Pacific rimincludes the countries around the shores of the Pacific ocean including Japan and the western seaboard of the United States and Canada.
Packaging Functional roles: 1) Protect a products before consumer use, 2) can act to facilitate a product's use by the consumer, 3) must satisfy legal requirements, 4) can act to inform the consumer, 5) play an important communication role for the product, acts on an symbolic level, associating the product with specific brand values and attributes. May be used to send strong messages to customers. Development: 1) Design and redesign, 2) Shape and size, 3) Color and graphics, 4) Names.
Parallel processorHigh-performance computer which uses numerous microprocessors to process a number of pieces of information at the same time.
Conditions of successful participation: 1) Genuine, 2) Continual, 3) Clear purpose, 4) Manager's wish.
Partnership see Trading organization.
Partnership marketinginvolves close collaboration and mutually advantageous relationships with linked distributors in the supply chain.
Partnership souringis the use of a supplier with whom the organization has a long-term relationship including new product development and efficiency improvements.
Penalty clauseClause in a contract providing for a specific sum to be payable in the event of a subsequent breach.
Penetration pricing A value-pricing technique in which you set prices aggressively low in order to gain as much market share as possible; the opposite of skim pricing. (Courtland L. Bovee, John V. Thill)
People The marketing mix element for services, to highlight the fact that the quality of many services depends on the quality of people delivering it (e.g. a pay can be ruined by bad acting).
Definition #1 Perception is the process by which people select, organize and interpret sensory stimuli into a meaningful and coherent picture. The way consumers view an object (for example their mental picture of a brand or the traits they attribute to a brand).
Definition #2 Perception is the process by which data is selected, sorted, organized and interpreted in order to form a meaningful and coherent 'picture' of the world.
Perfect informationInformation which removes all doubt and uncertainty from a decision and gives decision-makers complete confidence that they have selected the most profitable course of action.
Perfect marketis a perfectly competitive market is one in which there is a large number of firms, each with a very small share of the market, producing a homogeneous product, with firms and consumers possessing perfect information, and with free entry to and exit from the industry.
Perfectly inelastic demand The most extreme case of inelastic demand, in which changes in price have no effect on demand; this applies to products that people can't or won't live without. (Courtland L. Bovee, John V. Thill)
Person specification - Roger's 7 point plan: 1) Physical attributes (neat appearance, ability to speak clearly, health), 2) Attainments (educational qualifications etc.), 3) General intelligence, 4) Special aptitudes (neat work, speed and accuracy, written communication skills etc.), 5) Interests (practical, social, intellectual and physical), 6) Disposition (or manner, e.g. friendly, helpful), 7) Background circumstances.
Person specification - J. Munri Fraser's 5 point pattern of personality: 1) impact on others, 2) acquired knowledge or qualifications, 3) innate ability, 4) motivation, and 5) adjustment and emotional balance.
Personal competence(for managers): 1. Planning: 1.1 To plan to the achievement of results, 1.2 To pursuit of excellence, for themselves, for the organization, the staff and suppliers. 1.3 To monitor outcomes against the plan and to respond appropriately. 2. Managing others: 2.1 To be sensitive to the needs of the staff and superior (good interpersonal skills), 2.2 To be able to present themselves positively and professionally, 3. Managing oneself: 3.1 To demonstrate self-confidence, self-motivation, enthusiasm and personal drive, to control personal emotions and manage stress, 3.2 To learn and to develop, 4. Intellectual capabilities (competencies): 4.1 To be able to use their intellect effectively (to collect relevant information, to identify and apply concepts, to use their initiative), 4.2 To understand the culture of the organization and to help it to adapt to change.
Personal development: 1) Additional occupation training, 2) Professional qualification, 3) On-the-job experience, 4) Clarification/discussion with superiors.
Personal development plans (PDPs) are essentially action plans for people's career development which put the onus on them - the individual employees - to seek and organize training.
Definition #1. Personal selling is the oral presentation in a conversation with one or more prospec-tive purchasers for the purpose of making sales. (Philip Kotler)
Definition #2. Personal selling is the process of achieving mutually profitable economic exchanges between buyer and seller, based on inter-personal contact between buyer and seller, and on the seller's persuasive communication of his product or service qualities and benefits to the buyer.
Personal selling mix: 1) Sales presentations, 2) Sales meetings, 3) Incentive programs, 4) Samples and 5) Fairs and trade shows.
The primary purposes of personal selling: 1) To find prospects, 2) To convince prospect to buy, 3) To keep existing customers satisfied.
The stages of personal selling process: 1) Prospecting and evaluating (potential customers and acceptable prospects), 2) Preparation (prospect's specific product needs, current brands being used, available brands and personal characteristics), 3) Approach (contacting the prospect), 4) Presentation (holding prospect's attention, stimulate interest, develop desire for the product), 5) Objections (overcoming ones), 6) Closing (asking the prospect to buy), 7) Follow up (post-sale services).
Functions of personal selling: 1) Pre-negotiatory (finding potential buyers, discovering latent needs, producing feed back resulting in creating of satisfactory products); 2) Negotiatory, (persuasively presenting product and negotiating mutually agreeable prices and terms of sale, efficient sales administration, providing technical back-up service); 3) Post-negotiatory (providing after sales service, forecasting future sales, maintaining relationships)
The role of the salesperson involves more than merely selling: it includes communicating with customers in the wider sense and market research.
Basic methods of compensating sales persons: 1) Straight salary - advantages: (i) maximum security, (ii) large degree of control, (iii) easy to administer, (iv) predictable selling expenses; disadvantages: (i) lack of incentive, (ii) the necessity of close supervision, (iii) declining of selling expenses level; 2) Straight commission - advantages: (i) maximum amount of incentive, the ability to encourage salespeople to sell certain items by increasing the commission rate on these items, disadvantages: (i) lack of control over the sales force, (ii) the possibility of inadequate service to smaller accounts, (iii) decreased predictability of selling expenses; 3) Combination - advantages: (i) certain level of financial security, (ii) some degree of incentive, (iii) fluctuation selling expenses with sales revenue; disadvantages: (i) unpredictable sales expenses, (ii) difficulties in administration.
The forms of communication using in personal selling: 1) Language communication, 2) Kinetic communication (body language), 3) Proxemics communication (varying the physical space between the parties involved in communication), and 4) Tactile communication (involves touching, such as hand shaking).
Sources of prospects: 1) Company sales records, 2) Trade shows, 3) Referrals, 4) Newspaper announcements, 5) Public records, 6) Telephone directories, 7) Trade associations, 8) Direct mail lists.
The general characteristics of a good salesperson: 1) A good level of product knowledge, 2) Previous experience, 3) A pleasant personality, 4) The ability to persuade, 5) The ability to communicate with variety of individuals, 6) A high level of motivation, 7) A clean and tidy appearance, 8) Negotiation skills, 9) Presentation skills, 10) Initiative, 11) Ambition, 12) Confidence.
Personality is the total pattern of characteristic ways of thinking, feeling and behaving that constitute an individual's distinctive method of relating to the environment; affected by childhood, schooling, genetic endowments etc.
Elements of personality (Eysenck): 1) Personality traits, 2) Trait clusters, 3) Types.
Types of human beings: 1. The 'E' dimension: 1.2 Extrovert traits (expressiveness, impulsiveness, risk-taking, sociability, practicality, irresponsibility, activity). 1.2 Introvert traits (inactivity, carefulness, responsibility, control, reflectiveness, unsociability, inhibition. 2. The 'N' dimension: 2.1 Neuroticism traits (anxiety, guilt, obsessiveness, hypochondria, unhappiness, lack of autonomy, low self-esteem and instability), 2.2 Stability traits (calm, freedom from guilt, casualness, sense of health, happiness, autonomy, self-esteem).
PEST factorsFactors in an organization's environment (political-legal, economic, social-cultural, technological).
Also see Environment.
Phillips curveis a curve depicting a relationship between the level of unemployment and inflation in prices or wages.
Physical distribution (Logistics) The tasks involved in planning, implementing, and controlling the physical flow of materials and final goods from points of origin to points of use to meet the needs of customers at a profit. (Philip Kotler)
Physical distribution firms :
Logistics involves: 1. Order processing; 2. Transportation; 3. Stock management; 4. Warehousing; and 5. Customer services.
The choice of warehouse within an area will depend on : (i) the sites available; (ii) whether the customer will come to the supplier, or whether the supplier will deliver to the customer; (iii) local transport facilities (road, rail, etc); (iv) future development in the area; (v) whether a lease or a freehold is required; (vi) its geographical position within the market area.
Distribution costs are affected by the following factors : (a) Transport costs: higher in overseas markets owing to distance and, in poorer countries, low quality physical infrastructure. A greater variety of transport modes are used. (b) Warehousing: more sites might be needed in regional centers. (c) Stock levels will be higher, as distances are longer, from the manufacturer. (d) Order processing might include customs and VAT documentation. (e) Packaging: some adjustment might be needed. (f) Failure costs include lost sales through lack of available time. Customers in some markets (e.g. Germany) are very unforgiving if time and quality specifications are not met.
See also Distribution channel.
Physical evidence is marketing mix element for services denoting the environment in which service is delivered (e.g. seating comfort and lighting in restaurant).
Pilotis a trial undertaken on a modest scale in order to test the feasibility of something much bigger.
PIMSProfit impact of marketing strategies.
PlaceElement of the marketing mix detailing how the product/service is supplied to the customer (distribution). strategic planning, and short-term operation planning. The latter is usually for a period of one year.
Definition #2. Planning is the regular, systematic, customer-centered and controlled series of activities a company will undertake to meet business objectives, secure long-term profitability and realize its product/market strategy effectively and competitively.
Definition #3. Planning (SOSTAC) is a process of answering three basic questions: 1) Where are we now? (Situation analysis), 2) Where do we want to go - broad direction? (Objectives), 3) How do we get there? (Strategies), 4. How do we get there - individual steps? (Tactics); 5. How do we ensure arrival? (Actions); 6. How do we know when we have arrived? - (Control).
Marketing planning process: 1) Business mission (Purpose, Strategy, Standards and behaviors, Company values), 2) Marketing audit (Microenvironment, The market, Competition; Operating results, Strategic issues analysis, Marketing mix effectiveness, Marketing structures, Marketing systems), 3) SWOT analysis, 4) Generation and evaluation of strategic options (For increasing sales: Market penetration, Market expansion, Product development, Market development; Entry into new markets; For Improving profitability: Reduce costs, Rationalize operations, Increase prices), 5) Marketing objectives (Strategic thrust), Strategic objectives: Build, Hold, Harvest, Divest), 6) Core strategy (Target markets; Competitive advantage: Being better, Being faster, Being closer ; Competitors targets), 7) Marketing mix decisions, 8) Organization and implementation, 9) Control.
The marketing plan should include: 1) sales target; 2) total marketing budget analyzed (including (a) salaries, (b) above the line expenditure [advertising], below the line expenditure [sales promotion, price reduction, allowances etc.]); 3) the marketing mix; 4) the allocation of expenditure to products.
Smith's SOSTT-4Ms mnemonic elaborates of planning: (a) External analysis: 1) Situation, 2) Objectives, 3) Strategy, 4) Tactics, 5) Targets; (b) Internal analysis: 6) Men, 7) Money, 8) Minutes, 9) Measurement.
Planning cycle : 1) Examination of the marketplace: (i) External (sales trends, levels of competition, product development, promotional activity, patterns of consumption), (ii) Internal (brand share, product advantages, promotional activity, patterns of consumption); 2) Development of objectives and strategies: (i) Objectives (sales, market share, consumer purchasing), (ii) Strategies (7 P's); 3) Evaluation stage: (i) panel research, (ii) tracking studies, (iii) sales measures.
Tactical planning Planning the utilization of resources to achieve specific objectives in the most effective and efficient way.
Strategic planning is the formulation, evaluation and selection of strategies for the purpose of preparing a long-term plan of action to attain objectives. Also known as corporate planning and long range planning.
Levels of planning (from high details to high scope):
Planning horizonis the furthest time ahead for which plans can be quantified. It need not be the planning period.
Point-of-purchase Advertising that targets shoppers within the retail environment. Often aimed at impulse purchases. POP includes counter displays, window displays, store banners, aisle displays, etc. (Responsive Database Services, Inc)
Point-of-purchase promotions Displays and demonstrations that take place at the point of purchase or sale. (Philip Kotler)
Point of sale materials : 1) Outside signs, 2) Window displays, 3) Counter pieces, 4) Display racks, 5) Self-service cartons.
Political advertising Advertising whose central focus is the marketing of ideas, attitudes, and concerns about public issues, including political concepts and political candidates. In political advertising, the product is either a person or philosophy rather than goods and services. (Responsive Database Services, Inc)
Political environmentembraces the activities of the state in setting national objectives, legislating, policy making and implementation.
Political risk is the risk that political action will affect the position and value of a company.
Population is all those people who have the characteristics in which the researcher is interested.
Trends of the population: 1) The context of word population, 2) Development as against less-developed country growth rates, 3) The age and gender structure of a population, 4) The age and gender structure of a population, 5) Its distribution by region and locality, 6) Migration within and between national borders.
The implications of population trends to the marketer: 1) The demand size, the size of different market segments, 2) Supply side, the availability of labor, 3) Mix of public services required, 4) Taxation impact of the dependent population, 5) Aggregate spending and its distribution.
Population structure: 1) Age, 2) Gender, 3) Marital status, 4) Region, 5) Region, 6) Ethnic group, 7) Occupation.
Porter's competitive forcessee Structural analysis.
Porter's generic strategies see Generic strategies.
Position refers to the place where the advertisement is shown.
Position auditPart of the planning process which examines the current state of the entity in respect of: (1) resources of tangible and intangible assets and finance; (2) products, brands and markets; (3) operating systems such as production and distribution; (4) internal organization; (5) current results; (6) returns to stockholders.
Positioning see Market positioning.
Postal research questionnaires are sent to respondents for self-completion using postal services or other appropriate means of distribution.
Questionnaire design process: 1) Clear purpose, 2) Careful selection of target group and/or sample, 3) Avoiding bias, 4) No difficult and long questions, 5) Unambiguous questions, 6) Not-providing too many choices, 7) Relatively short questionnaire, 8) Analyze non-responses, 9) Making sure responses are representative of the whole sample, 10) Use of some open questions, 11) Thinking about data processing and analyzing, 12) Balancing cost and benefits, 13) Always testing pilot questionnaire.
Power is the ability (as opposed to the right) to do something, or stop something being done; power can be physical, based on access to resources, derived from formal position, derived from expertise, or personality, or the ability to disrupt (negative power).
PR See Public relations.
Predatory pricing The practice of lowering prices to a point where they inflict financial damage on competitors; the extreme case of predatory pricing seeks to drive competitors out of business entirely, and it is illegal. (Courtland L. Bovee, John V. Thill)
Present valueis the cash equivalent now of a sum receivable or payable at a future date.
Presentation. 1) Planning. Why are you saying it? 2) Purpose. To whom are you saying it? 3) Audience. What are you going to saying? 4) Structure. How are you going to say? Style. Also: 5) Timing, 6) Expectation, 7) Speaker, 8) Resources, 9) Layout, 10) Audience interaction.
Presentation structure: 1. Introduction - Good morning, and thank you for inviting me to this presentation. As you know I have been asked to prepare a presentation on the subject of direct marketing. I will use overhead projector to illustrate key issues and would appreciate it if you could ask questions at the and of the presentation. Thank you." 2. Content. 3. Summary - Within the limited time available I trust that I have highlighted the key issues pertaining to the & Thank you very much for you time and attention. If you have any questions I will be happy to try to answer them.
Presentation plan: 1.Title, 2. Equipment needed, 3. Aim/objective, 4. Beginning of presentation: 4.1 Time of opening, 4.2 Approach, 5. Middle: 5.1 Key points, 5.2 Visual aids.
Linking words or phrases of presentation: 1. Conclusion: 1.1 This has led to ..., 1.2 Therefore ..., 1.3 So ..., 1.4 As result ...; 2. Contradiction: 2.1 However ..., 2.2 But ..., 2.3 On the other hand ...; 3. Confirmation: 3.1 Similarly ..., 3.2 Again; 4. Building on the previous point - Moreover.
Press release A short document, also called a news release, that outlines some newsworthy event or activity and that companies send to reporters and editors with the hope of getting press coverage; press releases for television are often done on videotape. (Courtland L. Bovee, John V. Thill)
Pressure groupGroup of people who have got together to promote a particular cause (e.g. nuclear disarmament). Sometimes called a cause group. However also used to mean any interest group.
Pressure groupsare composed of people with common interests or attitudes who seek to influence relevant decision makers to act on their concerns: 1) Welfare (Age Concern, RSPCA, Action on Smoking & Health), 2) Recreation (National Cyclists. Union, Ramblers Association), 3) Cultural (Citizen's Advice Bureau, Lord's Day Observance Society), 4) Environmental (Conservation Society, Noise Abatement Society, AA), 5) Political (Tenants association, Campaign against Racial Discrimination), 6) International (Oxfam, Anti-Apartheid movement, Save the Children Fund).
Characteristics of pressure groups: 1) Specific common interests or attitudes, 2) Own special purpose, 3) Influence the context of government decisions, 4) Are not political parties.
Actions of pressure groups: 1) Complain, 2) Inform and persuade, 4) Debate and challenge, 5) Canvas and opinion form, 6) March and demonstrate, 7) Demand and negotiate.
Formal channels of pressure: 1) Pressure through government, 2) Pressure through parliament, 4) Pressure through public campaign.
The amount of money charged for a product or service, or the sum of the values consumers exchange for the benefits of having or using the product or service.
Price adjustment strategies see Pricing policies.
Price discriminationis the practice of charging different prices for the same product to different groups of buyers when those prices are not reflective of cost differences.
Price elasticityis a measure of the extent of change in market demand for a product in response to a change in its price.
Price elasticity of demand is a measure of the responsiveness of demand to changes in price: the percentage change in the quantity of a good demanded, divided by the percentage change in its price.
Price elasticity of supplyis a measure of the responsiveness of the quantity supplied of a good to changes in its price: the percentage change in the quantity supplied divided by the percentage change in price.
Price leaderIndicates to other firms in the market what a price will be.
Price mechanismis the way in which prices act as signals which co-ordinate the actions of economic agents in a free market economic system.
Pricing research is a form of Marketing research, which includes studies of price sensitivity and price perception.
The key stages in the pricing research: 1. Definition of the information required: 1.1 Costing information (raw materials, cost of production, distribution and warehousing, etc.); 1.2 Competitors' prices and discounts given to distributors; 1.3 The price the consumer would be willing to pay; 2. Identification of the sources of information and how that information is to be obtained: 2.1 Costing - accounts department; 2.2 Competitive prices and details of special offers are available from Retail audits or via our sales force; 2.3 Customers - marketing research (Hall test, Telephone research or Instore trials); 3. Collection of data: 4. Analysis of the data; 5. Conclusions and recommendations.
Price sensitivity An indication of the effect price has on buyers' intentions to purchase a given product or class of product; if buyers are considered price sensitive, changes in price will cause definite changes in their buying behavior. (Courtland L. Bovee, John V. Thill)
Price waris a systematic reduction in the price of a good or service by two or more competing firms, often occurring after the breakdown of an agreement.
Prices and incomes policyis a policy which aims to restrain both prices and incomes.
1. New product pricing strategies:
1.2 Market skimming is a pricing policy of charging high prices
when a product is first launched and spending heavily on advertising and
sales promotion to obtain sales. Progressively lower prices are charged as
the product moves into the late stages of its life cycle. The profitable
cream is therefore skimmed off in stages until sales can only be sustained
at lower prices.
2. Product mix pricing strategies:
3. Price adjustment strategies:
3.4 Promotional pricing involves temporary pricing products below list price, and sometimes below cost, to increase short-run sales: 3.4.1 Loss leader are used to attract customers to supermarkets and department sores in the hope that they will buy other goods at normal mark-up, 3.4.2 Special event pricing might be used in certain seasons. 3.4.3 Cash rebates are offered to consumers who buy the product from dealers within a specified time. 3.4.4 Discounts may be offered, 3.4.5 Geographical pricing strategies cover different freight charging strategies.
Necessary data to pricing decisions: 1) Cost data, 2) Demand data, 3) Competitor data (also see Sources of information about competitors).
Primary dataIn market research, this is data collected specifically for the study under consideration (e.g. by questionnaire).
Principal budget factorsee Budget.
PrivatizationPolicy to transfer economic activities to private ownership and control, including the sale of shares (51% or more) in previous nationalized industries to private individuals and institutions, contracting out of publicly funded services to private companies, and the sale of public housing.
Private sectoris the part of the economy in which productive activity is carried out by privately owned/run enterprises and includes the household and personal sector as well as businesses.
Private of contractis the relation between two contracting parties which allows either to sue the other for breach.
Problem childrensee Boston classification.
Problem classification matrix
This matrix must be interpreted as follows:
Type I requirements: 1.1 Very precise and comprehensive analysis of the market and the competition; 1.2 Detailed consideration of further strategic options; 1.3 Gradual refining of functional stages with checking or justification of underlying critical assumptions.
Type II requirements: 2.1 Thorough analysis and problems; 2.2 General consideration of the most important strategic alternatives; 2.3 Gradual refining of critical functional strategies.
Type III requirements: 3.1 Assessment and description of the problem relating to the project; 3.2 Drafting out the main concept. Type IV requirements: 4.1 Straightforward assessment of project conditions; 4.2 Preparation of a concept based on the most important or critical aspects only.
Process researchResearch into the ways goods/services are produced.
ProcessesMarketing mix element for services denoting how the service is actually delivered.
Producer marketssee Organizational markets.
Product type: I. Consumer: 1) Convince products; 2) Shopping product; 3) Specialty product; 4) Unsought product. II. Industrial: 1) Raw materials; 2) Major equipment; 3) Accessory equipment; 4) Components parts; 5) Process materials; 6) Customer supplies; 7) Industrial services.
Product modifications: 1) Quality modifications. That relate to a problems dependability and durability and usually are executed by alterations in the materials or production process employed. 2) Functional modifications are changes that affect a product versatility, effectiveness convenience, or safety. 3) Style modifications are changes in the sensory appeal of a product by altering its taste, texture, sound, smell, or visual characteristics.
Augmented Product Concept (Levitt and Kotler):
See below Product advertising, Product class, Product concepts, Product cost, Product form, Product liability, Product life cycle, Product line, Product mix pricing strategies, Product position, Product quality, Product research, Product testing, Production concept and Production efficiency
Product costsee Overheads/costs/expenses.
Product concepts The idea that consumers favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements. A detailed version of the new-product idea stated in meaningful consumer terms. (Philip Kotler)
A type of intense growth strategy that improves present products or develops new ones for the firm's current markets.
(Courtland L. Bovee, John V. Thill)
Product liabilityrefers to the legal obligation on companies to avoid acts or omissions that could have reasonably been expected to cause harm to consumers.
Product life cycleis a model which suggests that sales of a product grow and mature and then decline as the product becomes obsolete and customer demands change. Applicable in some cases (e.g. horse-drawn transportation) but perhaps less so in others (e.g. corn flakes); use with caution. It is defined in the CIMA Official Terminology as 'the pattern of demand for a product over lime'.
Stages of PLC: 1) Introduction Stage of the product life cycle; sometimes referred to as launch. Product sells in small volumes, and sales promotion is expensive. 2) Growth Stage of product life cycle characterized by increasing sales volumes, profitability and competition. 3) Maturity Stage of product life cycle characterized by relatively stable sales volumes and profitability. 4) Decline Stage of the product life cycle characterized by declining sales volumes and profits.
The strategic implication of the product life cycle:
1. Introduction (Development and launch: 1.1 Strategy - Aim to recover marketing expenditure in medium or long term; 1.2 Product - 1.2.1 Initially, poor quality, 1.2.2 Product design and development are a key to success, 1.2.3 No standard product and frequent design changes; 1.3 Customers - 1.3.1 Initial customers willing to pay high prices, 1.3.2 Customers need to be convinced about buying; 1.4 Marketing and promotion - 1.4.1 Creating awareness - high advertising and sales promotion costs, 1.4.2 Heavy use of personal selling, 1.4.3 High prices possible; 1.5 Competition - Few or no competitors; 1.6 Price and Profit margin - 1.6.1 High prices but losses due to high fixed costs, 1.6.2 Skimming (premium pricing strategy - high price of a small group of consumers, 1.6.3 Or Penetration - for elastic demand. 1.6.4 Price - low - for attract consumers and acquire market share; 1.7 Manufacturing and distribution - 1.7.1 Overcapacity - High production costs, 1.7.2 Few distribution channels 1.7.3 High labor skill content in manufacture; 1.8 Critical success factor - Increasing time to launch; 1.9 Information needs - Market research; 1.10 Financial controls: 1.10.1 Strategic `milestones`, 1.10.2 Physical evaluation, 1.10.3 Timetables and benchmarks.
2. Growth: 2.1 Strategy - Retain distinctiveness of product and rising sales; 2.2 Product - 2.2.1 Competitor's product have market quality differences and technical differences, 2.2.2 Quality improves, 2.2.3 Product reliability may be important; 2.3 Customers - Customers increase in number; 2.4 Marketing and promotion - 2.4.1 Generating awareness and appreciation, 2.4.2 High advertising cost still, but as a % of sales, cost are falling, 2.4.3 Prices falling; 2.5 Competition - 2.5.1 More competitors enter the market, 2.5.2 Barriers to entry can be important; 2.6 Price and Profit margin - 2.6.1 High prices. 2.6.2 High contribution margins, and increasing profit margins, 2.6.3 High P/E ratios for quoted companies in the growth market, 2.6.4 Maximum profitability; 2.7 Manufacturing and distribution - 2.7.1 Undercapacity, 2.7.2 Move towards mass production and less reliance on skilled labor, 2.7.3 Distribution channels flourish and getting adequate distribution is a key to marketing to success; 2.8 Critical success factor: 2.8.1 Market share, 2.8.2 Sustaining competitive advantage; 2.9 Information needs: 2.9.1 Relative market share, 2.9.2 Overall market grown, 2.9.3 Diminishing returns, 2.9.4 Competitor marketing strategies; 2.10 Financial controls: 2.10.1 Discounted cash flow evaluation; 2.10.2 Market shares, 2.10.3 Marketing objectives.
3. Maturity: 3.1 Strategy - Preoccupation of deception market; 3.2 Product - Product become more standardized and differences between competing product less distinct; 3.3 Customers - 3.3.1 Mass market, 3.3.2 Market saturation, 3.3.3 Repeat-buying of product becomes significant. Brand image also important; 3.4 Marketing and promotion - 3.4.1 Markets become segmented, 3.4.2 Segmentation and extending the maturity phase of the life cycle can be key strategies, 3.4.3 A market expansion strategy - converting non-users into users, extending use, 3.4.4 New promotional mix; 3.5 Competition - Competition at its keenest: on prices, branding, servicing customers, packaging, etc.; 3.6 Price and Profit margin - 3.6.1 Falling prices but good profit margins to high sales volume, 3.6.2 High prices in some market segments, 3.6.3 Low cost position (developing a basic product, innovate product design, cheaper raw materials, innovate production procedure, low cost distribution, reducing overheads - downsizing labor and upgrading plant., 3.7 Manufacturing and distribution - 3.7.1 Optimum capacity, 3.7.2 Low labor skills, 3.7.3 Distribution channels fully development, but less successful channels might be cut, 3.8 Critical success factors: 3.8.1 Contribution per unit of limiting factor, 3.8.2 Customer retention; 3.9 Information needs: 3.9.1 Comparative competitor costs, 3.9.2 Limiting factors; 3.10 Financial controls: 3.10.1 Return on capital employed, 3.10.2 Profit margin, 3.10.3 Maintaining market share.
4. Decline: 4.1 Strategy - Five options: 4.1.1Divestment or liquidation; 4.1.2 Harvesting; 4.1.3 Maintenance; 4.1.4 Profitable survivor; 4.1.5 Niche; 4.2 Product - 4.2.1 Product even less differentiated, 4.2.2 Quality becomes more variable; 4.3 Customers - Customers - sophisticated - buyers of a product they understand well; 4.4 Marketing and promotion - Less money spend on advertising and sales promotion; 4.5 Competition - 4.5.1 Competitors gradually exit from the market, 4.5.2 Exit barriers can be important; 4.6 Price and Profit margin - 4.6.1 Still low prices but falling profits as sales volume falls, since total contribution falls towards the level of fixed costs. 4.6.2 Some increases in prices may occur in the late decline stage; 4.7 Manufacturing and distribution - 4.7.1 Overcapacity because mass production techniques still used, 4.7.2 Distribution channels dwindling; 4.8 Critical success factor - Timely exit; 4.9. Information needs: 4.9.1 Rate of decline, 4.9.2 Best time to leave, 4.9.3 Reliable values of assets; 4.10 Financial controls: 4.10.1 Free cash flows, 4.10.2 Opportunity costing.
Product mix pricing strategies see Pricing policies.
Product quality The ability of a product to perform its functions; it includes the product's overall durability, reliability, precision, ease of operation and repair, and other valued attributes. (Philip Kotler)
See also Adoptions process.
Product line A group of products that are closely related either because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. (Philip Kotler)
Product-line featuring Selecting one or a few items in a product line to feature.
Product-line filling Increasing the product line by adding more items within the present range of the line.
Product-line pricing Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitor's prices.
Product line-stretching Increasing the product line by lengthening it beyond its current range.
Product test design: 1. Management information required; 2. The market in which the product will be sold; 3. The type of product being tested: 3.1 How new the product is to users, 3.2 How easy the product can be assessed by users, 3.3 How mach information consumers gather before selecting a product; 4. The availability of time and finance, 5. The need for standardization of the procedures across a wide range of products.
Differences between product testes center: 1. Sample size; 2. The type of people used as testers (current users of brand, potential users of product, etc.); 3. The type of test given to testers: 3.1 Monadic, 3.2 Comparative, 3.3 Sequential, 3.4 Conjoint; 4. The analysis techniques used on the collected data.
Production efficiencyProduction of a good is efficient in an economy if, for a given level of output of all other goods, and given the resources and technology available, the maximum possible quantity of the good is produced.
Productivityis the productivity of labor is indicated by its average product, measured at the level of the firm, the sector of the economy or the whole economy. Labor productivity can be defined as the output per worker in a given period of time.
Production concept The philosophy that consumers favor products that are available and highly affordable and that management should therefore focus on improving production and distribution efficiency. (Philip Kotler)
Profit and loss accountis an account which shows the gross profit or loss generated by an entity for a period (trading account) and after adding other income and deducting various expenses shows the profit or loss of the business (the profit and loss account). The two accounts are usually combined, particularly by companies.
Profit centeris a part of a business accountable for costs and revenues. In profit centers, managers are responsible for both cost and revenues and are accountable for the performance overall. Their profit center may be regarded as a strategic business unit but may take the form of a subsidiary company or simply a core activity if the activity is recharged across the rest of the organization.
Profit margina ratio used to measure how efficiently the operations of a business have been managed. Profit margin = (Profit before interest and tax / Sales) %
Profit orientated organizationOrganization whose primary goal is to make a profit for owners.
Profitabilityis the rate of return on capital or the excess of revenue over total cost of production.
Profitability control Evaluation and corrective action to assure the profitabil-ity of various products, territories, customer groups, trade channels, and order sizes. (Philip Kotler)
Strategies of maintaining or improving profitability: 1) Product differentiation to steepen demand curve, 2) Cartel, 3) Merger and acquisition for cost economies and minimization, 4) Focus, 5) Continuous innovation.
Projectan undertaking that has a beginning and an end, and is carried out to meet established goals within cost, schedule and quality objectives (Haynes). A project: 1) has specific start and end points; 2) has a well defined objective; 3) is self-contained or a 'one-off'; 4) often cuts across functional boundaries; 5) usually contains cost and time schedules for the duration of the project and performance specifications for the end results.
Project life cycle: 1) Conceiving and defining the project, 2) Planning the project, 3) Implementation and control, 4) Completion and evaluation (post-audit).
Projective techniques(of motivation research) are research techniques which draw out attitudes, opinions and motives from individuals in response to given stimuli.
Projective techniques: 1) Inkblot tests, 2) Third person, 3) Word association, 4) Sentence completion, 5) Thematic apperception tests, 6) Story completion, 7) Cartoons completion, 8) Psychodrama.
Problems of projective research techniques: 1) Lack of evidence of validity, 2) Small samples, 3) High subjectivism and prone to bias, 4) Developed not for the study of marketing or consumer behavior, 5) Ethical problems.marketing mix which includes all communications with the customer, thus including advertising, publicity, PR, sales promotion etc.
Factors affecting the selection of promotional methods : 1. The promotional objectives for this market; 2. Cultural constraints; 3. Legal constraints; 4. Facilities available for promotional effort in the market; 5. Economic development; 6. Distribution infrastructure; 7. Media availability; 8. Competition.
Promotions industry structure
Promotion recently changes: 1) Print industry (investment - no longer a barrier to entry), 2) Television (Satellite and cable), 3) Internet.
See also Sales promotion.
Promotion objectives : 1) Increase market share: (i) Awareness within target audience, (ii) Communication of brand values to the target, (iii) Generation feedback points; 2) Introducing new products; 3) Brand recognition (through brand awareness), 4) Establishing the values attached to the brand, 5) Distribution (demonstration the easy availability of product).
The factors affecting the timing of promotion: 1) Optimal period, 2) Seasonally, 3) Burst- and Drip-campaign.
The factors affecting the size of the promotional budget: 1) Geographic market, 2) Type of product (industrial, consumer durable or consumer convenience items), 3) Distribution of buyers, 4) External factors (competitors' promotional budgets, etc.), 5) Other factors (last year promotion budget, last year sales, etc.)
Methods of promotion budgeting:
Psychological contractis a set of expectations an individual has about an organization he or she works for; can be coercive, calculative, co-operative.
Psychological repositioningAltering beliefs about a brand, for example if a product is believed to be of poor quality.
Publicis a group of people united by a common interest that is specific to them or their situation.
There are four broad types of public: 1) all-issue publics, 2) apathetic publics, 3) hot-issue publics and 4) single-issue publics.
Publics is the range of different bodies which an organization interacts with: 1) Employees, 2) Investors, 3) Customers, 4) Regulators, 5) Government, 6) The local community, 7) Pressure groups, 8) Competition, 9) Shareholders, 10) Suppliers, 11) Trade intermediaries and 12) Media.
Public goodis a good whose benefits cannot be restricted to particular customers. Consumption of a public good is non-rivalries, meaning that consumption by one person does not deprive others of the good.
Public opinionis a consensus, which emerges over time, from all the expressed views that cluster around an issue in debate, so that this consensus exercises power.
Definition #1. Public relations is the art and science of analyzing trends, predicting their consequences, counseling organization leaders and implementing planned programs of action which will serve both the organizations and the public interest.
Definition #2 . Public relations includes all forms of planned communications, outwards and inwards, between an organization and its publics for the purpose of establishing and maintain mutual understanding.
Definition #3. Public relations is the means by which an organization tries to develop a mutual understanding between itself and its public (Institute of Public Relations).
Public relations mix: 1) Press kits, 2) Speeches, 3) Seminars, 4) Annual reports, 5) Charitable donations, 6) Sponsorships, 7) Publications, 8) Community relations and 9) Lobbying.
PR objectives: 1) Prestige and reputation (change the corporate image), 2) Promotion of products, 3) Dealing with issues and opportunities, 4) Goodwill of customers, 5) Goodwill of employees, 6) Overcoming misconceptions, 7) Goodwill of suppliers and distributors, 8) Goodwill of government, 9) Dealing with unfavorable publicity, 10) Attracting and keeping good employees, 11) Making the company known and understood in new export markets, 12) Preparing the stock market for a new share issue, 13) Strengthening the company against risk of takeover, 14) Supporting a sponsorship scheme.
PR transfer process (Jefkins):
PR decisions: 1) Appreciate the situation, 2) Defining objectives, 3) Define publics, 4) 5) Select media, 6) Creating message, 7) Select techniques, 8) Develop a budget, 9) Performance and 10) Evaluation.
Characteristics of publicity: 1) The message has high credibility, 2) No direct media cost, 3) Lose control of publication, 4) Lose control of content, 5) Lose control of timing.
Public relations models: 1) Press agency/publicity, 2) Public information, 3) Two-way asymmetric, 4) Two-way symmetric.
Public relation planning process: 1) State of the problem or aim, 2) Do the research, 3) Identify the publics, 4) Choose appropriated media, 5) Monitor the effects, 6) Look to the future, 7) Maintain financial checks.
Qualities of a good PR practitioner: 1) An ability to get on with all kinds of people, 2) An ability to communicate, 3) An ability to organize, 4) Personal integrity in both professional and private life, 5) Imagination in the creative sense, 6) An ability to find out and have access to information.
The main methods by which the information is gathered: 1) Reporters, 2) Special correspondents, 3) Stringers, 4) Foreign correspondents, 5) Feature writers, 6) Contributors, 7) Wire service, 8) News agencies, 9) Picture agencies and libraries, 10) PR sources.
The differences between PR and advertising:
The PR objectives for different publics:
PR communication tools: 1) Presentations, 2) Attendance at events, 3) Sponsorship.
Public sectorincludes the activities of central government departments, local authorities, public corporations and nationalized industries.
Public sector organizationis an organization controlled, directly or indirectly and/or funded by central and/or local government.
Public service advertising Advertising with a central focus on the public welfare. It is generally sponsored by a nonprofit institution, civic group, religious organization, trade association, or political group. (Responsive Database Services, Inc)
Definition #1. Publics a group of people who detect the same problem or issue, interact either face-to-face or through mediated channels, and behave as through they were one body.
Definition #2. Publics is the range of different bodies which an organization interacts with: 1) employees, 2) investors, 3) customers, 4) regulators, 5) government, 6) the community, 7) pressure groups, 8) competition, 9) suppliers, 10) trade intermediaries, 11) the local community.
Definition #3. The publics is related concept to stakeholders. People/organizations in the environment the firm must deal with. (Staff, Users, Government bodies, General public, Finance, Suppliers, Trade intermediaries, The local community, Media, Pressure groups)
The categories of publics (Grunig): 1) No public - The company has no consequences on the group, 2) Latent public - The group members affected by the issues the company but do not detect it, 3) Aware public - The group members recognize the issues, 4) Active public - The group members organize themselves to discuss, do something about the problem.
Also see Public.
Publicity See Public relations.
Pull strategy is a sales strategy that relies on massive advertising to consumers to draw them into retail outlets to ask for specific brands.
See also Push strategy.
Purchasing power parityis the theory that, in the long run at least, the equilibrium exchange rate between two currencies is that which equates the domestic purchasing power of each. For example, US$2 = =1 will represent equilibrium if $2 will buy the same amount of goods in the US as =1 will buy in the UK.
Pupilometric cameraUsed to assess the visual stimulation derived from an image.
Push strategyis a sales strategy that relies on salespeople to persuade retailers to stock and/or promote the product.
See Push incentives.
See also Pull strategy.