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7/30/2019 kotler ppt 201-300
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Personality and SelfPersonality and Self--ConceptConcept
PersonalityPersonality
Brand personalityBrand personality
SinceritySincerity
ExcitementExcitement
CompetenceCompetence
SophisticationSophistication
RuggednessRuggedness
SelfSelf--conceptconcept
Persons actual selfPersons actual self--conceptconcept
Ideal selfIdeal self--conceptconcept
Others selfOthers self--conceptconcept
Influencing Buyer Behavior
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Psychological FactorsPsychological Factors
MotivationMotivation
MotiveMotive
Freuds TheoryFreuds Theory
LadderingLaddering
Projective techniquesProjective techniques
Influencing Buyer Behavior
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Ernest Dichters research found:Ernest Dichters research found:
Consumers resist prunes because prunes areConsumers resist prunes because prunes arewrinkled looking and remind people of old age.wrinkled looking and remind people of old age.
Men smoke cigars as an adult version of thumbMen smoke cigars as an adult version of thumbsucking.sucking.
Women prefer vegetable shortening to animalWomen prefer vegetable shortening to animalfats because the latter arouse a sense of guiltfats because the latter arouse a sense of guilt
over killing animals.over killing animals.
Women dont trust cake mixes unless theyWomen dont trust cake mixes unless theyrequire adding an egg, because this helps themrequire adding an egg, because this helps themfeel they are giving birth.feel they are giving birth.
Influencing Buyer Behavior
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Maslows TheoryMaslows Theory
Influencing Buyer Behavior
Figure 7.3:MaslowsHierarchy of
Needs
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Herzbergs TheoryHerzbergs Theory
DissatisfiersDissatisfiers
SatisfiersSatisfiers
Influencing Buyer Behavior
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PerceptionPerception
Selective attentionSelective attention
People are more likely to notice stimuli thanPeople are more likely to notice stimuli thanrelate to a current needrelate to a current need
People are more likely to notice stimuli thanPeople are more likely to notice stimuli thanthey anticipatethey anticipate
People are more likely to notice stimuliPeople are more likely to notice stimuliwhose deviations are large in relation to thewhose deviations are large in relation to thenormal size of the stimulinormal size of the stimuli
Selective distortionSelective distortion
Selective retentionSelective retention
Influencing Buyer Behavior
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LearningLearning
DriveDrive
CuesCues
DiscriminationDiscrimination
Beliefs and AttitudesBeliefs and Attitudes
BeliefBelief
Spreading activationSpreading activation
AttitudeAttitude
Influencing Buyer Behavior
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The purchase of a product from a Company AThe purchase of a product from a Company Aturns out to be a positive experience. You areturns out to be a positive experience. You are
looking for a loosely related product, which is alsolooking for a loosely related product, which is also
offered by Company A. Do you assume that youoffered by Company A. Do you assume that you
will again have a positive experience withwill again have a positive experience with
Company As offering, or do youCompany As offering, or do you
look for the best of breed,look for the best of breed,
regardless of whichregardless of which
company offers it?company offers it?
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Buying RolesBuying Roles
InitiatorInitiator
InfluencerInfluencer
DeciderDecider
BuyerBuyer UserUser
Buying behaviorBuying behavior
The Buying Decision Process
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Table 7.3: Four Types of Buying Behavior
High InvolvementHigh Involvement Low InvolvementLow Involvement
Significant DifferencesSignificant Differencesbetween Brandsbetween Brands
Complex buyingComplex buyingbehaviorbehavior
VarietyVariety--seekingseekingbuying behaviorbuying behavior
Few Differences betweenFew Differences betweenBrandsBrands
DissonanceDissonance--reducingreducingbuying behaviorbuying behavior
Habitual buyingHabitual buyingbehaviorbehavior
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Complex Buying BehaviorComplex Buying Behavior
DissonanceDissonance--Reducing Buyer BehaviorReducing Buyer Behavior
Habitual Buying BehaviorHabitual Buying Behavior
VarietyVariety--Seeking Buying BehaviorSeeking Buying Behavior
The Buying Decision Process
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How marketers learn about the stages:How marketers learn about the stages:
Introspective methodIntrospective method
Retrospective methodRetrospective method
Prospective methodProspective method
Prescriptive methodPrescriptive method
Understanding by mapping the customersUnderstanding by mapping the customers
Consumption systemConsumption system
Customer activity cycleCustomer activity cycle
Customer scenarioCustomer scenario
MetamarketMetamarket
MetamediariesMetamediaries
Stages in the BuyingDecision Process
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The Edmunds.com home page shows the variety ofThe Edmunds.com home page shows the variety ofservices this Web company offers those shoppingservices this Web company offers those shoppingfor a car.for a car.
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Problem recognitionProblem recognition
Information searchInformation search
Personal sourcesPersonal sources
Commercial sourcesCommercial sources
Public sourcesPublic sources
Experiential sourcesExperiential sources
Stages of the BuyingDecision Process
Figure 7.4:Five-StageModel of theConsumerBuyingProcess
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Figure 7.5: Successive Sets Involved in CustomerDecision Making
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Evaluation of AlternativesEvaluation of Alternatives
Potential Attributes of interestPotential Attributes of interest
CamerasCameras
HotelsHotels
MouthwashMouthwash
TiresTires
Brand beliefsBrand beliefs
Brand imageBrand image
The Buying Decision Process
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Table 7.4: A Consumers Brand Beliefsabout Computers
ComputerComputer AttributeAttribute
MemoryMemoryCapacityCapacity
GraphicsGraphicsCapabilityCapability
Size andSize andWeightWeight PricePrice
AA 1010 88 66 44
BB 88 99 88 33
CC 66 88 1010 55
DD 44 33 77 88
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Strategies designed to stimulate interest in aStrategies designed to stimulate interest in a
computercomputer
Redesign the computerRedesign the computer
Alter beliefs about the brandAlter beliefs about the brand
Alter beliefs about competitors brandsAlter beliefs about competitors brands
Alter the importance weightsAlter the importance weights
Call attention to neglected attributesCall attention to neglected attributes
Shift the buyers ideasShift the buyers ideas
The Buying Decision Process
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Figure 7.9:Value addsfor IBMcustomers in
the globalelectronicnetworkingcapabilitymarket space
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Chapter 8Chapter 8Analyzing Business MarketsAnalyzing Business Markets
and Business Buyingand Business BuyingBehaviorBehaviorbyby
PowerPoint byPowerPoint by
Milton M. PressleyMilton M. Pressley
University of New OrleansUniversity of New Orleans
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Kotler onMarketingMany businessesMany businesses
are wiselyare wisely
turning theirturning their
suppliers andsuppliers and
distributors intodistributors intovalued partners.valued partners.
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Chapter Objectives In this chapter, we focus on six questions:In this chapter, we focus on six questions:
What is the business market, and how does itWhat is the business market, and how does itdiffer from the consumer market?differ from the consumer market?
What buying situations do organizational buyersWhat buying situations do organizational buyersface?face?
Who participates in the business buying process?Who participates in the business buying process?
What are the major influences on organizationalWhat are the major influences on organizationalbuyers?buyers?
How do business buyers make their decisions?How do business buyers make their decisions?
How do institutions and government agencies doHow do institutions and government agencies dotheir buying?their buying?
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What is OrganizationalBuying?
Organizational buyingOrganizational buying
The business market versus the consumerThe business market versus the consumer
marketmarket
Business marketBusiness market
Fewer buyersFewer buyers
Larger buyersLarger buyers
Close supplierClose supplier--customer relationshipcustomer relationship
Geographically concentrated buyersGeographically concentrated buyers
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What is OrganizationalBuying?
Derived demandDerived demand
Inelastic demandInelastic demand
Fluctuating demandFluctuating demand
Professional purchasingProfessional purchasing
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Blue Shield of Californias mylifepathBlue Shield of Californias mylifepath
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What is OrganizationalBuying?
Several buying influencesSeveral buying influences
Multiple sales callsMultiple sales calls
Directed purchasingDirected purchasing
ReciprocityReciprocity
LeasingLeasing
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If you were tasked with marketing aIf you were tasked with marketing a
product or service to an organization,product or service to an organization,
would you attempt to initially contact thewould you attempt to initially contact the
purchasing departmentpurchasing department, or, orpotentialpotential
usersusers of your companys offerings? Why?of your companys offerings? Why?Would the product youWould the product you
were selling make awere selling make a
difference? Why?difference? Why?
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What is OrganizationalBuying?
Buying SituationsBuying Situations
Straight rebuyStraight rebuy
Modified rebuyModified rebuy
New TaskNew Task
Systems Buying and SellingSystems Buying and Selling Systems buyingSystems buying
Turnkey solutionTurnkey solution
Systems sellingSystems selling
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What are some of the benefits to anWhat are some of the benefits to an
organization that can be derivedorganization that can be derived
from afrom asingle source solutionsingle source solution, or a, or a
systems buyingsystems buying arrangement with aarrangement with a
prime contractor? What are some ofprime contractor? What are some of
the potential pitfalls? Whatthe potential pitfalls? What
can the company do tocan the company do to
protect itself fromprotect itself from
these hazards?these hazards?
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Participants in the BusinessBuying Process
The Buying CenterThe Buying Center
InitiatorsInitiators
UsersUsers
InfluencersInfluencers
DecidersDeciders
ApproversApprovers
BuyersBuyers
GatekeepersGatekeepers
Key buying influencersKey buying influencers
Multilevel inMultilevel in--depth sellingdepth selling
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Figure 8-1: Major Influences onIndustrial Buying Behavior
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Major Influences on BuyingDecisions
Environmental FactorsEnvironmental Factors Organizational FactorsOrganizational Factors
PurchasingPurchasing--Department UpgradingDepartment Upgrading
CrossCross--Functional RolesFunctional Roles
Centralized PurchasingCentralized Purchasing
Decentralized Purchasing of SmallDecentralized Purchasing of Small--TicketTicketItemsItems
Internet PurchasingInternet Purchasing
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The eThe e--hub Plastics.com home page offers buyers andhub Plastics.com home page offers buyers andsellers of plastics a marketplace plus news andsellers of plastics a marketplace plus news andinformationinformation
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Covisints Web site offers both services andCovisints Web site offers both services andinformationinformation
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Major Influences on BuyingDecisions
Other Organizational FactorsOther Organizational Factors
LongLong--Term ContractsTerm Contracts
VendorVendor--managed inventorymanaged inventory
Continuous replenishment programsContinuous replenishment programs
PurchasingPurchasing--Performance Evaluation and BuyersPerformance Evaluation and Buyers
Professional DevelopmentProfessional Development
Improved Supply Chain ManagementImproved Supply Chain Management
Lean ProductionLean Production
JustJust--inin--timetime
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Major Influences on BuyingDecisions
Interpersonal and Individual FactorsInterpersonal and Individual Factors
Cultural FactorsCultural Factors
FranceFrance
GermanyGermany
JapanJapan
KoreaKorea
Latin AmericaLatin America
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The Purchasing/Procurement Process
Incentive to purchaseIncentive to purchase Three Company Purchasing OrientationsThree Company Purchasing Orientations
Buying OrientationBuying Orientation
CommoditizationCommoditization
MultisourcingMultisourcing
Procurement OrientationProcurement Orientation
Materials requirement planning (MRP)Materials requirement planning (MRP)
Supply Chain Management OrientationSupply Chain Management Orientation
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The Purchasing/Procurement Process
Types of Purchasing ProcessesTypes of Purchasing Processes
Routine productsRoutine products
Leverage productsLeverage products
Strategic productsStrategic products
Bottleneck productsBottleneck products
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The Purchasing/Procurement Process Stages in the Buying ProcessStages in the Buying Process
Problem RecognitionProblem Recognition
General Need Description andGeneral Need Description and
Product SpecificationProduct Specification
Product value analysisProduct value analysis
Supplier SearchSupplier Search
Vertical hubsVertical hubs
Functional hubsFunctional hubs
Direct external links to major suppliersDirect external links to major suppliers
Buying alliancesBuying alliances
Company buying sitesCompany buying sites
Request for proposals (RFPs)Request for proposals (RFPs)
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Table 8.1: Buygrid Framework: Major Stages (Buyphases) of theIndustrial Buying Process in Relation to Major Buying Situations
(Buyclasses)
BuyclassesBuyclasses
NewNew ModifiedModified StraightStraight
TaskTask RebuyRebuy RebuyRebuy
1. Problem recognition1. Problem recognition YesYes MaybeMaybe NoNo
2. General need description2. General need description YesYes MaybeMaybe NoNo
3. Product specification3. Product specification YesYes YesYes YesYes
BuyphasesBuyphases 4. Supplier search4. Supplier search YesYes MaybeMaybe NoNo
5. Proposal solicitation5. Proposal solicitation YesYes MaybeMaybe NoNo
6. Supplier selection6. Supplier selection YesYes MaybeMaybe NoNo
7. Order7. Order--routine specificationroutine specification YesYes MaybeMaybe NoNo
8. Performance review8. Performance review YesYes YesYes YesYes
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The Purchasing/Procurement Process
General Need Description andGeneral Need Description andProduct SpecificationProduct Specification
Product value analysisProduct value analysis
Supplier SearchSupplier Search
Vertical hubsVertical hubs
Functional hubsFunctional hubs
Direct extranet links toDirect extranet links tomajor suppliersmajor suppliers
Buying alliancesBuying alliances
Company buying sitesCompany buying sites
Request for proposals (RFPs)Request for proposals (RFPs)
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The Purchasing/Procurement Process
Proposal SolicitationProposal Solicitation
Supplier SelectionSupplier Selection
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Table 8-2: An Example of Vendor Analysis
AttributesAttributes Rating ScaleRating Scale
ImportanceImportanceWeightsWeights
PoorPoor(1)(1)
FairFair(2)(2)
GoodGood(3)(3)
ExcellentExcellent(4)(4)
PricePrice .30.30 xx
Supplier reputationSupplier reputation .20.20 xx
Product reliabilityProduct reliability .30.30 xx
Service reliabilityService reliability .10.10 xx
Supplier FlexibilitySupplier Flexibility .10.10 xx
Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5
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The Purchasing/Procurement Process
Customer value assessmentCustomer value assessment RoutineRoutine--order productsorder products
ProceduralProcedural--problem productsproblem products
PoliticalPolitical--problem productsproblem products
OrderOrder--Routine SpecificationRoutine Specification
Blanket contractBlanket contract
Stockless purchase plansStockless purchase plans
Performance ReviewPerformance Review
Buyflow mapBuyflow map
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Figure 8-2: Major Influences onIndustrial Buying Behavior
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Institutional andGovernment Markets Institutional marketInstitutional market
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Chapter 9Chapter 9Dealing with theDealing with theCompetitionCompetitionbyby
PowerPoint byPowerPoint by
Milton M. PressleyMilton M. Pressley
University of New OrleansUniversity of New Orleans
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Kotler onMarketingPoor firms ignorePoor firms ignore
their competitors;their competitors;
average firms copyaverage firms copy
their competitors;their competitors;
winning firms leadwinning firms lead
their competitors.their competitors.
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In this chapter, we focus on five thingsIn this chapter, we focus on five thingscompanies need to know about theircompanies need to know about their
competition:competition: Who the primary competitors areWho the primary competitors are
How to ascertain their strategies, objectives,How to ascertain their strategies, objectives,strengths and weaknesses, and reactionstrengths and weaknesses, and reactionpatternspatterns
How to design a competitive intelligence systemHow to design a competitive intelligence system
Whether to position as market leader,Whether to position as market leader,challenger, follower, or nicherchallenger, follower, or nicher
How to balance a customer versusHow to balance a customer versuscompetitor orientationcompetitor orientation
Chapter Objectives
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Figure 9-1: Five Forces DeterminingSegment Structural Attractiveness
Competitive Forces
Threat of:Threat of:
1.1. intense segmentintense segment
rivalryrivalry
2.2. new entrantsnew entrants
3.3. substitute productssubstitute products
buyers growingbuyers growing
bargaining powerbargaining power
suppliers growingsuppliers growing
bargainingbargaining
powerpower
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Figure 9-2: Barriers and Profitability
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GetThere.com, launched as the Internet Travel NetworkGetThere.com, launched as the Internet Travel Networkin 1995, was the first company to book trips over thein 1995, was the first company to book trips over theWebWeb
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Identifying Competitors Industry Concept of CompetitionIndustry Concept of Competition
IndustryIndustry
Number of Sellers andNumber of Sellers and
Degree of DifferentiationDegree of Differentiation
Pure monopolyPure monopoly
OligopolyOligopoly
Pure oligopolyPure oligopoly
Differentiated oligopolyDifferentiated oligopoly
Monopolistic competitionMonopolistic competition
Pure competitionPure competition
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Identifying Competitors Entry, Mobility, Exit BarriersEntry, Mobility, Exit Barriers
Entry barriersEntry barriers
Mobility barriersMobility barriers
Exit barriersExit barriers
Cost StructureCost Structure
Degree of Vertical IntegrationDegree of Vertical Integration
Vertical integrationVertical integration
Degree of GlobalizationDegree of Globalization
Market Concept of CompetitionMarket Concept of Competition
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ObjectivesObjectives
Figure 9-5: A Competitor s Expansion Plans
Analyzing Competitors
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Analyzing Competitors
Strengths and WeaknessesStrengths and Weaknesses DominantDominant
StrongStrong
FavorableFavorable
TenableTenable
WeakWeak
NonviableNonviable
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Table 9-1: Customers Ratings of Competitors onKey Success Factors
CustomerCustomerAwarenessAwareness
ProductProductQualityQuality
ProductProductAvailabilityAvailability
TechnicalTechnicalAssistanceAssistance
SellingSellingStaffStaff
Competitor ACompetitor A EE EE PP PP GG
Competitor BCompetitor B GG GG EE GG EE
Competitor CCompetitor C FF PP GG FF FF
Note: E = excellent, G = good, F = fair, P = poor.Note: E = excellent, G = good, F = fair, P = poor.
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Analyzing Competitors
Three Variables to MonitorThree Variables to Monitor
When Analyzing Competitors:When Analyzing Competitors:
Share of marketShare of market
Share of mindShare of mind
Share of heartShare of heart
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Table 9-2: Market Share, Mind Share, and Heart Share
Market ShareMarket Share Mind ShareMind Share Heart ShareHeart Share
20002000 20012001 20022002 20002000 20012001 20022002 20002000 20012001 20022002
Competitor ACompetitor A 50%50% 47%47% 44%44% 60%60% 58%58% 54%54% 45%45% 42%42% 39%39%
Competitor BCompeti tor B 3030 3434 3737 3030 3131 3535 4444 4747 5353
Competitor CCompeti tor C 2020 1919 1919 1010 1111 1111 1111 1111 88
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Reaction PatternsReaction Patterns1. If competitors are nearly identical and make their living the1. If competitors are nearly identical and make their living the
same way, then their competitive equilibrium is unstable.same way, then their competitive equilibrium is unstable.
2. If a single major factor is the critical factor, then the2. If a single major factor is the critical factor, then thecompetitive equilibrium is unstable.competitive equilibrium is unstable.
3. If multiple factors may be critical factors, then it is possible3. If multiple factors may be critical factors, then it is possiblefor each competitor to have some advantage and befor each competitor to have some advantage and bedifferentially attractive to some customers. The moredifferentially attractive to some customers. The morefactors that may provide an advantage, the morefactors that may provide an advantage, the morecompetitors who can coexist. Competitors all have theircompetitors who can coexist. Competitors all have theirsegment, defined by the preference for the factor tradesegment, defined by the preference for the factor trade--offsoffsthey offer.they offer.
4. The fewer the number of critical competitive variables, the4. The fewer the number of critical competitive variables, thefewer the number of competitors.fewer the number of competitors.
5. A ratio of 2 to 1 in market share between any two5. A ratio of 2 to 1 in market share between any twocompetitors seems to be the equilibrium point at which it iscompetitors seems to be the equilibrium point at which it isneither practical nor advantageous for either competitor toneither practical nor advantageous for either competitor to
increase or decrease share.increase or decrease share.
Analyzing Competitors
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For many years, the major national broadcastFor many years, the major national broadcast
television networks shared 100% of the market, andtelevision networks shared 100% of the market, andtraded market share back and forth periodically.traded market share back and forth periodically.
During the last two decades, the emergence ofDuring the last two decades, the emergence of
nationally available cable programming, and the risenationally available cable programming, and the rise
of rival broadcast networks like Fox, UPN, and WBof rival broadcast networks like Fox, UPN, and WB
have increasingly cut into the market share of thehave increasingly cut into the market share of the
big three. What steps would youbig three. What steps would you
recommend that the big threerecommend that the big three
networks take to stop or slownetworks take to stop or slow
this loss of market share?this loss of market share?
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Designing The CompetitiveIntelligence System
Four Main StepsFour Main Steps Setting Up the SystemSetting Up the System
Collecting the DataCollecting the Data
Evaluating and Analyzing the DataEvaluating and Analyzing the Data
Disseminating Information and RespondingDisseminating Information and Responding
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Designing The CompetitiveIntelligence System
Selecting CompetitorsSelecting Competitors Customer Value Analysis (CVA)Customer Value Analysis (CVA)
Customer Value = Customer BenefitsCustomer Value = Customer Benefits Customer CostsCustomer Costs
Customer Benefits = product benefits, serviceCustomer Benefits = product benefits, servicebenefits, personnel benefits, image benefitsbenefits, personnel benefits, image benefits
Customer Costs = purchase price, acquisitionCustomer Costs = purchase price, acquisitioncosts, usage costs, maintenance costs, ownershipcosts, usage costs, maintenance costs, ownershipcosts, disposal costscosts, disposal costs
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What do you see as the potential impact of theWhat do you see as the potential impact of the
availability of information via the Internet on theavailability of information via the Internet on the
design of competitive intelligence systems? Whatdesign of competitive intelligence systems? What
problems could be caused by the inability of theproblems could be caused by the inability of the
average computer user to verify the accuracy ofaverage computer user to verify the accuracy of
data from the web? What impact will emergingdata from the web? What impact will emergingdatabase technologies likedatabase technologies like
texttext--based data mining havebased data mining have
in competitive intelligencein competitive intelligence
systems?systems?
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Table 9-3: Customer Cost of Three Brands
AA BB CC
PricePrice $100$100 $ 90$ 90 $ 80$ 80
Acquisition costsAcquisition costs 1515 2525 3030
Usage costsUsage costs 44 77 1010
MaintenanceMaintenancecostscosts
22 33 77
Ownership costsOwnership costs 33 33 55
Disposal costsDisposal costs 66 55 88
Total costsTotal costs $130$130 $135$135 $140$140
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Designing The CompetitiveIntelligence System
Major Steps in Customer Value Analysis:Major Steps in Customer Value Analysis:1. Identify the major attributes customers value.1. Identify the major attributes customers value.
2. Assess the quantitative importance2. Assess the quantitative importanceof the different attributes.of the different attributes.
3. Assess the companies and competitors3. Assess the companies and competitorsperformances on the different customerperformances on the different customervalues against their rated importance.values against their rated importance.
4. Examine how customers in a specific4. Examine how customers in a specificsegment rate the companys performancesegment rate the companys performanceagainst a specific major competitor on anagainst a specific major competitor on anattributeattribute--byby--attribute basis.attribute basis.
5. Monitor customer values over time.5. Monitor customer values over time.
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Classes of CompetitorsClasses of Competitors
Strong versus WeakStrong versus Weak
Close versus DistantClose versus Distant
Good versus BadGood versus Bad
Designing The CompetitiveIntelligence System
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Figure 9-6:HypotheticalMarketStructure
Designing CompetitiveStrategies
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Designing CompetitiveStrategies
MarketMarket--Leader StrategiesLeader Strategies
Expanding the Total MarketExpanding the Total Market
New UsersNew Users
MarketMarket--penetration strategypenetration strategy
NewNew--market segment strategymarket segment strategy
GeographicalGeographical--expansion strategyexpansion strategy
New UsesNew Uses
More UsageMore Usage
Defending Market ShareDefending Market Share
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IGTs home page focuses on customer serviceIGTs home page focuses on customer service
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Defense StrategiesDefense Strategies
Position DefensePosition Defense
Flank DefenseFlank Defense
Preemptive DefensePreemptive Defense
Counteroffensive DefenseCounteroffensive Defense
Mobile DefenseMobile Defense
Market broadeningMarket broadening
Principle of the objectivePrinciple of the objective
Principle of massPrinciple of mass
Market diversificationMarket diversification
Contraction DefenseContraction Defense
Planned contractionPlanned contraction(Strategic withdrawal)(Strategic withdrawal)
Designing Competitive Strategies
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Designing CompetitiveStrategies
Two Case Studies:Two Case Studies:Procter & GambleProcter & Gambleand Caterpillarand Caterpillar
Proctor & GambleProctor & Gamble
Customer knowledgeCustomer knowledge
LongLong--term outlookterm outlook
Product innovationProduct innovation
Quality strategyQuality strategy
LineLine--extension strategyextension strategy
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Designing CompetitiveStrategies
BrandBrand--extension strategyextension strategy
Multibrand strategyMultibrand strategy
Heavy advertising andHeavy advertising and
media pioneermedia pioneer
Aggressive sales forceAggressive sales force
Effective sales promotionEffective sales promotion
Competitive toughnessCompetitive toughness
Manufacturing efficiencyManufacturing efficiency
and cost cuttingand cost cutting
BrandBrand--management systemmanagement system
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Designing CompetitiveStrategies
MarketMarket--Challenger StrategiesChallenger Strategies Defining the Strategic Objective andDefining the Strategic Objective and
Opponent(s)Opponent(s)
It can attack the market leaderIt can attack the market leader
It can attack firms of its own size that are notIt can attack firms of its own size that are not
doing the job and are underfinanceddoing the job and are underfinanced
It can attack small local and regional firmsIt can attack small local and regional firms
Choosing a General Attack StrategyChoosing a General Attack Strategy
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Figure 9-10: Attack Strategies
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Swedish firm SCAs www.libero.se site creates a dialogue withSwedish firm SCAs www.libero.se site creates a dialogue withexpectant and new parents and even allows users to sendexpectant and new parents and even allows users to sendpictures, brief stories, and child wish list to family all over thepictures, brief stories, and child wish list to family all over theworld.world.
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Designing CompetitiveStrategies
Choosing a Specific AttackChoosing a Specific AttackStrategyStrategy
PricePrice--discountdiscount
Lower price goodsLower price goods
Prestige goodsPrestige goods
Product proliferationProduct proliferation
Product innovationProduct innovation
Improved servicesImproved services
Distribution innovationDistribution innovation
Manufacturing cost reductionManufacturing cost reduction
Intensive advertising promotionIntensive advertising promotion
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Designing CompetitiveStrategies
MarketMarket--Follower StrategiesFollower Strategies
Innovative imitationInnovative imitation
(Product imitation)(Product imitation)
Product innovationProduct innovation
Four Broad Strategies:Four Broad Strategies:
CounterfeiterCounterfeiter
ClonerCloner
ImitatorImitator
AdapterAdapter
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Designing CompetitiveStrategies
MarketMarket--Nicher StrategiesNicher Strategies
High margin versus highHigh margin versus high
volumevolume
Nicher Specialist RolesNicher Specialist Roles
EndEnd--user specialistuser specialist
ValueValue--added reselleradded reseller
VerticalVertical--level specialistlevel specialist
CustomerCustomer--size specialistsize specialist
SpecificSpecific--customer specialistcustomer specialist
Geographic specialistGeographic specialist
Product or productProduct or product--linelinespecialistspecialist
ProductProduct--featurefeaturespecialistspecialist
JobJob--shop specialistshop specialist
QualityQuality--price specialistprice specialist
Service specialistService specialist
Channel specialistChannel specialist
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Balancing Customer andCompetitor Orientations
CompetitorCompetitor--centered companycentered company
CustomerCustomer--centered companycentered company
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Chapter 10Chapter 10Identifying MarketIdentifying MarketSegments and SelectingSegments and SelectingTarget MarketsTarget Marketsbyby
PowerPoint byPowerPoint by
Milton M. PressleyMilton M. Pressley
University of New OrleansUniversity of New Orleans
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Kotler onMarketingDont buyDont buy
market share.market share.
Figure outFigure out
how to earnhow to earn
it.it.
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Chapter Objectives We focus on the following questions:We focus on the following questions:
How can a companyHow can a companyidentify the segmentsidentify the segmentsthat make up athat make up amarket?market?
What criteria canWhat criteria cana company use toa company use tochoose the mostchoose the mostattractive targetattractive targetmarkets?markets?
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Target Marketing Target marketing requires marketers toTarget marketing requires marketers to
take three major steps:take three major steps:
Identify and profile distinct groups of buyersIdentify and profile distinct groups of buyerswho differ in their needs and preferenceswho differ in their needs and preferences(market segmentation).(market segmentation).
Select one or more market segments to enterSelect one or more market segments to enter(market targeting).(market targeting).
For each target segment, establish andFor each target segment, establish andcommunicate the key distinctive benefit(s) ofcommunicate the key distinctive benefit(s) ofthe companys market offering (marketthe companys market offering (marketpositioning).positioning).
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Levels and Patterns ofMarket Segmentation
Levels of Market SegmentationLevels of Market Segmentation Mass marketingMass marketing
MicromarketingMicromarketing
Segment marketingSegment marketing
Market segmentMarket segment
SectorSector
Flexible market offeringFlexible market offering
Naked solutionNaked solution
Discretionary optionsDiscretionary options
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Levels and Patterns ofMarket Segmentation
Niche MarketingNiche Marketing NicheNiche
Local MarketingLocal Marketing
Individual Customer MarketingIndividual Customer Marketing
MassMass--customizationcustomization
ChoiceboardChoiceboard
CustomerizationCustomerization
SegmentsSegments
IndividualsIndividuals
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Levels and Patterns ofMarket Segmentation
Patterns for Market SegmentationPatterns for Market Segmentation
Preference segmentsPreference segments
Homogeneous preferencesHomogeneous preferences
Diffused preferencesDiffused preferences
Clustered preferencesClustered preferences
Natural market segmentsNatural market segments
Concentrated marketingConcentrated marketing
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Levels and Patterns ofMarket Segmentation
Market Segmentation ProcedureMarket Segmentation Procedure
NeedsNeeds--based marketbased market
segmentation approachsegmentation approach
Market partitioningMarket partitioning
BrandBrand--dominantdominant
hierarchyhierarchy NationNation--dominantdominant
hierarchyhierarchy
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ChemStations Web site offers customers solutionsChemStations Web site offers customers solutionsto their problems, not just products.to their problems, not just products.
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Table 10-1: Steps in Segmentation Process
DescriptionDescription
1. Needs1. Needs--BasedBasedSegmentationSegmentation
Group customers into segments based on similarGroup customers into segments based on similarneeds and benefits sought by customer in solvingneeds and benefits sought by customer in solvinga particular consumption problem.a particular consumption problem.
2. Segment2. SegmentIdentificationIdentification
For each needsFor each needs--based segment, determine whichbased segment, determine whichdemographics, lifestyles, and usage behaviorsdemographics, lifestyles, and usage behaviorsmake the segment distinct and identifiablemake the segment distinct and identifiable(actionable).(actionable).
3. Segment3. SegmentAttractivenessAttractiveness
Using predetermined segment attractivenessUsing predetermined segment attractivenesscriteria (such as market growth, competitivecriteria (such as market growth, competitiveintensity, and market access), determine theintensity, and market access), determine theoverall attractiveness of each segment.overall attractiveness of each segment.
4. Segment Profitability4. Segment Profitability Determine segment profitability.Determine segment profitability.
5. Segment Positioning5. Segment Positioning For each segment, create a value propositionFor each segment, create a value propositionand productand product--price positioning strategy based onprice positioning strategy based onthat segments unique customer needs andthat segments unique customer needs andcharacteristics.characteristics.
See text for complete table
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Levels and Patterns ofMarket Segmentation
Effective SegmentationEffective Segmentation MeasurableMeasurable
SubstantialSubstantial
AccessibleAccessible
DifferentiableDifferentiable
ActionableActionable
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Segmenting Consumer andBusiness Markets
Bases for SegmentingBases for SegmentingConsumer MarketsConsumer Markets
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Table 10-2: Major Segmentation Variablesfor Consumer Markets
GeographicGeographic
RegionRegion Paci fic , Mountain, West North Cent ral, West SouthPacific, Mountain, West North Central, West SouthCentral, East North Central, East South Central,Central, East North Central, East South Central,
South Atlantic, Middle Atlantic, New EnglandSouth Atlantic, Middle Atlantic, New England
City or metro sizeCity or metro size Under 5,000; 5,000Under 5,000; 5,000--20,000; 20,00020,000; 20,000--50,000; 50,00050,000; 50,000--100,000; 100,000100,000; 100,000--250,000; 250,000250,000; 250,000--500,000;500,000;
500,000500,000--1,000,000; 1,000,0001,000,000; 1,000,000--4,000,000; 4,000,0004,000,000; 4,000,000or overor over
DensityDensity Urban, suburban, ruralUrban, suburban, ruralClimateClimate Northern southernNorthern southern
DemographicDemographic
AgeAge Under 6, 6Under 6, 6--11, 1211, 12--19, 2019, 20--34, 3534, 35--49, 5049, 50--64, 65+64, 65+
Family sizeFamily size 11--2, 32, 3--4, 5+4, 5+
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Segmenting Consumer andBusiness Markets
Bases for Segmenting Consumer MarketsBases for Segmenting Consumer Markets
Geographic SegmentationGeographic Segmentation
Demographic SegmentationDemographic Segmentation
Age and LifeAge and Life--CycleCycle
StageStage