mm notes from kotler

8/19/2019 MM Notes From Kotler

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What Is Marketing?

Marketing is about identifying and meeting human and social needs. One of the shortest good definitions

of marketing is “meeting needs profitably.”When eBay recognized that people ere unable to locate some

of the items they desired most! it created an online auction clearinghouse.

When I"#$ noticed that people anted good furnishings at substantially loer prices! it created

knockdon furniture. %hese to firms demonstrated marketing sa&&y and turned a pri&ate or social need

into a profitable business opportunity.

%he $merican Marketing $ssociation offers the folloing formal definition' Marketing is the activity, set

of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have

value for customers, clients, partners, and society at large. (oping ith these e)change processes calls

for a considerable amount of ork and skill. Marketing management takes place hen at least one party

to a potential e)change thinks about the means of achie&ing desired responses from other parties.

%hus e see marketing management as the art and science of choosing target markets and getting,

keeping, and growing customers through creating, delivering, and communicating superior customer

value.

We can distinguish beteen a social and a managerial definition of marketing. $ social definition shos

the role marketing plays in society* for e)ample! one marketer has said that marketing+s role is to “deli&er

a higher standard of li&ing.” ,ere is a social definition that ser&es our purpose'

Marketing is a societal process by which individuals and groups obtain what they need and want through

creating, offering, and freely exchanging products and services of value with others . Managers sometimes

think of marketing as “the art of selling products!” but many people are surprised hen they hear that

selling is not the most important part of marketing- elling is only the tip of the marketing iceberg. /eter

0rucker! a leading management theorist! puts it this ay'

%here ill alays! one can assume! be need for some selling. But the aim of marketing is to make selling

superfluous. %he aim of marketing is to kno and understand the customer so ell that the product or

ser&ice fits him and sells itself. Ideally! marketing should result in a customer ho is ready to buy. $ll that

should be needed then is to make the product or ser&ice a&ailable.

What Is Marketed?

Marketers market 12 main types of entities' goods! ser&ices! e&ents! e)periences! persons! places! properties! organizations! information! and ideas. 3et+s take a 4uick look at these categories.

GOODS /hysical goods constitute the bulk of most countries+ production and marketing efforts.

#ach year! 5.. companies market billions of fresh! canned! bagged! and frozen food products and

millions of cars! refrigerators! tele&isions! machines! and other mainstays of a modern economy.


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SERVICES $s economies ad&ance! a groing proportion of their acti&ities focuses on the production of

ser&ices. %he 5.. economy today produces a 62782 ser&ices9to9goods mi).

er&ices include the ork of airlines! hotels! car rental firms! barbers and beauticians! maintenance and

repair people! and accountants! bankers! layers! engineers! doctors! softare programmers! and

management consultants. Many market offerings mi) goods and ser&ices! such as a fast9food meal.

EVENTS Marketers promote time9based e&ents! such as ma:or trade shos! artistic performances! and

company anni&ersaries. ;lobal sporting e&ents such as the Olympics and the World (up are promoted

aggressi&ely to both companies and fans.

EXPERIENCES By orchestrating se&eral ser&ices and goods! a firm can create! stage! and market

e)periences. Walt 0isney World+s Magic "ingdom allos customers to &isit a fairy kingdom! a pirate

ship! or a haunted house. %here is also a market for customized e)periences! such as a eek at a baseball

camp ith retired baseball greats! a four9day rock and roll fantasy camp! or a climb up Mount #&erest.

PERSONS $rtists! musicians! (#Os! physicians! high9profile layers and financiers! and other

professionals all get help from celebrity marketers.12 ome people ha&e done a masterful :ob of

marketing themsel&esegas (on&ention >isitors $uthority succeeded ith its pro&ocati&e ad campaign! “What ,appens

,ere! tays ,ere!” portraying 3as >egas as “an adult playground.” In the recession of @22A! hoe&er!

con&ention attendance declined. (oncerned about its potentially out9of9step racy reputation! the $uthority

took out a full9page BusinessWeek ad to defend its ability to host serious business meetings.

5nfortunately! the @22 summer bo) office blockbuster The Hangover ! set in a debauched 3as >egas!

likely did not help the city position itself as a choice business and tourist destination.

PROPERTIES /roperties are intangible rights of onership to either real property Creal estateD or

financial property Cstocks and bondsD. %hey are bought and sold! and these e)changes re4uire marketing.

=eal estate agents ork for property oners or sellers! or they buy and sell residential or commercial real

estate. In&estment companies and banks market securities to both institutional and indi&idual in&estors.ORGANIATIONS Organizations ork to build a strong! fa&orable! and uni4ue image in the minds of

their target publics. In the 5nited "ingdom! %esco+s “#&ery 3ittle ,elps” marketing program reflects the

food marketer+s attention to detail in e&erything it does! ithin the store and in the community and

en&ironment. %he campaign has &aulted %esco to the top of the 5" supermarket chain industry.


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5ni&ersities! museums! performing arts organizations! corporations! and nonprofits all use marketing to

boost their public images and compete for audiences and funds.

IN!ORMATION %he production! packaging! and distribution of information are ma:or industries.18

Information is essentially hat books! schools! and uni&ersities produce! market! and distribute at a price

to parents! students! and communities. %he former (#O of iemens Medical olutions 5$! %om

Mc(ausland! says! “Eour productF is not necessarily an G9ray or an M=I! but information. Our business is

really health care information technology! and our end product is really an electronic patient record'

information on lab tests! pathology! and drugs as ell as &oice dictation.”

IDEAS #&ery market offering includes a basic idea. (harles =e&son of =e&lon once obser&ed' “In the

factory e make cosmetics* in the drugstore e sell hope.” /roducts and ser&ices are platforms for

deli&ering some idea or benefit. ocial marketers are busy promoting such ideas as “Hriends 0on+t 3et

Hriends 0ri&e 0runk” and “$ Mind Is a %errible %hing to Waste.”

Wh" Markets?

MAR#ETERS AND PROSPECTS $ marketer is someone ho seeks a response


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MAR#ETS %raditionally! a “market” as a physical place here buyers and sellers gathered to buy and

sell goods. #conomists describe a market as a collection of buyers and sellers ho transact o&er a

particular product or product class Csuch as the housing market or the grain marketD.

Hi&e basic markets and their connecting flos are shon in Higure 1.1.Manufacturers go to resource

markets Cra material markets! labor markets! money marketsD! buy resources and turn them into goods

and ser&ices! and sell finished products to intermediaries! ho sell them to consumers. (onsumers sell

their labor and recei&e money ith hich they pay for goods and ser&ices.

%he go&ernment collects ta) re&enues to buy goods from resource! manufacturer! and intermediary

markets and uses these goods and ser&ices to pro&ide public ser&ices. #ach nation+s economy! and the

global economy! consists of interacting sets of markets linked through e)change processes.

Marketers use the term market to co&er &arious groupings of customers. %hey &ie sellers as constituting

the industry and buyers as constituting the market. %hey talk about need markets Cthe diet9seeking

marketD! product markets Cthe shoe marketD! demographic markets Cthe youth marketD! and geographic

markets Cthe (hinese marketD* or they e)tend the concept to co&er &oter markets! labor markets! and

donor markets! for instance.

Higure 1.@ shos the relationship beteen the industry and the market. ellers and buyers are connected

by four flos. ellers send goods and ser&ices and communications such as ads and direct mail to the

market* in return they recei&e money and information such as customer attitudes and sales data. %he inner

loop shos an e)change of money for goods and ser&ices* the outer loop shos an e)change of

information.


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#E/ C0STOMER MAR#ETS (onsider the folloing key customer markets' consumer! business!

global! and nonprofit.

Consumer Markets (ompanies selling mass consumer goods and ser&ices such as :uices! cosmetics!

athletic shoes! and air tra&el spend a great deal of time establishing a strong brand image by de&eloping a

superior product and packaging! ensuring its a&ailability! and backing it ith engaging communications

and reliable ser&ice.

Business Markets (ompanies selling business goods and ser&ices often face ell9informed professional

buyers skilled at e&aluating competiti&e offerings. Business buyers buy goods to make or resell a product

to others at a profit. Business marketers must demonstrate ho their products ill help achie&e higher

re&enue or loer costs. $d&ertising can play a role! but the sales force! the price! and the company+s

reputation may play a greater one.

lo!al Markets (ompanies in the global marketplace must decide hich countries to enter* ho to enter

each Cas an e)porter! licenser! :oint &enture partner! contract manufacturer! or solo manufacturerD* ho to

adapt product and ser&ice features to each country* ho to price products in different countries* and ho

to design communications for different cultures. %hey face different re4uirements for buying and

disposing of property* cultural! language! legal and political differences* and currency fluctuations. Jet!

the payoff can be huge.

Non"rofit and overnmental Markets (ompanies selling to nonprofit organizations ith limited

purchasing poer such as churches! uni&ersities! charitable organizations! and go&ernment agencies need

to price carefully. 3oer selling prices affect the features and 4uality the seller can build into the offering.

Much go&ernment purchasing calls for bids! and buyers often focus on practical solutions and fa&or the

loest bid in the absence of e)tenuating factors.

MAR#ETPLACES1 MAR#ETSPACES1 AND METAMAR#ETS %he marketplace is physical! such

as a store you shop in* the marketspace is digital! as hen you shop on the Internet. Korthestern

5ni&ersity+s Mohan ahney has proposed the concept of a metamarket to describe a cluster of

complementary products and ser&ices closely related in the minds of consumers! but spread across a

di&erse set of industries.


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Metamarkets are the result of marketers packaging a system that simplifies carrying out these related

productLser&ice acti&ities. %he automobile metamarket consists of automobile manufacturers! ne and

used car dealers! financing companies! insurance companies! mechanics! spare parts dealers! ser&ice

shops! auto magazines! classified auto ads in nespapers! and auto sites on the Internet.

$ car buyer ill engage many parts of this metamarket! creating an opportunity for metamediaries to

assist him or her in mo&ing seamlessly through them. #dmund+s C.edmunds.comD lets a car buyer

find the stated features and prices of different automobiles and easily click to other sites to search for the

loest9price dealer for financing! accessories! and used cars. Metamediaries also ser&e other

metamarkets! such as home onership! parenting and baby care! and eddings.

C"re Marketing C"n%e$ts

%o understand the marketing function! e need to understand the folloing core set of concepts.

Needs1 Wants1 and Demands

eeds are the basic human re4uirements such as for air! food! ater! clothing! and shelter. ,umans also

ha&e strong needs for recreation! education! and entertainment. %hese needs become wants hen they are

directed to specific ob:ects that might satisfy the need. $ 5.. consumer needs food but may ant a /hilly

cheesesteak and an iced tea. $ person in $fghanistan needs food but may ant rice! lamb! and

carrots.Wants are shaped by our society.

Demands are ants for specific products backed by an ability to pay. Many people ant a Mercedes* only

a fe are able to buy one. (ompanies must measure not only ho many people ant their product! but

also ho many are illing and able to buy it. %hese distinctions shed light on the fre4uent criticism that

“marketers create needs” or “marketers get people to buy things they don+t ant.” Marketers do not create

needs' Keeds pree)ist marketers. Marketers! along ith other societal factors! influence ants. %hey

might promote the idea that a Mercedes ould satisfy a person+s need for social status. %hey do not!

hoe&er! create the need for social status.

ome customers ha&e needs of hich they are not fully conscious or that they cannot articulate. What

does it mean hen the customer asks for a “poerful” lan moer or a “peaceful” hotel? %he marketer

must probe further. We can distinguish fi&e types of needs'

&' tated needs C%he customer ants an ine)pensi&e car.D

(' =eal needs C%he customer ants a car hose operating cost! not initial price! is lo.D)' 5nstated needs C%he customer e)pects good ser&ice from the dealer.D

*' 0elight needs C%he customer ould like the dealer to include an onboard ;/ na&igation system.D

+' ecret needs C%he customer ants friends to see him or her as a sa&&y consumer.D


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=esponding only to the stated need may shortchange the customer.1A (onsumers did not kno much

about cellular phones hen they ere first introduced! and Kokia and #ricsson fought to shape consumer

perceptions of them. %o gain an edge! companies must help customers learn hat they ant.

%arget Markets! /ositioning! and egmentation Kot e&eryone likes the same cereal! restaurant! college! or

mo&ie. %herefore! marketers start by di&iding the market into segments. %hey identify and profile distinct

groups of buyers ho might prefer or re4uire &arying product and ser&ice mi)es by e)amining

demographic! psychographic! and beha&ioral differences among buyers.

$fter identifying market segments! the marketer decides hich present the greatest opportunitiesol&o de&elops its cars for buyers to hom safety

is a ma:or concern! positioning its &ehicles as the safest a customer can buy.

O22erings and 3rands

(ompanies address customer needs by putting forth a 4a56e $r"$"siti"n! a set of benefits that satisfy

those needs. %he intangible &alue proposition is made physical by an offering, hich can be a

combination of products! ser&ices! information! and e)periences.

$ !rand is an offering from a knon source. $ brand name such as Mc0onald+s carries many associations

in people+s minds that make up its image' hamburgers! cleanliness! con&enience! courteous ser&ice! and

golden arches. $ll companies stri&e to build a brand image ith as many strong! fa&orable! and uni4ue

brand associations as possible.

Va56e and Satis2a%ti"n

%he buyer chooses the offerings he or she percei&es to deli&er the most value, the sum of the tangible and

intangible benefits and costs to her. >alue! a central marketing concept! is primarily a combination of

4uality! ser&ice! and price C4spD! called the customer value triad . >alue perceptions increase ith 4uality

and ser&ice but decrease ith price.

We can think of marketing as the identification! creation! communication! deli&ery! and monitoring of

customer &alue. !atisfaction reflects a person+s :udgment of a product+s percei&ed performance in

relationship to e)pectations. If the performance falls short of e)pectations! the customer is disappointed.

If it matches e)pectations! the customer is satisfied. If it e)ceeds them! the customer is delighted.

C"m$an7 Orientati"n T"8ard the Market$5a%e

;i&en these ne marketing realities! hat philosophy should guide a company+s marketing efforts?

Increasingly! marketers operate consistent ith the holistic marketing concept. 3et+s first re&ie the

e&olution of earlier marketing ideas.

The Pr"d6%ti"n C"n%e$t


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%he $r"d6%ti"n %"n%e$t is one of the oldest concepts in business. It holds that consumers prefer products

that are idely a&ailable and ine)pensi&e. Managers of production9oriented businesses concentrate on

achie&ing high production efficiency! lo costs! and mass distribution. %his orientation makes sense in

de&eloping countries such as (hina! here the largest /( manufacturer! 3egend Cprincipal oner of

3eno&o ;roupD! and domestic appliances giant ,aier take ad&antage of the country+s huge and

ine)pensi&e labor pool to dominate the market. Marketers also use the production concept hen they

ant to e)pand the market.

The Pr"d6%t C"n%e$t

%he $r"d6%t %"n%e$t proposes that consumers fa&or products offering the most 4uality! performance! or

inno&ati&e features. ,oe&er! managers are sometimes caught in a lo&e affair ith their products. %hey

might commit the “better9mousetrap” fallacy! belie&ing a better product ill by itself lead people to beat a

path to their door. $ ne or impro&ed product ill not necessarily be successful unless it+s priced!

distributed! ad&ertised! and sold properly.

The Se55ing C"n%e$t

%he se55ing %"n%e$t holds that consumers and businesses! if left alone! on+t buy enough of the

organization+s products. It is practiced most aggressi&ely ith unsought goods


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Without 4uestion! the trends and forces that ha&e defined the first decade of the @1st century are leading

business firms to a ne set of beliefs and practices. “Marketing Memo' Marketing =ight and Wrong”

suggests here companies go rong


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The Marketing Resear%h Pr"%ess

#ffecti&e marketing research follos the si) steps $merican $irlines C$$D as one of the first companies

to install phone handsets on its planes. Ko it+s re&ieing many ne ideas! especially to cater to its first9

class passengers on &ery long flights! mainly businesspeople hose high9priced tickets pay most of the

freight. $mong these ideas are' C1D an Internet connection primarily for e9mail but ith some limited

access to Web pages! C@D @ channels of satellite cable %>! and C8D a 29(0 audio system that lets each

passenger create a customized in9flight play list. %he marketing research manager as assigned to

in&estigate ho first9class passengers ould rate these ser&ices! specifically the Internet connection! and

ho much e)tra they ould be illing to pay for it. One source estimates re&enues of N62 billion from in9

flight Internet access o&er 12 years! if enough first9class passengers paid N@. $$ could thus reco&er its

costs in a reasonable time. Making the connection a&ailable ould cost the airline N2!222 per plane.

Ste$ &: De2ine the Pr";5em1 the De%isi"n A5ternati4es1 and the Resear%h O;


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long9term goodill ill this ser&ice add to $merican $irlines+ image? CD ,o important is Internet

ser&ice to first9class passengers relati&e to other ser&ices! such as a poer plug or enhanced

entertainment?

Kot all research pro:ects can be this specific. ome research is exploratory


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desires that might not surface in any other form of research. Hirms such as Hu:itsu 3aboratories! ,erman

Miller! IBM! Intel! teelcase! and Gero) ha&e embraced ethnographic research to design breakthrough

products. ,ere are three specific e)amples.

= Bank of $merica+s ethnographic research that folloed female baby boomers at home and hile they

shopped yielded to insights


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$irlines might prepare its on sur&ey instrument to gather the information it needs! or it might add

4uestions to an omnibus sur&ey that carries the 4uestions of se&eral companies! at a much loer cost. It

can also pose the 4uestions to an ongoing consumer panel run by itself or another company. It may do a

mall intercept study by ha&ing researchers approach people in a shopping mall and ask them 4uestions.

$s e+ll discuss in more detail later in this chapter! many marketers are taking their sur&eys online here

they can easily de&elop! administer! and collect e9mail and Web9based 4uestionnaires.

,oe&er they conduct their sur&eys


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=##$=(, IK%=5M#K% Marketing researchers ha&e a choice of three main research instruments in

collecting primary data' 4uestionnaires! 4ualitati&e measures! and technological de&ices.

&uestionnaires $ 6esti"nnaire consists of a set of 4uestions presented to respondents. Because of its

fle)ibility! it is by far the most common instrument used to collect primary data. =esearchers need to

carefully de&elop! test! and debug 4uestionnaires before administering them on a large scale. %he form!

ording! and se4uence of the 4uestions can all influence the responses. #losed$end %uestions specify all

the possible ansers and pro&ide ansers that are easier to interpret and tabulate. &pen$end %uestions

allo respondents to anser in their on ords and often re&eal more about ho people think. %hey are

especially useful in e)ploratory research!here the researcher is looking for insight into ho people think

rather than measuring ho many people think a certain ay.

&ualitative Measures ome marketers prefer more 4ualitati&e methods for gauging consumer opinion!

because consumer actions don+t alays match their ansers to sur&ey 4uestions. 'ualitative research

techni%ues are relati&ely unstructured measurement approaches that permit a range of possible responses.

%heir &ariety is limited only by the creati&ity of the marketing researcher. Because of the freedom it

affords both researchers in their probes and consumers in their responses! 4ualitati&e research can often be

an especially useful first step in e)ploring consumers+ brand and product perceptions. It is indirect in

nature! so consumers may be less guarded and re&eal more about themsel&es in the process.

Rualitati&e research does ha&e its drabacks.Marketers must temper the in9depth insights that emerge

ith the fact that the samples are often &ery small and may not necessarily generalize to broader

populations. $nd different researchers e)amining the same 4ualitati&e results may dra &ery different

conclusions.

&' 'ord associations


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*' Brand "ersonification


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(' $am"le si,e. 0ow man% "eo"le should we surve%/ 3arge samples gi&e more reliable results! but it+s

not necessary to sample the entire target population to achie&e reliable results. amples of less than 1

percent of a population can often pro&ide good reliability! ith a credible sampling procedure.

)' $am"ling "rocedure. 0ow should we choose the res"ondents/

/robability sampling allos marketers to calculate confidence limits for sampling error and makes the

sample more representati&e. %hus! after choosing the sample! marketers could conclude that “the inter&al

fi&e to se&en trips per year has chances in 122 of containing the true number of trips taken annually by

first9class passengers flying beteen (hicago and %okyo.”

(OK%$(% M#%,O0 Ko the marketing researcher must decide ho to contact the sub:ects' by mail!

by telephone! in person! or online.

Mail Contacts %he mail %uestionnaire is one ay to reach people ho ould not gi&e personal inter&ies

or hose responses might be biased or distorted by the inter&ieers. Mail 4uestionnaires re4uire simple

and clearly orded 4uestions. 5nfortunately! the response rate is usually lo or slo.

-ele"hone Contacts Telephone interviewing is a good method for gathering information 4uickly* the

inter&ieer is also able to clarify 4uestions if respondents do not understand them. Inter&ies must be

brief and not too personal. $lthough the response rate has typically been higher than for mailed

4uestionnaires! telephone inter&ieing in the 5nited tates is getting more difficult because of

consumers+ groing antipathy toard telemarketers.

In late @228! (ongress passed legislation alloing the Hederal %rade (ommission to restrict telemarketing

calls through its “0o Kot (all” registry. By mid9@212! consumers had registered o&er @22 million phone

numbers. Marketing research firms are e)empt from the ruling! but gi&en the increasingly idespread

resistance to telemarketing! it undoubtedly reduces the effecti&eness of telephone sur&eys as a marketing

research method in the 5nited tates.

In other parts of the orld! such restricti&e legislation does not e)ist. Because mobile phone penetration

in $frica has risen from :ust 1 in 2 people in @222 to almost one9third of the population in @22A! cell

phones in $frica are used to con&ene focus groups in rural areas and to interact &ia te)t messages.

(ersonal Contacts "ersonal interviewing is the most &ersatile method. %he inter&ieer can ask more

4uestions and record additional obser&ations about the respondent! such as dress and body language. $t

the same time! hoe&er! personal inter&ieing is the most e)pensi&e method! is sub:ect to inter&ieer bias! and re4uires more administrati&e planning and super&ision. /ersonal inter&ieing takes to forms.

In arranged interviews! marketers contact respondents for an appointment and often offer a small

payment or incenti&e. In intercept interviews, researchers stop people at a shopping mall or busy street

corner and re4uest an inter&ie on the spot. Intercept inter&ies must be 4uick! and they run the risk of

including non probability samples.


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Online Contacts $n approach of increasing importance! the Internet offers many ays to do research. $

company can embed a 4uestionnaire on its Web site and offer an incenti&e to anser it! or it can place a

banner on a fre4uently &isited site such as Jahoo-! in&iting people to anser some 4uestions and possibly

in a prize. Online product testing! in hich companies float trial balloons for ne products! is also

groing and pro&iding information much faster than traditional ne product marketing research

techni4ues. ,ere is ho one small business is using the Internet to conduct research on ne9product

de&elopment.

Marketers can also host a real9time consumer panel or &irtual focus group or sponsor a chat room! bulletin

board! or blog and introduce 4uestions from time to time. %hey can ask customers to brainstorm or ha&e

folloers of the company on %itter rate an idea. Online communities and netorks of customers ser&e

as a resource for a ide &ariety of companies. Insights from "raft sponsored online communities helped

the company de&elop its popular line of 1229calorie snacks. ,ere are to other e)amples.

= 0el Monte tapped into its 229member! handpicked online community called “I 3o&e My 0og” hen it

as considering a ne breakfast treat for dogs. %he consensus re4uest as for something ith a bacon9

and9egg taste and an e)tra dose of &itamins and minerals. (ontinuing to ork ith the online community

throughout the product de&elopment! the company introduced fortified “nausage Breakfast Bites” in half

the time usually re4uired to launch a ne product.

= Inter(ontinental ,otel ;roups uses both sur&eys and communities to gather data on customer

satisfaction. Online sur&eys pro&ide actionable and speedy results to correct customer ser&ice issues* the

online community pro&ides a sounding board for more in9depth! longerterm research ob:ecti&es. Online

research as estimated to make up 88 percent of all sur&ey9based research in @22Q! and Internet9based

4uestionnaires also accounted for nearly one9third of 5.. spending on market research sur&eys in the

same year. %here are many other means to use the Internet as a research tool. through the Web site and

mo&e to other sites. It can post different prices! use different headlines! and offer different product

features on different Web sites or at different times to learn the relati&e effecti&eness of its offerings.

Jet! as popular as online research methods are! smart companies are choosing to use them to augment

rather than replace more traditional methods. $t "raft Hoods! online research is a supplement to

traditional research! said eth 0iamond! director of consumer insights and strategy. “Online is not a

solution in and of itself to all of our business challenges!” he said! “but it does e)pand our toolkit.”81%here are a number of pros and cons to online research.8@ ,ere are some ad&antages'

= Online research is inex"ensive1 $ typical e9mail sur&ey can cost beteen @2 percent and 2 percent less

than hat a con&entional sur&ey costs! and return rates can be as high as 2 percent.

= Online research is fast1 Online sur&eys are fast because the sur&ey can automatically direct respondents

to applicable 4uestions and transmit results immediately. One estimate says an online sur&ey can generate


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6 percent to A2 percent of the targeted response in A hours! compared to a telephone sur&ey that can

re4uire 62 days to obtain 12 inter&ies.

= (eo"le tend to !e honest and thoughtful online1 /eople may be more open about their opinions hen

they can respond pri&ately and not to another person hom they feel might be :udging them! especially

on sensiti&e topics Csuch as! “ho often do you bathe or shoer?”D.

Because they choose hen and here they take the sur&ey and ho much time to de&ote to each 4uestion!

they may be more rela)ed! introspecti&e! and candid.

= Online research is versatile1 Increased broadband penetration offers online research e&en more

fle)ibility and capabilities. Hor instance! &irtual reality softare lets &isitors inspect 890 models of

products such as cameras! cars! and medical e4uipment and manipulate product characteristics. #&en at

the basic tactile le&el! online sur&eys can make ansering a 4uestionnaire easier and more fun than paper9

and9pencil &ersions. Online community blogs allo customer participants to interact ith each other.

ome disad&antages include'

= $am"les can !e small and skewed1 ome 2 percent of households ere ithout broadband Internet

access in the 5nited tates in @22* the percentage is e&en higher among loer income groups! in rural

areas! and in most parts of $sia! 3atin $merica! and (entral and #astern #urope! here socioeconomic

and education le&els also differ.88 $lthough it+s certain that more and more people ill go online! online

market researchers must find creati&e ays to reach population segments on the other side of the “digital

di&ide.” One option is to combine offline sources ith online findings. /ro&iding temporary Internet

access at locations such as malls and recreation centers is another strategy. ome research firms use

statistical models to fill in the gaps in market research left by offline consumer segments.

= Online "anels and communities can suffer from excessive turnover1 Members may become bored ith

the company+s efforts and flee. Or perhaps e&en orse! they may stay but only halfheartedly participate.

/anel and community organizers are taking steps to address the 4uality of the panel and the data they

pro&ide by raising recruiting standards! donplaying incenti&es! and carefully monitoring participation

and engagement le&els. Ke features! e&ents! and other acti&ities must be constantly added to keep

members interested and engaged.

= Online market research can suffer from technological "ro!lems and inconsistencies1 /roblems can

arise ith online sur&eys because broser softare &aries. %he Web designer+s final product may look &ery different on the research sub:ect+s screen.

Online researchers ha&e also begun to use te)t messaging in &arious ays


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%he data collection phase of marketing research is generally the most e)pensi&e and the most prone to

error. Marketers may conduct sur&eys in homes! o&er the phone! &ia the Internet! or at a central

inter&ieing location like a shopping mall. Hour ma:or problems arise in sur&eys. ome respondents ill

be aay from home or otherise inaccessible and must be contacted again or replaced. Other respondents

ill refuse to cooperate. till others ill gi&e biased or dishonest ansers. Hinally! some inter&ieers ill

be biased or dishonest.

Internationally! one of the biggest obstacles to collecting information is the need to achie&e consistency.

8Q 3atin $merican respondents may be uncomfortable ith the impersonal nature of the Internet and need

interacti&e elements in a sur&ey so they feel they+re talking to a real person.

=espondents in $sia! on the other hand! may feel more pressure to conform and may therefore not be as

forthcoming in focus groups as online. ometimes the solution may be as simple as ensuring the right

language is used.

Ste$ *: Ana57@e the In2"rmati"n

%he ne)t9to9last step in the process is to e)tract findings by tabulating the data and de&eloping summary

measures. %he researchers no compute a&erages and measures of dispersion for the ma:or &ariables and

apply some ad&anced statistical techni4ues and decision models in the hope of disco&ering additional

findings. %hey may test different hypotheses and theories! applying sensiti&ity analysis to test

assumptions and the strength of the conclusions.

Ste$ +: Present the !indings

$s the last step! the researcher presents findings rele&ant to the ma:or marketing decisions facing

management. =esearchers increasingly are being asked to play a more proacti&e! consulting role in

translating data and information into insights and recommendations. %hey+re also considering ays to

present research findings in as understandable and compelling a fashion as possible.

Ste$ ,: Make the De%isi"n

%he $merican $irlines managers ho commissioned the research need to eigh the e&idence. If their

confidence in the findings is lo! they may decide against introducing the in9flight Internet ser&ice. If

they are predisposed to launching the ser&ice! the findings support their inclination. %hey may e&en

decide to study the issues further and do more research. %he decision is theirs! but rigorously done

research pro&ides them ith insight into the problemome organizations use marketing decision support systems to help their marketing managers make better

decisions. MI%+s ohn 3ittle defines a marketing de%isi"n s6$$"rt s7stem MDSSB as a coordinated

collection of data! systems! tools! and techni4ues! ith supporting softare and hardare! by hich an

organization gathers and interprets rele&ant information from business and en&ironment and turns it into a

basis for marketing action. Once a year! Marketing ews lists hundreds of current marketing and sales


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softare programs that assist in designing marketing research studies! segmenting markets! setting prices

and ad&ertising budgets! analyzing media! and planning sales force acti&ity.

C"m$"nents "2 a M"dern Marketing In2"rmati"n S7stem

%he ma:or responsibility for identifying significant marketplace changes falls to the company+s

marketers.Marketers ha&e to ad&antages for the task' disciplined methods for collecting information!

and time spent interacting ith customers and obser&ing competitors and other outside groups. ome

firms ha&e marketing information systems that pro&ide rich detail about buyer ants! preferences! and

beha&ior.

Marketers also ha&e e)tensi&e information about ho consumption patterns &ary across and ithin

countries.

(ompanies ith superior information can choose their markets better! de&elop better offerings! and

e)ecute better marketing planning. #&ery firm must organize and distribute a continuous flo of

information to its marketing managers.

$ marketing in2"rmati"n s7stem MISB consists of people! e4uipment! and procedures to gather! sort!

analyze! e&aluate! and distribute needed! timely! and accurate information to marketing decision makers.

It relies on internal company records! marketing intelligence acti&ities! and marketing research. %he

company+s marketing information system should be a mi)ture of hat managers thinks they need! hat

they really need! and hat is economically feasible. $n internal MI committee can inter&ie a cross9

section of marketing managers to disco&er their information needs.

Interna5 Re%"rds

%o spot important opportunities and potential problems! marketing managers rely on internal reports of

orders! sales! prices! costs! in&entory le&els! recei&ables! and payables.

The Ordert"Pa7ment C7%5e

%he heart of the internal records system is the order9to9payment cycle. ales representati&es! dealers! and

customers send orders to the firm. %he sales department prepares in&oices! transmits copies to &arious

departments! and back9orders out9of9stock items. hipped items generate shipping and billing documents

that go to &arious departments. Because customers fa&or firms that can promise timely deli&ery!

companies need to perform these steps 4uickly and accurately. Many use the Internet and e)tranets to

impro&e the speed! accuracy! and efficiency of the order9to9payment cycle.Hossil ;roup Hossil ;roup $ustralia designs and distributes accessories and apparel globally. Its account

e)ecuti&es lacked the latest information about pricing and in&entory hile taking holesale orders. ,igh

demand items ere often out of stock! creating problem for retailers. $fter the firm deployed a mobile

sales solution that connected account e)ecuti&es ith current in&entory data! the number of sales tied up


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in back orders fell A2 percent. %he company can no pro&ide retailers ith actual in&entory le&els and

ship orders in hours instead of days.

Sa5es In2"rmati"n S7stems

Marketing managers need timely and accurate reports on current sales. Walmart operates a sales and

in&entory data arehouse that captures data on e&ery item for e&ery customer! e&ery store! e&ery day and

refreshes it e&ery hour. (onsider the e)perience of /anasonic.

/anasonic /anasonic makes digital cameras! plasma tele&isions! and other consumer electronics. $fter

missing re&enue goals! the company decided to adopt a &endor9managed in&entory solution. In&entory

distribution then came in line ith consumption! and a&ailability of products to customers :umped from

62 percent to percent. %he a&erage eeks that product supply sat in /anasonic+s channels ent from @

eeks to :ust eeks ithin a year! and unit sales of the targeted plasma tele&ision rose from @2!222 to

appro)imately 122!222. Best Buy! the initial retailer co&ered by the &endor9managed in&entory model!

has since ele&ated /anasonic from a %ier 8 upplier to a %ier 1 “;o9%o” Brand for plasma tele&isions.

(ompanies that make good use of “cookies!” records of Web site usage stored on personal brosers! are

smart users of targeted marketing. Many consumers are happy to cooperate' $ recent sur&ey shoed that

percent of indi&iduals agreed cookies are important to them hen using the Internet. Kot only do they

not delete cookies! but they also e)pect customized marketing appeals and deals once they accept them.

(ompanies must carefully interpret the sales data! hoe&er! so as not to dra the rong conclusions.

Michael 0ell ga&e this illustration' “If you ha&e three yello Mustangs sitting on a dealer+s lot and a

customer ants a red one! the salesman may be really good at figuring out ho to sell the yello

Mustang. o the yello Mustang gets sold! and a signal gets sent back to the factory that! hey! people

ant yello Mustangs.”

Data;ases1 Data Wareh"6sing1 and Data Mining

(ompanies organize their information into customer! product! and salesperson databases


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to yield still9deeper insights. 5sing in9house technology! Wells Hargo can track and analyze e&ery bank

transaction made by its 12 million retail customers


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ne products. ome ere using ;race aterproofing materials to soundproof their cars and patch boots

and tents. e&en ne9product ideas emerged! orth millions in sales.

= Motivate distri!utors2 retailers2 and other intermediaries to "ass along im"ortant intelligence1

Marketing intermediaries are often closer to the customer and competition and can offer helpful insights.

(on$gra has initiated a study ith some of its retailers such as afeay! "roger! and Walmart to study

ho and hy people buy its foods. Hinding that shoppers ho bought their Or&ille =edenbacher and $ct

II brands of popcorn tended to also buy (oke! (on$gra orked ith the retailers to de&elop in9store

displays for both products. (ombining retailers+ data ith its on 4ualitati&e insights! (on$gra learned

that many mothers sitched to time9sa&ing meals and snacks hen school started. It launched its

“easons of Mom” campaign to help grocers ad:ust to seasonal shifts in household needs.

= 0ire external ex"erts to collect intelligence1 Many companies hire specialists to gather marketing

intelligence.18 er&ice pro&iders and retailers send mystery shoppers to their stores to assess cleanliness

of facilities! product 4uality! and the ay employees treat customers. ,ealth care facilities+ use of mystery

patients has led to impro&ed estimates of ait times! better e)planations of medical procedures! and less9

stressful programming on the aiting room %>.

= Network internall% and externall%1 %he firm can purchase competitors+ products! attend open houses

and trade shos! read competitors+ published reports! attend stockholders+ meetings! talk to employees!

collect competitors+ ads! consult ith suppliers! and look up nes stories about competitors.

= $et u" a customer advisor% "anel1 Members of ad&isory panels might include the company+s largest!

most outspoken! most sophisticated! or most representati&e customers. Hor e)ample! ;la)omith"line

sponsors an online community de&oted to eight loss and says it is learning far more than it could ha&e

gleamed from focus groups on topics from packaging its eight loss pill to here to place in9store

marketing.

= -ake advantage of government3related data resources1 %he 5.. (ensus Bureau pro&ides an in9depth

look at the population sings! demographic groups! regional migrations! and changing family structure of

the estimated 82!2!6@ people in the 5nited tates Cas of uly 1! @22AD. (ensus marketer Kielsen

(laritas cross9references census figures ith consumer sur&eys and its on grassroots research for clients

such as %he Weather (hannel! BMW! and o&ereign Bank. /artnering ith “list houses” that pro&ide

customer phone and address information! Kielsen (laritas can help firms select and purchase mailing listsith specific clusters.

= (urchase information from outside research firms and vendors1 Well9knon data suppliers include

firms such as the $.(. Kielsen (ompany and Information =esources Inc. %hey collect information about

product sales in a &ariety of categories and consumer e)posure to &arious media. %hey also gather

consumer9panel data much more cheaply than marketers manage on their on. Biz8Q2 and its online


24/27


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;i&en the speed of the Internet! it is important to act 4uickly on information gleaned online. ,ere are to

companies that benefited from a proacti&e approach to online information'

= When ticket broker tub ,ub detected a sudden surge of negati&e sentiment about its brand after

confusion arose about refunds for a rain9delayed Jankees7=ed o) game! it :umped in to offer

appropriate discounts and credits. %he director of customer ser&ice obser&ed! “%his EepisodeF is a canary

in a coal mine for us.”

= When (oke+s monitoring softare spotted a %itter post that ent to 12!222 folloers from an upset

consumer ho couldn+t redeem a prize from a My (oke reards program! (oke 4uickly posted an

apology on his %itter profile and offered to help resol&e the situation. $fter the consumer got the prize!

he changed his %itter a&atar to a photo of himself holding a (oke bottle.

G5";a5 marketing

%he process of conceptualizing and then con&eying a final product or ser&ice orldide ith the hopes of

reaching the international marketing community. /roper global marketing has the ability to catapult a

company to the ne)t le&el! if they do it correctly. 0ifferent strategies are implemented based on

the region the company is marketing to. Hor e)ample! the menu at Mc0onaldTs &aries based on

the location of the restaurant. %he company focuses on marketing popular items ithin the country.

;lobal marketing is especially important to companies that pro&ide products or ser&ices that ha&e a

uni&ersal demand such as automobiles and food.

;lobal Marketing in&ol&es marketing acti&ities by firms that do each of the folloing'

• !tandardi(e their marketing programs) $llo marketing efforts to seamlessly operate across

country borders. tandardization ensures products! promotions! price and channel structure

cooperate together to increase opportunity and effecti&ely meet the needs of global customers.

• #oordinate across markets) Businesses eliminate cost inefficiencies and reduce duplicate

business efforts of their nationalLregional di&isions

• "ractice *lobal +ntegration) %his in&ol&es playing a role in many different orld markets that

are rele&ant to the business. Integrating firm operations means some markets use the resources of

others to achie&e success and &ice9&ersa. It also in&ol&es balancing responses to competiti&e

attacks in all areas.

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The *lobal "erspective) "no that standardizing a marketing program does not necessarily mean that all

marketing efforts and marketing strategy ill be the same. %he ;lobal /erspecti&e is the idea that hen

firms operate in different nations! they commit to de&elop and change plans for the company on a

country9by9country or region9by9region basis. #&en though plans change! there are still common factors

in strategy and practice that allo for some form of standardization. “%he performance of business

acti&ities designed to plan! price! promote and direct the flo of a company+s goods and serices to

consumers or users in more than one nation for a profit”

Ind6stria5 marketing

%he Industrial products market consist of all the organisation that ac4uire goods and ser&ices used in

production of other products or ser&ices used that are sold or supplied to others. Kot only are the products

more technically inclined there e)ists a closer relationship beteen the customer supplier.

,ence! marketing plays a key role in the success of an Industrial product. $s the business buyers are more

sophisticated! the marketing capabilities of the Industrial marketers must be upto the market e)pectations.

%hey must be aare of the market segmentation concepts pertaining to industrial products! the buying

process as ell as the decision making process of the buying organisation. %hey must keep track of client

ob:ecti&es! competiti&e de&elopment! social responsibilities and regulatory de&elopments.

$ product centered person ho technically centered only cannot be successful. Many organisation today

tend to be technically inclined or orse still financially inclined Cinterested greatly in cost cuttingD hich

leads to an organisation ha&ing e)cellent products but no market.

%he marketing department of the organisation ensures customer satisfaction and portrays the organisation

and its products to the orld. (ustomer education alone cannot ork ithout the support of the designers!

technical e)pert. $nd most essentially the supporti&e top management”

%oday industrial marketing also encompasses the internet marketing. %here are online marketing ebsites

hich gi&e a platform for buyers and sellers. We can find electric motors! polycarbonate resin tyres and a


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hole range of other products offered by the suppliers for sale.

%his kind of sites! are+ called B@B Cbusiness to businessD ebsites. It eliminates the lengthy procedures of

negotiations and background checks of companies etc. before the Industrial product is purchased. One

such company is alibaba.com based in (hina ith a turno&er of o&er N11 Million.

(ritical changes ha&e occurred in Industrial markets o&er the past decade. Business firms are demanding

higher product 4uality from their suppliers! faster deli&ery! better ser&ice and loer prices. %he Industrial

firms need to speed up their product de&elopment process because of shorter product life cycles. %hey

also need to find better ays to distribute and promote their product at loer cost. %he Industrial

marketing concepts ould help marketers to achie&e their goal.

%he marketing process facilitates an e)change process beteen customers and company. What differs

beteen the different types of organisation is not the need for an e)change process! but the nature of hat

is e)changed beteen the organisation and its customers. %he customers are nothing but the markets. %he

differences beteen the different types of Industrial markets are one of the reasons hy an increasing

number of organisations are turning toards marketing.

mm notes from kotler

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