Marketing Management Kotler 15th Ed (Ch 1 – 8)

Creating value for customers and building strong customer relationships
Marketing
Sum of the tangible and intangible benefits and costs to them. Marketers can increase value of a customer offering by reducing price or increasing quality.
Value
Apple, Nike, Geico, Budweiser, FedEx, Southwest
Great Marketing Companies
Product, Price, Place, Promotion
Marketing Mix
Consumers dislike the product and may even pay to avoid it (Demand)
Negative
Consumers may be unaware of or uninterested in the product (Demand)
Nonexistent
Consumers may share a strong need that cannot be satisfied by an existing product (Demand)
Latent
Consumers being to buy the product less frequently or not at all (Demand)
Declining
Consumer purchases vary on a seasonal, monthly, weekly, daily or even hourly basis (Demand)
Irregular
Consumers are adequately buying all products put into the marketplace (Demand)
Full
More consumers would like to buy the product than can be satisfied (Demand)
Overfull
Global Markets, Consumer Market, Business Markets, Government Market
Key Customer Markets
Fewer, larger buyers
Close supplier-customer relationship
Professional purchasing
Multiple buying influences
Derived demand
Inelastic demand
Fluctuating demand
Geographically concentrated buyers
Direct purchasing
Characteristics of Business Markets
Physical (Market)
Market-places
Digital (Market)
Market-spaces
Cluster of complimentary products and services closely related in the minds of consumers, but spread across a diverse set of industries.
Metamarkets
Basic human requirements such as air, food, water, clothing, shelter
Needs
When needs are directed to specific objects that might satisfy the need.
Wants
Wants for specific products backed by the ability to pay. People who want a Mercedes, but only those that are willing and able to buy it
Demand
A marketing strategy that involves dividing a broad target market into subsets of consumers, businesses, or countries who have common needs and priorities, and then designing and implementing strategies to target them.
Segmentation
A particular group of consumers at which a product or service is aimed. Segments that present the greatest opportunity to a firm
Target Markets
Promote (a product, service, or business) within a particular sector of a market, or as the fulfillment of that sector’s specific requirements.
Positioning
Producer > Wholesaler > Retailer > Consumer
Marketing Channels
Production, Product, Selling, Marketing, Holistic
Marketing Concepts
Consumers will favor products that are available and affordable (Marketing Concept)
Production Concept
Consumers will favor products that offer the most in quality, performance, and innovative features (Marketing Concept)
Product Concept
Consumers will not buy enough without a large scale selling and promotion effort (Marketing Concept)
Selling Concept
Focus on satisfying the needs and wants of target markets (Marketing Concept)
Marketing Concept
This marketing concept improves both the consumer’s and the society’s well being (Marketing Concept)
Societal marketing concept
Aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business. Customers, employees, marketing partners and members of the financial community (Holistic Marketing)
Relationship marketing
Occurs when the marketer devices marketing activities and assembles marketing programs to create, communicate, and deliver value for consumers such that “the whole is great than the sum of its parts” (Holistic Marketing)
Integrated marketing
An element of holistic marketing, the task of hiring, training, and motivating able employees who want to serve customers well. Ensure that everyone in the organization embraces appropriate marketing principles, especially senior management (Holistic Marketing)
Internal marketing
Requires understanding the financial and nonfinancial returns to business and society from marketing activities and programs. Going beyond sales revenue to examine the marketing scorecard to interpret what is happening to market share, customer loss rate, customer satisfaction, product quality and others (Holistic Marketing)
Performance marketing
Tool for identifying ways to create more customer value
Value Chain
Gathering and acting upon information about the market (Core Business Processes)
Market-Sensing Process
Researching, developing and launching new high-quality offerings, quickly and within budget (Core Business Processes)
New-Offering Realization Process
Defining target markets and prospecting for new customers (Core Business Processes)
Customer Acquisition Process
Building deeper understanding, relationships, and offerings to individuals (Core Business Processes)
Customer Relationship Management Process
Receiving and approving orders, shipping goods on time, and collecting payment (Core Business Processes)
Fulfillment Management Process
1. It is a source of competitive advantage and makes significant contribution to perceived customer benefits
2. It has applications in a wide variety of markets
3. It is difficult for competitors to imitate
Core competency
Central instrument for directing and coordinating the marketing effort. Operates at two levels: strategic and tactical
Marketing Plan
Lays out the target markets and the firm’s value proposition, based on an analysis of the best market opportunities
Strategic Marketing Plan
Specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and services
Tactical Marketing Plan
Define the mission > Establish SBUs > Assign resources to SBUs > Assess growth opportunities
Strategic planning steps
What is our business? Who is the customer? What is of value to the customer?
Mission
Must have over 5% of mother company revenue. GE’s appliance division compared to their mother company. Have to fit within mission statement of mother company
1. Single business, or a collection of related businesses, that can be planned separately from the rest of the company
2. Has its own set of competitors
3. Has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit
SBU
Market Growth Rate (Cash Usage) vs Relative Market Share
(Cash Generation) (Stars, Question Marks, Cash Cows, Dogs)
BCG Matrix
Market Development, Diversification, Market Penetration, Product Development
Product-Market Expansion Strategies
Develop new markets with current products by identifying new demographic or geographic markets.
Market Development
New products for new markets. How? Start up or buy new businesses.
Diversification
Increase sales to present customer with current products by cutting prices, increasing advertising, getting products into more stores.
Market Penetration
Offering modified or new products to current customers. How? New styles, flavors, colors, or modified products.
Product Development
Success Probability vs Attractiveness (1, 2, 3, 4)
Opportunity Matrix
Probability of Occurance vs Seriousness (1, 2, 3, 4)
Threat Matrix
EX: Costco, McDonald’s, Ikea, Walmart
Cost Leadership
EX: Ferrari
Focus
EX: Monster Thickburger
Differentiation
Product/Service Alliance
Promotional Alliance
Logistics Alliance
Pricing Collaborations
Strategic Alliances
The sales goal set for a product line or sales representative
Sale Quota
People, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely and accurate information to marketing decision makers
Marketing Information System
Set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. Internal records system supplies “results data,” but the marketing intelligence supplies “happening” data.
Marketing Intelligence System
Inside the company. EX: Order to payment cycle
Internal Records
Outside the company. Usually based on competitors and their customers. EX: Corporate espionage, benchmarking
Market Intelligence
Data you personally collect (new)
Primary Data
2nd hand data, already existing
Secondary Data
! Train sales force to scan for new developments
! Motivate channel members to share intelligence
! Hire external experts to collect intelligence ! Network externally
! Customer advisory panel
! Utilize government data sources
! Purchase information
How to improve market intelligence?
Environment where we have control
Micro-environment
Environment where we do not have control
Macro-environment
Unpredictable, short lived, and without social, economic and political significance
Fad
More predictable and durable than a fad. Reveal the shape of the future and can provide strategic direction
Trend
Large social, economic, political, and technological change that is slow to form, and once in place, influences us for some time. About 7-10 years or longer
Megatrend
Facts about people: Population age mix, Ethnicities, Educational groups, Household patterns. (Environmental Forces)
Demographics
Accelerating pace of change
Unlimited opportunities for innovation (Environmental Forces)
Technological
Consumer Psychology: recession of 2008 initiated new consumer spending patterns. Fundamentally shaken consumers’ faith and financial situations in the economy. Mindless shopping and more price consciousness became norm.
Income Distribution:
Subsistence Economies: few opportunities for marketers
Raw Material Exporting Economies: market for equipment, tools, supplies, and luxury goods for the rich
Industrializing Economies: new rich class and growing middle class demand new types of goods
Industrial Economies: rich markets for all sorts of goods (Environmental Forces)
Economic
Steel and public utilities have invested billions of dollars in pollution-controlled equipment and environmentally friendly fuels, making hybrid cards, low-flow toilet, organic foods, and green office buildings. Emerging market of green lifestyle
Corporate Environmentalism: companies recognize the need to integrate environmental issues into the firm’s strategic plans
Shortage of Raw Materials
Increase in Energy Costs
(Environmental Forces)
Natural
Unconscious world view that defines our relationships to ourselves, others, organizations, society, nature, and the universe.
Subculture: groups with share values, beliefs, preferences, and behaviors emerging from their specific life experiences or circumstances (Environmental Forces)
Sociocultural
Consists of laws, government agencies, and pressure groups that influence organizations and individuals. Sometimes these create new business opportunities. Mandatory recycling programs created new marketing for recycled products.
2 major trends: Increased business legislation & Growth of special interest groups. (Environmental Forces)
Political-Legal
Set of consumers with a sufficient level of interest in a market offer. Interest is not enough unless they also have sufficient income and access to the product
Potential Market
Consumers who have interest, income, and access to a particular offer.
Available market
Part of the qualified available market the company decides to pursue
Target Market
Set of consumers who are buying the company’s product
Penetrated Market
Total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program
Market Demand
Maximum sales available to all firms in an industry during a given period, under a given level of industry marketing effort and environmental conditions. Multiply the potential number of buyers by the average quantity purchases and then by the price
Total Market potential
Calls for identifying all the potential buyers in each market and estimating their potential purchases. Accurate if there is a list of all potential buyers and a good estimate of what each will buy
Market build-up method
Straightforward index for estimating market potentials.
(weighted average)
Market-Factor Index Method
Your company’s percentage of an industry or market’s total sales over a specified time period. Validates your position in the market and helps you fine-tune your overall marketing plan.
Market Share
Part of anticipating what buys likely to do under a given set of conditions
Forecasting
When interviewing buyers is impractical, the company may ask its sales representatives to estimate their future sales.
Composite of sales force opinions
Obtain forecasts from experts, including dealers, distributors, suppliers, marketing consultants, and trade associations
Expert Opinion
The function that 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
Marketing Research
Provide diagnostic information about how and why we observe certain effects in the marketplace and what that means to marketers
Marketing insights
these firms gather consumer and trade information, which they sell for a fee
Syndicated-service research firms
Hired to carry our specific projects. They design the study and report the findings
Customer marketing research firms
Provide specialized research services. Best example is the field-service firm, which sells field interviewing services to other firms
Specialty Line Marketing Research firms
Exploring options (to shed light on the real nature of the problem and to suggest possible solutions or new ideas) (Research Objectives)
Exploratory
Ex: How many people would use the internet for $5 (Research Objectives)
Descriptive
Ex: Would passengers use the internet more if they could use their own devices? Cause and effect (Research Objectives)
Causal
Observing unobtrusively as customers shop or consumer products (Research Approaches)
Observational
Research
Uses concepts and tools from anthropology and other social science disciplines to provide deep cultural understanding of how people live and work. Goal is to immerse the researcher into consumers’ lives to uncover unarticulated desires that might not surface in any other form of research (Research Approaches)
Ethnographic
Research
Gathering 6-10 people who spend a few hours with a skilled moderator to discuss a product, service, or other marketing entity (Research Approaches)
Focus Group
Assess peoples’ knowledge, beliefs, preferences, and satisfaction and to measure these magnitudes in the general population (Research Approaches)
Survey
Customers leave traces of their purchasing behavior in store scanning data, catalog purchases, and customer databases. (Research Approaches)
Behavioral Research
Designed to capture cause-and-effect relationships by eliminated competing explanations of the findings. If the experiment is well designed and executed, research and marketing managers can have confidence in the conclusions. Laboratory experiment – drink taste (Research Approaches)
Experimental Research
Consists of a set of questions presented to respondents. Most common to collect data (Research Instruments)
Questionnaires
Yes or No
Dichotomous Questions
Insert your level of agreement
Likert Scale
Pick the best option between two poles. (Large and Small)
Semantic Differential
Relatively indirect and unstructured measurement approaches, limited only by the marketing research’s creativity that permit a range of responses. Popular methods include: word associations, projective techniques, visualization, brand personification, laddering
Qualitative measures
A segment of the population selected to represent the population as a whole
Sample
Each individual has the same probability of being chosen
EX: choosing one name per page from a phone book
Simple random sample
Divide the populations into groups (strata) and then conduct random sampling.
Stratified random sample
In this technique, the total population is divided into these groups and a simple random sample of the groups is selected.
Cluster sample
This kind of sampling is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher.
Convenience sample
This kind of sampling sampling is a non-probability sampling technique where the researcher selects units to be sampled based on their knowledge and professional judgment.
Judgment Sample
This kind of sampling is a non-probability sampling technique wherein the assembled sample has the same proportions of individuals as the entire population with respect to known characteristics, traits or focused phenomenon.
Quota Sample
Expensive and is subject to bias and distortion are disadvantages of?
Disadvantage of using personal interviews
The difference between the prospective customer’s evaluation of all the benefits and costs of an offering and the perceived alternatives
Customer Perceived Value
The perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image
Total Customer Benefit
The perceived bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychological costs
Total Customer Cost
A deeply held commitment to rebuy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior
Loyalty
= Benefits – costs
Value
The whole cluster of benefits the company promises to delivery. It is more than the core positioning of the offering.
Value Proposition
Includes all the experiences the customer will have on the way to obtaining and using he offering. A set of core business processes that help deliver distinctive consumer value
Value Delivery System
A person’s feelings of pleasure or disappointment that result from comparing a product’s perceived performance to (or outcome) to expectations.
Satisfaction
A person, household, or company that over time yields a revenue stream exceeding by an acceptable amount the company’s cost stream for attracting, selling, and serving that customer.
Profitable customer
Best conducted with the tools of an accounting technique called Activity Based Costing (ABC).
Customer Profitability Analysis (CPA)
Tries to identify the real costs associated with serving each customer – the costs of products and services based on the resources they consume.
Activity Based Costing (ABC)
Describes the net present value of the stream of future profits expected over the customer’s lifetime purchases
Customer lifetime value (CLV)
Identifies the percentage of the potential target market at each stage in the decisions process, from merely aware to highly loyal
Marketing funnel
Ex: How likely is it you would recommend us to a friend?
Net Promoter Score
Adhering to requirements (EX: 200 thread count)
Conformance Quality
The study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs or wants.
Consumer Behavior
Reflects the learned values, perceptions, wants, and behavior that stem from family and other important institutions.
Culture
Are all the groups that have a direct (face-to-face) or indirect influence on their attitudes or behavior.
Reference group
They are based on the group members’ shared interests and goals. They are not structured with a specific goal in mind.
Informal reference group
Groups that have a specific goal or mission, structure and positions of authority
Formal reference group
Groups having a direct influence. Some of these are primary groups with whom the person interacts fairly continuously and informally, such as family, friends, neighbors, and coworkers. People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interaction.
Membership groups
Groups that people hopes to join
Aspirational groups
Groups whose values or behavior people reject
Dissociative groups
The most important consumer buying organization in society!
Family
Two families in the buyer’s life
Family of orientation (consists of parents and siblings) and Family of procreation (spouse and children)
The specific mix of human traits that we can attribute to a particular brand.
Brand personality
is a person’s pattern of living in the world as expressed in activities, interests, and opinions. It portrays the “whole person” interacting with his or her
Lifestyle
Stated that psychological forces that shaped peoples behavior are unconscious.
Freud
Stated that people are driven by different needs at different times. According to Maslow, human needs are arranged in a hierarchy from most to least pressing.
Maslow
Developed two-factor theory that distinguishes dissatisfiers (factors that cause dissatisfaction) from satisfiers (factors that cause satisfaction).
Herzberg
A need that is sufficiently pressing to direct the person to seek satisfaction.
Motive
The process by which people select, organize, and interpret information.
Perception
Tendency for people to screen out most of the information to which they are exposed.
Selective attention
Tendency of people to interpret information in a way that will support what they already believe.
Selective distortion
Retaining information that supports existing attitudes and beliefs. People tend to remember (forget) information that supports (differs) our attitudes and beliefs.
Selective retention
They argue that marketers embed covert, subliminal messages in ads or packaging. Consumers are not consciously aware of them, yet they affect behavior
Subliminal perception
The way information is recovered
Memory retrieval
Induces changes in our behavior arising from experience.
Learning
A strong internal stimulus impelling action
Drive
Minor stimuli that determine when, where, and how a person responds
Cues
Means we have learned to recognize differences in sets of similar stimuli and can adjust our responses accordingly.
Discrimination
Personal, Commercial, Public , Experiential
Information sources
A descriptive thought that a person has about something based on knowledge, opinion, faith.
Belief
Describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea.
Attitude
It’s a compensatory model, in that perceived good things about a product can help to overcome perceived bad things
Expectancy value model
With these models, positive and negative attribute considerations don’t necessarily net out.
Noncompensatory models
This product must meet my minimum requirements), the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes
Conjunctive heuristic
(I will rank order attributes and narrow down alternatives by comparing the first rankings) the consumer chooses the best brand on the basis of its perceived most important attribute
Lexicographic Heuristics
(I will rank the attributes by importance AND define the minimum required values) the consumer compares brands on an attribute selected probabilistically—where the probability of choosing an attribute is positively related to its importance—and eliminates brands that do not meet minimum acceptable cutoffs.
Elimination-by-aspects heuristics
Brand, Dealer (where), Quantity, Timing (when), Payment method (how)
5 Purchase Subdecisions
Consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to mind. Advertising and other marketing makes information more available to consumers. Occurs unconsciously and operates under the principle that “if you can think of it, it must be important.”
Availability heuristic
Consumers base their predictions on how representative or similar the outcome is to other examples. One reason package appearances may be so similar for different brands in the same product category is that marketers want their products to be seen as representative of the category as a whole.
Representativeness Heuristic
Consumers arrive at an initial judgment and then adjust it based on additional information
Anchoring & adjustment heuristic
The manner in which choices are presented to and seen by a decision maker.
The model of the buyer behavior shows stimuli as input and buyer response as output.
The Stimulus-response model (AKA Black box model)
The decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
Organizational Buying
Consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.
The Business Market
Multiple buying influences – Such as buying committees, which can be comprised of technical experts and senior management.
Direct purchasing – Often large volume customers purchase directly from manufacturer, rather than these markets also differ from the consumer market in demand functions.
Normally deal with far fewer but far larger buyers than consumer markets.
B2B vs B2C
A type of demand that can be influenced when the producer of a business product engages in marketing effort to encourage the sale of its buyers products EX: American Egg Board
Derived Demand
Total demand for many business goods and services is inelastic – that is, not affected too much by changes in price.
Inelastic Demand
Demand for business goods tends to be more volatile than the demand for consumer goods. At times, a rise of 10% in consumer demand can result in a rise in business demand by as much as 200%.
Fluctuating Demand
The process that occurs when a consumer makes another purchase of the identical goods in the identical amount under the identical terms from the identical supplier. A reorder on a routine basis
Straight Rebuy
New purchase (Buying Situation)
New Task
A buying situation in which an individual or organization purchase goods that have been purchased previously but changes either the supplier or some other elements of the previous order. In this the buyer wants to modify product specifications, terms, prices, suppliers.
Modified Rebuy
The contractor (seller) approaches a potential buyer and offers to provide all of the organizations MRO (maintenance, repair, and operating) supplies. Systems selling is a key strategy in bidding on large-scale industrial projects such as dams, pipelines, factories, etc.
Systems selling
Problem Recognition > Description & Characteristics > Supplier Search > Proposal Solicitations > Supplier Selection > Order Specification > Performance Review
Stages in the Buying Process
When problems are discovered from internal or external stimuli. A broken machine, low stock levels, or a new product being developed. External stimuli can trigger the process as well.
Problem Recognition
An approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods of production without affecting the product performance.
Product value analysis
(Blanket contracts) that establish long-term relationships. Here the supplier agrees to resupply the buyer as needed, at agreed upon prices, over a specific period of time.
Stockless purchase plans
Refers to a type of solution that includes everything you need to immediately start running a business
Turnkey solution
Largest customer in the world
US government
Operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors.
EX: Otis Elevator uses door systems from France, small geared parts from Spain, electronics from Germany, and motor drives from Japan; systems integration happens in the United States.
Global firm
1. No regular export activities
2. Export via independent representatives (agents)
3. Establishment of one or more sales subsidiaries
4. Establishment of production facilities abroad
Internationalization Process
Gradually entering countries in sequence (Approach)
The waterfall approach
Entering many countries simultaneously (Approach)
The sprinkler approach
Given more familiar language, laws, and culture, many U.S. firms prefer to sell in Canada, England, and Australia rather than in larger markets such as Germany and France.
Psychic proximity
A tax charged by a foreign government against certain imports
Tariff
Formed in 1957, this union set out to create a single European market by reducing barriers to the free flow of products, services, finances, and labor among member countries, and by developing trade policies with nonmember nations.
The European Union
In January 1994, the this agreement unified the United States, Mexico, and Canada in a single market of 440 million people who produce and consume $16 trillion worth of goods and services annually.
NAFTA
Links Brazil, Argentina, Paraguay, Uruguay, and (soon) Venezuela to promote free trade and the fluid movement of goods, people, and currency.
MERCOSUR
Twenty-one countries, as well as the NAFTA members and Japan and China, are working to create a pan-Pacific free trade area under the auspices of this form
APEC
Ten countries make up this group: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Viet Nam. The region is an attractive market of over 590 million people with $1.2 trillion in GDP. Member countries aim to enhance the area as a major production and export center.
ASEAN
When a domestic firm supplies management know-how to a foreign company that supplies the capital
Management contracting
Exports that are not handled directly by the manufacturer or producer but through an export agent or freight forwarder.
Indirect exporting
Overseas sales in which a producer or supplier controls all activities and collects all drawbacks.
Direct exporting
The licensor issues a license to a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty. The licensor gains entry at little risk; the licensee gains production expertise or a well-known product or brand name. The licensor, however, has less control over the licensee than over its own production and sales facilities.2
Licensing
Historically, foreign investors have often joined local investors in a ____ ____ company in which they share ownership and control.
Joint ventures
The ultimate form of foreign involvement where the foreign company can buy part or full interest in a local company or build its own manufacturing or service facilities
Direct investment
Society where the self-worth of an individual is rooted more in the social system (Japan)
Collectivist Society
Society where the self-worth of an individual is rooted more in the individual achievement (US)
Individualistic Society
These cultures tend to be less egalitarian
High power distance
These cultures tend to be more egalitarian
Low power distance
This dimension measures how much the culture is dominated by assertive males versus nurturing females
Masculine vs. Feminine
Indicates how risk-aversive people are
Uncertainty avoidance
Perceptions of a country can influence how consumers in other parts of the world react to the brands produced by the countries manufacturers.
Country-of-Origin Effects
Changing marketing communications for each local market
Communication Adaptation
If it adapts both the product and the communications
Dual Adaptation
Added costs and currency fluctuation risk might make the price two to five times as much in another country to earn the same profit for the manufacturer.
Price escalation
1. Set a uniform price everywhere
2. Set a market-based price in each country
3. Set a cost-based price in each country
3 choices for setting prices in different countries
Some products cross borders without adaptation better than others. While mature products have separate histories or positions in different markets, consumer knowledge about new products is generally the same everywhere because perceptions have yet to be formed.
Product standardization
Introduces the product in the foreign market without any change.
Straight extension
Alters the product to meet local conditions or preferences. Flexible manufacturing makes it easier to do so on several levels
Product adaptation
Product vs. Communications
– Do Not Change Product: Straight extension (DNCC), Communcation adaptation (AC)
– Adapt Product: Product adaptation (DNCC), Dual adaptation (AC)
– Develop New Product: Product invention (DNCC + AC)
Product & Communication Strategies
People are favorably predisposed to their own country’s products, unless they come from a less developed country.
Ethnocentric
This company’s strength was selling more efficiently and efficiently directly to consumers than IBM and Compaq, its hardware competitors at the time.
Dell
This technology company launched its success with an ingredient-branding marketing campaign (intel-inside)
Intel
The chain retailer began its success by keeping prices lower than competitors by reducing its profit margin.
Wallmart
This construction industry company is known for the great value it provides to its customers with highly reliable equipment, flexible financing, and a network of service and support.
Caterpillar
Instead of building bigger and more opulent casinos, this company invested in its data and customer loyalty program.
Harrah’s
This airline ranked #1 in the 2014 American Customer Satisfaction Index (ACSI)
Jet Blue
To address falling sales, this company shopped and ate at home and in restaurants with its customer
Campbell Soup
EDLP
Every day low prices (helps to smooth demand)