Marketing Research

Sasel Research has developed a research proposal for Epic Developers to investigate the needs and wants when buying inner-city luxury apartments. The information that we collect will determine the advertising strategies that will be employed. Background information must be considered before research design and data collection methods are implemented. We have collected a variety of secondary information including Australian Bureau of Statistics and focusing on recent surveys and reports they have published. This information paved the way to developing our further research methods.

We have decided that a questionnaire and focus groups would be the most appropriate method of research when considering our target audiences. The information gathered will allow Epic Developers to create a successful advertising campaign. Limitations within our research have also been addressed and further research has been outlined in our proposal. Sasel Marketing Research has developed a primary research project that utilises a communications approach. We will be directly questioning respondents to obtain data by using a questionnaire.

In order to give our recommendations on the best way to promote a new complex, we need to successfully obtain the necessary data. To acquire this data we need to come into direct contact with potential apartment buyers and existing apartment owners to find their perceptions and motivations that drive their behaviours. The communication method has been chosen, as it is fast, versatile, generally inexpensive and allows more control over the data-gathering activities. Our objectives can be met sufficiently through the communication method of collecting primary data.

The aim and objective of this research project is to determine the factors that interest of potential apartment buyers of units with out a view so as to create an advertisement that will effective advertise the apartment. These findings will assist the organization in their selection of the elements of the ad. So as to communicate more effectively to their target audience. This research project will take into account the different elements of purchasing a new apartment, in the city, which has no views.

And will look into the areas that the apartment has to offer, our unique selling point, For example, amenities, like cinemas, restaurants, and shopping malls that are situated close to the apartments. Such as, must we advertise a romantic lifestyle, a busy lifestyle, or an apartment with convenience? Considering the competition from real estates in the city with views and those with no views, we have to determine who are our primary and secondary target audience and what are the factors that has their preference.

This will help us understand our target audience better and assist the organization in creating the ad more targeted to the audience. As well as understanding what factors would attract the target audience to the apartments, the research also aims to know where our target audience are, their demographics and their choice and perceptions of the different locations of executive apartments. There is a vast amount of secondary data so it will be best to put it into five defined categories.

As urban redevelopment and urban renewal tend to be on the increase in Perth, so does the percent of people seeking dwellings that fit into the category of apartments and townhouses. There has been a general drift among first home owners from buying a separate house on the urban fringe to higher density inner city housing. In 1997 1998, 17% of first homebuyers had purchased medium to high density accommodation, up 3% since 1988 (Survey of income and Housing, 1998). The median age of first homebuyers is 31. 5. This rate has been increasing drastically over the past ten years due to the changing formation of family patterns.

People are delaying marriage and having children and staying in education longer. As a consequence young couples are the most likely to be first home buyers out of all income unit types (ABS, 1999). The ABS also states almost a third of households who owned their home outright were couples with no children. According to the Australian Bureau of Statistics (1999), flats and apartments are the second most common type of dwelling in Australia, with 12% of all dwellings falling in to this category. With the numerous apartment and townhouse developments taking place in Pert this rate is sure to increase.

A survey undertaken by the ABS shows that approximately 22. 25 of all households in Perth intend on moving in the next three years and 56. 7% of these within the next year. That is 156,600 households that are moving in the next year. Upon completion of the ABS survey it was found that the most common reasons for the preferred location of future dwellings were familiarity of area (76. 6%), attractive neighbourhood (64. 8%), wanting a better lifestyle (60. 9%), quiet location (58. 3%) and proximity to attractive geographical features (57. 2%).

When people have selected the area they then look for the right house to suit them. Appearance and layout will influence 73. 8% of them, better residence will affect 57. 1%, and home safety features will affect 42. 5% of potential buyers (ABS, 1998). People choose to be more energy sufficient and safety conscious. When choosing a dwelling 27. 4% look for natural gas, 26% want solar hot water and 23. 7% look for insulation Property developers seem to be concerned with one aspect that can influence potential clients into buying an apartment in a particular estate and that is a view.

Other developments in the past in the present that fit the criteria given include East Perth, Subiaco, Northbridge, Central Perth, west Perth and to a lesser extent South Perth. When viewing current and past advertising campaigns it can be seen that it can be divided in to two categories: with a view and without a view. Property Developers that offer a view in their apartments always use this attribute to sell the apartment in their advertising. Many property developers such as Limnios Property Group make this obvious. The majority of the Limnios properties in East Perth offer a view of the river or the city.

Limnios Property Group use lines such as East Perths finest apartments are as spectacular as the view and sweeping views of the city, the Swan River and the Darling range in order to sell. This unique selling point is usually accompanied with a spectacular photo of the view that can be seen from the apartment. Another new development in East Perth is the Aurora Queens Gardens. Its advertising incorporates such statements as refreshing views that change with the seasons. The harmony of the trees, flowers and water-lily ponds that welcome visitors and stimulate the senses.

Developments that are not based in East Perth also offer views of the city of simply of garden views that surround the estate. South Perth is a prime example. Although this area tends to be more expensive, its advertising is still along the same line. Mair and Co. sells their property by focusing on the uninterrupted City and river views. A good example of the city views is Kingsview Apartments. Although again they are expensive they focus on the views in their advertising. In their advertisement in the West Australian they have very little writing but two quite large pictures of the views from Mount Street in Perth, where the apartments are.

Developers that offer no views in their property focus on other important attributes such as inner-city living, lifestyle, stylish features, security, elegance, close to amenities, a lower price and that they my offer a small piece of a view. Inner city living is what has become stylish in this era and it is trendy to live in East Perth, Subiaco, and Northbridge. The Boas Gardens in Northbridge boast that Boas gardens estate is the latest in these inner city style village precincts, while Limnios states that they offer designer style from$420 000. They all show contemporary style and timeless elegance.

All the apartments have a new age appeal to them in the structure and finishings. Most of the apartments for sale on Wittenoom Street in East Perth do not offer a view as they are set away from the Swan River behind another row of apartments. Such developers as Asset and time Conti Sheffield seem to promote what features the apartment has. These include air conditioning, granite kitchens, European appliances, video intercom security parking sundecks, garden courtyards etc. Other developments tend to promote in their advertising the lifestyle that these trendy suburbs offer.

It is close to amenities, cafes and restaurants, BBQ areas, sports and recreational facilities, public transport, and the cultural and entertainment options of the city. According to the ABS, local facilities accessed by household members over a three week period include shops/shopping centres (97. 8%), sporting, park and recreational facilities (51. 2%), restaurants, cafes and hotels (47. 9%), and medical, health and welfare services (45. 6%). Being close to local facilities is important to all people living in Perth and this is a major factor for property developers.

Primary Audience They would be affluent couple without children and young professional (single) between the ages of 25 to 35 years old. Secondary Audience They would be older affluent couple whose children have already grown up and left home. These couples would fall between the ages of 36 to 55 years old. Primary Audience They would have at least tertiary level education or higher. Secondary Audience They would not be so highly educated but have at least high school education. Primary Audience They would most likely be holding good jobs and earning between $3000-$6000 per month.

Secondary Audience They would most likely be retirees or planning to be retiring soon, and their allowances/income would come from their children or from their own savings/investments. Primary Audience Most of the targeted primary audience would likely to be currently staying in rented apartments who wish to have their own property instead of continuing renting. Secondary Audience Most of the targeted secondary audience would most likely have their own house, but planning to change to a smaller apartment, as they do not require such big house when their children had already left home.

Primary Audience The targeted primary audience would be majority extroverts who are the fight overt with an aggressive nature; they would react accordingly to their inner feeling and believe strongly in their thinking and benefits. They tend to be more image- conscious and they are comfortable with being themselves. Secondary Audience The targeted secondary audience would be majority introverts who are also known as the fight covert with a passive nature; they rely on outer groups or reference groups for advised and comments.

They tend to be more conservative in their thinking and most likely not risk takers anymore due to their age. Primary Audience The targeted primary audience would be people who enjoy fun, entertainment, and dining out. Living a luxurious life would be their top priority. Secondary Audience The targeted secondary audience would most likely be people who had already retired or planning to retire soon. Living a simple and easy life tend to be their top priority, thus having facilities within their vicinity would be ideal. Primary Audience The targeted primary audience would be people who belong to the upper middle class.

These people are more highly educated thus more careers minded, nd due to the higher income they are earning, therefore they tend to emphasize more on a luxurious home with self-sufficient facilities. Secondary Audience Although the targeted secondary audience would be people who are retirees or most probably planning for their retirements and no longer so career minded, but due to their status and assets they owned they should also belong to the upper middle class. 6. RESEARCH DESIGN AND DATA COLLECTION METHOD The main aim of this research is to discover what the target market thinks is most important when buying an apartment.

By acquiring this information the results can then be used to help create a marketing plan. Both in-depth information and general opinions are needed to achieve this. For this reason, we have chosen to execute both a questionnaire and focus groups. The questionnaire will be conducted with people already living in similar apartments. The main aim of the questionnaire is to discover why they chose that particular apartment block. People that have moved in, in the last 2 years would be preferable as these people still have a good idea of why they moved there. They must also own the apartment.

People that are renting would not have as strong an opinion as people that own the apartments. As the apartments have no view it is important to find what the respondents find most important in an apartment block besides the view. Eg. Apartment features, close to amenities, location etc. It is also important to discover what facilities they find the most important. The facilities that attracted them to the apartments, but also the facilities they actually use. The location of apartments is another extremely important aspect and we must determine why they chose that location and to rate which locations they like the most.

The questionnaire will be carried out as an intercept. A phone interview would be more convenient but to achieve this we must acquire the details of people living in several apartment blocks and this may cause problems. Firstly, the apartment owners will not be too keen to give out this information and the respondents may feel their privacy has been violated. For these reasons approaching them anonymously would be wiser. The focus groups will concentrate on similar aspects of the apartments as the questionnaire, but it will look at these features at more depth.

The respondents will be taken from our database, but must fall into the following categories: The primary and/or secondary target markets: young couples or older couples both without children. Potential apartment buyers: looking to buy an apartment within the next year and have a clear understanding of what they are looking for, or; Apartment owners: people who have bought their apartment within the last year. People falling into these categories will have the best understanding of what they want or what they originally looked for in an apartment.

It is essential that they fall into the designated target markets so we know what the people in these target groups want. It is most important to understand exactly what people think of the apartment features other than the view. What features the respondents think are important must not be prompted, as this may influence their answers. The consultants will then probe them to find out why those features are so important. The location of the apartments is also a very crucial topic in the focus groups as the location can be used as a selling point.

We must comprehend exactly what the espondents think of the suburbs that feature apartments, i. e. East Perth, Subiaco, Northbridge, Central Perth, West Perth and South Perth. There are a number of factors that may limit our research project. These factors must be considered when drawing final conclusions. Sampling plays a major role in the collection of relevant data. It has the ability to strongly limit our research project. It is important to gather enough relevant data to make our research as accurate as possible. The research being conducted requires detailed specific knowledge about the target markets.

Generally it is considered the larger the sample size being used, the more accurate the results. Focus groups, such as the ones in our research, however do not require huge numbers of people thus small focus groups are accurate samples. The questionnaire however requires a large sample base yet is designed for a small specific group of people. Hence this research method is quite limiting. If however a large relevant sample is researched this will cause little effect to the results. The largest, relevant sample size would be suited to gain accurate results via this method of research.

If a large unrepresentative sample is researched it will be as meaningless as a small unrepresentative sample. The primary, dominating factor to remember here is cost. Although a large sample may be wanted for the questionnaire the budget constraints may not allow for it. So too with the number of focus groups wanted for accurate research. Our research is very limited to small specific target markets. Hence for future references it would be of little value. It is well suited however for our specific problem. Sampling error may also limit our research.

The results obtained from our sample may differ in some degree from the results that would be obtained from the entire population. Thus an advertising campaign may not reach its target markets. Error within our samples, such as correct sample size or type, must be assessed before final conclusions are drawn. When our research and data collection is completed, an advertising campaign may be formed based on our market research. Our research will allow for a comprehensive campaign to be formed, targeting specific markets with accurate knowledge of what is desired and appealing in apartment s today.

After the selecting the direction for advertising and the design of the advertisement, further research is to be executed to track and ensure advertisings effectiveness. The first stage of the tracking is pre-testing of the selected advertisements. After which testing during the advertising will be followed by post testing. Pre and posts measure consumers attitudes to and images of a set of brands before you advertise and then again a few months after your campaign. Measurements provide results such as: Advertising awareness (both spontaneous and prompted) Brand predisposition (likelihood to purchase) Recall of claims made by the advertising Pre testingthis will be done with a focus group A focus group will be done on the advertisement of choice.

Effectiveness of the ad and the recall of the brand and claims will be measured. Groups, which consist of 10 15 existing and potential apartment owners, will be gathered to be asked various questions. This will ensure that the choices of ads are successful for the campaign. During the campaignquestionnaire/surveys The questionnaire will be done through the telephone to allocated suburbs. The suburbs chosen will be the ones close to the city, for example, East Perth, Nedlands, Northbridge, South Perth, and Cottlesloe.

These are the areas where our potential buyers are situated. The telephone survey will be done during and after office hours to ensure their availability and this will also give them a chance to view the ads during the day. Another location for the survey is the selling ground and the showrooms of the apartments. Viewers of the apartments will be asked how did they get to know of the apartments and where did they view the advertisement. This will give us a substantial amount of understanding of the success of the advertisement and the placement of the ads.

Post testingsales figures and questionnaires To measure the success of the campaign after the sales of the apartments, we will measure the effectiveness by looking at the sales figures. This will give us an estimated idea of the effectiveness of the ads. But to confirm the results, a questionnaire will be posted to the buyers to evaluate the results. A questionnaire will also be done via a telephone interview to the participants that were called upon before. This will give us an estimate of what is the awareness of these people.

Market Segmentation Essay

The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are “most likely” to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments. Category of Need The first thing you can establish is a category of need that your offering satisfies.

The following classifications may help. For businesses: Strategic – your offering is in some way important to the enterprise mission, objectives and operational oversight. For example, a service that helped evaluate capital investment opportunities would fall into this domain of influence. The purchase decision for this category of offering will be made by the prospect’s top level executive management. Operations – your offering affects the general operating policies and procedures. Examples might be, an employee insurance plan or a corporate ide communications system.

This purchase decision will be made by the prospect’s top level operations management. Functional – your offering deals with a specific function within the enterprise such as data processing, accounting, human resources, plant maintenance, engineering design, manufacturing, inventory control, etc. This is the most likely domain for a product or service, but you must recognize that the other domains may also get involved if the purchase of the product or service becomes a high profile decision. This purchase ecision will be made by the prospect’s functional management.

For the individual consumer: Social Esteem or Pleasure – your offering satisfies a purely emotional need in the consumer. Examples are a mink coat or a diamond ring. There are some products that are on the boundary between this category and the Functional category such as a Rolex watch (a Timex would satisfy the functional requirement and probably keep time just as well). Functional – your offering meets a functional requirement of the consumer such as a broom, breakfast cereal or lawnmower. Segmentation of Needs Then you should establish what the need is and who is most likely to experience that need.

Your segmentation will be determined by a match between the benefits offered by your offering and the need of the prospect. Some “need” categories for segmentation include: Reduction in expenses Prospects might be businesses that are downsizing (right sizing), businesses that have products in the mature stage of their life cycle or individuals with credit rating problems. Improved cash flow Prospects might be businesses that have traditionally low profit argins, businesses that have traditionally high inventory costs or individuals that live in expensive urban areas.

Improved productivity Prospects might be businesses that have traditionally low profit margins, businesses that have recently experienced depressed earnings or individuals with large families. Improved manufacturing quality Prospects might be businesses with complex, multi-discipline manufacturing processes. Improved service delivery Prospects might be service businesses in highly competitive markets, product businesses requiring considerable post-sale support or ndividuals in remote or rural areas.

Improved employee working conditions/benefits Prospects might be businesses where potential employees are in short supply. Improvement in market share/competitive position Prospects might be new entrants to a competitive market. Need for education Prospects might be businesses or individuals looking for books on business planning, or seminars on Total Quality Management. Involvement with social trends Prospects might be businesses concerned with environmental protection, employee security, etc. individuals who believe in say ‘no’ to drugs, anti-crime, etc.

Specific – relating to product/service characteristics Prospects might be businesses or individuals interested in safety, security, economy, comfort, speed, quality, durability, etc. Factors that segment prospects Having determined the more general segmentation characteristics you can proceed to a more detailed analysis of the market. There are literally thousands of ways to segment a market, but the following are some of the more typical segmentation categories. For businesses:

Industry by SIC code This is especially beneficial for vertical market offerings. Size – revenues, # employees, # locations In general if your offering is highly sophisticated, requires significant resources or provides greater value based on volume, then the target should be the larger enterprises. Job position/responsibility Examples of offerings might be planning software for managers or cleaning agents for maintenance managers. Climate Examples of offerings might be dehumidifiers in areas near the ocean or snow plows in northern areas.

Marketers of mature products

How would you advertise a toothpaste at the four different stages in its life Risk seems to go hand in hand with the introduction stage because the chance of product failure is quite high. Profits will be below zero due to low initial revenues while the toothpaste company covers large expenses for promotion and distribution. We will need to let potential buyers aware of the new toothpaste availability. These buyers must know the toothpaste’s features, uses, and advantages over other brands. I’ll assume this particular toothpaste company has the resources, technological knowledge, and marketing know-how to launch the oothpaste successfully.

Having these assets will be a great advantage for the success of the new toothpaste brand. The growth stage will be critical to the toothpaste’s survival because the competitive reactions to the products success during this stage will affect the toothpaste’s life expectancy. I would expect the toothpaste’s sales to rise rapidly and profits to reach a peak and then start to slowly decline. To counter act the sales decline we must try to strengthen its market share and create a competitive niche by emphasizing the toothpaste’s benefits.

To accomplish these tasks we may need to cut rices to stay competitive and gain stronger market position. Our toothpaste’s sales curve will peak and begin to decline as will profits. This is the result of intense competition, as similar brands are now in the market. As a result many weaker competitors will be squeezed out or lose consumer interest. We must now turn our attention to develop improvements in our product and find positive differences in our version of toothpaste. We will continue to make fresh new promotional and distribution efforts. We will concentrate on advertising and dealer based promotions.

We must also look at another pportunity that exists. Marketers of mature products sometimes expand distribution into global markets. We will need to research and determine if our toothpaste will be accepted and fit the needs of global The stage where our sales will fall rapidly. New technology or social trends are at times the culprits of this downward spiral. Due to low profits we may cut promotion efforts, eliminate marginal distributors, and eventually plan to phase out our toothpaste. I will assume our toothpaste company has more than one product, a company’s future is rarely tied to one product.

As one product is declining, our toothpaste, ther products of ours are at different stages of the life cycle. Therefore we will need to deal with prolonging the life of existing products and introducing new ones. Our main objective as a company is to meet organizational sales goals. As one product is declining, other products are in the introduction, growth, or maturity stages for our company. # 3. “How do we sell this thing? ” Rank each of theses approaches, in descending 10. Buy a Cheap Labor-saving Device. 6. Don’t Let Someone Else Get Your Goat.

Buy an Affectionate Labor-Saving Device. #1. What do advertisers mean by strategy? What are the key considerations in an Averting messages aren’t created on a whim or by a quick flash of inspiration. Advertising is a disciplined art and involves a lot of strategic thinking. Advertisers create messages to accomplish specific objectives, a process called strategic planning. Advertisers determine what you want accomplished, decide on strategies to go about accomplishing, and implementing tactics which make the plan come to life. Advertising involves many different strategies.

First there must be a strategic business plan that deals with the broadest decisions made by the organization. Next advertisers have marketing strategies that will identify key advantages for the product or firm in the marketplace. Lastly there are advertising strategy decisions that are made which are crucial to all advertising situations. Advertisers must set objectives and identify the target audience. The advertising product must be compared to competing products features. The product must be position so it is welcomed in the marketplace by consumers.

Finally the advertisers must create a brand image and personality for the product. These are all key considerations for the advertising strategy. Targeting an audience for the product I feel is the most important. These audiences are equivalent to a target market, but often includes people other than prospects, such as those who influence the purchase. Once the target audience is defined this lets the advertising planner zero in on the most # 5. Identify how the creative use of emotion can enhance each operation. Perception: In the text there is a great example of how the L. A. City Fire Department got their message across that fireworks are dangerous.

Their billboard shows the image of a child’s hand missing one finger due o a fireworks related injury. The message here is personal and conveyed by the consumers that this could happen to someone in their Awareness: Most people want to read information or news that is relevant to themselves and things they care about. Advertisers create ads to bring out this emotion in consumers. I remember the billboard ad a few years back concerning N. A. F. T. A. These billboards didn’t concern every person or every worker.

The NAFTA situation only involved a percentage of workers. But these ads brought the attention to everyone who wanted to know more or thought they could help. The NAFTA ads brought awareness to the subject and educated people on Understanding: Being aware of a ad message sometimes is not enough. The message must also be understood as well. Understanding means the viewer or consumer gets an active response from what they have seen or heard. New car commercials are sometime ones that contain a lot of information.

Information on the brand, price, size, how it works, when and where to use it and so on. With this information we sometimes create an emotion inside about the particular car. We may want to go right out and buy it or take a test drive. Or we may simply onsider it for a future purchase. All in all the commercial had created an feeling of want for their product and as we all know “wanting” is an Persuasion: A persuasive message will shape attitudes and touch emotions. How someone feels about your product or company may be just as important as what that person knows about it.

One example come to mind is last years Budwesier commercial. The one where the current owner or CEO talks about the company’s family tradition and that the way they make their beer hasn’t changed ever. This is deffentily a persuasive commercial. They trying to convey that they are number ne in the industry, were there when we needed them and are a # 2. Hard-sell approach and soft-sell approach. I felt the original ad was bland and crowded. I really think they needed a real picture of a Updike tub and if I were to do another ad I would put one in. 6. Compare the differences in design, art, type and other elements in newspaper ads of expensive stores and lower-priced stores. Comparing Lazuras to K-Mart is really night and day. Lazuras has models wearing their clothes and real pictures and settings. K-Mart has still pictures of products and uses only a few colors. Lazuras’ ads comes tapled together like a small magazine while K-Marts is full sheets folded I think these differences are seen only to people who feel that one store is superior to the other.

Sure Lazuras obviously spends more money on print ads then does K-Mart but it really doesn’t mean anything unless your ad draws customers in to shop. I personally think both companies to a good job with their advertising I’d just rather shop at Lazuras, at least for Lazuras always is having some kind of sale. When I receive a Lazuras ad I know they must be having another 36 hour last chance sale of some sort. A lot of times I don’t even look through the ad because I figure its the same stuff as last weeks 36 hour blowout sale.

K-Mart usually put their ads in the Sunday paper and advertises item that are commonly purchased by customers and seasonal products. Their ads are two and three pages and always has on the front cover toys for kids. I remember these ads from way back when I was a kid. Both of these two company’s ad campaigns work and must be working well, because I continue to see them every One jingle that I dislike is the Sharpe Ford song. Its a great piece of work, “were sharp and were the reason Sharpe is Ford, Sharpe is Ford”, ocated at 3 o’clock sharp on the 465 dial.

That is perfect. Every time I hear it I get a visual of the 465 dial and where Sharpe Ford is located. One drawback though is that I can’t get the song out of my head the entire day. Another is a fairly new commercial for Giftpoint. com. They do a little rif from a Christmas song and only say Giftpoint. com. This is absolutely nerve racking and impossible to not sing the entire day I hope they take it off the air soon. I did however look at their web page. I believe these ads do reflect on the advertiser, sometimes good and sometimes bad.

I simply et annoyed but I tend to remember them and I think for the advertiser that is good. In some cases I think the advertiser uses our memory as their tool. Create a annoying jingle and play it on the radio over and over. We’ve all heard jingles and said to our selves after the fact that it was the stupidest jingle we’ve ever heard. Two weeks later were singing it in the shower or as we walk through the Ivy Tech parking lot. The dumb little jingles stick in our head and most of the times won’t go away. # 5. What ideas do you have for setting up some type of direct-response system to decrease “traffic overload”.

I think a good idea for Ivy Tech would be to have its own bookstore webpage. Student could access the page on campus or at home. They would be able to select and purchase books online for all their classes. The purchases could either be sent by mail or have a in house system for pick-up. Many student purchase books with a credit card. If student had an option to not wait in the enormously large line chance are they wouldn’t. Also for the school they would be able to cut back on inventory and may open up some room in side the bookstore. Overall I believe a online system would only be the beginning.

AM General’s prototype Hummer

Marketing often comes down to making your customers intelligent enough to buy your products or services. They have to understand what it is you’re selling, how it’ll help them, and how much better it is than any other solution. Market segmentation, is the selection of groups of people who will be most receptive to a product. The most frequent methods of segmenting include demographic variables such as age, sex, race, income, occupation, education, household status, and geographic location; psychographic variables such as life-style, activities, interests, and opinions; product use patterns; and product benefits.

Much segmentation involves combinations of these methods that can be targeted with a distinct marketing mix. The segmentation of a company’s market allows for a greater ability to reach its key customers in most cases. AM General’s Hummer began in 1979 with competition for the development of a High Mobility Multi-Purpose Wheeled Vehicle (HMMWV) to meet the Army’s highest standards. AM General’s prototype Hummer went to test in the Nevada desert in July 1980 – only 11 months from its design board beginnings.

After extensive evaluation, the Army awarded contracts for test vehicles to General Dynamics, Teledyne and AM General. Within 10 months, AM General delivered its Hummer prototypes to the Army proving grounds. After a five-month test period, the Hummer was judged as the superior technical offering. AM General was awarded the initial Hummer production contract in March 1983, calling 55,000 vehicles to be delivered over five years. Following the Hummer’s success and notoriety in the Persian Gulf War, AM General introduced a civilian vehicle in 1992.

Currently there are seven different civilian models available at more than 40 Hummer dealerships in the United States and 12 international distributors. AM General also supplies Hummers for use in heavy construction, mining, oil and gas exploration, fire and rescue, utilities and various government agencies. The Hummer was first classified as an organizational product and then became a consumer product. Based on what product classification the Hummer entails, the market segmentation should be tailored to the consumer and/or market segments it is marketing too.

The types of market segments currently existing for the Hummer in the consumer market are generally men with household incomes varying between 200,000 and 300,000 thousand dollars per year. Most of these men already own two or three cars. More doctors will purchase Hummers than lawyers. This market segment consists mostly of entrepreneurs as opposed to corporate conformists. The types of market segments in the b2b market are mostly associated with the government / military / US Army fleets.

AM General, producer of the Hummer, has also signed a number of licensing agreements for the use of the Hummer name-with Converse to market rugged footwear and with Timex to produce a “Hummer” watch. Which in turn leads to the market segmentation, which is the process of dividing a total market into market groups consisting of people who have relatively similar product needs, there are clusters of needs. Market segments can have numerous, positive and negative outcomes. There are many pros and cons associated with the above market segments. For the consumer market, the demand is created by a very narrowly defined group of consumers.

A specific target market is positive thing for producers of a good such as a Hummer, however it is very limiting to the overall demand of the product. In other words, the vast majority of the US population has an annual household income of much less than 200,000 thousand dollars and is not lead by extremely successful entrepreneurs or doctors. AM General knows which type of consumer to target, but the number of consumers in the market is relatively small. Good news for the b2b market! If AM General can continue to satisfy the demands of the US military, then they are pretty much guaranteed a continuously existing market.

The market may shrink and expand from time to time, however the US government will continue to demand military vehicles as long as world peace ceases to exist. With the falloff in demand from the government segment, AM General should target the consumer market more heavily. With e-commerce booming and many entrepreneurs creating new innovative dot. com companies, there are men out there with money to spend! Because Hummers are more of a luxury item to own rather than a conventional form of transportation, the market would be similar to that of the Aston Martin or Jaguar type vehicles. This in turn will lead to the marketing mix.

The marketing mix includes a combination of product, packaging, price, channels of distribution, advertising, promotion, and personal selling to get the product in the hands of the customer. AM General’s marketing mix will differ between that for the consumer and that for the b2b segment. For b2b transactions, product will meet the specifications requested by the business (their needs). Place isn’t too important. Price is pretty much lacking competition for the most part, and will only be important as to what the government can afford (contracts? ). Promotion will not be a huge concern here, either.

Am General will need to provide information that will make the government realize that their products (vehicles) are strong, reliable automobiles by which the government will benefit from (they will aid in military defense and development). For consumers, AM General will have to work a little harder in the promotional area. The name and image of the vehicle alone will attract customers who wish to identify with this image. However, the consumers need to believe that any consumer can actually drive around a Hummer easily and safely, not by just the military. Price will be of significance.

Not many people will be able to purchase such an expensive, impractical vehicle. Place may be of importance as well. The Hummer may be more attractive to those living in certain types of terrain where they feel they can enjoy the luxury of the outstanding performance of a Hummer off road, in water, sand, etc. Does there need to be Hummer dealership on every corner in every city? No. Hummers should be available upon special request because their target market is so specific. If a consumer wants one, they will search for one. They won’t decide to drop by the dealership on their way home from work and work a deal!

Buying a Hummer is a major decision (for most of us, anyway). In-Conclusion in order to identify its potential buyers, corporations such as AM General should choose to segment or not to segment a particular market. A corporation that does not segment chooses a mass-market, the same product is offered to all customers. Corporations segment a market because different groups within the market have different needs. To thrive, the chosen segment must be identifiable and computable, lucrative, economically accessible, and exhibit a relatively standardized response function to the marketing efforts designed for it.

AM General should focus its efforts on target markets, or groups of customers with similar needs, rather than on the entire market. No single offer or approach to a market will therefore necessarily motivate or satisfy all buyers. The marketing concept holds that marketing will be more effective if it is tailored to the unique needs of each target market. Auto manufacturers are continually seeking information about changes in their industry and macro-environment.

Citibank Asia Pacific Credit Card Launch

The key questions that must be answered in this case study are many. Yet the foremost question is should Citibank launch the card product in the Asia Pacific Rim and in what particular countries? The answer to this question is a resounding yes to all countries with the exception of Korea. Another key question is: How should the particular card launches be tailored to their particular countries based on marketing information gathered by the company? Another key question becomes: How does Rana Talwar convince his country managers to accept the product, while simultaneously convincing the company’s U.

S. headquarters to accept the project. I’ll provide my analysis on a country by country basis Ending my presentation with a total breakeven analysis. India, Indonesia, Malaysia, Philippines, Singapore, Thailand and Taiwan (Yes) The economies of these countries are growing along with their infrastructures. The countries have a low per capita income, yet this is due to the fact that wealth is basically concentrated in the extremely rich, upper middle and emerging middle classes.

Citibank’s added value services in these countries already include the innovative NRI program; this program helped Citibank develop relations with the Indian government by helping its Central Bank procure foreign currencies. Citibank, moving forward will have to implement a two-pronged approach in these launches. The first product, a Citibank classic card can be geared toward the emerging middle class. The features and benefits of this product can include wide acceptance in the country without carrying cash and payment options.

The second effort would be geared to the upscale customers that the Citibank is already doing business with. The features and benefits of a “preferred card option” would include: no pre-set spending limits, gold option (with 100,000 minimum relationship balance. ) . This two-pronged effort differentiates the cardholders by status and doesn’t turn our card into an everyday commodity. This must be kept in mind in the Asia Pacific Rim markets, as credit cards are status symbols.

The marketing strategies utilized by these countries based on economies of scales issue can in fact be implemented very similarly. Australia and Hong Kong (Yes) Being more developed markets with westernized infrastructures and similarities to The U. S. credit card marketplace, the products offered in these countries must have more diversification. In Hong Kong partnerships with local banks, healthcare associations and the like can add additional benefits of medical care, free cash rewards preferred credit limits and gifts. These options can be marketed as well in Australia.

Korea No (But Possibly in the Future, around 1997) Based on the local regulations that don’t permit banks to issue cards with revolving credit Also, due to strict foreign exchange control measures only local currencies cards could be issued. Yet in all other countries we are issuing the option of U. S. Dollars and the local currency. Until diplomatic relations solve this trade issue and “open up” this government to the benefits and conveniences of credit cards, we at Citibank will not move forward in this particular marketplace.

Accounting Ethics Essay

When examining the effect of open marketing on the profession of accounting it is important to view it from three perspectives: the client’s, the profession’s, and society’s. Additionally, two key areas that are affected by marketing must be addressed, these are concerning competition, and ethical implications. Marketing in public accounting is here to stay therefore making an argument against its existence would be fruitless; however, in order to achieve maximum benefit to the firm, the client, and s ociety more stringent guidelines must be implemented at the firm level. The first, and most obvious, of the effected areas is ompetition.

Within competition several points are discussed. First, the implications advertising has on public accounting– the model of perfect competition versus the model of monopolistic compet ition. Secondly, the relationship between firm size and advertising expenditures. Thirdly, the effect of advertising on firm specialization, the implications of client turnover on public accounting practice. Before making the comparison, a brief explanation why the two models are chosen is in order. Monopolistic competition has been chosen for the pre-advertising era because it most closely resembles the market tructure in an extreme sense.

The elements o f monopolistic competition are as follows: product differentiation, the presence of large numbers of sellers, and nonprice competition. Although accounting services between firms offer very little service differentiation, the absence of advertising serve s as a replacement because clients are not necessarily aware that other options are easily attainable. The post-advertising era is explained through the model of perfect competition for which the qualifications are as follows: very little or no service d ifferentiation, many sellers, and price as the only means of distinguishing ne firms service from anothers.

In a perfectly competitive market the price of a particular service is established solely by the interaction of market demand and supply. (Thompson p. 277) When market demand for accounting services increases the resulting demand shifts right causing pri ces to increase returning the market back to equilibrium. However when supply increases, such is the theoretical effect of adding advertisement to public accounting practice, the supply curve shifts right causing prices to fall. The model of monopolistic competition is also price sensitive, however only at the firm level.

For example, the CPA firm of XYZ has an established clientele base and uses referrals as its sole means of growth. They increase prices only as their cost o f providing the service increases and therefore are able to maintain their client base. In this example a gently downsloping demand curve exists (Thompson p. 304) causing only drastic changes in pricing to send their client base shopping for a new firm. The result is XYZ can continue to grow by practicing fair pricing and providing a reputable service.

Cut rate pricing only marginally effects their client base because there is little means to make heir pricing publicly known, and only drastic, unwarran ted increases sends clients packing. Conversely, in the post-advertising era, XYZ must always be aware of market pricing because the demand curve is steeper and more volatile. Therefore the client base of XYZ is not stable as in the previous example and measures must be taken to keep price s competitive with other firms regardless of cost inferences. The result is the necessity of a more aggressive policy regarding new client recruiting and a higher turnover of existing clients.

Now that the differences are established, the resulting issues in ublic accounting can be discussed. The first area deserving discussion is the relationship between firm size and advertising. expenditures. A study made of CPA firms in Britain in 1985 asserted “the most dramatic contrast between advertisers and non-advertisers was their size. ” (O’Donohoe p. 122) The obvious reason for this anomaly is availability of resources. Larger firms ha ve, at their disposal, a much larger profit level; therefore advertising expense is easily included only marginally affecting bottom line.

This implies larger firms to have gained a great deal more from inclusion of advertising than small firms. Consequ ently, small firms could be pushed out of the picture entirely in the area of audit services. Why? In the area of audit services, small firms have little to offer to differentiate themselves from their larger counterparts who can now freely move in and perform the service at a lower price. This, unfortunately, will be a byproduct of the adverti sing era. Smaller firms only hope is to emphasize “personalized service” in tax and full service areas in hope that audit services can result.

The major drawback is small firms are offered little room for growth because of the expense involved. Adverti sing in public accounting causes perspective clients to become bottom line oriented meaning the firms with the most available revenue to dump into advertising, coupled with the resources to offer lowest fees are the ones which grow. These resources are h eld by Big Six firms and large regional firms. As a result these firms will grow while small firms struggle. The second inference drawn from the model of perfect competition is some smaller firms being forced to specialize.

In order to differentiate themselves some smaller regionally operated firms have chosen to specialize. In the March 1990 issue of the CPA Journal Arvid Mostad, CPA published an article in which he set up “Seven Marketing Guidelines. ” His first guideline was “Create your own special niche. ” (Mostad p. 54) He goes on to encourage small firms to establish an area of expertise. (Mostad p. 54) This develops significant implications regarding firm longevity in a capitalistic market of industry upswings and downturns. An example of this is the construction industry in the Baltimore-Washington corridor.

The industry experienced phenomenal growt h in the Eighties followed by a near halt. The result? any small to medium size firms following the advice of specialization went belly up along with their clients. This uncertainty exists with any firms who specialize. ! Firm specialization clearly is n The final implication of the new competitive market is client turnover. Gone are the days when firms could guarantee retaining a client by providing a quality service at a fair price. New market pressures require firms to constantly evaluate pricing st rategies, and, in some cases bid on jobs yearly. This creates high levels of client turnover.

The result is firms must always actively seek new clients. Several drawbacks of this are increased overhead costs to firms, less stability, and greater servic e cost. Firms overhead costs increase because the expenses of replacing clients must be absorbed. This expense comes from both marketing tools used to attract clients, and costs of preparing a bid to perform a service. Firms which previously served a client base from year to year must face the uncertainty of retention of their client base now.

The cost of providing a service to a new client greatly exceeds that of providing the same service to an existing client. When ! roviding a service to a new clie Now that the difference in the competition aspect of public accounting is established emphasis is changed to examine the ethical implications derived as a result. In the area of ethics one must examine differences in independence, and integrity, and eva luate the changes in quality of service resulting from these areas. When examining independence one must maintain an emphasis on the competitive structure of the market and new pressures in the area of client retention. Independence, one may argue, never existed before; however an assumption is made that independence, t o some extent, historically exists.

With the competitive structure now present the process of gaining a new, and retaining an existing, client has become increasingly costly and time consuming. One may then infer that once a client is obtained, a firm would wish to do business with that client for an extended number of years, in order to realize the benefit of expenses incurred. Put simply, a firm would not look kindly toward a partner who lost a new client. This, inherently, decreases auditor indep endence during the first several years of the engagement. The partner overseeing the audit must always concern himself with the consequences f losing the engagement.

Previously, firms worked mostly with longstanding clien! ts and the relationship developed The second major area of ethical effect is that of integrity. Competition has resulted in some firms damaging the integrity of the profession. This damage has occurred mainly through pricing practices. Two deviant practices have become commonplace in today’s market. These are below cost pricing, and discount pricing. Many firms have adopted policies of below cost pricing as a tool of market penetration, (Formichella p. 199) implications regarding the motives and integrity of hese firms must be explo red.

Is it reasonable to assume that a firm would be willing to absorb a loss from an engagement, or would a more practical assumption state that firms which lowball would seek means to cut service costs at the expense of quality? It is not possible to answer this question; however its mere existence creates a damaging effect on the integrity, or at least perceived integrity, of the profession. The second pricing strategy which is cut-rate pricing provokes similar questions. In his commentary Mario Formichella states the following: It is no longer unusual to find firms willing to ake on work at substantial discounts from standard fee levels.

While there may be justifications for performing services at reduced rates during off-peak periods in special situations such as for non-profit institutions or similar organizations, the extent to which this practice has grown cannot be justified on any logical or professional basis. (Formichella p. 81) The distaste shown by Mr. Formichella in the area of cut-rate pricing shows it as an issue of concern and one which damages integrity. Mr. Formichella goes on to call for the implementation of professional standards to prohibit actions such as this which re damaging to the image and integrity of the profession.

One would have to agree with his statement; however difficulties arise, in the area of monopolistic activity when guidelines are established regarding pricing strategies across an industry. Unf ortunately the profession must rely on the integrity of individual firms to guard against this strategy. As a result, this is a practice likely to continue, albeit damaging to the profession and those which rely on the statements made by the profession. The existence of advertising in public accounting creates a new environment to which firms are still adapting.

This new environment is largely the result of increased competition and a clientele which is increasingly more bottom line oriented. In order to compete firms must place more emphasis on marketing and accept it as a cost of doing business. The result of this will be more difficult penetration and an increasingly limited number of small firms in the business. Market pressures also are forcing creating situations where ethical issues such as independence and integrity are questioned making it imperative that the AICPA create guidelines from which the evolving profession must base itself.

Toys “R” Us – Market Selection Strategy

Throughout the major Canadian cities we find many of the large category killer stores. These stores expanded across Canada in the 1980’s and 90’s. These category killing stores specialize in one particular category, but offer a moderately deep assortment of brands, styles, and prices in all of the merchandise classes that make up the category. One of these stores in present in Lethbridge. This store is Toys R Us. This store can satisfy most of the needs of the target market.

Most of the jobs that a small toy business would have to look after are performed through a head or regional office. This gives Toys R Us a distinct competitive advantage over the competition from the small toy retails in Lethbridge. Ordering, pricing, payroll, storage, advertising, and many other day to day activities are performed by few for very many.

Toys R Us is a large category killing store that is located at 225 1st Avenue South, right next door to the Park Place Mall in Lethbridge, Alberta. It offers a wide range of toys, bikes, computer games, baby needs, and games to children and adults throughout Southern Alberta. Toys R Us has been open in Lethbridge for almost six years.

Market Selection Strategy The market selection strategy for a category killer such as Toys R Us is fairly simple. A strategy often determines the target market, and the different market segments that the store is looking toward for the majority of its business.

Toys R Us is a store which is in a mature market. The majority of the growth that has happened in this market occurred in the 1960’s, when the majority of consumers enjoyed a higher disposable income and therefore large chain stores began to appear. The market is still strong and stable and Toys R Us can expect increases to their sales every year as there are no plans for another major toy competitor in the area.

The toy market is a very competitive business. Stores such as Wal-Mart and Zellers boast large toy departments and these are the biggest competition for Toys R Us. The store has some loyal customers. However, most of the customers in the toy market are very price sensitive and will shop at the store with the lowest prices. In order to increase their sales and market share, Toys R Us must look for ways to keep their customers loyal to the store.

The geographic location of the store helps to attract more customers off the highway and those potential shoppers from out of town. As Toys R Us sits next to Highway 3, it makes it easier for out of town customers to get to the store. Toys R Us is able to target consumers anywhere from the Alberta/Saskatchewan border to the east to Fernie, Cranbrook and Creston to the west. They also have the ability and size to attract all customers to the south of Lethbridge, including those who live in northern Montana. Customers to the north have the option of shopping at the larger Calgary store or Lethbridge. This gives Toys R Us a very large customer base.

The target market refers to the primary market that the store is trying to attract. In the case of Toys R Us, their target market is individuals with children, which range from 25-45 years of age. The target audience is also the adults but the advertising can often hit the children, ultimately who will enjoy the products the most. Toys R Us finds the majority of their customers are the parents, but for some of their video games, the older teenager often has a disposable income high enough to spend on the featured games in stock.

By understanding that the majority of buyers are the parents, Toys R Us has also stocked itself in the off-seasons with product parents may be interested in buying. These products include, learning games, adult games such as Trivial Pursuit and adult bicycles. As the population of Lethbridge expands, the sales of Toys R Us will increase.

Market Research

Most market research for Toys R Us is conducted at the regional offices or head office. The information gathered from here is passed on to the 65 individual stores across Canada. Some primary research is done on the store level such as checking competitors prices and wages. Other primary research done at the store level is the customer satisfaction surveys that are conducted over the year.

Secondary research is used at head office and regional offices to conduct more through market research for the stores. Very little money is budgeted for the stores to conduct market research. Often at the smaller stores such as Lethbridge, it is just another responsibility of the store director.

Personnel Management

The store has a three tiered management structure that tries to cover all areas of the store throughly and completely.

Due to the size of the business, the chart is not as in depth as a smaller business would have. The Director oversees the entire store and is responsible for the everyday operations of the store. All store decisions must pass through the director for approval. The director is responsible to report to the District Manager. The assistant director is responsible for maintaining the sales floor and making sure that this area is kept up to standard. He/she reports to the director but is not responsible for looking after the other manager. The other manager is responsible for the storeroom. Also, included in their duties is the maintenance of the computer and game system area. The manager reports to the director.

The four department heads are given three different departments to look after. One sales floor department head maintains the sales area. This space includes everything except the special deals area and seasonal. (See appendix A). The other sales floor DH looks after these areas. They report to the assistant director. The operations DH is responsible for the tills, shipping and receiving, meetings, and the video game area. He/she reports to the assistant director and director. The last DH looks after the storeroom and those employees and reports to the manager. Employees in all areas report to the DH’s and look after their respective areas. DH’s delegate tasks each day to the employees and work closely with the employees.

Often a smaller store like Lethbridge has a senior DH to fill the gap of a second manager that the larger centers have. These person(s) are given more responsibilities and can open and close the store without a manager or director present. The senior DH is often the person who is next in line for promotion to manager. They are no higher on the organizational chart than a normal DH, but do receive added job benefits(pay increase), and are often called upon in difficult situations.

Hiring

Toys R Us has a diverse set of employees ranging in age from 16 to 60. The number of employees greatly fluctuates throughout the year. A mass hiring is done in late October to fill positions of night crew and to have extra staff available for the Christmas season. An optimal number of 32 employees are kept for the rest of the year. At Christmas that number increases to 50-55. Employees must be 16 years old and have a positive attitude toward work. Most employees are required to work on ladders, so anyone with a fear of heights is often overlooked for hiring. Hiring is often not needed throughout the year as 5-7 people are kept after Christmas to help strengthen the numbers. From February to September hiring is done on a need only basis. Applications are accepted and kept throughout the year.

Training

A successful applicant is given a minimal amount of training. This is the weakest component that exists at Toys R Us. New employees are given handbooks, a two-hour video session of store policies, and a small tour of the store. After that, it is strictly on the job training. Cashiers are quickly trained by senior staff for a shift and a checklist is gone over. Sales assistants are often matched with a DH or a senior staff member to help the new employees with their job tasks. Often this training only lasts for one or two days. Employees are expected to learn the store layout on their own and very quickly. DH’s and managers are available to the employees for any questions that occur on the job. Training is on going at Toys R Us and as an employee stays with the company longer, they will be given more responsibilities and privileges.

A probationary period of three months is given to all new employees. Anytime up to ninety days the employee can be let go without recourse. A small evaluation is given to employees after the probationary period is completed.

Training sessions are also given in dangerous chemical handling (WHIMS), and employees are periodically given tips on how to fold strollers etc. at the bimonthly staff meetings. Also, the Chinook Health Region holds training sessions in the store for expectant mothers and employees on car seat and booster seat installation and proper fitting for children. Bomb threat and fire drills procedures are gone over every six months to ensure employees know the location of fire equipment and the proper policies.

International Marketing Program

A firms international marketing program must generally be modified and adapted to foreign markets. This international marketing program uses strategies to accomplish its marketing goals. Within each foreign nation, the firm is likely to find a combination of marketing environment and target markets that are different from those of its own home country and other foreign countries. It is important that in international marketing, product, pricing, distribution and promotional strategies be adapted accordingly.

In order for an international firm to function properly, cultural, social, economic, and legal forces within the country must be learly understood. The task of International marketing is more difficult and risky than expected by many firms. One of the most controlling factors of international marketing is management. It is very important for managers to recognize the differences as well as similarities in buyer behavior. Many mistakes can occur if managers fail to realize that buyers differ from country to country.

It is the international differences in buyer behavior, rather than similarities, which cause problems in successful international marketing. An international marketing manager is a manager responsible for facilitating the exchange of roducts between the organization and its customers or clients. Sometimes an international marketing manager will find difficulties in completing the exchange of products. Many surprises in international business are undesirable human mistakes. An international corporation must fully understand the foreign environment before pursuing business matters.

Problems constantly crop up and many times have unexpected results. Sometimes these unexpected results are unavoidable. Other times they are avoidable. To be sure those avoidable situations do not occur, international marketing managers must be aware of ultural differences. Cultural differences take place among most nations of the world. Differences in culture are one of the most significant factors in an international company. All nationalities posses unique characteristics, which are unknown to many foreigners. Many of the top international businesses are unaware of these cultural differences.

It is very important to understand these cultures in order to market a product successfully. As an example, different nationalities have different beliefs on how business matters should take place. Where some countries prefer to work with a deadline other ountries can take this as being offensive. Many countries feel it is an insult to be asked to work under a set time period. A country may feel that a deadline is threatening and may feel backed into a corner. On the other hand, other countries try to expedite matters by setting deadlines.

To be effective in a foreign market it is necessary to understand the local customs. Knowing what to do in a foreign country is as important as knowing what not to do. Failure to understand local customs can lead to serious misunderstandings between business people. The simple rejection of a cup of coffee can lead to total confusion. The decline of an invite is sometimes considered an affront. To avoid making blunders, a person must be able to discern the difference between what is acceptable behavior and what is not acceptable behavior.

Violations of a local custom can be insulting, and can cause uncomfortable situations. To be a successful manager of international marketing, one must be able to discern the differences as to what must and must not be done. It is almost impossible to attain complete knowledge and understanding of a foreign culture. As established, culture plays an important role in the drama of international marketing. Of all the cultural aspects, communication may be the most critical. It is certain that communication has been involved in a number of cultural confusion.

Good communication linkages must be set between a company and its customers, suppliers, its employees, and the governments of the countries where it performs business activities. Poor communication can obviously cause various difficulties. One source of difficulty among starting companies is that of effective communication with potential buyers. The problem is that there are many possible communication barriers. Sometimes messages can be translated incorrectly, egulations overlooked, and economic differences can be ignored. Other times when the message does arrive, its ineffectiveness can cause it to be of no value.

Every now and then a buyer will receive the message, but to the companies disappointment, the message was sent incorrect. It is normal in multinational businesses to send and receive messages on a regular basis. Many well-known people have incapacitated public speech introductions by using inaccurate titles and names. Not all communication problems are verbal. Some serious problems have occurred as a result of non-verbal communication. Non-verbal communication exist in numerous forms. Sometimes a persons appearance can convey a stronger message than intended.

Untidy attire, for example, can be more offensive in some nations than in others. The local people often are willing to overlook most of the mistakes made by tourist. On the other hand, locals are less tolerant of the errors of business people. It is very important to be able to interpret the different means of communication in international marketing. In America, we sometimes take for granted the display of products on the market. However, in other nations such roduct array and selection do not always exist. It is important to understand that even if local customers can afford a certain product, they may not always want it.

If by chance are interested, it may be only if it is substantially modified to fit their local preferences and taste. These adaptations exist in the form of product and package. The alteration of a material product is sometimes required to match the product to local taste and conditions. Adaptation of the package is often needed to attract customers to the product. Many times adaptation is also used to maintain a products righteousness in a unique environment. A firm is occasionally forced to modify both the product and the package to create an appropriate product for the new market.

Some products may require more technical modification than others may. Measurement systems vary between countries, and often components need to be adjusted to cleave to local standards. The need for product adaptation has existed for many years. In 1857 Englands East India Company possibly lost control of India because it failed to modify a product it provided. A product may be well acceptable in markets, but may not sell if housed in an inappropriate package. Packages promote the product and they protect it. International packaging must be able to withstand the journey.

Some countries have exported their products only to witness the return of crushed and half-empty containers. Packaging can sometimes bring embarrassment to a company. Medical containers made in the U. S. drew unwanted attention because they carried the instructions “Take off top and push in bottom. ” These messages was harmless here in America, but were sexual and humorous connotations to the British. Often the choice of package and product is difficult. Sometimes companies have failed to sell their products overseas because of the packaging of a product.

Each firm must determine the area most appropriate for its product. Determining the region where it is most appropriate to market a product is not an easy task. Wherever the location of these places, they must be found because market testing is essential in international marketing. Many countries maintain regulations concerning their products and packages. Countries have expectations that foreign marketers will adhere to the rules. Failure to abide by the rules of a country can prove to be very costly. The legal and political atmosphere varies across national borders.

Different countries have different legal policies. There are laws to which a marketer must abide by when marketing internationally. Some countries enact laws to protect consumers or to preserve a competitive atmosphere in the marketplace. Since many countries maintain regulations concerning their products and packages, the wording or color of a package can create difficulties. In some countries giving gifts to authorities is a standard business procedure. In other countries, such as the United States, these gifts would be considered as bribes or payoffs and are strictly illegal.

If an error occurs it can be costly, but with the appropriate alterations it can be orrected. The General Agreement on Tariffs and Trade (GATT) reforms imposes on national governments the obligation to sacrifice local and state laws that protect customers, and the environment. Plans were developed in the mid-1980s to broaden GATTs mandate by extending its police powers to the areas of foreign investment and trade in services. If such reforms are enacted, GATT will have the authority to remove barriers to foreign investment and to override or knock out local laws for protecting a nations insurance, brokerage, an banking businesses.

Removing local laws can definitely make the international ork place easier, when it comes to the legal aspect. In the field of marketing, a product promotion can be the most difficult. Timing is the most critical element in the launching of a new product. Most firms understand this and also perceive that varied peoples hold different conceptions of time. Since some nationalities are more conscious of time factors than others, extra time must often be allocated to guarantee that everything is completed as schedule. An international marketer can adopt several strategies regarding its product and promotion.

Marketing a product internationally through a single promotional message orldwide can be effective for products that have standardized appeal for the majority of the people. Most times this could be the least expensive strategy. When it is hard to translate promotional messages or to adapt an overall promotion to local customs, companies market one product. This promotion is designed to market one product but vary its promotions. Some products are well known among the nation and need little advertising. The advertisement can be on American influence located in China.

If a theme works exceedingly well in one country, then it naturally becomes very tempting for a firm to want to se it in another country. There is a big risk involved in doing this, because admirable themes are culturally oriented. For example, consider the very popular Marlboro advertisements. The Marlboro man projects a strong masculine image in America and in Europe. In Hong Kong, attempts to use this advertisement were unsuccessful because the urban people did not identify with horseback riding in the countryside. Several firms have tried to use old, reliable promotional methods in countries where they simply do not work.

Billboard advertisements, for example, are perfectly legal in most parts of the Middle East, but it oes not mean one should use them. In some cases companies have been know to advertise in the wrong language. Such mistakes can cause major problems. It is often the promotional strategy that creates mistakes. The perception of the product characteristics plays an important role in the international marketing strategy. One must realize that the importances of a certain product traits vary from country to country. Multinational corporations, therefore, must consider varying promotional tactics.

Adapting the product but using the same promotional mix is a strategy used when a product will not appeal to different ocal tastes. For example an American cheese company may need to use different ingredients when making cream cheese for the markets of different countries. The most expensive strategy is adapting to both the product and its promotion. This strategy may be required when neither the existing product nor its promotion would appeal to foreign markets. In some cases, the international firm may develop a completely new product for a foreign market. It can be very costly to create a new product line for a foreign market.

The distribution strategy used sometimes depends on the firms international organization. It does not matter if it is licensing, exporting, or manufacturing in the host country. International marketers use existing distribution channels for the most part. Distribution channels link the producer of a product to the consumer or industrial user. This international marketing channel is sequence of marketing organizations from nation to nation that directs the flow of products. Most industrial products use shorter channels. One of the most basic levels of international marketing is licensing.

A license is a contractual agreement in which one firm permits another to produce and market its product and se its brand name in return for a royalty or other compensation. This grant may be in the form of a direct sale of rights or be limited to a certain period of time. International licensing can be tied to joint ventures between the parent and the subsidiary. For example, an American candy manufacturer might enter into a licensing arrangement with a British firm. The British producer would be entitled to use the American firms candy formula, and packaging to advertise the candy as though it were its own.

The advantage of licensing is that it provides a simple method of expanding into a foreign market with no investment. However, if the licensee does not maintain the licensors product standards, the products image may be damaged. Another disadvantage is that a licensing arrangement does not usually provide the original producer with any foreign marketing experience. Technology licensing is a conceivable alternative to the exportation of finished products through intermediaries or to the different types of capital involvement, which could be chosen as an international strategy.

Many companies use intercompany licenses to protect the intellectual property of the parent company that is held by the subsidiary, and to allow for ayments by the subsidiary to the parent of certain license fees. Licensing is also dependent upon product characteristics. Products subject to rapid technological change are also good licensing candidates. For most large companies licensing is designed as a means to enter secondary markets. The potential licensor must look at legal and financial considerations.

Many times the decision to license has been made since the company has no other alternative because the government restricts direct investment through controls on foreign ownership or because it restricts the development of marketing network y a number of tariff barriers. Licensing allows the licensor to enter into foreign markets with a low financial risk. The decision to license is a complex one. Many licensing relationships do not succeed because the parties fail to understand each others agenda. The creation of joint ventures sometimes prevents all the problems encountered by a company when going overseas from occurring.

With the combined expertise and efforts of local and foreign firms, many problems will be eliminated. A joint venture is a partnership that is formed to achieve a specific goal or to operate for a specific period of time. International corporations may enter into joint ventures. Most joint ventures were formed to share the extremely high cost of exploring for offshore products. A company should create a joint venture only after giving it some consideration. Many problems occur when companys fail to thoroughly investigate potential partners.

Licensing decisions are as difficult to analyze as those decisions involving the creation of a joint venture. Failure to make the correct decisions at the right time can result in the loss of substantial long-range business prospects and profits. A firm can also manufacture its products in its home ountry and export them for sale in foreign markets. Like licensing, exporting can be a relatively low-risk method of entering foreign markets. Unlike licensing, it is not an easy task. Exporting opens up several levels of involvement to the exporting firm. On the basic level, the exporting firm may sill its products to an export/import merchant.

This merchant assumes all the risks of product ownership, distribution, and sale. It may purchase the goods in the producers home country and assume responsibility for exporting the product. The exporting firm may also ship its products to an export/import agent. The export/import gent arranges the sale of the products of foreign intermediaries for a commission or fee. The agent is an independent firm that sells and may perform other marketing functions for the exporter. The exporter retains title to the products during shipment and until they are sold.

An exporting firm may also establish its own sales offices in foreign countries. These installations are international extensions of the firms distribution system. The exporting firm maintains control over sales, and it gains both experience and knowledge of foreign markets. Eventually, the firm may develop its own sales force to operate in onjunction with foreign sales offices or branches. Pricing is a very important factor in international business. The pricing system more common in international marketing is cost-based pricing. Cost-based pricing is not as popular in domestic marketing as it is in international marketing.

Using this simple method of pricing, the seller first determines the total cost of producing or purchasing one unit of the product. The seller then adds the amount to cover additional cost and profit. The cost added is called the markup. The total cost of the markup is the selling price of the product. Many smaller firms calculate the markup as percentage of their total cost. Markup pricing is easy to apply, and it is used by most businesses. However, it has two major flaws. The first is the difficulty of determining an effective markup percentage.

If this percentages too costly, the product may be overpriced for its market. On the other hand, if the markup percentage is too low, the seller is “giving away” profit that could have earned simply by assigning a higher price. In other words, the markup percentage needs to be set to account for the working of the market, and that is very difficult to do. The second problem with markup pricing is that it separates pricing rom other business functions. The product is priced after production quantities are decided upon, after cost are incurred, and almost without regard for the market or the marketing mix.

To be effective, the various business functions should be integrated. The different types of pricing can vary in international marketing. Geographic pricing strategies deal with delivery cost. The seller may assume all delivery cost, no matter where the buyer is located. The seller may share transportation cost with the buyer to pay the greatest part of delivery cost. When a foreign product enters a country, there is a tax added to the cost. Import duties are designed to protect specific domestic industries by raising the prices of competing imported products. The importer first pays most of the import duties.

After the importer pays the price it is then passed on to the customers through higher prices. These higher prices are usually less competitive. The cost of shipping and complying with other various regulations can also add to the pricing method. Prices are also effected by exchange rates, especially by changes in these rates. Financial limitations are normally imposed through exchange rates. It is required to convert local currency to oreign currency at government-imposed exchange rates. Because of the added cost and uncertainties in the exchange rate, prices tend to be higher in foreign markets than in domestic markets.

An important economic consideration is the distribution of income. The distribution of income, especially discretionary income, can widely vary from nation to nation. Discretionary income is of particular interest to marketers because consumers have more input in the spending of it. Income creates purchasing power. International marketers tend to concentrate on higher income countries as either personal, disposable, or discretionary. For obvious reasons, marketers tend to concentrate on higher income countries. Some producers have found that their products are more likely to sell in countries with low income.

As in domestic marketing, the determining factor is how well the product satisfies its target market. International marketing encompasses all business activities that involve exchanges across national boundaries. A firm may enter the international market for many reasons. Whatever the reason international marketing can provide and efficient way of entering the market. A firms marketing program must be adapted to foreign markets to account for ifferences in the business environment and target markets form nation to nation.

The marketing mix may require the modification of cultural, social, economic, and legal differences. Foreign marketing requires the understanding of various additional costs, which tend to increase the prices of exported goods. The marketing program of an international company must adapt to the necessities of a foreign market. The strategies it uses to accomplish a firms marketing goal should be the main priority of the marketing program. False assumptions frequently cause expensive mistakes in the market.

Priceline. com (PCLN)

Priceline. com (PCLN) may have been able to bring a dynamic reverse auction model to the market, but a cloud of doubt now hangs over the company’s headquarters in Norwalk, Connecticut. Consumer adoption has been hurt by poor Web site functionality and a rigid bidding system that locks customers into buying products such as plane tickets without any control over specific flight details. On a bullish note, the company was recently reinstated into Connecticut’s Better Business Bureau after making improvements to its Web site and customer service.

But the bigger problem facing Priceline is a lack of support from investors, who have driven the company’s stock down 98% from its 52-week high. Executive departures and layoffs aside, the company’s delayed march toward profitability and inability to scale successfully might very well exemplify a doomed model, or a solution in search of a problem. Perhaps an emphasis on price has blinded Priceline to intangibles like quality service and a satisfying experience. It’s unclear whether consumers are willing to sacrifice brand and product features to save a few bucks.

The announcement in early October that the company’s WebHouse Club subsidiary for groceries and gas would close, was a shot heard ’round the Web and Wall Street and signaled the model might be broken. Introduction Which is the one place where you can satisfy your every need (almost every need) at your price? Be it airline tickets, hotel rooms, rental cars, mortgages, new automobiles, or even long distance calling time. The answer would be Priceline. com. All you have to do is know your need, state your terms, and make your offer. It doesnt get easier than this!

Priceline. com was one of the pioneer online companies to traverse the traditional limitations of the Internet and revolutionize online purchasing. Its strategy letting the consumer name his/her price, and matching it with a seller who is willing to fill the demand at that price and those conditions, there by providing the required service the consumer desires. Thus Priceline. com is basically an integrated, Web-based e-marketing automated system, which was one of its kinds when it started its business in the consumer marketplace.

In simple word it is the ideal middleman, who gets you what you want, when you want it through a unique dotcom experience. Priceline. com was formed on April 6, 1998 as a limited liability company, but looking at its potential and rapid success it was soon converted into a corporation. It activities at this time dealt mainly with providing leisure airline tickets with the unique difference of letting the customer name his/her own price. By December 31, 1999 its services included hotel rooms, mortgages and new automobiles.

The Company’s licensee, Priceline WebHouse Club, Inc. oon launched a Name Your Own Price service for groceries in the fourth quarter of 1999. Another licensee, Priceline Perfect Yard Sale, Inc. , launched on a test basis in the first quarter of 2000, a consumer-to-consumer based Name Your Own Price, which involved the sale of quality, used goods over the Internet. Today after nearly three years of existence Priceline. com boasts a huge market share, loyal fan following and 373 employees. Priceline. com can be best described as the ultimate Internet middleman. How Priceline. com Works?

Ron Rose, Chief Information Officer at Priceline. com, says, “Our goal is to lead the industry as a world-class customer-centric company, with an infrastructure that delivers the best, personalized customer service experience is absolutely fundamental to our company’s long-term success on the Internet. ” Priceline. com has pioneered a unique e-commerce pricing system known as a “demand collection system” that enables consumers to save money on a wide range of products and services while enabling sellers to generate incremental revenue.

Priceline. m uses its virtual business model, which works as a three-step process while allowing them rapid scaling using the Internet: The first step consist of Priceline. com collecting consumer demand, of the individual customer backed with the guarantee of the respective customers credit card, for a particular product or service at a price which is set by the customer. In the second step then, Priceline. com either communicates that demand directly to participating sellers or accesses participating sellers’ private databases to determine whether priceline. com can fulfill the customer’s offer.

In the final step, Priceline. com gets back to the consumers regarding their offers, which they can hold to for a specific period of time and, once fulfilled, offers cannot be canceled. If Priceline. com doesnt meet the customer price for a particular demand, the credit card is not charged and the customer is once again asked to change the price if he/she wants and the procedure is repeated. Priceline. com benefits consumers by enabling them to save money, while at the same time benefiting sellers by providing them with a competent revenue management tool capable of identifying and capturing incremental revenues.

By requiring consumers to be flexible with respect to brands, sellers and product features, priceline. com enables sellers to generate incremental revenue without disrupting their existing distribution channels or retail pricing structures. Target market An important goal for effective marketing strategy is the reduce costs of marketing through targeting of marketing efforts. But the todays digital world has shaken marketing to its core. Todays consumers are more of the cyber consumer.

Digital technology and Internet are changing consumers and are changing the way they relate to products and markets. Priceline. com has targeted its customers in a different way. Underlying Priceline. com’s marketing strategy is the Company’s belief that its target market is all consumers, not just Internet savvy consumers. It hasnt limited its customers to net users only, but has also reached the segment of the market, which doesnt generally use the Internet for shopping, through viral marketing and giving them choices and prices they cannot resist.

It has shown them that they have the power of pricing, shifting it from companies to the consumers. Priceline. com works on the trends of not only attracting their target markets through prompt website, but also with the advertisements, which have been hit, and toll-free numbers. Priceline. com not only uses Internet to target the consumers but also with lots of other advertisement and promotions. The advertisement with William Shatner, with the oldies of 60s and 70s has become such a hit with the people that they even ask for the record of the tape.

Priceline. m has targeted the whole consumers along with the Internet savvy people in a total different way. One way, which has benefited Priceline. com, is the viral marketing or the word of mouth strategy also known as the referral. Priceline. com with the word-of-mouth referrals has been able to draw large amount of customers to the site. Today Priceline. coms site is one of the Internets most heavily used sites, with more than 1. 5 million hits in a week. Consumers are required to accept certain trade-offs with respect to brands or product features in return for saving money.

For example, consumers are required to accept a reservation in any hotel within a specified geographic-area within a designated “class” of service (1, 2, 3, 4 or 5-star) and must accept limitations on changes and cancellations. As with the airline ticket service, the target market for Priceline. com’s hotel room reservation service is the leisure travel market, as the customers have no idea of the carrier and the time they are flying until the ticket is booked. If the ticket is booked, it cannot be cancelled or be changed. This is one of the reasons why business personnel cannot use Priceline. com as they have a fixed schedule.

The Priceline. com Strategy and the 4 Ps Priceline. coms goal is to continue to expand the Priceline. com business and to operate Priceline. com’s demand collection system as a leading source for the purchase of products and services on the Internet. The key features of Priceline. com’s strategy are as follows: Leverage the Priceline. com brand over diverse products and services: Priceline. com intends to continue to leverage of Priceline. com brands across its numerous products and services to achieve significant revenue scale and growth.

In contrast to most e-commerce businesses that operate in one or two “vertical” markets, Priceline. m is a “horizontal” commerce system that can benefit both buyers and sellers across a broad range of products and services. Priceline. com’s strategy is to make available multiple products and service offerings at its web site under a common brand to take advantage of these market opportunities. Priceline. com intends to expand directly in certain vertical markets and license its business model and name to independent licensees in other markets. Priceline. com and its licensees have launched or expanded offerings in several new categories over the past twelve months and these efforts will continue.

Strengthen the Priceline. com brand: The Company plans to expand consumer recognition of Priceline. com as the leading consumer brand for buyer-driven commerce over the Internet. To achieve this goal, Priceline. com intends to continue to pursue an aggressive brand development strategy through mass market and targeted advertising and promotions, press coverage and strong word-of- mouth support. While priceline. com is already one of the most recognized e-commerce brands among adult Americans, priceline. com believes that it can expand the public’s association with the Priceline. m Name Your Own Price proposition to a broad range of products and services.

Priceline. com plans to expand, but it seems quite impossible according to the current stock market prices. Priceline. com for the time being should concentrate on their travel section and expand as soon as their company is again well established. Product Strategy The product offering is considered to be the heart of a marketing mix. It is impossible to decide on a promotion campaign or set a price without knowing the products to be marketed. Priceline. com has numerous products and services to offer. Priceline. m commenced its service with the sale of leisure airline tickets.

The number of airlines participating in Priceline. com’s airline ticket service has increased to a total of 10 domestic airlines and 20 international airlines. Few of the major domestic airlines Priceline. com uses are United Airlines, American Airlines and Northwest, whereas major international airlines include Virgin Airways, British Airways and Lufthansa. Priceline. com uses Delta Airlines as both its domestic and international carrier. Consumers can make offers to purchase airline tickets through the Priceline. com Web site or the 1-800-PRICELINE-call center.

The customer than has to follow the process mentioned earlier. In October 1998, Priceline. com launched its Name Your Own Price travel service for hotel room reservations. Priceline. com’s hotel room reservation service currently is available in substantially all major cities and metropolitan areas in the United States. Hotels participate by filing private discounted rates with related inventory control rules in Priceline. com’s private database in a central reservation system for hotel rooms. These rates normally are not available to the general public or to consolidators and other discount distributors who sell to the public.

Priceline. com’s hotel room reservation service operates in a manner similar to its airline ticket service. Priceline. com offers two different rental car services. In December 1999, priceline. com launched its Insiders Rates) service and, in February 2000, Priceline. com launched its Name Your Own Price service. Priceline. com’s rental car services are currently available in substantially all major United States markets. Under Priceline. com’s Insiders Rates service, participating car rental companies offer Priceline. com customers who have already purchased an airline ticket from Priceline. m rates on car rentals in connection with a customer’s planned travel arrangements.

An offer is provided to a customer by e-mail and on Priceline. com’s web site when a customer checks the status of his or her request. Priceline. com’s Name Your Own Price rental car service operates in a manner similar to its airline ticket and hotel reservation services. Consumers can access the priceline. com Web site and select where and when they want to rent a car, what kind of car they want to rent (i. e. economy, compact, mid-size, SUV) and the price they want to pay per-day, excluding taxes, fees and surcharges.

In January 1999, Priceline. com introduced its home financing service. Under the terms of separate agreements with Alliance Partners, L. P. and Lending Tree, Priceline. com’s financing service allows consumers to set their interest rate and points for mortgages of a specified term, including, purchase money mortgages, refinancing and home equity loans. Priceline. com introduced its new car sales service on a test basis in the New York metropolitan area in July 1998. Since that time, Price lines new automobile service has been expanded to include 26 states. Priceline. m’s new car sales service accepts offers for every major brand of automobile.

Due to the numerous features and options on a new automobile, the range of product substitutability that consumers will accept is lower in the case of new cars than with airline tickets or hotels. Priceline. com does not negotiate on behalf of customers or dealers and does not represent to its customers or dealers that it is acting as an agent or broker on behalf of either party. Once a dealer accepts an offer for a new car, the consumer completes the transaction directly with the dealer.

The Priceline. m new car sales service is differentiated from other Internet car sales services, which serve as lead generators for participating car dealers. Under such services, multiple dealers may contact the customer in response to the customer’s inquiry to the Internet service. By contrast, Priceline. com’s new car sales service does not reveal the identity of the customer to the auto dealer until the dealer has accepted the customer’s offer. Furthermore, in contrast to other Internet car sales services, dealers are not currently required to pay a participation fee to review offers from the Priceline. m service.

Priceline. com has recently launched a Name Your Own Price service for international and domestic long distance calls. The company allows consumers to name their own price for phone-to-phone international and domestic long distance calls. Promotion Priceline. com has developed adaptive marketing programs to help bridge the between consumer offers and seller prices, provide users of the priceline. com service with other desired products, and generate additional revenue for the Company. These programs also serve as an integral part of Priceline. com’s strategy of building customer loyalty.

Priceline. com’s adaptive marketing programs presently include two distinct initiatives. The first, which it refers to as “adaptive promotions,” allows consumers to increase the amount of their offers, and thus their likelihood of success, at no additional cost by participating in sponsor promotions during the process of making a priceline. com offer. For example, a customer making an offer to buy a round-trip airline ticket can immediately have the amount of his or her offer increased and thereby increases his or her likelihood of success by applying online for a credit card.

The second type of adaptive marketing program is referred to as “adaptive cross selling” and utilizes cross selling of multiple products to increase the number of successful transactions. For example, a customer whose offer for an airline ticket was marginally below acceptable levels could be offered a second related product such as a hotel room reservation or a rental car day at a combined price that provided an acceptable margin for Priceline. com. During 1999, Priceline. com added adaptive marketing partners and, as a result, reduced its dependence on any one partner.

Priceline. m intends to continue to add adaptive marketing programs so that consumers have a variety of programs from which to choose and priceline. com has a diversified source of adaptive marketing revenues. Pricing Strategy The Internet and the World Wide Web has fundamental impacts on the pricing strategy of firms. Similarly, the technology has open many doors to buyers hitherto closed by the effects of time, cost and effort. Technology may combine with market forces to reduce the vast majority of a firm’s transactions to the level of commodity trades, leaving managers with little opportunity to make prices.

The information age – and the advent of computer-controlled machine tools – lets consumers have it both ways: customized and cheap, automated and personal. Particularly in consumer markets, suppliers tend to make prices while customers “take” them. There are a number of instances on the World Wide Web where the opposite situation is now occurring. One of them is Priceline. com. It is a kind of Internet pricing system that enables consumers to achieve significant savings by naming their own price for goods and services. Their primary products are new cars, travel, and personal finance products.

Priceline. com takes an offer of purchase to the seller and they have the option of accepting or rejecting any offers. Not unlike EBay, Priceline. com has no warehouse or inventories. At a higher level of customer price making, Priceline. com invite customers to name their price on products and services ranging from air tickets to hotel rooms, and new cars to home mortgages. In the case of air tickets for example, customers name the price they are willing to pay for a ticket to a destination, and provide credit card details to establish good faith.

Priceline. m then contacts airlines electronically to see if the fare can be obtained at the named price or lower, and undertakes to return to the customer within an hour. Priceline. com’s margin is the differential between the customer’s offer price and the fare charged by the airline. Place strategy The market space replaces market place, and in the land of ‘clicks vs. bricks’, you buy online in a virtual store and have the option of taking it back to a physical store “Place” will be online and not of much interest or it will consider virtual places as “real”.

Every company now competes in two worlds: a physical world marketplace and a digital world “market space”. Within a decade, most products and services will be sold in the market space. Priceline. coms market place is this market space and the web. Priceline. com continues to frequently update and enhance the features of the Priceline. com service. Priceline. com constantly monitors feedback from consumers and regularly adds new features to further simplify the buying process. Priceline. com also receives offers by telephone and provides customer service by telephone and e-mail to assist customers in the offer process.

 

Southwest Airlines Marketing Strategy

Southwest Airlines is the industry leader in low cost airfare. They began its operation in 1971 with three Texas based routes and began interstate routes in 1978. When Southwest entered the market in 1971 they employed a market penetration pricing approach. They wanted to provide the best service for the lowest possible price. They saw that if they cut out certain unnecessary benefits they could lower their ticket price to a level far below that of the competition. They do not have in flight movies, meals, or first class sections. This strategy has been very cost effective and Southwest passes the savings on to the customer.

They chose to focus on pleasure travelers and low-income travelers opposed to business travelers. This allowed them to take advantage of a market, which was often ignored by other airlines. Southwest is not concerned with the prices of other airlines. They do not engage in pricing to meet competition, or pricing below competition. CEO Herb Kelleher stated, Were not competing with other airlines. Were competing with ground transportation. This philosophy has led them to be very successful because they are priced below the competition, but dont raise their prices when the competition does.

Cost controlling is very important in the airline industry. Southwest is very good at controlling their costs. They offer a no frills service for people who want to get to their destination for as little as possible, and are not concerned about the bells and whistles like in-flight movies. Southwest also realized that when their planes are on the ground, they arent making money. They decided to keep their planes in the air as much as possible and have worked hard to keep a low turnaround time. They manage to unload passengers and load new passengers for the next flight within twenty minutes, which is shorter than the industry average.

Southwest also uses only one kind of plane, the Boeing 737, in order to reduce costs of parts and training employees to use different types of planes. All of these methods have lowered the cost of operations for Southwest and allowed them to have a profit of $4. 7 billion, which is twice that of United Airlines. And because they are so efficient they can pass the savings on to customers. There is no first class at Southwest and therefore all the customers are treated the same. They all receive the same level of attention and care. All customers feel special because they all receive the same high level of attention.

Southwest has segmented the market and decided that their target market would be pleasure travelers who are looking for low cost flights. Their positioning is a low cost airline with great customer service. This sets them apart from the competition because airlines that are low cost usually lack good service, where as, Southwest prides itself in good customer service. Colleen Barret, executive vice president of customers, says, We are not an airline with great customer service. We are a great customer service organization that just happens to be in the airline business.

This clearly shows Southwests feelings towards their customers and is a big reason for their continued success. Southwest carries their tradition of treating people right over to their employees. Southwest was the first airline to develop a profit-sharing initiative in 1973, which motivates employees to perform their best. Southwests employees are encouraged to have fun on the job. Their uniforms are also more casual than the industry standard. The laid back atmosphere and quality management is what make Southwest number one on Fortunes list of the 100 Best Companies to Work for in America.

Many online travel agencies were taking some of the business away from airlines. They buy tickets in bulk than sell them for cheaper than the airline does. Southwest has also added online purchasing of tickets to their web site to compete with these travel agencies. Southwests website is easy to navigate and only took 11 clicks and less than 5 minutes for me to book a flight from Baltimore to West Palm Beach, Florida. Online ticket discounters are more complicated and harder to navigate then Southwests website.

I dont believe these online ticket places will take away much of Southwests business because Southwest has entered the market too and has as low or lower costs than travel agencies. Since the tragedy of September 11th, there has been a drastic drop in airline travel and many industry leaders have taken massive hits. The other major airlines catered mainly to business travel, which has reduced the most since the terrorist attacks. “Almost all the airlines had focused on business travelers because they bought the high-price tickets. When there was a big cutback in business travel after 9/11, one airline Southwest Airlines Inc. red well.

Because it had catered to the economy traveler and effectively managed expectations, Southwest’s business bounced back quickly. The business of the other airlines didn’t,” says Maqbool Dada, a professor at the Krannert School of Management. Southwest has also taken steps to improve safety after 9/11. They are more aware of passengers movement in the front of the plane. The captain greeting each passenger as they board assures that anyone seen as a problem can be removed from the flight. And most importantly there have been modifications to the cockpit door to prevent forced entry.

All of theses measures will do something to improve safety and the feeling of well being of the passengers. Southwest should communicate the new security measures in advertisements so the customers can see what Southwest is doing to improve safety, which would make the customer feel more comfortable to fly. I would propose that a reduction in prices would generate more business, but Southwest is still in good shape financially. I would suggest that other major airlines drop prices temporarily until business picked up, but then they would be going head to head with Southwest.

It might be a better idea for other airlines to utilize pricing above competition and raise prices. This might give potential passengers a greater feeling of security because of the increased costs. They might feel that it is a superior product and safer because of the higher cost. Southwest should expand their product line and offer some international flights. Southwest should open an international route to Cancun, Mexico. College students going on spring break would definitely buy Southwests inexpensive tickets.

College students also arent concerned about in-flight movies, meals, or other perks. Southwest would crush the competition in that route and make a large profit. Even families going on vacation would fly Southwest Airlines to Mexico. It is cheaper than other major airlines and it is a respected airline, unlike some no name airlines that run flights to Mexico. Advertising would be best done on television because America has become lazy and watches too much TV. They should advertise their great customer service by having customer testimonials and pictures of smiling customers and employees.

They should also advertise during family oriented shows, because they are a form of inexpensive travel that a family could take advantage of. In conclusion, I feel that Southwest has taken advantage of its inexpensive flights and family oriented atmosphere to prevail despite the September 11th tragedy. Southwest has been a profitable business for 26 consecutive years and has twice the profits of United Airlines. They have been doing a great job providing customer service and will continue to be successful as long as they continue with their current plan.

Sony And Marketing

The primary concern or objective of marketing is to identify and satisfy, or exceed the changing needs of customers. In view of this broad concern of marketing, it can be seen that the concept of marketing encapsulates many activities in a business. Marketing, in fact, refers to any activity undertaken by a firm that has been designed to plan, price, promote and distribute ideas, goods and services to target markets. These marketing activities were executed in order to create exchange, that is sales, that will result in the achievement of the proprietors’ individual goals and the firm’s goals, both in the short-term and the long-term.

It is then obvious that marketing forms an integral component of any business’s operations. In particular marketing activities attempt to increase a firms’ revenue base, by placing an emphasis on enticing potential customers in target markets to purchase the firms’ products in order to satisfy their wants, rather than those of firm’s competitors. Consequently, the marketing directly contributes to the attainment of the financial goals of the firm.

Hence, the success of a firm is reliant upon the extent to which it is able to identify, and satisfy or exceed the customer’s needs more effectively and efficiently relative to its competitors vying for the same markets. Marketing as an activity that entails several features, all of which are presented during the course of the marketing process. Such features include, firstly and most importantly, that marketing is a comprehensive process that begins with the creation of an idea and ends up as product that will be sold to satisfy a customer’s needs.

Secondly, marketing is seen as a managerial process as it involves making managerial decisions about the particular mix of product, price, place and promotion in a firm. Furthermore, marketing involves managers planning and ensuring that particular sequenced activities are carried out, in order for the marketing plan to be successful. Finally, marketing is perceived as a way in which firms are able to satisfy the needs of customers, and in turn achieve their own business goals. Marketing provides the business with the ability to satisfy the changing wants of customers.

In light of this, and the fact that businesses have become increasingly aware of the role that marketing plays in achieving success in the business, several approaches or philosophies to marketing have developed. There are five central approaches to marketing, with the use of a specific marketing approach/s depends upon particular business’s marketing strategy and the type of product being marketed. These different approaches are: Marketing Concept: this approach believes that customer’s want-satisfaction is the economic and social reason for an organisation’s existence.

This approach stipulates that all of the business’s activities should be targeted towards meeting consumer wants, while at the same time meeting the organisation’s goals. In effect, this approach requires that the firm finds out what the customer wants, and subsequently develops a product to meet these requirements and then sell it at a profit. Production Concept: this approach states that the business will sell its product if it is both well made and affordable.

Businesses utilising this approach require management to focus on improving production techniques and cost structures of the business. Consequently, this approach does not place emphasis on customer want-satisfaction. Product Concept: this approach has the attitude that ‘product is king’ and focuses on the quality, features, and performance of the product. This approach believes that if the product has more features or is of a better quality and performance compared to competitors, it will then gain greater sales. This approach is not customer want-satisfaction oriented.

Selling Concept: this approach focuses on developing sales techniques and promotional activities in order to entice customers into buying an organisation’s product, whether they want it or not. Therefore this approach places direct emphasis on customers, but, possibly not on their want-satisfaction. Societal Marketing Concept: this is the latest marketing approach, it combines the main ideas of the marketing approach, that is, determining customer needs and satisfying the business’s goals, but also integrates social responsibility into the business.

This social responsibility includes increasing environmental awareness, which may include tackling the problems of pollution and the exploitation of non-renewable resources. Modern day businesses are under pressure to adopt this marketing approach, in order to become more socially responsible. This approach not only focuses on fulfilling the customer’s want-satisfaction, but also satisfying society. The electronics firm, Sony, has expanded its operations from its establishment in 1946 in a ‘bombed out department store’, to become one of the world’s largest and most influential electronics firms.

Sony, has furthermore, developed a worldwide reputation, as one of the worlds most innovative and technologically advanced firms. Its success can be attributed to several internal factors, which include, the freedom of workers to experiment, the passionate decisions of management, the established corporate culture, and also particularly to the marketing approaches that top management has integrated into the firm since its establishment.

The leaders of Sony, from its founders to the present-day management, have encouraged their product designers to express and prove their individual visions about the development of new products to the firm, as with the Sony Walkman. In fact top management has been ‘willing to join the creative fray’, which has lead to the development of a cohesive firm with a corporate culture. This management style prompted the development of premium quality, unique, and futuristic products, and along with the establishment of a strong corporate culture, formed the basis of the firm’s competitive advantage.

These aspects gave rise to adoption of several marketing approaches during the course of Sony’s life cycle. During Sony’s period of establishment the marketing approach was the key approach, since the initial management of Sony decided that the only way to succeed was to discover a new form ….. of technology and develop a product from it, which would satisfy the wants of customers. This was evidenced by the conception of the tape recorder, and the first pocket-sized radio, developed for changing lifestyles.

This approach has continued and still practiced today as signified by the recent development of the following products, the Walkman, the Handycam, the Discman, all of which are regarded by millions of customers as products that represent a way of life. The marketing approach was influential in the marketing of the Walkman, such a concept originated from a want of customers for a small, portable, tape/radio player, to replace the large, inconvenient players of the era.

Sony identified this customer-want, and the Walkman was introduced, and heavily marketed, and in turn, became one of! the firm’s most successful products. In addition Sony has realised that consumer-want for electronics is apparent in all age groups and as such, it has developed several products for different markets, for example, ‘My First Sony’ was introduced for a younger target market.

Another essential marketing approach for Sony has been the product approach, unlike other firms in Japan; Sony prides itself in producing products which have incorporated unique plastic appearance and futuristic features with superior quality, and affordability of price. These concepts have ensured that Sony’s sales have outstripped both domestic and foreign, including Western, competitors. In fact, Sony has upheld these concepts, in regards to their products, to the extent that they cancelled the production of a new television, simply because a rival had placed a similar product on the market.

Coupled with the product marketing approach has been the design of products, which is a major feature in the marketing strategy of Sony, this is evident with the Sony Playstation, which has been carefully designed and uniquely developed for the younger target market. In the future, with the dawn of the digital age, Sony must place greater emphasis on the product marketing approach, to achieve sales, if it wishes to maintain its market edge. This requires, Sony, embracing advanced technology in the manufacturing of its products.

The managers of Sony have realised the dilemma, that due to the speed of technological advancements, the products Sony releases today will become obsolete rapidly. Therefore, Sony is continually, incorporating innovation achieved via extensive research and development, to improve and expand upon its products to make them superior to competitors. This approach has lead to the development of several 21st century products to be used to dominate the future electronics market; these products include a portable head-mounted video player, a DVD player, and a new-generation computer.

The final approach to marketing by Sony has been the selling approach, Sony, as a multinational firm, has earned a reputation worldwide as being a superior producer market leader, in regards to electronics products. The size of the company allows it to promote its product on a larger scale than that of many of its competitors. Potential customers are enticed to purchase the firm’s product, even if they do not need it, by the array of commercials, catalogues, and other methods, which portray Sony product’s as being superior.

Further, the appearance of Sony’s products is heavily marketed as being state of the art, everyone is aware of the black, sleek, elegant, and futuristic appearance of the Sony the products. Sony is a successful international business as it has grown to become one of the world’s largest and most influential electronics firms, due to its ability to meet consumer-wants worldwide. This influence over the market is evident as domestic and international competitors wait for Sony to initiate a market trend via the introduction of a product, and then duplicate this, so as to benefit from Sony’s success.

Furthermore, Sony has come to possess a worldwide reputation, which rivals those of the other multinationals, like Nike and others, a reputation which has made Sony and its products synonymous with quality and superiority in electronics. Sony’s is also seen as internationally successful as it has entered many export markets in the world, including Australia, Sony also has established several headquarters in different parts of the world, including America and Europe, which is a testament to its international success.

This worldwide status has enabled Sony to discover chan! ges in consumer wants, new product ideas, and the success of different marketing approaches worldwide. Sony’s international success can be attributed to several internal factors, these in the passionate decisions of management, in that they allow the product designers the freedom to experiment and develop the ideas that may lead to a breakthrough for the firm.

Further, Sony’s success can be attributed to the establishment of a strong corporate culture in the firm, which allows the goals of the firm to be achieved, as managers have ensured the everyone is able to focus on the overall picture of the firm. Sony’s integration of marketing approaches is another keystone to the firm’s international success, as the simultaneous use of the strategies has allowed the firm to better satisfy customer wants, and in turn better achieve its own goals.

This success can be attributed, largely, to the role of product marketing in the business, the attitude that ‘product is king’ has allowed Sony to develop a general direction in which the firm is headed. The use of product marketing has resulted in Sony being able to, use different methods, such as market research and R&D, to discover the wants of customers, and in turn develop products to satisfy these wants, all of which has enabled Sony to gain sales and become successful, internationally. Product marketing has also allowed Sony to maintain its edge in the electronics market.

As Sony’s designers are using the market approach to continually develop, improve, and expand upon their products to meet the changing customer needs, this coupled with large-scale promotion of the product, itself, has allowed Sony to maintain its competitive advantage. This approach has also meant that any perceived problems with the products can be easily identified and corrected. Finally, the empha! sis on product marketing has allowed Sony to develop products which are encompassing the ‘technology of tomorrow today’ allowing, Sony to maintain its success well into the future.

What direct marketing efforts would you recommend to Avon

When I think of Avon the first thought that comes into mind are the Avon ladies and those Avon catalogs. This is actually what most people think of I believe. Avon is a extremely well-known company but this does not mean it doesnt have its problems. During the 80s Avon has had its shares of negativity; debt reaching -$400 millions but since then has bought itself up again and now into the 21st century it is trying many different options to increase sales which have barely climbed in the last four years.

The direct marketing efforts that I recommend Avon make are to definitely focus on television advertisement commercials like they did in the early 90s. To be honest the only advertisement for Avon I know of or only recognize are the print ads in magazines. Having television ads would make people more aware of Avon than they already are. It definitely would linger in peoples minds more than just seeing magazine ads. Print advertisements should also increase in number and be published in different magazines ranging from teens to woman with products being advertised that are targeted to that specific group.

Telemarketing can be help but I do not think Avon needs to focus on this. Maybe having telemarketers calling during holiday seasons offering a free holiday catalog or even just calling year round asking if consumers have an Avon representative or if they wish to receive a free catalog and have a Avon representative in their area contact them. Avon has used this method in the past but this method might be expensive and not yield much profit since you are not actually taking orders during these phone calls.

Direct mailing could also be of help since Avon has tried this in the past and has a greater response then the norm (11% rather then the 1% or 2% norm). This could also erase telemarketing since it basically is the same concept but no Avon representative would be given the interested customers name and address. Adding bind-ins could be useful too since the average girl or woman do read a lot of magazines and this would work well with print media advertisements. Imagine having an ad for an Avon product and then right next to it you see a postage paid reply card for a free catalog.

Even though Avon has in the past sent out samples of products maybe adding samples of makeup or fragrances in magazine ads would attract people to buy them and other products. Avon has recently begun to talk about how they are going to sell a special product line at stores such as Sears. This is a great opportunity for Avon to put ads in local newspapers of the cities in which there are Searss stores and also to buy space in Searss weekly flyer in Sunday papers. This can be an enormous plus for sales and profits of Avon.

I know this will hurt Avon representative but what is being sold is not the same product line sold in the catalog. Loyal product users of the catalog makeup will always stick with their favorite from the catalog. Avons main target market has always been woman between 35 and 54. I feel that Avon should focus in the young woman/teen market. I feel that once young women become customers that they will be customer for a long time and maybe even life. It is best to expose and introduce someone to Avon when young because I know I am still wearing some of the same brands of makeup that I did when I was younger.

College students to me would be a great target market since most dont have enough money to buy department store makeup and even drugstores Avon is known for its affordability and this group would be perfect to target. Once one friend has the makeup a ripple effect usually occurs. Groups of friends usually have the same things; I know this is true of mine. In order to target this group I feel a whole new product line has to be introduced that specifically targets college age woman and young adults/teens. Shimmer makeup, funky colored eye shadows and nail polishes, body glitter and just colors that this age group is wearing.

Trendy, chic, fun and flirty is what these girls are looking for not the usual pinks and reds that moms and grandmas wear. Advertising in dorms for Avon workshops could be posted in various colleges and universities with a number to call if interested. Print advertisements in magazines such as Seventeen, Glamour, and Elle should take place as well as free samples given out in the freshman dorm packs at orientation. Avon products are affordable and I guarantee that focusing on this target group would bring Avon a younger trendier following and yet its normal product line will still have its normal customer following.

Avon needs not take away any makeup but add on which is just attracting more customers plus more sales which equals bigger profits. Avon is as I have said earlier known for its quality at a reasonable price. Well when introducing a new product line, products should be sold at a special preview price that will be lower than the price it will be after the preview sale. As far as the regular product lines I definitely think special offers like when you buy a product from the new line you will get a regular product for half off.

This will increase sales of the product line to regular customers outside the targeted group. Major promotion for Avon products should take place. Promotional offers such as getting a certain amount off on your first purchase, offering coupons for a free makeover when Avon products are sold in department stores. Promotional events I believe should be an ongoing priority. I feel in my opinion Avon knows who its customers are and hope they will always be Avon customers. This might be true for some but Avon has to remember the saying out of sight out of mind; therefore I feel promotion is much needed.

In terms of product mixing, Avons sales are mainly form its cosmetics and beauty line but they also sell different products such as childrens books and toys as well as jewelry and clothing. I feel that Avon should definitely emphasize its makeup line of course but I feel they should also emphasize and focus on childrens items. Since the majority of Avons consumers are from 25-55 I feel that a childrens line would be profitable since mothers will have the convenience of ordering products for their children as well as toys and books from a company whose name they have faith in and trust and have used themselves and have gotten positive results.

As far as distribution is concerned I feel like Avon does do a good thing by offering customers the choice of buying directly from the distribution centers. I feel that this is a positive thing since the centers have served as showcases for products. Having Avon products readily available for customers to purchase is a easier more convenient time saving method of selling. Most consumers like the idea of not having to call their Avon lady place an order and then wait for the products to be delivered. Distribution centers would make Avon products more accessible to the consumers in that area.

I feel like more centers should be built. I mean I know from personal opinion when I think about ordering Avon I find it a hassle to try and find a representative to get a catalog. Id rather run to the drugstore and buy cosmetics from there. Even the thought of having to wait for the products to arrive to me is a disappointment. I know that if there were a distribution center near and Avon products were accessible to me I would have a lot of Avon products. This is why having products sold in department stores would definitely increase sales since more people would be exposed to the Avon product line.

Marketing Analysis of Oakley, Inc.

For my strategic sports marketing project, I decided to report on the sports marketing activities of a particular corporation. I specifically wanted to report on the marketing operations of a rather diverse company; one that offers more than one product line for more than one sport. Oakley, Inc. is a company that offers several different products for a wide range of sports. I will now briefly describe the company and its operations, as well as its primary sports marketing goals and objectives. Company Info.

Oakley, Inc. a Washington corporation formed in March 1994 to succeed to the assets and liabilities of Oakley, Inc. , a California corporation, which commenced operations in 1977 and began to sell sunglasses in 1984 (Scott, 1998). The company is an innovation-driven designer, manufacturer and distributor of consumer products, including high-performance eyewear, footwear, watches and athletic equipment. Oakleys principal strength is its ability to develop products which demonstrate superior performance and comfort through the combination of patented and other proprietary technology and unique styling.

The company has focused on eyewear innovations for sports applications, and its products are worn by a variety of athletes, such as skiers, cyclists, runners, surfers, golfers, tennis and baseball players and motocross riders. In addition, the companys products, which are currently sold in over 70 countries worldwide, have become increasingly popular with fashion-oriented consumers in the larger nonsports, or recreational, segment of the sunglass market.

Oakleys products currently include sunglasses (e. , Frogskins, M Frames, Zeros, Wires, Jackets, X Metal, Fives, and Topcoat), goggles, face shields for use with sports helmets, sunglass accessories, gear bags and a limited range of athletic footwear, technical apparel and premium timepieces (Scott, 1998). With focus on consumers for the next generation, the company has established itself as a legitimate world brand with unique expertise in product design, performance and production. Product Design & Development

State-of-the-art technology allows Oakley to shorten dramatically its product development cycle. Stereolithographic computer modeling is combined with CAD/CAM liquid laser prototyping to create fully detailed, wearable prototypes of eyewear and footwear (Oakley. com, 1999). Rapid iteration of working models allows for extensive testing and perfecting of product design before introduction to the public. After the development stage is complete, the final sculpture can be used directly in preparation of production tooling.

Utilizing these processes, the company is capable of introducing a new product line within four months of initial concept. Oakley has obtained hundreds of patents worldwide to protects its proprietary manufacturing methods and product features. Among the companys most important patents are those which guard its achievements in torodial single-lens geometry and the associated manufacturing techniques, dual-spherical lens technology and the associated optical advances, and innovations in frame design and functionality (Oakley. com, 1999).

The proprietary technologies employed in lens cutting, etching, and coating, as well as the companys significant investments in specialized equipment, are matched with exclusive formulations of production materials to produce the superior optical quality, safety and performance of Oakley eyewear (Mayes, 1998). Oakleys historical success is attributable to its introduction of products that represent improvements in performance and style over goods available on the market. To that end, the company strives to develop methods of production that provide greater precision and less cost than its competition.

Establishing itself as a global brand, Oakley has diversified beyond the eyewear market. The utilization of advanced technologies in fabrics and fabrication has placed Oakley at the forefront of innovation in the design and production of apparel. In addition to clothing, Oakley has also entered the performance footwear market. The initial footwear release was marked by a reinvention of current styles and sciences. The company continues to expand the limits of todays technologies, most recently by introducing wristwatches that merge critical innovations in gearing, bearings and microcircuitry from around the world (Oakley. m, 1999).

The company intends to introduce other product line extensions and new product lines in the future, in order to attract additional consumers to the brand. This type of diversity is part of the reason why Oakley has been so successful. Sales & Marketing The primary functions of Oakleys sales force are to sell to each retailer the appropriate mix and quantity of Oakley products, ensure that products are displayed effectively and educate retailers about the quality and features of Oakley products and Oakleys sales and marketing philosophies.

The company believes that its relationships with its customers, effective marketing and superior customer service are critical elements of their success (Walker, 1999). While Oakley uses traditional marketing methods in some instances, the company attributes much of its success to the use of less conventional methods, including sports marketing, targeted product allocation, advertorials and in-store display aids (Oakley. com, 1999).

Oakley has used sports marketing extensively to achieve consistent, authentic exposure that equates into strong brand recognition on a global level. Oakley utilizes the exposure generated by its athletes as an editorial endorsement of Oakleys eyewear rather than a commercial endorsement. The sports marketing division consists of 25 sports marketing experts domestically, with an additional 20 managers positioned in direct offices and with distributors internationally.

These experts specialize in each market segment and niche to negotiate contracts with athletes, identify and develop relationships with undiscovered talent, coordinate exposure with the media, educate and train these Oakley ambassadors about Oakley products and support them at all events and public forums where they wear Oakley products (Ryan, 1999). Oakleys sports marketing staff is diverse enough to understand and effectively market all sports, regardless of the sports image and special equipment needs.

Oakley earns the respect of its athletes even in the most core of sports such as surf and snowboard, yet continues to expand successfully into more traditional sports such as golf, tennis and baseball. Advertising & Promotion Oakley retains significant control over its promotional programs and is able to deliver a consistent, well-recognized advertising message at substantial cost savings compared to complete reliance on outside agencies (Zimmerman, 1997). Localized strategies of marketing and distribution are managed by direct operations in Europe, South Africa, Mexico, Japan, and Canada.

In other parts of the world, the integrity of the brand is safeguarded by carefully selected distributors who present Oakley products to their markets with local expertise (Oakley. com). Oakleys primary method of enhancing brand recognition is sports marketing, which places the Oakley brand before consumers through the endorsements of influential athletes and other personalities, some of whom have formal arrangements with the company. Some of these athletes include Michael Jordan, Mark McGwire, Dennis Rodman, and David Duval.

The effectiveness of this promotional strategy is believed to outweigh that of direct advertising, which often lacks the impact and recognition of athletic endorsement. The company believes that direct advertising can be useful, but only in situations that do not lead to competition with editorial coverage (Woodson, 1998). The second level of marketing is advertising. Products are promoted through print media, outdoor media, in-store visual displays, and other point-of-purchase materials. Promotion includes packaging, mailers, catalogs, billboards, the Internet and other media.

Oakley considers many factors in evaluating the effectiveness of these marketing opportunities. In addition to cost effectiveness, analytical criteria include the ability to engage new market opportunities, build image, enhance the statute of the brand and reinforce the identity of the brand (Woodson, 1998). During the past year, the company has expanded its direct marketing efforts by utilizing its cutting-edge Internet site and direct mail campaigns to more closely connect with the consumer. Oakley also maintains an intriguing and instructive presence on the Internet.

Oakley has made an extensive effort to continually enhance its virtual domain site enriching dynamic visuals with engaging text (Ryan, 1999). The companys diverse Internet offerings include: O StoreSM, a secure location for Internet commerce where customers can make purchases and track their order; and receive the latest information on Oakley athletes, technologies and new inventions. Beyond its own Internet site, Oakley utilizes alternative Internet sites, such as Yahoo, for promotion, and has purchased keywords such as sunglasses, optics, Oakley and others (Oakley. m, 1999).

When a customer visits the Yahoo site and searches with one of these keywords, an Oakley banner is displayed at the top of the page, and a double click will take them to Oakleys home page. The emphasis placed on Internet promotion and commerce, combined with efforts in attaining editorial coverage through the use of professional athletes, as well as more immediate contact with the consumer through direct marketing, reflect the forward-thinking nature of the companys advertising and promotion strategies (Scott, 1998). Principal Customers

During 1998, net sales to the companys ten largest customers, which included five international distributors, accounted for approximately 35. 7% of the companys total net assets (Oakley. com, 1999). Net sales to one customer, Sunglass Hut, the largest sunglass specialty retailer in the world, accounted for approximately 26. 0% of the companys 1998 net sales. Such sales do not include those sales to Sunglass Hut locations outside the U. S. that are made by the companys independent international distributors. At December 31, 1998, Oakley independent distributors serviced approximately 138 of the 1,768 Sunglass Hut locations worldwide.

While Oakley does not have any minimum purchase agreements with Sunglass Hut, the Company believes that it maintains a good relationship with Sunglass Hut. In early 1994, Oakley entered into an exclusive licensing agreement with Sunglass Hut to sell Oakley products through mail order catalogs, and in 1998, two Oakley mail order catalogs were produced with Sunglass Hut (Sunglass Hut, 1999). Competition Oakley is the leading designer, manufacturer and distributor of eyewear in the sports segment of the nonprescription eyewear market.

Within this segment, the company competes with mostly smaller sunglass and goggle companies in various niches of the sports market and a limited number of larger competitors, some of whom have greater financial and other resources than Oakley (Woodson, 1998). Some of these niche markets are susceptible to rapid changes in consumer preferences which could affect acceptance of Oakleys products. Oakley believes that the heavy protection of its intellectual property rights has limited the ability of others to compete in this segment.

Oakley believes that it is the established leader in this segment of the market, although several companies including Baush & Lomb, Luxottica, Bolle and other companies compete for Oakleys shelf space. Oakley also competes in the broader nonsports, or recreational, segment of the sunglass market, which is fragmented and highly competitive (Ryan, 1999). The major competitive factors include fashion trends, brand recognition, marketing strategies, distribution channels and the number and range of products offered.

The same companies mentioned above also compete in this market. Oakley differs from many of its competitors in that its competitors generally only import or repackage eyewear products. Few sunglass companies design, manufacture and assemble their own creations as many companies tend to imitate successful sunglass models (Oakley. com, 1999). In order to retain its market share, the company must continue to be competitive in quality and performance, technology, distribution, style, brand image, and customer service.

Within the athletic footwear and sports apparel market, Oakley competes with large, established brands such as Nike, Adidas, Reebok, and Fila, which have greater financial resources than Oakley. In addition to these companies, Oakley also competes with smaller brands, such as Airwalk, Timberland, and Vans. The upper-middle and luxury segments of the watch market are dominated by established Swiss brands, including Rolex, Breitling, Gucci, Omega, TAG-Heuer, and Movado (Oakley. com, 1999). Evaluation & Recommendations In evaluating Oakleys sports marketing program, I would give the company a nine out of ten.

It is obvious that their marketing strategy has worked wonders for their eyewear, and it has yet to be seen whether or not their strategy for the footwear and watches will prove to be as successful. Oakleys marketing strategy has helped them achieve a sustainable competitive advantage over their competitors. I think the idea of athlete endorsement has been a large contributor to their success. Keep in mind that Oakley has succeeded despite their lack of television commercials, and very limited print ads. Some recommendations that I can offer is to try and concentrate their efforts onto their footwear division.

Many people are suggesting that Oakleys expansion into the athletic shoe market is doomed to be unsuccessful. However, with their continued success in the eyewear market, Oakley has proved that they have a good idea of how to sell their products. I would suggest trying to get a high profile athlete, such as Michael Jordan, to endorse the shoes. Strive to gain the customers attention and awareness of the footwear. The more a customer sees the shoes on TV and being worn by high profile athletes, the more likely they are to purchase the shoes. Conclusion

In conclusion, I believe that Oakley has a strong grasp on the market and it is in large part because of their marketing strategy. It seems that everywhere one looks, they will see several people with Oakley sunglasses around their eyes. Because of Oakeys well trained marketers they are able to succeed in how to properly promote and advertise their products. Oakley has a well rounded mix of ways to get theirs products out into the consumers minds. As we head into the next millennium, I believe that Oakley will find even more unique and effective ways to market their innovative products.

International Marketing Essay

A firm’s international marketing program must generally be modified and adapted to foreign markets. This international marketing program uses strategies to accomplish its marketing goals. Within each foreign nation, the firm is likely to find a combination of marketing environment and target markets that are different from those of its own home country and other foreign countries. It is important that in international marketing, product, pricing, distribution and promotional strategies be adapted accordingly.

In order for an international firm to function properly, cultural, social, economic, and legal forces within the country must be learly understood. The task of International marketing is more difficult and risky than expected by many firms. One of the most controlling factors of international marketing is management. It is very important for managers to recognize the differences as well as similarities in buyer behavior. Many mistakes can occur if managers fail to realize that buyers differ from country to country.

It is the international differences in buyer behavior, rather than similarities, which cause problems in successful international marketing. An international marketing manager is a manager responsible for facilitating the exchange of roducts between the organization and its customers or clients. Sometimes an international marketing manager will find difficulties in completing the exchange of products. Many surprises in international business are undesirable human mistakes. An international corporation must fully understand the foreign environment before pursuing business matters.

Problems constantly crop up and many times have unexpected results. Sometimes these unexpected results are unavoidable. Other times they are avoidable. To be sure those avoidable situations do not occur, international marketing managers must be aware of ultural differences. Cultural differences take place among most nations of the world. Differences in culture are one of the most significant factors in an international company. All nationalities posses unique characteristics, which are unknown to many foreigners. Many of the top international businesses are unaware of these cultural differences.

It is very important to understand these cultures in order to market a product successfully. As an example, different nationalities have different beliefs on how business matters should take place. Where some countries prefer to work with a deadline other ountries can take this as being offensive. Many countries feel it is an insult to be asked to work under a set time period. A country may feel that a deadline is threatening and may feel backed into a corner. On the other hand, other countries try to expedite matters by setting deadlines.

To be effective in a foreign market it is necessary to understand the local customs. Knowing what to do in a foreign country is as important as knowing what not to do. Failure to understand local customs can lead to serious misunderstandings between business people. The simple rejection of a cup of coffee can lead to total confusion. The decline of an invite is sometimes considered an affront. To avoid making blunders, a person must be able to discern the difference between what is acceptable behavior and what is not acceptable behavior.

Violations of a local custom can be insulting, and can cause uncomfortable situations. To be a successful manager of international marketing, one must be able to discern the differences as to what must and must not be done. It is almost impossible to attain complete knowledge and understanding of a foreign culture. As established, culture plays an important role in the drama of international marketing. Of all the cultural aspects, communication may be the most critical. It is certain that communication has been involved in a number of cultural confusion.

Good communication linkages must be set between a company and its customers, suppliers, its employees, and the governments of the countries where it performs business activities. Poor communication can obviously cause various difficulties. One source of difficulty among starting companies is that of effective communication with potential buyers. The problem is that there are many possible communication barriers. Sometimes messages can be translated incorrectly, egulations overlooked, and economic differences can be ignored. Other times when the message does arrive, its ineffectiveness can cause it to be of no value.

Every now and then a buyer will receive the message, but to the companies disappointment, the message was sent incorrect. It is normal in multinational businesses to send and receive messages on a regular basis. Many well-known people have incapacitated public speech introductions by using inaccurate titles and names. Not all communication problems are verbal. Some serious problems have occurred as a result of non-verbal communication. Non-verbal communication exist in numerous forms. Sometimes a person’s appearance can convey a stronger message than intended.

Untidy attire, for example, can be more offensive in some nations than in others. The local people often are willing to overlook most of the mistakes made by tourist. On the other hand, locals are less tolerant of the errors of business people. It is very important to be able to interpret the different means of communication in international marketing. In America, we sometimes take for granted the display of products on the market. However, in other nations such roduct array and selection do not always exist. It is important to understand that even if local customers can afford a certain product, they may not always want it.

If by chance are interested, it may be only if it is substantially modified to fit their local preferences and taste. These adaptations exist in the form of product and package. The alteration of a material product is sometimes required to match the product to local taste and conditions. Adaptation of the package is often needed to attract customers to the product. Many times adaptation is also used to maintain a product’s righteousness in a unique environment. A firm is occasionally forced to modify both the product and the package to create an appropriate product for the new market.

Some products may require more technical modification than others may. Measurement systems vary between countries, and often components need to be adjusted to cleave to local standards. The need for product adaptation has existed for many years. In 1857 England’s East India Company possibly lost control of India because it failed to modify a product it provided. A product may be well acceptable in markets, but may not sell if housed in an inappropriate package. Packages promote the product and they protect it. International packaging must be able to withstand the journey.

Some countries have exported their products only to witness the return of crushed and half-empty containers. Packaging can sometimes bring embarrassment to a company. Medical containers made in the U. S. drew unwanted attention because they carried the instructions “Take off top and push in bottom. ” These messages was harmless here in America, but were sexual and humorous connotations to the British. Often the choice of package and product is difficult. Sometimes companies have failed to sell their products overseas because of the packaging of a product.

Each firm must determine the area most appropriate for its product. Determining the region where it is most appropriate to market a product is not an easy task. Wherever the location of these places, they must be found because market testing is essential in international marketing. Many countries maintain regulations concerning their products and packages. Countries have expectations that foreign marketers will adhere to the rules. Failure to abide by the rules of a country can prove to be very costly. The legal and political atmosphere varies across national borders.

Different countries have different legal policies. There are laws to which a marketer must abide by when marketing internationally. Some countries enact laws to protect consumers or to preserve a competitive atmosphere in the marketplace. Since many countries maintain regulations concerning their products and packages, the wording or color of a package can create difficulties. In some countries giving gifts to authorities is a standard business procedure. In other countries, such as the United States, these gifts would be considered as bribes or payoffs and are strictly illegal.

If an error occurs it can be costly, but with the appropriate alterations it can be orrected. The General Agreement on Tariffs and Trade (GATT) reforms imposes on national governments the obligation to sacrifice local and state laws that protect customers, and the environment. Plans were developed in the mid-1980s to broaden GATT’s mandate by extending its police powers to the areas of foreign investment and trade in services. If such reforms are enacted, GATT will have the authority to remove barriers to foreign investment and to override or knock out local laws for protecting a nation’s insurance, brokerage, an banking businesses.

Removing local laws can definitely make the international ork place easier, when it comes to the legal aspect. In the field of marketing, a product promotion can be the most difficult. Timing is the most critical element in the launching of a new product. Most firms understand this and also perceive that varied peoples hold different conceptions of time. Since some nationalities are more conscious of time factors than others, extra time must often be allocated to guarantee that everything is completed as schedule. An international marketer can adopt several strategies regarding its product and promotion.

Marketing a product internationally through a single promotional message orldwide can be effective for products that have standardized appeal for the majority of the people. Most times this could be the least expensive strategy. When it is hard to translate promotional messages or to adapt an overall promotion to local customs, companies market one product. This promotion is designed to market one product but vary its promotions. Some products are well known among the nation and need little advertising. The advertisement can be on American influence located in China.

If a theme works exceedingly well in one country, then it naturally becomes very tempting for a firm to want to se it in another country. There is a big risk involved in doing this, because admirable themes are culturally oriented. For example, consider the very popular Marlboro advertisements. The Marlboro man projects a strong masculine image in America and in Europe. In Hong Kong, attempts to use this advertisement were unsuccessful because the urban people did not identify with horseback riding in the countryside. Several firms have tried to use old, reliable promotional methods in countries where they simply do not work.

Billboard advertisements, for example, are perfectly legal in most parts of the Middle East, but it oes not mean one should use them. In some cases companies have been know to advertise in the wrong language. Such mistakes can cause major problems. It is often the promotional strategy that creates mistakes. The perception of the product characteristics plays an important role in the international marketing strategy. One must realize that the importance’s of a certain product traits vary from country to country. Multinational corporations, therefore, must consider varying promotional tactics.

Adapting the product but using the same promotional mix is a strategy used when a product will not appeal to different ocal tastes. For example an American cheese company may need to use different ingredients when making cream cheese for the markets of different countries. The most expensive strategy is adapting to both the product and its promotion. This strategy may be required when neither the existing product nor its promotion would appeal to foreign markets. In some cases, the international firm may develop a completely new product for a foreign market. It can be very costly to create a new product line for a foreign market.

The distribution strategy used sometimes depends on the firm’s international organization. It does not matter if it is licensing, exporting, or manufacturing in the host country. International marketers use existing distribution channels for the most part. Distribution channels link the producer of a product to the consumer or industrial user. This international marketing channel is sequence of marketing organizations from nation to nation that directs the flow of products. Most industrial products use shorter channels. One of the most basic levels of international marketing is licensing.

A license is a contractual agreement in which one firm permits another to produce and market its product and se its brand name in return for a royalty or other compensation. This grant may be in the form of a direct sale of rights or be limited to a certain period of time. International licensing can be tied to joint ventures between the parent and the subsidiary. For example, an American candy manufacturer might enter into a licensing arrangement with a British firm. The British producer would be entitled to use the American firm’s candy formula, and packaging to advertise the candy as though it were its own.

The advantage of licensing is that it provides a simple method of expanding into a foreign market with no investment. However, if the licensee does not maintain the licensor’s product standards, the product’s image may be damaged. Another disadvantage is that a licensing arrangement does not usually provide the original producer with any foreign marketing experience. Technology licensing is a conceivable alternative to the exportation of finished products through intermediaries or to the different types of capital involvement, which could be chosen as an international strategy.

Many companies use intercompany licenses to protect the intellectual property of the parent company that is held by the subsidiary, and to allow for ayments by the subsidiary to the parent of certain license fees. Licensing is also dependent upon product characteristics. Products subject to rapid technological change are also good licensing candidates. For most large companies licensing is designed as a means to enter secondary markets. The potential licensor must look at legal and financial considerations.

Many times the decision to license has been made since the company has no other alternative because the government restricts direct investment through controls on foreign ownership or because it restricts the development of marketing network y a number of tariff barriers. Licensing allows the licensor to enter into foreign markets with a low financial risk. The decision to license is a complex one. Many licensing relationships do not succeed because the parties fail to understand each other’s agenda. The creation of joint ventures sometimes prevents all the problems encountered by a company when going overseas from occurring.

With the combined expertise and efforts of local and foreign firms, many problems will be eliminated. A joint venture is a partnership that is formed to achieve a specific goal or to operate for a specific period of time. International corporations may enter into joint ventures. Most joint ventures were formed to share the extremely high cost of exploring for offshore products. A company should create a joint venture only after giving it some consideration. Many problems occur when company’s fail to thoroughly investigate potential partners.

Licensing decisions are as difficult to analyze as those decisions involving the creation of a joint venture. Failure to make the correct decisions at the right time can result in the loss of substantial long-range business prospects and profits. A firm can also manufacture its products in its home ountry and export them for sale in foreign markets. Like licensing, exporting can be a relatively low-risk method of entering foreign markets. Unlike licensing, it is not an easy task. Exporting opens up several levels of involvement to the exporting firm. On the basic level, the exporting firm may sill its products to an export/import merchant.

This merchant assumes all the risks of product ownership, distribution, and sale. It may purchase the good’s in the producer’s home country and assume responsibility for exporting the product. The exporting firm may also ship its products to an export/import agent. The export/import gent arranges the sale of the products of foreign intermediaries for a commission or fee. The agent is an independent firm that sells and may perform other marketing functions for the exporter. The exporter retains title to the products during shipment and until they are sold.

An exporting firm may also establish its own sales offices in foreign countries. These installations are international extensions of the firm’s distribution system. The exporting firm maintains control over sales, and it gains both experience and knowledge of foreign markets. Eventually, the firm may develop its own sales force to operate in onjunction with foreign sales offices or branches. Pricing is a very important factor in international business. The pricing system more common in international marketing is cost-based pricing. Cost-based pricing is not as popular in domestic marketing as it is in international marketing.

Using this simple method of pricing, the seller first determines the total cost of producing or purchasing one unit of the product. The seller then adds the amount to cover additional cost and profit. The cost added is called the markup. The total cost of the markup is the selling price of the product. Many smaller firms calculate the markup as percentage of their total cost. Markup pricing is easy to apply, and it is used by most businesses. However, it has two major flaws. The first is the difficulty of determining an effective markup percentage.

If this percentages too costly, the product may be overpriced for its market. On the other hand, if the markup percentage is too low, the seller is “giving away” profit that could have earned simply by assigning a higher price. In other words, the markup percentage needs to be set to account for the working of the market, and that is very difficult to do. The second problem with markup pricing is that it separates pricing rom other business functions. The product is priced after production quantities are decided upon, after cost are incurred, and almost without regard for the market or the marketing mix.

To be effective, the various business functions should be integrated. The different types of pricing can vary in international marketing. Geographic pricing strategies deal with delivery cost. The seller may assume all delivery cost, no matter where the buyer is located. The seller may share transportation cost with the buyer to pay the greatest part of delivery cost. When a foreign product enters a country, there is a tax added to the cost. Import duties are designed to protect specific domestic industries by raising the prices of competing imported products. The importer first pays most of the import duties.

After the importer pays the price it is then passed on to the customers through higher prices. These higher prices are usually less competitive. The cost of shipping and complying with other various regulations can also add to the pricing method. Prices are also effected by exchange rates, especially by changes in these rates. Financial limitations are normally imposed through exchange rates. It is required to convert local currency to oreign currency at government-imposed exchange rates. Because of the added cost and uncertainties in the exchange rate, prices tend to be higher in foreign markets than in domestic markets.

An important economic consideration is the distribution of income. The distribution of income, especially discretionary income, can widely vary from nation to nation. Discretionary income is of particular interest to marketers because consumers have more input in the spending of it. Income creates purchasing power. International marketers tend to concentrate on higher income countries as either personal, disposable, or discretionary. For obvious reasons, marketers tend to concentrate on higher income countries. Some producers have found that their products are more likely to sell in countries with low income.

As in domestic marketing, the determining factor is how well the product satisfies its target market. International marketing encompasses all business activities that involve exchanges across national boundaries. A firm may enter the international market for many reasons. Whatever the reason international marketing can provide and efficient way of entering the market. A firm’s marketing program must be adapted to foreign markets to account for ifferences in the business environment and target markets form nation to nation.

The marketing mix may require the modification of cultural, social, economic, and legal differences. Foreign marketing requires the understanding of various additional costs, which tend to increase the prices of exported goods. The marketing program of an international company must adapt to the necessities of a foreign market. The strategies it uses to accomplish a firm’s marketing goal should be the main priority of the marketing program. False assumptions frequently cause expensive mistakes in the market.

Marketing Strategy for Pricelinecom

Which is the one place where you can satisfy your every need (almost every need) at your price? Be it airline tickets, hotel rooms, rental cars, mortgages, new automobiles, or even long distance calling time. The answer would be Priceline. com. All you have to do is know your need, state your terms, and make your offer. It doesnt get easier than this! Priceline. com was one of the pioneer online companies to traverse the traditional limitations of the Internet and revolutionize online purchasing.

Its strategy letting the consumer name his/her price, and matching it with a seller who is willing to fill the demand at that price and those conditions, there by providing the required service the consumer desires. Thus Priceline. com is basically an integrated, Web-based e-marketing automated system, which was one of its kinds when it started its business in the consumer marketplace.

In simple word it is the ideal middleman, who gets you what you want, when you want it through a unique dotcom experience. Priceline. m was formed on April 6, 1998 as a limited liability company, but looking at its potential and rapid success it was soon converted into a corporation. It activities at this time dealt mainly with providing leisure airline tickets with the unique difference of letting the customer name his/her own price. By December 31, 1999 its services included hotel rooms, mortgages and new automobiles. The Company’s licensee, Priceline WebHouse Club, Inc. , soon launched a Name Your Own Price service for groceries in the fourth quarter of 1999.

Another licensee, Priceline Perfect Yard Sale, Inc. , launched on a test basis in the first quarter of 2000, a consumer-to-consumer based Name Your Own Price, which involved the sale of quality, used goods over the Internet. Today after nearly three years of existence Priceline. com boasts a huge market share, loyal fan following and 373 employees. Priceline. com can be best described as the ultimate Internet middleman. Ron Rose, Chief Information Officer at Priceline. m, says, “Our goal is to lead the industry as a world-class customer-centric company, with an infrastructure that delivers the best, personalized customer service experience is absolutely fundamental to our company’s long-term success on the Internet. ”

Priceline. com has pioneered a unique e-commerce pricing system known as a “demand collection system” that enables consumers to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Priceline. m uses its virtual business model, which works as a three-step process while allowing them rapid scaling using the Internet: The first step consist of Priceline. com collecting consumer demand, of the individual customer backed with the guarantee of the respective customers credit card, for a particular product or service at a price which is set by the customer. In the second step then, Priceline. com either communicates that demand directly to participating sellers or accesses participating sellers’ private databases to determine whether priceline. com can fulfill the customer’s offer.

In the final step, Priceline. com gets back to the consumers regarding their offers, which they can hold to for a specific period of time and, once fulfilled, offers cannot be canceled. If Priceline. com doesnt meet the customer price for a particular demand, the credit card is not charged and the customer is once again asked to change the price if he/she wants and the procedure is repeated. Priceline. com benefits consumers by enabling them to save money, while at the same time benefiting sellers by providing them with a competent revenue management tool capable of identifying and capturing incremental revenues.

By requiring consumers to be flexible with respect to brands, sellers and product features, priceline. com enables sellers to generate incremental revenue without disrupting their existing distribution channels or retail pricing structures. An important goal for effective marketing strategy is the reduce costs of marketing through targeting of marketing efforts. But the todays digital world has shaken marketing to its core. Todays consumers are more of the cyber consumer.

Digital technology and Internet are changing consumers and are changing the way they relate to products and markets. Priceline. com has targeted its customers in a different way. Underlying Priceline. com’s marketing strategy is the Company’s belief that its target market is all consumers, not just Internet savvy consumers. It hasnt limited its customers to net users only, but has also reached the segment of the market, which doesnt generally use the Internet for shopping, through viral marketing and giving them choices and prices they cannot resist.

It has shown them that they have the power of pricing, shifting it from companies to the consumers. Priceline. com works on the trends of not only attracting their target markets through prompt website, but also with the advertisements, which have been hit, and toll-free numbers. Priceline. com not only uses Internet to target the consumers but also with lots of other advertisement and promotions. The advertisement with William Shatner, with the oldies of 60s and 70s has become such a hit with the people that they even ask for the record of the tape. Priceline. m has targeted the whole consumers along with the Internet savvy people in a total different way.

One way, which has benefited Priceline. com, is the viral marketing or the word of mouth strategy also known as the referral. Priceline. com with the word-of-mouth referrals has been able to draw large amount of customers to the site. Today Priceline. coms site is one of the Internets most heavily used sites, with more than 1. 5 million hits in a week. Consumers are required to accept certain trade-offs with respect to brands or product features in return for saving money.

For example, consumers are required to accept a reservation in any hotel within a specified geographic-area within a designated “class” of service (1, 2, 3, 4 or 5-star) and must accept limitations on changes and cancellations. As with the airline ticket service, the target market for Priceline. com’s hotel room reservation service is the leisure travel market, as the customers have no idea of the carrier and the time they are flying until the ticket is booked. If the ticket is booked, it cannot be cancelled or be changed. This is one of the reasons why business personnel cannot use Priceline. com as they have a fixed schedule.

The Priceline. com Strategy and the 4 Ps Priceline. coms goal is to continue to expand the Priceline. com business and to operate Priceline. com’s demand collection system as a leading source for the purchase of products and services on the Internet. The key features of Priceline. com’s strategy are as follows: Leverage the Priceline. com brand over diverse products and services: Priceline. com intends to continue to leverage of Priceline. com brands across its numerous products and services to achieve significant revenue scale and growth.

In contrast to most e-commerce businesses that operate in one or two “vertical” markets, Priceline. m is a “horizontal” commerce system that can benefit both buyers and sellers across a broad range of products and services. Priceline. com’s strategy is to make available multiple products and service offerings at its web site under a common brand to take advantage of these market opportunities. Priceline. com intends to expand directly in certain vertical markets and license its business model and name to independent licensees in other markets. Priceline. com and its licensees have launched or expanded offerings in several new categories over the past twelve months and these efforts will continue.

Strengthen the Priceline. com brand: The Company plans to expand consumer recognition of Priceline. com as the leading consumer brand for buyer-driven commerce over the Internet. To achieve this goal, Priceline. com intends to continue to pursue an aggressive brand development strategy through mass market and targeted advertising and promotions, press coverage and strong word-of- mouth support. While priceline. com is already one of the most recognized e-commerce brands among adult Americans, priceline. com believes that it can expand the public’s association with the Priceline. m Name Your Own Price proposition to a broad range of products and services.

Priceline. com plans to expand, but it seems quite impossible according to the current stock market prices. Priceline. com for the time being should concentrate on their travel section and expand as soon as their company is again well established. The product offering is considered to be the heart of a marketing mix. It is impossible to decide on a promotion campaign or set a price without knowing the products to be marketed. Priceline. com has numerous products and services to offer. Priceline. m commenced its service with the sale of leisure airline tickets.

The number of airlines participating in Priceline. com’s airline ticket service has increased to a total of 10 domestic airlines and 20 international airlines. Few of the major domestic airlines Priceline. com uses are United Airlines, American Airlines and Northwest, whereas major international airlines include Virgin Airways, British Airways and Lufthansa. Priceline. com uses Delta Airlines as both its domestic and international carrier. Consumers can make offers to purchase airline tickets through the Priceline. com Web site or the 1-800-PRICELINE-call center.

The customer than has to follow the process mentioned earlier. In October 1998, Priceline. com launched its Name Your Own Price travel service for hotel room reservations. Priceline. com’s hotel room reservation service currently is available in substantially all major cities and metropolitan areas in the United States. Hotels participate by filing private discounted rates with related inventory control rules in Priceline. com’s private database in a central reservation system for hotel rooms. These rates normally are not available to the general public or to consolidators and other discount distributors who sell to the public.

Priceline. com’s hotel room reservation service operates in a manner similar to its airline ticket service. Priceline. com offers two different rental car services. In December 1999, priceline. com launched its Insiders Rates) service and, in February 2000, Priceline. com launched its Name Your Own Price service. Priceline. com’s rental car services are currently available in substantially all major United States markets. Under Priceline. com’s Insiders Rates service, participating car rental companies offer Priceline. com customers who have already purchased an airline ticket from Priceline. m rates on car rentals in connection with a customer’s planned travel arrangements.

An offer is provided to a customer by e-mail and on Priceline. com’s web site when a customer checks the status of his or her request. Priceline. com’s Name Your Own Price rental car service operates in a manner similar to its airline ticket and hotel reservation services. Consumers can access the priceline. com Web site and select where and when they want to rent a car, what kind of car they want to rent (i. e. economy, compact, mid-size, SUV) and the price they want to pay per-day, excluding taxes, fees and surcharges.

In January 1999, Priceline. com introduced its home financing service. Under the terms of separate agreements with Alliance Partners, L. P. and Lending Tree, Priceline. com’s financing service allows consumers to set their interest rate and points for mortgages of a specified term, including, purchase money mortgages, refinancing and home equity loans. Priceline. com introduced its new car sales service on a test basis in the New York metropolitan area in July 1998. Since that time, Price lines new automobile service has been expanded to include 26 states. Priceline. m’s new car sales service accepts offers for every major brand of automobile.

Due to the numerous features and options on a new automobile, the range of product substitutability that consumers will accept is lower in the case of new cars than with airline tickets or hotels. Priceline. com does not negotiate on behalf of customers or dealers and does not represent to its customers or dealers that it is acting as an agent or broker on behalf of either party. Once a dealer accepts an offer for a new car, the consumer completes the transaction directly with the dealer. The Priceline. m new car sales service is differentiated from other Internet car sales services, which serve as lead generators for participating car dealers.

Under such services, multiple dealers may contact the customer in response to the customer’s inquiry to the Internet service. By contrast, Priceline. com’s new car sales service does not reveal the identity of the customer to the auto dealer until the dealer has accepted the customer’s offer. Furthermore, in contrast to other Internet car sales services, dealers are not currently required to pay a participation fee to review offers from the Priceline. m service. Priceline. com has recently launched a Name Your Own Price service for international and domestic long distance calls.

The company allows consumers to name their own price for phone-to-phone international and domestic long distance calls. Priceline. com has developed adaptive marketing programs to help bridge the between consumer offers and seller prices, provide users of the priceline. com service with other desired products, and generate additional revenue for the Company. These programs also serve as an integral part of Priceline. com’s strategy of building customer loyalty.

Priceline. com’s adaptive marketing programs presently include two distinct initiatives. The first, which it refers to as “adaptive promotions,” allows consumers to increase the amount of their offers, and thus their likelihood of success, at no additional cost by participating in sponsor promotions during the process of making a priceline. com offer. For example, a customer making an offer to buy a round-trip airline ticket can immediately have the amount of his or her offer increased and thereby increases his or her likelihood of success by applying online for a credit card.

The second type of adaptive marketing program is referred to as “adaptive cross selling” and utilizes cross selling of multiple products to increase the number of successful transactions. For example, a customer whose offer for an airline ticket was marginally below acceptable levels could be offered a second related product such as a hotel room reservation or a rental car day at a combined price that provided an acceptable margin for Priceline. com. During 1999, Priceline. com added adaptive marketing partners and, as a result, reduced its dependence on any one partner.

Priceline. m intends to continue to add adaptive marketing programs so that consumers have a variety of programs from which to choose and priceline. com has a diversified source of adaptive marketing revenues. The Internet and the World Wide Web has fundamental impacts on the pricing strategy of firms. Similarly, the technology has open many doors to buyers hitherto closed by the effects of time, cost and effort. Technology may combine with market forces to reduce the vast majority of a firm’s transactions to the level of commodity trades, leaving managers with little opportunity to make prices.

The information age – and the advent of computer-controlled machine tools – lets consumers have it both ways: customized and cheap, automated and personal. Particularly in consumer markets, suppliers tend to make prices while customers “take” them. There are a number of instances on the World Wide Web where the opposite situation is now occurring. One of them is Priceline. com. It is a kind of Internet pricing system that enables consumers to achieve significant savings by naming their own price for goods and services. Their primary products are new cars, travel, and personal finance products.

Priceline. com takes an offer of purchase to the seller and they have the option of accepting or rejecting any offers. Not unlike EBay, Priceline. com has no warehouse or inventories. At a higher level of customer price making, Priceline. com invite customers to name their price on products and services ranging from air tickets to hotel rooms, and new cars to home mortgages. In the case of air tickets for example, customers name the price they are willing to pay for a ticket to a destination, and provide credit card details to establish good faith.

Priceline. com then contacts airlines electronically to see if the fare can be obtained at the named price or lower, and undertakes to return to the customer within an hour. Priceline. com’s margin is the differential between the customer’s offer price and the fare charged by the airline. The market space replaces market place, and in the land of ‘clicks vs. bricks’, you buy online in a virtual store and have the option of taking it back to a physical store “Place” will be online and not of much interest or it will consider virtual places as “real”.

Every company now competes in two worlds: a physical world marketplace and a digital world “market space”. Within a decade, most products and services will be sold in the market space. Priceline. coms market place is this market space and the web. Priceline. com continues to frequently update and enhance the features of the Priceline. com service. Priceline. com constantly monitors feedback from consumers and regularly adds new features to further simplify the buying process.

Priceline. m also receives offers by telephone and provides customer service by telephone and e-mail to assist customers in the offer process. Priceline. com believes that it will continue to increase customer usage and loyalty by continuing to increase the functionality of the service and enhance consumer experience. Priceline. com understands that the international scope of the Internet and the global demand for the types of products and services available through Priceline. com presents opportunities to expand its service internationally.

Priceline. com has already launched web sites in Australia, which is named Myprice. m. au, which currently uses its Name Your Own Price strategy only for long distance calling cards, while the other web site for United Kingdom; Priceline. co. uk uses its Name Your Own Price just for Air plane tickets. Most of revenues to date have been derived from airline ticket sales, hotel room reservations and related adaptive marketing programs. As Pricelines business model evolved, they introduced a number of new products and services.

The Company had licensed its patented Name Your Own Price business model and affiliated trademarks and software systems to Priceline WebHouse Club, Inc. hich operated an Internet-based service for groceries and other retail products. In connection with the WebHouse Club transaction, Walker Digital, granted to Priceline. com a worldwide license to certain intellectual property, including patent and patent applications, useful in WebHouse Club’s business. Priceline. com also introduced the sale of gasoline. These new businesses typically incurred start-up costs and operating losses and were not successful.

The problem with the gasoline was that, the price of gas changes frequently, the sellers couldnt stand through it. Priceline. m had to heavily subsidize them; this in return affected the other businesses Consumers did not favorably receive these new businesses. The association of their brand name with these new entities might have adversely affected their business and reputation and may have diluted the value of Priceline. coms brand name. Priceline. com started two new products almost at the same time, the online gasoline and groceries. The idea behind the gasoline was that the customer would pay on the website the amount of the gasoline they wanted and they could name the price.

Priceline. m than would contact the gas station nearby the customers given address and if any dealer is ready to accept the price, than they would give the customer the product at the amount they asked for. This whole product was valid for three months. The reason why the gasoline business had to shut down because the OPEC raised the price of oil, and so dealers were paying more for fuel. They were passing part of the fuel charge on to Priceline. com. Also the main reason was the change of the price of the gasoline so frequently that if the customers price is valid for 3 months than the dealers were having loss.

These lead dealers to adjust their price much above the customer wanted as they started seeing in the future prices of the gasoline. This eventually lead to the regular customers complaining about the prices or high prices asked by the Priceline. com, which resulted in the stopping of the product, i. e. the gasoline. The other product, which went wrong, was the online groceries. The idea behind the whole thing was the same, with customers getting cheaper groceries at the price they wanted and also the dealers agreeing to it. But as the time went on, the customers started having difficulties in getting groceries.

Many times the customer would not get the thing they wanted when they went to collect the groceries. There was also a lack of variety in products. It offers only a few brands, sizes and items to finish online shopping. Also, the touch and feel of the things you get when you actually go and buy it is totally different, the customers also started complaining about it. One of the reasons also was that Americans love buying their own groceries with their own time. This particular product segment was meant for the people who are really busy and dont have time to buy them.

But eventually they landed using Pricelines Web clubhouse, which also takes a long time to come up with a shopping list. People didnt welcome it with much enthusiasm and after the initial sales; the people started avoiding which lead Priceline. com to stop this fragment of their business. The graphs below as shown are the price and volume of the Priceline. com, in the year of 2000. As shown there, there has been decline in both after the launching of the groceries and gasoline, which was removed in the last quarter of this year from the product line.

Also shown is the earnings per share ratio of the priceline. m for the last year, an as shown in the second graph which were down for the year are expected to go up next year. Price-Share Volume Graph for year 2000: Earnings per share for the year 2000: Priceline. com was formed in July 1997 and began operations on April 6, 1998, so has a limited operating history. Priceline. com is a new company Priceline. com should expand its products and services within the leisure travel industry over the next two years to encompass cruises, all-inclusive resorts, time-share and vacation packages. They also should include the sky miles, as its going to encourage customers travel regularly through them.

Marketing Principles Essay

Marketing often comes down to making your customers intelligent enough to buy your products or services. They have to understand what it is you’re selling, how it’ll help them, and how much better it is than any other solution. Jamba Juice is a leading juice and smoothies retail chain in the country. Started in 1990, originally called The Juice Club, their stores are now open in most states giving their customers an unexpected health experience by offering the best ingredients, remarkable service, and amazing flavor, nutrients and variety.

Jamba Juice is a company that follows on living a balanced lifestyle that integrates nutrition, fitness and fun. Its passion for health and uncompromising commitment to quality are the keys to its customers’ fulfillment and consequently to its success. Jamba Juice is known for their fresh-squeezed fruit and vegetable juice blends that are made on the spot with no additives such as sugars, preservatives, or artificial flavors. The company’s main goal is to augment the daily experience of its customers, its community, and its team members through the life-nourishing qualities of fruits and vegetables.

The main marketing issues for Jamba or any other company are social, economic, technological, competitive, and regulatory when compared with a environmental scan of the United States of America. If a Juice Club were to be open near the University Of Massachusetts Lowell, an environmental scan would prove to be useful. The strengths could be the college environment since they seem to have expendable income to use. However, the area around the university tends to be a more situated around the middleclass income. The college student is an ever transient demo since they are only here for about 4 years.

College students are also not here all year long so they are not truly your long-term customers, especially because they only have four years to spend at the university. The people who live around the school would be considered the main customer base. Also, a juice bar is a trend-based business, so one should consider whether or not a college area is a trend-setting environment. Considering the economic downturn we are in right now, does it truly make a Juice Bar a necessity? For example, you would assume that the consumers are going to save their money to buy lettuce and milk, rather than spend extravagantly on $4 juices.

The m iddle class type consumer is more economy sensitive then anyone, and they will just consider a juice bar to be a trend, not a necessity. Trends are ones that just come and go, and this can be a weakness. But, if the area happens to be a trendy one, comprised of people who usually like to do different things, then it could be a strength to gain that particular customer base a sort of niche in the market. Between trying to make itself known, a business has to battle with a player in the field that has already established itself. Consider the area around the college.

There is already a mom and pop type coffee house called the Sugar Shack which seems to have found its place in that market. This could be considered a weakness for Jamba Juice. People may be less likely to go to a juice bar when they are already comfortable with the existing coffee house in their area. The only real opportunity I can see is that there are no other juice bars in the area. Introducing something new to the area could potentially attract a lot of customers. There could also be a problem if competitors choose to clone your business in some form or other.

Then, a company is faced with the task of getting the customer to purchase your particular service/product over the competition. How long will it take to build brand loyalty? Will it be enough time to make a profit? If juice bar A is serving a similar product base compared to juice bar B, but B is cheaper and has a better atmosphere, then there goes your loyalty! You have to make sure that your product/service is the best in its area of business. The environmental force which is most critical for Jamba Juice is location.

Jamba Juice’s outlets are primarily located in strip centers and street locations. Consequently, it has to find access to a more diverse and concentrated traffic flow of potential customers than do Jamba Juice’s usual choice of strip malls and street locations. Let’s not forget the competition. There are also numerous smaller mom and pop chains of juice bars serving blended drinks, as well as health food cafes throughout the United States that operate in both strip malls, street locations, and specialty locations within airports, hospitals, office complexes and shopping malls.

Jamba Juice has to try to assimilate itself into other viable locations even if it means being closer than expected to the competition. The competitive environment for juice bars is a sketchy one. Juice bars have existed for over a decade, and were originally stationed in places such as gyms and/or health food stores. New entrants seem to come and go every day , either the new business is too close to the competition in its methods, services, or products offered that there is really no difference. This would entail consumers to stick to brand loyalty. One barrier to entry could be the demographic area in which u decide operate.

You need to decide whether to target a customer base of health-conscious consumers or the generation-x of the fast food industrial revolution. Another barrier is the competition. It is necessary to find out how many similar business and/or products there are in the area surrounding you, and what will really distinguish you from the rest. Sometimes when a consumer needs to really attain something it usually comes down to the first store they see, and that is where their business will be going. If a company truly makes themselves stand out, then the consumer will choose them before simply going to the first store they see.

In conclusion, the Jamba Juice case proved to be a interesting one at that, from the ideas behind the company to the introduction into the market place and the reaction to its health driven menu of products. Trends always seem to come and go. To be successful, you have to introduce fresh and new ideas to stay ahead of the game, otherwise you will be left in the dust in a cruel and truly competitive market place for health food. With advent of more competition a good product is only as good as the educated consumer who is going to purchase it.

Recommended solutions would be to conduct marketing research to find out if this is something people around campus and the surrounding area would want. The product should then be promoted by setting up a booth in the university center or near the food court and give out product samples. A survey could follow, as a way to find out the opinions of the new potential customers. The company must also ask themselves if everyone will succumb to the health craze, or if they will be directed toward coffee shops.

They also have to look at coke, pepsi, milk, beer, liquor, etc. ecause those are all indirect competition for Jamba Juice. Not everybody likes Juice, so if Jamba Juice provided other beverage options and snack foods like power bars or muffins, they would probably make a much higher profit. To establish itself from other juice bars in the area or the bars that might follow, Jamba Juice needs to differentiate themselves using many promotional strategies, such as, store atmosphere, coupons or giveaways, good quality, good products and flavors, etc. By incorporating all of these strategies, Jamba Juices has a much higher chance of becoming a success.

Marketing Plan for the introduction of Wide-bottom jeans

In order to understand why the Wide-bottom Jeans Group exists, it is inalienable to especially focus on one person, the founder and the core of the company Christie Clark. Her personality alone already legitimates the purpose of the company, playing the role of the every positive thinking entrepreneur, that is strongly drawing together stakeholders and employees by showing them that they can commit themselves to the business not only because of financial benefits. Clark`s and therefore Wide-bottoms higher ideal just simply seems to be to have fun and find new challenges while doing business.

Strategy Wide-bottoms core strategy seems to be to go into those markets were complacent industries have held high prices for years because of their monopolistic size. And they try to take an advantage of that complacentness. The markets itself can not be defined exactly as the Wide-bottom Group never had a core business thing. Thus the business where Wide-bottom wants to be in is also hard to define, but there is an opportunity for Wide-bottom wherever the monopolistic position of a competitor can be beaten.

Another basic strategy of the Wide-bottom group is always to use its undoubtedly strong brand name which is one of the view that is elastic enough to bind together a clutch of diverse products without snapping. It is part of Clarks strategy that the Brand name is not so much a product that it stands for, rather it stands for values: youth, iconoclasm, cheeky and perky informality. This provides the Wide-bottom Group with a flexibility that is almost unbeatable in terms of brand name.

The key is to make sure that the Wide-bottom name stays fresh and not to overuse it, and certainly the product has to have a certain quality. The third part of any Wide-bottom strategy that has to be emphasized, is the strategy of public figure marketing. Like no other entrepreneur in Longview, Texas, Christie Clark has the talent to market her products by going into the media with extraordinary actions that get her into the front-pages of the newspapers without paying any money for this advertisement. Company Values The values seems to be having fun in the business and to do things differently.

The goal of the Wide-bottom Group is to be the ultimate outlet and to provide the best value for money to customers. They believe that there should be some kind of fun to go into the big monopolistic businesses and then shake them up by offering good value quality based products, and a better service and people care to the customers and last but not least to make a profit at the end of the day. Overall the mission statement has clearly been defined by Christie Clark over the last 5 years. She has the Vision, the strategic intent, and she is the motivator for any person who is part of the company.

Strengths The Wide-bottom group has the advantage that they are experienced in two different kinds of distribution. Firstly in stationary trade and secondly in mail ordering. The group is far less integrated than other big groups like Daimler or Smiths Industries. This gives Wide-bottom the advantage of higher flexibility. This effect is even more extreme since Wide-bottom has very small Strategic Business Units. The Wide-bottom Group has a strong brand name incorporated by Christie Clark and is experienced in introducing new products in an competitive marketing environment.

Weaknesses The strength of being not too integrated into the concern can also be a weakness, when errors are discovered too late because of a too loose supervision or when the support of the mother company becomes insufficient or because of sluggish communication. Christie Clarks chaos approach is therefore less efficient. Opportunities The jeans market is an old and established market. The leading companies – being in the market for a century or more – have established themselves in a monopolistic situation with the help of huge advertising budgets.

The magic concept of Christie Clark in the past was to exploit the inefficiency of these kinds of markets normally protected with high barriers of entry. Threats The jeans venture is only one of the many in the big group and could easily be abandoned if it seems not to be feasible after a while. The jeans market has a very unsteady component which are the designer jeans. With the customers change in taste new competitors enter and leave the market. At the moment all the important designers are coming back into the market. The situation is very much alike the one in the late 70s and early 80s.

In the mid 80s the market for designer jeans collapsed and many players had to leave the market. Generation and Evaluation of Strategic Options There are a number of different options for a possible entry into the highly competitive jeans market , firstly Wide-bottom could use its promotion experience to take over some claims of the existing competitors. Wide-bottoms second penetration possibility could be to use distribution channels more efficiently than its competitors therefore being able to get an advantage in terms of costs and service. Thirdly, Wide-bottom has the possibility to sell the new product at a very competitive price.

Wide-bottom could also acquire an already established company in the jeans market to be able to gain access. Even though the product and the market is new, the entry strategy is based upon the core competence of the Wide-bottom Group. Marketing Objectives The results of the generation and evaluation of strategic options lead to the definition of market objectives. Two types of objectives have to be considered which help defining the core strategy. These objectives are strategic thrust (future direction of the business) and strategic objectives.

Together they define where the business and its products intend to go in future Considering the facts Wide-bottoms future direction of its business is to enter into the existing jeans market by market penetration. Alongside objectives for product and market direction, strategic objectives need to be agreed This involves the process of planing at the product level. As it is intended to enter an existing market with existing products the determination would have to be the task of being better than the competitors in terms of price, service and supply.

This goal could be reached not only by being cheaper than competitors but also much more flexible, to put it in a nutshell, firstly offering the same product for a better price than competitors and secondly offering a closer and better customer service. The Target Market Generally speaking Wide-bottom should attack the recession proof 5 pocket style straight leg blue jeans market, thus competing against brands such as Levis, Mustang, Pepe Jeans, Lee, Wrangler etc. therefore targeting the average consumer. The core target market will be those jeans that are mainly sold in the department stores and the discount chains.

The target is the average customer whereas the most important component is the 5 to 24 year old customers which account for 60% of the total jeans market, especially for Wide-bottom this is an interesting option as this is a similar target group as the customers of the Wide-bottom Megastores this will be dealt with in more depth later on in this assignment. Expressed more precise referring to a lifestyle analysis the target segments are ranging from modern mainstream, traditional working class, traditional mainstream to upper conservative.

It has always been the core of the Wide-bottom philosophy to target an entire already established and rather mature market, in which it is possible to gain a small market share with the high profile of the Wide-bottom brand name. Competitor targets Alongside decisions regarding target markets lie judgements about competitor targets. The analysis of how industry structure affects long-run profitability has shown the need to understand and monitor competitors. The key to superior performance is to gain and hold a competitive advantage.

Firms can gain a competitive advantage through differentiation of their product offering which provides superior customer value or by managing for the lowest delivery cost. The right strategic focus for the Wide-bottom Group concerning competitor target would be to try to win market share as the jeans market is in its mature state and cannot be expanded. This strategy implies gaining marketing success at the expense of the competition. Wide-bottom should seek to win market share through promotional innovation and penetration pricing.

If Wide-bottom carries out a frontal attack towards the market leaders its advantage will be based on cost leadership which will support a low price strategy to fight the market leader. Furthermore success is more likely if there is some restriction on the leaders ability to retaliate. Restrictions include pride, inflexibility and high advertising costs and technologic advantage. All market leaders in the jeans market have high expenditure on advertising and promotion which they off load on the customer.

As Wide-bottom generally does not run highly expensive advertising campaigns it would not have this disadvantage, it could offer jeans to a far better price than competition. Concerning promotional innovation, Wide-bottom would not need to open new shops, as it could sell and promote the jeans in its existing record shops. Finally, the challenger, in this case the Wide-bottom group, needs adequate resources to withstand the battle that will take place should the leader retaliate.

Wide-bottoms cash cow which has to provide the money for all new investments is its airline, Wide-bottom Atlantic. This will enable the group to withstand major competitor attacks. Competitive Advantage Competitive advantage will be obtained through lower prices for a good quality product. This can be achieved by the Wide-bottom Group through a cost advantage in terms of already established brand name partly established distribution channels and a high bargaining power. Competitive advantage will also be achieved through being able to respond quicker to customer needs.

Through building small business, units a closer relationship with the customer can be established, thus representing a serious weapon against the economies of scale and scope of the major competitors in the market. A very advanced IT system will improve the flow of communication between distributors, manufacturer, head office and customer. Marketing Mix Decision The sales will take place in the Mega stores owned by Wide-bottom and in retail stores with a good reputation like Foleys and Dillards.

The fight for shelf space will clearly be won by Wide-bottom because of its established reputation and brand name. When these principles can be realized a solid average jeans at a very attractive price will be the result. The jeans will be available in two main lines: for men and for women. These will have slightly different cuts but still correspond to the classic five pocket style. The material in use will be denim and for the beginning there will only be two basic colours which will be different kinds of blue and black.

Implementation The near future does not seem to have major external positive or negative surprises. It is therefore unlikely that strategies and objectives have to be redefined. On an internal basis Wide-bottom is unlikely as well to be restructured or to be bought up and the marketing plan can then be implemented smoothly and without any problems. A rise of a new company of that size requires a fair amount of capital, which can be provided by the big Wide-bottom group. Control

Because of the rapid development of information technology, Wide-bottom has the possibility to gain a true competitive advantage towards its competitors. As Wide-bottom will have build up an IT-system for its new company anyway, it can buy the very latest standard, giving Wide-bottom a considerable advantage. Wide-bottom has the unique chance to be the first competitor with an interactive consumer service system. Wide-bottom has therefore to install an Intranet/Internet application that will enable outlets, distributors, manufacturers and consumers to communicate and order on a real time basis.

Such facilities are internationally available (although they are not fully exploited yet) and can meet the companys needs at lower cost then traditional computer systems and networks. An practical example would look like this: a consumer browses through the Wide-bottom Jeans Web site, then places a direct order, pays with his credit card and can then choose between a delivery per mail for an extra fee or collect her jeans at the nearest outlet. This avoids the very annoying situation to make ones way to an outlet just to find the required jeans sold out.

Furthermore would this action automatically update the stock list at all levels of the product chain (requirement: being on-line), change the accounts in the head office and give the marketing people a highly efficient tool to analyze consumers, their tastes and behavior (e. g. a questionnaire). A more detailed analysis of the future system would not be desirable as it would go far beyond the scope of this marketing plan. This IT system will incorporate the framework around which the marketing mix decision will be wrapped.

With the help of a highly advanced IT system it will be possible to realize the just in time approach. The IT system must not only be used to undertake day to day business but also to be aware of the market and its behavior. Audit In order to be able to launch a new product, the marketing environment has to be scrutinised, which consists of external and internal environment. Marketing audit is a basis upon which a plan of action to improve marketing performance can be build. The marketing audit provides answers to the following questions: Where are we now?

Assumptions should be made as an ongoing part of the marketing audit: Inflation will remain at around 2. 5% per annum. Unemployment will be about 8 %. Social and cultural casualisation have made jeans the most popular article of clothing. Although the younger part of the population tends to represent a bigger part of the jeans market, older people are becoming increasingly important. Jeans have made their way from working clothes to an every day dress. Little has been changed since the first modern jeans was manufactured by Levi Strauss. An important invention was the zipper introduced by Lee in 1926.

Tweed (the untreated cotton fabric) is still the material jeans are mostly made off. New materials include rubberized cotton, nylon, leather, velvet, corduroy, snake printed or sequined. The finishing wash every jeans goes through before it is ready for sale has recently seen some changes. Stone wash is an example for a washing trend in the late 80s and early 90s. Market and Competition According to Prudential Securities sixty per cent of the jeans market is five-to 24-years-olds. But this market segment will grow by only 0. 6 % each year for the rest of the decade.

The world market for Jeans is between 6. 6 and 8 billion Dollar worth and (4 to 5 hundred million pairs sold annually). The growth rate over the last few years was: 1996 – 2. 6%, 1997 – 2. 6%, 1998 – 2. 4%. The main competitors in the market are Levis, Wrangler, Mossimo, Girbaus, Diesel, Bugle Boy and Jordache. However, in dollar sales, Levi remains No. 1. Recent competition has come up by designers such as Versace, Armani, Moschino, Joop, DKNY, Lacrois, Dolce & Gabbana, Anna Sui and Todd Oldhamm. This development shows the new consumer trend to spend more on jeans if they are well branded.

Levis just introduced the baggy style in an attempt to regain market share in the urban youth customer segment, demonstrating the importance of the urban youth market. The majority of sales takes place in retail chains and not in jeans outlets. Mail order has a surprisingly small market importance. Internal Marketing Audit The internal analysis of the Wide-bottom Group is difficult because it is far less integrated than many other concerns like Daimler or Smiths Industries. Christie Clarks SBUs are unusually small and the business culture of them is quite different.

But still, certain patterns can be found through the group. The groups image is unusually young. The concept of success is always similar: value for money. Since Wide-bottom penetrates most of the markets it is understandable that the company has a competitive advantage over its rivals in terms of price. Furthermore Christie Clark incorporates a very valuable branding tool. She incorporates youth, dynamic, entrepreneurial skills, sympathy, continuity and non-scandalous behavior. This means that less money has to be spend on advertising and branding. This indicates that the jeans could be sold either way.

Ben and Jerry’s marketing strategies

Ben and Jerry’s marketing strategies Ben & Jerrys were experiencing a steady growth within their sales figures from 1990 to 1993. However, In March 1994, Cost of Sales increased approximately $9. 6 million or 9. 5% over the same period in 1993, and the overall gross profit as a percentage of net sales decreased from 28. 6% in 1993 to 26. 2% in 1994. This loss might have been a result of several reasons, such as high administration and selling costs, a negative impact of inventory management, and start up costs associated with certain flavors of the new Smooth, No Chunks ice cream line.

Ben & Jerrys selling, eneral and administrative expenses increased approximately 28% to $36. 3 million in 1994 from $28. 3 million in 1993 and increased as a percentage of net sales to 24. 4% in 1994 from 20. 2% in 1993. This increase might reflect the increase in marketing and selling expenses and the increase in the companys administrative infrastructure. Ben & Jerry’s loss was not solely due to their employee orientated approach, but they appeared to have taken out a vast amount of capital lease in their aim to automate their production to keep up with the intense competition.

As reflected in the balance sheet, Ben & Jerry’s had einvested huge amounts of property and equipment in 1994 increasing their long-term debts by almost 45% in 1993. Alternatives available to the consumer now, and in the foreseeable future Haagen Dazs is currently the main competitor in the concentrated market place for super premium ice cream. Substitutes are however available. There are other ice creams not in the super premium category. To an extent, these are real competitors.

However for the market B&J caters for {the up market 25-40s with a high disposable income} their strategies should not have a great impact on B&J. The frozen yogurt lines which B&J now provides, has a number of direct competitors to deal with. Dealing with other substitutes is not that simple. Expensive (or not) chocolate, cakes, croissants and other post meal consumables are realistic options for the consumer. Ferrara Rocha will assure you that their product is the perfect accompaniment to any meal. B&J need to be wary of this.

How he/she makes the choice for ice cream (as opposed to chocolate etc. ) and then super premium (as opposed to premium or ordinary) and then B&J (as opposed to Haagen Dazs etc. ) is essential. [See section 3. 21 Research] The possibility of a rival ceasing B&J’s place as no. 1 or no. in the marketplace? Despite after tax losses in 94 both B&J and Haagan had a 42% share in early 95. None at present seem to have the ability or financial backing to challenge this, albeit Edys has Nestle. The possibility of new entrants in the market place is confined by two major problems.

The brand and distribution. Remembering that these are up market consumers where by cheap alternatives are not necessarily sought for then the key element is the brand. This brand and the associated image are something currently only Haagan and B&J have. This emotional tie related to B&J’s and everything it possesses beyond what it is in itself (i. . a good tasting ice cream) is something that will be difficult to emulate. It is a question of I wouldn’t be seen dead eating another ice cream as opposed to this is cheaper and tastes just like B&J’s so Ill buy this from now on.

The other barrier concerns distribution. With ice cream the idea of selling products through the Internet, despite the dried ice, which may accompany it, is not likely to be an option V the consumers will not readily enthuse over the idea. B&J’s is a fresh ice cream and by nature difficult to transport. Consequently distribution to stores around the USA and globally will e expensive and require partners such as Dreyer’s that have an extensive transportation network. It must be noted that this is potentially a concern or risk for B&J’s.

Having a rival manufacturer distributing their ice cream is likely to cause conflict, and B&J should change this immediately or have an adequate contingency plan . With both the above barriers the key entrants may be the other ice cream manufacturers in the premium or ordinary market, notably the premium. As it is these that already have the distribution network as well as the know how. It will still take a large investment for these anufacturers to sell their image. Internal Issues Due to the baby boom in 1994 the target market of Ben & Jerry has declined vastly.

Although Ben & Jerry still hold a large percentage of the small market share, the company needs to decide on whether this target segment is worth sticking with. At one stage Ben & Jerry’s pricing strategy worked really well, however it has become evident that demand over recent years has shifted towards lower priced products leaving pricing strategies being a big issue for the company. Until 1994 all of Ben & Jerry’s promotions were gained through the companys socially conscious ractices. However price wars with main competitors left the company having to pull funds off advertising campaigns to fund price discounts and store coupons.

Due to the fact that imitations for the product are being developed more rapidly, Ben & Jerry have changed their primary marketing goal to establish products that cannot be imitated but the technological developments of the company have not allowed them to launch the products within a realistic time limit. B&J’s mission statement includes the need, quite rightly, for a wide variety of innovative flavors. Five years to find the perfect coffee bean seems nnecessary. Coffee ice cream, in this period, may have become unattractive to the customer. What if after this period the product failed to penetrate the market?

This scenario is compounded by, – The quick replication by competitors – The high costs related to manufacturing each different flavor As a result it is key to cease brands not received well, as well as introducing new flavors quickly. Flavor of the month may be a way of bringing consumers to them on a regular basis. To identify what the consumer wants and cannot receive elsewhere, what he/she detests and what they would like to improve is important. Although there are some signs of B&J carrying out consumer research it is essential to introduce continual focus groups or panels.

It may be the case that a good ice cream is not selling well due to expense, lack of marketing or its just too different to comprehend trying. Research will be key in identifying the market in any region or country B&J wishes to operate, especially into consumers needs and wants. The way choices are made needs to be understood and the positioning of B&J needs to accommodate this. The decision is based, amongst others, by the mood of the potential consumer at the time of decision, the tastes of the accompanying riends V group decisions are likely to be an integral element, convenience of supply and time available.

Ben & Jerry seem to be proud of the success rate of their relaxed, casual culture and having employees involved in the decision making. However this policy needs to be reviewed as decisions are taking too long to be made due to large staffing numbers but with staff turnover at a low twelve percent, changing the decision making process could be very difficult. If it is not bad enough that the company is loosing market share, the company putting more funds into promoting their image than to them is irritating shareholders even more. A happy medium will have to be found for Ben & Jerry to gain confidence back from their investors.

The extent of internal rivalry amongst the established firms within the industry. Ben & Jerry exist in a consolidated marketplace with just two major players. The other is Haagen-Dazs. There is severe competition between the 2 players. If this rivalry is weak then companies have an opportunity to raise prices and earn greater profits. However, if rivalry is strong significant price competition including price wars can occur. Price competition limits profitability by reducing the margins that can be earned on sales, which could push he industry profits down in the process.

Ben & Jerry’s competitive structure seems to be consolidated. The more commodities like an industrys product the more vicious will be the price war. The nature and intensity of rivalry in their industry is much more difficult to predict. As the companies are interdependent competitive actions of one company will directly effect the profitability of others. Companies sometimes seek to reduce this (price war) by following the price lead set by the dominant company in the industry. The demand conditions also affect the intensity of internal rivalry between companies.

Growing demand tends to reduce rivalry as companies can sell more without taking market share away from other companies, resulting in high profits. Conversely declining demand results in more rivalry as companies fight to maintain revenues and market share. Therefore Ben & Jerry exist in a mature industry where there is declining demand; creating intense rivalry with Haagen Dazs. Buyers Ben & Jerry’s customers have no switching costs. Therefore Ben & Jerry have to be aware of upcoming price wars, to avoid losing customers to their rival. Hence Ben & Jerry’s customers have high bargaining power.

For example, during economic instability consumers are reluctant to spend their money on luxury products such as super premium ice creams. How much power can a supplier have? Ben & Jerry’s Supplier of milk and cream comes from Vermont Dairy farms which charge a higher price but do not use any genetically engineered drugs (rBGH). Their supplier of milk has increased bargaining power as a direct result of Ben & Jerry’s principals, which in this case is, “h Health issues. “h To protect smaller farms. Most of their suppliers are scattered around the world such as, “h South African rain forest, which supply Nuts. Passamaquoddy Indians, which supply their Blueberry. “h Georgia, which supply their peaches. High costs in transportation and research are inevitable. The coffee beans used in their coffee-flavored ice cream took the company five years to find; therefore one can imagine the high costs involved. Ben & Jerry also put money pack into the suppliers. This in turn establishes strong relations between company and supplier; for example the brownies used in their Chocolate Fudge Brownie Ice Cream are purchased from bakeries, which employ under skilled workers.

Doing so gives the supplier greater comfort and eassurance with better bargaining power, why? Because Ben & Jerry prefer to select their suppliers who have greater social morals. What Social and Economic Factors affected B&J? In 1994, sales were flat, profits were down, and the company’s stock prices had fallen to half its value. While Ben & Jerry had thrived in the 1980s, the coming of the baby boom in the 1990s meant a middle class society that was more health conscious {the target market which Ben & Jerry gained much success on}.

The company realizing its fall in sales quickly responded to the changes in consumer demands and introduced Ben & Jerry Lite. This line failed miserably. It seems like that Ben & Jerry failed to forecast and acknowledge the changing in consumer tastes, and was faced with increasing competition with Haagen-Dazs, which introduced its low-fat Ultra Premium ice-cream. Their social commitments to their customers community and suppliers have contributed to a successful and unique image, Ben & Jerry donated a portion of their sales from their Rainforest Crunch Ice Cream back into environmental preservation causes in South America.

Ben & Jerry also established the Ben & Jerry Foundation, which donated 7. 5% of its pre-tax profits helping non-profit organization, such as, “h An stablishment in New York to help drug addicted pregnant women. “h Individuals and families affected by the AIDS virus in Brattleboro. Such efforts had contributed to winning over like-minded consumers, however its arguable to what extent this will have on winning the hearts of international consumers. The question then arises, to what extent does their social unique image affect their consumer behavior?

Swot Analysis for Ben & Jerry Strengths “h Ben & Jerry have an established and recognized brand name. “h They have a relaxed, loyal and casual workforce. “h Good public and social image due to their principles in social awareness. h Wide variety of flavors in ice cream for customers. Weaknesses “h Ben & Jerry have a limited target market, as their product is niche. “h The suppliers and distributors (such as Dreyers) have high bargaining power, which allows them to raise their prices when they like. h They have concentrated more on donating their money to charities therefore neglecting forthcoming changes in trends. “h Declining market share. “h Slow development of new products. Opportunities “h Ben & Jerry should seek to globalize their product to compete effectively. “h Change their current suppliers and distributors, which might enable hem to be more cost effective Threats “h Threat of substitutes “h Economical changes such as in inflation or consumer spending “h Social changes within the consumer market such as health conscience attitudes.

This report concludes that Ben & Jerry has the potential to prosper so long as they: “h To be prepared for forthcoming changes in consumer needs and wants “h To compromise between maintaining their company image and satisfying their investors needs. “h Try to reduce their supplier and distribution costs by considering other options. Recommendations This report has identified three main areas of concern hat need to be addressed; “h Overcoming Inertia “h Introducing an international joint venture “h Maximizing profits through cost efficiency (Economies of Scale) In todays global environment, change rather than stability is necessary.

Rapid changes in technology, competition and customers demands have increased the rate at which companies such as Ben & Jerry’s needed to alter their strategies and structures to survive in the market place. As discussed earlier, one of the reasons why B&J have lost market share is because they failed to change themselves and adapt to a new competitive environment because of organisational inertia. To overcome this Ben & Jerry need to identify the main barrier to change such as consumer tastes. This can be overcome through the development of a marketing plan, as there seems to be no real evidence that Ben & Jerry have done this.

Ben & Jerry’s reliance on cause generated marketing has its benefit but it also has its pitfalls. Cause generated marketing and/or strategy has adaptability, whereas the long-term marketing plan has focus. Therefore a good marketing plan is adaptable. Employee productivity is one of the key determinants of a company’s efficiency and cost structure so this needs to be improved upon in order to make the ompany more competitive. The culture of the organization is strongly influenced by the founders and changes will be hard to achieve.

It is not recommended that the culture of the company be changed but that devising new ways to increase employee productivity through the Human Resource Function enhances it. After looking at many different options it is suggested that the employees be put into self-managing teams. Each team will be responsible for an entire task and time deadlines should be given. It is also suggested that pay rewards should be given to the teams that complete their task to the highest standard. This ption could lead to a more flexible work force, as employees will get to know each other’s roles.

It can also create a flatter organizational hierarchy, which would make the decision making process a lot quicker even though all employees are still involved. Marketing should make the consumer believe that at a given time, be it on a date or after a meal, that B&J is the perfect conclusion to a perfect lunch or a perfect evening. B&J needs to be aware of group decision especially couples. The idea of marketing B&J as the perfect accompaniment to a date could be profitable. How about the most romantic couple in USA competition?

Marketing Is Marketing

“Marketing is marketing, irrespective of the product or marketplace”. This is a theme common to many introductory marketing texts and degree courses. The two most common exceptions cited to this proposition are buying behavior models between consumers and business buyers and the extended ingredients of the services marketing mix. While the overall sentiments of marketing hold true across product and market boundaries, perhaps the differences are in fact more marked? Intends to spark some discussion pertaining to the extent to which marketers can safely generalize when discussing the nature and characteristics of marketing.

Are we correct in offering students and in-company training program generalizations that cut across the marketing domain? Are we doing justice to the core nuances if we simply draw out the variations between consumer goods, services, industrial and business-to-business marketing? Is there a different perspective that should, in the new millennium, be the focus of textbooks and marketing courses? Content Indicators: readability, Practice implications, originality, Research Implications* Marketing is marketing, irrespective of the product or marketplace. This is a theme common to many introductory marketing texts and courses.

The two most common exceptions cited to this proposition are buying behavior models between consumers and business buyers and the extended ingredients of the services marketing mix (cf. Dibb et al. , 1997; Kotler, 1998). While the overall sentiments of marketing hold true across product and market boundaries, perhaps the differences are in fact more marked? The marketers of services were the first to “speak out”, arguing that the nature of marketing is different owing to the basic characteristics of services: intangibility; direct organization-client relationship; onsumer participation in the production process; and Complexity.

The upshot for services marketers has been the extension of the marketing mix from the classical product, price, place (channel) and promotion “4Ps” to include at least people, physical evidence (ambience) and process. These marketers also point to the characteristics of services, notably intangibility of the service “product”, restricting opportunities for creating a differential advantage over competitors, with the inevitable dependence for differentiation and competitive edge on branding initiatives and personnel.

While services marketers have outlined significant differences for “their marketing”, on the whole, texts and marketers have argued there are relatively only minor differences between the marketing of consumer goods and industrial or business-to-business goods. This paper is intended to spark some discussion pertaining to the extent to which marketers can safely generalize when discussing the nature and characteristics of industrial, business-to-business marketing. Are we correct in offering students and in-company training program generalizations, which cut across the marketing domain?

Are we doing justice to the core nuances if we simply draw out the variations between consumer goods, services, industrial and business-to-business marketing? Is there a different “cut of the cake” which should, as the new millennium dawns, be the focus of textbooks and marketing courses? As co-author of one of the leading introductory marketing texts, Marketing: Concepts & Strategies (Dibb et al. , 1997), regular MBA, undergraduate and in-company lecturer, as well as marketing consultant, these are themes which, increasingly, are causing this author concern when preparing seminar papers and lecturing sessions.

Based on many years of researching and working with consumer brands, services and industrial products, as a starting proposition, here is a very personal view of how marketing in industrial markets really is different. Or is it? The core dissimilarities From basic marketing analyses, via target market strategy decisions, to the determination of tactical marketing mix programs and controls, there are marked differences in the issues encountered and the approaches deployed between consumer and industrial marketing.

Buying behavior (Figure 1) Consumer versus business-to-business buying illustrates the popular buying behavior models for consumer and business-to-business markets, revealing the additional specification stage in much business-to-business purchasing and the different sets of influencing forces (for example, Assael, 1997; Ford, 1997). There are many additional variations, including the role of the buying center versus consumer peers, the assessment of risk, the formality of buying and the nature of selling.

Few marketers, though, seem to disagree with there being some quite stark differences in how consumers buy and how businesses make purchases. Understanding competitors Perhaps because of the prominence of brands and the high profile in-home media adopted in much consumer promotion, most consumer marketers are aware of their rivals’ brands and marketing tactics. All too often, such competitive understanding is only superficial, but consumer marketers at least exhibit strong awareness of their like-for-like competitive arena (Chang and Simkin, 1997; Simkin, 2000).

In industrial markets, competitive intelligence is more difficult to attain – market researchers cannot so readily conduct surveys of rival management teams – and many businesses have only a haphazard awareness of their competitors’ intentions. Indeed, many managers seem so occupied with keeping up to date with product specification changes in their own portfolios and in sales force activity, that time allocated to assessing competitive forces is minimal.

Marketing research Business-to-business surveys are notoriously difficult to conduct owing to: ecretaries gate keeping; busy managers not wanting to “waste time” attending discussion groups or completing questionnaires; incentives not being as attractive to recipients as in much consumer research; and Confidentiality concerns being a major drawback. Such marketing research does occur, but by no means as easily or as frequently as in consumer markets, nor does it utilize anything like the extent of in-depth qualitative techniques as favored so strongly by the marketers of consumer goods [1]. Market segmentation

Perhaps one of the most important aspects of marketing (McDonald and Dunbar, 1995), market segmentation, is frequently deployed by practitioners in all markets. There is a striking variation in the base variables used in order to define the segments. Despite the sentiments of (Table 1) Segmentation variables, which presents the textbook menu of variables to use, many industrial market segmentation schemes are nothing more than common-usage industrial sectors or internal product groupings: a long way from the customer need and attitude segments adopted by consumer marketers (Dibb and Simkin, 2000).

Standard industrial classification coding or trade directory membership lists too often masquerade as customer grouping analysis. Branding Branding exists primarily for identification and to smooth the task of differentiating products (Macrae, 1996). There is a strong psychological ingredient inherent in consumer branding with many consumers, notably of supermarket merchandise, exhibiting strong loyalty to their favored brands.

This is true in certain industrial markets, but for many products the required unique positioning concept and associated marketing communications campaigns are lacking substance, longevity and the sheer emotion of consumer brand building activity (Doyle, 1998). Branding for most business-to-business goods, particularly industrial products are less persuasive and emotive than for the vast majority of consumer brands. The marketing mix McCarthy’s “4Ps” have re-appeared in many marketing texts for around three decades.

Product, promotion, pricing and place (channels) are still considered to be the tactical marketing toolkit manipulated by most marketing practitioners (Dibb and Simkin, 1997). Servicing marketing added the additional “3Ps” of people, process and physical evidence [2]. For industrial marketing, it is generalized in most introductory marketing texts that the core “4Ps” hold firm. Compared with most consumer goods, however, there is a much stronger customer service aspect to the product proposition: technical advice before a sale, ongoing customer support and after market operations.

Marketing channels are often shorter, with much use of dealer networks or direct marketing. The sales force is central to the promotional mix, sales promotion is heavily deployed, trade shows and direct marketing are popular, and advertising tends to be more technical and less emotive in nature. Even pricing is different: few industrial buyers adhere to list prices, expecting to negotiate or consider tenders (Hart, 1994). Within the “4Ps”, there are important changes of emphasis, while the importance of customer service and the managing the people ingredient in the marketing mix comes straight from the practices of services marketing.

Controlling implementation While there are exceptions in some of the more long-standing and mature marketing departments, the sales-oriented culture inherent in most industrial companies has not provided a basis for the required operational controls to ensure the effective implementation of marketing activity (Simkin, 2000). Marketing activity is more ad hoc, short-term and tactical, rather than on-going brand building or rolling out longer term marketing plan recommendations.

Some marketers may perceive these variations between consumer and industrial marketing to be only at the margins. Nevertheless, they are, from experience, quite striking differences and manifestly alter the manner in which marketing is actioned. But do they make marketing per se take on a different guise and ethos? Marketing is marketing Marketing is not a science: there is no single correct definition or approach to undertaking marketing. The following commonly cited definitions illustrate this variation: The aim of marketing is to make selling superfluous.

The aim is to know and to understand the customer so well that the product or service fits him/her and sells itself (management guru Peter Drucker). Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably (the UK’s Chartered Institute of Marketing). Marketing consists of individual and organizational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, servicing, distribution, promotion and pricing of goods, services and ideas (The American Marketing Association).

There are, however, common themes in most explanations of marketing. The most important are: 1. the ability to satisfy customers; 2. the exchange of product or service for payment or donation; 3. the need to create an edge over competitors; 4. the identification of favorable marketing opportunities; 5. profits or financial surpluses to enable a viable future for the organization; 6. that resources are utilized shrewdly to maximize a business’s market position; and 7. The aim to increase market share in priority target markets.

If the “right” opportunities are pursued, customers are properly probed, the “right” customers targeted with a marketing proposition designed to give a business an edge over its rivals, it is highly likely that customers will be satisfied, market share will rise in core target markets and profitability will accordingly support a viable future. Conversely, if a business develops a product or service which fails to reflect customer expectations and needs, is no better than competing offers and takes no account of evolving market conditions, it is unlikely that the future will be prosperous for such an organization.

These sentiments are equally applicable to consumer or industrial markets. Definitions of marketing count for little if businesses do not develop a process, culture and set of operational procedures to actually “do” marketing (Cravens, 1998; Piercy, 1998). The textbooks promote a process, which hinges on marketing analysis, marketing strategy, marketing mix tactics and internal program controls, typified by (Figure 2) The marketing process.

Recent research (Dibb and Simkin, 1997; 2000; Simkin, 2000) indicates that the majority of large UK businesses do now practice marketing and that when undertaking the more defined tasks of market opportunity appraisal, market segmentation/target marketing, or marketing planning, they do indeed proceed through an analysis-strategy-programs process. So, is it here where there is common ground: in how marketing is defined and in the marketing process to be deployed?

Is this how marketing should be explained: a common set of goals actioned through a process of marketing analysis, strategic decision making, formulation of tactical marketing mix programs and operational controls? Are the apparent differences in buying behavior explanation, competitor understanding, marketing research activity, market segmentation bases, branding, marketing mix ingredients and internal operationalisation, simply examples of marketing academics seeking to exaggerate perhaps only very minor variations in how marketing is perceived and utilized?

Are there other, perhaps more fundamental differences between the activities of consumer and industrial marketers not cited in this brief overview? Is there one way to describe and characterize marketing? Are any differences evident in industrial marketing merely subtle nuances or do they require their own full and proper explanation? Indeed, just what are the principal similarities and differences between “traditional” consumer marketing and business-to-business industrial marketing?

This author has concluded, “marketing is marketing”, with common objectives, processes and tools, irrespective of the market in question. However, the view presented here is that the basic marketing toolkit is applied differently and requires more than minor “tweaking” to tackle the characteristics of many industrial business-to-business products, target markets, and even marketing managers. What do you think?

Computability – Sales Goals

 

ComputAbility, a mail-order company, began in 1982. An authorized reseller of computer software and hardware, ComputAbility offers their clients over 50,000 products. The company has built their reputation on a foundation of competitive prices and quality service. In August of 1997, Creative Computers, also a mail-order company, acquired ComputAbility. The acquisition provided a number of benefits to the company, primarily a larger product selection to offer to customers. Currently, ComputAbility employs 60 + people with plans of adding on 20 to 30 more sales representatives and upport staff during the next year.

Prior to February of 1998, all of the sales representatives were in the inbound division. This division handles all incoming sales calls. Majorities of these calls are from individual consumers. Creative Computers had started their company the same way, but found the growth potential was in the business sector. In February of 1998, ComputAbility started their corporate sales division, an area already underway at Creative. This division of the company was created to develop relationships with business clients, and become the primary way of increasing company profit.

Computability added a dedicated trainer to the staff at the same time the corporate division was started. This individuals primary responsibilities were to train new hires in the areas of sales, product knowledge, company policies and procedures and computer systems. Although there was a solid training program in place, including ongoing new product training from manufacturers, the company was not profiting at an acceptable rate. ComputAbility experienced a decrease in sales and profits during the first year after the acquisition. The expectation was that the acquisition should have provided the tools ecessary to increase sales.

So what could be the problem? Although ComputAbility sales representatives now had more tools available to them, something was still missing. Creative Computers decided to test a sales training program for the corporate sales division. There are a number of sales training tools available. Tools range from books and seminars to dedicated sales training company programs. Management decided to work with a company who had developed a sales training program. The initial step was for top management to go through the training to see if it was worth the time and money investment.

After extensive research, the sales training program, from this point forward called “Discovery”, was adopted. Creative Computers hired the company who developed “Discovery,” to train the companys internal trainers and select corporate sales representatives. After the initial training, the company trainers conduct Discovery for all remaining and new employees. The training program consists of five courses, each containing one to three modules. The modules focus on techniques for cold calling, probing the company needs, developing client relationships, and account and time management.

Representatives are given metrics (daily goals) in the following areas; number of calls, talk time (amount of time the representative spends on the telephone), and dollar. The following goals show the expectations given to the employees during the first 6 months the training was in place: Calls: 80-120 calls per day Talk Time: 3. 5-4 hours per day Dollars: $3000 – $28000 gross profit (determined by months of employment) The company who created Discovery developed the metrics of calls and talk time. The dollar goals were determined by ComputAbility. Discovery has been in place for approximately 9 months.

ComputAbility has experienced a few issues regarding the metrics. The first issue deals with the number of calls the sales representatives are required to make. Representatives have expressed to management that the goals are not realistic and do not allow for development of client relationships. As a result of the first issue, the company is finding that not all representatives are following the program. This typically occurs after a few weeks on the job. At this point, the company needs to analyze if the Discovery program is effective; are the metrics given realistic? In addition, the determination needs to be made if

Discovery is followed, it leads to the representatives success. This is very difficult to analyze because as mentioned earlier, not every corporate sales representative is thoroughly following the program. It is also important to measure other factors that may be hindering their performance or assisting in their success, such as length of employment. The best way to determine the effectiveness of the Discovery program is to research proven sales training programs and techniques, analyze existing sales numbers in relation to the metrics and weigh additional factors that may influence the end result.

Senior Citizens Target Market Analysis

Over the past few years, with the help of modern technology, people have obtained access to virtually anything they desire at the simple click of a mouse button. Now, information can be accessed through various websites without having to visit a library, go to a store, a friend’s or relative’s home, or even travel agencies. The Internet is for all people- regardless of age, race, ethnic background, class, or religion. When it comes to marketers and which strategies will be most effective and efficient to become a successful website, every product in the market is geared towards a specific target group, regularly based on demographics.

Whether it is where a person lives, their marital status, age, or occupation, marketers try to target one particular area where they feel that their product will be benefited the most and where profits will be most generated for the business. One particular area that has been expanding not only in website visitations but also in new website formations is the senior citizen age group. Now, seniors are the fastest growing audience on the Internet. What is more interesting is the fact that they put their money where their “mouse” is.

This age group’s frequent use of the Internet is absolutely amazing and unbelievable. There are hundreds and hundreds of websites designed to be most suitable or more geared for this target group. The websites are specifically designed to meet the needs of older adults about the ages of 60 and above, and grandparents. It does not steer towards a certain economic or religious class. The majority of these websites provide much information on healthcare, health issues that affect them, relationships, money, news, entertainment, and childcare.

Part1B- Competitive Analysis Under the top 10 most popular sites for “www. seniorcitizens. com”, I chose the top four websites to analyze the areas in order to compare and contrast where www. seniorgold. com is strong and where it needs some work. The first site is called www. senior. com. Like any website, it will have many strengths and weaknesses. Allow me to discuss this website’s strengths first. The page was downloaded quite easily, with no error messages to refresh the page. Overall, the designs of the pages are colorful and have very clear graphics.

The text is very clear without being too wordy and misleading. The home page also has a search engine that allows the user to quickly find what he/she is looking for. In addition, it has a large variety of topics to choose from with easily accessible features. This website does contain a vertical and horizontal scroll bar on its homepage which makes the first impression for users a tedious one. It becomes very frustrating when someone has to keep scrolling up and down to search any information.

The contents on the homepage of a website should be clear, brief, and concise allowing you to link to it if more information is what is desired of the user. Another weakness would include the arrangement of topics on the homepage. They begin with serious news that then descends down to tacky, irrelevant links. Although the content of the text itself is clear, it looks all jumbled up, busy, and confusing. In order to be simple, and to the point, the topics should become more condensed, including the amount of links it has. Compared to www. seniorgold. , this website is more visually appealing to the eye. It appears to be more youthful through the use of cartoon characters and bold color schemes. The second website, www. elderweb. com, has tab links at the top of the homepage which allows the user to click on the tab which is relevant without having to search endless rows of subcategories to see which one applies to their information search.

There are no distracting side links that allows the user to choose to read the information or simply click on where they wish to go on the site. Unlike www. senior. , the page is very consecutive with the stories and features. The current headlines are brief and to the point. And, each headline gives the user a good sense of what each story is about without getting too wordy or redundant. There aren’t any banner ads that enable the user to concentrate more on his/her search without being distracted. One feature that I felt was quite important (especially since it is geared toward an older age group) was a button right on the home page that says, “Increase Text Size”. This is one feature that I had never seen on any of the other websites for senior citizens.

This is an important feature because, unfortunately, there are many senior citizens that do have visual impairments, and by using this feature, it facilitates their use of the website. A weakness that this website had was that it contained the same dull format and style throughout the whole website. The uninteresting graphics were all the same no matter which link you clicked on to view. The use of mute colors did not make this website very visually stimulating or appealing. This site also had a scroll bar, which, again, made the layout of the page seem very busy and unorganized.

This was the first senior website that did not have a search engine located anywhere. So, if you wanted some information, regardless of how consecutive or concise the text and layout may appear, you would not be able to simply type in what you were looking for to search. Compared to www. seniorgold. com, Elderweb has a very dull appearance. It looks very plain and old fashioned. It seems as though this site is geared more towards seniors that have a more traditional or conservative way of thinking. They prefer simplicity (i. e. light, dull colors, same graphics, etc) over complexity (i. old/bright colors, cartoons, modern graphics, etc).

The third website, www. thirdage. com, I would have to say is the best website for senior citizens-conservative and avant-garde. It contains a great color scheme of white and a soft green with no overwhelming or any dull graphic design. It does not have too many divertive banner ads. The search engine appears on every screen for easy access. It has a modern, strong homepage that is visually appealing with more interesting topics and subcategories geared more towards advice and different lifestyle levels.

This page does have a scroll down bar which could have been easily prevented by filling in the right side with that information. The whole right side is completely blank. This should have been used to condense the homepage without having to scroll down. Editorially, this page is not set up well. It has many scattered features, which makes everything look disjointed. The pictures all depict a youthful, healthy person. Obviously, the illustrations, which seem unrealistic, are not very reflective of their target audience. Measured up to www. seniorgold. com, this website is more appealing visually.

The topics are not as condensed or as easily accessible as that of the one referenced above. And lastly, www. 1travel. com, is the website which I felt was least relevant to senior citizens. It may have special discounts for them, however, on the homepage, it is not mentioned at all that any senior citizen discounts exist. This means that if there are any discounts, the user has to go searching for it. It is not easily accessible from it’s main page. It does not indicate at all that this site is geared toward senior citizens. It is another website to make travel/car/hotel reservations.

Why not visit any other travel websites that could probably give better bargains? A good feature on this website includes easy search methods (several search engines for each category). Also, the layout is immediate, it is in your face and very easy to gain access to. It contains excellent searching options and subcategories along with any questions with regard to the user’s travel needs. The layout of it has very basic colors- not too bold, yet not too boring either and there aren’t many banner ads in this page. This website does contain vertical and horizontal scroll bars.

The graphical layout overwhelms the text. The site seems to appear very busy, too wordy, or too much text perhaps. The text is also not very concise it seems scattered everywhere and is extremely redundant with several topics (ie FAQ’s, etc). Part1C-Site Analysis Seniorgold. com makes information searching very obtainable through the use of its shortcuts, word searches and options located on the left of the homepage layout. The layout is very colorful. The drop down menus are very resourceful in enabling the user to find what he/she is looking for without having to search the whole website to find it.

However, this site has a few weaknesses as well. One includes the busy-looking and visually unclear graphics. The site looks too full of activity with banner ads whose color schemes clash with the site’s design. Another important thing to note about this site is that it is outdated! I couldn’t help but notice that on the home page of this site it still had the link to: “Thanksgiving Preparation”. We’re in December!!! Websites that are not updated lose the interest and use of their web visitors. It is crucial for web page designers to keep their websites up-to-date with any new events.

Users may see this and see it a site deficiency. Part2A-Drive More Traffic To This Site I would recommend that the website changed its design layout. It should have a color scheme that compliments the text. The use of the drop down menus is very clear and concise. However it should concentrate on condensing the home page (it’s three pages long! ). One way of driving traffic to the site is to create banner ads for other senior citizen sites, as well as for nursing home sites, parenting sites, travel sites, and recreational activity sites.

What could also be done is to pay major Internet servers such as America Online, Yahoo, MSN, etc. for keyword bidding, Part 2B-Create A Stronger Community Among WWW. Seniorgold. Com Site Members I believe that this web site has a strong community as long as the above changes are made. This website does provide recreational activities such as casino resort trips and other activities that they could consider joining. Another addition may include the access to play games. For example, Bingo is a recreational game that senior citizens are notorious for.

Another feature that I believe is important in creating a strong community is the chat rooms. Senior citizens, since retirement or death of a loved one, feel a little lonely at times. I feel this is a great opportunity for them to communicate with other people without spending money. This website does have chat rooms. My experience of trying to enter a chat room, became well, quite discouraging. Under “Directory Word Search” I typed in “chat”. Once I got to the next page, it did not take me to any chat rooms or choice from various ones.

Instead, it took me to a page where I could find out where my roots come from!! After scrolling down almost to the bottom of the page, I found a link to chat and clicked on it. I never reached a chat room. The website needs to create word searches that facilitate the search, not make it more difficult. In addition to chat rooms, I think it should develop a variety of rooms where people can interconnect discussing similar hobbies such as golf, or crocheting, etc. Senior citizens need a sense of community and what best way to do it than by helping them find other people who feel the same!

Marketing Essays Senior Citizens Note: Professor, please notify me to confirm your receipt of my final paper. Thank You. Sofa Fernndez December 20, 2000 Professor Jim Coyle Internet Marketing 4555 Part 1A- Target Market Analysis Over the past few years, with the help of modern technology, people have obtained access to virtually anything they desire at the simple click of a mouse button. Now, information can be accessed through various websites without having to visit a library, go to a store, a friend’s or relative’s home, or even travel agencies.

The Internet is for all people- regardless of age, race, ethnic background, class, or religion. When it comes to marketers and which strategies will be most effective and efficient to become a successful website, every product in the market is geared towards a specific target group, regularly based on demographics. Whether it is where a person lives, their marital status, age, or occupation, marketers try to target one particular area where they feel that their product will be benefited the most and where profits will be most generated for the business.

One particular area that has been expanding not only in website visitations but also in new website formations is the senior citizen age group. Now, seniors are the fastest growing audience on the Internet. What is more interesting is the fact that they put their money where their “mouse” is. This age group’s frequent use of the Internet is absolutely amazing and unbelievable. There are hundreds and hundreds of websites designed to be most suitable or more geared for this target group. The websites are specifically designed to meet the needs of older adults about the ages of 60 and above, and grandparents.

It does not steer towards a certain economic or religious class. The majority of these websites provide much information on healthcare, health issues that affect them, relationships, money, news, entertainment, and childcare. Part1B- Competitive Analysis Under the top 10 most popular sites for “www. seniorcitizens. com”, I chose the top four websites to analyze the areas in order to compare and contrast where www. seniorgold. com is strong and where it needs some work. The first site is called www. senior. com. Like any website, it will have many strengths and weaknesses.

Allow me to discuss this website’s strengths first. The page was downloaded quite easily, with no error messages to refresh the page. Overall, the designs of the pages are colorful and have very clear graphics. The text is very clear without being too wordy and misleading. The home page also has a search engine that allows the user to quickly find what he/she is looking for. In addition, it has a large variety of topics to choose from with easily accessible features. This website does contain a vertical and horizontal scroll bar on its homepage which makes the first impression for users a tedious one.

It becomes very frustrating when someone has to keep scrolling up and down to search any information. The contents on the homepage of a website should be clear, brief, and concise allowing you to link to it if more information is what is desired of the user. Another weakness would include the arrangement of topics on the homepage. They begin with serious news that then descends down to tacky, irrelevant links. Although the content of the text itself is clear, it looks all jumbled up, busy, and confusing. In order to be simple, and to the point, the topics should become more condensed, including the amount of links it has.

Compared to www. seniorgold. com, this website is more visually appealing to the eye. It appears to be more youthful through the use of cartoon characters and bold color schemes. The second website, www. elderweb. com, has tab links at the top of the homepage which allows the user to click on the tab which is relevant without having to search endless rows of subcategories to see which one applies to their information search. There are no distracting side links that allows the user to choose to read the information or simply click on where they wish to go on the site. Unlike www. senior. , the page is very consecutive with the stories and features. The current headlines are brief and to the point. And, each headline gives the user a good sense of what each story is about without getting too wordy or redundant. There aren’t any banner ads that enable the user to concentrate more on his/her search without being distracted. One feature that I felt was quite important (especially since it is geared toward an older age group) was a button right on the home page that says, “Increase Text Size”. This is one feature that I had never seen on any of the other websites for senior citizens.

This is an important feature because, unfortunately, there are many senior citizens that do have visual impairments, and by using this feature, it facilitates their use of the website. A weakness that this website had was that it contained the same dull format and style throughout the whole website. The uninteresting graphics were all the same no matter which link you clicked on to view. The use of mute colors did not make this website very visually stimulating or appealing. This site also had a scroll bar, which, again, made the layout of the page seem very busy and unorganized.

This was the first senior website that did not have a search engine located anywhere. So, if you wanted some information, regardless of how consecutive or concise the text and layout may appear, you would not be able to simply type in what you were looking for to search. Compared to www. seniorgold. com, Elderweb has a very dull appearance. It looks very plain and old fashioned. It seems as though this site is geared more towards seniors that have a more traditional or conservative way of thinking. They prefer simplicity (i. e. light, dull colors, same graphics, etc) over complexity (i. old/bright colors, cartoons, modern graphics, etc). The third website, www. thirdage. com, I would have to say is the best website for senior citizens-conservative and avant-garde. It contains a great color scheme of white and a soft green with no overwhelming or any dull graphic design. It does not have too many divertive banner ads. The search engine appears on every screen for easy access. It has a modern, strong homepage that is visually appealing with more interesting topics and subcategories geared more towards advice and different lifestyle levels.

This page does have a scroll down bar which could have been easily prevented by filling in the right side with that information. The whole right side is completely blank. This should have been used to condense the homepage without having to scroll down. Editorially, this page is not set up well. It has many scattered features, which makes everything look disjointed. The pictures all depict a youthful, healthy person. Obviously, the illustrations, which seem unrealistic, are not very reflective of their target audience. Measured up to www. seniorgold. com, this website is more appealing visually.

The topics are not as condensed or as easily accessible as that of the one referenced above. And lastly, www. 1travel. com, is the website which I felt was least relevant to senior citizens. It may have special discounts for them, however, on the homepage, it is not mentioned at all that any senior citizen discounts exist. This means that if there are any discounts, the user has to go searching for it. It is not easily accessible from it’s main page. It does not indicate at all that this site is geared toward senior citizens. It is another website to make travel/car/hotel reservations.

Why not visit any other travel websites that could probably give better bargains? A good feature on this website includes easy search methods (several search engines for each category). Also, the layout is immediate, it is in your face and very easy to gain access to. It contains excellent searching options and subcategories along with any questions with regard to the user’s travel needs. The layout of it has very basic colors- not too bold, yet not too boring either and there aren’t many banner ads in this page. This website does contain vertical and horizontal scroll bars.

The graphical layout overwhelms the text. The site seems to appear very busy, too wordy, or too much text perhaps. The text is also not very concise it seems scattered everywhere and is extremely redundant with several topics (ie FAQ’s, etc). Part1C-Site Analysis Seniorgold. com makes information searching very obtainable through the use of its shortcuts, word searches and options located on the left of the homepage layout. The layout is very colorful. The drop down menus are very resourceful in enabling the user to find what he/she is looking for without having to search the whole website to find it.

However, this site has a few weaknesses as well. One includes the busy-looking and visually unclear graphics. The site looks too full of activity with banner ads whose color schemes clash with the site’s design. Another important thing to note about this site is that it is outdated! I couldn’t help but notice that on the home page of this site it still had the link to: “Thanksgiving Preparation”. We’re in December!!! Websites that are not updated lose the interest and use of their web visitors. It is crucial for web page designers to keep their websites up-to-date with any new events.

Users may see this and see it a site deficiency. Part2A-Drive More Traffic To This Site I would recommend that the website changed its design layout. It should have a color scheme that compliments the text. The use of the drop down menus is very clear and concise. However it should concentrate on condensing the home page (it’s three pages long! ). One way of driving traffic to the site is to create banner ads for other senior citizen sites, as well as for nursing home sites, parenting sites, travel sites, and recreational activity sites.

What could also be done is to pay major Internet servers such as America Online, Yahoo, MSN, etc. for keyword bidding, Part 2B-Create A Stronger Community Among WWW. Seniorgold. Com Site Members I believe that this web site has a strong community as long as the above changes are made. This website does provide recreational activities such as casino resort trips and other activities that they could consider joining. Another addition may include the access to play games. For example, Bingo is a recreational game that senior citizens are notorious for.

Another feature that I believe is important in creating a strong community is the chat rooms. Senior citizens, since retirement or death of a loved one, feel a little lonely at times. I feel this is a great opportunity for them to communicate with other people without spending money. This website does have chat rooms. My experience of trying to enter a chat room, became well, quite discouraging. Under “Directory Word Search” I typed in “chat”. Once I got to the next page, it did not take me to any chat rooms or choice from various ones.

Instead, it took me to a page where I could find out where my roots come from!! After scrolling down almost to the bottom of the page, I found a link to chat and clicked on it. I never reached a chat room. The website needs to create word searches that facilitate the search, not make it more difficult. In addition to chat rooms, I think it should develop a variety of rooms where people can interconnect discussing similar hobbies such as golf, or crocheting, etc. Senior citizens need a sense of community and what best way to do it than by helping them find other people who feel the same!

Market Power in the Deregulation of Electicity

Market power, which is at the heart of the debate over ownership and control of the electricity transmission network, has been identified by the FERC (Federal Energy Regulatory Commission) as a potential impediment to the development of an unencumbered competitive market for electricity. Market power exists when a producer or consumer is able to influence prices for their benefit.

The ability to influence prices may result from a small number of producers or consumers, a significantly high share of the market (on either the production or demand side), physical factors that influence transactions (such as the presence of transmission constraints that make some generators “must run” units), or control of access to a product’s distribution channels (such as control of the transmission system so that some producers of electricity can get their product to market while access is denied to others).

The question is whether TOUs (Transmission Owning Utilities) should be allowed to maintain control over the access to electricity markets in their geographically defined territories through control of the transmission system, or whether control of the network should be turned over to an ISO (Independent System Operator) in order to ensure fair competition and unbiased access to markets. These proposals are mutually exclusive, but it is possible that the industry may evolve through a system in which utilities maintain control of the transmission network for a while, then control is assumed by an ISO.

If utilities maintain control of their own networks, then they must “wheel” power into or through their systems. that is, provide third-party access to the transmission system, if other generating companies are to have access to competitive markets. In a “wheeling” model of a restructured electric power industry, TOUs maintain control of the network and allow access to third-party generators for a fee. The alternative is a power pool model, in which a third party (the ISO) assumes control of the network.

Cola Wars: Coke vs Pepsi

The Wall Street Journal recently did an article on how the soft-drink battleground has now turned toward new overseas markets. While once the United States, Australia, Japan, and Western Europe were the dominant soft-drink markets, the growth has slowed down dramatically, but they are still important markets for Coca-Cola and Pepsi. However, Eastern Europe, Mexico, China, Saudi Arabia, and India have become the new “hot spots. ” Both Coca-Cola and Pepsi are forming joint bottling ventures in these nations and in other areas where they see growth potential.

As we have seen, international marketing can be very complex. Many issues have to be resolved before a company can even consider entering uncharted foreign waters. This becomes very evident as one begins to study the international cola wars. The domestic cola war between Coca-Cola and Pepsi is still raging. However, the two soft-drink giants also recognize that opportunities for growth in many of the mature markets have slowed. Both Coca-Cola, which sold 10 billion cases of soft-drinks in 1992, and Pepsi now find themselves asking, “Where will sales of the next 10 billion cases come from? The answer lies in the developing world, where income levels and ppetites for Western products are at an all time high. Often, the company that gets into a foreign market first usually dominates that country’s market. Coke patriarch Robert Woodruff realized this 50 years ago and unleashed a brilliant ploy to make Coke the early bird in many of the major foreign markets. At the height of World War II, Woodruff proclaimed that Awherever American boys were fighting, they’d be able to get a Coke.

By the time Pepsi tried to make its first international pitch in the 50s, Coke had already established its brand name and a powerful distribution network. In the intervening 40 years, many new markets have emerged. In order to profit from these markets, both Coke and Pepsi need to find ways to cut through all of the red tape that initially prevents them from conducting business in these markets. This paper seeks to examine these markets and the opportunities and roadblocks that lie within each. In 1972, Pepsi signed an agreement with the Soviet Union which made it the first Western product to be sold to consumers in Russia.

This was a landmark agreement and gave Pepsi the first-mover advantage. Presently, Pepsi has 23 plants in the former Soviet Union and is the leader in the soft-drink industry in Russia. Pepsi outsells Coca-Cola by 6 to 1 and is seen as a local brand. Also, Pepsi must counter trade its concentrate with Russia’s Stolichnaya vodka since rubles are not tradable on the world market. However, Pepsi has also had some problems. There has not been an increase in brand loyalty for Pepsi since its advertising blitz in Russia, even though it has produced commercials tailored to the Russian market and has sponsored television concerts.

On the positive side, Pepsi may be leading Coca-Cola due to the big difference in price between the two colas. While Pepsi sells for Rb250 (25 cents), Coca-Cola sells for Rb450. For he economy size, Pepsi sells 2 liters for Rb1,300, but Coca-Cola sells 1. 5 liters for Rb1,800. Coca-Cola, on the other hand, only moved into Russia 2 years ago and is manufactured locally in Moscow and St. Petersburg under a license. Despite investing $85 million in these two bottling plants, they do not perceive Coca-Cola as a premium brand in the Russian market.

Moreover, they see it as a “foreign” brand in Russia. Lastly, while Coca-Cola’s bottle and label give it a high- class image, it is unable to capture market share. Romania is the second largest central European market after Poland, and this makes it a hot attleground for Coca-Cola and Pepsi. When Pepsi established a bottling plant in Romania in 1965, it became the first U. S. product produced and sold in the region. Pepsi began producing locally during the communist period and has recently decided to reorganize and retrain its local staff.

Pepsi entered into a joint venture with a local firm, Flora and Quadrant, for its Bucharest plant, and has 5 other factories in Romania. Quadrant leases Pepsi the equipment and handles Pepsi’s distribution. In addition, Pepsi bought 500 Romanian trucks which are also used for distribution in other countries. Moreover, Pepsi produces its bottles locally through an investment in the glass industry. While the price of Pepsi and Coca-Cola are the same (@15 cents/bottle), some consumers drink Pepsi because Pepsi sent Michael Jackson to Romania for a concert.

Another reason for drinking Pepsi is that it is slightly sweeter than Coca-Cola and is more suited for the sweet-toothed Romanians. Lastly, some drink Pepsi because, in the past, only top officials were allowed to drink it, but now everyone can. Coca-Cola only began producing locally in November 1991, but it is outselling all of its competitors. In 1992, Coca-Cola saw an increase n Romania of sales by 99. 2% and outsold Pepsi by 6 to 5. While Pepsi preferred to buy its equipment from Romania, Coca-Cola preferred to bring equipment into Romania.

Also, Coca- Cola brought 2 bottlers to Romania. One is the Leventis Group, which is privately owned. Coca- Cola has invested almost $25 million into 2 factories. These factories are double the size of the factory Pepsi has in Bucharest. Moreover, Coca-Cola has a partnership with a local company, Ci-Co, in Bucharest and Brasov. Ci-Co has planned an aggressive publicity campaign and has sponsored local sporting and cultural events. Lastly, Romanians drink Coke because it is a owerful western symbol which was once forbidden.

Both Coca-Cola and Pepsi are trying to have their colas available in as many locations in Eastern Europe, but at a cost which consumers would be willing to pay. The concepts which are becoming more important in Eastern Europe include color, product attractiveness visibility, and display quality. In addition, availability (meeting local demand by increasing production locally), acceptability (building brand equity), and afford ability (pricing higher than local brands, but adapting to local conditions) are the key factors for Eastern Europe. Both companies hope that heir western images and brand products will help to boost their sales.

Coca-Cola has a universal message and campaign since it feels that Eastern Europe is part of the world and should not be treated differently. Currently, it is difficult to say who is winning the cola wars since the data from the relatively new market research firms focusses on major cities. Pepsi had a commanding 4 to 1 lead in 1992 in the former Soviet Union. Without this area, Coca-Cola has a 17% share versus Pepsi’s 12% share in the soft drink industry. While both companies have been in Eastern Europe for many years, the main task now is to develop the market.

Sweetshops

Written over 50 years ago, was a declaration made, promising equality and fair treatment for the working, which unfortunately turned out to be a false promise for some. The people I speak of, are our fellow human beings working in slave-like conditions called sweatshops. Sweatshops have always been prevalent in society, this can be shown by looking at the history of sweatshops.

Presently organizations are failing in there strive to end sweatshops, companies are failing to abide by the moral code (apparel industry code), there is an ever growing gap between rich and poor, and consumers are continuing to buy the companies products and remain unaware. Sweatshop is a term for makeshift factories where poverty-stricken people- mostly women and children- work at top speed for 12 or more hours a day in an effort to earn a living wage (library). Often called the sweating system, which began when the factory system developed in the early 1800s.

Factories were not always large enough to house all the workers, instead the owners would sublet contracts for part of the work. Then the other subcontractors set up makeshift factories in dimly lighted, poorly ventilated buildings. They hired workers for low wages and long hours on a work when needed basis. Americans began to object to this almost right away, as early as the 1830s. In 1880, large numbers of immigrants began to come to America, and the problem became serious. The owners of sweatshops took advantage of the immigrants ignorance and poverty to get them to work for low wages.

During the 1900s, many states began to pass laws prohibiting products from being manufactured under sweatshop conditions. A fire at the Triangle Shirtwaist Company in 1911, in which 146 women died, urged many states to pass anti-sweatshop laws. States then began passing laws on wages, hours, child labor, making it impractical for factories to sublet work. Sweatshops became illegal in most countries. But not all, such as Asia and Africa, the less developed countries . There are many organizations out there trying to put a stop to sweatshops.

Organizations such as MOJO, co-op America, HRWF (Human Rights For Workers), Feminists against sweatshops, UNITE, No Sweat, USAS. This is only a small fraction of the organizations trying to put a stop to sweatshops. MOJO, co-op America and HRWF have posted web sites, and held campaigns to ban sweatshops. All these organizations try to make the public aware and more informed, rather then take the initiative to do anything specific about the problem. Feminists against sweatshops focus more on women in sweatshops, than child labor. UNITE is helping workers form unions to get the fair labor conditions they deserve.

Making their own union, UNITE already has over 500 members who are fighting for better wages, decent conditions and other rights. They have rallied for things like The New York City Council passes anti-sweatshop legislation for City uniforms. (Ref 1). They have training programs and give many good ideas towards making a statement, and things we as people can do to help. The United Students Against Sweatshops (or USAS), is an international student movement that involves individual students from campuses all over America and Canada fighting for sweatshop free labor conditions and workers’ rights.

The University of Toronto has its own version of this, and offers ideas on how you can start your own group (refer to appendix A). NO Sweat offers the most out of all these organizations. They have reports on garment enforcement going back to 1995. Although it mainly focuses on sweatshop conditions for American workers, its making the most difference, probably because they are so close to home. Although there have been many successes for these groups, all these efforts and many more, have still not put a stop to the issue of sweatshops.

In sweatshops, workers work seven days a week, having to be at the factory by 6:45 am, and must stay until 8:00 pm, with only one half hour lunch break, to sustain them through the day. The workers get paid anywhere on average from 6 cents per hour to 40 cents per hour, not even close to what is needed to survive. Half the companies that have signed the Apparel Industry Partnership are doing this very thing, which keeps people in poverty (refer to Appendix B & C). One example is the company NIKE, who as you can see, has signed this code, but are clearly not following it.

There is a whole website dedicated to Nike, and all the articles, television shows, stories, all talking about Nike, and how they treat there workers unfairly (refer to appendix D). Other companies are trying there best to follow the code, such as The Gap. True the Gap was using sweatshops, but in 1995, they changed their manufacturing process (ref 2). The Gaps vice president flew to El Salvador, and saw nothing that was out of code or conduct. While he was there he interviewed workers and heard nothing. However the Gap didnt stop there, they later sent more officials who found nothing.

The independent human rights ombudsman in El Salvador later publicly disputed them. The Gap had had enough, and indefinitely removed Mandarin from the approved factory list. The Gap would not approve their factory until they came up with a fair compromise Mandarin and the Gap could agree on. As you can see, not all companies are inflexible and unwilling to change. There are still many conditions at The Gap factories that are not appropriate, they still make less then a dollar an hour, and the working conditions are terrible. Although they have taken a step forward, but it is nowhere near enough. In 1996, global production of apparel exceeded $200 billion in retail value. About $125 billion is exported between countries, and $75 billion is consumed in the country of origin. The United States produced $49. 3 billion (or 25%) of the world total and imported $36. 4 billion worth of apparel. Some argue that overseas production lowers manufacturing costs, which ultimately reduces prices to consumers and strengthens the U. S. economy (ref 3). These numbers dont even compare to what the workers at Ralph Lauren are being paid. The base wage for these workers is 10 cents an hour, which translates into $4. 0 a week, $20. 90 a month and $249. 60 per year! (Ref 2). These low wages are largely responsible for why less developed countries cannot evolve into a developed country. Another reason why there is an ever-growing gap between the rich and the poor, is because these are the best jobs out there for them. Too many countries take advantage of them financially, and that the only choice is to work in a sweatshop to make a living. The only other option people have is slavery, which still doesnt make it okay. We are not treating everyone as equals, there will always be struggling countries until we do something about it.

People are forced to work as much as there bodies will allow, and yet it is still not enough to survive. One of the largest contributors to this problem, is that people are unaware of the treatment of others and still continue to buy these products. The first thing we can do as individuals and a society is to become aware and get involved. Know what you’re buying and where its coming from. Canadian companies like Woolworth, make clothes for several companies such as Northern reflections. Companies like Mattel who make Barbies, Nike, The Gap, Liz Claiborne. The easiest way to make a difference is to boycott them.

Next time your shopping ask the store clerk if she knows where the clothes are made and how they are made. If you are serious enough about this, start your own organization. When one considers the injustice the sweatshop worker deals with at the hands of corporate America, one can only wonder how such actions are allowed. Where is the Declaration of Human Rights? This document declares rights to all humans, but somehow sweatshop workers are overlooked? They are human beings too. Something must be done to end this parade of abuse. Take some action, next time you see The Gap, walk right by it, every little bit helps.

Marketing the Internet

As the internet grows in popularity every day, so too does electronic commerce. Electronic commerce, simply put, is the exchange of money for goods and services via electronic means. In other words, electronic commerce is usually when you purchase something off of the internet. Electronic commerce is often referred to as e-commerce, or e-business. In this paper I will be discussing the technical side of e-commerce, security, different points of view regarding e-business, and of course my personal opinion and experiences. Background Information: First I would like to discuss the types of e-business.

E-business can be anything from purchasing a toaster from a department store online to checking your bank statement online. All are examples of the many aspects of e-business. There are several aspects of e-business unique to it. When comparing traditional business to e-business, one can see several differences between the two. The most obvious difference when buying standard goods (such as a toaster, a book, or a new computer) is the store. When dealing with e-business there is no “real” store or merchandise to look at. It is all presented through the merchant’s webpage, or by other electronic means.

You will not be able to touch, or inspect potential purchases. All you will have to go on is perhaps a picture and a brief description of the item in question. This is obviously a big change from traditional store-based business practices. Why would any self-respecting consumer buy something via e-business if they were unable to touch, or inspect a potential purchase, and there is a real store just done the street? There are several reasons why e-business is appealing to a growing amount of people. For example, e-business is based on the internet. If you are using the internet, you are not bound by geography.

You can access any site, anywhere in the world from the comfort of your computer chair. What does this mean to the consumer? Now the consumer has access to several things they didn’t before. The consumer now has diversity. With the entire internet at your fingers, in a matter of minutes you can browse several stores in several parts of the world without even leaving your home. This allows you to compare prices and products. With e-business you are not restricted to the prices and products of you local stores. You can easily choose the best price on the best product.

Purchasing goods electronically is becoming easier by the day. The majority of e-businesses have software set up on their webpage to take and record your order as well as your credit card and personal information. The software is set up such that you can order anything you want without having to interact with anyone what so ever. You just have to enter your credit card number, address, and other personal information. Some people are not comfortable with the concept of sending their credit card number or other personal to a potential merchant over the internet, but are more comfortable using the telephone.

Most businesses know this and have set up a special number or other means to talk to a representative from the company to settle any questions, and to accept credit card numbers or other means of payment. There are of course several security issues involved in both forms of commerce. I will discuss security in greater detail later in the paper. The popularity of e-business is growing almost as fast as the technology itself. More and more people are using their computers to buy what ever they want, whenever they want. Every day there is an increasing number of companies that join the electronic world of business.

Companies spend millions of dollars a year to setup and maintain a website designed for e-business. Why are they willing to spend so much? Most business people have a good knowledge of how and why business works. It is not hard to see that there is a huge market in e-business. With the price of computers going down each day, more and more people have the opportunity to get in on their piece of cyberspace. A Typical E-business Transaction & Security Information: A few methods in which e-business is conducted are shopping, and online banking. Let’s examine the shopping aspect of e-business first.

When you go to a site to buy something, a site such as www. amazon. com, there are a few things you should notice. They have something called a shopping cart. When you finally decide that you want to buy something, you enter the quantity you wish to purchase, and then “add to shopping cart”. The shopping cart it a CGI script used to keep track of the things you want, and how many. This is a way to keep track of everything while you can continue shopping. When you are finished adding everything to the shopping cart, then you choose the option to “check out”.

This starts another CGI script that takes all of your personal data such as your name, address, and phone number, as well as your credit card number. When you examine the online banking portion of e-business, you have a few more things to consider. In order to use online banking, you will have to have an account with the bank in question. Once you have your account, you can go to the bank’s webpage and set it up by giving them account and personal information. Then you will be able to use their software to access your account.

There is definitely an issue with privacy in both cases. It is obvious that customers do not what their personal information released. A more important issue, perhaps more important than your personal information is your credit card number. This can be used by anyone who has it. There is no real way to stop someone from using your number at another site to buy things with out your permission. This is a major concern of the e-business industry. Should the consumer be concerned? Well, yes and no. The first thing you should be concerned with is the validity of the e-business itself.

Unless the company can offer you some kind of assurance that you can agree with, you should stick to the companies you know and trust. Many businesses you have been using for years are now making the push to provide an electronic method to shop. Once you have established that you are in fact dealing with a respectable firm, you in most cases have nothing more to worry about. Most respectable companies use data encryption to secure online transfers. These sites use your browser to encrypt data so that no one without the decryption key can gain access to your information.

Microsoft Internet Explorer and Netscape come standard with 40-bit encryption. With your data encrypted, even with a 40-bit encryption, it is safer to transmit that data around the world than to call in your number over the telephone. When you are talking about online banking, you most likely will have to upgrade your browser to support 128-bit encryption. The majority of online banking companies will not let you use the basic 40-bit encryption because it is not quite as safe as the 128-bit version. It is assumed that you need more protection for your bank accounts than you do for a basic online purchase.

In all cases you should be using some form of encryption to transfer data. Some companies will give you a security guarantee. Issues Regarding E-business: There are two points of view to consider. There is the consumer and the business person. Within these two groups, there are those in favor of e-business and those who are not. First I would like to talk about the consumer and there points of view. There are many reasons why a potential customer will either like e-business or will not. I believe the main reason most people like e-business is the ease in which they can get what ever they want, when ever they want it.

Anyone with a valid credit card can go to a site such as www. amazone. com, and order anything they want at any time of the day. Within a few days (depending on the method of shipping chosen) their order will arrive at their front door. The problem with shopping online is, because you are not bound by geography, the company you bought from could be on the other side of the world. They have to send you the product. This obviously creates delays in receiving your merchandise and you will also have to pay a modest shipping charge in addition to any other charges.

If you are buying something heavy like a computer monitor, you may not wish to spend the extra fifty or so dollars to have it shipped. In this case going to your local circuit city may be a more effective way of shopping. Basically, when shopping online you have the power to get anything any time, but you may have to pay for your convenience. From the perspective of the e-business itself, there are other things to consider. Mostly you need to consider the cost versus the sales. Is it worth the cost to setup and maintain a website? What exactly is involved in setting up an e-business?

In order to set an e-business you will need a domain name, webspace to put pictures and things like that, and bandwidth. In addition to this, you might need to hire technical support, and purchase software needed to run your business. Compared to the cost of traditional commerce, I believe e-business is much cheaper to run and maintain. When running an e-business you wont have as high of an overhead to pay. A domain name, webspace, and bandwidth are all fairly cheap. A growing number of businesses think e-commerce is a good investment, and a legitimate way to expand their company.

Large companies such as K-Mart are leaning towards the e-business market. Personal Experience: In my quest for the best product at the best price, I too have turned to e-commerce from time to time to get what I needed. My first experience comes from purchasing a telephone online. I started by visiting several sites and inspecting what they had to offer. I began to notice right away that some stores are more expensive than others, even for the exact product. I proceeded to find the best deal on the phone I wanted and, as I described before I added it to my shopping cart at www. mazon. com. Next I went to check out. The scrip loaded and I entered all of my personal data and my credit card number. After I did all of that, I was taken to a billing screen where I could choose my form of shipping based on cost and time. At the bottom of the billing section it added the price of the phone and all of the additional charges (such as shipping), and produced an actual total. Before proceeding to confirm my order I considered my position. Was it worth the price after shipping to buy here instead of at a local shop? Do I need the phone right away?

It turned out that even after shipping and all additional costs, I got the phone for less than my local stores could offer. Because I did not need the phone right away, I decided to purchase it. Within three or four days I received my phone and was satisfied with my first online purchase. It is also worth noting that I bought my phone at about 2am. Another personal experience of mine regards online banking. I have a checking and a savings account with Wellsfargo. I noticed that they offered online banking free of charge, so I figured I would try it out.

I went to their website and began to setup my online account. I was asked for my basic personal and my account information. I gave them all of that and proceeded to try to log into my account. I was surprised to find that I could not. I was using Internet Explorer with only 40-bit encryption. Wellsfargo requires that you use a browser with at least 128-bit encryption. After I downloaded the addon for Internet Explorer, I successfully logged in. I was meet with a number of options. I could check my checking account balance, my savings account balance, and I could transfer money between the two.

This made me very pleased. I have trouble keeping my checking account up to date, but with this I could see exactly what I had with only a day’s delay. I am overly pleased with all of my e-business encounters. I enjoy buying things from my home at any hour. It is also very convenient to see my account status in almost real time. Summary: To summarize this paper, e-business is basically online transactions for goods and services. There are many things to consider when buying something online. Firstly you should be dealing with a company that you are totally comfortable with.

After you have that established, online shopping is safer than any other form of commerce because of the use of encrypted data transfer. Online banking is another aspect that is worth looking into. You can get information about your accounts anytime for little or no charge. Online banking, of course requires a stronger method of encryption, so you may need to download the newest security plugin for your browser. Finally, e-business is the new business of the future. You can buy anything, any time, and get information from your home. Which makes being antisocial just that much easier.

Cultural Change in International Markets

Competitive pressures caused by globalization, deregulation, and discontinuous technological changes seem to have forced many organizations into considering radical change as a way of surviving and growing. A big part of this radical change has to do with accepting and handling cultural differences among other nations. Organizations pursue change to enhance their competitive positions and to grow. Cultural Change Culture changes over time, despite the fact that one of the more important attributes of culture is that it is conservative and resistant to change.

When marketing a ew innovation to a foreign country, the marketer must possess a thorough knowledge of that country’s culture in order to be successful there, as new innovations can be fail or even cause offence if not marketed or designed in a manner appropriate to that particular culture. There are six rules of thumb when doing business across cultures: 1. Be prepared. Whether traveling or selling from home, you should never approach a foreign market with first researching the area.

Some of the things to learn would include social and business etiquette, history, current affairs, the culture’s alues, geography, religion, political structure, and practical matter such as currency and hours of business. 2. Slow down. In America “Time is money. ” Americans always seem to be in a rush and can seem unfriendly or arrogant. In other countries, patience is the key. 3. Establish trust. Having crisp business relationships will get the salesperson nowhere. Product quality, pricing, and clear contracts are not as important as the personal relationship and trust that are developed over time. 4. Understand the language.

Languages differ in parts of the world one must have a ocabulary that is sensitive to nuance and connotation. An interpreter could also be helpful if needed. 5. Respect the culture. Manner are important. The traveling person is a guest and must respect the hosts’ rules. 6. Understand components of culture. There are two types: surface culture (fads, styles, foods, etc. ) and deep culture (attitudes, beliefs, values). Importance of cultural understanding One of the reasons a marketer may be unsuccessful internationally is when they mistakenly see some cultures as being similar when they are in fact quite different.

There are a number of ways in which this can occur. One of the ways this can occur is when countries’ cultures are considered similar on the basis they speak the same language. However, in instances where this occurs, often a lot of words have a very different meaning in one country than another, a good example being the difference here in Ireland with the U. S. Consider the question “Was there any craic? ” here, meaning was it fun or a good time, while the same question in the states would be interpreted as was there any drugs as in “crack”.

The same question but two very different meanings! Another mistake is where different cultures are lumped together as one. In western society it is commonly thought that most Asian groups such as the Japanese, Chinese and Koreans for example have similar cultures when in fact they are quite different. Failure to recognize the differences could have serious consequences for a marketer. Even within a country, a marketer must be aware of the existence of subcultures. There is no better example than the U. S. with people of all ethnic backgrounds.

Ethnocentricity People who are familiar with only one cultural pattern may believe they have an awareness of cultural differences elsewhere, when in reality they do not. Unless they ave had occasion to make comparisons with other cultures, they are probably not even aware of the important features of their own. They are probably also oblivious to the fact that many societies consider their culture superior to all other (ethnocentricity) and that their attempts to introduce the “German way” or the “American way” may be met with resistance.

Failure to understand a culture is a huge mistake when marketing internationally, but this is by no means the only obstacle to overcome. Culture tends to be resistant to change, although the level of resistance to a new innovation varies. This can be due in a large part to the fact that most cultures tend to be ethnocentric. What this means is that the country holds their own culture in a far higher esteem than any foreign culture and usually views other cultures as inferior, strange, or even barbaric.

This can often result in innovations being rejected if accepting them would require changing a part of their culture, either cultural values, customs, or beliefs. There are many reasons a culture may be resistant, but that said resistance can be overcome but the marketer needs to understand the process of acceptance. There has been research into this in order to speed up acceptance and bring about change, vital to a marketer who is often working within a timeframe and cannot just wait for the change to happen.

Cultural change can be brought about in a number of ways; cultural borrowing, unplanned cultural change, and planned cultural change. Cultural Borrowing Culture is learned and passed from generation to generation. When a country encounters a problem it often looks to other countries to see how they coped with the same problem. They then borrow the solution and adapt it to their own needs. When this ew action is judged acceptable by society, it is approved and becomes a part of the culture that will be passed to the next generation.

So while cultures are in their own right unique, they are often made up of parts of other cultures. Unplanned Cultural Change As the name explains, unplanned cultural change is where change is brought about in a culture without being planned by uncontrollable factors such as war or revolution. A good example of this would be the role of women in the workplace changing with the industrialization of Europe or the changing of the Japanese diet as a result of World War II. Planned Cultural Change With planned cultural change, the process of change is hastened by the marketer.

This is achieved by removing the cultural factors that are an obstacle to a new innovation. Not all innovations require change; some can be marketed in a manner similar to existing products. However if cultural change is needed for acceptance, marketers will try to bring about that change themselves by converting the cultural factors that are obstacles to acceptance into stimulants for change. The social system and structure can change within a country upon acceptance of a new innovation.

The majority of the time there are no undesirable consequences but they can occur and the marketer must be aware of this, as there can be serious repercussions for them and their company if there are adverse reactions to the new innovation regardless of the fact it may have been accidental. Knowledge about other cultures and how they affect the way people do business may show business-people working in a culture different from their own that their solutions are not always the appropriate ones for a given task.

Understanding this is the first step in learning how to use cultural differences to gain a strategic advantage. Mishandling or ignoring cultural differences can cause numerous problems, such as lost sales, the departure of competent employees, and low morale that contributes to low productivity. How can international businesspeople learn to live with other cultures? The first step is to realize that there are cultures different from their own. Then they must go and learn the characteristics of those cultures so that they can adapt to them.

Traveling to this country and staying a while or undergoing an extensive, training program would be helpful to cover the main characteristics of the culture, including the language. Cultural Change in International Markets Competitive pressures caused by globalization, deregulation, and discontinuous technological changes seem to have forced many organizations into considering radical change as a way of surviving and growing. A big part of this radical change has to do with accepting and handling cultural differences among other nations.

Organizations pursue change to enhance their competitive positions and to grow. Cultural Change Culture changes over time, despite the fact that one of the more important attributes of culture is that it is conservative and resistant to change. When marketing a new innovation to a foreign country, the marketer must possess a thorough knowledge of that country’s culture in order to be successful there, as new innovations can be fail or even cause offence if not marketed or designed in a manner appropriate to that particular culture.

There are six rules of thumb when doing business across cultures: 1. Be prepared. Whether traveling or selling from home, you should never approach a foreign market with first researching the area. Some of the things to learn would include social and business etiquette, history, current affairs, the culture’s alues, geography, religion, political structure, and practical matter such as currency and hours of business. 2. Slow down. In America “Time is money. ” Americans always seem to be in a rush and can seem unfriendly or arrogant.

In other countries, patience is the key. 3. Establish trust. Having crisp business relationships will get the salesperson nowhere. Product quality, pricing, and clear contracts are not as important as the personal relationship and trust that are developed over time. 4. Understand the language. Languages differ in parts of the world one must have a ocabulary that is sensitive to nuance and connotation. An interpreter could also be helpful if needed. 5. Respect the culture. Manner are important. The traveling person is a guest and must respect the hosts’ rules. . Understand components of culture. There are two types: surface culture (fads, styles, foods, etc. ) and deep culture (attitudes, beliefs, values). Importance of cultural understanding One of the reasons a marketer may be unsuccessful internationally is when they mistakenly see some cultures as being similar when they are in fact quite different. There are a number of ways in which this can occur. One of the ways this can occur is when countries’ cultures are considered similar on the basis they speak the same language.

However, in instances where this occurs, often a lot of words have a very different meaning in one country than another, a good example being the difference here in Ireland with the U. S. Consider the question “Was there any craic? ” here, meaning was it fun or a good time, while the same question in the states would be interpreted as was there any drugs as in “crack”. The same question but two very different meanings! Another mistake is where different cultures are lumped together as one.

In western society it is commonly thought that most Asian groups such as the Japanese, Chinese and Koreans for example have similar cultures when in fact they are quite different. Failure to recognize the differences could have serious consequences for a marketer. Even within a country, a marketer must be aware of the existence of subcultures. There is no better example than the U. S. with people of all ethnic backgrounds. Ethnocentricity People who are familiar with only one cultural pattern may believe they have an awareness of cultural differences elsewhere, when in reality they do not.

Unless they ave had occasion to make comparisons with other cultures, they are probably not even aware of the important features of their own. They are probably also oblivious to the fact that many societies consider their culture superior to all other (ethnocentricity) and that their attempts to introduce the “German way” or the “American way” may be met with resistance. Failure to understand a culture is a huge mistake when marketing internationally, but this is by no means the only obstacle to overcome. Culture tends to be resistant to change, although the level of resistance to a new innovation varies.

This can be due in a large part to the fact that most cultures tend to be ethnocentric. What this means is that the country holds their own culture in a far higher esteem than any foreign culture and usually views other cultures as inferior, strange, or even barbaric. This can often result in innovations being rejected if accepting them would require changing a part of their culture, either cultural values, customs, or beliefs. There are many reasons a culture may be resistant, but that said resistance can be overcome but the marketer needs to understand the process of acceptance.

There has been research into this in order to speed up acceptance and bring about change, vital to a marketer who is often working within a timeframe and cannot just wait for the change to happen. Cultural change can be brought about in a number of ways; cultural borrowing, unplanned cultural change, and planned cultural change. Cultural Borrowing Culture is learned and passed from generation to generation. When a country encounters a problem it often looks to other countries to see how they coped with the same problem. They then borrow the solution and adapt it to their own needs.

When this ew action is judged acceptable by society, it is approved and becomes a part of the culture that will be passed to the next generation. So while cultures are in their own right unique, they are often made up of parts of other cultures. Unplanned Cultural Change As the name explains, unplanned cultural change is where change is brought about in a culture without being planned by uncontrollable factors such as war or revolution. A good example of this would be the role of women in the workplace changing with the industrialization of Europe or the changing of the Japanese diet as a result of World War II.

Planned Cultural Change With planned cultural change, the process of change is hastened by the marketer. This is achieved by removing the cultural factors that are an obstacle to a new innovation. Not all innovations require change; some can be marketed in a manner similar to existing products. However if cultural change is needed for acceptance, marketers will try to bring about that change themselves by converting the cultural factors that are obstacles to acceptance into stimulants for change. The social system and structure can change within a country upon acceptance of a new innovation.

The majority of the time there are no undesirable consequences but they can occur and the marketer must be aware of this, as there can be serious repercussions for them and their company if there are adverse reactions to the new innovation regardless of the fact it may have been accidental. Knowledge about other cultures and how they affect the way people do business may show business-people working in a culture different from their own that their solutions are not always the appropriate ones for a given task. Understanding this is the first step in learning how to use cultural differences to gain a strategic advantage.

Mishandling or ignoring cultural differences can cause numerous problems, such as lost sales, the departure of competent employees, and low morale that contributes to low productivity. How can international businesspeople learn to live with other cultures? The first step is to realize that there are cultures different from their own. Then they must go and learn the characteristics of those cultures so that they can adapt to them. Traveling to this country and staying a while or undergoing an extensive, training program would be helpful to cover the main characteristics of the culture, including the language.

Marketing As A Career

Marketing reasearch analysis collect, analyze, and interpret data to determine potential sales of a product or service. To this end they prepare reports and make recommendations on subjects ranging from prefrences of prospective customers to methods and costs of distribution and advertising. They research available printed data and accmulate new data through personal interviews and questionnaires. Knowing what customers want, why they want it, and what price they are willing to pay for it have always been concerns of manufacturers and producers of goods and services.

With rowth in industry and increased competition for manufactured products, businesses begian to use marlketing research to measure public opinion. Emphasis on marketing research did not really occur until after World War II. From this point, however, new knowledge of techniques and increased uses of the findings have developed at a rapid pace. One area of marketing research is company service and products. Here marketing research analysts collect data on brand name, tradew mark, product design, or packaging for current products or products in expiramental stage to measure consumer likes and islikes.

Also included. Also oncluded in this aspect of marketing research are studies of the services and products of competitors. Another area of marlketing research issales methods and policies. Here, the marketing research analyst is concerned with detailed studies of the firms sales records. A firms international marketing program must generally be modified and adapted to foreign markets. This international marketing program uses strategies to accomplish its marketing goals.

Within each foreign nation, the firm is likely to find a combination of marketing environment and target markets that re different from those of its own home country and other foreign countries. It is important that in international marketing, product, pricing, distribution and promotional strategies be adapted accordingly. In order for an international firm to function properly, cultural, social, economic, and legal forces within the country must be clearly understood. The task of International marketing is more difficult and risky than expected by many firms.

One of the most controlling factors of international marketing is management. It is very important for managers to recognize the differences as well as imilarities in buyer behavior. Many mistakes can occur if managers fail to realize that buyers differ from country to country. It is the international differences in buyer behavior, rather than similarities, which cause problems in successful international marketing. An international marketing manager is a manager responsible for facilitating the exchange of products between the organization and its customers or clients.

Sometimes an international marketing manager will find difficulties in completing the exchange of products. Many surprises in international business are undesirable human mistakes. An international corporation must fully understand the foreign environment before pursuing business matters. Problems constantly crop up and many times have unexpected results. Sometimes these unexpected results are unavoidable. Other times they are avoidable. To be sure those avoidable situations do not occur, international marketing managers must be aware of cultural differences.

Cultural differences take place among most nations of the world. Differences in culture are one of the most significant factors in an international company. All nationalities posses unique characteristics, which are unknown to many foreigners. Many of the top international businesses are unaware of these cultural differences. It is very important to understand these cultures in order to market a product successfully. As an example, different nationalities have different beliefs on how business matters should take place. Where some countries prefer to work with a deadline other countries can take this as being offensive.

Many countries feel it is an insult to be asked to work under a set time period. A country may feel that a deadline is threatening and may feel backed into a corner. On the other hand, other countries try to expedite matters by setting deadlines. To be effective in a foreign market it is necessary to understand the local customs. Knowing what to do in a foreign country is as important as knowing what not to do. Failure to understand local customs can lead to serious misunderstandings between business people. The simple rejection of a cup of coffee can lead to total confusion.

The decline of an invite is sometimes considered an affront. To avoid making blunders, a person must be able to discern the difference between what is acceptable behavior and what is not acceptable behavior. Violations of a local custom can be insulting, and can cause ncomfortable situations. To be a successful manager of international marketing, one must be able to discern the differences as to what must and must not be done. It is almost impossible to attain complete knowledge and understanding of a foreign culture. As established, culture plays an important role in the drama of international marketing.

Of all the cultural aspects, communication may be the most critical. It is certain that communication has been involved in a number of cultural confusion. Good communication linkages must be set between a company and its customers, suppliers, its mployees, and the governments of the countries where it performs business activities. Poor communication can obviously cause various difficulties. One source of difficulty among starting companies is that of effective communication with potential buyers. The problem is that there are many possible communication barriers.

Sometimes messages can be translated incorrectly, regulations overlooked, and economic differences can be ignored. Other times when the message does arrive, its ineffectiveness can cause it to be of no value. Every now and then a buyer will receive the message, but to the companies disappointment, the message was sent ncorrect. It is normal in multinational businesses to send and receive messages on a regular basis. Many well-known people have incapacitated public speech introductions by using inaccurate titles and names. Not all communication problems are verbal.

Some serious problems have occurred as a result of non-verbal communication. Non-verbal communication exist in numerous forms. Sometimes a persons appearance can convey a stronger message than intended. Untidy attire, for example, can be more offensive in some nations than in others. The local people often are willing to overlook most of the istakes made by tourist. On the other hand, locals are less tolerant of the errors of business people. It is very important to be able to interpret the different means of communication in international marketing. In America, we sometimes take for granted the display of products on the market.

However, in other nations such product array and selection do not always exist. It is important to understand that even if local customers can afford a certain product, they may not always want it. If by chance are interested, it may be only if it is substantially modified to fit their local preferences and taste. These daptations exist in the form of product and package. The alteration of a material product is sometimes required to match the product to local taste and conditions. Adaptation of the package is often needed to attract customers to the product.

Many times adaptation is also used to maintain a products righteousness in a unique environment. A firm is occasionally forced to modify both the product and the package to create an appropriate product for the new market. Some products may require more technical modification than others may. Measurement systems vary between countries, and often components need to be adjusted to cleave to local tandards. The need for product adaptation has existed for many years. In 1857 Englands East India Company possibly lost control of India because it failed to modify a product it provided.

A product may be well acceptable in markets, but may not sell if housed in an inappropriate package. Packages promote the product and they protect it. International packaging must be able to withstand the journey. Some countries have exported their products only to witness the return of crushed and half-empty containers. Packaging can sometimes bring embarrassment to a company. Medical containers made in the U. S. drew unwanted attention because they carried the instructions “Take off top and push in bottom. ” These messages was harmless here in America, but were sexual and humorous connotations to the British.

Often the choice of package and product is difficult. Sometimes companies have failed to sell their products overseas because of the packaging of a product. Each firm must determine the area most appropriate for its product. Determining the region where it is most appropriate to market a product is not an easy task. Wherever the location of these places, they must be found because market esting is essential in international marketing. Many countries maintain regulations concerning their products and packages. Countries have expectations that foreign marketers will adhere to the rules.

Failure to abide by the rules of a country can prove to be very costly. The legal and political atmosphere varies across national borders. Different countries have different legal policies. There are laws to which a marketer must abide by when marketing internationally. Some countries enact laws to protect consumers or to preserve a competitive atmosphere in the marketplace. Since many countries maintain regulations oncerning their products and packages, the wording or color of a package can create difficulties. In some countries giving gifts to authorities is a standard business procedure.

In other countries, such as the United States, these gifts would be considered as bribes or payoffs and are strictly illegal. If an error occurs it can be costly, but with the appropriate alterations it can be corrected. Removing local laws can definitely make the international work place easier, when it comes to the legal aspect. In the field of marketing, a product promotion can be the most difficult. Timing is the most critical element in the launching of a new product. Most firms understand this and also perceive that varied peoples hold different conceptions of time.

Since some nationalities are more conscious of time factors than others, extra time must often be allocated to guarantee that everything is completed as schedule. An international marketer can adopt several strategies regarding its product and promotion. Marketing a product internationally through a single promotional message worldwide can be effective for products that have standardized appeal for the majority of the people. Most times this ould be the least expensive strategy. When it is hard to translate promotional messages or to adapt an overall promotion to local customs, companies market one product.

This promotion is designed to market one product but vary its promotions. Some products are well known among the nation and need little advertising. The advertisement can be on American influence located in China. If a theme works exceedingly well in one country, then it naturally becomes very tempting for a firm to want to use it in another country. There is a big risk involved in doing this, because admirable themes are culturally riented. For example, consider the very popular Marlboro advertisements. The Marlboro man projects a strong masculine image in America and in Europe.

In Hong Kong, attempts to use this advertisement were unsuccessful because the urban people did not identify with horseback riding in the countryside. Several firms have tried to use old, reliable promotional methods in countries where they simply do not work. Billboard advertisements, for example, are perfectly legal in most parts of the Middle East, but it does not mean one should use them. In some cases companies have been know to dvertise in the wrong language. Such mistakes can cause major problems. It is often the promotional strategy that creates mistakes.

The perception of the product characteristics plays an important role in the international marketing strategy. One must realize that the importances of a certain product traits vary from country to country. Multinational corporations, therefore, must consider varying promotional tactics. Adapting the product but using the same promotional mix is a strategy used when a product will not appeal to different local tastes. For example an American cheese company may need to use ifferent ingredients when making cream cheese for the markets of different countries.

The most expensive strategy is adapting to both the product and its promotion. This strategy may be required when neither the existing product nor its promotion would appeal to foreign markets. In some cases, the international firm may develop a completely new product for a foreign market. It can be very costly to create a new product line for a foreign market. The distribution strategy used sometimes depends on the firms international organization. It does not matter if it is licensing, exporting, or anufacturing in the host country.

International marketers use existing distribution channels for the most part. Distribution channels link the producer of a product to the consumer or industrial user. This international marketing channel is sequence of marketing organizations from nation to nation that directs the flow of products. Most industrial products use shorter channels. One of the most basic levels of international marketing is licensing. A license is a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation.