification (new products for existing customers or new customers for existing products)

Target market definition Product-line depth and breadth Branding policies Product-market development plan Line extension and product elimination plans

Goals and objectives

Overall corporate objectives aggregated across businesses: Revenue growth Profitability ROI (return on investment) Earnings per share Contributions to other stakeholders

Constrained by corporate goals Objectives aggregated across product-market entries in the business unit: Sales growth New product or market growth Profitability ROI Cash flow Strengthening bases of competitive advantage Allocation among product-market entries in the business unit Allocation across

Constrained by corporate and business goals Objective for a specific product-market entry: Sales Market share Contribution margin Customer satisfaction

Resource deployments

ALLOCATION AMONG BUSINESSES IN THE CORPORATE PORTFOLIO

Allocation across components of the marketing plan (elements of the

Allocation across functions shared by multiple businesses (Corporate R&D, MIS) Identification of a sustainable competitive advantage Primarily through superior corporate financial or human resource; more corporate R&D; better organizational processes or synergies relative to competitors across all industries Shared resources, technologies or functional competencies across businesses within the firm

functional departments within the business unit

marketing mix) for a specific product-market entry

Primarily through competitive strategy; business units competencies relative to competitors in its industry

Primarily through effective product positioning; superiority on one or more components of the marketing mix relative to competitors within a specific product market

Synergy

Shared resources (including favorable customer image) or functional competencies across product market within an industry

Shared marketing resources competencies or activities across product-market entries

2.4 What questions should a companys mission statement answer?

What is our business? Who are our customers? What kinds of value can we provide to these customers? What should our business be in the future?

2.5 What criteria should be used in a corporate mission statement?

Physical terms, focusing on products or services or technology The most useful mission statements focus on the customer need to be satisfied and the functions that must be performed to satisfy that need. They are specific as to customer groups and products or technologies on which to concentrate.

Characteristics of effective corporate mission statements Broad

FUNCTIONAL

Specific Long-distance transportation for large-volume producers of low-value, low density products Long-haul, coal-carrying railroad

Based on customer needs

Transportation Business

PHYSICAL

Based on existing products or technology

Railroad business

2.6 What is the value to the corporation of ethical guidelines?

To reduce inconsistent behaviors among marketing reduce risk/damaging ongoing-term relationships with suppliers, channel partners and customers. To reduce damaging the trust between a firm and its suppliers or customers, thereby not disrupting the development of long term exchange relationships and resulting in the likely loss of sales and profits over time.

2.7 Define strategic intent or vision.

A Motivator for staff, personable lending to employee commitment.

2.8 What are the four components of a corporate objective?

1) 2) 3) 4) 1) 2) 3) 4) A performance dimension or attribute sought A measure or index for evaluating progress A target or hurdle level to be achieved A time frame within which the target is to be accomplished.

2.9 What are the two major directions a corporation can go in seeking growth? What are the major options within each?
Two major directions -Diversification or Expansion

Current products Current Markets

New Products
PRODUCT DEVELOPMENT STRATEGIES

Market penetration strategies Increase market share Increase product usage Increase frequency of use Increase quantity used New applications
MARKET DEVELOPMENT STRATEGIES

Product improvements Product-line extensions New products for same market

New Markets

Expand markets for existing products

Diversification strategies Vertical integration Forward integration Backward integration Diversification into related businesses (concentric diversification) Diversification into unrelated businesses

Geographic expansion Target new segments

2.10 What is a portfolio model?

Enable managers to classify and review their current and prospective SBUs by viewing them as portfolios of investment opportunities and then evaluating each business's competitive strength and the attractiveness of the markets it serves.

Question Marks High

2.11 What are the two dimensions in the BCG growth share matrix? What are the assumptions concerning each of these dimensions? Describe the type of Stars business contained in each of the models four cells.

Market

10% Dogs Cash cows Growth rate (in constant dollars) Low

10

1 Relative market share

0.1

Two Dimensions

Market Growth rate maturity and attractiveness of an industry Relative Market share a proxy for its competitiveness strength within its industry Business Types Question Marks - Business in high-growth industries with low relative market shares also known as problem children increase shares of a question mark business it becomes a star, If they fail it will turn into a dog. Stars - market leader in a high-growth industry, critical to the continued future success of the firm . as industries mature they move into cash cows. Cash Cows - high relative hare of low-growth markets because they are the primary generators of profits and cash in a corporation. Do not require additional capital markets are stable share leadership usually mean they enjoy economies of scale and relatively high profit margins. Dogs low share businesses in low-growth markets throw off some cash, typically generate low profits, or losses.

2.12 What are the major limitations of the BCG model?

Market growth rate is an inadequate descriptor of overall industry attractiveness Relative market share is inadequate as a description of overall competitive strength The outcomes of a growth share analysis are highly sensitive to variations in how growth and share are measured While the matrix specifies appropriate investment strategies for each business, it provides little guidance on how best to implement those strategies

The model implicitly assumes that all business units are independent of one another except for the flow of cash.

2.13 What is value-based planning?

Is a resource allocation tool that attempts to assess the shareholder value a given strategy is likely to crease, it is a basis for comparing the economic returns to be gained from investing in different businesses pursuing different strategies from alternative strategies that might be adopted by a given business unit. 1) 1) Assess the economic value a strategy is lively to produce by examining the cash flows it will generate rather than relying on distorted accounting measures such as return on investment 2) 2) 2) Estimate the shareholder value that strategy will p[reduce by discounting its forecasted cash flows by the businesss risk-adjustment cost of capital 3) 3) 3) Evaluate strategies based on the likelihood that the investments required by a strategy will deliver returns greater tan the cost of capital . The amount of return a strategy or operating program generates in excess of the cost of capital is commonly referred to as its economic value added or EVS.

2.14 What are its limitations?

Value based planning is not a substitute for strategic planning; it is a tool for evaluating strategy alternative identified and developed through mangers judgments. It relies on forecast of many kinds to put a financial value on the hopes, fears, and expectations managers associate with each alterative. I.e. forecasts of sales volumes, product mix, unit price and competitive action

2.15 Ideally, what characteristics should strategic business units have?

A homogenous set of markets to serve with a limited number of related technologies. A unique set of products markets Control over those factors necessary for successful performance Responsibility for their own profitability

2.16 What are the objectives of a business unit?

Sub objectives vary across Strategic Business Units SBUs according to their industry attractiveness, strength of their competitive positions with those industries, and resource allocation decisions by corporate management.

2.17 What is the role of marketing in formulating and implementing strategies?

Marketing mangers bear the primary responsibility for formulating and implementing strategic marketing plans for individual product0market entries. However freedom of action is designing such plans is often constrained by the firms corporate and business0level strategies.

2.18 What are the more important characteristics of a market-oriented company?

The marketing concept holds that the planning and co-ordination of all company activities around the primary goal of satisfying customer needs in the most effective means to attain and sustain a competitive advantage and achieve company objectives over time. They adopt a variety of organizational procedures and structures to improve the responsiveness of their decision making, including more detailed environmental scanning, continuous, real-time information systems; seeking frequent feedback form and coordinating plans with key customers and major suppliers; decentralization of strategic decisions, encouragement of entrepreneurial thinking among lower-level mangers an the use of inter functional management teams to analyze issues and initiate strategic actions outside the formal planning process.

Part 2 Market Opportunity Analysis

Module 3 Environmental Analysis - Content Questions:
3.1 What are the major problems in terms of the planets physical environment?
Depletion of many of the earths valuable resources, decline in the earths overall health deserts are growing while forests are shrinking, lakes are dying, quality and quantity of groundwater are declining and rising temperatures. Pollution problems, inadequate supply of municipal water.

3.2 What are green products?

Green products are those that are environmentally friendly ie phosphate-free detergents, recycled motor oil, tuna caught without netting dolphins, organic fertilizer, high-efficiency light bulbs, recycled paper.

3.3 What kinds of risk derive from a change in a countrys regulatory environment?
Confiscation (seizure without compensations) Exportation (seizure with some compensations) Domestication (transfer of ownership to the host country and local management and sourcing) Change in exchange control, local content laws, import restriction taxes and price controls Designed to provide advantage to local industry.

3.4 What are some of the more important opportunities resulting from research in biology? Electronics?
Trends in biology especially in gene therapy. I.e. research to discover faulty geneses is an example of what is hoped to be gained. Trends in Electronics / Telecommunication relating to how goods and services as well as ideas are exchanged and how individuals learn and earn as well as interact with one another.

3.5 What are the major trends in the worlds population?

Ageing of the worlds population, caused primarily by declining mortality rates. Rapid shift in the populations of less-developed countries from rural to urban.

3.6 Describe the four major shifts taking place in the US population.
Family Structure Ageing Closely structured family is less and less typical, households because of divorce, remarriage two wage earners etc Baby boomers 1949 1064 continue to dominate growth in the age groups they pass through en route to old age. Immigrants account for nearly 1/3 of US annual growth and end up residing mostly in the large metropolitan areas of the South and West. Migration of jobs and people to suburban cities further and further form central cities. Ethnic Composition Diverse ethnically 25% of population is composed of racial minorities.

Geographic Distribution

3.7 Define purchasing power parity. Further, explain why an unadjusted per capital GNP substantially understates the spending power of urban households in the underdeveloped countries.
Gross domestic product (GNP) measure economic performance of a country on a per capita basis after accounting for inflation, in order realistically to compare incomes across countries it is necessary to use a purchasing power parity (PPP) approach that takes into account the cost of a standard basket of products expressed in US dollars for each country. Thus, using a PPP analysis helps to compare the

relative purchasing power of a given country for goods with what theses same goods would cost in the United States. PPP typically lower GDP per capita income for wealthier countries and higher ones for the poorer nations. Despite leveling from PPP the GDP gap is less inflation increased between rich and poor countries mainly because of higher population growth. PPP does not take into account the subsidies provided by many countries for such essentials as food, utilities, shelter, transportation, education and medical care, which account for about half of the average household expenditures in developed countries.

3.8 What are the major forces driving the competitive environment?
Known as the macro environments Globalization of business Takes more resources to be a major global player, the number of players become more and more limited. Almost always results in a change in an industrys structure, which makes it more difficult for entry as well as for competitors to survive Rate and complexity has a strong impact on innovations in the production process and development of new and improved products. Vertical integration and mergers. In retailing they have been numerous and far reaching include: Fast growth of general merchandise discount stores operating cost lower than traditional retailers Direct marketing via telemarketing, direct mail and Internet Growth in vertical marketing systems that integrate producers, wholesaler and retailer into a unified system designed to achieve lower costs while increasing market power. I.e. franchising examples of fast foods (McDonalds) In US Deregulation has had an impact on airlines, trucking banking bringing more competition. And Regulation to Telephone markets, which had controlled of the seven Baby Bells the new legislation, will open theses markets to competition and in exchange will permit the Baby Bells to compete in the long-distance market. Changing values, Attitudes and lifestyles These are powerful engines of change as companies compete to take advantage of new trends. I.e. increase concern about physical fitness has been responsible for athletics clubs exercise equipment ect..

Technology

Changing channels of distribution

Regulation / Deregulation

3.9 Describe what an opportunity/threat matrix is and how it can be used to help management identify, evaluate and respond to environmental events.
An opportunity/threat matrix enables the examination of a large number of events in such a way that management can focus on the most important ones. In any given period, many environmental events that could have an impact on the firm either positively or negatively may be detected. Example:

3.10 What are the ethical issues arising from the interaction of business and the environment?
Environmental Impact Third world countries concerns for unhealthy working environments, Third world countries use of child labour High prices of third world countries for goods purchase pharmaceutical drugs.

Module 4 Industry Dynamics and Strategic Change Content Questions:

4.1 What are the various levels at which products can be defined?
Industry Product class Includes an array of non-competing products i.e. car industry May serve diverse markets. The more generic the definition the higher the aggregation level of products i.e. desserts versus pastries

Product type Brand level

Subsets of product class contain items that are technically the same Bottom of the aggregation hierarchy, inappropriate units of analysis. Sales largely function of managements strategic decisions,

4.2 Describe market hierarchies.

Market Hierarchy is a complex one to define since there are numerous ways markets can be arrayed. Levels targeted, the trend is towards greater specificity that is towards targeting more precisely defined segments at the lower level in the hierarch e.g. Johnson & Johnson targeted children aged 2 6years with a special line of bath products featuring Winnie the Pooh.

4.3 Describe what is meant by the product life-cycle concept.

Sales history of a product and the sales change over time in a predictable way the product go through a series of five distinct stages: Each opportunities brings threats, thereby affecting the strategy as well as marketing programmes.

4.4 What are the characteristics and their implications of each of the product life-cycle stages? 4.5 What are the strategic implications of the product life cycle?
4.3 Stages 4.4 Characteristics and Implications 4.5 Strategic Implications Both innovators and followers, accelerate overall market growth and product acceptance through awareness, trial and product availability. Increase competitive position

Introduction

Purchase of new product limited because members of the target market are insufficiently aware of its existence. And product availability. Communications task at the outset to build awareness of the new products uniqueness, expensive undertaking promotional expenditures product availability for trial

Growth

As people learn about product and it becomes readily available, sales increase at a progressively faster rate. Marketing mix changes, prices tend to decline , price differences between brands decrease, Sellers build channel or a direct sales system provide maximum

product availability and service at lowest cost. This accomplished rivals at disadvantaged, Promotion costs concerned with building demand for a companys brand (selective demand) than demand for product class or type (primary demand) Firms strive to build favorable attitudes toward their brand on unique features, promotion costs remain high, typically decline as a percentage of sales. Shake-out / Competitive turbulence stage Growth slows as the number of buyers nears maximum and repeat sales become increasingly more important than trial sales as number of buyers and purchases stabiles Price cuts, weaker competitors leave the market, stronger firms gain shares. Major changes in industrys competitive structure occur. Firms rationalize product line by eliminating weaker items, emphasis creative promotional pricing and strengthen its channel relationships. Marketing mix changes More direct price competition, firms make every effort to maintain and enhance their distribution system. Reduce number of products carried weaker competitors need to offer buying incentives to continue in the market. Improve/solidify competitive position

Maturity

Sales plateau, typically lasts some time, Net adoption rate holds steady, adopters drop out and exceed new first time users, Longer stage lasts the more likely changes occur. If firm does not respond successfully to change its competitors do, then a change in industry structure of significant may occur Marketing mix changes Various brands mare similar, breakthroughs by R&D or engineering help to differentiate product. Options is to add value to product that benefits customer., increase

Maintain position

service distribution and in-store displays become increasingly important as does effective cost management. Decline sales rate declines and product is said to have reached its final stage this may be gradual or extremely fast. Sales decline, costs increase and radical efforts are needed to reduce costs and the asset base. Exit barriers are low , many firms vacate the market so increasing the sales of remaining firms, there by delaying their exit. Stronger firms may even prosper for a time.

4.6 What are the major limitations of the product life-cycle concept?
Major limitations lies in its normative approach to prescribing strategies based on assumptions about the features or characteristics of each stage. It fails to take into account that the product life cycle is in reality driven by market forces expressing the evolution of consumer preferences (the market), technology (the product) and competition (the supply side)

4.7 Describe the adoption process.

The adoption process involves the attitudinal changes experienced by individuals from time they first hear about a new product, serve or idea until they adopt it. The five stages in the adoption process are: Awareness Interest Person only aware of the existence of the new product insufficiently motivated to seek information about it Individual becomes sufficiently interested in the new product, but is not yet involved. Mental rehearsal stage, Individual is mentally applying the new product to his or her own use requirements and anticipating the results. Individual actually uses the product, but, if possible, on a limited basis to minimize risk. Only is the use experience is satisfactory with the product stand a chance of being adopted. Individual not only continues to use the new product but adopts it in lieu of substitutes.

Evaluation

Trial

Adoption

4.8 What is the adoption rate a function of?

The time dimension is a function of the rate at which people in the target group move through the five stages in adoption process. Depends on the following factors 1) 2) 3) 4) 5) 6) 1) 2) 3) 4) 5) 6) Risk (cost of product failure or dissatisfaction) Relative advantage over other products Relative simplicity of the new product Compatibility with previously adopted ideas Extent to which its trial can be accomplished on a small-scale basis Ease with which the central idea of the product can be communicated.

4.9 What are the various adopter categories?

Innovators First 2.5% of all individuals who ultimately adopt a new product, more venturesome more likely to be receptive to new ideas and tend to have high incomes which reduces the risk of a loss arising from an early adoption. Next 13% 14 % who adopt. Part of local scenes, often opinion leaders, serve as vital links to members of the early majority group, participate more in community organizations than do later adopters. 34% of those who adopt. Display less leadership than early adopters, tend to be active in community display less leadership than early adopters, active in community affairs * thereby gain respect form their peers0. do not like to take unnecessary risks and want to be sure new product will prove successful before they adopt it. Another 34% Frequently those individuals adopt a new product because they are forced to do so for either economic or social reasons. They participate in community activities less than the previous groups and only rarely assume a leadership role. Last 16% they are the most local; . participate less in community matters than any other groups and stubbornly resist change. Adopt a product so late sometimes that it has already been replac3ed by another new product.

Early adopters

Early Majority

Late Majority

Laggards

4.10 Describe the ways in which a product markets characteristics change as the market evolves.

Product innovation diminishes over time. Thus the sales of a new products those entering the market for the first time decline as percentage of total market volume form 10.2% during the growth stage of evolution to 5.4% during growth maturity, to 3.5% and 3.7% during stable maturity and declining maturity and to 2.8% in the decline stage. This is know as PIM (profit impact of market strategy)

4.11 What questions need to be answered in making an industry analysis?

1) 1) How profitable is the industry likely to be in the short term? Or in the longer term? 2) 2) What are the more import industry characteristics? 3) 3) What are the industry driving forces? a. a. Changes in the markets long-term growth rate which directly affect investment decisions and intensity of competition b. b. Changes in buyer segments, which affect demand and strategic marketing programmes c. c. Diffusion of proprietary knowledge, which controls both the rate at which products become ore alike and the entry of new firms d. d. Changes in cost and efficiency, derived from scale and learning effects which have the potential of making entry more difficulty e. e. Changes in government regulations, which can affect entry costs, bases on competition and profitability. 4) 4) What the essential determinants of success?

4.12 What are the major forces, which determine industry competition?
This is a part of industry analysis, five interactive competitive forces that collectively determine an industrys long-term attractiveness present competitors, potential competitors, the bargaining power of suppliers and buyers and substitute products .

Module 5 Consumer Marketing and Buying BehaviourContent Questions:

5.1 Describe each of the four types of purchasing decision.
Extent of involvement High Complex decision making (cars, homes, vacations)

Extent of decision making

Low Limited decision making, including variety seeking and impulse purchasing (adult cereals and snack foods) Inertia (frozen vegetables, paper towels)

Extended (information search; consideration of brand alternatives

Habit /routine (little or no information search; focus on one brand)

Brand loyalty (athletic shoes, adult cereals, cologne, deodorant)

5.2 Describe briefly the five steps consumers go through when purchasing high involvement products or services.
Problem identification Triggered by unsatisfied needs or wants Perceive differences between in deal and actual states on some physical or sociopsychological dimension. Seek products or services to help bring their current state more into balance with the idea How much information will a consumer seek? Source of Information - personal commercial - public Evaluation of alternatives Product attributes and their relative importance i.e. Cost , Performance, Social attributes, Availability Choosing a source from which to buy the product involves essential the same mental process i.e. mail order, teleshopping, catalogue, retail store. Aspiration or expectation level how well the product was expected to perform. Post purchase dissonance consumer may doubt whether they made the best possible choices. Such doubts are called cognitive

Information search

Purchase

Post Purchase Evaluation

dissonance.

5.3 How do low-involvement purchase decisions differ from high-involvement ones?

They are not import to consumers, the search for information to evaluate alternative brands is minimal. As a result, decisions to buy products such as cookies or cereal often are made within the store either impulsively on the basis of brand familiarity or as a result of comparisons of the brands on the shelf.

5.4 What are the marketing implications of low-involvement purchasing?

Implications Product design and positioning High Involvement Low Involvement Brand evaluation occurs after the product is purchased, consumers seek brands that are least likely to give them problems, Focus on product features that minimize any problems in using the product. Passive information gatherer, advertising should focus on a few main points to make it as easy as possible for them to gain familiarity and positive association with a brand. Television is primary medium for advertising. allows passive learning. Distinctive package design helps consumers recognize brands they have seen advertised. Bought often on price alone, special sales or coupon offers can be effective. If no problems experienced in use of trial consumers may continue to repurchase the brand out of inertia until a competitor offers an attractive price promotion Extensive retail distribution important because consumers are unwilling to search for a particular brand. Link product to some involving issue, i.e. bran cereals associated their product with a high

Consumers evaluate alternative brands according to choice criteria that reflect the benefits they seek

Advertising and Promotion

Printed media are better for highly involved with the product and actively seeking information.

Pricing

Distribution

Strategies to increase consumer

involvement

fibre diet that may reduce the incidence of colon cancer.

5.5 Describe the Fishbein model by using an example.

Attitude A = Consumers overall attitude towards Brand A Bi = Consumers belief concerning the extent to which attribute i is associated with Brand A Ii = The importance of attribute i to the consumer when choosing a brand to buy. k = The total attributes considered by the consumer when evaluating alternative brands in the product category. i = Any specific product attribute.

Cruise ship selection Service attribute Demographics other passengers Entertainment Ports of Call Cruise A = (10x8)+(10x8)+(8x8) = 224 Cruise B = (10x8)+(10x10)+(8x9) = 252
Cruise C = (10x8)+(10x9)+(8x9) = 242 Cruise B would be selected.

Importance weight (0 10) 10 10 8

Rating A 8 8 8

Rating B 8 10 9

Rating C 8 9 9

5.6 What is the difference between a compensatory and a non-compensatory model?

In a compensatory model a poor evaluation of one attribute can be offset by a strong evaluation on another. In a non compensatory model brands are evaluated one attribute at a time. Until one is superior

5.7 How do demographics and lifestyle have an impact on buying behaviour?

Demographics influence: 1) 1) The nature of consumers needs and wants 2) 2) Their ability to buy products or services to satisfy those needs 3) 3) The perceived importance of various attributes or choice criteria used to evaluate alterative brands 4) 4) Consumers attitudes toward and preferences for different products and brands. Lifestyles People live their lives in different ways i.e. different opinions, interests and activities, i.e. buying and using brands in different ways for different purposed.

5.8 Identify the major social influences on consumers decision-making processes.

Social Culture set of beliefs, attitudes and behaviour patterns relatively stable over time. Sub Culture share common geographic, ethnic, racial or religious backgrounds, They continue to hold some values, attitudes and behaviour pattern that are uniquely their own. Social Class - status groups largely based on similarities in income, education and occupation. Reference Groups groups that affect consumer behaviour through normative compliance, value-expressed influence and informational influence. The Family it serves as the primary socialization agent, helping members acquire the skills, knowledge and attitudes to function as consumers.

Culture - subculture

Social

Social Class reference groups - family

Personal

Demographics, including stage in family life cycle - lifestyle

Perception, memory, needs

Psychological

Attitudes towards product class

Attitudes towards brands

Consumer

Module 6 Organisational Markets and Buying Behaviour Content Questions:

6.1 What are the major differences between organisational and consumer markets?
Organisational markets are about twice as large as consumer markets. Organisational buyers purchase goods and services for further production, for use in operations or for resale to other consumers, In contrast to individual and households who buy for their own use and consumption.

Differences between organisational and consumer markets Demand characteristics The demand for industrial goods and services is: 1 Derived from the demand for consumer goods and services. 2 Relatively inelastic price changes in the short run are not likely to affect demand drastically. 3 More erratic because small increases in consumer demand can, over time, strongly affect the demand for manufacturing plants and equipment. 4 More cyclical. Market demographics Organisational buyers, when compared with buyers of consumer goods, are: 1 Fewer in number. 2 Larger. 3 Geographically concentrated. 4 More apt to buy on specifications. Buyerseller relationships Organisational markets are characterised by the following when compared with the markets for consumer goods: 1 The use of professional buying specialists following prescribed procedures. 2 Closer buyerseller relationships. 3 The presence of multiple buying influences.

6.2 Who are the major types of organisational customers?

Resellers Goods Producers

All retailers, wholesalers buy large quantities of goods for resale to other organisation or household consumers Producers of raw materials (such as farm and forest products firms and mines), building contractors and manufacturers. Banks, Hotels (lodgings), Financial, Insurance, entertainment, Education Large buyers of goods and services

Service Producers Government

6.3 What groups of people are the participants in the buying process?
It involves people from various departments, and can be: Users Influencers

People who must use or work with the product or service

Provide information for evaluating alternative products and services, usually technical experts from various departments. Help determine specifications and criteria to use in making the purchase decision. Control the flow of information to other people in the purchasing process, primarily purchasing agents and suppliers salespeople control information that reaches other decision makers. Purchasing agent or purchasing manager buyers have authority to contact suppliers and negotiate the purchase transaction. Person who has the authority to make a final purchase decision.

Gatekeepers

Buyers

Deciders

6.4 What factors determine the buying task faced by an organisation?

1) 1) The newness of the problem and the relevant buying experience of decision makers in the buying center. 2) 2) The information needs of the people in the buying center. 3) 3) The number of new alternative products and/or suppliers to consider in making the purchase decision.

Three kinds of buying task or situations; 1) 1) Straight rebuy purchasing common product or service the organisation has bought many times before. Routine

2) 2) Modified rebuy organizations needs remain unchanged, but buying center members are not satisfied with the product or the supplier they have been using. 3) 3) New-task buying organisation faces a new and unique need or problem 0 one in which buying center members have little or no experience in buying and thus must expend a great deal of effort to define purchasing specifications.

6.5 Describe briefly the organisational purchase decision-making process.

Recognition of a problem or need Derived demand Requirements planning Determining product specification

Search for information about products and suppliers Value analysis Make-or-buy decisions Information about potential suppliers

Evaluation and selection of suppliers Vendor analysis

Purchase decision Purchasing Contract Just-in-time purchasing arrangements

Post Purchase evaluation and feedback

6.6 What are the marketing implications of the following categories of industrial goods and services?
Category Raw materials. Description Characteristics Limited supply, few producers; distribution is a key function; price is a Marketing Implication Little promotional activity except for cooperative advertising

Relatively unprocessed goods that become apportion of a final

product

critical competitive variable.

campaigns funded by trade groups to stimulate primary demand for a product. Manufacturers buy most components materials and parts in large quantities, usually sold direct, without use of middlemen. Wholesale distributors sell to smaller manufactures in some lines of trade. To avoid disrupting production runs, sellers must ensure a steady reliable supply of materials and parts, JIT Wide range of specific items, it is hard to genralise about the most common or appropriate marketing strategies for accessory equipment. , producers sell accessory equipment directly. Presale and post sale service requirements are substantial, but the monetary value of the average sale is high enough to justify direct distribution. Personal selling either by the producers or a distributor sales force is the most important promotional method used in selling accessory

Component materials and parts.

Processed goods that become a portion of a final product.

High volume purchases, long-term contracts; fierce competition among suppliers, requires good service and nurturing of relationships with buyers.

Accessory equipment.

Finished goods that facilitate production of a final product

Enduring but less os than installations, more standardized, more frequently purchased and less costly than capital equipment; less complex buying intermediaries may be involved.

equipment. Products standarsied and not technically complex and thus advertising and brand name promotion are also important.

Installations.

Major capital goods used to produce a final product, but not part of the final product.

Long-lasting; involved in production of many units of the final product over several years; involve large monetary outlays; capital budgeting committee involved in purchase decision; sold directly from manufacturer.

Presents real chanllege because there are few potential coustomers at any one time, average sale is very large. Many installations are custom0made to fit a partcular customers needs, therefore sellers must provide enginerring and design services before making a sale. Often long perod of negotiation prior to fina transaction. Firms sell installatin must usually provid emany post sale services, ie installation, training, maintenance repair and sometimes financing. Small number of buyers large monetary volue of each sale and custom engineering involved, distriution usually dirct from producer to customer. Some wholesale distributors provide replacement parts and repair services for equipment already in operation. For similar

reasons promotional emphasis is usually on personal selling rather than advertising, Highcaliber, well-trained salespeople are critically important in the marking of installations. Operating supplies. Finished goods that facilitate repair, maintenance and ongoing operations. Analogous to consumer convenience goods, frequently purchased and consumed in a short time; standardized; broad market; heavy used of channel intermediaries. Purchased in small quantities by a great many different organizations, wholesale middlemen typically used to distribute. Price is usually critical variable in marketing operating supplies. Competing products are quite standardized and there is little brand loyalty. Personal selling by agents and distributors is also important. Services are intangible purchased prior to evaluation by buyer, Suppliers qualifications, past performance and reputation become critical determinants of the success of the marketing effort. Price is less important in selling business services because a lawyer or consultant with an outstanding reputation can often charge much more for a given service than one who is less well

Business services.

Provide special expertise to facilitate ongoing operations

Long-term relationships with customers; suppliers qualifications, experience and reputation critical to success; purchase decision often made by top executives.

know, Even so, rice often serves as an indicator of quality, especially when there are no other quality cues.

Module 7 Marketing Information and Marketing Research Content Questions

7.1 Describe market database systems and how they can be used.
Point of Sale (POS) database are used for direct marketing and prospecting programmes for companies that sell directly to end users. Collecting demographic data and tracking purchases. Geodemographic database provide 4 types of data demographics, geographics, psychographics and consumer behaviour.

7.2 Define what is meant by the term marketing research.

The function which links the consumer, customer and public to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

7.3 What are the six steps in the marketing research process?
Steps Potential error Management identifies the wrong problem or defines it poorly Management fails to identify the specific information needed for decision-making or the researcher uses the wrong source. Ambiguous questions or poor experimental designs result in invalid responses. Sample procedures result in the selection of a biased sample.

1. Problem formulation
2. Determining information needs and data source 3. Research design, including questionnaire 4. Sample design and size

5. Data collection

Errors are caused by non-response, by poor selection of respondents, by the interviewer, or by Errors occur while transforming raw data from questionnaires into research findings.

6. Tabulation and analysis

7.4 What is the difference between primary and secondary data sources?
Primary Are collected specifically for the problem at hand and require the firm to undertake the steps in the research process or hire an outside agency to do so Data collected by other organizations and are not usually tied directly to the firms problems. They have the advantage of saving time and money, but the data must be compatible with the needs of the specific study.

Secondary

7.5 How can secondary source data be evaluated?

Researchers must answer the question How good are the data? if the source specifies the datacollection method used, it can serve as the basis for the evaluation. If not the researchers are forced to judge the quality on the basis of other factors. I.e. research sponsors may be federal government or a trade association. And how data was collected i.e. by mail or personal interview.

7.6 What is the difference between exploratory and conclusive research?

Exploratory Uses secondary data (case studies and interview with knowledgeable people) Used to learn more about the nature and scope of the problem Preliminary step to be followed by conclusive research that tests the relevant findings Flexibility is key to the investigation

Conclusive

Comprises descriptive and experimental studies

studies .

Conclusive research to test alternative solutions to a problem

7.7 What is the difference between descriptive and experimental research?

Descriptive often referred to as survey research more commonly used design

Experimental

advantage of permitting the researcher to show cause-and effect relationships between the variables 0 something that can only be inferred from descriptive studies. Some serious disadvantages that limit its usefulness in marketing 1) 1) most experiments can measure only immediate results 2) 2) Expensive 3) 3) Use small samples that may not be representative of the national market 4) 4) Difficulty holding all variables constant 5) 5) Pose severe administrative problems can be audited by competitors

7.8 What are the major differences between probability and non-probability sampling?
Probability Ensures that every unit in the universe has a known probability of being selected. This is the only method that enables the researcher to measure the reliability of the sample data Possible problems 0 minorities or poor are under-represented in phone or mail survey Non Probability Does not provide every unit in the universe with a known probability of being included in the sample. Thus, the results cannot be generalize with any degree of certainty to a larger population Is not objective unit included because the researcher thinks it should be

7.9 Why is interviewing one of the major sources of error in a typical research project?
Telephone and personal interviews, an interviewer often selects the person to interview, asks questions and records the answer and errors can occur at each step. Respondents refuse to cooperate Unable to remember information wanted Biased by the interviewing process

Not want to report things that reflect poorly on their intelligence or social position. Does question mean the same to everyone Interviewing respondents it the one major source of error in the typical research project,

7.10 Under what conditions would you use each of the various data collection methods?
Questioning Most common way - almost any problem can be attacked using it, problems involving attitudes, knowledge and buying intentions can be approached only by using this method. Recognizes and notes people, objects and actions, rather than asking for information. Less popular than interviewing respondents

Observation

7.11 What are the major kinds of data you would want to collect about a competitor?
Examining data on their characteristics, objectives, strategies, performance to date and their strengths and weaknesses in order to gain insights into their future behaviour.

7.12 What two kinds of measures need to be merged to develop a meaningful measure of customer satisfaction?
The first has to do with understanding of the criteria used by customers to evaluate the quality of the firms relationship with them. Knowing the product/service attributes that constitute the customers choice. Criteria as well as the relative importance of each should facilitate this task. Once these attributes are identified they serve as the basis for developing expectation measures The second type of measurement is concerned with how well the firm is meeting the customers expectations on an individual attribute as well as an overall basis, Thus, if the choice criteria of a cruise lines target market included such attributes as food, exercise facilities and entertainment, then a performance measure would be developed for each .

7.13 Define the term marketing potential.

Market measurements are critical in determining, which markets to target, what resources to allocate to each and whether the firms sales performance is each is satisfactory.

7.14 How can one measure market potential?

Via Single factor index researchers use it most successfully when the two items have a derived or complementary demand. Multiple-factor indexes - use a combination of two or more factors to estimate relative market potentials, multifactor index

7.15 What is a marketing-decision support system?

Marketing-Decision support systems (MDSS) deals with the use of computer technology to enhance a marketers ability to identify and solve problem on a continuous day-in day-out basis using a marketingdecision support system. - It co-ordinates collection of data, systems, tools, and techniques with supporting software and hardware by which organisation gathers and interprets relevant information from business and its environment and turns into a basis for marketing action. Highly flexible and action oriented

7.16 What is the future of MDSS?

Many have not progressed further in developing more sophisticated system. Major reason risk involve din making large investments, given the difficulty of estimating the return. Al closely related problem is that the success of such system depends heavily on the decision making capabilities of the user. Companies will adopt during the next decade. Increasingly empowering mangers throughout the organisation to make bigger, more complex decisions more quickly because of increased environmental dynamics. Becoming a critically needed resource

7.17 What are the major ethical issues in marketing research?

Potential to harm individuals when such information is used worth their knowledge or/or consent, leading them to be excluded from or included in activities in such a way that they are harmed economically, psychologically or physically Stem in large part from the interaction between the researcher and respondents, clients and the general public. Fir instance, respondent should not be pressured to participate, should have the right to remain anonymous and should not be deceived by fake sponsorship. .

Module 8 Market Segmentation and Market TargetingContent Questions

8.1 Define market segmentation.

Involves subdividing the market place into distinct subsets of customers having similar needs and wants, each of which can be reached with a different marketing mix. lead them to respond in similar ways to a particular product offering and strategic marketing Programme.

4 Classifications Characteristics of the person Nature of the situation in which the product or Service any be purchased Geography Culture and Subculture adopted by the consumer

8.2 Why is there a strong interdependency between market segmentation, market targeting and positioning?
Determination of which segment target. To do so would require evaluating the relative attractiveness of each segment (size, revenue potential and growth rate), the benefits sought and the firms relative business strengths. This is called target marketing, Finally product positioning that is, designing product offerings and developing strategic marketing programmes that collectively create an enduring competitive advantage in the target market would need to be undertaken. All must be well considered and implemented if the firm is to be successful in managing a well considered and implemented if the firm is to successful .

8.3 What is the rationale for market segmentation?

Find an appropriate segmentation scheme that will facilitate market targeting, product positioning and the formulation of successful marketing strategies and programmes.

8.4 What are the benefits of market segmentation?

1) 1) Identifies opportunities for new-product development 2) 2) Segmentation helps in the design of marketing programmes that are most effective for reaching homogenous groups of customers 3) 3) It improves the strategic allocation of marketing resources.

8.5 Why is market segmentation of growing importance?

1) 1) Population growth has slowed 2) 2) More product markets are maturing in turn sparks more intense competition as firms seek growth via gains in market share.

3) 3) Social and economic forces as expanding disposable incomes, higher education level and more awareness of the world 4) 4) Important rend toward micro segmentation. Accelerated by new technology 5) 5) Implementation of specialized marketing programmes by broadening and segmenting their own services.

8.6 What is the objective of the market segmentation process?

Divide the market into groups of prospective buyers of a product or service who are relatively homogenous with regard to their demands. Ideally the variances within individual groups would be relatively small.

8.7 What are the different types of descriptors used to segment consumer goods? Industrial goods?
Consumer and Industrial Macro & Micro Physical General behavioral Product- relatedness Behaviour Customer Needs

8.8 Describe the two-step process used to segment industrial markets.

Macro segmentation Divides the market according to the characteristics of the buying organisation using such descriptors a geography, location, company size and industry affiliation. (SIC) International counterpart of SIC is the trade-category code Groups customers by the characteristics of the individuals who influent the purchasing decision for instance, age, sex and position within the organisation

Micro segmentation

8.9 What is geodemographic segmentation? Why is it becoming increasingly important?

It attempts to predict consumer behaviour by making demographic, psychographics and consumer information available at the bloc and zip code levels.

8.10 What are the requirements for effective segmentation?

1) 1) Adequate size 2) 2) Measurability

3) 3) Accessibility 4) 4) Different response.

8.11 What are the two emerging inter-country global segments?

Identify consumers with similar needs and wants reflected in their behaviour in the marketplace across a range of countries. Identifies consumer homogenous groups of consumers across country segments.

8.12 Why, for many products, are international markets becoming more homogeneous?
Similar segments have emerged in different countries at the same time because of technological developments affecting communications, transportation and travel, developing Global segments.

8.13 What are the steps in constructing a market-attractiveness/businessposition matrix for evaluating potential target markets?
1) 2) 3) 4) 5) 1) Choose criteria to measure attractiveness and competitive position 2) Weight attractiveness and competitive position factors to reflect their relative importance 3) Assess the current position of each potential target market on each factor 4) Project the future position of each market based on expected environmental, customer and competitive trends 5) Evaluate implications of possible future changes for business strategies and resources requirements

8.14 What are the three most common types of targeting strategy? Discuss each.
Mass Market 1) 1) Ignore any segment differences and design a single product and marketing program that will appeal to the larges number of consumers. Capture sufficient volume to gain economies of scale and a cost advantage. 2) 2) Design separate products and marketing programmes for the differing segments. Differentiated marketing. Involves serving one or more segments that, while not the largest consist of substantial numbers of customer seeking somewhat specialized benefits from a product or service. Designed to avoid direct competition with larger firms pursing bigger segments. Target one or more fast-growth segments even though they may not currently be very large. Favored by smaller competitors to avoid direct confrontation with larger firms while building volume and share for the future

Niche Market

Growth Market

8.15 Discuss the major inclusion and exclusion ethical issues involved in market targeting.
Inclusion Exclusion Undesirable stereotypes. Include sex role, race or age stereotypes ie women a sex objects. Certain groups are deprived of the products or services but also that they may pay more for those they do receive.

Module 9 Positioning Decisions - Content Questions

9.1 What is meant by positioning?
Differentiation the perceived fit between a particular product and the needs of the target market. Defined relative to competitive offerings and consumer needs.

9.2 What are the differences between physical and perceptual positioning?
A business position its offering so that customers in the target market perceive it as providing the desired benefits, thereby giving it an advantage over current and potential customers. Physical position offerings are based on comparison on some set of objective physical characteristics

9.3 What are the limitations of physical positioning?

A simple comparison of only the physical dimensions of alterative offerings usually does not provide a complete picture of relative positions because positioning ultimately takes place in customers minds.

9.4 What are the steps in the positioning process?

1) 2) 3) 4) 5) 6) 7) 8) 1) Identify relevant set of competitive products 2) Identify the set of determinant attributes that define the product space in which the positions of current offerings are located. 3) Collect information from a sample of customers and potential customers about perceptions of each product on the determinant attributes 4) Analyze intensity of a products current position in customers minds. 5) Determine products current location in the product space (product positioning) 6) Determine customers most preferred combination of determinant attributes 7) Examination the fit between preferences of market segments and the current positions of product (market positioning). 8) Select positioning or repositioning strategy.

9.5 What are some of the more common types of bases used to distinguish one product or service from another?
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 1) Features physical product position and industrial products 2) Benefits directly related to a product 3) Usage including end use , demographic, psychographics or behavioral and popularity. 4) Parentage who makes it, 5) Manufacturing process the subject of a firms positioning efforts. 6) Ingredients - positioning concept illustrated by ie pure cotton 7) Endorsements two types those by experts ie medical professionals and those via emulation Michael Jordan using Nike shoes. 8) Comparison with a competitors product is commonplace 9) Pro-environment positioning seeks to portray a company as a good citizen 10) Product Class new different product type 11) Price/quality 12) Country or geographic area

9.6 What constraints are imposed on a brand with an intense position?

Developing a strong relationship between a brand and a limited number of attributes.

9.7 What are the limitations of a product positioning analysis?

It indicates how alterative products or brands are positioned relative to one another in costumers; minds. Does not tell the marketer which positions are most appealing to customers.

9.8 In choosing a given position for a given brand, what factors should one consider?
Market targeting analysis and the results of a market positioning analysis. Position should match the preferences of a particular market segment and should take into account the current positions of competing brands. Also reflect the current and future attractiveness of the target market and the relative strengths and weaknesses of the competitors.

9.9 What is a product intent share?

Product intent share represents the percentage of consumers who intend to buy a specific brand before actually searching for it. Integrates all factors that influence the perceived qualities of a product.

9.10 How can the purchase intent share that a brand might acquire in a given segment be estimated?

Based on the positions of existing brands and the preferences of consumers in the segments. In a perceptual map obtained via multidimensional scaling, based on the distance between a brands position and the ideal points.

9.11 What market dynamics should be considered in evaluating the sales potential of alternative positions?
1) 2) 3) 4) 5) 6) 7) 1) 2) 3) 4) 5) 6) 7) Growth of market segments Evolution of segments ideal pints Changes in position intensity Evolution of existing brands positions Emerging attributes Development of new segments Introduction of new brands.

9.12 Describe each of the various market positioning strategies.

Monosegment positioning
Multisegment positioning Developing a product and marketing Programme tailored to the preferences of a single market segment. Position a product so as to attract consumers from different segments. Provides higher economies of scale, requires smaller investments and avoids dispersion of managerial attention Not in best economic interest of a firm to switch from multisegmeent position to monosegment (assumes use several brands, each positioned to serve the needs of only one segment) only implement monosegment when forced to do so. Head-on strategy where a new brand targets a position similar to that of an existing successful brand. Position anew brand in anticipation of the evolution of a segments needs. This is particularly appropriate when the new brand is not expected to have a fast acceptance and market share will build as the needs of consumers become more and more aligned with the benefits being offered. Periodically repositioning a brand to follow the evolution of the segments needs. When a firm occupies a strong position in a market segment with a single brand, it is vulnerable to imitative positioning strategies. Preempt competitive strategies by introducing similar poison for the same

Standby positioning

Imitative positioning

Anticipatory positioning

Adaptive Positioning

Defensive positioning.

segment.

Part 3 Developing Strategic Marketing Programmes

Module 10 Business Strategies and Marketing Programme Decisions - Content Questions
10.1 What are the basic/generic competitive strategies? Describe each briefly.
1) 1) Overall cost leadership 2) 2) Differentiation building customer perceptions of superior product quality, design or service 3) 3) Focus in which the business avoids direct confrontation with its major competitors by concentration on narrowly defied market niches.

10.2 What are the characteristics of Miles and Snows four business strategies?
Prospector

Operates within a broad product-market domain that undergoes periodic redefinition Values being a first mover in new product and market areas, even if not all of these efforts prove to be highly profitable. Responds rapidly to early signals concerning areas of opportunity, and these responses often lead to new rounds of competitive actions. Competes primarily by stimulating and meeting new market opportunities but may not maintain strength over time in all markets it enters.
Attempts to locate and maintain a secure position in relatively stable product or service areas. Offers relatively limited rage of products or services compared to competitors Tries to protect its domain by offering lower price, higher quality or better service than competitors. Usually not at the fore front technological / new product development in its industry; tends to ignore industry changes not directly related to its area of operation. An intermediate type; makes fewer and slower product-market changes than prospectors, but is less committed to stability and efficency than defenders Attempts to maintain a stable, limited line of products or services, but carefully follows a selected set of promising new developments in its

Defender

Analyser


Reactor

industry. Seldom a first mover, but often a second or third entrant in product markets related to its existing market base often with a lower-cost or higher-quality product or service offering. Lacks any well-defined competitive strategy Does not have as consistent a product market orientation as its competitors Not as will to assume the risks of new-product or market development as its competitors Not as aggressive in marketing established products as some competitors Responds primarily when it is forced to by environmental pressures..

10.3 How do low-cost defender, differentiated defender, prospector and analyzer differ with respect to their scope, cash needs and synergy?
Dimensions Scope Low Cost Defender Differentiated Defender Mature / stable 0 well defined domain; mature technology and customer segment Prospector Analyzer

Mature/stable/well defined domain; mature technology and customer segments

Broad/ dynamic domains; technology and customer segments not well established. Need cash for product development (question marks or stars) Danger is sharing operating facilities and programmes better to share technology/ marketing skills.

Mixture of defender and prospect strategies.

Resources

Generate excess cash (cash cow)

Generate excess cash (cash cow)

Need cash for product development but less so tan do prospectors Danger in sharing operating facilities and programmes better to share technology / marketing skills

Synergy

Need to seek operating synergies to achieve efficiencies

Need to seek operating synergies to achieve efficiencies

10.4 What are the appropriate external environment conditions for a prospector strategy? A defender strategy?

External factors Prospector Market characteristics Industry in introductory or early growth stage of life cycle, many potential customer segments as yet unidentified and/or undeveloped.

Defender Industry in maturity or decline stage of life cycle; current offerings targeted at all major segments; sales primarily due to repeat purchases/ replacement demand. Basic technology fully developed and stable; few major modifications or improvements likely.

Technology

Newly emerging technology; many applications as yet undeveloped.

Competition

Few established competitors; industry Small to moderate number of wellstructure still emerging; single established competitors; industry competitor holds commanding share structure stable, though acquisitions of major market segments. and consolidation possible; maturity of market means relative shares of competitors tend to be reasonably stable over time.

Business's SBU (or parent) has strong R&D, SBU (or parent) has superior sources relative strengths product engineering and marketing of supply and/or process engineering research and marketing capabilities. and production capabilities that enable it to be low-cost producer; R&D, product engineering, marketing, sales or service capabilities may not be as strong as those of some competitors.

10.5 What are the marketing implications for each of the different business strategies with respect to:

Strategy

Marketing policies and programme components

Prospector

Differentiated defender

Low-cost defender

Product policies Product-line breadth relative to competitors Technical sophistication of products relative to competitors Product quality relative to competitors Service quality relative to competitors Price policies Price levels relative to competitors Distribution policies Degree of forward vertical integration relative to competitors Trade promotion expenses as percentage of sales relative to competitors Promotion policies Advertising expenses as percentage of sales relative to competitors Sales promotion expenses as percentage of sales relative to competitors Salesforce expenses as percentage of sales relative to competitors + + -

+ ? ?

+ + +

+ -

Key: Plus sign (+) = greater than the average competitor. Minus sign (-) = smaller than the average competitor. Question mark (?) = uncertain relationship between strategy and marketing policy or programme component.

10.6 Do service businesses require different strategies? Why? Why not?

Services can be thought of as intangibles and goods as tangibles. Service can rarely be experienced in advance of the sale while goods can be experienced even tested before purchase. Many organizations are concerned with producing and marketing a service as their primary offering rather than as an adjunct to a physical product. Have the same implications as those for goods producers.

Module 11 Product and Services Decisions - Content Questions

11.1 What is a product? Describe its various components.
A product can be defined as anything that satisfies a want or need through use, consumption or acquisition. It included subjects, services, places, people activities, and ideas.

11.2 Describe the four subgroups of consumer goods. 11.3 What are the marketing strategy implications of this classification?
Examples Convenience goods Shopping goods toothpaste, soap Strategy elements stressed Maximum distribution, consumer advertising

Colour TV, cars

Available in limited number of stores, personal selling important, limited to extensive advertising, seller often offer financing, warranties and post purchase service Limited distribution high price strong advertising to promote brand uniqueness and where available locally - Strong promotion, including personal selling.

Specialty goods

Musical instruments, stereo equipment

Unsought Goods

Certain medical services, insurance,

11.4 How do the earlier decisions concerning targeting and positioning affect the composition of the product line as well as the attributes of individual products?

Earlier steps in the marketing management process constrain a business units product strategy especially market targeting and market positioning which have an impact on the composition of the product line and the attributes of individual products.

11.5 How do the various stages in the product life cycle constrain product strategy?
As times change the environment in which the business unit competes, the result is likely to be a change in its product strategy, constrained by the products life cycle.

11.6 What are the characteristics of a high-share global strategy?

1) 1) A drive for a strong international market-share position 2) 2) Products with a high degree of international standardization 3) 3) A marketing Programme especially price, product line and advertising geared to the mass market. 4) 4) Large expenditures on design and R&D relative to the industrys norm. Because of the large volume of sales, these costs on a unit basis are low. 5) 5) The use of regional production facilities or a rationalized global network designed to reduce logistics costs.

11.7 Under what conditions should a firm adopt a localization strategy?

The premise that products and programmes must be adapted to the needs and wants of individual countries because of environmental differences especially cultural ones,. Often occurs because of mandatory adaptation * that is, the foreign market requires it).

11.8 Discuss briefly the effect of each positioning strategy on product decisions.
Single (mono) product line is typically shorten than if it undertakes a multisegment positioning strategy, In a defensive positioning strategy a firm with a successful brand introduces a second similar brand to pre-empt a competitors initiative strategy, similar to a flanker or fighting brand, which counters the moves made by competitors by offering retailers certain price and advertising concessions.

11.9 How does each of the three major types of business strategy constrain a firms product strategy?
Prospector Strategies Center on new-product development, which encourages broad and technically advanced lines Concerned with defending their established business, either by using a low cost approach or by differentiating their product offering on the basis of quality and service. Some attention to new-product

Analyzers

development. Defender Similar to Analyzers except the defenders devote fewer resources to the development of new products, have smaller product lines (on average) and wherever possible differentiate themselves from competitors via service.

Three major types of business strategies constrain a firms product strategy with respect to its breadth, technical sophistication, quality and service.

11.10 What are the eight dimensions of quality? How do these affect a firms quality strategies?
Performance Features Has to do with a products basic operating characteristics, Secondary product characteristics that are designed to enhance the products basic functions. Is the probability that a product will perform satisfactorily over a given period. The extent to which a products operating characteristics meet certain specifications. Measure of the life of a product, technical (replacement) and economic (repair cost) Concerned with the speed and ease of obtaining competent repair. How product looks, feels, sounds, tastes, and smells Results from the use of indirect measures since the consumer may lack or not understand information about a products attributes.

Reliability

Conformance

Durability

Serviceability Aesthetics Perceived quality

11.11 How does branding benefit consumers? Sellers?

Consumers Simplifies shopping, facilitates the processing of information concerned with purchase options, provides confidence that the consumer made the right decision. Enhances effectiveness of their marketing Programme promotion Brand loyalty which in turn leads to greater profitability

Seller

Opportunities for successfully launching brand extensions Prices and margins resulting from a competitive advantage Channel relationships.

11.12 Under what conditions is branding particularly effective?

When it is difficult for the consumer to measure the products quality objectively. Status, large enough market to warrant the cost of branding, differentiate product.

11.13 Why in America have high quality store brands gained considerable share as against national brands?
In the 80s the national brands regularly increased their prices along with making massive distributions of coupons, thereby training consumers to shop on price. Large number of line extensions and in general, focused less on brand equity. Taking advantage of the price vulnerability of many national brands. Strong in the soft goods trade.

11.14 Discuss briefly the various branding strategy options.

Individual Branding Each product has a distinctive name. I.e. Proctor and Gamble (Tide, Luvs, Crest, Pringles) Same brand name to cover a group of products i.e. Campbells soups Sears Kenmore appliances Examples include generic, no-frills, unbranded, Company deliberately competes against itself i.e. General Motors (Buick versus Oldsmobile versus Pontiac)

Family Branding

No brand brand Name Multipe Brands strategy

11.15 Define each of the following: Line filling.

Lengthens the product line by adding items within the present range , objective to satisfy more customers, increase sales and profits Involves lengthening the product line beyond its current range of variables, such as size and price. Introduction of new products that differ significantly form those in

Line stretching. Line extensions.

the existing line certainly by more than just size and price. Greater costs and financial risks than product line filling or stretching strategies

. 11.16 How does the fact that services are intangible affect marketing management?
Differentiates service from a good. The degree to which a service is intangible affects the getting and keeping of customers. Consumers are forced to buy the promise of a service. They are intangible; hence marketers need to make them tangible to prospective buyers.

11.17 Discuss briefly the five criteria consumers use to evaluate service quality.
Tangibles Reliability Responsiveness Assurance Empathy Appearance of physical characteristics Dependable performance Promptness and helpfulness Competence, courtesy and credibility Good communication and customer understanding

Module 12 Developing and Testing New Products and Services- Content Questions
12.1 How can the variation in new-product failure-rate estimates be explained?
Some studies examine the proportion of new-product concepts or ideas that fail to achieve commercial success, while others focus only on products that fail after being introduced into the market.

12.2 Why is it becoming increasingly difficult to introduce new products successfully?

Maturity of many basic technologies, shorter product life cycles, increasing competition, government regulations and the increased costs of new-product development process.

12.3 Why are more and more firms using teams to introduce new products?

One of the advantages of using teams is their ability to reduce the time of the new product development process by fostering closer relations between various functional areas. Reduces time to gain approval from one area.

12.4 What are the major steps of the new-product development process?
1) 1) New product objective and strategy 2) 2) Opportunity identification, idea generation and screening 3) 3) Product development a. a. Key benefits b. b. Product features c. c. Product positioning d. d. Sales potential e. e. Business plan 4) 4) Product Design a. a. Engineering b. b. Use tests c. c. Simulated test marketing d. d. Field test Marketing 5) 5) Commercialization

12.5 What are the more important reactive strategies for new-product development?
Defensive strategy adjusts a firms existing products so they can better compete against a recently introduced competitive product Imitative strategy quickly copies a new product Second-but-better strategy improves on a competitors new product Responsive strategy reacts to consumer request for a new or improved product.

12.6 How can proactive strategies be implemented?

R&D strategy strives to develop superior technical products Marketing Strategy based on finding a consumer need and then developing a product to fill it. Entrepreneurial foster development of new improved products. Acquisition strategy whereby a firm buys new products to bring to market.

12.7 What are the more important sources of new product ideas?
Customers

Company personnel Channels of distribution Competitors Government Agencies Old products (brands) Miscellaneous sources

12.8 What are the various ways new product ideas can be tested?
Screening process depends on constraints set forth in the firms new product strategy.

Scoring models early stages of new product development process use limited number of review criteria to more sophisticated ones. Easy to use and low in cost. When only rough distinctions are required among projects.

12.9 Describe a core benefit proposition.

CBP states what is being offered to consumers, what they will derive from it and why this is important all in terms of consumer benefits.

12.10 How can new products be tested?

Laboratory Tests can often accurately measure the performance of certain types of products and a variety of conditions Consumer tests informal in-house use test a sample of consumers as asked to use the product and then fill out a questionnaire. Highly structured blind-paired comparison tests. Consumer does not know the brands involved. Ie taste test panels. To elaborate computer analyses.

12.11 Describe a laboratory test market and how it operates.

Mostly applicable to packaged consumer products, mainly food, household and some personal care items. The procedure measures the process by which a consumer adopts a new product. The process consists of three major steps: awareness, trial and repeat buying.

12.12 Describe electronic mini-test markets.

A.C. Nielsen and Information Resources Behaviour Scan. . The latter pioneered the technology that monitors the purchasing and viewing behaviour of a sample of household in eight or so small cities across the United States. Panel member show their id card at the supermarket checkout, a scanner records their purchases and the data are sent directly to a central computer.

12.13 Under what conditions would a firm be well advised to forgo a full-scale test market?
If The companys market share total sales and repeat buying measurements clearly exceed expectations there is no reason not to proceed with national distribution.

12.14 Describe briefly the various commercialization strategies.

Forego market testing and move directly to a roll-out region by region or nationally from the outset. Extension of the full-scale test market, which was designed to test a national introductory plan. Roll-out test rather than an elaborate market test Test area where the company has strong resources in order to lead from strength to get things moving. Multiple channels roll out Based on the trade-offs between risk and the need to plan the cash flow for the introduction and the speed with which competitors are likely to react.

12.15 What problems are involved in applying the new-product development process to services?
Testing a new service can pose problems since the presence of the consumer in the service system makes it difficult to develop a service that is uniform or consistent. Service companies try to get around this problem in a variety of ways they use machines (automatic bank tellers) .

12.16 What are the major ethical issues involved in the development of new products?

Business is critics for excessive production of me-too products, leads to waste in the economic system. Reverse that business fails to produce products that are needed such as products for people with unusual physical attributes. Safety into products Impact of Product and Packaging on the environment.

Module 13 Pricing Decisions - Content Questions

13.1 Why has price become a more important part of a firms marketing strategy in recent years?
Slower growth, the maturing of many basic industries, improved productivity, the growing power of retailers and their private labels and the increased aggressiveness of low-cost global competitors have made domestic markets more price competitive. Resulting in pricing and price competition becoming number one priority in the 1990s.

13.2 Why is price an area in which managers feel the most pressure to perform yet the least certain they are doing a good job?
For the most part, managers believe that they dont have control over price. The market dictates it yet anything closer to the right price can have a tremendous impact.

13.3 What are the steps in the price-setting decision process?

Influences and Constraints SBU and marketing strategies Target market characteristics Product characteristics Competitor characteristics Company strengths and weaknesses Environmental influences o o Economic trends o o Legal restrictions o o The price-setting decision process 1) 1) Set strategic pricing objective 2) 2) Estimate demand and price elasticity of demand 3) 3) Determine cost and their relationship to volume 4) 4) Examine competitors prices and costs 5) 5) Select a method for calculating prince 6) 6) Set a price level 7) 7) Adapt price structure to meet variations in demand and cost across geographic territories, market segments, etc. 8) 8)

13.4 Under what conditions is penetration pricing appropriate?

When in addition to a large market: 1) 2) 1) Target customers are relatively sensitive to price 2) The firms costs are low compared to those of competitors and the SBU is pursing a low-cost strategy

3) 4)

3) Production and distribution costs per unit are likely to fall substantially with increasing volume. 4) Low prices may discourage potential competitors from entering the market.

13.5 Describe a skimming price policy.

Setting the price very high and appealing to only the least price-sensitive segment of potential customers. This can also be accomplished over time, as in periodic discounting, when the seller prices high at the beginning of each period and low at the end. Used normally in pioneer development of a new product market. Maximize short-run profits.

13.6 Describe a harvesting price strategy.

Maximize short-term profits before demand for the product disappears. Typically involves cutting marketing, production and operating costs of the product while setting a relatively high price to maintain margins and maximize profits.

13.7 What are the major factors affecting a customers sensitivity to price?
1) 1) Buyers willingness to pay a given price for a product is influenced by their perception and preferences: their needs, desires, awareness of and attitude towards the item in question 2) 2) The price, availability and attractiveness of alternative brands and substitutes products affect buyers willingness to buy the product. 3) 3) Size of their incomes relative to the price influences customers ability to pay for a product or service. Taken together, these factors determine the perceived value a potential customer will associate with a given product-market entry and price he or she will pay.

13.8 Define the term elasticity of demand.

The larger the proportion of price-sensitive customers in a products market the more sensitive overall demand is to a change in the products price. The degree of responsiveness of demand to a price change is referred to as the price elasticity of demand.

13.9 What is the formula for calculating the price elasticity of demand for a product or service?

Price elasticity of demand (E) = %change in quantity demanded / % change in price

13.10 What are the major problems in using this formula?

Failure to consider the response of competitors to the companys change in price The demand may be inelastic for a given price change, but elastic for a larger amount That elasticity is measure din terms of sales revenues not profit margins (one reason being that it does not take into account scale effects) A lowering of price may affect the sales of others in the companys product line It ignores any societal benefits that may be accorded to the company for benefiting low-income segments via a price reduction

13.11 What are the more common ways of estimating a products demand curve?
1) 1) approach is to survey a sample of consumers, or bring them into a laboratory setting, and ask them how much of the product they would buy at different possible prices. -Validity is questionable, 2) 2) estimating the price-quantity relationship via the regression analysis of historical sales using consumer panel data, 3) 3) in-store experiments where a products price is systematically varied, or 4) 4) multiple test markets. This is expensive.

13.12 How can competitors costs and prices be estimated?

Track the price, cost and relative quality of each competitors offer. Competitors costs are harder to measure than their price. Reverse engineering can be used to take apart competing products and examinee the cost of their components, packing and production process.

13.13 Describe (using an example) cost-plus or mark-up pricing, rate-of-return or target return pricing and break-even pricing.
Cost plus or mark up pricing is simply to add a standard mark-up to the cost of the product.

rate-of-return or target return this uses the same method as markup price but adds the cost of capital tied up in producing and distributing the product. break-even pricing This is the variable cost per unit and fixed costs the volume necessary to just cover total costs.

13.14 Describe the various competition-oriented pricing methods.

Going rate or competitive parity - where all try to maintain prices equal to those of one or more major competitors. Used when little product differentiation and a few large competitors. Discount or premium price policies base its pricing on what its competitors are charging, but try to hold its price either below or above the competition. Sealed bidding buyers request a formal bid with no later opportunity for change.

13.15 Describe the various customer-oriented pricing methods.

Perceived Value potential customers usually have some idea of what constitutes a good or bad price. - consumers expect a single customary price for products i.e. Candy bars at a customary price of 10 cents when cost put pressure on manufactures margins, they reduced size of bar rather than upset customers expectation by raising the price. Selling all products in a category at one of several predetermined price points or levels. Each price line represent a different level of quality. users use price as an indication of quality.

Customary Prices

Price Lining

Psychological pricing Promotional pricing

most common type is sale: the offer of a reduced price on a product for a limited time.

13.16 Define the following terms: The manufacturer places the goods free on board a transportation carrier. At this point the title and responsibility pass to the customer, who pays the freight form the factory to the destination. The seller picks up all or part of the freight charges. New freight competitors trying to penetrate new markets and smaller absorption competitors in maturing industries trying to increase their share pricing. zone pricing. Is another compromise approach that falls between FOB and uniform delivered pricing. Here the company divides the country into two or more pricing zones. IT charges all customers within the same zone the same delivered price, but a higher price is set for distant zones than for those closer to the plant. FOB origin pricing. 13.17 Describe the various forms counter trade can take.
Barter Compensation deals Direct exchange of goods with no money and no third party involved. Seller agrees to take some % of the payment in cash and the rest in goods.

Buyback arrangements

Seller offers a plant, equipment, or technical exercise to a customer and agrees to accept a partial payment products manufactured with the equipment or training supplied. Seller compensated in cash but agrees to spend a substantial amount of that cash with e customer or its government over a stated time period.

Offsets

13.18 Define trade or functional discounts, quantity discounts, co-operative advertising allowances and rebates.
Trade or functional discounts Quantity discounts Cooperative advertising Allowance A discount from the suggested retail list price. This discount is given to the wholesaler and / or retailer.

Discount increases as order size increases.

A temporary reduction in the products price. I.e. Pepsis offer of 15 cans of soda for the price of a 12-pack. Similar to discounts In they inducements to encourage channel members or final customers to engage in specific behaviors in support of the product. I.e. car is a trade-in allowance. Rebates reduce the price of the product through a money-refund offer. Example mail in rebate.

Rebates

13.19 What conditions allow for price discrimination?

Not always possible or wise to set different prices for essential the same product. 1) 1) Must be obviously be identifiable customer segments with different price sensitivities 2) 2) Either the customer segments must be physically separated from one another or the firm must institute control procedures to ensure that the segment paying the lower price cannot resell the product o customers paying the higher price. 3) 3) The cost to the manufacturer of segmenting and monitoring the market should not exceed the extra revenue generated by the discriminatory pricing. 4) 4) The firm should be confident that resentment among customer asked to pay the higher price, or competitive conditions in the market, will not leave it vulnerable to competitive attacks in the high price segments. 5) 5) The firm should pay careful attention to the legal restrictions involved in price discrimination.

Module 14 Distribution Decisions - Content Questions

14.1 Define a marketing channel.
The set of interdependent organizations involved in the process of making a product or service available for consumption or use by consumers or industrial users.

14.2 Define each of the institutions found in marketing channels.

Merchant wholesalers Agent middlemen Take title to the goods they handle; sell primarily to other resellers industrial and commercial customers rather than to individual customers. Includes manufacturers representatives and brokers. Also sell to other resellers and industrial or commercial customers, but do not take title to the goods. Usually specialize in the selling function and represent client manufacturers on a commission basis. Sell goods and services directly to ultimately consumer s for their personal, nonbusiness use. Usually take title to goods they handle; are compensated by the margin between the price they pay for those goods and the price they receive from their customers. Include advertising agencies, marketing research firms, collection agencies, trucking firms and railways; specialize din one or more marketing functions, work on a fee-f0r-service basis to help clients perform those functions more effectively and efficiently.

Retailers

Facilitating agencies

14.3 Define the following:

Rack jobber

one unique form of full-service wholesaler. In recent years supermarkets and drugstores have added non-traditional product lines such a magazines, housewares, and health and beauty aids about which they have little knowledge. Rack jobbers have prospered by not only performing a full range of wholesaling activities by also taking over some retain functions such as providing display racks, promotional materials, stocking and selling on consignment.
Work for several manufactures, carry non-competitive, complementary merchandise in n exclusive territory and concentrate only on the selling function. Important where a manufactures sales are not sufficient to support a company salesperson in a particular territory.

Manufacturers agent.

Broker.

Independent firms whose purpose is to bring buyers and sellers together for an exchange. Brokers usually have no continuing relationship with a particular buyer or seller.

14.4 What are the major trends in wholesaling?

One wholesaler to acquire / merge with another wholesaler that has favorably located branches and one or more new product lines Increase the number of value-added services offered, such as financing arrangements, engineering consultants, just-in time inventory control, overnight deliveries and store layouts. Large wholesalers are also implementing a combination of strategies to improve low margins. Cutting operating costs by using their resources more efficiently.

14.5 What are the major types of retailer?

General merchandise discount chains Wholesale clubs (Wal-Mart) carry a broad assortment of goods

(Sam;s) cash-any carry wholesalers selling to small businesses and individual consumers (Safeway) full lien self-service store selling food and related products. (ToysRUs )offering in-depth assortment within a limited number of lines at low prices.

Supermarkets Single-line massmerchandiser stores

14.6 What are the major types of non-store retailing?

Direct selling Catalogue sales 1% all retail sales ie Avon house to house 5% all retail sales general merchandise and specialty

Television home shopping Vending The World Wide Web

20% all retail sales home shopping channel Food snacks, beverages, cigarettes Great potential for selling goods and services to consumers around the world.

14.7 What are the major trends in retailing?

The demographic changes ie two wage earner households, aging baby boomers Consumer attitudes more health care concerns Retailers carrying more diverse me4rchandise lines Slowing of retail sales, little new shopping center construction greater emphasis on price, greater competition and more and more consolidation through mergers Retailers investing heavily in sate of the art technology to maximize operating efficiencies.

14.8 Describe each of the four alternative consumer goods channels.

Channel A Channel B Channel C Channel D Involves direct distribution from producer to the consumer Producers that sell direct to retailers who in turn cell to consumers Wholesalers and retailers and is most common for low-cost frequently purchased items Agent sells to wholesalers who in turn sell to retailers, is used when the manufacture is too small or its product line too narrow to justify a company sales force.

A Producer

B Producer

C Producer

D Producer

Wholesaler

Wholesaler

Agent

Retailer

Retailer

Retailer

Consumer

Consumer

Consumer

Consumer

14.9 Describe each of the four alternative industrial goods channels.

A Producer B Producer C Producer D Producer

Agent

Agent

Wholesaler

Wholesaler

Industrial Buyer

Industrial Buyer

Industrial Buyer

Industrial Buyer

14.10 The design of a distribution channel involves a series of interrelated decisions. What are they?

Influencing factors
SBU and marketing strategies

Specify objectives to be achieved by distribution channels

Target market characteristics Product characteristics Competitor characteristics Company strengths and weaknesses Environmental factors

Determine desired number of retail outlets (for consumer goods and services only)

Determine appropriate number of wholesale distribution points

Select types of institution to be used at each channel level

14.11 Firms design channels to accomplish one or more objectives? What are they?
1) 2) 3) 4) 5) 1) 2) 3) 4) 5) Making the product available Ensuring adequate promotional effort Providing high-level customer service Obtaining market information Providing cost effectiveness

14.12 Describe the three basic strategies of retail coverage.

Retail Coverage Intensive Maximum Major strength Major Weakness Lack of retailer support Risk of relying on single retailer. Product appropriate for Low involvement consumer High-involvement specialty or shopping goods.

Maximizes product availability Matches retailer clientele with target market; facilitates close co-operation with retailer. Provides adequate coverage but not at expense of manufacturer retailer co-operation

Exclusive

Single

Selective

Limited

Difficult to implement given inter store competition, especially where discounts may occur

Infrequently purchased shopping goods.

14.13 Describe the various types of vertical marketing system.

Corporate VMS Contractual VMS Involves a vertically integrated system Formulates agreements spelling out a coordinated set of rights and obligations for members of the system Co-operation between two or more channel partners is based on norms of mutual trust and the expectation that co-operation will increase the total systems success thereby make all members better off in the long term

Administered VMS

14.14 What are the major sources of channel power?

Economic power Coercive power Members perceive that a firm can mediate economic rewards for them if they follow its directives Perception that one channel member will punish another for failure to co-operate. Inverse of economic power. Punishments usually take the form of a reduction in or with holding of economic rewards Perception one channel member has special knowledge or expertise that can benefit other members of the system Beliefs that the benefits generated are likely to continue. Belief that one channel member has the right to make certain decisions or demands and to expect compliance from other members, result of ownership or contractual agreements but in some instances it is based on moral authority or common beliefs.

Expert power

Referent power Legitimate power

Module 15 Promotion Decisions - Content Questions

15.1 Define each of the promotion mix components.
Advertising Personal selling Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral

presentation (person-to-person communication) Sales promotion Incentives designed to stimulate the purchase or sale of a product usually in the short term. Non-paid, non-personal stimulation of demand for a product, service or business unit by planting significant news about it or a favorable presentation of it in the media.

Public relations

15.2 In recent years substantial changes have occurred in the way firms market their goods all of which have affected the firms promotion decisions. What are they?
Targeting of smaller and smaller segments including individual consumers. Growth in no-traditional media resulted in increase in direct marketing. Ie Internet. Increase competition that forced firms to become more price conscious. Shift in power from manufacturers to retailers that have resulted from growth of large discount general merchandise and killer category chains.

15.3 Describe the communication process.

Source Message Medium Received Response Feedback The communicator a set of symbols The communication channel The target audience A set of reactions

Intended Message

Sent Message

Intended Feedback Message

Receiver

Sent Source (sender) Message

15.4 Consumers engage in practices designed to protect themselves from receiving unwanted messages. Describe these practices.
Selective exposure Expose themselves to messages and media that are compatible with their existing attitudes, Avoid messages not compatible with their attitudes or that they find irritating or boring. People distort or misinterpret the intended meaning of a message when it differs from their attitudes. The greater the attitude change required to make respondents accept the position advocated in the message, the more likely the message is to be distorted or rejected.

Selective perception

Selective retention

People the to forget more quickly communications that are substantially at variance with their attitudes. People remember for a longer time messages that reinforce their attitudes.

15.5 What are the steps needed to develop a promotion programme?

Type of product or service involved Characteristics of the targeted audient Companys positional strategy Promotional strategies Promotional programmes used by major competitors Buyers purchase decision process The channels of distribution The stages of the product life cycle Merits of the individual promotion elements. o o Advertising o o Personal selling o o Sales Promotion o o Public Relations

15.6 What subjects is advertising decision making concerned with?

Setting objectives Deciding what the message should be and How to present it Media types and vehicles to use What frequency and Analyzing the effectiveness of the advertising programme.

15.7 What are the major types of advertising?

Cobranding Enables a brand to be leveraged by entering another product call as a braded ingredient, which has less risk than a brand extension or combining two brands Most brand advertising focus on stimulating selective demand for a particular product.

Selective demand

Primary Demand Seeks to expand the market for a product type Co-operative Advertising Corporate Joint effort by manufacturers and retainers to sell a particular product.

Differs from product advertising in that its purpose to benefit the

(institutional) Advertising Issue advertising

corporation by building favorable attitudes toward the overall firm.

Support a given social or economic issue in which the firm has a strong interest. Designed to generate awareness and understanding of a companys financial performance.

Investor relations

15.8 What is the hierarchy-of-effect model?

Move prospective buyers through a series of steps awareness, comprehension, conviction, action to the ultimate goal of purchasing the product or service.

15.9 Describe Rays three-order hierarchy models

Learning Hierarchy The mental stages people go through when deciding to purchase relatively high-involvement consumer or industrial products. Consists of action followed by attitude change and learning; do, feel, learn, Consisting of a general awareness followed by action and then attitude change and learning: do, feel

Dissonance-attribution Hierarchy Low Involvement Hierarchy

15.10 What are the contents of a copy platform?

Basic issue or problem advertising must address Advertising objective Target audience Major selling idea or key benefits Creative strategy statement (campaign theme, appeal and execution technique) Support information

15.11 What have researchers concluded regarding what message structures are most effective?
Success of any message depends not only on its content, but also on its structure. Two-sided presentations generally more effective with those members of the audience who are well educated or opposed to the communicators position. Prepare people for counterarguments.

Drawing conclusions the best thing to do, although advertisability of doing so depends on the intelligence of the audient, the complexity of the subject matter presented and the extend to which the audience is involved. Optimum size of a message is difficult to ascertain because of the interactions of message size, the power of the message itself and effect of repletion on consumer learning. Strongly liked to the degree of consumer interest in the product. Low interest require high or large unit message i.e. full page advertisement 30 second television spot. Message is of great interest to the target audience a smaller unit may suffice.

15.12 What problems arise from using reach and frequency measures?
1. Defining the target audience and correlating ti with audiences reached by the various media vehicles. 2. Defining exposure is it an opportunity to be exposed to a given message or is it an actual reading of a print advertisement, the actual watching of a television commercial or the actual listening to an advertisement on radio? Difficult task to measure exposure, no matter how it is defined. 3. Not all who are exposed are of equal value to the advertiser 0 some may not even be prospects 4. How should successive exposures be weighted? Is a second exposure worth more than third? How much? And how much time should else between exposures.

15.13 What are the advantages and limitations of each of the four types of mass media?
Television best at communicating images and symbols because it can demonstrate product usage and consumer reactions. Enormous reach almost all US households have a TV set. less involving than television, but offers economy and the opportunity to target specific audiences- Hispanics, blacks, teenagers, senior citizens. Inexpensive compared with TV reaches people mostly when they are doing something else-working, driving or walking. Often used to reinforce TV advertising Printed media more involving than broadcast media, Readers select what advertising they want to read and take as much time as they wish to read it. Effective in communicating specific information about a product. Particular important for most industrial products and high-involvement consumer goods. (three major types of magazines, consumer, farm and business), Newspapers advertise consists mainly of retail and classified.

Radio

Out of home, exhibition and supplementary media Supplementary Directories and yellow pages Event sponsorship

cover wide variety of media typed Out-of home Billboards are most prominent Exhibition in-store display materials

become increasingly popular high visibility in terms of media coverage,

15.14 Why have retailers had difficulty in using the Web?

It requires subscribing to an Internet access service as well as the hardware and software to facilitate accessing the site and exploring the company information fields, Technical support needed to maintain the system, including its update and security. Advertising costs associated with maximizing site traffic and guiding visitors through the files.

15.15 How are print medium audiences typically measured?

Researches conduct interviews however when to conduct the interview is also a problem

15.16 What are the major problems in measuring television audiences?

Researchers can measure the number of sets tuned to a given programme, how long they are tuned to a given programme but do not know the demographics of the individual viewing , the number of actual views, does not record who is looking at the television especially during commercials.

15.17 Describe the various ways to pre-test message effectiveness.

Recall test Print advertisement are inserted into a simulated magazine and respondents are told to read whatever interest them After doing so, they are asked to ply back advertisements they remember. Tested by exposing them in one or more cities and following up with several hundred phone interview to find out how many remember the message Give respondents an advertisement and using a variety of projective techniques to elicit responses. Use special machines to measure physiological responses to advertising.

Television Commercials Project tests

Physiological

test Pupil Dilation When person is viewing or listening to interesting pleasant message the pupil dilates. Administered by commercial research firms measure the effects of television commercials through the use of consumer panels located in a number of small cities. Similar to the above except the audiences reaction to commercials is measured electronically during the showing via buttons the audience pushes to indicate liking / disliking.

Sales test

Theatre tests

On Air testing

Using VHF or cable television channel to air a given program in which the advertisement will appear.

15.18 Describe the various ways to measure the effects of an advertising message after it has run.
Recognition test Most popular post-exposure testing. Field workers interview people who say they have read a given issue of a magazine. Respondent goes through the issue pointing out what was seen and read. Interviewer asks which parts were read. Interviewer starts each interview at a random point within the issue, so that ratings are not affected by respondent fatigue. Measure the effectiveness of an advertising message especially a television commercial after it has been run. Respondents are typically aided In their recall. Interviews show them a list of the advertisers and brands presented and ask which ones they have seen recently. Interviewers proceed to obtain play backs of these advertisement from the respondents.

Recall tests

15.19 Discuss the use of a globalised advertising strategy as compared with a localized one.
The benefit of globalize is in the form of economies of scale, which relate primarily to production costs and to a lesser extent to the use international media. Okay for product component of the marketing mix especially for industrial goods and consumer durables. Difficulties encountered by differences in local cultures, translation, how consumer respond to humorous appeals, sexual appeals reactions, Start with standard / globalize and expand to local as required.

15.20 Define the term sales promotion.

Those marketing activities, other than personal selling, advertising and publicity, that stimulate consumer purchasing and dealer effectiveness

15.21 What are the most commonly used sales promotion techniques?
Price off promotions, premiums, sampling, rebates, contests sweepstakes trade promotions.

15.22 Define the term public relations.

A promotional function that uses two-way communication to mesh the needs and interest of an institution or persons with the needs and interests of the various publics with which that intuition or person must communicate.

15.23 Define the term integrated communications plan.

The process of building and reinforcing mutually profitable relationships with employees, customers, other stakeholders and the general public by developing and coordinating a strategic communications programme that enables them to make constructive contact with the company brand through a variety of media.

15.24 Discuss the problems in regulating and controlling deception in advertising.

It is difficult to detect in many cases because of the subtle ways in which it can work. Enforcement is hindered by the fact that advertisers can legally employ puffery which uses subjective claims the best or greatest to promote a product.

Module 16 Personal Selling Decisions - Content Questions

16.1 What are the advantages of using personal selling as a promotion tool?
Involves face-to-face communication with a potential customer More persuasive than advertising or publicity in the mass media

Communicates with only one potential customer at a time and tailors the message to that customer's unique needs and interests feedback is immediate knows when a particular sales approach is not working and can switch to a different tack transmit more complex and larger amounts of information than with other promotional tools representative can devote a great deal of time to educating that customer about the advantages and features of a product or service

16.2 What are the strategic circumstances where personal selling is likely to play a major role in a firms promotion mix? 16.3 Discuss personal selling objectives.

Objective Winning acceptance for new products Developing new customers

Activities involved Sales reps build awareness and stimulate demand for new products or services among existing or potential customers. Sales reps find and cultivate new customers and/or expanded distribution for business's products or services.

Maintaining customer Sales reps work to increase value delivered to customers by loyalty providing advice or training on product use, expediting orders and facilitating product service. Technical service to facilitate sales Sales reps work to increase value to customers by helping integrate product or service with customer's other equipment or operations and by providing design, installation and/or training. Sales reps work to increase understanding of product's features and applications as basis for possible future sales and to educate people who may influence final purchase.

Communicating product information

Gathering information Sales reps provide reports on competitors' actions, customers' requests or problems and other market conditions, and conduct marketing research or intelligence activities.

16.4 Discuss each of the four types of sales job.

Trade selling gain and maintain support for the firm's products within the distribution channel by providing merchandising and promotional services to the channel members.

gaining distribution support for new products by making effective sales presentations to wholesale or retail buyers. build and maintain volume from current customers perhaps to facilitate new-product introductions by giving purchase decision makers product information and service assistance. Missionary salespeople often do not make sales to customers directly but persuade them to buy the firm's products from wholesalers or retail suppliers. provide the technical product information and technical design and engineering services needed to facilitate sales. identify, establish relationships with and obtain business from new customers

Missionary selling

Technical selling New business selling

16.5 What are the six stages in the personal selling process?

Prospecting for Customers

Opening the relationship

Qualifying the prospect

Presenting the sales message

Closing the sale

Servicing the account

16.6 What are the ethical and legal constraints in the presentation of the sales message?
information communicated should be as accurate as possible Salespeople sometimes engage in puffery by making glowing claims about their product or company (`Our service is the best in the business). claim of a factual nature regarding a product's or service's inherent capabilities such as how it will perform or what it will do for the customer the law treats those claims as statements of fact and implied warranties If a customer relies on such statements, makes a purchase and then finds that the product does not perform as promised, the supplier can be sued for misrepresentation or breach of warranty

16.7 What are the various types of salesforce organisation?

geographic area, product type, customer selling function

16.8 What problems do firms face when they expand their sales efforts into other countries?
how to organise their selling efforts across national boundaries should the firm rely on independent agents to represent its interests in a foreign market or hire its own company salespeople? appropriate horizontal structure for that salesforce- geographically, by product line, by type of customer or some other way

16.9 What are the steps involved in using the workload approach to establish the size of the salesforce?
1. 1. Using the account classification scheme specified in the firm's account-management policies, determine how many potential customers are in each category. 2. 2. Multiply the number of potential customers in each category by the desired call frequency specified by the firm's account-management policies (number of calls per year for each type of customer). Add the totals across all customer categories to arrive at a total workload for the salesforce stated in total calls to be made in a year. 3. 3. Estimate the average number of calls a salesperson can make in a year. 4. 4. Determine the number of salespeople needed by dividing the total number of calls that need to be made by the average number of calls a salesperson can make in a year.

16.10 What personal characteristics are important in trade selling? Missionary selling? Technical selling? New business selling?

Trade selling

Age, maturity, empathy, knowledge of customers and business methods.

Missionary selling Youth, high energy and stamina, verbal skill, persuasiveness. Technical selling Education, product and customer knowledge usually gained through training, intelligence. Experience, age and maturity, aggressiveness, persuasiveness, persistence.

New business selling

16.11 What are the major types of compensation plan? What are the pros and cons of each?
Compensation Especially useful method Straight salary When compensating new (12%) sales reps; when firm moves into new sales territories that require developmental work; when sales reps must perform many non-selling activities. Straight commission (5%) When highly aggressive selling is required; when non-selling tasks are minimized; when company cannot closely control salesforce activities. Advantages Disadvantages

Provides sales rep with maximum amount of security; gives sales manager large amount of control over sales reps; easy to administer; yields more predictable selling expenses. Provides maximum amount of incentive; by increasing commission rate, sales managers can encourage reps to sell certain items; selling expenses relate directly to sales resources.

Provides no incentive; necessitates closer supervision of sales reps' activities; during sales declines, selling expenses remain at same level.

Sales reps have little financial security; sales manager has minimum control over salesforce; may cause reps to provide inadequate service to smaller accounts; selling costs less predictable.

Combination (83%)

When sales territories have relatively similar sales potentials; when firm wishes to provide incentive but still control salesforce activities.

Provides certain level of Selling expenses less financial security; predictable; may be provides some incentive; difficult to administer. selling expenses fluctuate with sales revenue; sales manager has some control over reps' nonselling activities.

16.12 How has technology helped to control sales costs?

Better follow-up of clients and potential customers, improved tracking of leads and better time management were the most frequently cited reasons for the positive impact of computers on sales productivity

Part 4 Strategic Marketing Programmes for Selected Situations

Module 17 Strategies for New and Growing Markets Content Questions
17.1 Describe the subcategories of new products based on their degree of newness.
New-to-the-world product New product lines True innovations new to the firm and create an entirely new market 10% Product category that is new for the company introducing it, but not new to customers in the target market competitive brands exist 20% New items that supplement a firms established product line 26%

Additions to existing product lines Improvements in or revisions of existing product Repositioning

Provide improved performance or greater perceived value brought out to replace existing product 26%

Existing products that are targeted at new applications and new market segments 7% Product modifications proving similar performance at lower cost 11%

Cost reductions

17.2 What are the potential sources of competitive advantages available to a pioneer?

Economies of scales and experience High switching costs for early adopters Pioneer defines the rules of the game Distribution advantage Influence on consumer choice criteria and attitudes Possibility of pre-empting scarce resources

17.3 What are the possible advantages of adopting a follower strategy?

1) 2) 3) 4) 1) 2) 3) 4) Ability to take advantage of pioneers positioning mistakes Ability to take advantage of pioneers product mistakes Ability to take advantage of pioneers marketing mistakes Ability to take advantage of pioneers limited resource

17.4 What are the determinants of success for a pioneer strategy?

1. 1. New product market is insulated form the entry of competitors, at least for awhile, by strong patent protection, proprietary technology or substantial investment requirements 2. 2. The firm has sufficient size, resources, and competencies to take full advantage of its pioneering position and preserve it in the face of late competitive entries.

Large entry scale Broad product line High quality product Heavy promotional expenditures.

17.5 Discuss each of the three types of pioneer strategy.

Mass Market Penetration Niche penetration Skimming or early withdrawal Capture and maintain a commanding share of the total market for the new product. Most successful with entry barriers inhibit or delay appearance of competitors Focus on a single market segment. Lets smaller pioneer gain the biggest bang for its limited bucks and avoid direct confrontation with bigger competitors. Competition is usually inevitable, and prices and margins tend to drop dramatically after followers enter the market, skimming strategy while planning an early withdrawal involves setting a high profits and recover the products development cost quickly, high prices and limited advertising and portion to maximize unit profits.

17.6 What marketing activities should a firm engage in to increase customers awareness and willingness to buy? And to increase the customers ability to buy?
Increase Customers awareness and willingness to buy 1) 1) Aggressively building product awareness and motivation to buy 2) 2) Make it as easy as possible for those customers to try the new product Increase Customers ability to buy 1) 1) pursuing mass-marketing penetration to keep prices low and offer liberal financing arrangement 2) 2) easy credit terms during the introductory period 3) 3) lack of product availability

17.7 What marketing programme components are important for a skimming strategy?
Relatively high price Introductory promotional programmes best focus on customer groups who are least sensitive to price early adopters of new products Focus on up market customers

17.8 Discuss the marketing actions and strategies to achieve the share maintenance objectives of a market leader.
1. Retain its current customers they remain brand loyal making repeat or replacement purchases a. Maintaining/improving satisfaction and loyalty b. Encourage/simplify repeat purchase c. Reduce attractiveness of switching

2. Stimulate selective demand among later adopters to capture a large share of the continuing growth in industry sales a. Head-to head positioning against more competitive offering or potential offerings b. Differentiated positioning against competitive offerings or potential offerings

17.9 What marketing activities and strategies are needed for a challenger to achieve share growth?
Capture repeat/replacement purchases form current customers of the leader or other target competitor by:
a) a) Head to head positioning against competitors offering in primary target market b) b) Technological differentiation from target competitors offering in its primary target market.

Stimulate selective demand among later adopters by:

a) b)

a) Head to head positioning against target competitors offering in established market segments b) Differentiated positioning focused on untapped or underdeveloped segments

Module 18 Strategies for Mature and Declining Markets Content Questions

18.1 What strategic issues are involved with mature markets? Declining markets?
Hold existing customers to sustain a meaningful competitive advantage Success depends heavily on firms ability to achieve and sustain a lower delivered cost or some perceived product-quality or customer-service superiority. Passively defend mature products while using the bulk of revenue to develop aggressively market new product with more growth potential

18.2 Success in mature markets requires two sets of strategic actions. What are they?
1) 1) Development of a well-implemented business strategy to sustain a competitive advantage 2) 2) Flexible and creative marketing programmes geared to purse growth or profit opportunities as conditions change in specific product markets.

18.3 What strategy options are available to both analyzers and defenders in their attempt to sustain a competitive advantage in mature markets?
Differentiation of their product offering (on the basis of either superior quality or service, or customer intimacy) Maintaining a low-cost position.

18.4 What dimensions do customers use to perceive underlying differences across products in a given category?
Performance Durability Conformance with specifications Features How well does it work? How long will it last? What is the incidence of product defects?

Does an airline flight offer a movie and dinner?

Reliability Serviceability Fit and finish Brand name

Will each visit to a restaurant result in consistent quality? Is the product easy to service? Does the product look and feel like a quality product? Is this a name that customers associate with quality?

18.5 What dimensions do customers use to judge the quality of the services they receive?
Tangibles Reliability Responsiveness Assurance Appearance of physical facilities, equipment personnel and communications materials Ability to perform the promised service dependably and accurately Willingness to help customers and provide prompt service Knowledge and courtesy of employees and their ability to convey trust and confidence Caring, individualized attention the firm provides its customers.

Empathy

18.6 What are the more important ways in which a company can improve customer perceptions of service quality?
Gap between customers expectations and the marketers perception management perceptions and service quality specifications service-quality specifications and service delivery service delivery and external communications Determine what service attributes customers consider important

Ensure employees know what the companys service policies are and believe that management is seriously committed to those standards; their performance is likely to fall short of desired levels. Employees must be provided with training, equipment and time necessary to deliver good service. Service performance must be measured and evaluated. Good performance must be rewarded Good service performance may disappoint some customers if the firms marketing communications cause them to have unrealistically high expectations.

perceived service and expected service

Management fails to close one or more of the above 4 gaps.

18.7 Discuss briefly the various ways a firm can maintain a low-cost position.
Produce a no-frills product Creating an innovative product design Finding cheaper raw materials Automation production Developing low-cost distribution channels Reducing overhead

18.8 What should a firm strive to achieve during the early years of market maturity?
Maximize the flow of profits over the remaining life of the product market. Maintain and protect the businesss market share. Continue strengthen their position through a fortress defense.

18.9 Discuss the strategies that can be used to extend the volume growth of products.
Strategy Increasedpenetration Extended use Increase the proportion of users by converting current no-users in one or more major market segments Increase the amount of product used by the average customer by increasing frequency of use or developing new and more varied ways to use the product Expand the number of potential customers by targeting underdeveloped geographic areas or applications segments.

Market expansion

18.10 Discuss briefly how a firm can use sequential strategies to expand a global market.
Develop home market and then expand, firms can enter foreign markets in a variety of ways, Simply relying on import agents to

Developing joint ventures to Establishing wholly owned subsidiaries.

18.11 What are the three sets of factors that help determine the strategic attractiveness of declining product markets?
Conditions of demand Exit barriers Intensity of future competitive rivalry Including the rate and certainty of future declines in volume The ease with which weaker competitors can leave the market Intense price competition and maintain reasonable margins

18.12 Discuss briefly the strategic options possible in declining markets.

Harvesting Maintenance Maximize short term cash flow; maintain or increase margins even at the expense of a slow decline in market share Maintain share in short term as market declines, even if margins must be sacrificed. Increase share of the declining market with an eye to future profits; encourage weaker competitors to leave. Focus on strengthening position in one or a few relatively substantial segments with potential for future profits.

Profitable Survivor

Niche

Part 5 Implementing & Controlling Strategic Marketing Programmes

Module 19 Implementing Business and Marketing Strategies - Content Questions
19.1 What are the three aspects of the relationship between corporate headquarters and the business unit that determine the SBUs success in implementing a particular competitive strategy?

1 The degree of autonomy provided to each business unit manager.

2 The degree to which the business unit shares functional programmes and facilities with other units. 3 The manner in which the corporation evaluates and rewards the performance of its SBU managers.

19.2 Successful implementation of a given strategy is more likely under what conditions?
When the business has the functional competencies demanded by its strategy and supports them with substantial resources relative to those of competitors, is organized suitably for its technical, market and competitive environment and has developed appropriate mechanisms for co-ordinating efforts and resolving conflicts across functional departments.

19.3 What additional functional-area competencies are needed for success for service organisations especially those involving high customer contact?
service organisations and manufacturers that provide high levels of customer service as part of their product offering often need some additional functional competencies because of the unique problems involved in delivering quality service. close co-ordination between operations, sales and marketing is crucial. Also, because many different employees may be involved in producing and delivering the service production planning and standardisation are needed to reduce variations in quality from one transaction to the next. Similarly, detailed policies and procedures for dealing with customers are necessary to reduce variability in customer treatment across employees. All of this suggests that personnel management particularly the activities of employee selection, training, motivation and evaluation is an important adjunct to the production and marketing efforts of high-contact service organisations.

19.4 Organisational adaptiveness and innovativeness are enhanced under what conditions?
1) 1) decision-making authority is decentralised; 2) 2) managerial discretion and informal co-ordination mechanisms replace rigid rules and policies; and 3) 3) more specialists are present. Thus, prospector business units and their marketing departments are likely to perform better when they are decentralised, have little formalisation and are highly specialised

19.5 Under what conditions is a functional type of organisation best to use? And a product-management type?
Functional type companies operating in stable and slow-growth industries where the environments are predictable. Thus, the form is appropriate for low-cost defender SBUs attempting to maximise their efficiency and profitability in

mature or declining industries. Product management type When an SBU has many product-market entries, this form adds an additional layer of managers to the marketing department, usually called product managers, brand managers or marketing managers, each of whom has the responsibility to plan and manage the marketing programmes and to coordinate the activities of other functional departments for a specific product or product line.

19.6 Discuss briefly the recent organisational design developments.

Managing of business processes in contrast to functional areas. Every business has about six basic or core processes, such as, for example, new-product development and materials flow. The former would be staffed by individuals from marketing, R&D, manufacturing and finance. The latter would contain people with expertise in purchasing, manufacturing, order delivery and billing.

Managing processes will make the organisation essentially horizontal flat (few layers) and lean in contrast to a vertical or hierarchical model. Thus, executive positions will no longer be defined in terms of managing a group of functionally oriented people; instead, executives will be concerned with a process that strongly emphasises the importance of customer satisfaction. Process management is quite different from the management of a function because, 1) 1) It uses external objectives for example, customer satisfaction rather than simple revenues. 2) 2) People with different skills are grouped to undertake a complete piece of work; their work is done simultaneously, not in sequence. 3) 3) Information flows directly to where it is used. Thus, if you have an upstream problem, you deal with the people involved directly rather than via your boss.

19.7 What are the more common international organisational structures?

Functional type Would have vice presidents (worldwide) for such areas as manufacturing, marketing and finance all reporting to the president. giving SBUs worldwide control over their product lines. The main advantages of this type of structure are the economies derived from centralising manufacturing activities and the ability to respond quickly to product-related problems originating in overseas markets. Marketing is localised at the country or regional level. when there is considerable variance across markets regarding product acceptance and marketing activities. Firms typically organise on a regional basis (North America, Latin America, Far East, Middle East and Africa) using a

Products based

Area structure

central staff that co-ordinates worldwide planning and control activities. Hybrid organisation combination of the functional, product or area types of structure. The global matrix is one such attempt. It has individual business managers reporting to both area and functional groups, or area managers reporting to business and functional groups, thereby enabling the company to balance the need for centralised efficiency and its responsiveness to local needs. But the dual reporting sets up conflicts and slows the management process to such an extent that many companies, have returned to more traditional organisational designs

19.8 What are the major components of an annual marketing plan for a given product?

Executive summary

Presents a short overview of the issues, objectives, strategy and actions incorporated in the plan and their expected outcomes for quick management review. Summarises relevant background information on the market, competition, past performance of the product and the various elements of its marketing programme (e.g. distribution, promotion, etc.) and trends in the macroenvironment. Identifies the main opportunities and threats to the product that the plan must deal with in the coming year and the relative strengths and weaknesses of the product and business unit that must be taken into account in facing those issues. Specifies the goals to be accomplished in terms of sales volume, market share and profit. Summarises the overall strategic approach that will be used to meet the plan's objectives. This is the most critical section of the annual plan for helping to ensure effective implementation and co-ordination of activities across functional departments. It specifies: What specific actions are to be taken Who is responsible for each action. When the action will be engaged in. How much will be budgeted

II

Current situation

III

Key issues

IV

Objectives

Marketing strategy

VI

Action plans

VII

Projected profitand-loss statement Controls

Presents the expected financial payoff from the plan.

VIII

Discusses how the plan's progress will be monitored; may present contingency plans to be used if performance falls below expectations or the situation changes.

19.9 What subject areas should be discussed under the analysis of the current situation section of the annual marketing plan?
Market Situation Data relating to the present target market. I.e. market size growth trends, variations across geographic regions or other market segments. Market research information re customer perceptions and buying behaviour trends Identifies and describes the products major competitors in terms of their size, market share, product quality, marketing strategies and other relevant factions. Likelihood that other potential competitors will enter the market in near future and possible impact of such entry. Broad environmental occurrences or trends that my have a bearing on the products future. Relevant economic, technological, political/ legal or social/cultural changes. Products performance on sales volume, margins, marketing expenditures, and profit contribution for several recent years. Usually presented in form of a table

Competitive Situation

Macro environmental Situation Past Product Performance

19.10 Describe what should be included in the discussion of a companys action plan for a given product.
Specific actions necessary to implement the strategy for the product are listed, together with a clear statement of who is responsible for each action, when it will be done and how much is to spent o each activity.

Module 20 Controlling Marketing Strategies and Programmes - Content Questions

20.1 What are the major steps in the control process?

Setting standards of performance

Specifying the necessary feedback data

Obtaining the needed control data

Evaluating feedback data explaining gab between actual and given standards of performance

Taking corrective action

20.2 Why are more and more firms using non-financial control measures in addition to the traditional financial-based measures? What are some of the more commonly used non-financial measures?

Companies are turning to measure they feel better reflect how their mangers think about what decision areas drive the firms success such as Customer satisfaction Product quality Market share New-product development

20.3 How have some of the new types of organisational structure posed difficult control problems?
Many objectives can best be measured in no-financial terms Profits is a short- term ensure and can be manipulated by taking actions that may prove dysfunction in the longer term Profits can be affected factors over which management has no control Setting milestones that are achievable. Such systems can cause actions to be taken that in the short term may help attain the desired goals, but in the longer term may be detrimental to the firm.

20.4 Describe the use of benchmarking as a performance type of measure.

The firms performance in a given area is compared against the performance other companies. The comparison does not however have to be with companies in the same industry.

20.5 What are the advantages of using the marginal contribution method to determine a products profitability?
A product or market may make a contribution to profits even though it shows a loss, because is absorbing overhead costs, indicates what is gained by adding or propping a product or a customer.

20.6 What does strategic control hope to accomplish?

Monitoring and evaluating a firms SBU level strategies. Strategic control must provide some way of changing the firms thrust if new information about the environment and/ or the firms performance so dictate.

20.7 What is the major benefit of a variance decomposition analysis?

Variance decomposition attempts to isolate the causes for deviation from a plan. It analysis the areas where problems may exist. However determining the factors that caused the favorable or unfavorable variances requires additional information coupled with the skills of an experienced manager.

20.8 What are the major determinants of a consumer products sales and market share?
Effective distribution Relative price Attitude maintenance Change towards one or more salient product characteristic relative to competition and shelf facings.

20.9 What are the factors that determine the extent of control exercised over an overseas subsidiary?
Largely a function of its size Differences in the environment Extent to which the company employs a standardized rather than localized strategy Larger companys international operation greater the likelihood that staff personnel specializing in control activities will be on site Small overseas operations tend to involve fewer specialist and less intensive control system

20.10 What are the various types of marketing audit?

Marketing Environment audit Analysis of the firms present and future environment with respect to its demographic /economic, technological, political, social and competitive components. The intention is to identify the more significant trends to see how they affect the firms customers, competitors, channel intermediaries and suppliers How appropriate these internal factors are, given current major

Objectives and strategy area

audit Planning and control system area audit Market productivity area audit Marketing functions area audit

environmental trends and any changes in the firms resources Evaluates the adequacy of the systems that develop the firms productmarket entry action plans and the control and reappraisal process. Evaluates the firms new-product development procedures. Firms overall structure (can it meet changing needs of the marketplace) how the marketing department is organized. The extent of synergy between the various marketing units. In depth how adequately the firm handles each of the marketing mix elements. Questions relating to product concern the attainability of the present product-line objectives, the extent which individual products fit the needs of the target markets, and whether the product line should be expanded or contracted. Price and distribution questions Evaluates the extent to which the company engages in ethical and socially responsible marketing. Especially in consumer goods companies seeks to determine whether product managers are channeling their efforts in the best ways possible. What they are doing compared with what they ought to be doing.

Ethical Audit

Product manger audit

20.11 What are the major steps in the contingency planning process?
Identifying critical assumptions about the future

Measuring probability of each critical assumptions being right

Rank ordering of critical assumptions

Tracking / monitoring of action plan

Setting triggers to activate contingency plan

Specifying alternative response options

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Contact us Security Products terms and conditions Rates and charges Ways to bank with us London 2012 Business Guide The key to sustainability

Using input from customers to meet their needs and wants better
Business is about selling. Everything else, including the whole process of production, management, and even marketing, is basically sales support. It all comes down to persuading a customer to give you money and to go on doing so. So it is astonishing how little most businesses actually know about their customers and how little trouble they take to relate to them.

Your customers define your business, and not just because without them you are nothing. Their needs form your bedrock and their desires shape your future. The key to a solid business is to make them feel closer to your business. This involves finding out what they feel and want. This guide covers two separate but inter-related areas:

Customer relations, which is about keeping existing customers happy. Customer research, which is about getting feedback from them.

Define your objectives Before you start contacting customers or asking them any intrusive questions, you must be careful to define your objectives clearly. Customer relations Customer relations has several objectives, more or less in the following order of priority:

To make the customer feel valued. To identify potential problems in advance. To provide indications of emerging needs or trends for use in future product development.

Customer relations is a continuous ongoing process whose principal tool is communication. Customer research Customer research tends to be based more on discrete projects, each of which may have one or more of several different objectives:

To measure how good your customer service is and where you could improve. To identify problems or possible improvements with an existing product/service. To test changes to an established product/service. To provide indications of future needs or trends for use in product/service development (note that this is also the third objective of customer relations).

To assess potential demand for a planned new product/service. To test a new product/service.

Note that customer research, unlike customer relations, usually embraces potential as well as existing customers. Do not expect your customers to come up with all your ideas for you. They are most likely to respond if you present them with a range of options. Having said that, if they do come up with ideas on their own, look at them seriously. If a lot of people bring up the same issue without prompting, there could be a major problem or unmet need out there. Customer relations

Talk first To understand your customers, you need to talk to them whenever you have the opportunity, whether they are direct clients, consumers or intermediate resellers. More importantly, encourage them to talk back. At every contact, try to get them to open up a bit. Be friendly, but not intrusive or long-winded. Ask if they have any problems or suggestions

95% of the time the questions will seem a routine formality, but the other 5% is the bit that matters. If they are vague, pin them down. Try asking, If you could change one thing about our product or service, what would it be?

Be specific. Ask, We were thinking of doing x what do you think of that? Ask new customers why they came to you, and, as tactfully as possible, why they left their previous supplier.

Accept that customers will look at or try other suppliers. Encourage them to come back to you for a final talk before finalising any change of supplier, if only to say why they are going.

What was it that made them buy at that point? How can you apply this information to prospective customers?

Be open to criticism, so do not try too hard to defend yourself: this is not a debate to be won, but an opportunity for you to learn and to show you are willing to learn. Following up The first indication many businesses have that a customer has a problem with them, is when they realise that they have become an ex-customer. The challenge businesses face is the British dislike of complaining. People would rather avoid any embarrassment by dropping you without a word. The solution is proactively to ask customers if they are happy with their purchases and whether they have discovered any glitches. This may involve after-sales support, such as a follow-up phone call, which is actually customer research in the guise of customer relations. Customers can tell you about:

What is right or wrong with your products/services. How they use them. This may highlight new uses or suggest refinements that you can pass on to other customers.

How they perceive the benefits now that they have experienced them, which will help you channel your marketing and sales efforts more precisely.

What they would change/improve if they could.

Problems they are having. For example, if you question them, you may find that they consider the new software package they bought from you, say, is more of a hindrance than a help. If this is the case, you might be about to have an ex-customer on your hands unless you can reverse the situation. The solution may be as simple as recommending a good training course.

What they like least about dealing with your business. What they like most about your products. Themselves and their wider needs and wants.

In many cases, you may be able to address these through another part of your organisation or by recommending a colleague or associate business. Of course, what you will hear from customers is not comprehensive, systematic, measurable, or even reliable for one thing, people tend to say what they think you want to hear. It is, however, the most important source of information your business has. Dont rely on memory. Keep a customer contact book and take notes of each comment they make. Better still, use a customer database on your computer so everyone can share the information. Listen Hold regular meetings with your staff, at which one of the items should be a report on what they are hearing from customers either in work or socially. Much of this is little more than gossip, but if the same things keep coming up, take notice. Act on what you hear. In particular, be prepared to feed it into product development. You may also hear things that cause you to alter your actual marketing strategy. Do not be too proud to change. Customer research Customer research is just one discipline within market research. It aims to provide both hard factual data and less tangible feedback or feelings:

Who bought what, when? Are any trends or patterns apparent? What are your common cross-sells and up-sells? Could this be systematised so that when a customer buys X they automatically get a follow-up call to see if they might also find Y useful as well?

What is the average size of order? Where are your customers based? What sort of business are they?

Such data tells you little on its own. It is how you interpret it and the building picture that matter. Check how much other information you can find out in-house.

For example, the knowledge that most of your customers employ less than five people may appear irrelevant at first glance. However, knowing this, you will begin to understand the mindset of the owner cant afford to have people away from their desks for an extensive three-day training course. So you might change the way you deliver courses to make them telephone-based. Other data can help you target your marketing more precisely. For example, asking new customers how they first heard of you an advert, article in a magazine or word-of-mouth will help you track the effectiveness of your marketing efforts. And analysis later will show which media to target in your next campaign. Types of customer research There are two basic types of customer research:

Qualitative. Usually based on in-depth discussions with customers, either individually or in groups. Quantitative. Usually done using standard questionnaires that allow the results to be easily analysed.

The former is of greater use in gauging what people actually think, but depends on good analysis. The latter gives an air of certainty, albeit often artificial, which can be useful in convincing others. Can you do it yourself? Like most business disciplines, market research can benefit from specialist skills and experience. Hence, some people maintain that market research is best done by experts. Knowing how to design effective questionnaires, how to get the right sample, how to contact people and get a good response rate, and how to interview in depth or work with a focus group are all specific skills that most business owners and managers do not have. Most market research firms have their own way of doing things. This is often a closely guarded secret. It is also difficult to find out which firms approach is right for you. Moreover, as with any form of consultancy, it can be hard to tell the professionals from the charlatans. Research firms are often expensive and while their services may well be worth the money, they are usually out of reach of most small businesses. Hence you may be forced to do your own market research instead. This is not as difficult as research firms would make out. A great deal depends upon common sense. You can gain enormous benefits from even simple techniques and projects. The key is always to be alive to the need and opportunities to gather information from all sources. Firstly, you can find out a good deal of very useful information from basic desk research. Before you even get down to talking to customers, for example, your database and management accounts should be examined for information. Questionnaires Questionnaires are the main tools of customer research. They can also be used as a supplement to customer relations, but should never take the place of talk. They may be sent or given to the customer, or filled in by an interviewer. They can be delivered by a variety of methods, such as direct mail or email. Questionnaire design

A good questionnaire is:

Short: this is more likely to get a response. To the point: collect only what you need to know, not what might be nice to know. Easy to read clearly printed, open, and nicely set out on the page. Easy to fill in and navigate, with a few, easy instructions, and plenty of space for those with large handwriting.

Unambiguous: avoid terms like usually and frequently. Jargon-free: if you must use a technical term, define it. Unbiased: leading questions defeat the object.

Questionnaire analysis Above all, questionnaires should be designed with their ultimate use in mind analysis. If your research is quantitative, use tick boxes or points systems (4 = excellent, 1 = poor, and so on) which can be analysed on spreadsheets later. If it is qualitative, leave lots of space for personal comments. Do not restrict replies to your own categories so include a category of Others (please specify). Testing your questionnaire Prepare a dummy questionnaire and send it to a few colleagues to fill in. Listen to what they think of it. Clear up any ambiguities you may know what you want to know, but others do not. Check that your questions ask for the answers in the form you want. Put male or female rather than sex, for instance. You can use these responses as test data for a dummy analysis, using a spreadsheet if your research is quantitative. Making contact Once you have decided what you want to ask, you must put your questions in front of the people you want to ask. Mail surveys Mailed questionnaires do not usually get a good response unless a large number of people happen to feel strongly about a given issue. If you receive such a response, you would do well to take notice. You can increase responses by offering an incentive, or a prize draw, and by enclosing a pre-paid or freepost envelope. You might also consider making responses anonymous to get more honest answers. Target your mailshot carefully. You may decide to mail just existing customers, or you could include dormant or excustomers. You will then have to decide whether you want to mail all of your customers, a random selection or a specific group individual buyers, say, or retailers.

A word of warning: people who take the time and trouble to fill in and return a questionnaire are a minority and therefore not necessarily typical of the majority. Email surveys Email surveys may get you a better response than a letter, but bear in mind that:

An email survey could be seen as suspiciously like spam. Unless you have been diligent about collecting every customers email address, you could end up with an unrepresentative group.

Telephone interviews Telephone surveys are much more laborious and expensive but can provide much richer feedback. The key to telephone canvassing is to have a good script and to stick to it. However, telemarketing is increasingly seen as intrusive too, and those who reply will, once again, not be typical of the majority of people, who will want you off the telephone as quickly as possible. Face-to-face interviews Face-to-face interviews can take many forms. At one end of the spectrum a researcher with a clipboard approaches customers as they leave your shop, say, and runs through a closely defined script with prompts. At the other end is the in-depth interview in which a highly trained interviewer encourages the customer to speak at length for half an hour or more. Unlike the in-shop situation, this process is designed so that the questioner will say relatively little. There is a range of variations between these extremes. Bear these general points in mind:

It is not usually cost-effective to interview every customer. On the other hand, it is difficult to get a really random sample when selecting people, say, as they leave your shop. Saturday shoppers are quite different to lunch-hour shoppers.

Those willing to take part in such exercises are not typical: many people simply do not have the time. People are suddenly invited to talk in detail about things which they have probably not spent much time thinking about before.

Focus groups Focus groups are managed group discussions. A typical exercise will involve groups of six to eight people who represent a cross-section of customers current or potential. The ideal focus group will have the air of a brainstorming session. A trained moderator will draw out the shy, check the dominant, and introduce new information and key questions at appropriate points. For many such reasons, focus groups may best be conducted by experienced professionals. The criticisms that apply to face-to-face interviews apply doubly to focus groups. What sort of people would want to take part in such a discussion? Can the result be anything but artificial? On top of this, there is the distortion of the

social dimension. Some people will want to impress the members of the group, or not offend them, or defeat them in argument, or dominate, or do any one of a thousand other illogical things people do when they interact in groups. They will not be thinking and acting as they do when deciding whether or not to buy your product. Nevertheless, many organisations find such research extremely useful. Analysis All this research is pointless unless it is analysed and used. Everything should be designed with that analysis in mind. So establish in advance:

The sort of analysis you require qualitative or quantitative. The kind of information you require and in what format. Who the survey will be sent to. The purpose for which the results will be used.

If it is to be worth the effort, the results should impact on every aspect of business planning and strategy. Not least will be the lessons such exercises teach you about the direction of your future marketing. Developing relationships Developing a relationship with existing customers can itself be an adjunct, possibly an alternative, to formal market research. For example:

Observation is a great tool of market research: visit your customers and see how they use your products and services in practice.

Use existing customers for advance product testing they will enjoy the novelty and will appreciate being asked.

Use loyalty groups, cardholders, club members and the like as the basis for feedback and market research; these are people with a proven and active interest in your product.

Above all, establish a two-way relationship. This means:

You must listen as well as talk. The benefits go both ways.

As well as being an excellent resource for market research, customers will appreciate the fact that their opinions are seen to be valued.

NCGIA Core Curriculum in Geographic Information Science URL: "http://www.ncgia.ucsb.edu/giscc/units/u051/u051.html"

Unit 051 - Information Organization andData Structure

Written by: Albert K. Yeung Ontario Ministry of Northern Development and Mines, Canada

DRAFT - comments invited

This unit is part of the NCGIA Core Curriculum in Geographic Information Science. These materials may be used for study, research, and education, but please credit the author, Albert K. Yeung, and the project, NCGIA Core Curriculum in GIScience. All commercial rights reserved. Copyright 1998 by Albert K. Yeung. Your comments on these materials are welcome. A link to an evaluation form is provided at the end of this document.

Advanced Organizer
Topics covered in this unit
This unit presents an overview of the terminology and concepts pertaining to information organization and data structure in the context of information science and management. The aim is to provide a general but articulate introduction to the principles and methods of information organization, with special reference to geographic information, that serves as a prerequisite for more advanced studies of data models and database in subsequent units. Topics covered in this unit include:

definitions of data, information, data files and database the concept and components of information domain the data-oriented approach to information system development the principles and methods of information organization the principles and methods of data structure design and specification of data structure by data modeling design and specification of data structure by process modeling

Learning Outcomes
After learning the material covered in this unit, students should be able to:

distinguish between data and information

describe the components of information domain in the context of information system design describe the data-oriented approach to information system development explain information organization from the perspectives of: data, relationship, operating system and system architecture list typical spatial and non-spatial data structures and describe their characteristics describe the phases of work of data modeling and their respective end products describe the method of process modeling and its end product

Full Table of Contents Instructors' Notes Metadata and Revision History

Unit 051 - Information Organization and Data Structure

1. Definitions and Terminology
1.1. Data and information

many people use the terms "data" and "information" as synonyms but these two terms actually convey very distinct concepts "data" is defined as a body of facts or figures, which have been gathered systematically for one or more specific purposes o data can exist in the forms of linguistic expressions (e.g. name, age, address, date, ownership) symbolic expressions (e.g. traffic signs) 2 mathematical expressions (e.g. E = mc ) signals (e.g. electromagnetic waves) "information" is defined as data which have been processed into a form that is meaningful to a recipient and is of perceived value in current or prospective decision making o although data are ingredients of information, not all data make useful information data not properly collected and organized are a burden rather than an asset to an information user data that make useful information for one person may not be useful to another person o information is only useful to its recipients when it is relevant (to its intended purposes and with appropriate level of required detail) reliable, accurate and verifiable (by independent means)

up-to-date and timely (depending on purposes) complete (in terms of attribute, spatial and temporal coverage) intelligible (i.e. comprehensible by its recipients) consistent (with other sources of information) convenient/easy to handle and adequately protected

the function of an information system is to change "data" into "information", using the following processes (Figure 1): o conversion --- transforming data from one format to another, from one unit of measurement to another, and/or from one feature classification to another o organization --- organizing or re-organizing data according to database management rules and procedures so that they can be accessed cost-effectively o structuring --- formatting or re-formatting data so that they can be acceptable to a particular software application or information system o modeling --- including statistical analysis and visualization of data that will improve user's knowledge base and intelligence in decision making the concepts of "organization" and "structure" are crucial to the functioning of information systems --- without organization and structure it is simply impossible to turn data into information

1.2. Geographic data and geographic information

geographic data are a special type of data; by "geographic", it means that o the data are pertinent to features and resources of the Earth, as well as the human activities based on or associated with these features and resources o the data are collected and used for problem solving and decision making associated with geography, i.e. location, distribution and spatial relationships within a particular geographical framework geographic data are different from other types of data in that o they are geographically referenced, i.e. they can be identified and located by coordinates o they are made up of a descriptive element (which tells what they are) and a graphical element (which tells what they look like, where they are found and how they are spatially related to one another) the descriptive element is also commonly referred to as non-spatial data the graphical element is also commonly referred to as spatial data geographic information is obtained by processing geographic data, the aim of which is to o improve the user's knowledge about the geography of the Earth's features and resources, as well as human activities associated with these features and resources o enable the user's to develop spatial intelligence for problem solving and decision making concerning the occurrence, utilization and conservation of the Earth's features and resources, as well as the impacts and consequences of human activities associated with them

because of the special nature and characteristics of geographic data, generic concepts of information organization and data structure cannot be applied directly to them o this unit attempts to explain the principles and methods of information organization and data structure with special reference to geographic data, particularly with respect to: the organization and structure of descriptive geographic data the organization and structure of graphical geographic data the relationship and linkage between the descriptive and graphical elements of geographic data

1.3. The Information Domain

an information system is designed to process data, i.e. to accept input (data), manipulate it in some way, and produce output (information) (Figure 1) it is also designed to process events --- an event represents a problem or system control which triggers data processing procedures in an information system the information domain of an information system therefore includes both data (i.e. characters, numbers, images and sound) and events (i.e. problem and control) there are three different components of the information domain o information organization (also referred to as information structure) --- the internal organization of various data and event items (see Section 2 below) the design and implementation of information organization is referred to as data structure (see Section 3 below) o information contents and relationships --- the attributes relating to the data and the events, and the relationships with one another the process of identifying information contents and relationships is known as data modeling in information system design (see Section 4 below) o information flow --- the ways by which data and events change as they are processed by the information system the process of identifying information flow is known as process modeling in information system design (see Section 5 below) the above views of information domain provides the conceptual framework that links database management and application development in information systems o it signifies that information organization and data structure are not only important for the management of data, but also for the development of software applications that utilize these data

1.4. The data-oriented approach to information systems

an information system is perceived as being made up of four components: data, technology, process (or application) and people the traditional approach to information system development was either technology-oriented or process-oriented

o o

technology-oriented approach --- based on availability and/or functionality of hardware and software process-oriented approach --- based on the desire to automate a particular business process

the current approach to information system development is data-oriented or data-driven o information systems are designed and developed to process, manage and analyze data in support of the business objectives of an organization o of the four components of information systems, data are most stable computer technology is evolving very rapidly consider the advances in computer hardware and software in the last several years there is always a risk of using newest technologies which have not been fully market-tested processes may change due to changing business objectives, customer requirements, modes of service delivery and available tools and technology consider the changes in bank transactions (depositing and withdrawing money) that have occurred in the last several years process-oriented applications have relatively short life span and frequent re-development is very costly particular business functions always require the same data for operation and decision-making purposes despite changes in technology and process for example, bank transactions use the same data no matter how they are done (over the counter or using an automated telling machine) o of the four components of information systems, data are most expensive to acquire in many projects, the collection of data accounts for half or more of the capital investment it is natural to make use of the most stable and expensive component to drive information system design and development in order to maximize the return from capital investment a data-oriented approach to information system is characterized by o managing data as a valuable corporate resource in the same way financial, technical and human resources are managed this is the basis of the concept of information resource management (IRM) o sharing data among different users or user groups this helps maximize the cost-benefit ratio of the capital investments on information systems o data-centric strategy in the acquisition of hardware and software specifications of hardware and software must be able to meet data requirements, but not to change data requirements in order to suit the characteristics or functionality of hardware and software o data-driven application development software applications are designed to enable the effective and efficient use of data in business operation and decision making the use of information systems is always used by organizations as an opportunity to re-engineer business, i.e. to change the philosophy and ways of running a business

data orientation does not mean that every user is involved in information organization and data structure o ensuring that information organization and data structure meet the business needs of an organization is the responsibility of a small team of technical staff under the leadership of a database administrator the database administration team defines an organization's information organization by carrying out detailed user requirement studies representatives of end users assist in defining information organization by taking part in user requirement studies o system developers design and build software applications without the need to worry about information organization and data structure, i.e. they develop applications on the basis of existing or accepted data structures however, system developers may also assist in defining information organization by taking part in user requirement studies o information organization and data structure are transparent to end users, i.e. they can use software applications without the need to know anything about data structure however, this does not imply that information organization and data structure are trivial considerations in information system o information organization and data structure reflect the users' requirements many projects fail because of the lack of understanding of information organization and data structure, but not because of the lack of capability of technology identification of users' requirements, which forms the foundation of good design and correct specification of information organization and data structure, is always the most important step in information system development the ultimate goal of information organization and data structure is to create the necessary technical environment that allows the development of information systems which are o cost-effective to implement --- by the ability to use shared data and possibly applications by users in different organizations o flexible to build --- by permitting the addition or removal of applications, in response to changing needs and objectives of the information users, without affecting existing data structure o easy to use --- by eliminating the need of the regular users to worry about the structure of the data

2. Information Organization

information organization can be understood from four perspectives: o a data perspective o a relationship perspective o an operating system (OS) perspective o an application architecture perspective

2.1. The data perspective of information organization

the information organization of geographic data must be considered in terms of their descriptive elements and graphical elements because o these two types of data elements have distinctly different characteristics o the have different storage requirements o they have different processing requirements

2.1.1. Information organization of descriptive data

for descriptive data, the most basic element of information organization is called a data item (Figure 2a) o a data item represents an occurrence or instance of a particular characteristic pertaining to an entity (which can be a person, thing, event or phenomenon) it is the smallest unit of stored data in a database, commonly referred to as an attribute in database terminology, an attribute is also referred to as a stored field the value of an attribute can be in the form of a number (integer or floatingpoint), a character string, a date or a logical expression (e.g. T for 'true' or 'present"; F for 'false' or 'absent') some attributes have a definite set of values known as permissible values or domain of values (e.g. age of people from 1 to 150; the categories in a land use classification scheme; and the academic departments in a university) a group of related data items form a record (Figure 2b) o by related data items, it means that the items are occurrences of different characteristics pertaining to the same person, thing, event or phenomenon (e.g. in a forest resource inventory, a record may contain related data items such as stand identification number, dominant tree species, average height and average breast height diameter) o a record may contain a combination of data items having different types of values (e.g. in the above example, a record has two character strings representing the stand identification number and dominant tree species; an integer representing the average tree height rounded to the nearest meter; and a floating-point number representing the average breast height diameter in meters) in database terminology, a record is always formally referred to as a stored record in relational database management systems, records are called tuples a set of related records constitutes a data file (Figure 2c) o by related records, it means that the records represent different occurrences of the same type or class of people, things, events and phenomena a data file made up of a single record type with single-valued data items is called a flat file (Figure 3a) a data file made up of a single record type with nested repeating groups of items forming a multi-level organization is called a hierarchical file (Figure 3b) o a data file is individually identified by a filename

a data file may contain records having different types of data values or having a single type of data value a data file containing records made up of character strings is called a text file or ASCII file a data file containing records made up of numerical values in binary format is called a binary file in data processing literature, collections of data items or records are sometimes referred to by other terms other than "data file" according to their characteristics and functions an array is a collection of data items of the same size and type (although they may have different values) a one-dimensional array is called a vector a two-dimensional array is called a matrix a table is a data file with data items arranged in rows and columns data files in relational databases are organized as tables such tables are also called relations in relational database terminology a list is a finite, ordered sequence of data items (known as elements) by "ordered", it means that each element has a position in the list an ordered list has elements positioned in ascending order of values; while an unordered list has no permanent relation between element values and position each element has a data type in the simple list implementation, all elements must have the same data type but there is no conceptual objection to lists whose elements have different data types a tree is a data file in which each data item is attached to one or more data items directly beneath it (Figure 4) the connections between data items are called branches trees are often called inverted trees because they are normally drawn with the root at the top the data items at the very bottom of an inverted tree are called leaves; other data items are called nodes a binary tree is a special type of inverted tree in which each element has only two branches below it a heap is a special type of binary tree in which the value of each node is greater than the values of its leaves heap files are created for sorting data in computer processing --- the heap sort algorithm works by first organizing a list of data into a heap a stack is a collection of cards in Apple Computer's Hypercard software system

the concept of database is the approach to information organization in computer-based data processing today o a database is defined as an automated, formally defined and centrally controlled collection of persistent data used and shared by different users in an enterprise (Date, 1995 and Everest, 1986) above definition excludes the informal, private and manual collection of data

"centrally controlled" does not mean "physically centralized" --- databases today tend to be physically distributed in different computer systems, at the same or different locations a database is set up to serve the information needs of an organization data sharing is key to the concept of database data in a database are described as "permanent" in the sense that they are different from "transient" data such as input to and output from an information system the data usually remain in the database for a considerable length of time, although the actual content of the data can change very frequently the use of database does not mean the demise of data files data in a database are still organized and stored as data files the use of database represents a change in the perception of data, the mode of data processing and the purposes of using the data (Table 1), rather than physical storage of the data databases can be organized in different ways known as database models the three conventional database models are: relational, network and hierarchical relational --- data are organized by records in relations which resemble a table (Figure 5a) (See Section 3.2.1 for further explanation) network --- data are organized by records which are classified into record types, with 1:n pointers linking associated records (Figure 5b) hierarchical --- data are organized by records on a parent-child one-tomany relations (Figure 5c) the emerging database model is object-oriented data are uniquely identified as individual objects that are classified into object types or classes according to the characteristics (attributes and operations) of the object (Figure 5d) (See Section 3.2.2 for further explanation)

2.1.2. Information organization of graphical data

for graphical data, the most basic element of information organization is called a basic graphical element o there are three basic graphical elements (Figure 6): point line, also referred to as arc polygon, also referred to as area o these basic graphical elements can be individually used to represent geographic features or entities for example: point for a well; line for a road segment and polygon for a lake) o they can also be used to construct complex features for example: the geographic entity "Hawaii" on a map is represented by a group of polygons of different sizes and shapes

the method of representing geographic features by the basic graphical elements of points, lines and polygon is said to be the vector method or vector data model, and the data are called vector data o related vector data are always organized by themes, which are also referred to as layers or coverages examples of themes: geodetic control, base map, soil, vegetation cover, land use, transportation, drainage and hydrology, political boundaries, land parcel and others o for themes covering a very large geographic area, the data are always divided into tiles so that they can be managed more easily a tile is the digital equivalent of an individual map in a map series a tile is uniquely identified by a file name o a collection of themes of vector data covering the same geographic area and serving the common needs of a multitude of users constitutes the spatial component of a geographical database o the vector method of representing geographic features is based on the concept that these features can be can be identified as discrete entities or objects this method is therefore based on the object view of the real world (Goodchild, 1992) the object view is the method of information organization in conventional mapping and cartography graphical data captured by imaging devices in remote sensing and digital cartography (such as multi-spectral scanners, digital cameras and image scanners) are made up of a matrix of picture elements (pixels) of very fine resolution o geographic features in such form of data can be visually recognized but not individually identified in the same way that geographic features are identified in the vector method o they are recognizable by differentiating their spectral or radiometric characteristics from pixels of adjacent features for example, a lake can be visually recognized on a satellite image because the pixels forming it are darker than those of the surrounding features; but the pixels forming the lake are not identified as a single discrete geographic entity, i.e. they remain individual pixels similarly, a highway can be visually recognized on the same satellite image because of its particular shape; but the pixels forming the highway do not constitute a single discrete geographic entity as in the case of vector data the method of representing geographic features by pixels is called the raster method or raster data model, and the data are described as raster data o the raster method is also called the tessellation method o a raster pixel is usually a square grid cell but there are there are several variants such as triangles and hexagons (Peuquet, 1991) o a raster pixel represents the generalized characteristics of an area of specific size on or near the surface of the Earth the actual ground size depicted by a pixel is dependent on the resolution of the data, which may range from smaller than a square meter to several square kilometers o raster data are organized by themes, which is also referred to as layers

o o o o

for example, a raster geographic database may contain the following themes: bed rock geology, vegetation cover, land use, topography, hydrology, rainfall, temperature raster data covering a large geographic area are organized by scenes (for remote sensing images) of by raster data files (for images obtained by map scanning) the raster method is based on the concept that geographic features are represented as surfaces, regions or segments this method is therefore based on the field view of the real world (Goodchild, 1992) the field view is the method of information organization in image analysis systems in remote sensing and geographic information systems for resource- and environmentaloriented applications

in the past, the vector and raster methods represented two distinct approaches to information systems o they were based on different concepts of information organization and data structure o they used different technologies for data input and output recent advances in computer technologies allow these two types of data to be used in the same applications o computers are now capable of converting data from the vector format to the raster format (rasterization) and vice versa (vectorization) o computers are now able to display vector and raster simultaneously o the old debate on the usefulness of these two approaches to information organization does not seem to be relevant any more o vector and raster data are largely seen as complimentary to, rather than competing against, one another in geographic data processing

2.2. The relationship perspective of information organization

relationships represent a important concept in information organization --- it describes the logical association between entities o relationships can be categorical or spatial, depending on whether they describe location or other characteristics

2.2.1. Categorical relationships

categorical relationships describe the association among individual features in a classification system o the classification of data is based on the concept of scale of measurement o there are four scales of measurement: nominal --- a qualitative, non-numerical and non-ranking scale that classifies features on intrinsic characteristics for example, in a land use classification scheme, polygons can be classified as industrial, commercial, residential, agricultural, public and institutional ordinal --- a nominal scale with ranking which differentiates features according to a particular order

for example, in a land use classification scheme, residential land can be denoted as low density, medium density and high density interval --- an ordinal scale with ranking based on numerical values that are recorded with reference to an arbitrary datum for example, temperature readings in degrees centigrade are measured with reference to an arbitrary zero (i.e. zero degree temperature does not mean no temperature) ratio --- an interval scale with ranking based on numerical values that are measured with reference to an absolute datum for example, rainfall data are recorded in mm with reference to an absolute zero (i.e. zero mm rainfall mean no rainfall)

categorical relationships based on ranking are hierarchical or taxonomic in nature o this means that data are classified into progressively different levels of detail data in the top level are represented by a limited broad basic categories data in each basic category are then classified into different sub-categories, which can be further classified into another level if necessary o the classification of descriptive data is typically based on categorical relationships (Figure 7)

2.2.2. Spatial relationships

spatial relationships describe the association among different features in space o spatial relationships are visually obvious when data are presented in the graphical form o however, it is difficult to build spatial relationships into the information organization and data structure of a database there are numerous types of spatial relationships possible among features (Table 2) recording spatial relationships implicitly demands considerable storage space computing spatial relationships on-the-fly slows down data processing particularly if relationship information is required frequently there are two types of spatial relationships (Figure 8) o topological --- describes the property of adjacency, connectivity and containment of contiguous features o proximal --- describes the property of closeness of non-contiguous features spatial relationships are very important in geographical data processing and modeling o the objective of information organization and data structure is to find a way that will handle spatial relationships with the minimum storage and computation requirements

2.3. The operating system (OS) perspective of information organization

from the operating system perspective, information is organized in the form of directories o directories are a special type of computer files used to organize other files into a hierarchical structure (Figure 9)

directories are also referred to as folders, particularly in systems using graphical user interfaces a directory may also contain one of more directories the topmost directory in a computer is called the root directory a directory that is below another directory is referred to as a sub-directory a directory that is above another directory is referred to as a parent directory directories are designed for bookkeeping purposes in computer systems a directory is identified by a unique directory name computer files of the same nature are usually put under the same directory a data file can be accessed in a computer system by specifying a path that is made up of the device name, one or more directory names and its own file name for example: c:\project101\mapdata\basemap\nw2367.dat the concept of workspace used by many geographic information system software packages is based on the directory structure of the host computer a workspace is a directory under which all data files relating to a particular project are stored (Figure 10)

2.4. The application architecture perspective of information organization

computer applications nowadays tend to be constructed on the client/server systems architecture client/server is primarily a relationship between processes running in the same computer or, more commonly, in separate computers across a telecommunication network (Figure 11) o the client is a process that requests services the dialog between the client and the server is always initiated by the client a client can request services from many servers at the same time o the server is a process that provides the service a server is primarily a passive service provider a server can service many clients at the same time there are many ways of implementing a client/server architecture but from the perspective of information organization, the following five are most important o file servers --- the client requests specific records from a file; and the server returns these records to the client by transmitting them across the network o database servers --- the client sends structured query language (SQL) requests to the server; the server finds the required information by processing these requests and then passes the results back to the client o transaction servers --- the client invokes a remote procedure that executes a transaction at the server side; the server returns the result back to the client via the network o Web server --- communicating interactively by the Hypertext Transfer Protocol (HTTP) over the Internet, the Web server returns documents when clients ask for them by name o groupware servers --- this particular type of servers provides a set of applications that allow clients (and their users) to communicate with one another using text, images, bulletin boards, video and other forms of media

from the application architecture perspective, the objective of information organization and data structure is to develop a data design strategy that will optimize system operation by o balancing the distribution of data resources between the client and the server databases are typically located on the server to enable data sharing by multiple users static data that are used for reference are usually allocated to the client o ensuring the logical allocation of data resources among different servers data that are commonly used together should be placed in the same server data that have common security requirements should be placed in the same server data intended for a particular purpose (file service, database query, transaction processing, Web browsing or groupware applications) should be placed in the appropriate server o standardizing and maintaining metadata (i.e. data about data) to facilitate the search for the availability and characteristics of existing data

3. Data Structure
3.1. Levels of data abstraction

as noted in Section 1.3, information organization is concerned with the internal organization of data o it represents the user's view of data, i.e. conceptualization of the real world o it is the lowest level of data abstraction, which can be done with or without any intent for computer implementation o it is expressed in terms of data models (Peuquet, 1991) (Figure 12) note the differences between "data models" and "database models" the vector and raster methods of representing the real world as explained in Section 2.1.2 above are "data models" the relational, network, hierarchical and object-oriented databases are "database models" --- they are the software implementation of data models data structure represents a higher level of data abstraction than information organization in the sense that it is concerned with the design and implementation of information organization o it represents the human implementation-oriented view of data o it is expressed in terms of database models this implies that data structure is software-dependent but hardware is not yet a consideration data structure forms the basis for the next level of data abstraction in information system: file structure or file format o file structure is the hardware implementation-oriented view of data o it reflects the physical storage of the data on some specific computer media such as magnetic tapes or hard disk

this implies that file structure is hardware-dependent

3.2. Descriptive data structures

descriptive data structures describe the design and implementation of the information organization of non-spatial data as most commercial implementations of information systems today are based on the relational and object-oriented database models, we explain the data structures of these models in the following two sections

3.2.1. Relational data structure

the relational data structure is the table which is formally called a relation (Figure 13) o a relation is a collection of tuples that correspond to the rows of the table the number of tuples in a relation is called the cardinality o a tuple is made up of attributes that correspond to the columns of the table the number of attributes in a tuple is called the degree o each relation has a unique identifier called the primary key the primary key is a column or combination of columns that at any given time has no identical values in any two rows this means that the values of each row of the primary key are always unique this allows the use of the primary keys to relate data in different tables in data processing (Figure 13) the primary keys in those tables are called foreign keys o in order to enforce database integrity, relations are always normalized normalization is built on the concept of normal form a relation is said to be in a certain normal form if it satisfies a prescribed set of conditions (Date, 1995) as a minimum, a relation in the relational database has to satisfy the conditions of the first, second and third normal forms first normal form (1NF) --- a relation is said to be in 1NF if and only if its tuples contain no repeating attributes (i.e. there must not be multiple values for a single entity which might theoretically result from multiple sampling at a particular location) second normal form (2NF) --- a relation is said to be in 2NF if it satisfies the condition for 1NF and if every non-key attribute is irreducibly dependent on the primary key third normal form (3NF) --- a relation is said to be in 3NF if it satisfies the condition for 2NF and the non-key attributes are mutually independent

3.2.2. Object-oriented data structure

unlike the relational data structure, there is not a formalized object-oriented data structure o this means that different object-orientation implementations have different data structures

however, object-oriented data structure can be explained in generic terms using the concepts of object identify, object structure and type constructors (Elmasri and Navathe, 1994) o the concept of object identity each object in an object-oriented database is provided a unique systemgenerated object identifier (OID) the OID is for internal reference by the system and is therefore transparent to the user the OID is immutable, i.e. its value remains unchanged even when a particular object is removed from the database, its OID will never be assigned to any new object o the concept of object structure the concept of object structure allows complex objects to be constructed from simple objects each object is viewed as a triple (i, c, v) where i = the object's unique identifier (OID) c = a constructor (which indicates how the object value is constructed) v = object value different object-oriented systems use different constructors, including: atom, tuple, set, list and array o an object value v is interpreted on the basis of the value of the constructor c in the triple (i, c, v) that represents the object if c = atom, then v is an atomic value (i.e. it is an indivisible value) if c = tuple, then v is a tuple containing one or more attributes with their respective OIDs if c = set, then v is a set of object identifiers (OIDs) for a set of objects of the same type if c = list, then v is an ordered list of OIDs of the same type if c = array, then v is an array of OIDs of the same type the concept of type constructors a type constructor is used by an object-oriented definition language (OODDL) to define the data structure for an object-oriented database schema (Figure 14)
o

3.3. Graphical data structures

3.3.1. Raster data structure

in the raster data structure space is subdivided into regular grids of square grid cells or other forms of polygonal meshes known as picture elements (pixels) (Figure 15) o the location of each cell is defined by its row and column numbers o the area that each cell represents defines the spatial resolution of the data o the position of a geographic feature is only recorded to the nearest pixel o the value stored for each cell indicates the types of the object, phenomenon or condition that is found in that particular location

different types of values can be coded: integers, real numbers and alphabets integer values often act as code numbers, which are referenced to names in an associated table (called the look-up table) or legend different attributes at the same cell location are stored as separate themes or layers for example, raster data pertaining to the soil type, forest cover and slope covering the same area are stored separately in a soil type theme, a forest cover theme and a slope theme

there are several variants to the regular grid raster data structure, including: irregular tessellation (e.g. triangulated irregular network (TIN)), hierarchical tessellation (e.g. quad tree) and scan-line (Peuquet, 1991)

3.3.2. Vector data structure

there are many implementations of vector data structures, including: o spaghetti --- a direct line-for-line unstructured translation of the paper map (Figure 16) this structure has very limited practical use it is usually an interim data structure for map digitizing o hierarchical --- a vector data structure developed to facilitate data retrieval by separately storing points, lines and areas in a logically hierarchical manner (Figure 17) o topological --- a vector data structure that aims at retaining spatial relationship by explicitly storing adjacency information (Figure 18) the basic logical feature for line and area coverage is a straight line segment each individual line segment is defined by the coordinates of its end points called nodes topological information is stored by recording the from-node and to-node of each line segment the left-polygon and right-polygon (in the direction of the from-node to the to-node) of each line segment

3.4. The georelational data structure

the georelational data structure was developed to handle geographic data o it allows the association between spatial (graphical) and non-spatial (descriptive) data o it is the data structure used by many vector-based GIS software packages o both spatial and non-spatial data are stored in relational tables point, line and polygon data are stored in separate feature attribute tables (FAT) (Figure 19) in the FAT, each entity is assigned a unique feature identifier (FID) topological information is explicitly stored by employing a method similar to the topological data structure described above non-spatial data are stored in relational tables o entities in the spatial and non-spatial relational tables are linked by the common FIDs of entities (Figure 20)

4. Data Modeling

data modeling is the process of defining real world phenomena or geographic features of interest in terms of their characteristics and their relationships with one another o it is concerned with different phases of work carried out to implement information organization and data structure there are three steps in the data modeling process, resulting in a series of progressively formalized data models as the form of the database becomes more and more rigorously defined o conceptual data modeling --- defining in broad and generic terms the scope and requirements of a database o logical data modeling --- specifying the user's view of the database with a clear definition of attributes and relationships o physical data modeling --- specifying internal storage structure and file organization of the database data modeling is obviously closely related to the three levels of data abstraction in database design as noted in Section 3.1 above: o conceptual data modeling ----> data model o logical data modeling ---------> data structure o physical data modeling -------> file structure

4.1. Conceptual data modeling

entity-relationship (E-R) modeling is probably the most popular method of conceptual data modeling o it is sometimes referred to as a method of semantic data modeling because it used a human language-like vocabulary to describe information organization o it involves four aspects of work: identifying entities an entity is defined as a person, a place, an event, a thing, etc. identifying attributes determining relationships drawing an entity-relationship diagram (E-R diagram) (Figure 21)

4.2. Logical data modeling

logical data modeling is a comprehensive process by which the conceptual data model is consolidated and refined o the proposed database is reviewed in its entirety in order to identify potential problems such as irrelevant data that will not be used omitted or missing data inappropriate representation of entities lack of integration between various parts of the database unsupported applications potential additional cost to revise the database

the end product of logical data modeling is a logical schema the logical schema is developed by mapping the conceptual data model (such as the E-R diagram) to a software-dependent design document (Figure 22)

4.3. Physical data modeling

physical data modeling is the database design process by which the actual tables that will be used to store the data are defined in terms of o data format --- the format of the data that is specific to a database management system (DBMS) o storage requirements --- the volume of the database o physical location of data --- optimizing system performance by minimizing the need to transmit data between different storage devices or data servers the end product of physical data modeling is a physical schema (Figure 23) o a physical schema is also variably known as data dictionary, item definition table, data specific table or physical database definition o it is both software- and hardware specific o this means the physical schemas for different systems look different from one another

5. Process Modeling

process modeling is the process-oriented approach, as opposed to the data-oriented approach, of information system design o the objective is to identify the processes that the information system will perform o it also aims at identifying how information is transformed from one process to another o the end product of process modeling is a data flow diagram (DFD) this implies that process modeling is by no means only concerned with process, it also deals with information organization and data structure in the context of information system design, process modeling is one of the methods of structured business function decomposition used to determine user requirements in conceptual modeling o DFD is the principal modeling tool o a DFD is constructed using four basic symbols to represent process, data stores, entities and data flow in a business function (Figure 24) process --- it represents the transformation of data as they flow through the system: data flow into a process, are changed, and then flow out to another process or a data store entity --- the basic definition of an entity is similar to that for E-R modeling and it represents the initial source and final destination of data in a DFD data store --- a temporary or permanent holding area for data data flow --- the connection between processes and data stores along which individual entities or collection of entities flow process modeling is a top-down analysis and design method

o o o o

it results in a hierarchy of DFDs that represent a general-to-detail decomposition of processes (Figure 25) a top level DFD, called the Level-0 DFD, typically contains a single process or a small number of processes that describes a business from a global perspective this DFD is then decomposed into lower levels of DFDs (i.e. Level-1, Level-2, etc.) that provide progressively more detailed breakdown of business processes the final DFD is used as the basis for information organization and data structure in the process-oriented approach to information system development

6. Summary

this unit represents an overview, rather than a detailed explanation, of the principles and methods of information organization and data structure o the aim is to provide students with an articulate view of information organization from the conceptualization, through design and specification, to the practical implementation of data and file structures in information science and management o this enables students to understand how different processes in information system development, such as data modeling, database design and application development, are related to one another information organization refers to the internal organization of data and event items in information systems information organization is a key consideration in today's data-oriented approach to system design and development; it is crucial to the functioning of information systems information organization is largely conceptual in nature, and can be understood from four interrelated perspectives: data, relationship, operating system and application architecture data structure is the design and implementation of information organization; it is the intermediate step of work between conceptual database design and the practical implementation of file structures the identification of entities, attributes and relationships for data structure can be carried out either by data modeling or process modeling

7. Review and Study Questions

1. The following three lines of figures have been extracted from a computer file:

00713344 5000 7.50 1998 12 31 000999999999999 23112410 0500 7.50 1999 11 01 000999999999999 33132211 8000 8.00 2001 06 30 000999999999999 Are these data or information? Explain why.

2. Explain the importance of information organization and data structure to the functioning of information systems. 3. Information organization and data structure are key considerations in information system development. Who are the people responsible for identifying, specifying and implementing an organization's requirements for information organization and data structure? 4. Explain the differences between geographic data and other types of data from the perspective of information organization and data structure. 5. List the characteristics of the database approach as opposed to the conventional data file approach to data processing. 6. Explain the difference between a "data model" and a "database model" 7. Define "categorical relationship" and "spatial relationship". Explain why spatial relationships are more difficult than categorical relationships to implement in data structure. 8. Information systems are now mostly based on the client/server architecture. Explain the impact of this particular architecture on information organization in system implementation. 9. What is a relation in the context of data structure? List the characteristics of a relation in terms of data structure. 10. What is an object in the context of data structure? How is the data structure for an objectoriented database schema constructed? 11. Explain the relationships among conceptual, logical and physical modeling in database design. 12. What is a data flow diagram? Explain how a data flow diagram can be used in connection with information organization and data structure.

8. References
Date, C.J. (1995) An Introduction to Database Systems (6th ed.) Addison-Wesley, Reading, MA.

Elmasri, R. and Navathe, S.B. (1994) Fundamentals of Database Systems. Addison-Wesley, Menlo Park, CA. Everst, G.C. (1986) Data Management: Objectives, System Functions and Administration, McGraw-Hill, New York. Goodchild, M.F. (1992) Geographic Data Modeling. Computers and Geosciences. Vol. 18, No. 4, pp. 401-408. Peuquet, D.J. (1991) Methods for Structuring Digital Cartographic Data in a Personal Computer Environment. In Geographic Information Systems: The Microcomputer and Modern Cartography by Taylor, D.R.F. (ed.), Pergamon Press, Oxford. Pressman, R.S. (1997) Software Engineering: A Practitioner's Approach (4th ed.) McGraw-Hill, New York.

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Citation
To reference this material use the appropriate variation of the following format: Albert K. Yeung. (1998) Data Organization and Structure, NCGIA Core Curriculum in GIScience, http://www.ncgia.ucsb.edu/giscc/units/u051/u051.html, posted October 15, 1998.

The correct URL for this page is: http://www.ncgia.ucsb.edu/giscc/units/u051/u051.html Created: October 10, 1998. Last revised: October 12, 1998.

To the Core Curriculum Outline