Marketing: -

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.

Marketing channel: -

Marketing channel is a set of institutions necessary to transfer the title to goods and to move goods from the point of consumption.(Vendors, publishers, library facilities.)

Marketing mix: -

The mix of controllable variables that the firm/library uses to reach desired use/sales level in target market, including price, product, place and promotion- 4 P’s. For a library this would be embodied in price of user’s time to access goods, a product would be a book or storytime, place is a branch or bookmobile, and promotion is publicity, displays etc.

Marketing plan: -

A document composed of an analysis of the current marketing situation, opportunities and threats, analysis, marketing objectives, marketing strategy, action programs, and projected income statement. This could be very similar to a library’s long range plan. Maturity stage of product life cycle Initial rapid growth is over and use/sales level off. Microenvironment The set of forces close to an organization that have direct impact on its ability to serve its customers, including channel member organizations, competitors, user markets, publics and the capabilities of the organization.

Macroenvironment: -

The conditions facing a company/library including demographic, economic, natural, technological, political, and cultural forces.

Market positioning: -

Positioning refers to the user’s perceptions of the place a product or brand occupies in a market segment. Or how the company/library’s offering is differentiated from the competition’s. For a library a competitor may be another public agency competing for public funds. What unique niche does the library serve when competing against police for same $$Market profile A breakdown of a facility’s market area according to income, demography, andlife style (often.)

Market segmentation: -

Market segmentation is the process of subdividing a market into distinct subsets of users that behave in the same way or have similar needs. Segments for the library could be demographic (Asian); geographic (branch-level); psychographics (leisure-oriented); customer size (largest user group area); benefits (have children in the home learning to read.)

Market share: -

Market share is a proportion of the total sales/use in a market obtained by a given facility or chain. Branch A has 35% of the system’s circulation.

Holistic marketing: -

Holistic marketing is a concept that is increasing in popularity, as more business owners are seeking to promote their products and services in a way that conveys authenticity and integrity.  Holistic marketing can be defined as a heart-centered approach to expanding and promoting one's business.  The intention is to attract highly qualified customers who have made an emotional connection with what is being offered.

Conventional marketing is much more of an impersonal process that looks at promotion as a numbers game. The more people who are exposed to your marketing messages, the better.  Holistic marketing is a personal process of

building genuine relationships with prospective customers through effective education and benefit-oriented story sharing. 

The beauty of this form of marketing is that there is very little selling that has to be done in the negative sense of the term.  Instead, the prospective customer sells him/herself on what is being offered through effective connection and education.  Many service-based business owners who hate the idea of forcing others to see the value in their product are now able to promote their work authentically using this concept of holistic marketing.

In particular, the internet makes it much easier to engage in this new style of marketing.  Now the business owner can share helpful information from their website in a way that does the selling for them.  The main idea is that selling is accomplished through offering value up front with no risk on the part of the prospective client.  Then, if it is a natural progression, the customer will move through the sales funnel until he/she decides that they are ready to buy. 

Holistic marketing is a concept whose time has come.  Now, entrepreneurs who have hated selling can promote their work without being pushy or inauthentic. 

Relationship marketing: -

Relationship marketing is a form of marketing developed from direct response marketing campaigns conducted in the 1970s and 1980s which emphasizes customer retention and satisfaction, rather than a dominant focus on point-of-sale transactions.

Relationship marketing differs from other forms of marketing in that it recognizes the long term value to the firm of keeping customers, as opposed to direct or "Intrusion" marketing, which focuses upon acquisition of new clients by targeting majority demographics based upon prospective client lists.

Internal marketing (IM): -

Internal marketing is an ongoing process that occurs strictly within a company or organization whereby the functional process aligns, motivates and empowers employees at all management levels to consistently deliver a

satisfying customer experience. According to Burkitt and Zealley, "the challenge for internal marketing is not only to get the right messages across, but to embed them in such a way that they both change and reinforce employee behaviour".

Key concepts of internal marketing include:

IM functioning as a continual internal 'upskilling' process. Alignment of the organization’s purpose with employee behavior. Employees internalizing the core values of the organization. Motivation, reframing and empowerment of employee attitude. Inside-out management approach. Retaining a positive customer experience throughout the

business objectives

Integrated marketing: -

Coordination of a variety of promotional vehicles (e.g., print/broadcast advertising, public relations, direct marketing, in-store promotions) and multiple stages in a promotional campaign to ensure that the marketing message is consistently received by the greatest possible number of people in the target market.

Social Responsibility Marketing: -

“Social responsibility marketing is an understanding of broader concerns and the ethical, environment, legal and social context of marketing activities and programs.” The cause and effects of marketing clearly extend beyond the company and the consumer to society as a whole. Social responsibility also requires that marketers carefully consider the role that they are playing and could play in terms of social welfare.

Ansoff's Product-Market Expansion Grid: -

Ian Ansoff has proposed a useful framework called the product/market expansion grid for detecting new intensive growth opportunities. There are four strategies, one for each of the quadrants:

Market Penetration Strategy When the product is in the current market, it can still grow. There are three major

approaches to increasing current product's market share: 1. Encourage current customers to buy more. 2. Attract competitor’s customers. 3. Convince non-users to use the product.

Market-Development Strategy When the current product is launched in a new market, there are three approaches to develop the market: 1. Expand distribution channels. 2. Sell in new locations. 3. Identify the potential users.

Product-Development Strategy When a new product is launched in the current market, the intensive growth strategies could be to: 1. Develop new features. 2. Develop different quality levels. 3. Improve the technology.

Diversification When a new product is launched in a new market, diversification makes good sense as better opportunities are found outside the present business. The diversification strategies are of three types: 1. Concentric Diversification Strategy: Develop new products with the earlier technology for new segments 2. Conglomerate Diversification Strategy: Develop new products for new markets. 3. Horizontal Diversification Strategy: Develop new products with new technology for old customers.

Ansoff’s product ~ market expansion matrix

Existing Products New Products

Existing Markets

Market penetrationoo

Product developmentoo

New Markets Market developmentoo

Diversificationoo

Generally speaking, a marketing manager will, in most cases, progress through these expansion steps, commencing with the strategy that presents the least amount of risk to his or her organisation.

Difference between sales, marketing and advertising: -This is a common question, and a lot of people confuse these various terms. First of all, marketing encompasses a wide range of both analysis and tactics. For example, marketing involves doing customer analysis, including market segmentation, market peceptions, market sizing, but also competitive analysis and reactions, target segment selection, positioning, branding, advertising, sales, promotions, channel of distribution arrangement and management, product line decisions, sales force management, and more. You can see, marketing involves a number of activities.

Advertising, however, is a tactic in marketing. It involves a number of activities to be sure, but it really focuses on communicating a message to the market (which it partly shares with Public Relations).

Sales is also a tactic of marketing. This is typically what the sales force does. But it is marketing's job to focus the entire marketing effort (of which the sales force is one part) towards providing what customers want and gaining a sustainable strategic advantage.

Needs Wants and Demands: -Need refers to the basic desire that is necessary for the survival of the individual. An example of a need is food which is used to satisfy the hunger need. Want is when you have options available to satisfy the needs. Like for example you need food (need) but you want to eat a cheese burger (want). Wants are the options that you sue to satisfy the needs. Wants are not necessary for survival, you can do without them but you would feel happy to have them. Demand is basically the

aggregate of the needs and wants of the people. Demand incorporates a new aspect; it is the willingness and ability of a person to buy something. Now even if a person needs and wants food, is he able to buy it? Demand incorporates the monetary or resource aspect and says that a person can only demand something if he is willing to buy it and also has the necessary resources to buy it.

Core competencies : -

A core competence is the result of a specific unique set of skills or production techniques that deliver value to the customer. Such competences give an organization access to a wide variety of markets. Hamel and Prahalad (1990) refer to a number of organizations and their products to support their concept including NEC, Honda and Canon.

Core competencies are interesting from a traditional marketing point of view since it could be argued that they take a product or production orientation rather than a market orientation. If you focus on production techniques and skills then aren't you looking at your business from an internal point of view? The answer is yes. However, the core competences give a business a competitive advantage in a number of markets, markets where customers perceive a benefit from the product. So if needs are being met better than the competition, there is an argument that core competences are indeed market-oriented. There are at least three tests of a core competence.

Three tests of core competence.

Provides potential access to a wide variety of markets. Should make a significant contribution to the perceived customer benefits of

the end product. Should be difficult for competitors to imitate.

For example, Microsoft has expertise in many IT-based innovations and technologies. Customers perceive many benefits in relation to Microsoft's products. For a variety of reasons including unique skills, it is difficult for competitors to imitate Microsoft's core competences.

When trying to identify a core competence, it is often easy to mistake them for scarce or unique resources i.e. resources rather than skills or production technologies. Also often skills and production technologies do not amount to a core competence or resource because they do not comply with one or more of the three tests. They are the thresholds that the organization must achieve to remain competitive. Threshold competences and scarce resources may not provide access to a variety of markets, may not be so significant to customers and may be less difficult to imitate.

In summary there are core competences and scarce resources, and threshold competences and threshold resources.

In order to be competitive an organization needs material resources such as premises, a factory or offices - depending on the nature of business of course. Material resources tend to be the most straightforward to achieve. Then an organization needs to achieve the right balance between Human Resources, training and recruitment. This state is more difficult to achieve. Intangible resources, including core competences are the most difficult and challenging to achieve. This is depicted in the diagram above. In fact they drive competitive advantage.

Marketing Environment : -

“The forces that directly and indirectly influence an organisation’s capability to undertake its business.”

OR

“All the things that a company must consider when developing its marketing plans, such as people’s incomes, the products of competitors, new technology.” E.g. the impact of the Internet on today’s marketing environment

The trading forces operating in a marketplace over which a business has no direct control, but which shape the manner in which the business functions and is able to satisfy its customers.

Task Environment: -

The task environment includes sectors with which the organization interacts directly and that have a direct impact on the organization's ability to achieve

its goals. The task environment typically includes the industry, competitors, customers, techniques of production, suppliers, stock market, raw materials, market sectors, and perhaps the human resources and international sectors.

Broad Environment: -

“Broad environment is the environment which constitutes the general environmental influences that all firms must cope with.” Broad environment includes analysis of economic forces, socio-cultural forces, demographic forces, political and governmental, technological factors, etc.

Supply Chain: -

“A whole series of processes, companies, places, etc. that are involved in making and selling a product. The supply chain includes the supply of raw materials and parts and the processes of manufacturing, storing, transporting and selling the product to the customer.”

Market segmentation: -

Market segmentation is a strategy that involves dividing a larger market into subsets of consumers who have common needs and applications for the goods and services offered in the market. These subgroups of consumers can be identified by a number of different demographics, depending on the purposes behind identifying the groups. Marketing campaigns are often designed and implemented based on this type of customer segmentation.

One of the main reasons for engaging in market segmentation is to help the company understand the needs of the customer base. Often the task of segregating consumers by specific criteria will help the company identify other applications for their products that may or may not have been self evident before. Uncovering these other ideas for use of goods and services may help the company target a larger audience in that same demographic classification and thus increase market share among a specific sub market base.

Market segmentation strategies can be developed over a wide range of characteristics found among consumers. One group within the market may

be identified by gender, while another group may be composed of consumers within a given age group. Location is another common component in market segmentation, as is income level and education level. Generally, there will be at least a few established customers who fall into more than one category, but marketing strategists normally allow for this phenomenon.

Along with playing a role in the development of new marketing approaches to attract a certain demographic within the market base, market segmentation can also help a company understand ways to enhance customer loyalty with existing customers. As part of the process of identifying specific groups within the larger client base, the company will often ask questions that lead to practical suggestions on how to make the products more desirable to customers. This activity may lead to changes in packaging or other similar changes that do not impact the core product. However, making a few simple changes in the appearance of the product sends a clear message to consumers that the company does listen to customers. This demonstration of good will can go a long way to strengthen the ties between consumer and vendor.

Marketing Planning and its various strategies : -

Marketing plans are vital to marketing success. They help to focus the mind of companies and marketing teams on the process of marketing i.e. what is going to be achieved and how we intend to do it. There are many approaches to marketing plans. Marketing Teacher has focussed upon the key stages of the plan. It is contained under the popular acronym AOSTC.

ANALYSIS

OBJECTIVES

STRATEGIES

TACTICS

CONTROLS

Stage One - Situation Analysis (and Marketing Audit).

Marketing environment. Laws and regulations. Politics. The current state of technology. Economic conditions. Sociocultural aspects. Demand trends. Media availability. Stakeholder interests. Marketing plans and campaigns of competitors. Internal factors such as your own experience and resource availability.

Also see tools for internal/external audit:

SWOT PEST Porter's Five Forces Marketing Environment

Stage Two - Set marketing objectives.

SMART objectives

Specific - Be precise about what you are going to achieve. Measurable - Quantify you objectives. Achievable - Are you attempting too much? Realistic - Do you have the resource to make the objective happen (men,

money, machines, materials, minutes)? Timed - State when you will achieve the objective (within a month? By

February 2010?).

If you don't make your objective SMART, it will be too vague and will not be realized. Remember that the rest of the plan hinges on the objective. If it is not correct, the plan may fail.

Stage Three - Describe your target market

Which segment? How will we target the segment? How should we position within the segment?

Why this segment and not a different one? (This will focus the mind). Define the segment in terms of demographics and lifestyle. Show how you

intend to 'position' your product or service within that segment. Use other tools to assist in strategic marketing decisions such as Boston Matrix , Ansoff's Matrix , Bowmans Strategy Clock, Porter's Competitive Strategies, etc.

Stage Four - Marketing Tactics.

Convert the strategy into the marketing mix (also known as the 4Ps). These are your marketing tactics.

Price Will you cost plus, skim, match the competition or penetrate the market?

Place Will you market direct, use agents or distributors, etc? Product Sold individually, as part of a bundle, in bulk, etc? Promotion Which media will you use? e.g sponsorship, radio advertising,

sales force, point-of-sale, etc? Think of the mix elements as the ingredients of a 'cake mix'. You have eggs, milk, butter, and flour. However, if you alter the amount of each ingredient, you will influence the type of cake that you finish with.

Stage Five - Marketing Controls.

Remember that there is no planning without control. Control is vital.

Start-up costs. Monthly budgets. Sales figure. Market share data. Consider the cycle of control.

Finally, write a short summary (or synopsis) which is placed at the front of the plan. This will help others to get acquainted with the plan without having to spend time reading it all. Place all supporting information into an appendix at the back of the plan.

Value Creation and delivery sequence: -

a. Strategic Marketing: -

“The process of a company planning where and how to sell its products most effectively”

b. Tactical Marketing: -

"Tactical Marketing is the execution of your marketing plan, such as generating leads, placing media, creating marketing tools, and implementing a follow-up system. In other words, it's the medium in which your message is delivered.”

Value and Satisfaction: -

Customer satisfaction refers to the extent to which customers are happy with the products and services provided by a business. Customer satisfaction levels can be measured using survey techniques and questionnaires. Gaining high levels of customer satisfaction is very important to a business because satisfied customers are most likely to be loyal and to make repeated orders and to use a wide range of services offered by a business.

The need to satisfy customer for success in any commercial enterprises is very obvious. The income of all commercial enterprises is derived from the payments received for the products and services to its external customers. Customers are the sole reason for the existence of commercial establishments.

Since sales are the most important goal of any commercial enterprise, it becomes necessary to satisfy customers. For customer satisfaction it is necessary to establish and maintain certain important characteristics like:

a. Quality

b. Fair prices

c. Good customer handling skills

d. Efficient delivery

e. Serious consideration of consumer complaints.

Satisfaction is the feeling of pleasure or disappointment attained from comparing a products perceived performance (outcome) in relation to his or her expectations. If the performance falls short of expectations, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied. If the performance exceeds expectations, the customer is highly satisfied or delighted.

Customer lifetime value

In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) and a new concept of "customer life cycle management" is the present value of the future cash flows attributed to the customer relationship. Use of customer lifetime value as a marketing metric tends to place greater emphasis on customer service and long-term customer satisfaction, rather than on maximizing short-term sales.

Calculating customer lifetime value

Customer lifetime value has intuitive appeal as a marketing concept, because in theory it represents exactly how much each customer is worth in monetary terms, and therefore exactly how much a marketing department should be willing to spend to acquire each customer. In reality, it is difficult to make accurate calculations of customer lifetime value due to the The specific calculation depends on the nature of the customer relationship. Customer relationships are often divided into two categories. In contractual or retention situations, customers who do not renew are considered "lost for good". Magazine subscriptions and car insurance are examples of customer retention situations. The other category is referred to as customer migrations situations. In customer migration situations, a customer who does not buy (in a given period or from a given catalog) is still considered a customer of the firm because she may very well buy at some point in the future. In customer retention situations, the firm knows when the relationship is over. One of the challenges for firms in customer migration situations is that the firm may not know when the relationship is over (as far as the customer is concerned).

Most models to calculate CLV apply to the contractual or customer retention situation. These models make several simplifying assumptions and often involve the following inputs:

Churn rate The percentage of customers who end their relationship with a company in a given period. One minus the churn rate is the retention rate. Most models can be written using either churn rate or retention rate. If the model uses only one churn rate, the assumption is that the churn rate is constant across the life of the customer relationship.

Discount rate The cost of capital used to discount future revenue from a customer. Discounting is an advanced topic that is frequently ignored in customer lifetime value calculations. The current interest rate is sometimes used as a simple (but incorrect) proxy for discount rate.

Retention cost The amount of money a company has to spend in a given period to retain an existing customer. Retention costs include customer support, billing, promotional incentives, etc.

Period The unit of time into which a customer relationship is divided for analysis. A year is the most commonly used period. Customer lifetime value is a multi-period calculation, usually stretching 3-7 years into the future. In practice, analysis beyond this point is viewed as too speculative to be reliable. The number of periods used in the calculation is sometimes referred to as the model horizon.

Periodic Revenue The amount of revenue collected from a customer in the period.

Profit Margin Profit as a percentage of revenue. Depending on circumstances this may be reflected as a percentage of gross or net profit. For incremental marketing that does not incur any incremental overhead that would be allocated against profit, gross profit margins are acceptable.

Uses of Lifetime Value

Lifetime Value is typically used to judge the appropriateness of the costs of acquisition of a customer. For example, if a new customer costs $50 to acquire (CPNC, or Cost Per New Customer), and their lifetime value is $60, then the customer is judged to be profitable, and acquisition of additional similar customers is acceptable. For this reason, the costs involved in the first purchase are typically not included in LTV, but rather, in the Cost Per New Customer calculation.

Customer Loyalty: -

“The fact that a customer prefers to use a particular shop/store, etc. or continues to buy a particular type of product.”

Customer value proposition : -

In the field of marketing, a customer value proposition consists of the sum total of benefits which a vendor promises that a customer will receive in return for the customer's associated payment (or other value-transfer).

Put simply, the value proposition is what the customer gets for his money/time.

Accordingly, a customer can evaluate a company's value-proposition on two broad dimensions with multiple subsets:

1. relative performance: what the customer gets from the vendor relative to a competitor's offering;

2. price: which consists of the payment the customer makes to acquire the product or service; plus the access cost

The vendor-company's marketing and sales efforts offer a customer value proposition; the vendor-company's delivery and customer-service processes then fulfill that value-proposition.

Customer equity: -

Customer equity is the total combined customer lifetime values of all of a company’s customers.

Overview

In deciding the value of a company, it is important to know of how much value its customer base is in terms of future revenues. The greater the customer equity (CE), the more future revenue in the lifetime of its clients; this means that a company with a higher customer equity can get more money from its customers on average than another company that is identical in all other characteristics. As a result a company with higher customer

equity is more valuable than one without it. It includes customers' goodwill and extrapolates it over the lifetime of the customers.

The term is a misnomer since the term has nothing to do with the traditional meaning of equity.

There are three drivers (factors) to customer equity, all of which refer to three sides of the same thing:

1. Value equity: What the customer assesses the value of the product or service provided by the company to be;

2. Brand equity: What the customer assesses the value of the brand is, above its objective value;

3. Retention equity: The tendency of the customer to stick with the brand even when it is priced higher than an otherwise equal product;

Customer equity strategy

Companies often attempt to gain more customers and increase revenues by improving customer equity. They do this by:

improving consumer service improving the value or desirability of the brand improving goodwill improving brand popularity such as by advertisements

Influences on consumer behavior: -

01. Cultural Factor:-

Cultural factor divided into three sub factors (i) Culture (ii) Sub

Culture (iii) Social Class

o Culture:- The set of basic values perceptions, wants, and behaviour

learned by a member of society from family and other

important institutions. Culture is the most basic

cause of a person’s wants and behaviour. Every group or

society has a culture, and cultural influences

on buying behaviour may vary greatly from country to country.

o Sub Culture :-

A group of people with shared value systems based on common life experiences and situations.

Each culture contains smaller sub cultures a group of people with shared value system based on

common life experiences and situations. Sub culture includes nationalities, religions, racial group and

geographic regions. Many sub culture make up important market segments and marketers often design products.

o Social Class:- Almost every society has some form of social structure,

social classes are society’s relatively permanent and ordered divisions whose members share similar values,

interests and behaviour.

02. Social Factors:-

A consumer’s behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles and status

o Groups :- Two or more people who interact to accomplish individual

or mutual goals. A person’s behavior is influenced by many small groups.

Groups that have a direct influence and to which a person belongs are called membership groups.

Some are primary groups includes family, friends, neighbours and coworkers. Some are secondary groups, which are more formal and have less regular interaction. These includes organizations like religious groups, professional association and trade unions.

o Family:-

Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization society and it has been researched extensively. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services.

o Roles and Status :- A person belongs to many groups, family, clubs, and

organizations. The person’s position in each group can be defined in

terms of both role and status. For example. M & “X” plays the role of father, in his family

he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them.

03. Personal Factors:-

It includes i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv)

Life Style (v) Personality and self concept.o Age and Life cycle Stage:-

People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle.

o Occupation :-

A person’s occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A Co. can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors.

o Economic situation :- A person’s economic situation will affect product choice

o Life Style :- Life Style is a person’s Pattern of living, understanding

these forces involves measuring consumer’s major AIO dimensions.

i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family recreation) and opinions (about themselves, Business, Products)

o Personality and Self concept :- Each person’s distinct personality influence his or her

buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.

04. Psychological Factors:-

It includes these Factors. i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes

Motivation :-o Motive (drive) a need that is sufficiently pressing to direct the

person to seek satisfaction of the need Perception :-

o The process by which people select, Organize, and interpret information to form a meaningful picture of the world.

Learning:-

o Changes in an individual’s behaviour arising from experience.

Beliefs and attitudes :-o Belief is a descriptive thought that a person holds about

something o Attitude, a Person’s consistently favourable or unfavourable

evaluations, feelings, and tendencies towards an object or idea.

MODEL OF CONSUMER BEHAVIOUR: -

C. Consumer Psychology: -

The term consumer psychology refers to the study of how people relate to the goods and services they use in their daily lives. Also known as the study of consumer behavior, consumer psychology provides opportunities to examine issues such as what factors are most important when people decide to purchase a particular item, how customers determine the value of a service, and whether or not television and magazine advertisements can convince a reluctant consumer to try a new product for the first time. Consumer psychology seeks to describe and explain consumer behavior, although some consumer psychologists will attempt to predict or influence a customer’s decisions.

The discipline of consumer psychology draws heavily from the fields of marketing, advertising, economics, anthropology, social psychology, and cognitive psychology. However, consumer psychology has been recognized as its own area of study since World War II. One of the first noted consumer psychologists was John B. Watson, the man who suggested that ads for Johnson & Johnson’s baby powder be structured to subtly play on the anxiety and insecurity commonly felt by new mothers. His technique of recognizing the emotional appeal of advertising remains a cornerstone of consumer psychology today.

Like any other discipline, consumer psychology has several possible areas of specialization. Some consumer psychologists study the impact of advertising or product packaging on a consumer’s purchasing decisions. Others focus their research on how marriage, parenthood, and other important life stages affect consumer behavior. The psychology of price, or how the perceived value of an item is determined, is another popular specialty within the field of consumer psychology.

Consumer psychologists can be researchers, educators, consultants, managers, and policy makers. A bachelor’s degree in consumer psychology prepares you for entry-level jobs with advertising agencies, research firms, governmental institutions, and private corporations that wish to learn more about how customers interact with a particular product. However, a graduate degree in marketing, management, or advertising is often necessary before one can expect to advance within the field.

Career opportunities in consumer psychology offer a chance to interact with a variety of people while applying problem solving and creative thinking skills to a number of tasks. A typical day working in the field of consumer psychology involves brainstorming, analyzing research data, preparing reports, and meeting with clients. The risk of burnout is quite high, however,

since most professionals are expected to work large amounts of overtime when an employer is preparing for a product launch.

CUSTOMER VALUE DELIVERY SYSTEM: -

End-to-end system that collaborates (at least in some fashion!) all the departments of organisation to deliver value to customers is called a Value Delivery System. E.g.:- Whether you are working in a sales organization or a factory or an R&D lab, you are also a part of a larger system of delivering value to customers.

The problem with such situations is that breakdowns and lack of alignment within the whole system can hinder you from optimizing the value that you create and deliver. The activity of improvement thus focuses on the whole system.

In any VDS work, an early stage is in scoping out the system on which you are going to work. It can be soup-to-nuts stuff or can be constrained within a single organization.

Questions to ask of anyone in the system include:

Who do you deliver value to? How do they evaluate it? What is their current evaluation? Who delivers value to you? How do you evaluate it? What is your current evaluation?

It thus becomes a game of suppliers and customers, linking people and systems together. A neat trick in asking these questions is that you can match up what the suppliers and customers said: are perceptions the same? Usually not. With a little communication, there is scope for immediate improvements.

Customers receive value every time they touch us or our products. This customer lifecycle has been characterized by the following stages, which spell the unforgettable word 'COILUSD':

Choosing Ordering Installing Learning

Using Supporting Disposing

Product positioning: -

Product positioning is the way users/consumers view competitive brands or types of products. This can be manipulated by the organization/library. The library’s video collection, available for free, is competitive with local video stores that charge, if video collections are comparable. If the collections are not, the library is differentiating the video collection from the video store.

Mental accounting: -

A concept first named by Richard Thaler (1980), mental accounting attempts to describe the process whereby people code, categorize and evaluate economic outcomes.

One detailed application of mental accounting, the behavioral life cycle hypothesis (Shefrin & Thaler, 1988), posits that people mentally frame assets as belonging to either current income, current wealth or future income and this has implications for their behavior as the accounts are largely non-fungible and marginal propensity to consume out of each account is different.

Mental accounting, utility, value and trfhfhfhansaction

In mental accounting theory, framing means that the way a person subjectively frames a transaction in their mind will determine the utility they receive or expect. This concept is similarly used in prospect theory, and many mental accounting theorists adopt that theory as the value function in their analysis.

Another very important concept used to understand mental accounting is that of modified utility function. There are 2 values attached to any transaction - acquisition value and transaction value. Acquisition value is the money that one is ready to part with for physically acquiring some good. Transaction value is the value one attaches to having a good deal. If the price that one is paying is equal to the mental reference price for the good,

the transaction value is zero. If the price is lower than the reference price, the transaction utility is positive.

Situation analysis (SWOT): -

An examination of the internal factors of a library to identify strengths and weaknesses, and the external environment to identify opportunities and threats.

An examination of the internal environment of a firm (mission, objectives, strategies, resources, trends, etc) to identify particular strengths and weaknesses, and its external environment (demographic, economic, technological, social and cultural, legal and political, and natural forces) to identify particular opportunities and threats.

Marketing demand states: -

Various levels of consumer interest in the purchase of a product. At any given time there may be no demand, adequate demand, or too much demand for a given product, and marketers must be aware of these states of consumer demand in order to create a desired level of demand for their particular product. Marketers may face any of the following demand states: negative demand-a major part of the market dislikes the product, like dental work; no demand-consumers may be uninterested in the product; latent demand-consumers have a hidden want for a product that is not satisfied by any existing product, like unharmful cigarettes; falling demand-desire for a product declines; irregular demand-demand varies over a period of time, which may be seasonal, weekly, or even daily; full demand-desire for the product is equal to the product manufacturer's ability to produce the product; overfull demand-the desire for the product is greater than the manufacturer's ability to produce the product.

Marketing intelligence system: -

Marketing Intelligence System is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment.

Levels of Market Segmentation

Market segmentation represents an effort to increase a company's targeting precision. It can be carried out at four levels segments, niches, local areas, and individuals.

Market segmentation represents an effort to increase a company's targeting precision. It can be carried out at four levels: segments, niches, local areas, and individuals. Before we discuss these levels, however, we need to say a word about mass marketing.

MASS MARKETING: -

In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. Henry Ford epitomized this marketing strategy when he offered the Model-T Ford to all buyers; they could have the car "in any color as long as it is black." Coca-Cola also practiced mass marketing for many years when it sold only one size Coke in a 6.5-ounce bottle.

The traditional argument for mass marketing is that it creates the largest potential market, which leads to the lowest costs, which in turn can translate into either lower prices or higher margins. However, many critics point to the increasing splintering of the market, which makes mass marketing more difficult. According to Regis McKenna:

Consumers have more ways to shop: at giant malls, specialty shops, and superstores; through mail-order catalogs, home shopping networks, and virtual stores on the Internet. And they are bombarded with messages pitched through a growing number of channels: broadcast and narrow-cast television, radio, on-line computer networks, the Internet, telephone services such as fax and telemarketing, and niche magazines and other print media.

The proliferation of advertising media and distribution channels is making it

difficult to practice "one size fits all" marketing. No wonder some have claimed that mass marketing is dying. Not surprisingly, many companies are retreating from mass marketing and turning to micromarketing at one of four levels.

SEGMENT MARKETING: -

A market segment consists of a large identifiable group within a market. A company that practices segment marketing recognizes that buyers differ in their wants, purchasing power, geographical locations, buying attitudes, and buying habits. At the same time, though, the company is not willing to customize its offer/communication bundle to each individual customer. The company instead tries to isolate some broad segments that make up a market. For example, an auto company may identify four broad segments: car buyers seeking basic transportation, those seeking high performance, those seeking luxury, and those seeking safety.

Thus segmentation is a midpoint between mass marketing and individual marketing. The consumers belonging to a segment are assumed to be quite similar in their wants and needs. Yet they are not identical. Some segment members will want additional features and benefits not included in the offer, while others would gladly give up something that they don''t want very much. For example, Ritz-Carlton Hotels target affluent guests and provide many amenities and a lower price. Thus segment marketing is not as precise as individual marketing but is much more precise than mass marketing.

Segment marketing offers several benefits over mass marketing. The company can create a more fine-tuned product/service offer and price it appropriately for the target audience. The choice of distribution channels and communications channels becomes much easier. And the company may face fewer competitors if fewer competitors are focusing on this market segment.

NICHE MARKETING: -

Market segments are normally large identifiable groups within a market?for example, nonsmokers, occasional smokers, regular smokers, and heavy smokers. A niche is a more narrowly defined group, typically a small market whose needs are not being well served. Marketers usually identify niches by dividing a segment into sub-segments or by defining a group with a distinctive set of traits who may seek a special combination of benefits. For example, the sema, and heavy smokers with emphysema who are

overweight.

While segments are fairly large and thus normally attract several competitors, niches are fairly small and normally attract only one or a few competitors. Niches typically attract smaller companies. Larger companies, such as IBM, whose lose pieces of their market to nichers; Dalgic labeled this confrontation as "guerrillas against gorillas." As a defense, some larger companies have turned to niche marketing, which has required more decentralization and some changes in the way they do business. For example, Johnson & Johnson consists of 170 affiliates (business units), most of which pursue niche markets.

Niche marketers presumably understand their niches'' needs so well that their customers willingly pay a price premium. For example, Ferrari gets a high price for its cars because its loyal buyers feel that no other automobile comes close to offering the product-service-membership benefit bundle that Ferrari does.

An attractive niche is characterized as follows: The customers in the niche have a distinct and complete set of needs; they will pay a premium to the firm best satisfying their needs; the "nicher" has the required skills to serve the niche in a superior fashion; the nicher gains certain economies through specialization; the niche is not likely to attract other competitor or the nicher can depend on itself; and the niche has sufficient size, profit, and growth potential.

An advertising agency executive wrote: "There will be no market for products that everybody likes a little, only for products that somebody likes a lot." A chemical company executive predicted that chemical companies that succeed in the future will be those that can identify niches and specialize their chemicals to serve each niche's needs. According to Linneman and Stanton, niche-pickers will find riches in niches and companies will have to niche or be niched. Blattberg and Deighton claim that "niches too small to be served profitably today will become viable as marketing efficiency improves." In many markets today, niches are the norm.

LOCAL MARKETING: -

Target marketing is increasingly taking on the character of regional and local marketing, with marketing programs being tailored to the needs and wants

of local customer groups (trading areas, neighborhoods, even individual stores). Thus Citibank provides different mixes of banking services in its branches depending on the bank's neighborhood demographics. And Kraft helps supermarket chains identify the cheese assortment and shelf positioning that will optimize cheese sales in low-income, middle-income, and high-income stores, and in different ethnic communities.

Those in favor of localizing a company's marketing point to the pronounced regional differences in communities' demographics and lifestyles. They see national advertising as wasteful because it fails to address local target groups. They also see powerful local and regional retailers who are demanding more fine-tuned product assortments for their neighborhoods.

Those against local marketing argue that it drives up manufacturing and marketing costs by reducing economies of scale. Logistical problems become magnified when companies try to meet different regional and local markets'' requirements. And a brand's overall image might be diluted if the product and message differ in different localities.

INDIVIDUAL MARKETING / CUSTOMERIZATION: - The ultimate level of segmentation leads to "segments of one," "customized marketing," or "one-to-one marketing." The prevalence of mass marketing has obscured the fact that for centuries consumers were served as individuals: The clothier tailor-made the suit, the cobbler designed shoes for the individual, and so on. And much business-to-business marketing today is customized, in that a manufacturer will customize the offer, logistics, and financial terms for each major account. It is the new technologies? Specifically computers, databases, robotic production, and instant communication media such as e-mail and fax? That are permitting companies to consider a return to customized marketing, or what is called "mass customization." Mass customization is the ability to prepare on a mass basis individually designed products and communications to meet each customer's requirements.

Target Markets: -

A target market is the market segment which a particular product is marketed to. It is often defined by age, gender and/or socio-economic grouping.

Brand : -

Brand is a unique and identifiable symbol, association, name or trademark which serves to differentiate competing products or services. Both a physical and emotional trigger to create a relationship between consumers and the product/service.

Branding: -

“Branding is endowing products and services with the power of brand.” Branding involves creating mental structures and helping consumers organise their knowledge.

Brand Extension: -

Brand extension is the application of a brand beyond its initial range of products, or outside of its category. This becomes possible when the brand image and attributes have contributed to a perception with the consumer/user where the brand and not the product is the decision driver.

Brand Reinforcement: -Brand Reinforcement is the activity associated with getting consumers who have tried a particular brand to become repeat purchasers and with attracting new users; brand reinforcement is a key objective of the growth stage of the product's life cycle.

Brand portfolio: -

Some companies have multiple products and services, each of which may have its own brand (trademark, service mark), or form part of a "family of brands." They may be common law marks, or registered under statutes in various countries and states. The total collection of these rights is called the "brand portfolio."

Brand Equity: -

Brand equity is the value - both tangible and intangible that a brand adds to a product/service.

OR

The differential effect that brand knowledge has on consumer response to the marketing of that brand.

BRAND EQUITY MODELS: -

AAKER model for brand equity: -

1. Brand loyalty2. Brand awareness3. Perceived quality4. Brand associations5. Others: Patents, channels, etc.

BRANDZ model for brand equity: -

Brand Resonance: -

The first level of the pyramid deals with establishing the identity of the brand. Keller suggests a single building block for this phase and terms it

brand salience. In building a highly salient brand, he argues that it is important that awareness campaigns not only build depth (ensuring that a brand will be remembered and the ease with which it is) but also breadth (the range of situations in which the brand comes to mind as something that should be purchased or used).

Richard Branson’s Virgin brand has achieved depth of awareness and is easily recognized and recalled in South Africa. The challenge facing the brand is to make consumers aware about its breadth and diversity of offerings including air travel, game lodges, finance, health clubs, drinks, and mobile communication. Follow the Virgin brand around the globe, and that challenge stretches to books, trains, cosmetics, jewellery, wines, radio, and

even space flights in the next few years. The second layer of the pyramid deals with giving meaning to the brand and here Keller presents two

building blocks: brand performance and brand imagery. Brand performance is the way the product or service attempts to meet the consumer’s functional needs. Brand performance also has a major influence on how consumers experience a brand as well as what the brand owner and others say about the brand.

Delivering a product or service that meets and, hopefully, exceeds consumer needs and wants is a prerequisite for successful brand building. In communicating brand performance, Keller identifies five areas that need to be communicated: primary ingredients and supplementary features; product reliability, durability and serviceability; service effectiveness, efficiency and empathy; style and design; and price

Brand imagery deals with the way in which the brand attempts to meet customers’ psychological and social needs. Brand imagery is the intangible aspects of a brand that consumers pick up because it fits their demographic profile (such as age or income) or has psychological appeal in that it matches their outlook on life (conservative, traditional, liberal, creative, etc). Brand imagery is also formed by associations of usage (at work or home) or via personality traits (honest, lively, competent, rugged, etc).

It is in this building block that advertising plays a major role in shaping the image of the brand, although word-of-mouth recommendations and a consumer’s own experience are equally important. However brand imagery is built, it is important that brand managers and strategists craft strong, favorable and unique associations for a brand.

Luxury cars, BMW in particular, are brands that work hard to communicate brand performance and imagery. Sales people, brochures, Internet sites and car journal reviews will all tell you about the performance of a BMW. The delivery of this type of communication has largely remained consistent, only being updated at regular intervals to reflect the specifications of new models. What has changed is the imagery used to communicate the brand from the power-impregnated advertisements of a BMW outrunning a land speed rocket car to the more esoteric imagery of innovative kinetic sculptures being powered by the wind. The change in advertising imagery reflects a shift by the German automaker away from targeting the affluent automobile enthusiast to targeting the “ideas class”, a market segment which comprises up-market buyers more interested in design and innovation than brute performance.

Having dealt with brand identity and meaning, we move upwards to the

third tier of the pyramid to develop a consumer response to the brand.

Keller proposes two building blocks for this tier, namely brand judgments and brand feelings. Judgments about a brand emerge from a consumer pulling together different performance and imagery associations. These judgments combine into a consumer’s opinion of a brand and whilst there are multiple judgments that an individual can make, Keller believes there are four that companies must pay attention to in their brand-building efforts. They are the perceived quality of the brand; brand credibility (the extent to which the brand is perceived as having expertise, being trustworthy and likable); brand consideration (the brand must be relevant to the consumer so that they are likely to purchase or use it); and brand superiority (the extent to which consumers view the brand as being unique and better than other brands).

Maintaining brand judgement is particularly important when a company embarks on brand extension as what counted as quality, credibility, consideration and superiority in one market can evaporate as the brand extends its product line and/or market reach. Baby food manufacturer Gerber tried to enter the adult food market in the 1970s by producing small helpings of fruits, vegetables, desserts, etc in the same jars it used for infant food. Unable to garner credibility (adult food is very different to baby food), consideration (how many adults would think about buying food for themselves that is packaged in a well-established baby-food jar) and superiority (many other brands specialize in adult food) for its new product

range, Gerber quickly ditched which was widely regarded as a spectacular failure.

Whereas brand judgments can be fairly logical, brand feelings are consumers’ emotional responses to the brand. Keller identifies six brand-building feelings that he regards as important emotions that a consumer can have towards a brand, namely warmth, fun, excitement, security, social approval and self-respect.

The first three are experiential and immediate and increase in the level of intensity whilst the latter three are private and enduring and increase in the level of gravity. These responses are likely to come together in different combinations for individual consumers and the distinct brands they are relating to.

What is important for the brand manager and strategist is that responses are positive and come to mind when a consumer thinks about the brand.

Telecommunication companies often depict the emotional rewards of making a call such as a child bringing joy to his or her geographically-distant grandparents by speaking to them on the phone. Fun is a major component of brand communication with well-known South African examples such as Castrol’s “Boet and Swaer” and “Mad About Oil” campaigns and Vodacom’s “Yebo Gogo” and “Meerkat” campaign. Volvo plays on the brand feeling of security by emphasizing the safety of its cars. Investment management firm Allan Gray also targets the feeling of security by emphasizing the long-term performance of the investments it makes on behalf of its clients.

The final tier of the pyramid deals with the consumer’s relationship with the brand and here Keller introduces the sixth building block which he

calls brand resonance. Resonance is characterized by the intensity of the psychological bond that customers have with the brand and their level of engagement with the brand. The challenge for the brand manager and strategist is to develop the bond and increase the number of interactions (repeat purchases of a product or service) through the development of marketing programmes that fully satisfy all the customers’ needs, provides them with a sense of community built around the brand and even empowers them to act as brand champions.

Along with Apple, Harley-Davidson is a brand that succeeds in creating a strong and lasting bond with its customers. The motorcycle manufacturer’s primary vehicle for achieving this is the global Harley Owners Group, known affectionately as HOG, which organizes regular events for its more than 600,000 members. Executive from the company often join these rides, which can number up to 25,000 riders, which successfully reinforce the brand’s message of freedom, individualism, self-expression, etc as well as building the sense of community that the brand creates. Harley-Davidson customer are famously loyal with over 45 percent of owners having previously owned one of the brand’s distinctive motorcycles.

In wrapping up this review of the pyramid model, it is useful to heed Keller’s advice not to take shortcuts: “The length of time to build a strong brand will therefore be directly proportional to the amount of time it takes to create sufficient awareness and understanding so that firmly held and felt beliefs and attitudes about the brand are formed that can serve as the foundation for brand equity.”

Brand Life Cycle: -The three phases through which brands pass as they are introduced, grow, and then decline. The three stages of the brand life cycle are the introductory period, during which the brand is developed and is introduced to the market; the growth period, when the brand faces competition from other products of a similar nature; and, finally, the maturity (ageing) period, in which the brand either extends to other products or its image is constantly updated. Without careful brand management, the maturity (ageing) period can lead to decline and result in the brand being withdrawn. Similar stages can be observed in the product life cycle.