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Check Your Understanding: 1. ________ is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Customer perceived value (CPV) is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives (Kotler & Keller, 2006, p. 177). 2. The 20-80 rule states _____. The well-known 20-80 rule says that the top 20 percent of the customers may generate as much as 80 percent of the company’s profits. Kotler & Keller, 2006, p. 184). 3. Formal groups having a direct influence on a person such as religious, professional, and trade union groups are _____. A person’s reference groups consist of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior. Groups having a direct influence on a person are called membership groups. Some membership groups are primary groups, such as family, friends, neighbors, and co-workers, those with whom the person interacts fairly continuously and informally.
People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interaction. (Kotler & Keller, 2006, p. 213) 4. _____ consist(s) of all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, etc. that become linked to a brand “node. ” Brand associations consist of all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand node. (Kotler & Keller, 2006, p. 24) 5. Derived demand refers to the fact that the demand for business goods is ultimately derived from the demand for _____. The demand for business goods is ultimately derived from the demand for consumer goods. (Kotler & Keller, 2006, p. 247) 6. A _____ is a more narrowly defined customer group seeking a distinctive mix of benefits. A niche is a more narrowly defined customer group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub segments. (Kotler & Keller, 2006, p. 278) Exercises: 1.
List the steps involved in conducting a customer value analysis. A customer value analysis allows a firm to understand how its customers experience value, and gain insight from its customers’ decision making criteria and processes. It maps customer needs and objectives in terms of the customer’s value chains; thus looking beyond end-user and decision maker needs and revealing the net total effect of the customer-vendor relationship on all of the customer’s processes, costs and benefits. The following steps can be some of the steps involved in the customer value analysis. What your customers want ???Which suppliers are performing well or poorly against these wants ???Whether or not you offer customers good value relative to your competitors ???How much your products are really worth ???What improvements to your product would be worth the most to customers ???How to set prices to be competitive and to capture the full worth of your product ???The role of marketing communications in shifting how customers view your brand Works Cited Source : CVAL. COM 2. Name five ways companies can use their databases.
With automation being the on the top of B2B marketer’s must-have list, some companies may want to consider database marketing as a first step. Using MS Access, as a tool to explore data for the purpose of gaining greater marketing insights. For small business with significant volumes of customer and transaction data, having the tools to explore and analze data can yield significant improvements in the effectiveness of specific marketing tactics. Below are 5ways of database tools for marketing. 1 ??? Improve Accuracy of Promotional Campaign Planning
Analyze historical sales data and use the information to make better predictions about campaign outcomes. With repetition of this exercise the accuracy of predictions will improve and lead to more accurate planning. 2- Provide Sales Reps with Timely, Accurate Data Provide sales team with concise sales-tracking reports during a promotion. By pushing snippets of valuable information to sales team at appropriate intervals during and at the end of a promotion, they are armed with the knowledge they need and focus their efforts on selling. 3 ??? Customer Segmentation and Profiling
Because data that resides in the database is relational, it allows for the extraction of data from multiple source tables using a single query to filter out unwanted records. The ability to extract data based on multiple criteria avoids the problem of multiple listings for a single customer. 4 ??? Profile Profitable Customers Profile customers and segment them into groups based on their contribution to bottom line. Starting with 3 groups: not profitable, somewhat profitable, highly profitable. Analyze the characteristics of the two profitable groups and use this information to develop a group profile.
Focus lead generation efforts on attracting companies that match these 2 profiles and reduce or eliminate marketing efforts directed at the unprofitable group. 5 ??? Develop Reports for Delivery of Timely, Accurate Information Creating a few standardized reports, once built, these reports can be cloned and populated with data using a query. To update with new or refreshed data, replace the report record source with a new source query. The new data will flow into the report automatically without the need to re-create the entire report. Works Cited Source : Moenconsulting 3. What is the difference between biogenic needs and psychogenic needs?
The biogenic (or primary) group of human needs are defined as those referring ‘ to the basic physiological needs which are related to the bodily functions such as hunger, thirst, sex, sleep, and exercise. The other general category of human needs are recognized as psychogenic needs – those needs which are psychological or emotional. A more complex categorization (or hierarchy) of human needs and attendant theory of their sequential development was proposed by MASLOW. Maslow’s hierarchy of needs is simply a ranked structure of behavioral stimuli that try to explain motivation.
It is one of the Content Theories of motivation. Maslow describes BIOGENIC and PSYCHOGENIC needs. BIOGENIC needs ??? biological determinants of behavior. PSYCHOGENIC needs ??? emotional or psychological determinants of behavior. He described two “higher order needs. ” Those are: The need for freedom of inquiry and expression: for social conditions permitting free speech and encouraging justice, fairness and honesty. The need for knowledge and understanding: to gain and order knowledge of the environment, to explore, learn and experiment. 4. Distinguish between “family of orientation” and “family of procreation. Children look at their family as a family of orientation because the family exists to develop, nurture and socialize them into contributing members of society. Once they are adults and have children, they look at their new family as a family of procreation, as defined below. Parents look at their family as a family of procreation because they exist to have children and socialize them until they are ready to enter the adult world. Family of Orientation is from a child’s point of view -their parents, while from the parents point of view it is a family of procreation.
The purpose of a family of procreation is to produce children and bring them up 5. The buying center consists of all members of the organization who play any of seven roles in the purchase decision process. Name and define each of these roles. The buying center includes all members of the organization who play any of seven roles in the purchase decision process. 1. Initiators: Those who request that something be purchased. 2. Users : Those who will use the product/service 3. Influencers: People who influence the buying decision. Technical personnel are particularly important influencers. . Deciders : People who decide on product/service requirements ~ suppliers 5. Approvers: People who authorize the proposed actions of deciders or buyers 6. Buyers: People who have formal authority to select the suppliers and arrange terms. 7. Gatekeepers: People who have the power to prevent sellers or information from reaching members of the buying center. Of all the seven roles played in the purchasing game, the gatekeeper is the most critical and many times, the most difficult with whom to deal. Examples of these types include PAs,receptionists, secretaries and phone operators Works Cited
Source : Chemarkconsulting Case Study: Forget nanotechnology, it’s Nana-technology (that is, grandmother-technology) that will make a big impression on this market. Marketers are beginning to recognize the need to redo product lines to accommodate the massive number of seniors who are about to cross the retirement threshold. Consumers are already beginning to see phones with larger numbers on their key pads, digital hearing aids to make music easier to listen to, programmable pill dispensers, and GPS systems that display maps in larger type. Fashion designers have begun to add lines of senior glasses.
Clothing manufacturers have also taken note ??? remember that today’s seniors set the fashion and style industry on its ear in the ’60s and ’70s. With annual incomes of $175,000 plus, seniors are demanding products that fit their needs. Seniors are also interested in modern technology. Several companies are modifying their game business to include devices and programs that appeal to seniors’ desire to remain mentally alert and entertained. Such devices can also teach seniors more about advancing technology. The spending power of the Baby Boomers will motivate companies to re-think how they approach seniors in the marketplace.
Nana-technology is “where it’s at” in the twenty-first century! Adapted from “Nana Technology” by Phuong Ly, Business 2. 0, October 2007, pp. 40-41. Case study developed by Dr. John R. Brooks, Jr. , Houston Baptist University. Questions: 1. Why is the senior market becoming more attractive? 2. What generational group is powering the growth of seniors? 1. Why is the senior market becoming more attractive? Companies have always thought about groups like babies, teens and youth. That’s the reason we have stores like Baby ‘r’ us , toys ‘r’ us ,Forever 21 , Abercrombie etc.
The above groups are always in news because of the happenings around them. In the past the senior market has never appealed to the society due to the culture in many countries where seniors are more dependent on their kids. It was a perception that seniors would never spend on anything except the most important needs. With the baby boomers, who have steady incomes, everything has changed drastically. These senior groups are the ones, who defined fashion in the past and are willing to spend more to keep up with the market. 2. What generational group is powering the growth of seniors?
According to the U. S. Census Bureau, adults 50+ represent 76 million people, 28% of the total U. S. population and 37% of the population is 18+. Demographic trends associated with the aging of the baby boomer population, plus gains in longevity, will grow the 50+ market to over 106 million by 2015 when they will account for 45% of the adult population. Seniors are, and will become even more, a market, social and political force to be reckoned with and hence a very attractive community to a range of advertisers and marketing sponsors. The following are the some of the facts bout growing seniors, who ???Account for 60% of all healthcare spending ???Purchase 74% of all prescription drugs ???Buy 51% of all over-the-counter drugs ???Acquire 41% of all new cars ???Purchase 25% of all toys ???Account for 80% of all luxury travel ???Spend $7 billion online annually ???Fastest growing segment on the Internet ???Spend more time online than teenagers ???Adults 50+ control a household net worth of $19 trillion. ???Own 70% of all money market accounts and certificates of deposit assets ???Have an income per capita that is 26% higher than the national average ???Spend more than one trillion dollars on goods and services