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Moral principles and values that govern actions unwritten rules we've developed for interactions with one another govern us when sharing resources or honoring contracts maintains an order & fairness, honesty
Society's values which are enforceable in court
Framework for Ethical Decisions
Societal & Culture norms General Business norms Company norms Personal Norms/VAlues
Societal Culture & norms
Basic set of values of the society
General Business norms
What is the standard practice in business Basic business values: Consumer has right to safety, to be informed, to choose, & to be heard No longer caveat emptor (the principle that the buyer alone is responsible for checking the quality and suitability of goods before purchase is made) …
Industry Standards
American Marketing Association (AMA) first, do no harm foster trust and consumer confidence in the marketing system valus of honesty, responsibility, fairness, respect, openness, and citizenship
Company Norms
What could those in your company say about this decision? Code of conduct, company policy Code of ethics
Code of Ethics
Many companies have them Help marketing managers & employees make better decisions guidelines help employees identify what their firm recognizes as acceptable business practices effective internal control on behavior>more responsible than external controls(gov't regulation) help emplo…
Personal Norms/Values
How do you feel about this decision? Personal moral philosophies: Moral Idealism: if any bad occurs, then the action is unethical Utilitarianism: balance good versus bad
Level of Responsibility Model
To whom is a company responsible? Investors only All Stakeholders Society in General
Corporate Responsibility
Profit Responsibility Companies responsible only to stockholders and investors one duty: maximize profit within the law Stakeholder Responsibility responsible to owners & customers, employees, suppliers Societal Responsibility responsible to owners & stakeholders & society in gener…
Common Ethical Issues
Product Planned Obsolescence Products that are "unhealthy" Place Is there an obligation to serve unsatisfied segments, even if limited profit Price What is "reasonable" profit Most profitable Promotion: how much "puffery" is okay
Consumer Ethics
If we expect firms to act ethically, then so should we Unauthorized downloading or sharing computer files Copyright violations Insurance fraud Return of used items
The Supply Chain
Physical Supply Network Raw Materials Components Manufacturer Physical Distribution Network Resellers Consumers Sometimes called Demand/Value chain: must have demand supply chain reflects a production or sales orientation instead to marketing orientation
Supply Chain Management
management of all activities through which raw materials are transformed into products and made available to final consumers Management requires: Channel Management Logistics Management
Marketing Channel (channel management)
A set of interdependent organizations involved in transfer of ownership as finished products move from producer(mfg) ot consumer
Channel Structure
Direct Channels: Mfg- end user Best used when/for: Complex, expensive, customized items Many Business-Business products mfg wants control Indirect Channel: Mfg- Distributor- Retailer -end-user or Mfg- Ret - end user Best Used for: Low cost, standard items Most consumer products
Channel Intermediaries
Retailer= sells mainly to final consumers Merchant Wholesaler= Buys and takes title to goods from mfg; stores, ships, and sells to other businesses Agent and/or Broker= Facilitates sale between mfg and others
1st Reason to Use Intermediaries
Intermediaries develop skills in selling Customer knowledge Efficiency in handling large volumes Good merchanidizing
2nd Reason to Use Intermediaries
Intermediaries Overcome Discrepancies Discrepancy of Quantity= manufacturer produces in large volume, consumers buy in small volume Discrepancy of Assortment= manufacturer produces many of one item; consumer buys one of many items Temporal Discrepancy= difference in when something is p…
3rd Reason to Use Intermediaries
Intermediaries Provide Contact Efficiency 25 Transactions needed when going from mfg - consumer(BAD!) 10 Transactions needed with 1 intermediary Fewer transactions the better
Channel Members Perform Marketing Functions
Transactional Promotion Negotiation Risk Taking Logistical Distribution Sorting Storing Facilitating Researching & Financing
Importance of Channel Members
Functions must always be performed If no intermediaries, then must be performed by the manufacturer or the consumer For standard, low cost consumer items, intermediaries reduce the cost to the final consumer
Trends in Channel Design
Disintermediation= elimination or reduction in the number of levels Increased use of electronic channels Software, movies, books online
Management of physical flow of raw materials, components and products across the supply chain Objective: To give customer(channel member or consumer) the needed level of customer service at the lowest cost Measured in terms of: Flexibility Order cycle time Order accuracy Product ava…
Logistical Components of the Supply Chain
Sourcing & Procurement Production Scheduling Order Processing Inventory Control Warehouse & Marketing Handling Transportation Logistics Information System
Sourcing & Procurement
Obtain needed supplies in right quality at lowest cost Develop long term relationships with suppliers
Production Scheduling
Determining method and timing of the manufacturing of a mix of products Build to stock versus build to order
Order Processing
A system for easily receiving orders and accurately and quickly filling them EDI- electronic data interchange: computer to computer exchange of ordering information
Inventory Control
Maintaining the correct amount of inventory Goal is to meet product availability standards while keeping costs low MRP, DRP systems
Warehousing & Materials Handling Functions
Storing products Moving products within a facility Receiving, sorting, storing, finding, getting ready for shipment
Railroads Motor Carriers Pipelines Water Airways
Trends in Supply Chain Management
Advanced computer technology (RFID) Outsourcing of logistics functions (3PLs) Electronic distribution
Relationship of Logistics to Marketing Mix
Product characteristics can significantly impact logistics costs Logistics must be aware of upcoming promotions Effective logistics can reduce prices and/or increase revenue
Text: intangible tasks Any deed, act, or performance
Importance of Services
Services as a percentage of GDP- 81% Services as a percentage of employment- 81%
How Services Differ from Physical Goods
Intangible: can't be seen, touched, tasted, felt, stored; makes evaluation of quality difficult Inseparable: consumer must be present; must manage consumer Perishable: services can't be produced ahead of time & stored; production & consumption occur at same time; can't inspect out defec…
Key Dimensions of Service Quality
How consumers view quality: Reliability- serve performed correctly? Responsiveness- is service performed on time? Assurance- do employees look like/talk like they know what they are doing? Empathy- do employees care? Tangibles- are physical surroundings attractive, clean, etc.?
Adjusting the Marketing Mix
Basic marketing mix (4P's) is expanded Strategies/applications differ in each of the 4P's as compared to applications for physical goods
Expanded 4P's of Services (what are they)
Physical evidence- Place & Product Processes- Product & Price People - Price & Promotion
Expanded 4P's of Services (in detail)
People Employees The Customer Other customers all influence quality of experience Physical Evidence The tangible part of the service The "services cape" Processes Activities which lead up to and are a part of the service
Adjusting the Basic Marketing Mix
Product: Emphasize the service process; Build brand image Place: Generally no intermediaries; Convenience is important Price: Prices are harder to set and justify to customers for many services; Use Price to adjust demand to supply Promotion: Focus on making services seem tangible; Sha…
Core Service
Key service being purchased Use a logo that reflects service (interactive imagery) interactive imagery= logo itself tells you what the service is and what the company does
Everything a person receives in an exchange Physical good, service, idea
Product Issues
Types of products Branding of products Packaging of products Number of products How are new products developed and managed
Types of Consumer Products
Classified by search process Type is not inherent to the product category Convenience= merits little shopping Shopping=will compare several options Speciality= will go out of way to get Unsought= unaware or unwanted
Brand= identification of the seller's product Brand Name= that part that can be spoken Brand Mark= part that cannot be spoken Global Brand= At least 33% of the product is sold outside its home country
What a Brand really is
A shortcut in buying A promise: about performance about quality Who creates the promise the company the customers
Brand Love: loyalty beyond reason Brand Equity: value of a company/brand name; what extra value does the brand name bring; Lanham Act Developing Brand names: often outsourced to branding companies; easy to say, memorable, suggests product use, can be easily translated, evokes correct em…
Branding Strategies
Brand versus no brand (generic) Manufacturer (by producer) Private (by retailer) Family (all products have same brand) versus Individual (each product has own brand) Co-branding: two individual brands, from different companies, are shown on one package
Functions/Benefits of Packaging
Functional Benefits Contain and protect Perceptual Benefits Promote- last 5 seconds Create image Value Benefit Add value beyond the contents
Number of Products
Most firms offer a wide number of products Product mix= all items a firm offers Product line=group of related items Depth of product line= how many items in the product line Width of product mix= how many different product lines
New Product Development
Firms continually develop new products New to world New modification New to firm Use an established new product development process Manage products throughout life cycle
New Product Development Process
New Product Strategy Idea Generation Idea Screening Business Analysis Development Test Marketing Commercialization
New Product Strategy
A goal or strategy on how new products will fit into overall corporate success 3M's strategy
Idea Generation
Sources of New Product Ideas Customers Employees Distributors Competitors Vendors R&D Consultants
Idea Screening
Narrowing down and eliminating bad ideas Includes concept testing
Business Analysis
Demand Cost Sales Profitability
Creation of prototype Packaging, branding, labeling Final gov't approvals if needed Detailed marketing strategy Significant cost commitment
Test Marketing
The Limited Introduction to determine consumer reactions Sometimes done with a scanner panel Sometimes done in a lab setting
Product Inventory Buildup Distribution Advertising (consumer and trade)
Why products fail
Will this (new product development process) guarantee success in the market?- No, but will reduce risk No discernible benefits/differences Product quality problems Poor execution of other marketing mix element
The process by which the adoption of a new product spreads. Is faster when: Complexity is lower Compatibility is higher Relative Advantage is higher Observability is higher Trial ability is higher
Product Life Cycle
Sales growth of new products can be tracked over time Length of time varies but basic shape remains the same Best used for product categories
Product Life Cycle Introduction
Characteristics: New product High costs to market Profit none (negative) Generally no competitors Innovators buy Strategies: Must create primary demand Offer basic product Advertising should educate and inform Sampling give-aways
Product Life Cycle Growth
Characteristics: Rapidly rising sales Profits increase and often peak Some repeat buyers Competition begins to enter Early adopters buy Strategies: Must create specific (secondary) demand Lower prices to gain market penetration Expand distribution and advertising
Product Life Cycle Maturity
Characteristics: Sales reach high level, but growth slows Many competitors (price) Market saturation Profits are high and then begin to decline due to price pressures Middle majority buys Strategies: Look for new product innovations and modifications Heavily promote brand with remin…
Product Life Cycle Decline
Characteristics: Sales drop off Profits stop Laggards buy Strategies: Reduce promotion Consolidate inventory to a few locations Consider modifying or dropping product
Extending Time in the PLC
Increase frequency of use- by same consumers Increase number of users- expand into different target market with same product Find new uses- identify new applications of the product

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