Rubbermaid Want to Buy an Expensive Rubber1 Dustpan
THE BEST-SELLING CAR IN the world is not a VW, Toyota or Chevy, but the Little Tikes Cozy Coupe - a leg-powered. Flintstones-like car for toddlers. It is one of the thousands of products made by one of the world's most successful companies. Rubbermaid. The company's rise started in 1934 when the then Wooster Rubber Company made a little-noticed addition to its line of balloons a rubber dustpan. It sold the new dustpan door to door for twice what competitors were charging for their metal...
Estimating Competitors Reaction Patterns
A competitor's objectives, strategies and strengths and weaknesses explain ils likely actions, and its reactions to moves such as a price cut, a promotion increase or a new product introduction. In addition, each competitor has a certain philosophy of doing business, a certain internal culture and guiding beliefs. Marketing managers need i deep understanding of a given competitor's mentality if they want to anticipate how that competitor will act or react. Each competitor reacts differently....
Balancing Customer and Competitor Orientations
A company whose moves arc mainly based on competitors' actions and reactions it spends most of its time tracking competitors'moves and market shares and trying to find strategies to counter them. A company that focuses on customer developments in designing irs marketing strategies ami on delivering superior value to its target customers. We have stressed the importance of n company watching its competitors closely, Whether a company is a market leader, challenger, follower or nicher, it must...
Introduction Mgw
Organizations that sell to consumer and business markets recognize that they cannot appeal to all buyers in those markets, or at least not to all buyers in the saint way. Buyers are too numerous, too widely scattered and too varied in their needs and buying practices. Companies vary widely in their abilities to serve different segments of the market. Rather than trying to compete in an entire market, sometimes against superior competitors, each company must identity the parts of the market that...
Test Market
From August to October 1990 Ballygowan test marketed Kisqua as a pasteurized drink in 250 ml glass bottles. The test was conducted in the Dublin area using Ballygowan's main independent distributor serving 250 GTNs combined confectioner, tobacconist and newsagents , delicatessens and petrol stations. The results were discouraging. Most of the negative reaction centred on the pack and retailers not knowing where to position the range in their store. Ballygowan's management now faced a difficult...
Creating Competitive Advantages
After reading this chapter, you should be able to Explain the importance of developing competitive marketing strategies that position the company against competitors and give it the strongest possible competitive advantage. Identify the steps that companies go through in analyzing Discuss the competitive strategies that market leaders use to expand the market and to protect and expand their market shares. Describe the strategies that market challengers and followers use to increase their market...
Battling for Position in the Fast Lane
In the late 1980s, Europe dominated the world luxury car market. Germany reigned with Mercedes, BMW and Audi followed by Sweden's Saab and Volvo. Rover's re-entry into the crowded luxury car market contained a clue to the future. Realizing that it did not have the scale to design and buiid a range of cars by itself, Rover made a deal with Honda. For Rover it was to be the 800, a replacement for its SD1 for Honda, the Legend. Both firms intended to sell them in the North American market. Rover...
Discussing the Issues 1
I. Select a sports anil leisure footwear company. What micro environmental trends will affect the success of the company in the decade ahead What marketing plans would you make to respond to these trends Marketing Highlight 4.2 noted the growing importance of two demographic groups, the 'Third Agers' and 'Generation Xers'. If you were in charge of marketing in a consumer healthcare company, how would you deal with the potential opportunities presented hy these two consumer groups Pressure...
Preview Case Federal Express Losing a Packet in Europe
FEDERAL EXPRESS FEDEX , PIONEER OF the express-delivery industry as we now know it, has pulled out of the European market with a red face and an even redder balance sheet. Left to fight for Europe's express package deliveries market are Brussels-based DHL, Australian TNT and new US entrant, UPS United Parcel Service . Founded in 1973, EedEx got off to a slow start - educating the American public about the value of overnight delivery took time. However, building doggedly on the advertising...
Procter Gamble How Many is Too Many
PROCTER amp GAMBIA is THE market leader in the United States and the European detergent markets. In the United Ktat.es it markets nine brands of laundry detergent Tide, Cheer, Gain, Dasb, Bold 3, Dreft, Ivory Snow, Oxydol and Era . The cultural and competitive diversity in Europe means that even more brands, such as Ariel, are used to serve that market. Why so many Besides its many detergents Procter amp Gamble sells eight brands of hand soap Zest, Coast, Ivory, Safeguard. Camay, Oil of Ulay,...
Segmentation
The aim in segmentation is to find groups of people who are sufficiently alike in some way to make them a target market. There are broadly two ways of doing this. The first way is die a priori approach that splits a market by some predetermined criterion like age, sex or social class. This method works when products closely align with the a priori segments, but often they do not. A priori segmentation sometimes works in new markets, hut it becomes inadequate as the market becomes more...
Strong or Weak Competitors
Most companies prefer to aim their shots at their weak competitors. This requires less resources and time. Conversely, the firm may gain little. Alternatively, the firm should also compete with strong competitors to sharpen its abilities. Furthermore, even strong competitors have some weaknesses and succeeding against them often provides greater returns. A useful tool for assessing competitor strengths and weaknesses is customer value analysis asking customers what benefits they value and how...
Institutional and Government Markets
So far, our discussion of organizational buying has focused largely on the buying behaviour of business buyers. Much of this discussion also applies to the buying practices of institutional and government organizations. However, these two nonbusiness markets have additional characteristics and needs. Thus, in this final section, we will address the special features of institutional and government markets. institutional market Schools, hospitals, nursing homes, prisons and other institutions...
Designing the Competitive Intelligence System
We have described the main types of information that company decision-makers need to know about their competitors. This information needs collecting, interpreting, distributing and using. Although the cost in money and time of gathering competitive intelligence is high, the cost of not gathering it is higher. Yet the company must.design its competitive intelligence system in a cost-effective way. The competitive intelligence system first identifies the vital types of competitive information and...
Problem Recognition
The buying process begins when someone in the company recognizes a problem or a need that can be met by acquiring a specific good or a service. Problem recognition can result from internal or external stimuli. Internally, the company may decide to launch a new product that requires new production equipment and materials. Or a machine may break down and need new parts. Perhaps a purchasing manager is unhappy with a current supplier's product quality, service or prices. Externally, the buyer may...
Close or Distant Competitors
customer value analysis Analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors' offers. Most companies will compete with those competitors who resemble them the most. Thus, Citroen Peugeot competes more against Renault than against Porsche. At the same time, the company may want to avoid trying to 'destroy' a close competitor. Here is an example of a questionable 'victory' Bausch amp Lomb in the late 1970s moved...
Value Chain
Michael Porter proposed the value chain as the main tool for identifying ways to create more customer value see Figure 11.2 .15 Every firm consists of a collection of activities performed to design, produce, market, deliver and support the firm's products. The value chain breaks the firm into nine value-creating activities in an effort to understand the behaviour of costs in the specific business and the potential sources of competitive differentiation. The nine value-creating activities...
Perception
A motivated person is ready to act. How the person acts is influenced by his or her perception of the situation. Two people with the same motivation and in the same situation may act quite differently because they perceive the situation differently. Anna Flores might consider a fast-talking camera salesperson loud and false. Another camera buyer might consider the same salesperson intelligent and helpful. Why do people perceive the same situation differently All of us learn by the flow of...
Assessing Competitors Strengths and Weaknesses
Can a company's competitors carry out their strategics and reach their goals This depends on each competitor's resources and capabilities. Marketers need to identify accurately each competitor's strengths and weaknesses. As a first step, a company gathers key data on each competitor's business over the last few years. It wants to know about competitors' goals, strategies and performance. Admittedly, some of this information will be hard to collect. For example, industrial goods companies find...
Satisfying Customer Needs
To succeed or simply to survive, companies need a new philosophy. To win in today's marketplace, companies must be customer-centred - they must deliver superior value to their target customers. They must become adept in building customer relationships, not just building products. They must be skilful in market engineering, not just product engineering. New chief executive of GEC Industries, George Simpson's views were honed at Rover where the corporate culture had to shift to the notion that...
Statistical Demand Analysis
Time-series analysis treats past and future sales as a function of time, rather than as a function of any real demand factors. But many real factors affect the sales of any product. Statistical demand analysis is a set of statistical procedures used to discover the most important real factors affecting sales and their relative influence, The factors most commonly analyzed are prices, income, population and promotion. Statistical demand analysis consists of expressing sales Q as a dependent...
Proposal Solicitation
In the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. In response, some suppliers will send only a catalogue or a salesperson. However, when the item is complex or expensive, the buyer will usually require detailed written proposals or formal presentations from each potential supplier. Business marketers must be skilled in researching, writing and presenting proposals in response to buyer proposal solicitations. Proposals...
The Marketing Process
The strategic plan defines the company's overall mission and objectives. Within each business unit, marketing plays i role in helping to accomplish the overall strategic objectives. Marketing's role and activities in the organization are shown in Figure 3.6, which summarizes die marketing process and the forces influencing marketing strategy. marketing process The process of 1 analyzing marketing opportunities 2 selecting target markets f,3 developing tlie marketing mix and 4 managing the...
Customer Value Analysis The Key to Competitive Advantage
In analyzing competitors and searching for competitive advantage, one of the most important marketing tools is customer value analysis. The aim of a customer value analysis is to determine the benefits that target customers value and how they rate the relative value of various competitors' offers. The main steps in customer value analysis are as follows 1. Identify the chief attributes that customers value. Various people in the company may have different ideas on what customers value. Thus the...
Requirements for Effective Segmentation
Clearly there are many ways to segment a market, but not all segmentations are effective. Indeed, there is quite a gap between the sophisticated approaches to segmentation that are sometimes suggested and what is actually used by prac-titioners,'17 For example, buyers of table salt may divide into blond and brunette customers, hut hair colour obviously docs not affect the purchase of salt. Furthermore, if all salt buyers bought the same amount each month, believed all salt is the same and...
Applying llie Concepts
Changes in the marketing environment mean that marketers must meet new consumer needs that may be quite different - even directly opposite - from those in the past. You can track changes in the marketing environment by looking at how companies modify their products. Make a list of the products you encounter in one day that claim to be 'low' or 'high' in some ingredient, such as low-tar cigarettes or high-fibre cereal. Write down similar products that seem to offer the opposite characteristics....
t Interpreting and Reporting the Findings
The researcher must now interpret the findings, draw conclusions and report them to management. The researcher should not try to overwhelm managers with numbers and fancy statistical techniques. Rather, the researcher should present important findings that are useful in the important decisions faced by management. However, interpretation should not be by the researchers alone. They are often experts in research design and statistics, hut the marketing manager knows more about the problem and...
Distributing Information
Information has no value until managers use it to make better marketing decisions. The information gathered needs distributing to the right marketing managers at the right time. Most companies have centralized marketing information systems that provide managers with regular performance reports, intelligence updates and reports on the results of studies. Managers need these routine reports tor making regular planning, implementation and control decisions. But marketing managers may also need...
Questions Jpa
1. What types of market research method did Ballygowan use 2. What sorts of information were Ballygowan's management hoping to get from the different methods they used Is quantitative marketing research intrinsically more reliable than qualitative research 3. Relate the market research to the stages in the product development process and explain how they contributed to Ballygowan's understanding of the strategy for launching Kisqua. 4. Were the methods appropriately used and what alternatives...
Products and Services
People satisfy their needs and wants with products. A product is anything that can he offered to a market to satisfy a need or want. Usually, the word product suggests a physical object, such as a car, a television set or a bar of soap. However, the concept of product is not limited to physical objects - anything capable of satisfying a need can be called a product. In addition to tangible goods, products include services, which are activities or benefits offered for sale that are essentially...
The Principle of Curbing Potential Harm
As much as possible, transactions freely entered into by producers and consumers are their private business. The political system curbs producer or consumer freedom only to prevent transactions that harm or threaten to harm the producer, consumer or third parties, Transactional harm is widely recognized SOURCES Tun Dickson, 'The search for universal ethics', Financial Times 22 July 1994 , p. 11. Also, copies of the Principles far Business can ho obtained from Caux. Round Table Secretariat,...
Questions 1
1. What are the chief strengths and weaknesses of the Catalan company How and why did they change over time 2. What were the vital strategic shifts of JFP and what stimulated them 3. What are the roles in the buying centre for lamps towards the end of the case How does JFP seek to influence people in the buying process 4. How does the market vary across Europe What mistakes were made in Spain and France 5. What is JFP looking for in its joint ventures d. Would you recommend the company to sign...
Defining Customer Value and Satisfaction
More than 35 years ago, Peter Drueker observed that a company's first task is co create customers'. However, creating customers can be a difficult task. Todays customers face a vast array of product and brand choices, prices and suppliers. The company must answer a key question How do customers make their choices The answer is that customers choose the marketing offer that gives them the most value. Customers are value-maximizers, within the bounds of search costs and limited knowledge,...
TouchyFeely Research into Consumer Motivations
box You taste nice riot harsh.' Ideal cigarette to smoker 'If I can make you relaxed and happy, that's what I am here for. I always try to please my customers.' researchers use a wide variety of non-directive and projective techniques to uncover underlying emotions and attitudes towards brands and buying situations. The techniques range from sentence completion, word association and inkblot or cartoon interpretation tests, to having consumers describe typical brand users or form daydreams and...
The Strategic Plan
The strategic plan contains several components the mission, the strategic objectives, the strategic audit, SWOT analysis, portfolio analysis, objectives and strategies. All of these feed from and feed into marketing plans. A mission states the purpose of a company. Firms often start with a clear mission held within the mind of their founder. Then, over time, the mission fades as the company acquires new products and markets. A mission may be clear, but forgotten by some managers. An extreme...
When to Use Relationship Marketing
Relationship marketing is not effective in all situations. Transaction marketing, which focuses on one sales transaction at a time, is more appropriate than relationship marketing for customers that have short time horizons and can switch from one supplier to another with little effort or investment. This situation often occurs in 'commodity' markets, such as steel, where various suppliers oifer largely un differentia ted products. A customer buying steel can buy from any of sever steel...
How Do Government Buyers Make their Buying Decisions
Government buying practices often seem complex and frustrating to suppliers, who have voiced many complaints about government purchasing procedures. Those include too much paperwork and bureaucracy, needless regulations, emphasis on low bid prices, decision-making delays, frequent shifts in buying personnel and too many policy changes. Yet, despite such obstacles, selling to the government can often be mastered in a short time. The government is generally helpful in providing information about...
Performance Review
In this stage, the buyer reviews supplier performance. The buyer may contact users and ask them to rate their satisfaction. The performance review may lead the buyer to continue, modify or drop the arrangement. The seller's job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction. We have described the stages that would typically occur in a new-task buying situation. The eight-stage model provides a simple view of the business...
Niche Marketing
Market segments are normally large identifiable groups within a market - for example, luxury car buyers, performance car buyers, utility car buyers and economy car buyers. Niche marketing focuses on subgroups within these segments. A niche is a more narrowly defined group, usually identified by dividing a segment into subsegments or by defining a group with a distinctive set of traits who may seek a special combination of benefits. For example, the utility vehicles segment might include light...
Nop
'Flight by machines heavier than air is unpractical and insignificant, if not impossible' Simon Newcombe, 1901 . Eighteen months later the Wright brothers flew. 'My imagination refuses to see any sort of submarine doing anything but suffocating its crew and foundering at sea' II. G. Wells, 1902 . 'Airplanes are interesting toys, but of no military value' France's Marshal Foch, 1911 . 'The energy produced by the breaking down of the atom is a very poor kind of thing. Anyone who expects a source...
Preview Case Gastrol Liquid Engineering
ANTONI CAREFULLY MEASURED FOUR LITRES of Syntec into his greatest love, his new Van Dieman Formula Ford single-seater rating car Tomorrow he was racing her for the first time at Silverstone and wanted to do well. Racing the Formula Fords was exciting, but his real dream was to race for Ferrari. That is why he had left his home in Barcelona to work for a specialist engineering firm in rural England. Leaving Spain was hard, but he was now near where he needed to be at the heart of the world's...
Nature of the Buying Unit
Compared with consumer purchases, a business purchase usually involves more buyers and a more professional purchasing effort. Often, business buying is done by trained purchasing agents, who spend their working lives learning how to buy well. The more complex the purchase, the more likely that several people will participate in the dec is ion-making process. Buying committees made up of technical experts and top management are common in the buying of primary goods. Therefore, business marketers...
iria Business Markets
Consumer and business marketers use many of the same variables to segment their markets. Business buyers segment geographically or by benefits sought, user status, usage rate, loyalty status, readiness state and attitudes. Yet business marketers also use some additional variables which, as Table 9.4 shows, include business customer demographics industry, company size operating characteristics buying approaches situation a factors and personal characteristics.21 The table lists important...
Applying the Concepts Qcc
Thinking about the participants in this course, 2. segment them into different groups allocate a mnemonic- to each group if you wish . What is your chief segmentation variable Select several products or services and assess if you could effectively market them to these segments. How effective was your segmentation effort in the first instance By looking at advertising and at the products th era selves, we can often see what target segments marketers hope to reach. Find advertisements of several...
Questions Kxr
1. Compare the positioning strategies used by Sehott in the case. 2. Why did one succeed and the other fail 3. Could country of origin be used to help position the product 4. What types of product could be successfully positioned as German, French, Italian. Swedish, Dutch, etc. 5. What associations could Sehott have used to communicate its successful positioning What personalities 6. To what extent does successful positioning depend upon the tangible features of a product being marketed SOURCES...
Case 10
SCHOTT, THE GERMAN MANUFACTURER OF glass for industrial and consumer products, had a problem deciding how to position its innovative product, Ceran, in the American market. The product, a glass-ceramic material made to cover the cooking surface of electric ranges, seemed to have everything going for it, It was completely non-porous and thus stain resistant , easy to clean and long-lasting. Best of all, when one burner was lit, the heat didn't spread it stayed confined to the circle directly...
Communicating and Delivering the Chosen Position
Once it has chosen a position, the company must take strong steps to deliver and communicate the desired position to target consumers. All the company's marketing-mix efforts must support the positioning strategy. Positioning the company calls for concrete action - it is not just talk. If the company decides to build a position on better quality and service, it must first deliver that position. Designing the marketing mix - product, price, place and promotion - involves working out the tactical...
DissonanceReducing Buying Behaviour
Dissonance-reducing buying behaviour occurs when consumers are highly involved with an expensive, infrequent or risky purchase, but see little difference among brands. For example, consumers buying carpeting may face a high-involvement decision because carpeting is expensive and self-expressive. Yet buyers may consider most carpet brands in a given price range to be the same. In this case, because perceived brand differences are not large, buyers may shop around to learn what is available, but...
Perceptual Mapping
perceptual maps A product positioning tool that uses mu hidimensional scaling of consumers' perceptions and preferences to portray the psychological distance between products and segments. Perceptual maps are a valuable aid to product positioning. These maps use multidimensional scaling of perceptions and preferences that portray psychological distance between products and segments, using many dimensions. They contrast with conventional maps that use two dimensions to show the physical distance...
Undifferentiated Marketing
Using an undifferentiated marketing strategy, a firm might decide to ignore market segment differences and go after the whole market with one offer. This can Three alternative market-coverage strategic be because there are weak segment differences or through the belief that the product's appeal transcends segments. The offer will focus on what is common in the needs of consumers rather than on what is different. The company designs a product and a marketing programme that appeal to the largest...