The Blackwell Encyclopedic Dictionary of Marketing

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title: TheBlackwellEncyclopedicDictionaryofMarketingBlackwellEncyclopediaofManagement

author: Lewis,BarbaraR.publisher: BlackwellPublishingLtd.

isbn10|asin: 0631214852printisbn13: 9780631214854ebookisbn13: 9780631227724

language: Englishsubject Marketing--Dictionaries.

publicationdate: 1999lcc: HF5415.B45521999ebddc: 380.1/03

subject: Marketing--Dictionaries.

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Contents

Preface vi

ListofContributors vii

DictionaryEntriesAZ 1254

Index 255

Action

Theterm"action"appearsattheCONATIVE(orbehavioral)STAGEofmodelsofMARKETINGCOMMUNICATIONSandreferstopositiveactsofthebuyer/customer/consumersuchasseekingfurtherinformationfromthesupplyingorganization,TRIALoftheproductorservicetogetherwiththefirst(and,ultimately,repeat)purchaseoftheproductorservice.Triggeringdesiredformsof"action"isbestachievedbyspecificcommunicationtechniquessuchasADVERTISING(forseekingfurtherinformation),andPERSONALSELLING(fortrialandpurchase),althoughmorerecentdevelopmentsinDIRECTMARKETINGsuchasDIRECTMAIL,OFFTHEPAGEselling,andTELEMARKETINGarenowbeingusedtogenerateacompleterangeofactions.

Bibliography

Kotler,P.(1994).Marketingmanagement:Analysis,planning,implementationandcontrol(8thedn).EnglewoodCliffs,NJ:Prentice-Hall.Chapter22.

McCarthy,E.J.&Perreault,W.D.(1993).Basicmarketing(11thedn).Homewood,IL:Irwin.Chapter15.

DAVIDYORKE

AdaptiveStrategy

Thisisoneofthreestrategicstyles,theothersbeingtheENTREPRENEURIALandPLANNING,suggestedbyMintzberg(1973).Theadaptivemodeissuitedtolarge,oftennon-profit-oriented,organizationsthatwilltendtobeinthepublicsector.Theydonothaveunambiguousgoalsandtherearemanydifferentinterestgroupswithintheorganization,eachwiththeirownobjectivesandagenda.Consequently,

strategyoftenemergesthroughaprocessofbargainingandconsensus-seeking,similartothatidentifiedbyCyert&March(1963).Thisapproachtostrategyformationcanbecontrastedwiththeentrepreneurialstyleofbolddecision-making.Thisisgenerallyafeatureofsmallorganizationsdominatedbytheownermanager.However,suchaperspectiveignoresresearch(e.g.,Golby&Johns,1971)suggestingthatmanysmallfirmstendtoberatherconservative,withtheirownerspreferringtoensurecontinuedcontrolratherthanengagingintakingsignificantriskswithaviewtosecuringsignificantgrowth.Largefirms,particularlythosewithadominantchiefexecutive,mayalsoengageinentrepreneurialstrategyformation.Finally,theplanningmodeisthetraditionalapproachtoSTRATEGICPLANNINGandtendstobesuitedtolarge,bureaucratic,organizationsoperatinginrelativelystableenvironmentswiththeresourcestoaffordthedetailedanalysissuchanapproachrequires.

Bibliography

Cyert,R.M.&March,J.G.(1963).Abehavioraltheoryofthefirm.EnglewoodCliffs,NJ:Prentice-Hall.

Golby,C.W.&Johns,G.(1971).Attitudeandmotivation.BoltonCommitteeResearchReport#7.

Mintzberg,H.(1973).Strategymakinginthreemodes.CaliforniaManagementReview,16,(2),Winter,4453.

DALELITTLER

AdoptionProcess

Theconsumeradoptionprocessisamicroprocessandfocusesonthe"mentalprocessthroughwhichanindividualconsumerpassesfromfirsthearingaboutan

BCGMatrix

TheBCGmatrix,asitsnameimplies,istheeponymoustechniquedevelopedbytheBostonConsultancyGroup,thatgainedpopularityinthe1970s.Itwasadvancedasatechniqueforassistingcompaniestoanalyzetheirdiversebusinessportfolios.Itisbasedontwomajorpremises.ThefirstrelatestowhattheBCGtermstheexperiencecurveeffectbywhichthetotalcostsinvolvedinmanufacturing,distributing,andsellingaproductdeclinewithincreasedexperienceinproduction.Theexperienceisacompositeofeconomiesofscaleandspecialization;themodificationstoorredesignofproductstoobtainlowercosts;productivityimprovementsfromtechnologicalchangeand/orlearningeffectsleadingtotheadoptionofnewproductionmethods;andthedisplacementoflessefficientfactorsofproduction.Theeffectsofexperiencecanbedepictedbyplottingrealunitcostagainstcumulativeproductionvolumeasameasureofaccumulatedexperience.Iflogarithmicscalesareusedthenastraightlineisnormallyobtained.Infact,theBostonConsultancyGrouparguedthatrealunitcostsfallby20to30percentforeachdoublingofcumulativeexperience.Theimplication,then,isthatbusinessesshouldfocusonsecuringhighvolume,andthereforehighMARKETSHARE,throughaggressivepricing.Thesecondpremiseisthattheconsumptionofresources,inparticularcash,isadirectfunctionofmarketgrowth.BCGdevelopedafour-boxmatrix(seefigure1)withmarketgrowthandmarketsharerelativetothatofthenextlargestcompetitor(sincethisisthetrueindicatorofCOMPETITIVEADVANTAGE)asthetwoparameters.Eachismeasuredas"high"or"low."Businessescanthenbecategorizedaccordingtowhetherornottheyare"stars''(highmarketgrowth,lowrelativemarketshare);"cashcows"(lowgrowth,highshare);"problemchildren"(highgrowth,lowshare);or"dogs"(lowgrowth,lowshare).Thecashcowsshouldhavelowercoststhantheirrivalsanddemandcomparativelylowerinvestment.Theythereforegeneratecashwhichcanbeemployedtoconvertsomeofthe

"questionmarks"into"stars"whichareessentiallycashneutral.Thestarsoftodayshouldbecomethecashcowsofthefuture.Generally,itisarguedthatthedeletionofthe"dogs"shouldbeseriouslyconsidered.

Figure1TheBCGMatrix

Thetechniquehasbeenextensivelyreviewedandapparentlyaccepted,probablybecauseofitssimplicityandeasycomprehensibility.However,therehavebeenmanycriticisms.Theremaybeproblemsindefining"market"andhence"marketshare";themeasuresof"high"and"low"aresubjectiveandeasilymanipulatable;thepossibilitiesofexternalfinancingareexcludedfromtheanalysis;andtheinfluenceofNON-PRICEFACTORSondemandtendstobeignored.Moreover,theapproachisoverlydeterministicandtheacceptanceofitsprescriptionscouldleadtosuboptimumandevensignificantlyinappropriatedecisions.Forexample,so-called"dog"businessesmighthavecostanddemandinterrelationshipswithotherbusinesses,andtodeletethese,astheanalysisimplies,couldhaveadverseconsequencesfor

CallPlanning

PERSONALSELLING(byrepresentativesfromsupplierorganizationstocustomers)isconsideredavitalelementinthemarketingCOMMUNICATIONSMIX.However,itisextremelyexpensiveandincreasinglyso.Cost-effectivenessofthepersonalsellingeffort,i.e.,makingmoreproductiveuseofsalespersons'time,willbeenhancedifthescheduleforcallingoncustomers,bothactualandpotential,canbeplanned.Clearly,twofactorsareofimportance,namely,thetimeavailabletothesalespersonandtheneedsofthecustomer.Intoday'scompetitiveenvironment,thelattershouldpredominate.Somecustomersmayneedmorefrequentcontactwithsalespersons,somemayevenspecifythefrequencyandthetimestomeet.Theobjective,therefore,ofcallplanningistousetheresourceofpersonalsellingasefficientlyaspossiblewithnounnecessaryorduplicatedcalls.Timeshould,however,besetasideforpossibleemergencycallsasrequestedbycustomers.

Bibliography

Wilson,M.T.(1983).Managingasalesforce(2ndedn).Aldershot:Gower.

DAVIDYORKE

ChannelsofDistribution

Productsandservicesaremovedfromtheirsourceofproductiontothecustomerbymeansofachannelofdistribution.Thechannelmaybesimplewhentheproducersellsdirecttocustomers(through,forexample,DIRECTMAIL)oritcanconsistofoneormoreintermediaries,suchasagents,

WHOLESALERS,andRETAILERS.Theform,andcomplexity,ofthedistributionchannelemployeddependsontheproduct(itsperishability,bulk,frequencyofpurchase,whetherornotitisanindustrialorconsumerproduct),thecustomersfortheproduct,andtheirgeographicaldispersion.

Aproducermayemployanintermediarybecauseitisthetraditionalpracticeoftheindustry,althoughoftensignificantcompetitiveadvantagescanbegainedfrominnovating.Sellingdirectcanbeemployedbyfirmssellingparticularcategoriesofindustrialproducts,suchasexpensivecapitalgoodsorbulkrawmaterials.Suchsalesinvolvehigh-valuedispatches,relativelyinfrequentpurchases,andspecialpre-saleNEGOTIATIONonpriceandtechnicalspecifications.However,directselling(seeDIRECTMARKETING)isemployedwidelyinconsumermarkets,andisgainingmorewidespreadappeal,partlybecauseoftheoftenconsiderablylowercosts.

Whereindependentintermediariesareused,adistinctioncanbedrawnbetweenthosewhoactmerelyonbehalfofthemanufacturer(e.g.,sellinganddistributingtheproduct)withoutpurchasingtheproduct(i.e.,theydonottaketitle),andthosewhotaketitleandundertakeallfurtherresponsibilityfordistributionandperhapsotheraspectsofmarketing.Intermediarieswhodonottaketitleincludebrokersandmanufacturers'salesagents.Abrokerwillattempttofindpossiblepurchasersoftheproductandbringthemanufacturerandthesepotentialcustomerstogether.Manufacturers'salesagentsfulfillsimilarfunctions,althoughtheywilloftenemploytheirownsalesstaff,carrystockonconsignment,andprovideancillaryservicessuchasfinancing,installation,

DAGMARModel

TheDAGMARmodel(DefiningAdvertisingGoalsforMeasuredAdvertisingResults)isamodelofMARKETINGCOMMUNICATIONSandwasdevelopedbyColley(1961)specificallyforthemeasurementofADVERTISINGeffectiveness.Itpostulatesthatthecustomer/buyermovesfromastateofunawarenessthroughAWARENESSoftheproductorservice,COMPREHENSION(anunderstandingofwhattheproductorservicewilldo),CONVICTIONthatitwillmeetrequirements,toACTION(apurchase).Abenchmarkmeasureisfirsttakenofthepositionalongthespectrumtowhichmembersofthetargetgroup(s)haveprogressed.Objectivesarethenestablished,advertisingisproduced,andafurthermeasureistakentodiscoverwhetherornotanyeffectiveshifthasoccurred(i.e.,whetherornottheobjectiveshavebeenmet).Precisemeasurementisimpossibleassomanyothervariablesarepresent.Furthermore,suchvariablesbecomemorenumerousthefurtheronemovestowardaction.

SeealsoCommunicationsobjectives

Bibliography

Colley,R.H.(1961).Definingadvertisinggoalsformeasuredadvertisingresults.NewYork:AssociationofNationalAdvertisers.

DAVIDYORKE

Database

Adatabaseisacollectionofrelatedinformationwhichiscapableofbeingorganizedandaccessedbyacomputer.Dependingonthesoftwarebeing

used,informationcanbeenteredinnumericorwordform.Commonnumericaldatabasesystemssuchasspreadsheetsallowahighdegreeofquerying,analysis,sorting,andextractionofinformation.Themostcommonusageofdatabasesinmarketingistodevelopacustomerdatabase.Typically,customerinformationsuchaspurchasehistory,valueandtimingoforders,responsestopreviousoffers,name,address,anddemographiccharacteristicswillbegatheredaswellasadditionalinformationfromsalespersons'reportsandexternalsourcessuchasgeodemographicprofiles(seeGEODEMOGRAPHICS).Databasemarketingallowsclosermonitoringofacompany'scustomersandcanbeusedto:identifythemostprofitable/leastprofitablecustomers,allowcross-sellingofgoods,identifypossiblecustomersegments,andhelpincommunicatingindividuallywithcustomers.Databasemarketinghasdevelopedhandinhandwithamoretailoredapproachtomarketinggoodsandservices,sincemoreisknownaboutcustomersasindividualsandtheycanbereachedthroughDIRECTMAILcampaigns.

Databasecanalsobeusefulforbibliographicsearches,sitelocation,MEDIAPLANNING,marketFORECASTING,marketpotentialstudies,andMARKETSEGMENTATIONstudies.Manycommercialnumericdatabasesexistwhichcontaininformationonsales,populationcharacteristics,thebusinessenvironment,economicforecasts,specializedbibliographies,andothermaterial.Forexample,ABI/Informcontainsabstractsofarticlesinapproximately1,300businesspublicationsworldwide.Predicasts(PTS)providesnumerouson-linedatabasesonproducts,markets,competitors,demandforecasts,annualreports,etc.seePROFITIMPACTOFMARKETINGSTRATEGIES(PIMS)isan

EconomicEnvironment

TheeconomicenvironmentisoneoftheelementsintheMARKETINGENVIRONMENTinwhichasupplierorganizationisoperating.Anationalgovernment,aftertakingaccountofinternationalfactorssuchascapitalandcurrencymovements,isresponsibleforcreatingandmaintainingafavorablemacroeconomicenvironment(seeMACROENVIRONMENT).Itachievesthisbytheuseofmonetaryandfiscalpoliciesaimedatmanipulatingthelevelsofinflationandemploymentand,hence,thelevelsofDISPOSABLEandDISCRETIONARYINCOMEamongvarioussegmentsofthepopulation.Thus,thelevelofeconomicactivitywillgovernthepossiblesuccessofallorganizations.Atanyonetime,theeconomicenvironmentfordifferentcountrieswillvarywidely.Thus,theabilitytoforecastchangesfromcurrentbaselevelswillbeamajorfactorinthedecisiontoinvestornot.

Bibliography

Dibb,S.,Simkin,L.,Pride,W.M.&Ferrell,O.C.(1994).Marketing,conceptsandstrategies(Europeanedn).Boston,MA:HoughtonMifflinCo.Chapter2.

Palmer,A.&Worthington,I.(1992).Thebusinessandmarketingenvironment.Maidenhead:McGraw-Hill.Chapter6.

Semenik,R.M.&Bamossy,G.J.(1993).Principlesofmarketing.Cincinnati,OH:South-WesternPublishingCo.Chapter2.

DAVIDYORKE

EFTPOS

EFTPOSorelectronicfundstransferatpointofsale,referstodebitor"plastic"cardpaymentatthepointofsalebydirectfundstransferfromthe

customer'saccounttotheretailer'saccount.Itevolvedintheearlytomid1980s.Itisanareaofcontinuingdevelopmentandisfastbecomingaleadingpaymentsystemforretailers.

Bibliography

McGoldrick,P.J.(1990).Retailmarketing.Maidenhead:McGraw-Hill.

Penn,V.(1990).RetailEFTPOS90:Paperholdsoutagainstplastic.InternationalJournalofRetailandDistribution,19,(1),1012.

STEVEGREENLAND

ElectronicDataInterchange(EDI)

Electronicdatainterchange(EDI)referstocomputer-to-computerexchangeofstandardbusinessdocumentationinmachineprocessableform.EDImessagesarehighlystructuredsothatinformationgeneratedbyoneorganizationononecomputercanbereadbythatofanothercomputerinthesameoradifferentorganization.TheprimeapplicationsforEDIhavebeenfortransactions,e.g.,ordersandinvoices.Thebenefitsofthishavebeenfoundinspeedinguptradecommunicationsandreducinglaborcosts.Intheautomotiveindustry,EDIisusedbycomponentsuppliers,manufacturersanddealerstofacilitatethetradingprocessesinvolvedinbuyingandsellingcomponentsandcars.

Bibliography

Holland,C.,Lockett,G.&Blackman,I.(1992).Planningforelectronicinterchange.StrategicManagementJournal,13,359550.

MARGARETBRUCE

FactorAnalysis

Factoranalysis,atypeofMULTIVARIATEANALYSIS,isconcernedwiththeinterrelationshipswithinasetofvariablesandwithreducingthevariablesrequiredtorepresentasetofobservations.Theprocedureinvolvestheconstructionofanumberoffactorstoexplainthevariationinthemeasuredvariables.Thedatareductionarisesbecausethenumberoffactorscreatedislessthanthenumberofvariables.Oneexamplehas17variablesconcernedwiththeusefulnessof17riskrelieversexplainedbythreefactorsidentifiedasclarifying,simplifying,andrisk-sharingfactors.

Factoranalysisisempiricalinthatthecomputationsarecarriedoutonthedataset,thenumberoffactorsbeingdeterminedbyastoppingrule.Thefactorsmayormaynotbemeaningfullyinterpretedtofitinwithanytheoreticalideas.Ifmeaningfulfactorsareobtained,factorscoresforeachcasearecomputedforfurtheruse,e.g.,todescribeindividualsorasvariablesinmultipleregression(seeREGRESSIONANDCORRELATION)orinCLUSTERANALYSIS.

FactoranalysisisbestcarriedoutusingacomputerpackagesuchastheSTATISTICALPACKAGEFORTHESOCIALSCIENCES,orSPSS.STRUCTURALEQUATIONMODELShaveextendedtheideasoffactoranalysis.

Bibliography

Hair,J.F.,Anderson,R.E.&Tatham,R.L.(1987).Multivariatedataanalysis(2ndedn).NewYork:Macmillan.Chapter6.

MICHAELGREATOREX

Feel-Buy-LearnModel

Thefeel-buy-learnmodelinMARKETINGCOMMUNICATIONS(see

alsoAIDAMODEL,HIERARCHYOFEFFECTSMODELandINNOVATION-ADOPTIONMODEL)suggeststhatinparticularsituationsbuyers/customersdonotfollowthelogicalLEARN-FEEL-BUYsequence.IntheFBLsituation,buyers/customershaveimagesofandfeelingstowardproductsandservicespriortopurchasebutlearningabouttheproduct(service)attributesdoesnotoccuruntilafterpurchase.Thishappens,forexample,whenitisnoteasyorpossibletodescribeaproductorserviceusingwords;insteadpicturesorimagesareusedtoinvokefeelingsinthepotentialbuyers'/customers'mindsinthehopethatsuchfeelingswillleadtoapurchase.Examplesincludeperfume,travel,aspectsofentertainment,andleisureactivities.

SeealsoLearn-feel-buymodelandBuy-feel-learnmodel

Bibliography

Dickson,P.R.(1994).Marketingmanagement(internationaledn).FortWorth:TheDrydenPress.Chapter12.

Kotler,P.(1994).Marketingmanagement:Analysis,planning,implementationandcontrol(8thedn).EnglewoodCliffs,NJ:Prentice-Hall,p.602.

DAVIDYORKE

FinancialPlanningforMarketingCommunications

ExpenditureonMARKETINGCOMMUNICATIONSactivitiesmustbemonitored,evaluated,andcontrolled.Suchcontrolcanonlybeundertakenagainstaplan,usingoneofthecommunicationmodels.Theplanshould

Gatekeepers

Gatekeeperscanhaveanimportant(ifoftenunnoticed)informalinfluenceonorganizationalpurchasing(seeORGANIZATIONALBUYINGBEHAVIOR;PURCHASINGPROCESS),althoughtheyarenotmembersoftheDECISION-MAKINGUNIT(DMU)inaformalsense.Thetermreferstothoseindividualswhocontrolaccesstoanorganization(suchasreceptionists,telephoneoperators,securitystaff,personalassistants,secretaries,andaides)andsomayinfluencetheflowofinformationintoanorganization.Asinformationisacrucialaspectoftheprocessofmarketingbetweenorganizations,theinfluenceofgatekeeperscanbeappreciated.

DOMINICWILSON

GenericStrategies

Theseareamenuofbroadorgeneralstrategieswhichcanbeappliedbydifferentorganizationsindifferentcontexts.Writersonstrategytendtohavetheirownlists.Forexample,IgorAnsoff(1965)presentedthematrixoffour"directional"strategies(seeDIRECTIONALMATRIX).MichaelPorter(1980)definedthewidelyknowngroupofgenericstrategies:COSTLEADERSHIPSTRATEGY,DIFFERENTIATIONSTRATEGYandFocusSTRATEGY(seealsoCOMPETITIVESTRATEGY).Othershaveproducedmoreextensivelists.Mintzberg(1988)developedwhathearguedisacomprehensivesetofgenericstrategies,groupedintofiveclusters.Therearethosewhichareconcernedwith:locatingthecorebusiness,i.e.,definingwhataretheboundariesofthebusiness,itsessentialprocesses,etc.;distinguishingthecorebusiness,i.e.,identifyingwhatisdifferentaboutthebusinesswhichcanprovideacompetitiveadvantage,includinghowvalueisaddedandthecorecompetitivestrategiesithasadopted;elaboratingthecorebusiness,suchasdevelopingitsproductofferingwithinthebusinessandotherstrategiesdefinedwithintheAnsoffmatrix;

extendingthecorebusiness,suchasthroughdiversification,verticalintegration;andreconceivingthecorebusiness,suchasthroughredefiningthebusinessintermsofbroaderneeds,ratherthanfromanarrowproductortechnologyperspective,asLevitt(1960)argued.

Thenotionofgenericstrategiescanbecriticizedalongtwofronts.First,theycanonlybepresentedinbroadoutlineformsincethespecificfeaturesofthebusiness,andthecontextwithinwhichtheorganizationoperates,willdefinethecontentandinfluencetheprocessofimplementation.Second,thecompetitiveprocessinvolvesrivalrybetweenbusinessesseekingtosecuresomeadvantagefrombeingdifferent,sothatthemostappropriatecompetitivestrategiesarelikelytobethosewhichareinnovativeoratleastdifferentinsomewayfromthoseofotherfirms,anddonotfollowsomeacceptedstrategicrecipe.

Bibliography

Ansoff,H.I.(1965).Corporatestrategy:Ananalyticapproachtobusinesspolicyforgrowthandexpansion.NewYork:McGraw-Hill.

Levitt,T.(1960).Marketingmyopia.HarvardBusinessReview,38,(4),JulyAug.,4556.

Mintzberg,H.(1988).Genericstrategies:Towardacomprehensiveframework.InAdvancesinstrategicmanagement,Greenwich,CT:JAIPress,vol.5,pp.167.

Porter,M.(1980).Competitivestrategy:Techniquesforanalyzingindustriesandcompetitors.NewYork:FreePress.Chapter2.

Rumelt,R.(1980).Theevaluationofbusinessstrategy.InWilliamF.Glueck(Ed.),Business

Imageistheperceptionofaservice,brand,product,ororganizationbyitspublics.Forexample,aFordEscortmaybeperceivedindifferentwaysbyForddealers,bythecorporatebuyerofafleetofcars,byafamilyman,andbyasinglefemalebuyer.Ahospital'simageincludesallaspectsofpatientcare,customerservice,andtheoverallimpressionofthehospitalbythosewhoencountertheorganizationinavarietyofformsaspatient,employee,andlocalresident.Theimage(oridentity)ofanorganizationisthesumofallthewaystheorganizationchoosestopresentordefineitselftothevariouspublics.Thisincludesthephysicalenvironment,stationery,publications,names,languagestyle,signs,advertisements,uniforms,andsoon.

Bibliography

Aaker,D.A.&Myers,J.G.(1987).Advertisingmanagement(3rdedn).EnglewoodCliffs,NJ:Prentice-Hall.Chapter5.

MARGARETBRUCE

Impact

InthecontextofADVERTISING,anddecisionsrelatingtochoiceofmedia(seeMASSMEDIA),organizationstakeaccountofthepotentialimpactofadvertisements.Impactisthequalitativevalueofanexposurethroughagivenmedium,e.g.anadvertisementforkitchenapplianceswouldhaveahigherimpactinGoodHousekeepingthaninSportsIllustrated.

SeealsoAdvertising

DAVIDYORKE

Implementation

TheimplementationofstrategyisregardedasthethirdpartofafourstageprocessofSTRATEGICPLANNINGinvolvingthestagesofanalysis,planning,implementation,andcontrol.Theprocessassumesthatafteranalysis,plansaredevisedwhichactasblueprintsforaction.Appropriatefeedbackmechanismsshouldbeinplacetodetectdeviationsfromplanssothat,wherepossible,actionscanbetakentoputthebusinessbackoncourse.

Thisperspectivedepictsthedevisersofplansasseparatefromthosewhoimplementthem.Action,then,issomehowdepictedasdivorcedfromtheformulationofstrategywhich,accordingtoBonoma&Crittenden(1988),hastendedtoreceivethegreateracademicemphasis.

However,itmightbeexpectedthattheimplementationofstrategymightitselfbesignificantinshapingthewayinwhichitemerges.Thoseattheinterfacewiththemarket,forexample,willbefacedwithissuesonaday-to-daybasisthattheplannersremotefromcustomersandtheebbandflowofthemarketwillnothaveadetailedgraspof;while,ofcourse,theplanformulatorscannotpossiblyanticipatealloftheissuesandchangeswhicharise.Thesemaydemandpragmaticresponseswhich,inturn,canaffecttheemergingstrategy.Mintzberg(1990)criticizedtheviewofwhathetermedthe"designschool"whichportraysformulationandapplicationasseparatestages:"OurcritiqueoftheDesignSchoolrevolvesaroundonecentraltheme:itspromotionofthoughtindependentofaction,strategyformationaboveallasaprocessofconception,ratherthanasoneoflearning"(182).

Becauseoftheuncertainties(seeUNCERTAINTY),itwouldberealistictoassumethatorganizationsneedtohavetheflexibilityto

JointVentures

seeINTERNATIONALJOINTVENTURES

KeyAccount

"Account"herereferstoacustomer/supplierrelationship,andassomeaccountsaremoreimportantthanotherstheymaybetermed"keyaccounts"becauseoftheirimplicationsforeitherorallparties.Manydifferentfactorscanmakeanaccount"key"suchas:thevolumeorvalueoftheexchangesinvolved;theknock-onimplicationsoffailureinanaccount(e.g.,faultyoilfilterscanimmobilizevastmachines);theanticipatedflowofrepeatbusiness(e.g.,frompilotprojects);orthereputationofaparticularcustomer(e.g.,TheQueen)orsupplier(e.g.,"Intelinside").Othercustomer/supplieraccountsmaybeparticularlyimportantbecauseofindirectfactorse.g.,acustomermaybeinvolvedwithasupplierincollaborativeproductdevelopment,orinqualityimprovementmeasures,orinmutualbenchmarking.Theimportanceof"keyaccounts''shouldbereflectedinthesensitivitywithwhichsuchaccountsaremanagede.g.,intheseniorityoftheaccountmanagersandtheflexibilityallowedinnegotiations.

DOMINICWILSON

MacroEnvironment

Theenvironmentofanorganization(seeMARKETINGENVIRONMENT)isgenerallyregardedasconsistingofaMICROENVIRONMENTandamacroenvironmentwhichiscomposedofseveralmajorelementsoverwhichtheorganizationhaslittle,ifany,influence.Themajorforcesinthemacroenvironmenttendtobeviewedas:social,economic,legal,political,economic,andtechnological.Itisgenerallyassumedthatorganizationswillidentifythemajortrendsandpossiblefuturedevelopmentsinthesevariouscomponentsofthemacroenvironmentandthepossiblethreatstotheirexistingbusinessandtheopportunitiesforfuturedevelopments(seeSWOTANALYSIS).Inthissense,organizationsareoftendepictedasbeingreactive,althoughitisclearthattheycanbeactiveincertainareas,throughmajortechnologicalinnovationandattemptsatinfluencingthepolicy-makingandlegislativeprocesses.Anorganization'senvironmentalanalystscanbeveryselectivewithrespecttothoseaspectsofthemacroenvironmentonwhichtheyfocusandintheirinterpretationofthem.

SeealsoEnvironmentalanalysis

Bibliography

Brownlie,D.B.(1994).InM.J.Baker(Ed.),Themarketingbook(3rdedn).Oxford:Butterworth-Heinemann.Chapter7.

Sanderson,S.M.&Luffman,G.A.(1988).Strategicplanningandenvironmentalanalysis.EuropeanJournalofMarketing,22,(2),1427.

DALELITTLER

MacroMarketing

Macromarketingembracesmarketing'sroleinsocietyandcanbedefinedas"thedeliveryofastandardoflivingtosociety."Theaggregationofall

organizations'marketingactivitiesincludestransportationanddistribution,andsotheefficiencyofthesystemformovinggoodsfromproducerstoconsumersmaysubstantiallyaffectasociety'swell-being.Thus,macromarketingistheaggregateofmarketingactivitieswithinaneconomy,orthemarketingsystemwithinasociety,ratherthanthemarketingactivitiesofasinglefirm.

Bibliography

Zikmund,W.G.&d'Amico,M.(1995).Effectivemarketing:creatingandkeepingcustomers.StPaul,MN:WestPublishingCo.Chapter1,p.21.

BARBARALEWIS

Magazines

Magazinesarepublicationswhicharepurchasedandreadbypeopleaspartoftheirlifestyle(seeLIFESTYLES).Magazinecontentmayrelateto:aspectsofhomelife,e.g.,cooking,gardening,do-it-yourself;leisure,sporting,andsocialactivities;education(e.g.,TheTimesHigherEducationSupplement)andemployment.SomemagazinesareindustryspecificandmaybereferredtoasTRADEJOURNALS(e.g.,TheGrocer,DrapersWeekly)andsoareboughtbyorganizationsaswellasindividuals;othersareassociatedwithprofessionalbusinessgroups(e.g.,Investors'Chronicle,AccountingAge).

Thereadershipofmagazinesmay,therefore,bespecific(e.g.,AnglingWeekly)andperhapsalsosmall(PopularBridge)ormuchbroader(Woman'sWeekly)andpossiblywithamasscirculation(e.g.,RadioTimesandTVTimes)Consequently,magazinereadersmaybepro-

NaturalEnvironment

ThenaturalenvironmentisoneoftheelementsoftheMARKETINGENVIRONMENT.Thisaspectisconcernedwithecologicalissuessuchastrendsintheavailabilityofrawmaterialsandenergy,andincreasingmeasurestoprotectthenaturalenvironment.

DOMINICWILSON

seeCONSUMERNEEDSANDMOTIVES

Negotiation

Ithasbeenarguedthatcustomer/suppliernegotiationshavetraditionallytendedtobepartofa"zero-sumgame"andthatanadvantageforoneside(e.g.,adiscount)was"won"throughadisadvantagefortheother(Dion&Banting,1988).Thisis,ofcourse,anoversimplifiedviewofthecomplexfieldofcustomer/suppliernegotiationsandtherewouldhavebeenmanyexceptionstothisexaggeratedlyaggressivepictureofnegotiation.Nevertheless,thisimageseemstohavehadapowerfulinfluenceonthesalesnegotiationliterature,muchofwhichhasfocusedontechniquesformanipulatingcustomersintosalesagreementswhich,bydefinition,theywouldotherwisehavenegotiatedfurtherorevendeclined.Amoresophisticatedviewofmarketingnegotiationnowprevailswhereby"win-win"situationsaresoughtinwhichbothsupplierandcustomergainfromnegotiation.Anexampleofthismutuallybeneficialapproachistheideaoflong-termcustomer/supplierpartnerships(seeSUPPLIERS)wherecommitmentandtrustonbothsidesreplacethetraditionalimageofsuspicionandhostility.Inreality,differentcircumstancesandpersonnelwill

requiredifferentnegotiatingstylesandthishasalwaysbeenthecase.Thefundamentalprincipleremainsthateffectivenegotiationdependsnotjustonskillandtechniquesbutonunderstandingthepositionofallpartiesinvolvedaprinciplewhichliesattheheartofmarketingmoregenerally.

Bibliography

Carlisle,J.&Parker,R.(1990).Beyondnegotiation.Chichester:JohnWiley.

Dion,P.A.&Banting,P.M.(1988).Industrialsupplierbuyernegotiations.IndustrialMarketingManagement,17,(1),Feb.,4348.

Fisher,R.&Brown,S.(1988).Gettingtogether:buildingarelationshipthatgetstoYes.Boston,MA:HoughtonMifflinCo.

Lancaster,G.&Jobber,D.(1985).Salestechniqueandmanagement.London:Pitman.

Lidstone,J.B.J.(1991).Manualofsalesnegotiation.Aldershot:Gower.

McCall,I.&Cousins,J.(1990).Communicationproblemsolving.Chichester:JohnWiley.Chapter6,89115.

DOMINICWILSON

NetMargin

Netmargin(generallyexpressedasapercentage)referstotheexcessofsalesrevenuesovercumulativecosts,aftersubtractingfixedcostsbutbeforetakingaccountofanyextraordinary,exceptional,ornon-product-relatedissues.

SeealsoMargin

DOMINICWILSON

Observation

Observationisamethodofcollectingdataonatopicofinterestbywatchingandrecordingbehavior,actions,andfacts.Informal,unstructured,observationisaneverydaymeansofcollectingmarketinginformation.However,plannedobservationislikelytoproducebetterinformationthancasualobservation.Observationcaninfactbestructuredorunstructured,withdisguisedorundisguisedobservers,inanaturaloracontrivedsetting,usinghumanand/orelectronic/mechanicalobservers.

Observationisusedinsteadof,orinconjunctionwith,surveysinvolvinginterviewsutilizingquestionnairesordepthinterviews.Observationislesssuitablethaninterviewtechniquesformeasuringattitudes,needs,motivations,opinions,etc.,exceptwherethesubjectsbeingstudiedareunabletocommunicateverbally,e.g.,childrenandanimals.Observationisunsuitableforstudyingeventsthatoccuroveralongperiodoftimeorthatareinfrequentorunpredictablewhenanexcessiveamountoftimeandmoneymayberequiredtocarryouttheresearch.Observationissuitablefortrafficcounts,forpackagingexperiments,forretailaudits,etc.,wheredataaremoreeconomicallygatheredthroughobservationthanthroughinterviews.Sometimesdataarecollectedbyobservationandthroughquestionnairesandtheresultscompared.

Structuredobservationisusedwhenaproblemhasbeendefinedpreciselyenoughfortheretobeaspecificationofthebehaviorandactionstobestudiedandthewaysinwhichtheactionswillbecodedandrecorded.Unstructuredobservationisusedinexploratoryresearchwheretheproblemhasnotbeenidentifiedandwheretheobserverhaslessguidanceaboutwhattonoteandrecord.Structuredobservationimpliespriorknowledgeofthesubjectunderstudy,ofhypothesestobetested,orinferencestobemade.Forthislatterreason,trainedhumanobserversmaybepreferredtomechanicalobserversasahumanobservercanmakesuchinferencesina

waythatamachinecannot.Perversely,thisisapotentialweaknessofthemethod,relyingasitdoesonthesubjectiveandpossiblybiasedjudgementoftheobserver.

Indisguisedobservationsthesubjectsdonotknowthattheyarebeingobserved.Disguisedobservationsareusedinordertoovercomethetendencyforsubjectstochangetheirbehavioriftheyknowthattheyarebeingwatched.Mysteryshopping,whereobserverstakeontheroleofstoreorbankcustomersinordertoassessthelevelofserviceofferedbysalesstaff,isoneexampleofdisguisedobservation.Otherexamplesofdisguisedobservationincludetheuseoftwo-waymirrorsorhiddencameras.UndisguisedobservationsincludethemeasurementofTVaudiencesbasedonasampleofhouseholdsinwhichon-setmetersrecordwhenaTVsetisinuseandtowhichchannelitistuned.

Sometimesitispossibletostudybehaviorinnaturalsettings.Countinghowmanypeopleturnrightandhowmanyturnleftatthetopofanescalatorinadepartmentstorecanbedoneinanaturalsetting.Likewise,theeffectofnewpointofsaledisplaymaterialforaproductmaybestudiedbyobservingthesalesoftheproductinasupermarketbycountingthenumbersinstockatthebeginningandattheendofaperiodandadjustingforadditionstostock;thisisobservationresearchdoneinanaturalsetting.However,theresearcheroftenwantstocontrolforinterveningvariablesbyresearchinginalaboratory,whichisobviouslyanunnaturalsetting.Aswellascontrollingintervening

Packaging

Inthepast,commoditiesweretypicallysoldaslooseitems,themostwidelyusedformofpackagingwasapaperbag,andpackaginghadapurelyfunctionalrole,i.e.,toprotecttheproduct.Today,however,theplethoraofcompetingproductsfromwhichtheprospectivebuyerhastochoosepointstopackaging'sroleinproductpromotionbycommunicatingtheproduct'sfeatures,benefits,andimage.Yavas&Kaynak(1981)arguethataneffectivepackagedesignisapromotionaltoolandshould:attracttheprospectivebuyer,communicaterapidlyandclearly,createadesirefortheproduct,andtriggerasale.Southgate(1994)suggeststhatcreativepackagingaddsvalueandhelpstoachievebrandpreference.Abadlydesignedpackagemaycommunicatetotheconsumerthattheproductitcontainsisoflowvalue.Conversely,awell-designedpackageisevidenceofthecareandattentionthathasgoneintotheproduct.Apackagehastoselltheproductatthepointofsaleandactasthesalestoolinself-serviceenvironments.

Bibliography

Southgate,P.(1994).Totalbrandingbydesign.London:KoganPage,p.21.

Yavas,V.&Kaynak,E.(1981).Packaging:Thepast,presentandthefutureofavitalmarketingfunction.ScandinavianJournalofMaterialsAdministration,7,(3),3553.

MARGARETBRUCE

Pareto'sRule

The20/80rule,attributedtotheItalianeconomistandpoliticalphilosopher,VilfredoPareto,suggeststhat20percentoftheproducts/customersaccountforapproximately80percentoftherevenues/profits.Themajorcustomers

orproductsmightthenactasafocusoftheorganization'sactivities,whichbegsthequestionofwhattodowiththeoftenlongtailofproductsorcustomers.Importantandobviouscriteriaarewhetherornotthebenefittocostratioofservicingcustomersorsupplyingproductsinthe"tail"isorcouldbeincreased,andtherearestrategicreasonsforretainingthesecustomersorproductsinthePRODUCTMIX.

DALELITTLER

PartnershipSourcing

Thereisconsiderableevidencetosuggestthatmanagingsourcingrelationshipsaspartnerships,whetherupstreamordownstream,cangenerateasignificantCOMPETITIVEADVANTAGEforbothpartners(Johnston&Lawrence,1988;CBI,1991;Hanetal.,1993;Lamming,1993).Partnershipsourcingreferstothepracticeofsourcingonanexclusivebasisfromasinglesupplieroveranextendedperiodoftimeandwithextensivecustomeraccesstotheoperationsandmanagementsystemsofthesupplier.Thisprovidesobviousbenefitstothesupplierintheguaranteeddemandfortheirofferingstothecustomer.Customerbenefitsincludetheguaranteesoffairprices,appropriatequality,andcontinuityofsupplywhichareunderwrittenbythecustomer'saccesstothesupplier'soperationalsystemsandaccounts.Bothorganizationsbenefitfromtheincreasingexperience,mutualunderstanding,andpersonalrelationshipswhichdevelopasthepartnershipbecomesestablished.Naturally,aswithallcollaborativerelationships,thesebenefitsmaybecome"vulnerabilities"ifoneofthepartiesattemptstotakeadvantageoftheother.Formanyorganizationstherequirementtotrusttheirsuppliersor

QualitativeResearch

Qualitativemarketingresearchaimstofindoutwhatisinaconsumer'smind.Itisamajormethodologyusedinexploratoryresearchbyhelpingtheresearcherbecomefamiliarwithaproblemfromtherespondent'spointofview.Qualitativeresearchstudiesfeelings,opinions,needs,motives,attitudes,beliefs,pastbehavior,etc.,whicharedifficulttoobservedirectlyortoobtaindataonusingstructuredapproachessuchasquestionnairesurveys(seeSURVEYRESEARCH).

Qualitativemethodsinclude(one-to-one)DEPTHINTERVIEWSandFOCUSGROUPinterviews;thesemethodsarelessstructuredthanthemajoralternativequantitativeapproachessuchasthoseusingquestionnaires.TheyalsoincludePROJECTIVETECHNIQUESwhichconcentrateonassociation,completion,andconstructiontechniques.

Thereareseveralreasonsfortheuseofthelessstructuredqualitativeapproach.Peoplemaybeunwillingtoanswer,truthfullyanddirectly,embarrassingquestionsorquestionsthatreflectontheirstatusorwhicharesubjecttosocialpressure.Theinterviewermay,then,havetoinvestigatesuchtopicsindirectly.Theresearchermaybeunable,especiallyatanexploratorystage,todeviseaquestionnairethatwillallowrespondentstodescribefullytheiremotions,behavior,etc.inacomplicatedsituation.Anunstructuredapproachallowstherespondentstochoosehowtoreportontheirfeelings,needs,motives,attitudes,values,etc.Inadepthinterview,awell-trainedinterviewerisabletofollowuparespondent'sanswertoaquestionandprobedeeperintotherespondent'sthinkingandthismayleadinunanticipatedwaystotheuncoveringofunderlyingorhiddeninformation.

Amajordifficultyofqualitativeresearchisthesubjectivenatureoftheanalysis,interpretation,andreportingoftheresults.Aproblemisthe

requirementforhighlytrainedinterviewers,usuallypsychologists.Interviewerbiascanalsobeaproblem.Samplesareoftensmallandunrepresentativeand,thus,itisdifficulttogeneralizeresultsfromqualitativestudiestothepopulationofinterestasawhole.

QualitativeresearchismostusefulintheproblemdefinitionstageoftheMARKETINGRESEARCHprocesswheretheresearcher,whileawarethatthereisamarketingproblem,istryingtodefineorarticulatetheproblempriortoattemptingtosolveit.Quantitativeresearch,ontheotherhand,ismoreusefulatthelater,decision-making,stageofthemarketingresearchprocess.

Bibliography

Malhotra,N.K.(1993).Marketingresearch:Anappliedorientation.EnglewoodCliffs,NJ:Prentice-Hall.Chapter6.

MICHAELGREATOREX

QuestionnaireDesign

QuestionnairesareassociatedmainlywithSURVEYRESEARCHbutareusedsometimesaspartofexperimentalresearch(seeEXPERIMENTATION).Aquestionnaireisaformalizedsetofquestionsforobtaininginformationfromrespondents.Aquestionnairecanbeadministeredinaface-to-facepersonalinterview,bytelephone,bycomputer,orbypost.

Questionnairesareusedtomeasure:(1)behavior;past,present,orintended;(2)knowledge;(3)attitudesandopinions;and(4)

Radioisabroadcastingmediumwhichdependsforitsefficacyonthespokenword.Thedevelopmentofcommercial,asopposedtogovernment-controlled,radiostations,providesADVERTISINGopportunities.

Radioadvertisinghastheadvantagesof:localandregionalflexibility;cheapproductionandmediacosts;veryshortleadtimes;strengthofcommunicationwithtargetaudiences;andtheabilitytoreachpeoplewhoareonthemove(e.g.,driving)andatwork.However,thereislimitednationalcoverage,andcreativeopportunity,andmany"listeners"areusingtheradioasabackgroundwhileinvolvedinotherprimaryactivities(bothatworkandathome).TheseelementsrelatetotheIMPACTthatradioadvertisinghasinreachingitstargetsand,inturn,itscost-effectiveness.

Bibliography

Crosier,K.(1994).Promotion.InM.J.Baker(Ed.),Themarketingbook(3rdedn).(Chapter21,pp.484533.Oxford:Butterworth-Heinemann.

DAVIDYORKE

RatingScales

Ratingscalesallowmeasurementsofobjectstoberecorded.TheyareusedinMARKETINGRESEARCHquestionnairestomeasurearespondent'sattitudestowardsproducts,beliefsconcerningproductattributes,importancesofproductattributes,intentionstobuy,etc.Therespondentisrequiredtoprovideanestimateofthemagnitudeofanattitude,belief,importance,orlikelihoodbyplacingamarkonanumericalscaleorbyselectingoneofaseriesofnumberedorderedcategoriesonthescale.

Acontinuousratingscalerequirestherespondenttoindicatearatingbyplacingamarkattheappropriatepositiononalinethatrunsfromone

extremetotheother.Forinstance,theanswerstoquestionsconcerningthelikelyoutcomeofsomeeventmayberecordedonascalegoingfromimpossibletocertain.Alternatively,theendpointsofthescalemaybemarkedas0and100withintermediatepointsmarkedalongthescaleinintervalsof20.Typically,theresearchertreatstherecordedscoresasintervaldata.

Inanitemizedratingscale,therespondentrecordsaratingonascalethathasasmallnumberofcategories.Associatedwitheachcategoryisanumberoraseriesofdescriptionsthatareordered.Itemizedratingscalesarepopularinmarketingresearchandoftenformpartofmorecomplicatedmulti-itemratingscales.CommonlyusedratingscalesaretheLikertandsemanticdifferentialscales.

ALikertscalerequirestherespondenttorecordhis/herdegreeofagreementwitheachofaseriesofstatementsabouttheobjectoftheresearch.Eachscalehasasmallnumberofcategories,typicallyfivecategories,rangingfromstronglydisagreetostronglyagree.Fordataanalysispurposeseachcategoryisgivenanumbergoingfrom,say,1forstronglydisagreeto5forstronglyagree.Analysiscanbecarriedoutonanitem-by-itembasisusingfrequencydistributionsorarithmeticmeans(profileanalysis).Useofarithmeticmeansassumesthatthescalesareinterval.Alternatively,togetanoverallassessmentoftheobjectbeingstudied,summatedscoresoverthebatteryofscalescanbecalculatedforeachrespondent,rememberingtoreversethescoresfornegativestatementssothatstronglyagreeingtoapositivestatement

SalesCallCycle

SALESFORCEmanagement(seeSALESMANAGEMENT)usuallyinvolvesdefiningthenumberofcallsthatasalespersonwouldbeexpectedtomaketoparticularcustomers.Customersmaybeclassifiedaccordingtotheirimportanceintermsofsalesvolume,profitability,reputation,andgrowthpotential,andthenumberofcallsduringaperiodspecifiedaccordingtotheimportanceoftheaccount.Thenumberofhoursthatsalesrepresentativesareexpectedtospendwithcustomersmaybeanadditionaloralternativetarget.Adistinctionmaybemadebetweenservicingexistingcustomersasagainstprospectingfornewaccounts.Companiesmayexpectsalesrepresentativestospendaproportionoftheirtimeseekingnewaccounts,andestablishatargetforthenumberofunsuccessfulcallstobemadetoaprospect.

Someflexibilityisrequiredinestablishingasalescallcycleinordertoallowthesalesrepresentativethediscretiontodealwith,forexample,unexpecteddemandsofcustomers.

Bibliography

Dalrymple,D.J.&Cron,W.L.(1995).SalesmanagementConceptsandcases.NewYork:JohnWiley.Chapters5,11.

DALELITTLER

SalesForce

Inmany,althoughnotall,organizations,thesalesforceistheprincipalmeansofobtainingorders.ThiswillbeachievedbyPERSONALSELLING,eitherbyvisitingcustomersorbyTELEMARKETING(telephoneselling)onaplannedbasis.Eachmemberofthesalesforcemayhaveaterritoryorgroupofcustomerswhichisorganizedgeographically,

byproduct/servicetype,bycustomertype,orbysomecombinationofthese.Salestargets(byvolumeorvalue)maybesetbut,inaddition,membersofthesalesforcemayhaveotherdefinedactivitiessuchascustomerservice(e.g.,problemsolvingandtraining),attendanceatEXHIBITIONS,andcollectingoverdueaccounts.

AfeatureofSALESMANAGEMENT,initsplanningandcontrolofthesalesforce,istobalancesalespotentialwithworkload.Forinstance,inthecaseofSALESTERRITORY,twoterritoriesmaycontainanequalpotential,intermsofactualandlikelypotentialcustomersandtheirdemandforcertainproducts/services,butthegeographicalspreadofthecustomersmaybetotallydifferentwithoneterritoryneedingmuchmoretravel.Ifsalespersons'remunerationistobeequitable,theworkload,howevermeasured,mustbeperceivedtobesimilar.Muchwilldependonthejobdefinitionofthesalesforceaslaiddownbysalesmanagementinthequesttosatisfybothcustomerneedsanditsowncorporateobjectives.

Bibliography

Cravens,D.W.&LaForge,R.W.(1983).Salesforcedeploymentanalysis.IndustrialMarketingManagement,12,July,179192.

Dalrymple,D.J.&Cron,W.L.(1995).SalesmanagementConceptsandcases.NewYork:JohnWiley.Chapter24.

Wilson,M.T.(1983).Managingasalesforce.(2ndedn).Aldershot:Gower.

DAVIDYORKE

SalesManagement

SalesmanagementisresponsiblefortheorganizationandperformanceoftheSALESFORCE.Morespecifically,

TargetMarket

Thisisagroupofpotentialusersorconsumerswhichisthefocusofthebusiness'smarketingeffortforaparticularproductorservice,usuallyidentifiedbymeansofMARKETSEGMENTATION.

FIONALEVERICK

Targeting

seeMARKETSEGMENTATION;POSITIONING

TechnologicalEnvironment

ThetechnologicalenvironmentisoneoftheelementsoftheMARKETINGENVIRONMENT.Thisaspectisconcernedwithdevelopmentsandtrendsintechnologynotonlyintermsofcustomerofferingsbutalsowithrespecttothetechnologyofproductionanddistribution.Forexample,therehavebeenimportantdevelopmentsinaspectsoftechnologyrelevanttomarketingitselfsuchastheuseofrelationaldatabases,barcodescanning,electronicdatainterchange,personalmobilecommunications,computerizedanimation,interactivemulti-mediasystems,andtelephoneshopping.

DAVIDYORKE

Telemarketing

Telemarketing(ortelephoneselling)systematicallyusesaDATABASEofactualandpotentialcustomerstodefineandselltocustomerswithahighprobabilityofpurchase.Greaterefficiencyisachievedby:avoidingexpensivesalesvisits;wideningtherangeofpossiblecontacts,particularlyforsmallerorganizations:andrespondingmorequicklytocustomer

requestsorcomplaints.Disadvantages,ifnotmanagedproperly,are:apossiblebreak-downincoordinationbetweentheinsideandoutsideSALESFORCE,ifbothareused;toomuchharassmentofcustomers;thecreationoftheimpressionthatitisacost-cuttingandlesspersonalsubstituteforafieldsalesforce;andlackofcoordinationofcustomersellingandservice.

Bibliography

Dickson,P.R.(1994).Marketingmanagement.FortWorth:TheDrydenPress.Chapter11.

Moncrief,W.C.,Shannon,S.,Lamb,C.W.Jr&Cravens,D.W.(1989).Examiningtherolesoftelemarketinginsellingstrategy.JournalofPersonalSellingandSalesManagement,Fall,112.

Winter,C.de(1988).Telephoneselling.London:Heinemann.

DAVIDYORKE

Teleshopping

seeTV-BASEDHOMESHOPPING

Television

Televisionisacommunicationsmedium(seeMASSMEDIA)combiningsoundandvisibilitywithanimation.Itsavailabilityiswidespreadindevelopedcountries,enhancedbythedevelopmentandgrowthofcablenetworksandsatellitechannels.TelevisionisamajorADVERTISINGmedium,itsmainadvantagesbeing:nationalorselectivecoverage;intrusiveness;anabilitytobuildawarenessquickly;afamilymedium;acapacitytostimulateINTERPERSONALCOMMUNICATIONS;andavailabilityofaccurateaudienceaudit/marketresearchdata.

UmbrellaStrategy

Anorganizationissaidtohaveanumbrellastrategywhenthereisacleardefinitionofstrategicgoals,andeventhegeneralstrategicdirection,bythechiefexecutive(orseniormanagement),butthedetailofhowthesegoalsaretobeachievedhasyettobedecided.Withintheseestablishedboundaries,thevariousactors(suchasfunctionalmanagers)havetheflexibility,oftenthroughaprocessofiterationandconsensusbuildingthatwillinvolveseniormanagement,todevelopthesubstanceoftheSTRATEGY,i.e.,themeansbywhichthestrategicgoalsaretoberealized.Thestrategyhasalsobeentermed"deliberatelyemergent"(Mintzberg&Waters,1985)astheleadershippurposefullyallowsotherstheflexibilitytodevisestrategiccontent.

SeealsoEmergentstrategy

Bibliography

Mintzberg,H.&Waters,J.A.(1985).Ofstrategies,deliberateandemergent.StrategicManagementJournal,6,(3),JulySept.,25772.

DALELITTLER

Uncertainty

Uncertaintyhastraditionallybeendefinedintermsofitsdifferencefromrisk,theclassicdistinctionbetweenthetwobeingmadebyKnight(1921).Hesuggestedthat"risk"appliestothoseinstanceswheretheoutcome(s)canbemeasured,i.e.,wheresomevalue(orprobability)canbeascribedtothepossibilityofsomeparticulareventoccurring.Uncertainty,ontheotherhand,applieswhenitisnotpossibletodothis.Hague(1971)adoptsaslightlydifferentterminology,distinguishingbetween"insurable"and"non-insurable"risk.Theformer,hesuggests,referstosituationswhereitis

possibletoassessthelikelihoodofaparticularoccurrencebasedonstatisticalanalysisbyexpertssuchasactuaries.''Non-insurablerisk"applieswhenitisdifficulttopredicttheoutcome,whichisthecase,soHaguecontends,inmostbusinessinvestmentdecisions.Shackle(1970)suggestedthatuncertaintyexistswhen"therecanbenoknowingforcertainwhatwillbetheconsequencesofaction"(21).

Some,e.g.,Freeman(1974),havearguedthatinthecaseoftechnologicalINNOVATION,wherethereisgenerallyconsiderableuncertaintyabouttheoutcome,uncertaintycanbeanaggregationofatleastthreedifferenttypes:market,technological,andgeneralbusinessuncertainty.Marketuncertaintyarisesfromthedifficultiesinpredictingcompetitors'actionsandthemarketreactionatdifferentprices.Technologicaluncertaintyoccursbecauseofthedifficultiesinvolvedinpredictingwhetherornottheinitialtechnicalspecificationswillbeachievedatacostwhichwillenablethecompanytosetapriceacceptabletocustomersandatthesametimemakeasatisfactoryreturn.Inmanycases,productdevelopmentmaybeattendedbyincreasingcostsofdevelopmentasunforeseentechnicalhurdlesarisedemanding,sometimes,noveltechnicalsolutions.Finally,generalbusinessuncertaintysurroundsallmajorinvestmentdecisions,andstemsfromthepossibilityofrandomevents.

Uncertaintycanhaveaprofoundimpactondecision-making,andespeciallythatrelatedtosignificantchanges.Itunderminesmanyoftheassumptionssurroundingthe"designschool"ofstrategyformation(Mintzberg,1990)(seeIMPLEMENTATIONofstrategy),andsuggeststheneedforflexibilityandCONTINGENCYPLANNING.

Validity

Ascaleorameasureisvalidifitmeasureswhatitisintendedtomeasure.Validityisestablishedbyconsideringthefollowingcriteria:facevalidity,reliability,criterionvalidity,andconstructvalidity.

Faceorcontentvalidityisthedegreetowhichameasurecapturesthecharacteristicsofaconceptonedesirestomeasure.Itisasubjectiveassessmentofthecorrespondencebetweenthetheoreticalconceptsunderstudyandthemeasurementsbeingconstructed.

HighRELIABILITYisessentialforvaliditybutdoesnotensurevalidity.Ameasuremaybereliablebutnotvalidwhenerrorsareconsistentorsystematic.

Criterionvalidityconsiderswhetherornotthescaleperformsasexpectedinrelationtoothervariables,thecriterionvariables.Thecriterionvariablesmaybeselectedattitudinal,behavioral,socioeconomic,orpsychographicvariables.Concurrentvalidityisassessedwhenthescalebeingevaluatedandthecriterionvariablesaremeasuredatthesametime.Predictivevalidityisassessedwhenthedataonthescalesarecollectedatonepointintimeandusedtopredictvaluesofthecriterionvariableswhicharemeasuredatalaterpointintime.

Constructvalidityinvolvesunderstandingtheconceptsthattheconstructsaremeasuringandtheirinterrelationships.Isaconstructedmeasurehighlypositivelycorrelatedwithothermeasuresofthesameconstruct(convergentvalidity),notcorrelatedwiththeoreticallyunrelatedconstructs(discriminantvalidity),orcorrelatedinanexpectedwaywithdifferentbutrelatedconstructs(nomologicalvalidity)?Aconstructisvalidifitbehavesasexpectedinrelationtootherconstructs.

Bibliography

Tull,D.S.&Hawkins,D.I.(1987).Marketingresearch:Measurementandmethod(4thedn).NewYork:Macmillan,pp.225228.

MICHAELGREATOREX

seeLIFESTYLES;PSYCHOGRAPHICS

ValueAdded

ThenotionofvalueaddedreferstotheprinciplethatvalueisaddedcumulativelytoaproductorservicebysuccessiveparticipantsintheVALUECHAIN.Thus,valueaddedatanyparticularstageofthechaincanbeestimatedas:valueofoutputlesscostofinput(notincludinglabor).Valueaddedanalysiscanprovideausefulinputtointernalproductivitycalculations(e.g.,valueaddedperpersonorperworkgroup)andcanalso,ofcourse,beanimportantbasisfortaxation.

ForthepurposesofPRICINGdecisionsitisimportanttoassessvalueintermsoftheuseratthenextstageinthevaluechain.Inotherwords,inacompetitivemarket,valueshouldbedeterminedbythe"customerperspective."Theconceptisalsoparticularlyusefulincompetitiveanalysiswhereorganizationscanexaminetheirownactivitiestoensurethattheyonlyengageinoperationswheretheyareabletoaddsignificantvalue,leavingotheraspectsoftheiractivities(e.g.,distribution,design)tospecialistsubcontractors.

DOMINICWILSON

ValueChain

Thevaluechainembracesthevariousactivitiesaimedatcreatingvalueforthecustomerandthemarginthatthefirmobtains.It

Wealth

Aperson'spurchasingpowerderivesfromDISPOSABLEINCOMEandDISCRETIONARYINCOME,resultingfrombothemploymentandothersources.Anincreasinglyimportantsourceisthatofwealth,i.e.,theownershipofassetssuchaspropertysavings,shares,etc.whichthemselvesyieldanincomeandwhichhelptocreatealifestyle(seeLIFESTYLES).Thesecondhalfofthe20thcenturyhasseenanincreaseinwealthamonglargenumbersofpeopleineconomicallydevelopedcountries,butasthepopulationsofsuchcountriesage,andthestateisunableorunwillingtosupportthoseinretirement,theincomefromwealthmaynotbespentintheshorttermbutmaybereinvestedforthefuture.

Bibliography

CentralStatisticalOffice.FamilySpending(annual).London:HMSO.

Dibb,S.,Simkin,L.,Pride,W.M.&Ferrell,O.C.(1994).Marketing,conceptsandstrategies(Europeanedn).Boston,MA:HoughtonMifflinCo.Chapter2.

UnitedStates,BureauoftheCensus.StatisticalabstractoftheUnitedStates.Austin:ReferencePress.

DAVIDYORKE

WheelofRetailing

Thisisatheorysuggestingthatentrantstoanewretailmarketwillbegintradingascut-price,lowoverhead,lowmargin,andlowstatusoperations(McNair,1958).Overtime,thesetraderswillincreasetheiroverheadsbyofferingadditionalservicesandproductlines,perhapsinbetterlocations,smarterpremisesandwithmoresophisticatedmarketingcommunications.Theseretailersarethenmorevulnerabletonewlowcostentrantstothe

marketwhomaybeabletoundercuttheoriginalretailer'sprices.Theretailcyclewillthenhavecomefullcircle.

Thewheeltheoryisageneralizationthatmaynotholdtrueinallcases.Retailersenteringnewmarketsmaybetemptedtocopythetradingformatofestablishedretailerswhichmayrequiresophisticatedtradingpatternsfromthestart.Inothercases,suchastimesofrecession,retailersmayattempttocutcostsandevenreducesomeservices,thusmovingintheoppositedirectiontothatwhichissuggestedbythewheeltheory.

Bibliography

McNair,M.P.(1958).Significanttrendsanddevelopmentsinthepostwarperiod.InA.B.Smith(Ed.),Competitivedistributioninafreehighleveleconomyanditsimplicationsfortheuniversity(pp.125).UniversityofPittsburghPress.

STEVEWORRALL

Wholesalers

Wholesalersformthepartofthemarketingchannelbetweenproducers/manufacturersandtheretailer.Wholesalersbuyandsellinlargequantitiesdirecttotheretailerandgenerallydonotsellgoodsdirecttothepublic.

SeealsoRetaildistributionchannels

Bibliography

Lewison,D.(1994).Retailing.NewYork:Macmillan.

STEVEGREENLAND

Word-of-MouthCommunications

Word-of-mouthcommunicationisanon-commercialformofmarketingcommunicationwherethe

Note:Headwordsareinboldtype

Aaker,D.A.9,117

Abell,D.F.113,132,156

Abratt,R.116

ACORNclassification69,108,227

acquisition

andbrandequity10

capability101

action1,25,49

inAidamodel5

andconviction37

inDAGMARmodel42

andplanning77

seealsoconativestage;directmail;directmarketing;offthepage;telemarketing

adaptivestrategy1

seealsoentrepreneurialstrategy;planningstyle

administeredpricing109

adoptionprocess12,30

acceptanceprocessmodel2

andadoptercategories2

andconcepttesting26

anddiffusionprocess2,48

five-stagemodel2

andpenetrationpricing152

seealsoinnovation-adoptionmodel

advertisementseeadvertising

advertising23,191

andbrand9

choiceofmedia3

andcognitivestage19

comparative157

andconcepttesting26

controls3

cost-effectiveness5,19,1334,181,244

andcreativecontent39

deceptive124

effectiveness3,21,42,155,182

seealsoDAGMARmodel

expenditure3

frequency3,67,1334,182,244

impact3,77,1334,181

andinternationalchannelmanagement83

andinternationalmarketing89

ontheInternet133

magazine111

andmarketentrystrategies87

messages3,67

newspaper141

asnon-pricefactor141

objectives3,128

andonestepflowmodel144

andpersonalinfluence102

pointofsale25,155

andproductlifecycle3,167

radio181

reach1334,181,182,244

andsales3,21

andselectiveexposure2,133,206

television141,243

astriggertoaction1

andtwostepflowmodel246

seealsoagency;communicationsmix;consumerperceptions;directmail;marketingcommunications;message;posters;promotion;selectiveexposure

advertisingagencyseeagency

AdvertisingStandardsAuthority3

affectivestage4,20

inAidamodel5

andconsumerattitudes27

andconviction37,75

andinterest80,81

andmarketingcommunicationstechniques4,133

seealsocognitivestage;conativestage;marketingcommunications

agency2,4,206

directmail49

internationalchannelmanagement84

manufacturers'salesagents17

seealsoadvertising;packaging;promotion;publicrelations;salespromotion

Aidamodel45

andaction5

andaffectivestage5

andattention5,19

andcognitivestage5

andconativestage5

andinterest5,81

seealsocommunicationobjectives;marketingcommunications

AIOs(activities,interestsandopinions)seelifestyles

alliances89

AmericanMarketingAssociation118,130

Andreasen,A.R.13

Andrews,K.37

Ansoff,H.I

anddirectionalmatrix49,51,68,114

andstrategicdecisions235,237

arithmeticmeans9,46,181

AshridgeMissionModel135

Assael,H.31

atmospherics5,80

seealsoimpulsepurchasing;storedesign

attention5,5,19

seealsoAidamodel

attitudesseeconsumerattitudes

design47

external61,120

internal81,120,241

marketing61,120,234

auto-regressivemovingaveragemethod25

awareness6,49,63,66,167

andcognitivestage19,75,80,106

inDAGMARmodel42

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Pagevi

Preface

Marketingposesaninterestingchallengeforthelexicographer:thesubjectmaybelongestablishedinpractice,butitsemergenceasaformalizedareaofacademicinterestwithitsownconcepts,techniques,terms,andtheoriesisrelativelyrecent.Aswithotherareasofmanagementwhicharenowfociofcerebralscrutiny,thereismoreloosenessthantightnessabouttheterminologyandrangeofitsinterests.Thereis,then,muchscopestillforcontentionabouttheessenceoftheacademicdisciplineofmarketing,althoughtheongoingdebatemaynaturallyreflecttheevolvingnatureofthesubjectasmuchasthelackofaclearconsensusemanatingfromitslimitedheritage.

Despitethis,marketersingeneraldotendtoemployacorelanguageaboutwhichthereis,atleast,somedegreeofvisibleagreement,eventhoughtheremay,innotinfrequentcases,besomelackofprecisionandevenconflictaboutinterpretationsthatwemaynothavebeenclearlyabletoclarifyorresolve.Thiscommongroundofthecorelanguagehasformedthebaseofthisvolume,withelementsgarneredfromawidearrayofsources,includingourresidentialexpertsonparticularaspectsofmarketinghereintheMarketingGroupattheManchesterSchoolofManagement.Theculloftheresultinglonglistofterms,concepts,andareasofmarketingwastoalargeextenttheresultofthearbitrarydecisionsoftheeditors.Thetaskwassomewhatsimplifiedbecauseformanytopicstherewereseveralprospectiveentriesusedinsimilarways,andwherethisappliedwehaveusedextensivecross-referencing.

Theresultwehopereflectsthefoundationsofmarketing,andprovidesastartingpointforfurtherinvestigation,ameansofconfirmation,oraneasysourceofreference.

Wearegratefulfortheassistance,inthedevelopmentofthisvolume,ofourcolleaguesintheMarketingGroupattheManchesterSchoolofManagement,someofwhomhavesubsequentlymovedon.Theyare(in

alphabeticalorder):MargaretBruce,MikeGreatorex,SteveGreenland,NigelHolden,FionaLeverick,VinceMitchell,DominicWilson,SteveWorrall,MoYamin,andDavidYorke.

WearealsoindebtedtoBerylBoswellandPatriziaVenosafortheirtypingandeffectivecoordinationofmaterialfromdiversesources.Theircontributionhasbeeneminentlycleartous.

BARBARAR.LEWISDALELITTLER

Pagevii

Contributors

MargaretBruceManchesterSchoolofManagement

MichaelGreatorexManchesterSchoolofManagement

SteveGreenlandManchesterSchoolofManagement

NigelHoldenManchesterSchoolofManagement

FionaLeverickAberdeenBusinessSchool

BarbaraLewisManchesterSchoolofManagement

DaleLittlerManchesterSchoolofManagement

Vincent-WayneMitchellManchesterSchoolofManagement

DominicWilsonManchesterSchoolofManagement

SteveWorrallManchesterSchoolofManagement

MoYaminManchesterSchoolofManagement

DavidYorkeManchesterSchoolofManagement

innovation,tofinaladoption,"i.e.,theconsumergoesthroughaseriesofstagesofacceptanceintheprocessofadoptinganewidea.

Rogers(1983)definesthesestagesasthefollowing:Awareness:theconsumerisexposedtoaproductinnovation,iscognizantofit,butlacksinformationaboutit.Interest:theconsumerisstimulatedtoseekinformationaboutaninnovation.Evaluation:theconsumerconsiderswhetherornotitwouldmakesensetotrytheinnovation,a"mentaltrial."Trial:theconsumertriestheinnovationonasmallscale,ifpossible,toimprovehis/herestimateoftheproduct'sutility.Adoption/rejection:theconsumerdecidestomakefull/regularuseoftheproduct.

Analternativemodel,offeredbyRobertson(1971),the"acceptanceprocess,"hasstagesofproblemrecognition,awareness,comprehension,attitudeformation,legitimation/conviction,trial,andadoption.Thismodelfocusesontheuseofparticularinformationsourcesatthevariousstages.Typically,impersonalsources(e.g.,MASSMEDIA)havemostvalueincreatinginitialproductawareness,andINTERPERSONALCOMMUNICATIONShavemostvalueatthelater,evaluative,stages.

Timepervadestheadoptionprocessinrelationto:thetimefromawarenessofanewproducttopurchase(foranindividualconsumerorhousehold);theidentificationofadoptercategories;andrateofadoption.Withrespecttoadoptercategories,Rogers(1983)assumedanormallydistributedadopterpatternof:innovators,earlyadopters,earlymajority,latemajority,andlaggards.Rateofadoptionreferstohowquicklyaproductinnovationisacceptedbythosewhowilladoptit;forexamplemobiletelephonesandvideorecordershavebeenadoptedmuchmorequicklythandishwashersandelectrictoothbrushes.

Theadoptionprocessisaffectedbyproductcharacteristics(seeDIFFUSIONPROCESS)andbyconsumervariables.Withrespecttoconsumervariables,anumberofresearchershavetriedtoprofileearlyadoptersandconsumerinnovatorsinrelationto:demographicandsocioeconomicfactors,personalitytraits,perceptionsofrisk,productinterest,consumptioncharacteristics,mediahabits,andopinionleadership,

buthavefoundvaryingconclusions.

Bibliography

Engel,J.F.,Blackwell,R.D.&Miniard,P.W.(1990).Consumerbehaviour(6thedn).Orlando,FL:TheDrydenPress.Chapter23.

Robertson,T.R.(1971).Innovativebehaviourandcommunication.NewYork:Holt,Rinehart&Winston.

Rogers,E.M.(1976).Newproductadoptionanddiffusion.JournalofConsumerResearch,2,March.

Rogers,E.M.(1983).Diffusionofinnovations(3rdedn).NewYork:FreePress.

Rogers,E.M&Shoemaker,F.L.(1971).Communicationofinnovations(2ndedn).NewYork:FreePress.

Schiffman,L.G.&Kanuk,L.Z.(1991).Consumerbehaviour(4thedn).Prentice-Hall.Chapter18.

BARBARALEWIS

seeADVERTISING

Advertising

Advertisingisapaidformofnon-personalpresentationandcommunicationaboutanorganizationand/oritsgoodsandservices,byanidentifiedsponsor,thatistransmittedtoatargetaudiencethroughamassmedium.

Advertisingisaone-waycommunicationfromanorganizationtoacustomerandissubjecttotheconsumerselectiveprocessesof:exposure,perception,selection,distortion,andretention(seeCONSUMERPERCEPTIONS,SELECTIVEEXPOSURE,andSELECTIVERETENTION),i.e.,theaudienceisnotobligatedtobeattentiveorrespond,whichinturndependson:consumerattributes,needsandvalues,predispositions,characteristicsofthecompanyanditsmessages,andchannelsofcommunications.Keyfeaturesofadvertisingare:itspublicpresentation,whichconfersalegitimacy;itspersuasivenature,whichis

possiblethroughrepetition;anditsexpressivenatureinsofarasitdramatizesacompanyanditsproductsorservices.

Advertisingisanintegralelementofanorganization'sMARKETINGCOMMUNICATIONS(seealsoCOMMUNICATIONSMIX).Itmaybeplannedandexecutedwithinanorganizationorhandedovertospecialists,i.e.,advertisingagencies(seeAGENCY).Advertisingisan

Bibliography

Strong,E.K.(1925).Thepsychologyofselling.NewYork:McGraw-Hill.

DAVIDYORKE

Attitudes

seeCONSUMERATTITUDES

Awareness

AwarenessisthefirststepintheDAGMAR,HIERARCHYOFEFFECTS,andINNOVATION-ADOPTIONmodelsofMARKETINGCOMMUNICATIONSwhichfocusontheconsumerpurchasingprocess.Atthisinitialstageinthebuyingprocess,thepotentialcustomer/buyerismadeawareoftheexistenceoftheproduct,service,ororganizationsupplyingit.Variousstimulimaybeusedtocreateawarenessinthebuyer'sorcustomer'smind,dependingonthechannelsofcommunicationused(seeCOMMUNICATIONSMIX).Awarenessissometimesdifficulttoachieveduetotheconsumer'sselectiveprocesses(seeSELECTIVEEXPOSUREandCONSUMERPERCEPTIONS).

Bibliography

Colley,R.H.(1961).Definingadvertisinggoalsformeasuredadvertisingresults.NewYork:AssociationofAdvertising.

Lavidge,R.J.&Steiner,G.A.(1961).Amodelforpredictivemeasurementsofadvertisingeffectiveness.JournalofMarketing,25,Oct.,

Rogers,E.M.(1962).Diffusionofinnovations.NewYork:FreePress.

DAVIDYORKE

businessesatpresentinmoreattractivequadrants.

Ingeneral,theanalysisrestsontheassumptionthatbusinesses'productshavealifecycle(seePRODUCTLIFECYCLE),ofwhich,inparticular,the"mature"stageisofsufficientdurationtoenablethecompanytoreapthebenefitsofitspreviousinvestmentsincurrent"cashcows."Theindustrymight,however,witnesstheintroductionofanewtechnologywhichmightgivea"groinkick"tothetechnologyofthefuturecashcow,therebyunderminingitsfuturemarketposition.Theemphasisonmarketsharecanblinkerdecision-makerstosuchapossibilityandperhapsfurtherthedependenceonavulnerableindustry,whilerivalsmayleapfrogthefirmbyacquiringexperiencethroughthepurchaseofplantandequipmentwhichembodystate-of-the-arttechnology.Finally,cashcowsmayrequireconsiderableinvestmentinordertoprotecttheircompetitiveness,afactwhichtheanalysisseemstooverlooksomewhat.

Bibliography

Hedley,B.(1976a).Afundamentalapproachtostrategydevelopment.LongRangePlanning,9,(6),211.

Hedley,B.(1976b).Strategyandthe"businessportfolio".LongRangePlanning,10,(1),915.

Wensley,R.(1981).Strategicmarketing:Betas,boxesorbasics.JournalofMarketing,45,173182.

DALELITTLER

Bidding

Biddingortenderingisaprocessinwhichpotentialsuppliersareinvitedtosubmitbidsortendersinwhichtheysetouttheirspecifications,termsandpricesinresponsetoastatedcustomerrequirement.HowtodecidethepriceaspectofabidortenderismadeevenmoreawkwardbytheUNCERTAINTYsurroundingrivalbidsandtheneedtobalancethewishtomakeaprofit(orevenjusttocovercosts)againstthewishtosecurethe

contract.Becausepriceisonlyoneaspect(ifoftenthemostimportant)ofthebidortender,thesuccessfulbidderwillnotalwaysbethatofferingthelowestprice,thoughevidenceofalowerbidmaybeusedtorenegotiatethepriceofferedbytheeventualcontractor.

Thereareseveralvariantsoftendering,especiallyauctionbiddingandsealed-bidpricingwhichisusedinorganizationalmarkets(andScottishrealestatemarkets).Thesetechniquesforsolicitingpriceshavetheeffectoforientingpricedecisionsmoretowardcompetitiveissuesthantowardissuesofcostordemand.

Thereareseveraladvantagestocompetitivebiddingortenderingforthecustomer:itcanhelptoremovemanypossibilitiesforcorruptorunethicalpractices;itprovidesimportantcompetitiveinformationwherethismightotherwisebedifficulttogather;ithelpstoensurevalueformoneyandcostminimization;anditprovidesinsighttothecostsassociatedwithdifferencesinthetermsofthecontract(e.g.,indeliveryarrangements,qualitylevels,serviceprovision).Becauseofitsapparentefficiencyandprobity,competitivebiddingortenderingisincreasinglybeingusedinlarge-scaletenderswherepriceisamajorpurchaseconstraintand/orwhereitisimportanttoensurethatprocessesareseentobeequitableand"aboveboard"(e.g.,incentralandlocalgovernmentpurchasing,andinOUTSOURCING).

DOMINICWILSON

Billboards

seePOSTERS

BivariateAnalysis

Bivariateanalysisisconcernedwiththequantitativeanalysisofdatawherepairsofvariablesareanalyzedtogether,usuallytoseeifthereisanyrelationshipbetweenthevariables.

Ifbothvariablesaremeasuredonnominal(categorical)scales,CROSS-TABULATIONS(cross-tabs)canbeusedtosummarizethesampledataintheformoftwoormorefrequencydistributions.Across-tabisatablewiththecategories(orvalues)forthetwovariableslistedonthetwoaxesand

thecountsofthenumberoftimeseachpairofvaluesoccursrecordedinthecellsofthetable.Therowandcolumntotalsareusuallycalculatedandpercentagesacrosstherowsand/ordownthecolumnsarealsocomputedtoaidintheinterpretation,description,anddiscussionoftheresults.Inprinciple,cross-tabscanbeformedinmorethantwodimensionswhendataformorethantwocategoricalvariablesare

purchasetodifferentdepartmentswithintheorganization;andtheculturalattitudeoftheorganizationtoPERCEIVEDRISK.Ithasalsobeensuggestedthatthepoliticalandcultural"peckingorder"ofdepartmentsandindividualswithinanorganizationcanbeanimportantvariable,allowingsomeindividualstohaveconsiderableinfluenceoverpurchasingdecisionsoutsidetheirfunctionalareasofresponsibility(Pettigrew,1975;Strauss,1964).

Bibliography

Pettigrew,A.M.(1975).Theindustrialpurchasingdecisionasapoliticalprocess.EuropeanJournalofMarketing,5,Feb.,419.

Strauss,G.(1964).Work-flowfrictions,inter-functionalrivalryandprofessionalism:Acasestudyofpurchasingagents.HumanOrganisations,23(1),137149.

Webster,F.E.Jr&Wind,Y.(1972).Organizationalbuyingbehavior.EnglewoodCliffs,NJ:Prentice-Hall.

DOMINICWILSON

BuyingOperations

seeCONSUMERDECISION-MAKINGPROCESS

BuyingProcess

seePURCHASINGPROCESS

andsoon.Bothbrokersandagentsreceiveacommissiononanysales.

Intermediarieswhodotaketitleincludewholesalersandretailers.Thesebothbuyandsell.Wholesalerswillcollectarangeofgoodsfromvariousmanufacturersandusuallysellthemtootherintermediaries(e.g.,smallretailers).Wholesalersareusedwhen,forexample,theamountsoldpercustomerisrelativelysmall,orwhencustomersarewidelyscatteredgeographically.Generally,wholesalersselltoothercompaniesortoretailers.Retailers,whichcarryoutasimilarfunction,mostlyselltothefinalcustomer.Largeretailerswillgenerallytakedeliverydirectfrommanufacturers.

Therearevarioustransfersbetweenthedifferentelementsofthedistributionchain.Fivetypesoftransfercanbeidentified:physicalgoodstransfersthemovementofgoods,rangingfromtheinitialrawmaterials,throughcomponentsandsubassemblies,tothefinalproduct;ownershiptransferastheproductpassesthroughthechain,theownershipofthephysicalgoodscanchange;paymenttransferthemovementofmoneyforthepaymentofgoodsandservices;informationtransfertheflowofinformationbetweendifferentstagesinthechain;andinfluencetransferthewayinwhichdifferentelementsinthechainattempttopromotethemselvesandtherebyinfluenceotherelementsinthechain.

Bibliography

Dibb,S.,Simkin,L.,Pride,W.M.&Ferrell,O.C.(1994).Marketing:Conceptsandstrategies(Europeanedn).London:HoughtonMifflinCo.Chapters10,11,12.

McCarthy,E.J.&Perreault,W.D.(1993).Basicmarketing(11thedn).Homewood,IL:Irwin.Chapters13,14.

DALELITTLER

ClusterAnalysis

Clusteranalysisreferstoabodyoftechniquesusedtoidentifyobjectsor

individualsthataresimilar.Usingmeasurementsonseveralvariablesforanumberofcases,asmallnumberofexclusiveandexhaustivegroupsorclustersareformed.Eachclusterhashighwithinclustershomogeneityandhighbetweenclustersheterogeneity.Usuallyameasureofthedistancebetweenindividualsisusedtobuildupclusters.Whenthenumberofcasesissmall,theclusteringcanbeobserved,butwithlargernumbersofcasesfasterclusteringisusedandlessdetailedoutputisprovidedbythecomputerpackages,e.g.,theSTATISTICALPACKAGEFORTHESOCIALSCIENCES,SPSS,whicharenecessaryforclusteranalysis.Oncethesamplehasbeenpartitionedandtheclustershavebeenidentifiedusingsomeofthevariablesintheanalysis,theremainingvariablescanbeinvestigatedtoobtainprofilesoftheclustersandtoseeifandwheretherearedifferencesbetweentheclusters.

ClusteranalysisdiffersfromDISCRIMINANTANALYSISinthatthereisnoexternalmeansofgroupingthecases.

Theusefulnessinmarketingtohelpinsegmenting(seeMARKETSEGMENTATION)populationsshouldbeobvious.Thevariablesusedtodefinetheclusterscouldbetheneedsandlifestylesofindividualsandthesubsequentprofilingmayinvolvedemographic,socioeconomic,etc.variablestoseewheretheclustersdifferandtoseeiftheclusterscanbenamed.Iftheresearcherhasalargesample,aclusteranalysismayprecedetheapplicationofotherstatisticalmethods,includingothermultivariatetechniques(seeMULTIVARIATEMETHODS(ANALYSIS)),toeachclusterinturn.

Bibliography

MICHAELGREATOREX

CodesofPractice

Itisdesirablethatindustriesconformtocertainrulesorregulationsintheconductoftheirbusiness.Broadly,suchregulationsmaybeimposedbyexternalorganizations(i.e.,bylaw)ortheymaybeself-imposed(i.e.,codesofpracticesuchasadvertisingindustrystandardsandthoseenforcedby

professionalservicefirms).Theadvantagesclaimedforcodesofpracticeare:theycanhelptoraisethestandardsofanindustry;organizationswithintheindustryareoftenhappytoacceptrestrictionsimposedbyvoluntarycodesofpracticeratherthanbesubjecttothelawover

qualityasaculturesatisfiesbiologicalandsocialneeds;anadaptivequalityasculturesadapttochangingneedsandenvironment;andanintegrativequalityaculturewillembraceanumberofsubgroupsandsubcultures.

Thefundamentalorientationofcultureinmodernindustrialsocietyistowardachievementandattainmentandincreasinglevelsofsatisfaction.Further,Westerncultureischaracterizedbyvarioustrends:increasingaffluenceandaleisureorientation;increasingeducationandmorequestioningoftraditionalvalues;increasingcommunications/mobility,leadingtoincreasedawarenessandpurchaseofalternatives/variety;anddecreasinginfluenceofthefamily.

Culturalchangeistheprocessbywhichasocietyimprovesorrevisesitsresponsestotheenvironment,andculturalpatternschangeasnewvaluesemergeandsubculturesdeveloSubcultureswithinanationalculturehavetheirowndistinctiveideas,values,andcharacteristicswhichmaybeverydifferentfromthetotalpatternofculture.Thesearebasedonculturaltraditionsemanatingfromvarioussources,andexamplesofsubculturesare:ethnicandracialinparticularimmigrantgroupswhichprovideatwo-wayculturalinfluencewithanindigenouspopulation,stimulatedbymassmediacommunicationsandopportunityfortravel;youthi.e.,teenagemarketswhichareexemplifiedbyrelativelyhighspendingpowerandlittleBRANDLOYALTY;regional;andreligious.Inmodernsocietysubculturesareofsignificancetomarketersbecauseoftheirinfluenceonproductsandservicesdemanded,i.e.,marketsegmentsmayderivefromsubculturalneeds.

Further,culturalvariationsonaninternationalbasishaveimplicationsfororganizationswhichexporttheirproductsandservices.Forexample,products,packages,tastes,colors,promotions,anddistributionmaynotbeacceptableacrossnationalboundariese.g.,relatingtothestatusofwomenintheMiddleEast,culturaltaboos,communicationsdeficiencies,thestateofeconomicdevelopment.So,marketingstrategiesneedtobemoderatedaccordingly.

Bibliography

Engel,J.D.,Blackwell,R.D.&Miniard,P.W.(1990).Consumerbehavior(6thedn).Orlando,FL:TheDrydenPress.Chapter3.

Hawkins,D.I.,Best,R.J.&Coney,K.A.(1992).Consumerbehavior:Implicationsformarketingstrategy(5thedn).Homewood,IL:Irwin.Chapter2.

Krech,D.,Crutchfield,R.S.&Ballachey,E.L.(1962).Individualinsociety.NewYork:McGraw-Hill.

Loudon,D.L.&DellaBitta,A.J.(1993).Consumerbehavior(4thedn).McGraw-HillInt.Chapters3,4.

Moschis,G.P.(1987).Consumersocialization.Lexington,MA:LexingtonBooks.

Schiffman,L.G.&Kanuk,L.Z.(1991).Consumerbehavio(4thedn).Prentice-Hall.Chapters14,15,16.

Solomon,M.R.(1992).Consumerbehavior.NeedhamHeights,MA:Allyn&Bacon.Chapters13,15.

BARBARALEWIS

CustomerSatisfaction

seeSERVICEQUALITY

CustomerService

seeSERVICEQUALITY

Customers

Traditionally,customersmightbedefinedastheactualorintendedpurchasersofproductsorservices.Recentdevelopmentsinthescopeofmarketingmightalsoseeotherpartiesintheorganization'sMARKETINGENVIRONMENTascustomers.Forexample,INTERNALMARKETINGtheorysuggeststhatanorganizationviewitsemployeesascustomers,orthatthemarketingfunctionmightregardotherpartsoftheorganizationascustomers.

SeealsoSuppliers

FIONALEVERICK

ongoingprogramofresearchconductedbytheStrategicPlanningInstitute(Cambridge,MA,USA)intotheimpactofMARKETINGSTRATEGIES:over250companiesprovidedataonover2,000businessesforatleastfouryears'trading.Giventhehugediversityofdatabasesavailable,severalnetworkshavebeenestablishedtoallowuserseasieraccesstoeach.OneofthelargestofthesehostnetworksisDIALOGwhichcontainsover200differentdatabases.NEXISisanotherlargesystem.

Bibliography

Fletcher,K.(1994).Theevolutionanduseofinformationtechnologyinmarketing.InM.J.Baker(Ed.),Themarketingbook(3rdedn)(pp.333357).Oxford:ButterworthHeinemann.

Rapp,S.&Collins,T.L.(1987).Maximarketing.NewYork:McGraw-Hill.

VINCEMITCHELL

Deciders

DecidersarethosemembersoftheDECISION-MAKINGUNIT(DMU)whoareresponsibleforthefinalpurchasedecision(thoughtheydonotalwayssignthepurchasecontract).Formajorpurchasedecisionsthedecidermaybethechiefexecutive,adirector,orthechiefprocurementofficerbutforrelativelyinsignificantpurchasedecisionsthedecidermaybeajuniormemberofthepurchasingstaff(seeORGANIZATIONALBUYINGBEHAVIOR;PURCHASINGPROCESS)

DOMINICWILSON

Decision-MakingUnit

seeBUYINGCENTER

Demand

Theassessmentofdemandiscrucialtoresponsiblepricinganalysisanddecision-making,yetdemandcanoftenbeanunknowableandevena

mercurialfactor.Atoneextreme,analysisofdemandcanbelittlemorethanastatisticalextrapolationofhistoricdemanddata,regardlessofthevalidityofthedata,themethodologyusedfortheircollection,ortheassumptionsunderlyingtheiruse(aswiththeFordEdsellmotor-car).Atanotherextreme,assessmentofdemandcanbenomorethanintuitiveguessworkproppedupbyselectivedata(aswiththeSinclairC5electricmini-car).

Thedemandforaproductorservicecanbeseenashistoric,existing,latent,orpotential.Historicdemanddescribescustomers(individualsandorganizations)whohavepurchasedaparticularproductorserviceinthepast,whereasexistingdemanddescribescustomerswhoarecurrentlypurchasingtheproductorservice,andpotentialdemanddescribesthosecustomerswhomightpurchasetheproductorserviceintheforeseeablefuturegivenvariouschangesinmarketingstrategyorenvironmentalcircumstances(e.g.,protectionism).Someauthoritiesalsousethetermlatentdemandtorefer,ineffect,todemandwhichcouldbedevelopedreasonablyquickly(sodistinguishinglatentdemandfrompotentialdemand)withappropriatemarketingstrategiesbutwhichmeanwhileremainsdormant.ThemosteasilyadaptedaspectofmarketingstrategiesisPRICINGandthisisusuallythequickestwaytotranslatelatentdemandorpotentialdemandintoexistingdemand.Yettoomuchdemandcanbejustasproblematicforasupplierastoolittledemandandaresponsiblepricingpolicywillthereforedependcruciallyoncarefulassessmentofdemand.

Clearlytherewilloftenbesimilaritiesbetweentheseformsofdemandbuttherecanalsobeimportantdifferences.Forexample,theproductorserviceinquestionmaywellhavechangedsignificantlyovertimetotheextentthathistoricdemandisnolongerausefulindicationofpotentialdemand.Thecharacteristicsofdemandcanalsochangeovertime(e.g.,indisposableincome,customersophistication,sensitivitytoparticularproductaspects).Andthereisusuallysufficientenvironmentalchangeanduncertaintyaboutthedatatomeanthatdemandshouldgenerallybeassessedcautiously.Demandisevenmoredifficulttoassesswhereaproductorserviceisinnovative,makinghistoricreferencepointsevenmoreproblematic.ThiscautioniscapturedintheconceptofrealizabledemandwhichreferstothatfractionofpotentialdemandwhichanorganizationconsidersitcanrealisticallyachievewithitsMARKETINGSTRATEGYandPRICINGdecisions.

DOMINICWILSON

customersbutwhichareunrelatedtoitsexistingtechnologies,althoughthisdoesnotaccordwithAnsoffsdefinitionofdiversification.

Bibliography

Ansoff,H.I.(1965).Corporatestrategy:Ananalyticapproachtobusinesspolicyforgrowthandexpansion.NewYork:McGraw-Hill.Chapter6.

Kotler,P.(1994).Marketingmanagement:Analysis,planningimplementationandcontrol(8thedn).EnglewoodCliffs,NJ:Prentice-Hall.Chapter3.

Mintzberg,H.(1988).Genericstrategies:Towardacomprehensiveframework.InAdvancesinstrategicmanagement,Greenwich,CT:JAIPress,vol.5pp.167.

Porter,M.E.(1985).Competitiveadvantage:Creatingandsustainingsuperiorperformance.NewYork:FreePress.

DALELITTLER

Figure1EmergentStrategy

Source:Mintzberg,1987.

EmergentStrategy

Emergentstrategy,astermedbyMintzberg(1987),isastrategythatisnotcarefullypre-planned;itisrealizedintheabsenceofintentions,ordespiteunrealizedintentions.AsMintzbergnotes:"strategiescanformaswellasbeformulated.Arealizedstrategycanemergeinresponsetoanevolvingsituation,oritcanbebroughtaboutdeliberately,throughaprocessofformulationfollowedbyimplementation."SuchaviewisincontrasttotraditionalSTRATEGICPLANNINGwhichisfoundedonthepremisethatitispossibletoanalyzetheMARKETINGENVIRONMENT,forecastpossibleoutcomes,selectstrategicalternativesbasedonanevaluationofthereturnseachislikelytoyield,anddeviseplanstoimplementthechosenstrategicoptionsinordertoensurethattheycomeabout.However,itisincreasinglyrecognizedthatUNCERTAINTYconsiderablycloudstheabilitytopredictallthepossibleinfluencesandthereforepossibilitiesthat

mightarise.Consequently,theremaybeunforeseenopportunitiesanddifficulties.Evencarefullyplannedstrategiesmightleadtodifferentoutcomestothosesought.(Seefigure1.)

Bibliography

Mintzberg,H.(1987).FivePsforstrategy.CaliforniaManagementReview,30,(1),Fall.

DALELITTLER

EndUsers

Endusersmayormaynotbethepurchasersofproducts.Theycanhaveasignificantinfluenceonthepurchasingdecision(e.g.,childreninconnectionwithcertainhouseholdpurchasingdecisions).

DALELITTLER

inthescaleofinvestmentthatthefirmiswillingtocommittoforeignmarkets.Inrelativeterms,sellingindustrialrefrigeratorstoSaudiArabiamaybeequallydemandingasdevelopingamarketingstrategyforthesameproductsinChina.

Bibliography

Johanson,J.&Vahlne,J.-E.(1977).Theinternationalisationprocessofthefirmamodelofknowledgedevelopmentandincreasingforeignmarketcommitments.JournalofInternationalBusinessStudies,8,(1),Spring/Summer2332.

NIGELHOLDEN

ExternalAudit

ThisisonepartofaMARKETINGAUDIT(theotherbeingINTERNALAUDIT),anditinvolvesexaminationoftheexternalenvironment,threats,andopportunitiessurroundinganorganization.Theexternalauditissynonymous,ineffect,withENVIRONMENTALANALYSIS.

SeealsoSWOTanalysis

Bibliography

DAVIDYORKE

contain(bothintotal,andforeachtargetsegmentofbuyers/customers(seeMARKETSEGMENTATION)):ananalysisofthecurrentsituation,e.g.,levelofAWARENESS,numberofproductTRIALS;anobjective,e.g.,toincreasetheleveloftrialfromXpercenttoYpercentinsixmonths;andanallocationoffinancialresourcesoverthechosenelementsintheCOMMUNICATIONSMIX,e.g.,SALESPROMOTION,PERSONALSELLING,EXHIBITIONS.Bothduringandaftertheperiodoftimeoftheplan,performancecanbemonitoredagainstobjectives.

Bibliography

McCarthy,E.J.&Perreault,W.D.(1993).Basicmarketing.Homewood,IL:Irwin.Chapter21.

DAVIDYORKE

FinancialServicesRetailing

Financialservicesretailingreferstothedistributionoffinancialservicesviabranchdistributionnetworks.Withinthissectortheservicesofferedareincreasinglybeingviewedasproductsandthebranchesarebeingviewedasretailenvironmentsinwhichthestaffmembersaresalespersons,ratherthan"bankers,"practicingsellingskills(Riley&Knott,1992).Conceptsandtechniquesofretailmarketinghavebeenreadilyadoptedbymosttypesoffinancialinstitutionthathavedirectinterfacewiththeconsumermarket.Sincethelate1980sthemajorUKinstitutions,somewithnetworksizesinexcessof2,000branches,havewithoutexceptionbeenconductingnationwiderationalizationandrefurbishmentprograms(Greenland,1994).

Unabletodifferentiatebyproduct,financialinstitutionsseeretailimageasakeytoachievingcompetitiveadvantage.Thebranch,thefrontlinephysicalpresenceonthehighstreet,isanimportantmediumforimagecommunication.Outletshavebecomefarmorecustomerorientatedwith

keyretailmerchandisingconceptsandprinciplesbeingincorporatedintomodernbranchdesigns.Themodernfinancialserviceoutletisfarmoreopenplan,withreduceduseofbanditscreensandwithplacementofstaffoutinthebankinghallarea,largeglassfrontagesandmuchmoreofashop-likeappearancethantraditionalbranches.

SeealsoRetailimage;Retailmerchandising;Storedesign

Bibliography

Greenland,S.J.(1994).Rationalizationandrestructuringinthefinancialservicessector.InternationalJournalofRetailandDistributionManagement,22,(6),2128.

McGoldrickP.J.&GreenlandS.J.(1994).Retailingoffinancialservices.Maidenhead:McGraw-Hill.

Riley,D.&Knott,P.A.(1992).Throughtheeyesofthecustomer:Researchintothenewlookandfunctioningofbankandbuildingsocietybranches.155thESOMARSeminaronBankingandInsurance.

STEVEGREENLAND

FocusGroups

Afocusgroupinterview,aformofdepthinterview(seeDEPTHINTERVIEWS),isconductedbyatrainedmoderatorwithasmallgroupofrespondents.Focusgroupinterviewsareoftenreferredtoasatypeofqualitativemarketingresearch(seeQUALITATIVERESEARCH).Theyareusedmainlyasalternativestostructuredinterviewsusingquestionnaires,incomplexsituationswheredirectquestioningmaynotprovidesatisfactoryinformationduetorespondentsbeingunwillingorunabletogiveanswerstoquestionsthattheyfindembarrassingorfeelareinvasionsofprivacy.Also,focusgroupsareusedinpreliminaryresearchtohelpinclarifyingtheresearchissues,innewproductresearchandconcepttesting,inadvertisingandcommunicationsresearch,instudyingattitudesandbehavior,andindesigningquestionnairesforuseinsubsequentresearch.

Groupsofabouttenindividualsareselectedandofteneachgroupischosentorepresentaparticularmarketsegment(seeMARKET

SEGMENTATION).Thediscussionisusuallytapedorvideoed.Althoughtheinterviewisrelativelyunstructured,themoderatorleadsthegrouptoprovokeanin-depthandinteractivediscussionoftherelevanttopics.

Theadvantagesoffocusgroupsincludethestimulationfrominteractionwithinthegroupwhichallowseachindividualtorefineand

McGoldrick,P.&Davies,G.(1995).Internationalretailing:Trendsandstrategies.London:PitmanPublishing.

NIGELHOLDEN

FreeSample

Theprovisionofafreesample,particularlyofanewproduct,isameansofencouragingTRIAL.Freesamplesmaybedistributedtohouseholds;providedwithmagazinesornewspapers;orgivenwithexistingproductswhicharepurchased.FreesamplesareobviouslyameansofreducingPERCEIVEDRISKand(generally)applytofast-movingconsumergoods.

DALELITTLER

Frequency

AspartoftheirADVERTISINGprograms,organizationshavetodecidewhichmedia(seeMASSMEDIA)touse,andamajorconsiderationhereisthedesiredfrequency,i.e.,thenumberoftimeswithinaspecifiedperiodthatanaverageperson,household,ororganizationisexposedtotheadvertisingMESSAGE.

SeealsoAdvertising

DAVIDYORKE

policyandstrategicmanagement(3rdedn).Maidenhead:McGraw-Hill.

DALELITTLER

Geodemographics

Geodemographicgroupsofconsumers(i.e.,identifiedbygeographicanddemographicvariables),referredtoasgeodemographicclassifications,arebuiltonthepremisethatpeoplewholiveinsimilarneighborhoodsarelikelytohavesimilarpurchasingandlifestylehabits(seealsoLIFESTYLES).MostclassificationsarebuiltbyusingdatafromtheCensusofPopulationsuchasemploymenttype,age,maritalstatus,familysize,propertytype,etc.Othervariablescanbeusedandsomeclassificationshaveadoptedthisapproach,e.g.,Mosaic,Finpin.Sometimes,apreliminaryprocesscalledPRINCIPALCOMPONENTANALYSISisusedontherawvariablestoidentifycommonalitiesinthedata.EithertherawvariablesortheprincipalcomponentsarethensubjecttoCLUSTERANALYSIStoidentifysimilartypesofgeographicalareas.(Fordetailsoftheclassificationsandmethods,seeJournaloftheMarketResearchSociety,1989.)

Table1TheMain1991Census-basedgeodemographicclassificationsintheUKClassificationsystem

No.ofinputvariables

No.ofclusters

Non-censusdataused?

ACORN 79 (a)6(b)17(c)54

PIN 49 (a)4(b)16(c)42

FINPIN 58 (a)4(b)10(c)40

FRSdata

MOSAIC 87 (a)11(b)52

Creditdata;ElectoralRoll;PAFdata;CCJs;Retailaccess;Agemodel;prop'n.director

SuperProfiles120 (a)10(b)40(c)160

TGI;electoralroll;creditdata;CCJs

DEFINE 146 (a)10(b)50

Creditdata;ElectoralRoll;Unemploymentstatistics;Insurancerating

(c)1050Neighbors&Prospects

48 (a)9(b)44

Source:Sleight,1995.(a)(b)and(c)identifydifferentlevelsofaggregation.FRS=FinancialResearchSurvey;CCJ=CountyCourtJudgement;PAF=PostalAddressFile;TGI=TargetGroupIndex.

HypothesisTesting

HypothesistestingorstatisticalsignificancetestingisimportantinMARKETINGRESEARCH.Abatteryofsignificancetestsisavailabletotesthypothesesconcerningpopulationmeans,proportions,differencesbetweenmeansandproportions,correlationcoefficients,etc.basedondatafromaprobabilitysample(seeSAMPLINGandSTATISTICALTESTS).

Althoughtherearemanydifferenttestsdependinguponthecircumstances,thephilosophyunderlyingthetestsisthesame.Anullhypothesisissetupconcerningacharacteristicorparameterofthepopulation.Thenullhypothesisisthatthepopulationparameter,e.g.,amean,aproportion,thedifferencebetweentwomeansortwoproportions,isequaltoaparticularspecifiedvalue.Thisisthehypothesisthatistestedandisassumedtobetrueforthepurposeofthetest.Analternativehypothesisissetup.Thealternativehypothesiscanbeasimplehypothesis,e.g.,thattheparameterisequaltoadifferentspecificvalue,ormoreusuallythattheparameterisnotequalto(orsometimeseithergreaterthanorlessthan)thevaluespecifiedinthenullhypothesis.Thenullandalternativehypothesesarespecifiedbeforesampledataareexamined.

Thetestchoosesbetweenthetwohypothesesusingateststatisticwhosesamplingdistributionisknown,assumingthenullhypothesistobetrue.Inpractice,thenullhypothesisisnotrejectedwhenthechancesofobtainingaparticularvalueoramoreextremevalueoftheteststatisticarehigh;itisrejectedifthosechancesarelow.Thequestioniswhatisahighandwhatisalowchance?Aprobabilitylevel,thelevelofsignificance,say5percentor1percentor10percent,isfixedbeforetheteststatisticiscalculated.Thisenablesrangesofvaluesfortheteststatistictobeworkedout.Iftheteststatistic,whencalculated,fallsinonerangeitisnotrejected,ifitfallsinotherranges,usuallyextremeranges,itisrejected.Alternatively,whenthecalculationsarebeingdoneusingcomputerpackages,thecomputerworksouttheprobability(oftencalledthepvalue)ofobtainingamoreextremevalueoftheteststatisticthantheoneobtainedandifthisislessthanthepreviouslyspecifiedsignificancelevelthenullhypothesisisrejected,

otherwisethenullhypothesisisaccepted.

Thus,whenanullhypothesisisrejected,thereisasmallchanceofrejectingahypothesisthatistrue.Itwould,onthefaceofit,makesensetomakethechancesofthiserror,calledaTypeIerror,assmallaspossiblebyusingverylowsignificancelevels.However,thereisanotherkindoferror,TypeIIerror,whichisthechanceofnotrejectingafalsehypothesis,which,foragivensamplesizeandteststatistic,increaseswhenthechanceofaTypeIerrorisreduced.Increasingthesizeofthesampleisonewayofimprovingthesensitivityofatest.

Itisimportanttonotethatastatisticallysignificantdifferencebetweenthemeansoftwogroupsmayormaynotsaysomethingaboutthepracticalorcommercialdifferencebetweenthetwogroups.Forinstance,thedifferencebetweenthemeansoftwogroupsmaybestatisticallysignificant(becauseoflargesamples)buttheactualdifferencebetweenthesamplemeansmaybeverysmallandofnopracticalsignificancewhatever.

Bibliography

Chisnall,P.M.(1992).Marketingresearch(4thedn).Maidenhead:McGraw-Hill.Chapter15.

MICHAELGREATOREX

adapt,adjust,andaugmentwhatmayhavebeenproposedinanyoriginalplansinresponsetonewlyemergentinformation,theconsequencesofpastactions,competitors'reactions,andotherdevelopments.Effectiveimplementationmay,asPiercy(1990)argues,beaniterativeprocesswhichinvolvesthemajorprotagonistsandwhichtakescognizanceofthedifferentpowerrelationshipsintheorganization.

Strategyinsomecasesmaybeseenasemerging(Mintzberg,1973;Huttetal.,1988)(seeEMERGENTSTRATEGY)andtheprocessofdevelopingstrategymaybeintimatelyinterwovenwiththeactionofimplementation.

Bibliography

Bonoma,T.V.&Crittenden,V.L.(1988).Managingmarketingimplementation.SloanManagementReview,29,Winter,714.

Hutt,M.D.,Reingen,P.H.&Ronchetto,J.R.(1988).Tracingemergentprocessesinmarketingstrategyformation.JournalofMarketing,52,Jan.,419.

Mintzberg,H.(1990).Thedesignschool:Reconsideringthebasicpremisesofstrategicmanagement.StrategicManagementJournal,11,(3),Mar.Apr.,171195.

Piercy,N.(1990).Marketingconceptsandactions:Implementingmarketing-ledstrategicchange.EuropeanJournalofMarketing,24,(2),2442.

DALELITTLER

ImpulsePurchasing

Impulsepurchasingisapurchaseresultingfromanunplannedorspur-of-the-momentbuyingdecision,wherenopriorintentionexisted.Itisusuallythoughtofasanin-storeprocess,althoughitcanoccurinresponseto

externalornon-storepromotionalactivities.Stimulatingtheimpulsepurchasehasbecomeakeyobjectiveofretailersandcanaccountforsignificantproportionsofsalesvolume.Storedesignswithvisualmerchandisingprinciples,displayingexpensiveproductranges,havebeendevelopedtoactivelyencourageimpulsepurchases.

SeealsoStoredesign

Bibliography

Walters,D.(1994).Retailingmanagement.London:Macmillan.

STEVEGREENLAND

InboundCommunications

CommunicationsinDIRECTMARKETINGmaybeeitherinboundoroutbound(seeOUTBOUNDCOMMUNICATIONS).Thelatterareinitiatedbythesupplierorganizationdirectlytothebuyerorcustomer,e.g.DIRECTMAILandTELEMARKETING.Inboundcommunicationoccurswhenapotentialbuyerorcustomerisstimulatedtoreplytoaformofindirectcommunicationwhichappearsinthemedia,e.g.,TELEVISIONorRADIOadvertisementsoradvertisementsinNEWSPAPERS,MAGAZINES,orTRADEJOURNALSwhichmayinvitearesponsefromthereceivereitherinperson,inwriting,bytelephone,orthroughelectronicmail.Evaluationofthecost-effectivenessofthestimulusisrelativelyeasyeitherintermsofthenumberofpositiveresponses,e.g.requestsforinformationor,ifpossible,thevalueofsalesgenerated.

Bibliography

Roberts,M.L.&Berger,P.D.(1989).Directmarketingmanagement.EnglewoodCliffs,NJ:Prentice-Hall.

DAVIDYORKE

IndirectCommunications

MARKETINGCOMMUNICATIONSmaybeeitherdirect,e.g.personalface-to-face,verbal,orinwritingwiththetargetedbuyer,customer,or

consumer;orindirectwhereitisintendedthatthetargetwillreceiveacommunicationsMESSAGEthroughanappropriate,impersonal,channel.IndirectcommunicationchannelscomprisetheMASSMEDIA(e.g.TELEVISION,RADIO,NEWSPAPERS,MAGAZINES,TRADEJOURNALS),PUBLICITY,andtheRETAILENVIRONMENT(e.g.,SALESPROMOTIONorPACKAGING).

thereisevidenceintheconsumerbehaviorliteraturethatthisdoesoccur.Thefamilyisthemostimportantsourceofgroupinfluenceonanindividual,inparticularinhisorherformativeyears.However,oneofthedistinguishingcharacteristicsofWesternculture(seeCULTURE)isthedeclininginfluenceofthefamily.

Aspecifictypeofgroupinfluenceofinteresttomarketersisreferencegroup(s)influence.Thesearegroupswhichconsumersidentifywithandareusedasreferencepointsindeterminingjudgements,beliefs,andbehavior.Theysetstandardswhicharethesourceofpersonalbehaviornorms.Theymaybemembershiporaspirantgroups.Examplesofaspirantgroupsarepersonalitieswhoselifestylesarecharacterizedbyluxuryproducts/consumption;andsoccerstarswhoareemulatedbysmallboys(andothers)astypifiedinthepurchaseof"footballstripsandapparel."

Bearden&Etzel(1982)studiedreferencegroupinfluenceandtheconspicuousnessofaproductanditsbrands,andsuggestedthatreferencegroupinfluencecanbestrongorweakforproductand/orbrand.Forexample,thepurchaseofacarandthemodelchosenarebothsubjecttosuchinfluence,whereasforsatellitetelevisionreferencegroupinfluenceprevailswithrespecttoproductownershipbutnotfor"brand"choice.

InterpersonalcommunicationsarecomplementarytoMASSMEDIAcommunications,andconsumersusebothtypesdependingontheproduct,stageinthedecision-makingprocess,andperceptionsofrisk.Interpersonalcommunicationsprovideatwo-waycommunicationprocess,areusuallyseenasmoretrustworthythanthemassmedia,andarehardertoselectivelyignoreortuneout.However,theymayalsobeprovidingunrealisticorinaccurateinformationandare,indeed,usuallycommunicatingevaluationsandopinionsratherthanfactualinformation.

Bibliography

Bearden,W.O.&Etzel,M.J.(1982).Referencegroupinfluenceonproductandbrandpurchasedecisions.JournalofConsumerResearch,9,(2),Sept.,18394.AlsoinH.H.Kassarjian&T.S.Robertson(Eds)(1991).

Perspectivesinconsumerbehaviour.(4thedn).pp.43551.PrenticeHall.

Engel,J.F.,Blackwell,R.D.&Miniard,P.W.(1990).Consumerbehavior(6thedn).Orlando,FL:TheDrydenPress.Chapter5.

Hawkins,D.I.,Best,R.J.&Coney,K.A.(1992).Consumerbehavior:Implicationsformarketingstrategy(5thedn).Homewood,IL:Irwin.Chapter5.

Katz,E.&Lazerfeld,P.F.(1955).Personalinfluence.Glencoe,IL:FreePress.

King,C.W.&Summers,J.O.(1979).Overlapofopinionleadersacrossconsumerproductcategories.JournalofMarketingResearch,7,Feb.,4350.

Myers,J.H.&Robertson.,T.S.(1972).Dimensionsofopinionleadership.JournalofMarketingResearch,9,Feb.,416.

Schiffman,L.G.&Kanuk,L.Z.(1991).Consumerbehavior(4thedn).Prentice-Hall.Chapters11,17.

Solomon,M.R.(1992).Consumerbehavior.NeedhamHeights,MA:Allyn&Bacon,Chapter11.

BARBARALEWIS

Interviews

seeDEPTHINTERVIEWS;FOCUSGROUPS;SURVEYRESEARCH

LatentDemand

seeDEMAND

Learn-Feel-BuyModel

Thelearn-feel-buymodels(seeAIDAMODEL,HIERARCHYOFEFFECTSMODEL,INNOVATION-ADOPTIONMODEL)inMARKETINGCOMMUNICATIONSproposethatbuyers/customers/consumersfirstlearnaboutaproductorservicebyseeing,reading,andunderstandinganadvertisementorbeingtherecipientofothermarketingcommunications.Theynotonlylearnwhatbenefitstheproductorservicemaygive,butmayalsodeveloppositivefeelingsaboutit,i.e.,theyaremovingthroughstagesofunawarenesstoawareness,interest,andliking.Inturn,thismaystimulatethepotentialcustomers/consumerstobuytheproductorservice,andtodeveloployaltytowarditinthelongerterm.Thissequenceismostappropriatewhenthebuyer/customerhashighinvolvementwithaproductcategorywithhighdifferentiation,e.g.,inthepurchaseofacar.

SeealsoBuy-feel-learnmodel;Feel-buy-learnmodel

Bibliography

DAVIDYORKE

Learning

seeCONSUMERLEARNING

LegalSystem

ThelegalsystemisapowerfulforceintheMARKETINGENVIRONMENTsurroundinganyorganization,bothnationalandinternational.Legalsystemsvaryfromcountrytocountry,somebeingcontrolledwhollybygovernment,otherscontainingbothstatutelawandprecedent,i.e.,judgesmaymodifypreviousdirectionstomeetchangingcircumstances.Theprincipalfeaturesofanylegalsystemasanelementinthemarketingenvironmentrelatefirsttotherightsofthesupplier,i.e.,thelegalconditionsinwhichmarketingactivitiesmaybeundertaken,andsecondlytotherightsofthecustomer(see,forexample,CONSUMERPROTECTION).Problemsmayarisewhenanorganizationseekstointernationalizeitsoperations,aselementsindifferentlegalsystemsmayprecludetheuseofastandardizedmarketingplan.

Bibliography

DAVIDYORKE

Licensing

Licensingisoneofthreeindirectmethodsofmarketentry(seeINTERNATIONALMARKETENTRYANDDEVELOPMENTSTRATEGIES)thatinvolvethetransferofindustrialpropertyrightsandotherresources,includingcapital.TheothermethodsareFRANCHISINGandproductioncontracts(sometimescalledmanagementcontracts).InthecontextofINTERNATIONALMARKETING,thetermlicensingreferstospecificcontractualarrangements

Wells,W.D.(1975).Psychographics:Acriticalreview.JournalofMarketingResearch,12,May,196213.

Wells,W.D.&Gubar,G.(1966).Lifecycleinmarketingresearch.JournalofMarketingResearch,Nov.,355363.

Wells,W.D.&Tigert,D.J.(1971).Activities,interestsandopinions.JournalofAdvertisingResearch,11,2735.

BARBARALEWIS

ListPrice

Inorganizationalmarketspriceisoftentheresultofnegotiationsbasedonanotionallistpricewhichistheneitherdiscounted(e.g.,forvolumepurchases),oraugmented(e.g.,forcustomizedorders).ListpricesareoftenquotedinproductcataloguestogetherwithstipulatedDISCOUNTlevelsforspecifiedvolumesapracticereferredtobysomewritersasadministeredpricing.

DOMINICWILSON

Logistics

Thisisamanagementfunctionconcerningtheprocessofphysicaldistributionandstockholding.Itdealswiththeplanning,allocating,andcontrollingofafirm'sresourcesandtheirmovementaroundtheorganizationorbetweenorganizationsinasmooth,uninterrupted,andtimelyflow.Withinaretailsystemthiswouldincludetheflowofgoodsfromthesiteofmanufacturetothefinalconsumer.Theallocationoffinancialandhumanresourceswouldalsobetheresponsibilityoflogisticsmanagement.

Efficiencyofallocationisofgreatimportancetoensurethatthereisnoover-orunder-supplyandthatresourcesaredistributedatlowestpossiblecost.Thisrequiresconsiderationofstockholdingcosts,packagingandtransportcosts,etc.

Bibliography

Christopher,M.(1977).Distribution,planningandcontrol,acorporateapproach.Farnborough,Hants:Gower.

STEVEWORRALL

filedwithrespecttotheirdemographiccharacteristics(seeDEMOGRAPHICS)whichhasimplicationsforMEDIAPLANNING(seealsoADVERTISING).

Magazinestypicallyprovidefull-coloradvertisingatareasonablecost,havearelativelylonglifeandmultiplereadership,andcanprovidebroadnationalcoveragewith,sometimes,flexibilitythroughregionaleditions.Further,thereisprovensuccessofmagazines'editorialoffersandsalespromotions.Onedrawbackofmagazineadvertisingistherelativelylongleadtimeforcopydates.

DAVIDYORKE

MailOrder

Mailorderismostreadilyassociatedwithcatalogshopping.Goodsareselectedfromthecatalogassortmentandordersmailedortelephonedthroughtotheretaileroralocalagent.Mailorderhastraditionallybeendirectedatlowersocialclasses,withtheattractionofeasilyobtainablecreditterms,andatconsumerslivinginmoreremoteareas,whereaccesstoshopsisrestricted.Morerecentlycertainretailers,suchasNextwiththelaunchoftheNextDirectoryin1988,havesuccessfullydevelopedcatalogswhichappealtomoreup-marketconsumers.Thesehavehelpedtorevitalizethemailordersectorandimprovethefrequentlydowdyanddown-marketimageassociatedwiththisretaildistributionchannel.Greenland&McGoldrick(1991)identifyover40differentmotivesassociatedwithcatalogormailordershopping,thekeydimensionsbeing:

Hassle-freeconvenience

Riskreduction

Addedvaluewithcredit,promotions,andfreegifts

Recreationalexperience

Transactionefficiency

Decisionreassurance.

Themailordersectorisagrowtharea,e.g.,in1993USmailordersaleswereup7percentover1992(DirectMarketing,1994).Keyissuesimpactingonthefutureofthisretaildistributionchannelincludetheimageofdirectmarketing,mergerandacquisitionactivity,alternativemedia,andaninteractivemarketplace(Petsky,1994).SeealsoRetaildistributionchannels

Bibliography

DirectMarketing(1994).1994mailorderoverview.DirectMarketing,57,(4),258.

Greenland,S.J.&McGoldrick,P.J.(1991).Frommailordertohomeshoppingrevitalisingthenonstorechannel.JournalofMarketingChannels,1,(1),5985.

Petsky,M.(1994).Criticalissuesandtrendsforthefutureofmailorder.DirectMarketing,57,(4),2932.

STEVEGREENLAND

Make/BuyDecision

AnimportantalternativetoPURCHASINGgoodsorservicesistosupplythemfrominternalsources.Equally,beforeundertakinginternalproductionofgoodsorservicesitisimportanttoconsiderwhetherexternalpurchasingmightprovideamoreefficientorpreferablealternative.Makeorbuydecisionscanalsoapplytointernalservicessuchasmarketing,research,planning,accounting,anddesign,whichmaybebetterundertakenbyexternalspecialistswitheconomiesofscaleandspecializedinvestments(Anderson&Weitz,1986).Thisissuehasmanystrategicandoperationalimplicationsbeyondtherelativelysimpleaspectofcostcontrol.In-housesupplierarrangementsappeartoofferpotentialadvantagesofmanagementcontrol,ofcostmanipulation(e.g.,inTRANSFERPRICING),ofacquittingminimumnationalcontentrequirementswherethealternativeisinternationalsourcing,offlexibleproductionmanagement,andofusingwhatmightotherwisebeunder-utilizedassets.Buttherecanalsobesignificantproblemsofcostcontrol,quality,delivery,andservicewherethe

commercialpressuresofmarketforcesare(orareperceivedtohavebeen)"suspended."Decisionsinthisareaarefrequentlyconcernedwithpolitical,cultural,personal,historic,andstrategicissuesratherthanwiththemoreroutinepurchasingconcerns.

relationshiptothepositionsofthebrandsonthemap.

Bibliography

Green,P.E.,Carmone,F.J.&Smith,S.M.(1989).Multidimensionalscaling:Conceptsandapplications.Boston,MA:Allyn&Bacon.

MICHAELGREATOREX

MultivariateMethods(Analysis)

MultivariatemethodsofdataanalysisinvolvetheconsiderationofrelationshipsbetweenmorethantwovariablesandassuchextendUNIVARIATEANALYSISandBIVARIATEANALYSISofdata.Multivariatemethodsrequiretheuseofcomputer-basedstatisticalanalysispackagessuchastheSTATISTICALPACKAGEFORTHESOCIALSCIENCES,orSPSS,andMINITAB.

Thebest-knownmethodsareMultipleRegression(seeREGRESSIONANDCORRELATION)whichseekstofindtherelationshipbetweenadependentvariableandseveralindependentvariables,PRINCIPALCOMPONENTANALYSISandFACTORANALYSISwhicharelookingforinterrelationshipswithinasetofvariables,DISCRIMINANTANALYSISwhichseeksthebestcombinationsofvariablestodiscriminatebetweengroupsofrespondents,CLUSTERANALYSISwhichisarangeofgroupingtechniques,MULTIDIMENSIONALSCALINGwhichisusedtoobtainperceptualmapsofhowcustomersperceivebrands,andCONJOINTANALYSISwhichcanbeusedtoobtainindirectevaluationsoftheutilitiesofproductattributes.STRUCTURALEQUATIONMODELS(orlatentvariablepathmodels)bringtogetherthemanypartstheMARKETINGRESEARCHeffortandthesoftware,suchasLISREL,PROCCALIS,orEQS,usedtoestimatetheparametersofthesemodelscanbeseenassupersedinginaholisticwaysomeofthemultivariatemethodsmentionedabove.

Bibliography

MICHAELGREATOREX

Network

TheresearchoftheIMP(IndustrialMarketingandPurchasing)GroupofresearchersintoEuropeanbuyer-sellerPURCHASINGrelationshipshasdevelopedtheconceptofinteraction(seeINTERACTIONAPPROACH)wherebysuppliercustomerrelationshipsareunderstoodintermsofasetofevolvingandmutually-dependentexchangesboundnotonlybycommerciallogicbutalsobyfactorsofsocialandoperational"comfortableness."TheIMPresearchevolvedfromstudiesofprocurementpracticesbetweensuppliersandcustomersinEuropeanindustrialmarketswheretheimportanceofaninformalnetworkofpersonalcontactswasquicklyrecognizedascrucialtotheday-to-dayworkofprocurementpersonnel.Atamoreaggregatedlevel,organizationsinamarketwillsharemanysuchrelationshipsinwhatcanbeanalyzedasanetworkofbilateralandmultilateralrelationships(Håkansson&Snehota,1989).Itmayevenbeusefultodefineorganizationalmarketsintermsofthecommonfactorssharedbyanetworkoforganizationalrelationshipsratherthanthemoreusualsimplisticreferencetoproductsorservices.Morerecently,thenetworkconceptcouldbeseenasanimportantstimulustoresearchinterestinissuesofinterorganizationalcollaborationandstrategicalliances(seeINTERNATIONALSTRATEGICALLIANCES),e.g.,intermsofNEWPRODUCTDEVELOPMENT(Håkansson,1987)andtechnologymanagement(Håkansson,1990).

SeealsoRelationshipmarketing

Bibliography

Håkansson,H.(1987).Productdevelopmentinnetworks.InH.Håkansson(Ed.),IndustrialtechnologicaldevelopmentAnetworkapproach(pp.84128).London:CroomHelm.(Also(abridged)inD.Ford(Ed.),Understandingbusinessmarkets:Interaction,relationshipsandnetworks.(pp.487507).London:AcademicPress.)

Håkansson,H.(1990).Technologicalcollaborationinindustrialnetworks.EuropeanManagementJournal,8,(3),3719.

Håkansson,H.&Snehota,I.(1989).Nobusinessisanisland:Thenetworkconceptofbusinessstrategy.ScandinavianJournalofManagement,4,(3),187200.

DOMINICWILSON

NewProductDevelopment

Newproductdevelopment,orNPD,"istheprocessthattransformstechnicalideasormarketneedsandopportunitiesintoanewproductthatislaunchedontothemarket"(Walshetal.,1992,16).Newproductscanmakeaprofoundcontributiontocompetitivenessandthisisparticularlyacuteinaneraofacceleratingtechnologicalchange,generalshorteningofthePRODUCTLIFECYCLE,andincreasinglyintensecompetition.ThemostcommonrepresentationoftheNPDprocessisasaseriesofdecisionstagesoractivities(Kotler,1984,5thedn).Cooper&Kleinschmidt(1986)identify13stagesoftheNPD:

(1)screeningofnewproductideas;

(2)preliminarymarketassessment;

(3)preliminarytechnicalassessment;

(4)detailedmarketstudy/marketresearch;

(5)business/financialanalysis;

(6)physicalproductdevelopment;

(7)in-houseproducttesting;

(8)customertestsofproduct;

(9)testmarket/trialsell;

(10)trialproduction;

(11)pre-commercializationbusinessactivities;

(12)productionstart-up;and

(13)marketlaunch.

However,thetraditionalsequentialmodelofNPDhasbeencriticizedforignoringtheinteractionsthatoccurbetweenthestagesandtheinteractionsbetweendifferentdepartments,aswellaswithexternalagencies,suchascustomersandsuppliers(Hart,1995).TheuncertaintiesofNPDarerecognizedandrelatetobothmarketuncertaintiesandtechnologicaluncertainties(seeUNCERTAINTY).ThemoreradicaltheNPD,thenthegreaterthedifficultyinmakingexanteassessmentsofthetechnicalandmarketopportunities.Aconsiderableamountofresearchhasbeendevotedastohowtoimprovethelikelihoodofnewproductsuccess.However,thereislittleagreementastowhatconstitutes"success,"andvariousindicatorshavebeenused,suchasdifferentfinancialmeasuresanddifferentunitsofanalysis,whichmeansthatdirectcomparisonoftheresultsofseparatestudiesisnotfeasible.Nonetheless,somethemeshaveemergedfromthedifferentstudiesthatappeartohavesomebearingonthe

medicalequipmentthattechnical,aesthetic,andergonomicfeatureswereallreasonsfordoctors'preferenceswhenchoosingsuchproducts.

SeealsoCompetitiveadvantage;Productdifferentiation

Bibliography

Moody,S.(1984).Theroleofindustrialdesigninthedevelopmentofnewscience-basedproduction.InR.Langdon(Ed.),Designpolicy,vol.2:Designandindustry.London:DesignCouncil.

Rothwell,R.(1981).Non-pricefactorsintheexportcompetitivenessofagriculturalengineeringgoods.ResearchPolicy,10,260.

Saviotti,P.,Coombs,R.,Gibbons,M.&Stubbs,P.(1980).Technologyandcompetitivenessinthetractorindustry.AReportoftheDepartmentofIndustry.DepartmentofScienceandTechnologyPolicy,UniversityofManchester,UK.

Walsh,V.,Roy,R.,Bruce,M.&Potter,S.(1992).Winningbydesign:Technology,productdesignandinternationalcompetitiveness.(Chapter2,pp.6468).Oxford:BasilBlackwell.

MARGARETBRUCE

Not-for-ProfitMarketing

Not-for-profitmarketingispartof"non-business"marketing(togetherwithSOCIALMARKETING)whichrelatestomarketingactivitiesconductedbyindividualsandorganizationstoachievesomegoalotherthanordinarybusinessgoalsofprofit,marketshare,orreturnoninvestment.Marketingconceptsandtechniquescanbeappliedtonot-for-profitorganizationsinboththepublicandprivatesectorsandincludes,forexample:governmentagencies,healthcareorganizations,educationalinstitutions,religiousgroups,charities,politicalparties,performingarts.

Forexample,universitiesfacingincreasingcostsmayusemarketingtocompeteforbothstudentsandfunds,e.g.,definingmarketsbetter,

improvingtheircommunicationandpromotion,andrespondingtoneedsofstudentsandotherpublics.Oneofthemaincharacteristicsofmanynot-for-profitorganizationsisthattheirsupportdoesnotcomedirectlyfromthosewhoreceivethebenefitswhichtheorganizationproduces,e.g.,fundingforstudents'educationcomesfromstudentfees,governmentsources,endowments,industrysponsorship,researchgrantawardingbodies.

Bibliography

Blois,K.J.(1994).Marketingfornon-profitorganisations.InM.J.Baker(Ed.),Themarketingbook.London:Heinemann.

Christy,R.(1995).Thebroaderapplicationofmarketing.InG.Oliver(Ed.),MarketingToday.(Chapter24,pp.500527).HemelHempstead,UK:Prentice-Hall.

BARBARALEWIS

variables,laboratoryresearchallowsstimulitobeinvokedandresponsemeasuredinsituationswhereoccurrencesofthestimulatingeventinreallifemightbeuncommon.Thisisonewayinwhichlaboratoryresearchcanbeaquickwayofobtainingdata.Laboratoryresearchalsopermitseasieruseofelectronicandmechanicaldevicestorecordbehavior.

Amongtheelectronicandmechanicaldevicesthatareusedtorecordbehaviorarethosethatrecordphysiologicalchangesinsubjectswhentheyaresubjecttostimuli.Forexample,thegalvanometerisusedtomeasuretheemotionalarousalofsubjectsexposedtoadvertisingcopybymeasuringthechangesinelectricalresistancecausedbythesweatingthatisbroughtonbyemotionalarousal.Theeyecamerarecordseyemovementsofsubjectslookingatnewspaperadvertisements.Otherelectronic/mechanicaldevicesincludetheon-setmetersusedtomeasureTVaudiencesandthescannersthatareusedbypanelsofshopperstoreadthebarcodesontheirpurchases.

Bibliography

MICHAELGREATOREX

OffthePage

Offthepageisatechniqueforcommunicationorsellingusingcatalogs(eitherprintorelectronic)towhichabuyer/customerrespondsdirectlyinperson,inwriting,orbytelecommunication(seeDIRECTMARKETING;INBOUNDCOMMUNICATIONS).Thenumberofresponsesmaybeusedasaprimafaciemeasureofthecost-effectivenessoftheactivity,andthenamesofrespondentsmaybeenteredontoaDATABASEinordertobuildaprofileoflikelyfuturebuyers/customersforspecificproductsorserviceswhothenmaybetargetedmoreprecisely.

Offering

Marketinghastraditionallydifferentiatedbetweenproductsandservices

(seeSERVICECHARACTERISTICS).ThePRODUCThasbeenviewedasconsistingofabundleoftangibleandintangibleattributes.Thus,Littler(1984)suggeststhataproducthasthreedimensions:thecore,consistingoftheessentialbenefitorservice;thetangibleproduct,includingthecolor,taste,design,brandname,andpackaging;andtheaugmentedproduct,suchastheback-upservice,warranty,anddelivery.The"product,"then,isasetofbenefits,manyofwhichcanbeseenasinvolvingservice,offeredtothecustomer.Firmscanbeviewedasmakinganofferingofapackageofvaluestocustomers,ratherthansellingapureserviceorphysicalproduct.Insomecases,especiallyinorganizationalmarkets,firmswillactas"problemsolvers"andprovidecompletesystems(thedesign,development,installation,andimplementationof,forexample,managementinformationsystems)(seeSYSTEMSMARKETING).

Bibliography

Littler,D.A.(1984).Marketingandproductdevelopment.Oxford:PhilipAllan.Chapter6.

DALELITTLER

OneStepFlowModel

Theonestepflowmodelofcommunicationspresentsmasscommunications(seeMASSMEDIA),mainlyADVERTISING,asactingdirectlyoneachmemberofthetargetaudience.Thisoften-called"hypodermicneedle"modelofcommunications(thecommunicationpassingdirectlytoindividualmembersoftheaudience)contrastsmarkedlywiththeTWOSTEPFLOWMODEL,whichdepictscommunicationsasbeingfilteredthroughintermediariescalledopinionleaders(seeINTERPERSONALCOMMUNICATIONS).Manyindividualsarelikelytoreceiveinformationfrommasscommunications,althoughSELECTIVEEXPOSURE,SELECTIVEPERCEPTION,andSELECTIVERETENTIONwillactasfilters.Masscommunicationsmaycreateawarenessandeveninterest,butthenfurtherinformationmaybesoughtorreceivedthroughinterpersonalchannels,suchasfromopinionleaders(seeINTERPERSONALCOMMUNICATIONS).

DALELITTLER

OpinionLeaders

seeINTERPERSONALCOMMUNICATIONS

termtendstobeusedinconnectionwithapurchasingdecisiontochangefromaninternalsourcetoanexternalsource.Forexample,anorganizationmaydecidethatinfutureitwill''outsource"partofitsdistributionoperationbypurchasingdistributionservicesfromanorganizationspecializinginthisfield.Theadvantagesof"outsourcing"canincludecostreduction(externalsourcesmayenjoyscaleeconomies),accesstospecialistexpertise,andgreaterconcentrationonanorganization's"corecompetence"(byavoiding"peripheral"operations).Thepotentialdisadvantagesofoutsourcingcanincludereducedcontrolovertheoperationsinvolvedandsolessflexibilityinrespondingtounexpecteddevelopments.Itis,therefore,importanttotakeintoaccountboththestrategicandtheoperationalimplicationsofoutsourcing.

Therehasbeenanotableincreaseintheuseofoutsourcingduringthe1980sand1990s,forexampleinUKlocalgovernmentandhealthmarkets.Itcouldbearguedthatthishasarisenasadirectconsequenceofincreasingcompetitivepressureswhichhaveforcedorganizations(oftenagainsttheirculturalpredispositions)tooutsource"uncompetitive"activitiestoexternalspecialistsandtofocusonareasofmoresustainableandprofitabledifferentiatedcompetence.

SeealsoMake/buydecision

DOMINICWILSON

OwnBranding

Thisistheprocesswherebyaproductorservicenameisdevelopedfororbyaretailerfortheirexclusiveuse.Insomecasestheproducerofabrandedgoodwillproduceasimilarproductforaretailergivingitadifferentnameaschosenbythatretailer.Inothercasestheretailermaycontracttohavetheproductmanufacturedindependently.ExampleswouldincludeMarksandSpencer's"StMichael"rangeandSainsbury's"ClassicCola."

Ownbrandgoodsareusuallypositionedinthemarketplacetocompetedirectlywiththemanufacturers'brands(oftenappearingnexttotheminthe

store)andmayevenhaveaverysimilarappearanceandusagecharacteristics.Inothercasesstoresmaystockonlytheirexclusivebrands(e.g.,BodyShop).

Inpursuingsuchamarketingstrategytheretailermaybeattemptingtocreateconsumerloyaltyforhisbrandandtakemarketsharefromthecompetitors.Thisstrategymayalsoraisetheretailer'sprofileintheconsumer'smind.Inaddition,ownbrandingmayallowaretailertogainanadvantageovercompetitorswithoutownbrandproductsastheperceivedqualityofownbrandsincreaseswhilestillbeingofferedtothecustomeratapricelowerthanmanufacturers'brands.Dore(1976)recommendsa15percentdiscountonsimilarbrandedgoods.

Problemswithanownbrandstrategycanincludeincreasedpressureonlimitedstoredisplayspace,andthepossibleconfusionofcustomersduetoanabundanceofverysimilarproducts.

Bibliography

Dore,B.(1976).Ownlabelsaretheystillworththetroubletogrocers?AdvertisingandMarketing,13,(2),5863.

James,G.&Morgan,N.J.(Eds)(1994).Addingvalue:Brandsandmarketinginfoodanddrink.London:Routledge.

STEVEWORRALL

customersoftenagainstabackgroundofrelativelyantagonisticbargainingcanbeamajorpsychologicalandculturalbarriertoaccessingthebenefitsofpartnershipsourcing.Partnershipsourcingismorerelevanttothosemarketswherelong-termguaranteesofsupplycontinuityareimportantanditisdifficulttoswitchswiftlybetweensources,perhapsbecauseofproductcomplexityorscarcityorhighcompetitivedifferentiation.

Bibliography

CBI(1991).Partnershipsourcing.London:ConfederationforBritishIndustry.

Han,S-L.Wilson,D.T.&Dant,S.P.(1993).Buyersupplierrelationshipstoday.IndustrialMarketingManagement,22,(4),Nov.,331338.

Johnston,R.&Lawrence,P.R.(1988).BeyondverticalintegrationTheriseofthevalue-addedpartnership.HarvardBusinessReview,66,July-Aug.,94101.

Lamming,R.(1993).Beyondpartnership.Prentice-Hall.

DOMINICWILSON

Payback

Payback(orpaybackperiod)referstothetimetakentoreachthebreak-evenpoint(seeBREAK-EVENANALYSIS)fortheprofitabilityofaparticularproductorservice.PaybackisreachedwhencumulativefixedandvariablecostsarematchedbycumulatedsalesrevenuesandsoiscruciallyinfluencedbyPRICINGdecisions.Manyorganizationsusepaybackasakeyinternalmeasuretoprioritizealternativeproduct/serviceofferingsbutthereisadangerthatthismayencouragemanagerstoplanunrealisticorshort-termpricingpolicies.

DOMINICWILSON

PenetrationPricing

PenetrationpricingisthetermusedtodescribeaPRICINGstrategywherebyanorganizationusesalowpriceinmarketinganewproductsoastodevelopalargeMARKETSHAREveryquickly.Forexample,penetrationpricingmightbeusedbyanewentrantaimingtodevelopasubstantialcompetitivepositioninamarketdominatedbyanestablishedrival.Alternatively,thestrategymightbeusedtolaunchanewproductwheretheinitialbarrierstocompetitiveentrywerethoughttobelowandtherewasariskofrivalsdevelopingimitativeproductsquickly.

Followingsuccessfulentrytoamarketusingapenetrationpricingstrategy,pricelevelscansubsequentlyberaised(e.g.,wherethepricehadbeenpromotedasatemporaryintroductoryDISCOUNT),althoughraisingpricesisoftenproblematicandcangenerateundesirablemarketsignals.Moreusually,pricessetthroughapenetrationpolicyareheldlargelyunchangedandbecomeprofitableasunitcostsdecreaseinlinewiththeeconomiesofscalemadeavailablethroughgrowingmarketshare.Scaleeconomiesandcapitalinvestmentrequirementsinproductionanddistributioncanthenprovidesignificantbarrierstodeternewentrants.Thus,theeffectofsuccessfulpenetrationpricingisoftentoacceleratenotonlytherateofadoption(seeADOPTIONPROCESS),butalsotheearlystagesofthePRODUCTLIFECYCLEandtheemergenceofcompetitivemarketstructures.Alongsidethesepotentialadvantages,penetrationpricingalsocarriestherisksassociatedwithcommitmenttorelativelylong-termpolicies(includingreducedcompetitiveflexibility).Inshort,penetrationpricingislikelytobeappropriatewherethereiswidespreadpotentialdemandfortheoffering,wherethisdemandcanbeaccessedquicklybythesupplier,wheresignificantscaleeconomiesareavailable,andwhererivalscouldotherwisedevelopimitativeofferingspromptly.

DOMINICWILSON

PerceivedRisk

TheconceptofperceivedriskcanbelookedonasanextensionofthegeneralconceptualframeworkoftheCONSUMERDECISION-MAKINGPROCESS,whichmaybedescribedasproblem-solvingactivityinwhichaconsumerattemptstoidentifyproductperformanceandpsychologicalgoals

(seeCONSUMERNEEDSANDMOTIVES)andtomatchthemwithproducts/brands.However,consumerdecision-makinginvolvesriskinthesensethatanyactionwillproduceconsequenceswhichcannotbeanticipatedwithanythingapproachingcertainty,andsomeofwhicharelikelytobeunpleasant.Consumerscannotconceiveofallpossible

takecloseaccountoftheviewsofproductionmanagementandworkersaswellasconsultingfinance(forscrapandobsolescencerates),goodsreceiving(fordeliveryperformance),qualitycontrol,andproductengineering(forcompatibilitywithanyproposedchangestoproductdesignorproductionsystems)

(12)Reassessmentofrequirementinanticipationofmajorchanges(e.g.,inproductdesign,insuppliers,intechnology).

SeealsoPurchasing

Bibliography

Robinson,P.T.,Faris,C.W.&Wind,Y.(1967).Industrialbuyingandcreativemarketing.Boston,MA:Allyn&Bacon.

DOMINICWILSON

demographicandothercharacteristicsusefulforclassifyingrespondents.

Thecriticalconcerninquestionnairedesignistheminimizationofmeasurementerror,i.e.,minimizingthedifferencebetweentheinformationsoughtbytheresearcherandthatproducedbythequestionnaire.Thefactorsthatneedtobeconsideredinquestionnairedesigninclude(1)specificationofrequiredinformation;(2)questioncontent;(3)questionwording;(4)responseformat;(5)questionorder;(6)physicalcharacteristics;and(7)pilottesting.

Softwareisavailabletoaidthedesignofquestionnairesandintelephoneandcomputerinterviewingtoprovidethequestionsandcollecttheresponsesastheyaremade.

Thespecificationoftherequiredinformationisanessentialpartoftheresearchprocessandanecessaryprerequisiteofgoodquestionnairedesign.Itisalsonecessarytoconsiderwhotherespondentswillbeandwhattheinterviewtechniquewillbepostal,computer,telephone,orpersonal.

Thenextconsiderationistodetermineindividualquestioncontent.Arethedatatobeproducedbyaparticularquestionneeded?Willaparticularquestionproducethespecifieddata?Areseveralquestionsneededratherthanone?Acommonerroristoasktwoquestionsinone,resultinginaquestionthattherespondenthasdifficultyinansweringunambiguously.Willtherespondentnotanswerthequestionbecause(1)itisoutsidethecompetenceoftherespondent,(2)therespondenthasforgottentheanswer,(3)therespondentcannotarticulatetheanswer,or(4)thesubjectisembarrassingorprivateandtherespondentisunwillingtoprovideananswer?

Thewordingofthequestionisimportant.Simple,frequentlyused,andwell-understoodwordsarepreferred.Leadingquestionssuchas"Mostpeopleagreethatcorporalpunishmentiswrong,doyou?"or"DoyouthinkpatrioticBritonsshouldbuyJapanesecars?"shouldbeavoided.Questionsshouldgivealternativesequalprominence,forinstancearesidentofGlasgowmightbeasked''Doyouprefertotravelbyair,train,orroadwhen

goingtoLondon?";justaskingwhethertheyprefertotravelbyairwouldbiastheanswers(seeTull&Hawkins,1987).WhenusingabatteryofRATINGSCALES,say,Likertscales,thestatementsshouldbeapositiveandnegativemixture;indeed,differentquestionnaires,withthedirectionofthestatementsvarying,couldbepreparedanddistributedrandomlytotherespondents.

Theresponseformatisachoicebetweenopen-endedandclosedquestions.Inopen-endedquestionstherespondentisfreetoofferanyreplyusinghis/herownwords.Thisprecludestheinfluencingoftherespondentbythelistofresponsecategories.Responsesthataredifferenttotheresearcher'sexpectationscanbeforthcoming,makingopen-endedquestionssuitableforexploratoryresearch.Ontheotherhand,respondentsdislikewritinganswersonquestionnairesandsothisreducestheusefulnessofself-completionquestionnaires;forinterviewer-administeredquestionnaires,thesummarizationandrecordingofanswersislefttotheinterviewers,whoseabilitiesandbiasesmayvary.Eventually,responsestoopen-endedquestionshavetobecoded,whichmayleadtomisinterpretationofresponsesandcertainlyaddstocost.

Inclosedquestionsalistofpossibleresponsecategoriesisprovidedforrespondentstochooseandrecordtheirchoice.Closed,ormultiplechoicequestions,areeasierfortheinterviewerandtherespondent.Theyincreaseresponserates,reduceinterviewerbias,anddataanalysisiseasier.However,multiplechoicequestionsaremoredifficulttocomposeasthelistofpossibleanswersneedstobecomplete,aproblemwhosesolutionrequirespreliminaryresearch.Thelistcanbiasanswers,notonlybecausesomeresponsecategoriesmaybeomittedbutalsoduetotheorderinwhichthecategoriesarelisted.Forthisreason,severalquestionnaireswithdifferentresponsecategoryordersmaybeproducedanddistributedatrandominpostalsurveys;incomputersurveystheordermaybeeasilyvaried;andinpersonalinterviewsseveralpromptcardswithdifferentordersofalternativesmaybeproducedandusedatrandom.

Thequestionsequencecanaffectreplies:theruleistostartwithgeneraltopicsandgraduallybecomemorespecific.Routesthroughthequestionnairemayneedtobedeviseddependingontheresponsestoearlyquestions:thus,ownersofaproductmaybeaskedonesetofquestions,

non-ownersadifferentset.Initialquestionsshouldbesimpleandinteresting,

otherwiserespondentsmayrefusetocompletetheinterview.Forthesamereason,demographicandclassificationquestionsshouldbeleftuntiltheendunlesstheyareneededimmediately,e.g.,toestablishwhetherornottherespondentisqualifiedtofillaquotainquotasampling.

Thephysicalcharacteristicsshouldmakethequestionnaireeasytouse,especiallywhenbranchingquestionsareusedtodecideonroutesthroughthequestionnaire.Physicalappearanceisespeciallyimportantinpostalsurveysinordertosecurethecooperationoftherespondent.

Questionnairesshouldbepilotedinordertoseeifthequestionsareunderstoodbytherespondentsandmeanthesamethingtotherespondentastheresearcherintended,thatthelistsofresponsecategoriesarecomplete,thatthequestionnaireisnottoolong,andthattheroutesthroughthequestionnaireareappropriateandcanbefollowedbytheinterviewersorrespondents.

Bibliography

Tull,D.S.&Hawkins,D.I.(1987).Marketingresearch:Measurementandmethod(4thedn).NewYork:Macmillan.Chapter7.

MICHAELGREATOREX

andstronglydisagreeingwithanegativestatementbothscorethesame.

Thesemanticdifferentialisaratingscale,usuallywithsevenpoints,withendpointsgivenlabelsthathaveoppositemeanings.Usuallyrespondentsratetheobjectunderstudyonseveralbipolarratingscaleswithendsgivenadjectivessuchascleandirty,hotcold,softhard,slowfast,etc.Eachscalecanbescored1to7andanalysiscanbecarriedoutitembyitem(profileanalysis).Asummatedmeasurecanbeconstructed,rememberingtoreversesomescalessothatpositiveadjectivesareconsistentlyscored.Againthisassumes,controversially,thatthescalesareinterval.

Othertypesofratingscalesarealsoused.Examplesinclude5-or7-pointimportancescalesgoingfromveryunimportanttoveryimportanttorecordtheimportanceofeachofseveralproductattributes,orusefulnessscalestorecordtheusefulnessofeachofseveralriskrelievers,suchasobtainingtheadviceoffriendsorrelativesorbuyingthemostpopularbrand.

Themajorissuesintheconstructionofitemizedratingscalesinclude(1)thenumberofscalecategories;(2)balanced(equalnumberofpositiveandnegativecategories)orunbalanced;(3)oddorevennumberofcategories(withanevennumberofcategories,respondentscannotsitonthefence);(4)forcedorunforced(thelatterhasadon'tknowcategory);and(5)theamountofverbaldescription(seeTull&Hawkins,1987).

Multi-itemratingscalesbuildupontheindividualratingscalesdiscussedabove.Thesimplestmulti-itemscalesaresimplesumsofselectedindividualscales,rememberingtoreversenegativescales.Morecomplicatedscalesincludeweightedsumsoftheindividualscaleswiththeweightsbeingsuggestedbymultivariatestatisticalmethods,e.g.,FACTORANALYSISandtheuseofSTRUCTURALEQUATIONMODELS.TestsforRELIABILITY,suchasCronbach'salpha,andVALIDITYareappropriatebeforesuchmulti-itemscalescanberecommended.

AnalternativetodirectlymeasuredratingscalesarescalesobtainedindirectlybymethodssuchasMULTIDIMENSIONALSCALINGandCONJOINTANALYSIS.Inthelatter,"products"areassessedoveralland

the"part-worths"or"utilities"ofindividualproductattributesarederivedmathematically.

Bibliography

Bearden,W.O.,Neteymeyer,R.G.&Mobley,M.F.(1993).Handbookofmarketingscales.London:Sage.

MICHAELGREATOREX

WhenorganizationsareplanningtheirADVERTISINGand,inparticular,decidingonwhichmediatouse(i.e.,MEDIASCHEDULE),theyhavetoconsiderthedesiredreachoftheiradvertising,i.e.,thenumberofpersons,households,ororganizationsexposedtoaparticularmediascheduleatleastonceduringaspecifiedperiodoftime.

TheeffectivereachisthepercentageofthetargetMARKETexposedtotheadvertisementfortheminimumnumberoftimes(FREQUENCY)thatisjudgednecessaryfortheadvertisementtobeeffective.CalculationofeffectivereachisdiscussedbyKotler(1994).

SeealsoAdvertising

Bibliography

Kotler,P.(1994).Marketingmanagement:Analysis,planning,implementationandcontrol(8thedn).EnglewoodCliffs,NJ:Prentice-Hall.Chapter23,pp.638639.

DAVIDYORKE

RealizableDemand

seeDEMAND

ReferenceGroups

Regionalism

Theglobaleconomyandsocietycontainsanumberofregionswhichshareadegreeofcommonalityinculture,language,politicaloutlook,and,toalesserdegree,economiccircumstance.Forexample,onecan

Kotler,P.(1988).Marketingmanagement:Analysis,planning,implementationandcontrol(6thedn).NewYork:Prentice-Hall,135.

Morgenstein,M.&Strongin,H.(1992).Modernretailing,managementprinciplesandpractices(3rdedn).Prentice-Hall.

STEVEWORRALL

RiskReduction

seePERCEIVEDRISK

thiswillinclude:definingthetaskofthesalesforce,organizationintosalesterritories,planningsalescallcycles,recruitingandtrainingofpersonnel,settingobjectives,establishingbudgets,motivationofpersonnel,andperformanceevaluationagainstobjectives.Fromtheevaluation,salesmanagementcandeterminestrengthsandweaknessesandinitiateanychangesinlinewithcorporateobjectivesandsupport.

Bibliography

Adams,T.(1988).Successfulsalesmanagement.London:Heinemann.

Churchill,G.A.Jr,Ford,N.M.&Walker,O.C.Jr(1985).Salesforcemanagement:Planning,implementationandcontrol.Homewood,IL:Irwin.

DAVIDYORKE

SalesPromotion

Salespromotion(s)isapartofthemarketingCOMMUNICATIONSMIXandisanactivityand/ormaterialthatactsasadirectinducement,offeringaddedvalueandincentiveforaproducttoresellers,salespersons,orendcustomers.

Salespromotionsaredesignedtostimulatedealerortradepurchasesand,inturn,inconsumermarketsto:getcustomerstotryanewbrand;encouragefavorableopinions;matchcompetitors'actions;increasesalesfrequencyandamounts,etc.Mostsalespromotionsareshortterm,andtheytendtobeusedmoreintensivelyinthemarketingoffast-moving-consumergoodswhereBRANDswitchingandperceivedhomogeneityoftheofferingsprevails.Theyarerelativelymoreeasytoisolateandevaluatethanotherelementsinthecommunicationmix.

Tradepromotionsincludebuyingallowances,freegoods,cooperative

advertising,dealersalescontests,anddisplaymaterials.Consumerpromotionsincludesamples,COUPONS,PRICEPROMOTIONS,redeemablevouchersforgifts,contests,combinationoffers,tradingstamps,andclubs(e.g.TescoClubCard).PromotionsmayalsobetargetedattheSALESFORCE,e.g.contestsandprizes.

Bibliography

Blattberg,R.C.&Nelsin,S.A.(1990).Salespromotion:Concepts,methodsandstrategies.EnglewoodCliffs,NJ:Prentice-Hall.

Peattie,S.&Peattie,K.(1994).Salespromotion.InM.J.Baker(Ed.),Themarketingbook(3rdedn).(Chapter22,pp.534554).Oxford:Butterworth-Heinemann.

Wilmhurst,J.(1993).Below-the-linepromotion.Oxford:Butterworth-Heinemann.

DAVIDYORKE

SalesTerritory

ASALESFORCEneeds,typically,tobestructuredinordertoachieveitsobjectiveseffectively.Itcanbestructuredentirelygeographically,byproducttype,bycustomertype,orbysomecombinationofthese.Whicheverformisused,eachsalespersonwillbeallocatedaterritory,rangingfromafewsquarekilometers/milestothewholecountryor,indeed,anumberofcountries.Thesimplestformofsalesterritoryisonewhereallcustomersarevisitedortelephonedbyonepersonresponsibleforallproducts/services.Wheretheproductrangeiswideand/orwherecustomertypeswithdifferingneedscanbereadilyidentified,territorieswilltendtooccupymorethanonesalespersonand,intheformercase,customersmaybevisited/telephonedbymorethanoneperson.

Thereisaneedtobalancethecostsofimplementingdifferentstructureswiththebenefits/problemsasperceivedbyindividualcustomers.Aparticularfeaturewillbethefrequencywithwhicheachcustomerneedsto

becontacted,thusnecessitatingtheplanningofsalescallcycleswithineachterritory.SuchSALESCALLCYCLESwillalsoattempttobalanceworkloadwithpotential,foreachterritory.

Bibliography

Dalrymple,D.J.&Cron,W.L.(1995).SalesmanagementConceptsandcases.NewYork:JohnWiley.Chapter5.

DALELITTLER

SystemsMarketing

Especiallyinorganizationalmarkets(seeORGANIZATIONALMARKETING),businesseshavedevelopedthecapabilitytoprovidewhatmightbetermed"totalsolutions"tocustomer"problems"orrequirements.Thus,suppliersofcomputerizedbusinessessystemswilldesign,develop,andimplement,includingthetrainingofusers,amanagementinformationsystemtomeettheinformationrequirementsofcustomers;orprocessplantcontractorsmightbeinvolvedinthedesign,construction,andcommissioningofchemicalplant.Thesesuppliersmayhavealltheresourcesinhousetoprovidethetotal"package''ortheymay,asappropriate,subcontracttoothers.Insomecases,therearefirms,suchasconsultantengineers,whichactascoordinatorsbasedontheirskillsinplanningandmanagingthevariousactivitiesrequired.

InmanyMARKETS,suchasdefenceorwherecomplexplantandequipmentisrequired,thereisatraditionofproviding"systems."Thepurchaseroftensolicitstendersfromwhataretermedprimecontractorswhichareresponsibleforbiddingandassemblingthedifferentactivitiesnecessarytosupplywhatthecustomerwants.Theseprimecontractorsprovidea"turn-key"operation,socalledbecausethecustomersimplyturnsonekeytoobtainwhatissought.

DALELITTLER

However:televisionareasmaybetoolargeforpotentialadvertisers;coveragemayberestricted;potentialtargetsmaybelightviewers;andtheattentionoftheviewermaynotbeguaranteedduetochoiceofchannels,fastforwardingofvideorecordersduringcommercialbreaks,andchannelswitchingbetweenthesebreaks.Consequently,althoughmeasuresofREACHandFREQUENCYareknown,thecost-effectivenessoftelevisionadvertisingisdifficulttoevaluate.

DAVIDYORKE

Tender

seeBIDDING

TestMarketing

Testmarketinginvolvesthemarketingoftheproductusingtheproposedmarketingpolicyinalimitedareathatisrepresentativeofthetotalmarket.Theratioofthemarketingeffortforthetestregiontothatagreedforthetotalmarketmustbeapproximatelythesameastheratioofthesizeofthetestmarkettothetotalmarket.

Testmarketingwillgenerallybeemployedtopredicttheresultsofafullnationallaunch.Itisalsoameansoftestingtheimplementationandmanagementofthelaunch.

Althoughtestmarketingmaybeexpensive,itwillincuralowercostthanafullnationallaunch,whileinformationreceivedduringthetestmaybeusedtomodifyorevensignificantlyalterthemarketingprogrambeforeafullnationallaunch.Itisanattempttoreducerisk.

Thereareanumberofadvantagesoftestmarketing,suchasthedetectionofpossibleweaknesseswiththemarketingmixandtheexperimentationofalternativemarketingmixesindifferenttestareastoassessbrandawareness,brandloyalty,andrepeatpurchasesthatmayresultfromvariationsinthemarketingmix.

However,testmarketingcanalertcompetitorsofanimpendingproduct

launch.Theymaydecidetodeveloparivalproductwhichbenefitsfromobservationsmadeofthetestmarketingexercise.Testmarketinginanycasegivescompetitorstimetodevelopandlaunchtheirownproduct.Inadditiontocompetition,otherconditionsmayalsochange,resultingin,forexample,lostopportunitiesflowingfromthedecisionnottomarketfullyearlier.

Anotherriskisthatothercompaniesmarketingproducts,whichinsomewaycompetewiththenewproduct,maytakeactionstodisruptthetestmarket.Theymayincreaseadvertisingandpromotion,introducespecialoffers,ortemporarilycutprices.Meaningfulconclusionsontheperformanceofthenewproductwillconsequentlybedifficulttomake.

Thedecisiontotestmarketisthenaresultofacarefulbalancingoftheopportunitycostsagainstthebenefitsofloweringriskandpossiblyimprovingthefullmarketlaunch.

StagesinPlanningaTestMarket

Thereareseveralstagesinvolvedinplanningatestmarketexercise:

EstablishAims

Ingeneral,theaimwillbetopredictthesalesthatarelikelytobeobtainediftheproductwasmarketedinthetotalmarket.Moreover,sinceitisineffectarehearsalofthenationallaunch,thecompanywillalsobeinterestedinevaluatingtheoperationofthetestmarketingexercise.

SelectofaTestMarketRepresentativeoftheTotalMarket

Formanyproducts,theareaselectedshouldbeamicrocosmofthenationalmarketintermsofdemographicstructure,numberandsizeofretailingoutlets,employmentandsocio-economicfactors.Thismaybedifficulttoguarantee,andsomeapproximationswillhavetobemade.Wherespecializedmarketsegmentsformthetarget,and/orwheretelevisionadvertisingisnotacomponentofthemarketingprogram,morelimitedareas,includingtownsorareasofcities,maybeselected.

DecideontheDurationoftheTest

Ingeneral,companieswillstrivetoobtainanindicationofthe"equilibrium"marketshare,whileatthesametimehavingasshortatest

marketperiodaspossiblesoasnottogivecompetitorstimetodevelopandmarketcompetitiveproductsbeforethetestmarketerdecidestogonational.Inordertogainarealisticinsightintotheacceptabilityofthe

Bibliography

Lazarsfeld,P.F.,Berelson,B.&Goudet,H.(1948).Thepeople'schoice(2ndedn).NewYork:ColumbiaPress.

Schiffman,L.G.&Kanuk,L.L.(1991).Consumerbehavior(4thedn).Prentice-Hall,p.502.

BARBARALEWIS

TypesofMeasure

Measurementinvolvesassigningnumberstocharacteristicsofobjectsoreventsinsuchawaythatthenumbersreflectreality.Essentially,therearefourdifferenttypesofmeasurementscales:nominal(orcategorical),ordinal,interval,andratio.Aswemovefromcategoricaltoratiosothearithmeticpowersofthemeasuresincrease.Theselectionoftheappropriatedescriptivestatisticalmeasureand/orteststatisticdependsupon,amongotherthings,thetype(s)ofscalesusedtomeasurethevariablesofinterest.

Nominalmeasurementscalesusenumberstocategorizeobjectsorevents.Thus,foravariablecalledgenderthenumber1canbeusedasalabelformales,thenumber2asthelabelforfemales.Againforavariablesuchasoccupationdoctorscanbelabeled1,teachers2,students3,marketresearchers4,andsoon.Thenumbersarebeingusedasshorthandtoidentifycategories,andthenumbersarereplaceablebyfullerdescriptionsorlabelsatanytime.Thereisnosuggestionthatmalesprecedefemalesjustbecauseineverydayarithmetic1comesbefore2,orthatonefemaleisworthtwomalesbecause2istwice1,orthataddingadoctortoateachergivesastudentjustbecause1plus2equals3.Thewell-knownrulesofarithmeticdonotapplytothesenumbersforobviousreasons.

Ordinalscalesusenumberstorankitemsinorder.Aswithnominalscales,casesaregiventhesamenumberasothercasesthatsharethesamecharacteristicbuttheorderofthegivennumbersreflectstheorderinreality.Thus,respondentsmaybeaskedabouttheirlevelofagreementordisagreementwithastatement.Forsuchavariable,respondentswho"agree

strongly"maybegiventhenumber1,those"agreeing"given2,those"neitheragreeingnordisagreeing''given3,those"disagreeing"given4whilethose"disagreeingstrongly"aregiven5.Thenumbersreflecttherelativepositionoftheresponsesbutnottheirmagnitude.Thereisnosuggestionthatthedifferencebetweenthecategories"agreeing"and"agreeingstrongly"isnecessarilythesameasthedifferencebetweenthecategories"neitheragreeingnordisagreeing"and"agreeing"despitethefactthat,inothercircumstances,thedifferencesbetween2and1andbetween3and2arethesame.

MuchMARKETINGRESEARCHinvolvingtheuseofquestionnairestomeasuretheattitudes,opinions,preferences,etc.ofconsumersisbasedonordinalmeasurementscales.Ordinalmeasuresarebetterthannominalmeasuresinthatwithordinalscalestheorderofthenumbersreflectsareallifeorderofthecategorieswhilenominalmeasuresareusedwhensuchreallifeorderingisnotpossible.

Intervalmeasurementscaleshavethepropertythatequaldistancesonthescalerepresentequaldifferencesinthecharacteristicbeingmeasured.Thus,temperaturecanbemeasuredonintervalscales,thedifferencebetween10and15degreesisthesameasthedifferencebetween25and30degrees.Animprovedformofintervalscale,theratioscale,hastheadditionalpropertythatitispossibletocomputeandcompareratios.Thus,thedifferenceinpricebetween1and2isthesameasthedifferencebetween8and9butalsotheratioof10to5isthesameastheratioof6to3.Manyvariablescanbemeasuredonscaleswiththeseproperties;examplesareheight,weight,incomes,revenues,sales,prices,profits,ages,etc.Suchscaleshaveallthepropertiesofnominalandordinalscales,indeeditispossibletoconvertratio/intervalscalesintoordinalscaleswhichthemselvescanbeconvertedtonominalscales,ineachcasewithsomelossofinformation.

Thefirstquestiontobeaskedwhenastatisticianbeginstoanalyzeasetofdataiswhattypeofscaleisusedtomeasureeachvariable.Onlythencanadecisionbemadeastowhichstatisticsandtestsareappropriate.

Bibliography

Malhotra,N.K.(1993).Marketingresearch:Anappliedorientation.EnglewoodCliffs,NJ:Prentice-Hall,pp.27581.

MICHAELGREATOREX

Bibliography

Freeman,C.(1974).Theeconomicsofindustrialinnovation.Harmondsworth:Penguin.Chapter7.

Hague,D.C.(1971).Managerialeconomics.Harlow:Longman.Chapter7.

Knight,F.H.(1921).Risk,uncertaintyandprofit(2ndedn).Boston,MA:HoughtonMifflinCo.

Mintzberg,H.(1990).Thedesignschool:Reconsideringthebasicpremisesofstrategicmanagement.StrategicManagementJournal,11,(3),MarApr,171195.

Shackle,G.L.S.(1970).Expectation,enterpriseandprofit,London:Allen&Unwin.

DALELITTLER

UnivariateAnalysis

Univariateanalysisisconcernedwiththequantitativeanalysisofdatawhereeachvariableisanalyzedinisolation.Thepreliminaryanalysisofasurveyoftenbeginswithaunivariateanalysisofthedata.Dataforaseriesofvariables,onevariableatatime,forthewholeofasamplecanbesummarizedintoafrequencydistributionforeachvariablewithasuitableaccompanyingGRAPHICALREPRESENTATION,suchasapiediagram,barchart,histogram,ogive,etc.Alternatively,DESCRIPTIVESTATISTICSsuchasmeasuresofaverage,variation,skewness,andkurtosismaybecalculatedforeachvariable.

Pointestimatesofpopulationcharacteristics,suchaspopulationproportionsorpopulationmeansandtotals,canbemade,andCONFIDENCEINTERVALSbasedonthenormalort-distributionsareeasilycomputed.Hypothesistests(seeHYPOTHESISTESTING)concerningpopulationparametersforeachvariable,suchaspopulationproportions,populationaverage,orstandarddeviation,arewellknownandincludethez-testandt-testforintervaldata,thebinomialtestandonesamplechi-squaretestfor

nominaldata,andtheKolmogorov-Smirnovtestforordinaldata.

Bibliography

Tull,D.S.&Hawkins,D.I.(1987).Marketingresearch:Measurementandmethod(4thedn).NewYork:Macmillan.Chapters12&13.

MICHAELGREATOREX

UsersaremembersoftheDECISION-MAKINGUNIT(DMU)andarethoseindividualsworkinginanorganizationwhoaredirectlyinvolvedintheuseofthegoodsandservicespurchasedbytheorganization.Forexample,aweldercouldbeauserofhis/herorganization'sweldingmachinery,protectiveclothing,canteen,first-aidstation,trainingcourses,pensionscheme,etc.ItisimportanttoinvolveusersinthePURCHASINGPROCESStoensurethatwhateveriseventuallypurchasedwillbepracticableandreadilyintegratedinorganizationalsystems.Userscanbeinfluentialintheearlystagesofthepurchasingprocesswheretheymayinitiateapurchasingprocessthroughidentifyingaparticularneedandspecifyingwhatisnecessarytomeetthatneed.Theycanalsobeinvolvedinlatertrialsandqualitymonitoring.

SeealsoOrganizationalbuyingbehavior

DOMINICWILSON

Utility

Businesses,inprovidingproductsandservicesthroughtheirproductionandmarketingactivities,createanumberofkindsofeconomicutilitytoconsumers.Theseeconomicutilities(ofform,task,time,place,andpossession)enableanorganizationtoprovideconsumersatisfaction.

Formutilityiscreatedbyconvertingrawmaterialsintofinishedgoodsthatmeetconsumerneeds,e.g.,producingatennisracket.Taskutilityisprovidedwhensomeoneperformsataskforsomeoneelse,e.g.,abankhandingfinancialtransactions.Butjustproducingtennisracketsorhandlingbankaccountsdoesnotresultinconsumersatisfaction;theproduct(orservice)mustbesomethingthatconsumerswantorthereisnoneedtobe

satisfiedand,therefore,limitedutility.Consumerswillnotbesatisfieduntilpossession,time,andplaceutilitiesarealsoprovided.

Possessionutilitymeansfacilitatingthetransferofownershiporuseofaproduct/servicetotheconsumer.Thus,theconsumerobtainsagoodorserviceandhastherighttouseorconsumeit;customersusuallyexchangemoneyorsomethingelseofvalueforpossessionutility.

Timeutilityiscreatedbyhavinggoods/servicesavailablewhenconsumerswantthem,

andrelatestoopeninghoursofretailoutlets,24-hourtelephonelinesforbankingand/oradviceservices,etc.

Placeutilityiscreatedbymakinggoods/servicesavailablewhereconsumerswantthem,e.g.,movingproductsfromwarehousesorproducerstoalocationwhereconsumerswanttobuythem,andhavingservicesavailablewhereconsumerswanttoconsumethem.

Bibliography

Dibb,S.,Simkin,L.,Pride,W.M.&Ferrell,O.C.(1991).Marketing.(Europeanedn).Boston,MA:HoughtonMifflinCo..Chapter1,p.326.

McCarthy,E.J.&Perreault,W.D.(1993).Basicmarketing(11thedn).internationalstudentedition.Homewood,IL:Irwin.Chapter1,p.5.

BARBARALEWIS

wasfirstarticulatedbyPorter(1985).Thevalueactivitiescanbedividedintotwomaincategories:supportactivities,whichincludefirminfrastructure,humanresourcemanagement,technologydevelopmentandprocurement;andtheprimaryactivitiesofinboundlogistics,operations,outboundlogistics,marketingandsales,andservice.Itprovidesaframeworkforanalyzingnotonlyhowtheorganizationcurrentlyprovidesvaluebutalsohowvaluecanbeenhanced.Organizationsmaystrivetosecuresynergieswith,e.g.,suppliersby,e.g.,developinginboundlogisticssystemsthatprovidemutualbenefits.Althoughaninterestingconcept,itspracticalusefulnessremainstobedemonstrated.

Bibliography

Porter,M.E.(1985).Competitiveadvantage:Creatingandsustainingsuperiorperformance.NewYork:FreePress.

DALELITTLER

VerticalIntegration

Thisisregardedasanintegrativegrowthstrategy(Kotler,1994),althoughitcanbeemployedtodefendtheorganizationagainstpowerfulcompetitors,suppliers,andcustomers(seeCOMPETITIVESTRATEGY).Itgenerallyinvolvestheacquisitionofsuppliersand/orcustomers,therebyinteraliaprovidingsecurityofsupplyorofaccesstothemarket.Therearealsoverticallyintegratedsystemsinwhichtheremaynotbecompleteownership,butinwhichcooperationisfoundedon,e.g.,agreementsorminoritystakesbythevariouspartiesineachother.Suchsystemsmaybeeffectivelycoordinatedoradministeredbyonedominantorganization.

SeealsoHorizontalintegration

Bibliography

DALELITTLER

VisionStatement

Thevisionstatementisarelativelyrecentintroductiontothelexiconofstrategicmanagementandisgenerallyregardedasencapsulatingthedesired-forfuturefortheorganization,usuallyasexpressedbythechiefexecutive.VisionisalsoregardedasanelementintheMISSIONSTATEMENT.

Bibliography

Hamel,G.&Prahalad,C.K.(1994).Competingforthefuture.HarvardBusinessReview,72,(4),JulyAug.,122128.

DALELITTLER

senderoftheMESSAGEisassistedbyintermediariesinattemptingtoREACHthetargetbuyer/customer/consumer.Opinionleaders(seeOPINIONLEADER)maybenefitanorganizationwithpositiveword-of-mouthcommunicationsbutthereisadangerthatwordofmouthmaybedetrimentaltotheorganizationanditsproductsorservicesasaresultofpoorexperiencesoftheintermediary.

SeealsoInterpersonalcommunications;Marketingcommunications

DAVIDYORKE

ininnovation-adoptionmodel2,80

seealsoconsumerperceptions;DAGMARmodel;marketingcommunications;selectiveexposure

Badarocco,J.91

Bagozzi,R.P.57

Baily,P.J.H.175

barcharts45,46,73,249

barrierstoentry,non-tariff23,92,152,183

barrierstoexit,fixedcostsas234

Bartlett,C.97

BCGmatrix78,57,156

andproductportfolio170

seealsomarketshare

Bearden,W.O.103

benchmarking105,123

Berman,B.246

Berry,L.L.185,219

BetterBusinessBureau(USA)356

bidding8

auctionbidding8

sealed-bidpricing8

billboardsseeposters

Bitner,M.J.127,210,223

bivariateanalysis89,45,230

andcomputersoftware25,135

andcross-tabulation8,456

andhypothesistesting9

regressionandcorrelation9,46,184

seealsomultivariateanalysis;univariateanalysis

blueprintingseeservicedesign

Bolen,W.H.225

Bonoma,T.V.77,116,125,145,149

Booms,B.H.127,223

Borden,N.H.126

BostonConsultingGroupseeBCGmatrix

Boulding,W.etal.212

Box,G.E.P.65

Bradley,F.71

brand9

attributes136

andconjointanalysis27

global71,92

seealsoadvertising;ownbranding;packaging;product

brandequity10

andbrandimage10

andbrandloyalty10

brandimageseebrandloyalty

brandloyalty9,1011,30

andbrandequity10

andbrandimage10,157,166

andbrandpreference4,10

definitions10

andownbranding150

andproductlifecycle167

andretailerpatronage193

andriskreduction153

assegmentationvariable205

spurious/intentional11

andtestmarketing244

brandmanagersseemarketingorganization

brandpreferenceseebrandloyalty

brandingseebrand

break-evenanalysis1112,152

Broadcasters'AudienceResearchBoard(BARB)164,203

brokers,andchannelsofdistribution17

Brown,T.J.etal.221

Brownlie,D.T.1256

business-to-businessmarketing1213

andconsumermarketing12,33,119

andindustrialmarketing79

interactionapproach13

andmarketstructure12,113

andmarketingmanagement126

andmarketing1267

andmarketingprocess130

networkapproach13

andpurchasedecision12

andrelationshipmarketing185

aszero-sumgame146

seealsobuyingcenter;marketing;marketingconcept;marketingmanagement;marketingmix;organizationalbuyingbehavior;organizationalmarketing;relationshipmarketing

buy-feel-learnmodel13,20

seealsofeel-buy-learnmodel;impulsepurchasing;learn-feel-buymodel

buyerbehaviormodels1314

descriptivemodels13

predictivemodels14

seealsoconsumerbuyerbehavior

buyerbehaviortheories1415,30

seealsoconsumerbuyerbehavior

buyers12,15,80

seealsoorganizationalbuyingbehavior;purchasingprocess

buygridmodelseepurchasingprocess

buyingcenter1516,145

andbusiness-to-businessmarketing12

andorganizationalsegmentation148

seealsobuyers;deciders;gatekeepers;influencers;purchasing;specifiers;users

buyingoperationsseeconsumerdecision-makingprocess

buyingprocessseepurchasingprocess

callplanning17

seealsocommunicationsmix;personalselling;salescallcycle

Campbell,A.135,236

Carroll,A.B.228

cashcows7

catalogshoppingseemailorder;retailing

CCNclassification69

Chamberlain,E.H.166

Chandler,A.D.Jr237

andcorporatestrategy37,956

channelsofdistribution1718

andmanufacturers'brands10

andtransfertypes18

seealsodirectmail;retailing;wholesalers

chaostheory55

charities

andorganizationalmarketing146

andservicesmarketing223

andstrategicobjectives235

seealsonot-for-profitmarketing;servicessector

CharteredInstituteofMarketing118

chi-squaretest9,40,249

chiefexecutiveofficer

asdecider43

andentrepreneurialstyle1

andstrategicplanning236,248

andvisionstatement252

Chisnall,P.M.12,97,146

Christopher,M.220

Christopher,M.etal.223

clusteranalysis18,137,173

Pageii

THEBLACKWELLENCYCLOPEDIAOFMANAGEMENT

EDITEDBYCARYL.COOPERANDCHRISARGYRIS

TheBlackwellEncyclopedicDictionaryofAccountingEditedbyA.RashadAbdel-khalik

TheBlackwellEncyclopedicDictionaryofStrategicManagementEditedbyDerekF.Channon

TheBlackwellEncyclopedicDictionaryofManagementInformationSystems

EditedbyGordonB.Davis

TheBlackwellEncyclopedicDictionaryofMarketingEditedbyBarbaraR.LewisandDaleLittler

TheBlackwellEncyclopedicDictionaryofManagerialEconomicsEditedbyRobertMcAuliffe

TheBlackwellEncyclopedicDictionaryofOrganizationalBehaviorEditedbyNigelNicholson

TheBlackwellEncyclopedicDictionaryofInternationalManagementEditedbyJohnO'Connell

TheBlackwellEncyclopedicDictionaryofFinanceEditedbyDeanPaxsonandDouglasWood

TheBlackwellEncyclopedicDictionaryofHumanResourceManagementEditedbyLawrenceH.Peters,CharlesR.GreerandStuartA.Youngblood

TheBlackwellEncyclopedicDictionaryofOperationsManagementEditedbyNigelSlack

TheBlackwellEncyclopedicDictionaryofBusinessEthicsEditedbyPatriciaWerhaneandR.EdwardFreeman

Pageiii

TheBlackwellEncyclopedicDictionaryofMarketing

EditedbyBarbaraR.LewisandDaleLittler

ManchesterSchoolofManagement,UMIST

industryinitsownrightalthoughitemploysrelativelyfewpeople,themajorexpendituresbeingformediatimeandspace.

Themajorstagesinthedevelopmentofanorganization'sadvertisingare:settingadvertisingobjectives;decidingonthebudget;planningmessages;selectingthemedia;andevaluatingadvertisingeffectiveness.

Advertisingobjectivesflowfrompriordecisionsonanorganization'stargetMARKET(orsegments;(seeMARKETSEGMENTATION),marketPOSITIONINGandMARKETINGMIXandarevarious(e.g.,Colley(1961)lists52possibleobjectives).Theyareconcernedwithinforming,persuadingandremindingcurrentandpotentialbuyers/customers/consumers,includingotherorganizationsintheDISTRIBUTIONchain,withrespecttoproducts,andorganizations/institutions(seealsoCOMMUNICATIONSOBJECTIVES).Productandbrandadvertisingistypicallyfocusedongeneratingordefendingsaleswhereasinstitutionaladvertisingisusuallyconcernedwithpromotinganorganization'simageorreputation,developinggoodwill,orimprovingacompany'srelationshipswithvariousgroupstoincludecustomers,channels(ofdistribution)members,suppliers,shareholders,employees,andthegeneralpublic.

Insettingtheadvertisingbudget,organizationsmaytakeaccountoffactorssuchasstageinthePRODUCTLIFECYCLE,MARKETSHAREandcustomerbase,competition,advertisingfrequency,andproductsubstitutability.Theseandothervariablesarebuiltintoadvertisingexpendituremodelswhich,asaresultofdevelopingcomputertechnology,arebecomingincreasinglycomplex.Theadvertisingbudgetcanbeestablishedonthebasisofwhatisaffordable,asapercentageofsales,onthebasisofcompetitors'expenditures,onthebasisofobjectivesandtasks.

Advertisingmessagesrepresentthecreativeaspectofadvertising(seeMESSAGE)andorganizationsareconcernedwithdevelopingmessages,evaluatingandselectingamongthem,andexecutingthemeffectively.

Indecidingonadvertisingmedia,itisnecessarytotakeaccountofthe

desiredREACH,FREQUENCY,andIMPACT;chooseamongthemajormediatypesandvehicles;anddecideonmediatiming.

Thechoiceofmediatypesisinfluencedbyconsiderationssuchastheproduct/servicebeingadvertised,targetaudiencemediahabits,theadvantagesandlimitationsofthemedia,andtheircosts.Advertisingmediacomprise:TELEVISION,RADIO,NEWSPAPERS,MAGAZINES,TRADEJOURNALS,POSTERS(BILLBOARDS),andDIRECTMAIL.Theyaredistinguishedfromotherformsofcommunication(seeMARKETINGCOMMUNICATIONSandCOMMUNICATIONSMIX),e.g.,PUBLICITY,becausethetimeand/orspacehastobepaidfor.

Developingofadvertisingmessagesandchoiceofmediaisinfluenced,inpart,byproductsensitivityandadvertisingcontrols.Forexample,companiesneedtobeawareofthesensitivenatureofadvertisingalcoholandtobacco,themisuseofwhichmaycontributetohealthandsocialproblems.Advertisingcontrolsembracegovernment(legal)regulationsandself-regulation.Variouslegalstatutesimpingeonadvertising,e.g.,theTradesDescriptionsAct,theMedicinesAct,foodanddruglabelingrequirements,consumercreditregulations,togetherwithrestrictionswithrespecttotheadvertisingofalcohol,tobacco,medicines,professionalservices,etc.Examplesofindustryself-regulationmaybeseeninvariousCODESOFPRACTICE,theAdvertisingStandardsAuthority,andthetelevisionadvertisingstandardsauthorities.

Theeffectivenessofadvertisementsmaybeassessedintwomajorways:pre-testingadverts(e.g.,copytesting)andpost-evaluatingtheireffectiveness(e.g.,recallandrecognitiontests).Advertisersalsotrytomeasurethecommunicationseffectsonawareness,knowledge,preferences,andsales,althoughitisacceptedthatrelationshipsbetweenadvertisingandsalesarenotnecessarilycausaldueto:theinfluenceofothervariablesinthemarketingmix;competitors'activities;andsaleseffectsovertime,e.g.,advertsmaynotbeseenimmediately,impactmaybelater,theremaybecarry-overeffects,orsalesmaybebroughtforwardattheexpenseoffuturesales.

Bibliography

Colley,R.H.(1961).Definingadvertisinggoalsformeasuredadvertising

results.NewYork:AssociationofNationalAdvertisers.

ThefirsttermrelatestotheCOGNITIVESTAGEoftheprocess,indicatinganeedforthemarketingcommunicatortogainthereceiver'sATTENTIONbeforeattemptingtodoanythingelse.DevelopingINTERESTanddesire(topurchase)areelementsintheAFFECTIVESTAGE,i.e.,wherepositiveattitudestowardandpreferencefortheproductorservicearesought.ACTIONistheCONATIVESTAGE(thepurchase).

Measurestakenbeforeandafteraformofcommunicationisusedwillenableobjective(s)tobesetandthesuccessofittobeanalyzed.Progressionlogicallythroughthestagesisnotalwayspossibleindeedmuchdependsontheproductorservicebeingofferedandthetargetgroupsofreceivers.

Bibliography

Cox,K.K.&Enis,B.M.(1972).Themarketingresearchprocess.PacificPalisades,CA:GoodyearPublishingCo.,Inc.

Strong,E.K.(1925).Thepsychologyofselling.NewYork:McGraw-Hill.

DAVIDYORKE

AIOs(Activities,Interests,andOpinions)

seeLIFESTYLES

Atmospherics

"Atmosphericsisthetailoringofthedesignedenvironmenttoenhancethelikelihoodofdesiredeffectsoroutcomesinusers"(Greenland&McGoldrick,1994).Otherdefinitionsfocusuponthemoresubtledesigneffectsthatinfluenceconsumersatanalmostsubconsciouslevel:

"Atmosphericsthedesignofanenvironmentviavisualcommunications,lighting,colors,musicandscenttostimulatecustomers'perceptualandemotionalresponsesandultimatelyaffecttheirpurchasebehavior"(Levy&Weitz,1995).

ThetermwascoinedbyKotler(1973)inrelationtoaretailenvironment'scontributiontoitsbuyer'sorcustomer'spurchasingpropensity.

Itis,however,relevanttoabroadspectrumofproductretailingandserviceenvironmentsandisanimportantconsiderationinbothstaff,aswellascustomer,management.Effectiveuseofatmosphericscanenhancearetailoutlet'sdesignedenvironment,improvingstaffsatisfactionandperformancelevels,aswellasstimulatingfavorablereactionsandbehaviorincustomers.Suchfavorableoutcomesmightincludeapropensityforcustomerstospendmoretimeinthestoreandimprovementsinlevelsofimpulsepurchasing,storepatronage,andimage.

SeealsoImpulsepurchasing;Storedesign

Bibliography

Greenland,S.J.(1994).Thebranchenvironment.InP.J.McGoldrick,&S.J.Greenland(Eds),Retailingoffinancialservices(pp.163196).Maidenhead:McGraw-Hill.

Greenland,S.J.&McGoldrick,P.J.(1994).Atmospherics,attitudesandbehaviour:modellingtheimpactofdesignedspace.TheInternationalReviewofRetail,DistributionandConsumerResearch,4(1),116.

Kotler,P.(1973).Atmosphericsasamarketingtool.JournalofMarketingResearch,49(4),4864.

Levy,M.&Weitz,B.A.(1995).Retailingmanagement.Chicago:Irwin.

STEVEGREENLAND

Attention

AttentionisthefirststageintheAIDAMODELofMARKETINGCOMMUNICATIONS.Dependinguponthechannelofcommunicationused,variousstimulimaybeusedtogainattention,e.g.,inthebroadcastmedia,thefirstfivesecondsmayneedsomethingemotionallyappealing;in

printmedia,theuseofadramaticheadlineortheuseofcolormayhaveapositiveeffect;inPERSONALSELLING,appearance;orinTELEMARKETING,theinitialverbalcontactmaybeimportant.

Cost-effectivenessisvitalingainingattention.Broadly,lesspersonalformsofcommunicationsuchasmediaADVERTISINGaremorecost-effectiveatthisstage,althoughpersonalsellingandtelemarketingmaybeofusewithhighervalueproductsorservices.

analyzed,butinterpretationbecomesdifficultbecausetheincreasednumberofcellsoftenleavesemptycellsoranumberofcellswithsmallcounts.

Ifboththevariablesareinterval,therelationshipbetweenthemcanbestudied,visually,usingascatterdiagramand,numerically,usingsimplecorrelationandregression(seeREGRESSIONANDCORRELATION).Theproduct-momentcorrelationcoefficientmeasuresthestrengthofalinearrelationshipbetweenthevariables:avalueclosetozeromeansnorelationshiporaveryweakrelationship;avaluecloseto+1meansaverystrongpositiverelationship;whileafigurecloseto1meansaverystrongnegativerelationship.Theregressionanalysistellstheformoftherelationship,i.e.,thewayonevariableaffectstheotherisindicatedbythestraightlineequationestimatedusingregressiontechniques.

Ifbothvariablesaremeasuredonordinalscales,cross-tabsmaybeusedtosummarizethedata.Alternatively,correlationcoefficientssuchasKendall'stauorSpearman'srankcorrelationcoefficientindicatethestrengthofanyrelationshipbetweenthevariables.

Whenthevariablesaremeasuredonscalesofdifferenttypes,arangeofpossibilitiesarise.Forinstance,whenonevariableismeasuredonanintervalscaleandtheotheronacategoricalscale,thesamplecanbebrokendownintosubsamplesusingthecategoricalvariableandthedatafortheintervalvariablecanbesummarizedforeachsubsampleusingafrequencydistribution,histogram,and/ormeasuresofaverageandvariation.Subsamplescanbecomparedbylookingat,forexample,thehistogramsormeasuresofaverageoftheintervalvariabletoseeifandhowtheychangewithdifferentvaluesofthecategoricalvariable.

Arangeofhypothesistests(seeHYPOTHESISTESTING)isavailabletoseeifthereareanysignificantrelationshipsbetweenthevariables.Theappropriatetestdependsuponthetypeofmeasurementusedforeachvariable.Forinstance,ifbothvariablesaremeasuredoncategoricalscales,eitherthechi-squaretestoranexacttestusingthehyper-geometricdistributionislikelytobeuseddepending,amongotherthings,onthesizeofthesampleandthenumberofcategoriesforeachvariable.Ifboth

variablesareinterval,thet-testandF-testaretwoexamplesinvolvedintestinghypothesesrelatedtosimplecorrelationandregression.Whenonevariableisintervalandtheothercategorical,thet-testisusedtotestfortheequalityofarithmeticmeansoftheintervalvariablewhencomparingjusttwosubsamplesdefinedbythecategoricalvariableandtheF-testisusedwhentherearetwoormoresubsamples.Ifonevariableismeasuredonanordinalscaleandtheotheronacategoricalscale,thentestssuchastheMann-WhitneyUtest,theWilcoxontest,theruns-of-signstest,theKolmogorov-Smirnovtwo-sampletest,theKruskal-Wallisone-wayANOVA(analysisofvariance)test,andtheFriedmantwo-wayANOVAtestareused,dependinguponthecircumstances.Manyothertestsareavailablefordifferentsetsofsituations.

Bibliography

Tull,D.S.&Hawkins,D.I.(1987).Marketingresearch:measurementandmethod(4thedn).NewYork:Macmillan.Chapter13.

MICHAELGREATOREX

Theoriginalthinkingbehindbrandingwastotakeacommodityandtoendowitwithspecialcharacteristicsthroughimaginativeuseofname,PACKAGING,andADVERTISING.Aaker(1991)definesabrandas:"adistinguishingnameand/orsymbol(suchasalogo,trademark,orpackagedesign)intendedtoidentifythegoodsorservicesofeitheraselleroragroupofsellersandtodifferentiatethosegoodsorservicesfromthoseofitscompetitors."Centraltothevalueorequityofthebrandisasetofassets,including:BRANDLOYALTY;brandawareness;perceivedquality;andbrandassociations.Amanufacturerbrandisinitiatedbyaproducer,suchasCocaCola,andaprivateor"own-label"brandisinitiatedbyaretailer,suchasTesco's"Value"productline(seealsoPRODUCT).

Bibliography

Aaker,D.A.(1991).ManagingbrandequityCapitalizingonthevalueofabrandname.NewYork:FreePress.Chapter1.

Macrae,C.(1991).Worldclassbrands.Reading,MA:AddisonWesley.

MARGARETBRUCE

Thismodelassumesthatconsumersderivesatisfactionfromconsumption(probablynotthecasewithexpenditureoninsurances,dentaltreatment,etc.)andseektomaximizesatisfactionwithinthelimitsofincome.Themodelalsoassumesthatconsumershavecompleteinformationwithrespecttosupply,demand,andprices;completemobility,i.e.,canreachanymarketofferatanytime;andthatthereispurecompetition.Inpractice,consumerstypicallyarenotawareofandcannotjudgeallproductofferingsandmayhaverestrictedaccess.Consequently,consumersmaywellbe"satisficing"ratherthan"maximizing"theirutility.

Economictheorydoeshavearoletoplayinunderstandingconsumerbehavior,insofaraspeoplemaybe"problemsolvers,"tryingtomakerationalandefficientspendingdecisions.However,itisalsonecessarytoconsiderandunderstandthemarketingandotherstimulithatimpactonbuyerbehavior(seeCONSUMERBUYERBEHAVIOR),togetherwithbuyers'individualcharacteristics,i.e.,totakeaccountofvarioussocialandpsychologicalinfluencesonbuyingbehavior.

Bibliography

Katona,G.(1953).Rationalbehaviourandeconomicbehaviour.PsychologicalReview,Sept.,307318.

Kotler,P.(1965).Behaviouralmodelsforanalysingbuyers.JournalofMarketing,29,Nov.,3745.

Loudon,D.L.&DellaBitta,A.J.(1993).Consumerbehavior(4thedn).McGraw-HillInt.Chapter19.

Schewe,C.D.(1973).Selectedsocialpsychologicalmodelsforanalysingbuyers.JournalofMarketing,37,JulLy,3139.

BARBARALEWIS

Buyers

Buyersarethoseindividualsadministeringthepurchasingpoliciesandpracticesofanorganization.Atitsbest,buyingisaprofessionalactivity

withspecialistqualificationsandprofessionalbodies,butbuyingcanalsobeundertakenmuchmoreinformally(especiallyperhapsinsmallerorganizations)andwithlittlespecialistexpertise.BuyersarealsoimportantmembersoftheDECISION-MAKINGUNIT(DMU)wheretheyprovidemuchofthebackgroundinformationandanalysis.Perhapsthemostimportant(andmostoftenoverlooked)roleofbuyersisinmanagingtheday-to-dayrelationshipbetweenanorganizationanditssuppliers(seeORGANIZATIONALBUYINGBEHAVIOR;PURCHASINGPROCESS).

DOMINICWILSON

BuygridModel

seePURCHASINGPROCESS

BuyingCenter

Inthe1960sand1970sseveralsurveysofindustrypurchasingpracticesintheUKandtheUSAestablished,interalia,thatindustrialPURCHASINGdecisionsinvolvedmanyindividualsfromdifferentfunctionswithinanorganizationinwhatisnowgenerallyreferredtoasabuyingcenterordecision-makingunit(DMU).Webster&Windidentifiedfivebuying"roles"withinthecontextofthisbuyingcenter:USERS,INFLUENCERS,BUYERS,DECIDERS,andGATEKEEPERS(Webster&Wind,1972).Thisclassificationisnowwidelyacceptedasageneralmodelthoughadditionalrolesmaybeidentifiableoncloserexaminationofspecificinstances.Thevariousrolesdiscerniblewithinthebuyingcentermaysometimesbefulfilledbyonlyoneortwoindividuals,whileonotheroccasionstheserolesmaybeallocatedtodifferentindividuals,departmentsandlevelsofseniority,accordingtothecircumstancesofeachpurchase.Withthedevelopmentofmorecollaborativeapproachestointer-organizationalmarketing,suchasPARTNERSHIPSOURCING,itseemsreasonabletoextendthemembershipofthebuyingcenter,onoccasion,toincluderepresentativesofSUPPLIERS.

Furtherstudieshavesuggestedthatthecompositionofthebuyingcenterandtheinfluenceofthesedepartmentsandfunctionsonanyparticularpurchaseoccasionmayvaryaccordingtosuchvariablesas:buyclass(aNEWTASKgenerallyrequiresabroadermembershipofthebuyingcenter

thandoesaMODIFIEDorSTRAIGHTRE-BUY);thespecificpurchasecriteriaandtheirrelativeimportance(e.g.,anemphasisontechnicalspecificationsmayrequireadditionaltechnicalrepresentationinthebuyingcenter);phaseofthebuyingcycle;thecomplexityoftheproduct/serviceunderconsideration;thecompetitiveandstrategicsignificanceofthepurchase;thecostofthepurchaseoveritsusefullife;therelevanceofthe

whichtheyhavelittlecontrolorinfluence;andcodesmayofferacheaperandquickermeansofresolvinggrievancesthanusingmoreformallegalchannels.

TradeorindustryassociationsareencouragedtoadoptcodesofpracticeandtoupdatethemconstantlyastheMARKETINGENVIRONMENTchanges.

Bibliography

InstituteofPractitionersinAdvertising(1980).Somesuggestedprovisionsforuseinagency/clientagreements.London.

Runyon,K.E.(1984).Advertising.Columbus,OH:CharlesE.MerrillPublishingCo.Chapter23.

DAVIDYORKE

CognitiveDissonance

Individualconsumers'cognitionsforproductswhichareexpressedintermsofvalues,beliefs,opinions,andattitudes(seeCONSUMERATTITUDES)tendtoexistinclustersthataregenerallybothinternallyconsistent,andconsistentwithbehavior;andanindividualstrivesforconsistencywithinhisorherself.

However,anytwocognitiveelementsorattitudesmayormaynotbeconsonantwitheachother.Ifsuchaninconsistencyexistsinapre-purchasesituation,aconsumerhasastateofconflictwhichmakesitdifficulttomakeachoice.Ifafterapurchasethereisinconsistencybetweencognitiveelementsthencognitivedissonanceissaidtoexist,i.e.,itisapostpurchasestateofmind.

Whenmakingchoicesbetweenalternatives,consumersinvariablyexperiencecognitivedissonanceasonfewoccasionsdotheymakeacompletely"right"decision;consumersmayremainawareofpositivefeaturesofrejectedalternativesandnegativefeaturesofaselectedalternativewhichareinconsistent/dissonantwiththeactiontaken.

Cognitivedissonancewillbehighwhen:thebuyingdecisionisimportant,eitherpsychologicallyorintermsoffinancialoutlay;whenanumberofdesirablealternativesareavailable;whenthealternativesaredissimilarwithlittlecognitiveoverlap,e.g.,thechoicebetweenatelevisionorawashingmachine;andwhendecisionchoiceisaresultoffreewillwithnohelporappliedpressurefromothers.

Theexistenceofcognitivedissonanceispsychologicallyuncomfortableandsoconsumersdevelopstrategiestoreduce/eliminateittore-achieveconsistencyorconsonance.Theseinclude:eliminatingresponsibilityforthedecision,e.g.,returntheproduct;changeattitudestowardstheproducttoincreasecognitiveoverlap;deny,distortorforgetinformation(e.g.,cigarettesmokersandhealthwarnings);seeknewinformationtoconfirmone'schoice;orreducetheimportanceofthedecision.

Bibliography

Cummings,W.H.&Venkatesan,M.(1976).Cognitivedissonanceandconsumerbehavior:Areviewoftheevidence.JournalofMarketingResearch,Aug.,303308.

Festinger,L.(1957).Atheoryofcognitivedissonance.StanfordUniversityPress.

Schiffman,L.G.&Kanuk,L.Z.(1991).Consumerbehavior(4thedn).Prentice-Hall.Chapter9.

BARBARALEWIS

CognitiveStage

ModelsoftheCONSUMERDECISION-MAKINGPROCESSwhichsuggestthatatargetbuyerorcustomermovesfromastateofignoranceorunawarenessofanorganizationand/oritsproductsorservicestoultimatelymakingapurchasecomprisethreeprincipalstages:COGNITIVE,AFFECTIVE,andCONATIVE.(seealsoMARKETINGCOMMUNICATIONS.)ThecognitivestageisthatwhichdrawstheATTENTIONofthebuyerorcustomertoanorganization,itsproducts,

service,orbrands,createsanAWARENESSoftheirexistence,anddevelopsaclearunderstandingofwhatisbeingoffered.

Thecost-effectivenessofachievingthisisdeterminedlargelybytheMEDIAusedandthesizeandtypeofthetargetgroup(s).Forexample:PERSONALSELLINGislesscost-effectivewhenthenumberinthetargetgroupislarge,althoughTELEMARKETINGandDIRECTMAILcanreducethecost;andADVERTISINGisconsideredtoberelativelysuccessfulatthecognitivestageprovidingtherearemediaappropriateforreachingonlythetargetgroup.

increasednumberofcellsoftenleavesemptycellsoranumberofcellswithsmallcounts.

Thevariablesmaybeordinalvariablessuchasthosemeasuredonratingscalesorintervalvariableswherethedatahavebeengroupedintoafewclassesforeachvariable.Again,thecross-tabrecordsthecountsofthenumberofcasesfallingintoeachcellofthetable.

HYPOTHESISTESTINGrelatingtocross-tabsofteninvolvesthechi-squaretest.Othertestsandsummarystatisticsareavailabledependingonthetypeofdata;forinstance,ifbothvariablesaremeasuredonordinalscalesthenSpearman'srankcorrelationcoefficientorKendall'staumaybeused.

Aswellasrecordingthenumberofcasesineachcell,across-tabcanbeusedtopresentsummarystatisticsofothervariablesforthecasesineachcell.Forinstance,whileabasiccross-tabmaycountthesamplenumbers,brokendownbygenderandoccupation,itispossibletopresenttheaverageincome(ortheaverageofanysimilarvariable)ofthecasesineachgender/occupationcell.Furtheranalysisofsuchdatamayinvolveanalysisofvariance,butthecross-tabanalysisdescribedearlierinthisparagraphisaconvenientwaytogetafeelforthesedataandtopresentresultsinaconvenient,descriptivemanner.

Bibliography

MICHAELGREATOREX

Acueisanon-verbalsignalcommunicatedbyaperson,product,orservice.Peopledrawinferencesfromvisualinterpersonalcontactwhichgivesaccesstotheface,thehands,theposture,orthephysicalenvironmentinwhichtheinteractionistakingplace.Informationiscommunicatedviathe

aggregateofsocialcuesprovidedbyvisualandphysicalpresence.Productsandservicesalsocommunicateevaluativeinformationviaintrinsicandextrinsicstimulisuchasphysicalattributes,orADVERTISINGmessages.Thus,desiredimpressions,feelings,andattitudesmaybesubtlyencouragedbyMARKETINGCOMMUNICATIONStechniques(e.g.,PERSONALSELLING,PACKAGING,TELEMARKETING).

Bibliography

Loudon,D.L.&DellaBitta,A.J.(1993).Consumerbehavior(4thedn).McGraw-HillInt.

Rutter,D.R.(1994).Lookingandseeing.Theroleofvisualcommunicationinsocialinteraction.Chichester:Wiley.

DAVIDYORKE

CulturalEnvironment

ThisisoneoftheelementsoftheMARKETINGENVIRONMENT.Itconcernsculturalandethnicvariationbetweenandamongmarkets,aswellaschangesinculturalorethnicperspective.ItisofcourseparticularlyimportantinINTERNATIONALMARKETING,butisalsoincreasinglyimportantasnationalmarketsaresegmentedintosmallerniches,oftenbasedonculturalandethniccriteria(e.g.,inthefastfoodandfashionclothingmarkets).

SeealsoEnvironmentalanalysis;Culture

DOMINICWILSON

Culture

Individualsmaybedescribedasconformingtothenormsofculturesandsubculturesintheirlives.Culturereferstothetotalwayoflifeofasocietyandanationalculturereflectsitspopulation,government,andeconomy.Cultureisadeterminantandregulatorofbehavior,includingCONSUMERBUYERBEHAVIOR.Membersofaculturesharebeliefs,values,customs,traditions,andnormswhichshapetheirattitudesandbehaviorasconsumers.Culturalbeliefsandvaluesinterveneineconomicdecisionsmadebyconsumers.

Thereareanumberofdistinguishingcharacteristicsofculture,namely,learnedbehaviorpatternsofbehaviormaybelearned;sharingofvalues;atransmissivequalityasfamiliesshapethevaluesandperceptionsofchildrenandpassthemontobereflectedinattitudesandbehavior;asocialquality,i.e.,therulesofsocialbehavior;anideationalquality,asgroupshaveidealswithrespecttobehavior;agratifying

DemographicEnvironment

ThedemographicenvironmentisoneoftheelementsoftheMARKETINGENVIRONMENT(seealsoENVIRONMENTALANALYSIS).

SeealsoDemographics

DOMINICWILSON

Demographics

DemographicscompriseprobablythemostimportantvariableintheMARKETINGENVIRONMENTofanyorganization.Demographicsdescribe,andprovideastatisticalstudyof,ahumanpopulationintermsofitssize,structure,anddistribution.Sizeisthenumberofindividualsinapopulation,andisdeterminedby:fertilityandbirthrates;lifeexpectancyanddeathrates;andmigrationbetweenandwithincountries.Structuredescribesthepopulationintermsofage,gender,education,andoccupation,anddistributionreferstothelocationofindividualsintermsofgeographicregionorrural,urban,orsuburbanlocation.

Demographicdataaredeveloped,primarily,frompopulationcensusesandthestudyofdemographicsisconcernedwithunderstandingtrendstoincludeforecastsoffuturedemographicsize,structure,anddistribution.

Demographicsimpactonthebehaviorofconsumersandcontributetotheoveralldemandforgoodsandservices.Theyarechanginginannumberofways,influencedbysocialandculturalvariables(seealsoCULTURE).Suchtrends,indevelopedeconomies,include:

increasedlifeexpectancyandanagingpopulation

aslowingdownofthebirthrateandpopulationgrowth

growingpercapitaincomeanddiscretionaryincome

changingmixofhouseholdexpenditure

increasingparticipationofwomenintheworkforceandtheirchanging

rolesathomeandatwork

increasingproportionofwhitecollarworkers

trendsinliteracyandeducation

geographicalshiftsinpopulation,e.g.,urbantoruralandcitytosuburbsandnewtowns

changingethnicandracialmixes

changingfamilyandhouseholdstructure,totakeaccountofageprofiles,latermarriageandageofchild-bearing,fewerchildreninafamily,divorceandsingle-parentfamilies,increasingnumbersofsingle-personhouseholds,andtotalnumberofhouseholds

increasedhomeownershipandincreasedownershipofconsumerdurables

widespreadavailabilityofcredit

fewertraditionalshoppersandmorehomeshopping

increasedleisuretimeandparticipationinleisureactivities

changingmediahabits

increasesincrimeandsocialproblems.

Thesechanges/trendsareofkeyinteresttomarketingorganizations.Forexample,theymayseeopportunitiesarisingasparticularagegroupsincrease,orthreatsoccurringassomeagegroupsdecline.Demographictrendshaveimplicationsfor:productandservicedevelopment;identificationoftargetMARKETSandmarketsegments(seeMARKETSEGMENTATION)andotherelementsintheMARKETINGMIX.Theseimpactnotonlyonmanufacturersanddistributorsbutalsoonthoseorganizationswhichsupplyconsumergoodmanufacturers,e.g.,producersofcommoditiesandcapitalequipment.

Seealsolifestyles

Bibliography

CentralStatisticalOffice.Annualabstractofstatistics.London:HMSO.

Hawkins,D.I.,Best,R.J.&Coney,K.A.(1995).Consumerbehavior:Implicationsformarketingstrategy(6thedn).Internationalstudentedition.Chicago:Irwin.Chapter3,pp.7888.

McCarthy,E.J.&Perreault,W.D.Jr(1993).Basicmarketing.Homewood,IL:Irwin.Chapter6.

variablesbeingchosentobestseparatethetwogroups.

Discriminantscorescanbecalculatedforeachindividualinthegroupsandaplotofthesescores,indicatingtowhichgroupeachcasebelongs,willshow,itishoped,twonon-intersectinghistograms.Usually,however,theplotswilloverlaAcriticalvaluewillbechosensothatcaseswillbeclassifiedbythediscriminantfunctionaccordingtowhethertheyareaboveorbelowthecriticalvalue.Ifthereisoverlap,somecaseswillbemisclassified,evenbythediscriminantfunctionwhosefittingtheycontributedto.Aclassificationtableof"hitsandmisses"isonewayofjudgingtheusefulnessofthediscriminantanalysis.AlsousedtojudgetheadequacyofadiscriminantfunctionaremeasuressuchasWilks'Lambdaandthecanonicalcorrelationcoefficient.

Asatisfactorydiscriminantfunctioncanthenusemeasurementsonthevariablesforapreviouslyunclassifiedcasetopredicttowhichofthegroupsthecasebelongs.Forexample,basedonthedataforanindividualonthevariablesinadiscriminantfunctionongoodandbadcreditrisks,thediscriminantfunctionshouldindicatewhetherornottheindividualisagoodcreditrisk.

Significancetestsforcoefficientsareavailable.Thediscriminantfunctioncanbebuiltupinastep-wisefashion.Themethodcanbeusedinananalyticalway.Thus,largecoefficientsidentifyvariablesthatareimportantfordiscriminatingbetweenanddescribingthegroupsandthereforeworthyoffurtherattentionbymanagement.

Themethodcanbeextendedtomorethantwogroupswhenseveraldiscriminantfunctionswillbeestimated.Statisticalpackages,e.g.theSTATISTICALPACKAGEFORTHESOCIALSCIENCESorSPSS,thathavediscriminantanalysisroutinesareessential.

Bibliography

MICHAELGREATOREX

DisposableIncome

UnlikeDISCRETIONARYINCOME,totaldisposableincome(householdincomeafterdeductionofdirecttaxationandnationalinsurancecontributions)isnotavailableforcompetitionamongallsuppliers.Localtaxeshavetobepaidand"essential"purchases(e.g.,fuelforheatingandenergy)arelikelytoreducetheamountoftotaldisposableincomeavailableforspending/saving.

Bibliography

DAVIDYORKE

Distribution

seeRETAILDISTRIBUTIONCHANNELS

Distributors

seeRETAILDISTRIBUTIONCHANNELS

Diversification

ThisisregardedastheoptioninvolvingthegreatestriskinAnsoffs(1965)DIRECTIONALMATRIX.Itinvolvestheorganizationintroducingproductsbasedonnewtechnologiesintonewmarkets.However,therearegradationsinthedegreeofriskinvolved,dependingonwhetherornotthediversificationisrelatedorunrelated(alsoreferredtoasconcentricdiversification).Relateddiversificationinvolvescommonalitieswiththefirm'sexistingbusiness,sothatthereispotentialsynergybetweenthenewandtheexistingbusinessesbasedonacommonfacility,asset,channel,skill,oropportunity(Mintzberg,1988).Thesecommonalitiesmaybeeithertangibleorintangible(Porter,1985),thelatterinvolvingtacitmanagementskills.Unrelated,orconglomerate,diversificationinvolvestheextension

intonewbusinessareaswhichhavenorelationshipwiththecompany'sexistingtechnologies,markets,orproducts.Kotler(1994)alsoreferstohorizontaldiversificationwherebythecompanymaydevelopnewproductsaimedatitsexisting

EntrepreneurialStrategy

EntrepreneurialstrategyisoneofMintzberg's(1973)threestrategicstyles(seeSTRATEGICSTYLES;ADAPTIVESTRATEGY;PLANNINGSTYLE).Thefeaturesofthisstrategicstylearelikelytobebolddecision-makingbysinglevisionaryindividualswhoarerisktakers.Mintzbergsuggeststhatitislikelytooccurmostinorganizationswhichareunderthepersonalcontrolofoneindividualandwhichare"locatedinaprotectednicheintheenvironment."

Suchrisk-takingbehaviorisnotrestrictedtosmallorganizations,as,forexample,Littler&Leverick(1994)identifiedintheirstudyofentrantsintomobilecommunicationsmarkets.Indeed,manydecisionstoenternewmarketsandespecially,butnotexclusively,thosefoundedonadvancesintechnology,arelikelytohaveadegreeofentrepreneurialbehaviorifonlybecausetheuncertainties(seeUNCERTAINTY)makecalculationofthecostsandbenefitsextremelyproblematic.

Bibliography

Littler,D.A.&Leverick,F.(1994).Marketplanninginnewtechnologysectors.InJ.Saunders(Ed.),Themarketinginitiative.Prentice-Hall.

DALELITTLER

EnvironmentalAnalysis

OrganizationsexistwithinacomplexanddynamicenvironmentwhichcanbedescribedastheMARKETINGENVIRONMENT.Understandingthisenvironmentisoneofthemostimportantanddifficultaspectsofmanagementandhastraditionallybeenregardedasamarketingresponsibility(seeMARKETINGAUDIT).Obviously,thenumberofvariablesinfluencingthismarketingenvironmentaremany,soenvironmentalanalysisattemptstoidentifythemostinfluentialfactorsand

trendsaffectingtheorganizationanditsofferings.

Kotler(1994)hassuggestedthatitmaybehelpfultogroupthesevariablesintotwointerdependentbutdistinguishablecategories:theMICROENVIRONMENTandtheMACROENVIRONMENT,togethercomprisingtheMARKETINGENVIRONMENT.Analysisofthemacroenvironmentsometimesreferredtoastheexternalmarketingaudit(seeEXTERNALAUDIT)canusefullybeconsideredundersixheadings:theDEMOGRAPHICENVIRONMENT;theECONOMICENVIRONMENT;theNATURALENVIRONMENT;theTECHNOLOGICALENVIRONMENT;thePOLITICALENVIRONMENT;andtheCULTURALENVIRONMENT.Whereasallsixoftheseaspectsoftheenvironmentwillberelevanttoallmarkets,someaspectswill,ofcourse,bemoreapplicablethanothersinspecificmarkets.Therecanalsobeadangerofcompartmentalizationusingthisapproachforexample,importantissuesofecologyorconsumerismmightseemlesssignificantwhensplitupbetweensixheadings.Perhapsthemostnotablelimitationofthisapproachtoenvironmentalanalysisisthatitseemstogivelittleprioritytocompetitorsperseanditmaythereforebeappropriatetoadda"competitiveenvironment"toKotler'ssixcategories.

Thelevelofeffortandresourceswhichanyorganizationwillinvestinenvironmentalanalysiswilldependonmanyfactorsincluding:theavailabilityandreliabilityofSECONDARYDATA(e.g.,censusdata,governmentstatistics,publishedmarketanalyses);thecostofPRIMARYDATA(e.g.,commissionedmarketresearch,in-housesurveys);thevolatilityoftheenvironment(whereanalysiscanbeoutofdateevenbeforeitisfinished);thecompetitivenessofmarkets(whyshouldorganizationsinvestinanalysiswhenthereislittlethreatoflosingcustomers?);andwhatprioritymanagersgivetoenvironmentalanalysis,inthecontextofotherdemandsontheirtime.

Itisoftensuggestedthattheenvironmentisbecomingincreasinglycomplexandfast-moving.Thisobservationhas,ofcourse,beenmadeofmanyearliercenturiesalso,butitdoesseemparticularlytrueofthelate20thcenturyandthisemphasizestheimportanceofenvironmentalanalysis,whilealsohighlightingtheproblemsofanalyzingsuchvolatiledynamics.Theseproblemshaveencouragedthedevelopmentofdifferentanalytical

techniques,suchasscenariodevelopment(Schoemaker,1993),delphimethods(Linstone&Turoff,1975),andeventheuseofchaostheory(Stacey,1975),inordertounderstandthemarketingenvironmentsurroundinganorganization.

Table1Motivesfornon-exporterstobecomeexportersInternalstimuli Externalstimuli

Proactivefactors

managementdecisioneconomiesofscaleuniqueproductorcompetenceperceivedprofitabilitymarketingcompetence

identifiedforeignbusinessopportunitiesstimulation/incentivesfromgovernment,chambersofcommerce

Reactivefactors

riskdiversificationexcesscapacityretrenchment

unsolicitedforeignorderssmallorshrinkinghomemarket

SwedishscholarsJohanson&Vahlne(1977)proposedafour-stagemodel,accordingtowhichfirms:exportsporadically;exportusinganagent;exportviaasalessubsidiary;andmanufactureinaforeignsubsidiary.Othermodelshaveattemptedtodemonstratea"natural"progressionfrompassiveoroccasionalexportingtoastageofmakingnodistinctionbetweenhomeandforeignmarkets.Butthesecharacterizationshavebeencriticizedbysubsequentscholarswho,withsomejustification,findthem"toological"andthereforenotconsistentwithactualexperience.Thishasdeveloped,intheUSA,toakeeninterestinthemanagerialinfluences,includingcompetencies,onexportdevelopment;inEurope,studiesofinternationalizationhaveledtoextensiveinvestigationsoffirms'internationalnetworking(seeNETWORK)behavior.

Theproblemwiththesepreoccupationswithexportmotivationsandstagesofinternationalizationisthattheydeflectattentionfromexportingasaneverydaybusinessactivity.Itisintheexporters'taskthatwefindacleardistinctionbetweenexportingandinternationalmarketing.Firstofall,exportingisaformofforeignmarketentry(seeINTERNATIONAL.MARKETENTRYANDDEVELOPMENTSTRATEGIES),theessentialcharacteristicofwhichisthatitinvolvesdirectsellingtoforeigncustomers.Thesellingcanbecompletelydirectinthesensethat,evenifthefirmmakesuseoftheservicesofanexporthouseoralocallyappointedagentorsetsupanexportdepartment,thedirectinvestmentintheforeignmarketissmall.Inotherwords,exportingissellingintoforeignmarketswitha

permanentand(moreorless)exclusiverepresentationbyastock-holdingmarketintermediarysuchasadistributor.

Withrespecttoexportdepartments,itshouldbeemphasizedthattheirprimepurpose,generally,isnottosupporttheforeignsaleseffortthroughundertakingmarketstudiesorassistingwithexportdevelopmentplans,buttoprocessthepaperworkassociatedwiththephysicaltransferofproductsintoforeignmarkets.Suchactivitycaninclude:theissuingandprocessingofinvoices;thearrangingofpaymentsinwardandoutwardinforeigncurrencies;thepreparationofcompanybrochuresinforeignlanguages;andthesupervisionoftransportationarrangementstakingaccountofspecialrequirementsconcerningcustomsproceduresandgoodscertificationinthetargetmarket.

Asforthejobofexportmanagers,oneoftheirmaintasksistoforecastdemandingivenforeignmarketsandtopreparethecompanyaccordinglytomeetit.Evidencesuggeststhatforecastsofdemandarebasedonpersonalrelationships(seeRELATIONSHIPMARKETING)withcustomerswhichareparticularlyclose.TheexportmanagerisunlikelytoengageinthemoresophisticatedandexpensiveformsofinternationalMARKETINGRESEARCH,whichseektocreatecoherentandsystematicmethodologiesforidentifyingforeigncustomersanddevelopingspecific,culture-sensitive,businessapproaches.Itwould,however,bemistakentoassumethattheexportmanagerisperforcelessadroitthantheinternationalmarketingmanager.Thepointtoemphasizeisthattheyrepresentdifferentapproachestobusinessdevelopmentinforeignmarkets,thecrucialdifferenceresiding

expandhis/herviewsinthelightofcontributionsfromothermembersofthegrouFurthermore,theabilitytoshowthevideotapeofthediscussiontoexecutivesprovidesthemwithalmostdirectcontactwithcustomers.Thedisadvantagesincludethepossibilityofrespondents"lying"inordertoconformtogrouppressuresor,conversely,disagreeingwithfellowparticipantstowhomtheytakeadislike.Themoderatorcanintroducebiases.Interpretingandreportingtheresultsofthediscussionsissubjective.Becausethenumberofgroupsisusuallysmallandtheselectedsamplesnotrandom,generalizingtheresultstothepopulationishazardous.

Bibliography

MICHAELGREATOREX

FocusStrategy

ThefocusstrategyisoneofPorter's(1980)genericstrategies(seeGENERICSTRATEGIES)andinvolvesconcentratingononeormorenichesorsegments(seeMARKETSEGMENTATION),asagainstaimingatbroadmarketappeal.CompaniesadoptingafocusstrategyaimtosecureasustainableCOMPETITIVEADVANTAGEbybeingabletodifferentiatemoreeffectively,orhavelowercosts,thantheirrivalsfortheparticularcustomerclusterswhichtheyhavetargeted.However,thereistheriskthatcompetitorsmayadoptanarrowerfocusorthatthecostsofthefocusstrategymakethoseadoptingituncompetitivecomparedtothosefirmsaimingatthebroadmarket.Moreover,ifsuchanichestrategyishighlyprofitableitwillattractrivalswhich,inturn,willdiminishprofits.

SeealsoCompetitivestrategy;Costleadershipstrategy;Differentiationstrategy

Bibliography

Porter,M.E.(1980).Competitivestrategy:Techniquesforanalyzing

industriesandcompetitors.NewYork:FreePress.Chapter2.

DALELITTLER

Forecasting

UsesofForecasting

Forecasts,implicitorexplicit,areusedeverytimeamarketingdecisionismade.Strategistsneedlong-termforecastsofchangesintheenvironmentandofdemandforbothcurrentandpotentialproductsindifferentmarketsandsegments.Marketingmanagersusemediumtermforecaststoaiddecision-makingconcerningpricingandtheallocationofresourcessuchasadvertisingbudgetsandsalesforcepersonneltodifferentproductsandmarkets.Inaddition,marketersareoftencalledupontoprovideshort-termforecastsofsalestoenabletheproductionanddistributiondepartmentstoplanproduction,inventories,anddistribution.Further,marketersarerequiredtoprovideforecastsofsalesandrevenuesforthebudgetswhicharethebasisofmanagementandcontrolineveryorganization.

ForecastingMethods

Forecastingtechniquesdivideintoqualitativeandquantitativemethodsandthequantitativemethodsfurthersubdivideintocausalandnon-causalapproaches.

Non-CausalForecastingMethods.

Non-causalmethodstakeatimeseriesofpastobservationsofthevariabletobeforecastandextrapolatetheseriesintothefutureusinggraphicalor,moreusually,numericalmethods.

Thenaivemethodusesasingleobservation,usuallythelatest,astheforecastoffuturevalues.

Awell-knownmethoddecomposestheseriesintoitsconstituentparts,namely:trend,cycle,seasonality,anderror.Theconstituentpartsmaybecombinedinadditiveormultiplicativefashions.Forecastsarepreparedbyextrapolatingseparatelyeachcomponentofthetimeseriesandrecomposingtheextrapolationstoformforecastsofthewholevariable.Theclassicaldecompositionmethodhasbeenextendedintoaniterativeform,

togetherwithanabilitytotakeaccountofspecialevents,intheCensusIIsoftwarecurrentlyavailableandinusetoday.

However,forecastingmethodsbasedonexponentialsmoothingaremorepopularthantheclassicaldecompositionandtheCensusIImethods.Simpleexponentialsmoothingusesa

providingforecastsonsalesforbudgets,production,inventorycontrol,andmarketingmixdecisions.Aggregatingtheforecastsofindividualsalesrepresentativesofsalesofeachproducttoeachcustomerandpotentialcustomer(afteradjustmentforbiasesinpreviousforecasts)isacommonprocedure.

Forecastscanbepointforecastsorintervalforecastsorprobabilityforecasts.Apointforecastisaspecificamountandisalmostboundtobewrong.Anintervalforecastprovidesarangeofvaluesinwhichtheactualvaluemayfallwithagivenlevelofprobability.Sometimesminimum,mostlikely,andmaximumvaluesareestimated;otherassessorsareaskedtoprovidepessimistic,mostlikely,andoptimisticforecasts.Aprobabilityforecastattachesprobabilitiestogivenoutcomes,e.g.,thatthevariablebeingforecastwilllieinseveralpossibleintervals,orusesaprobabilitydistributiontodescribethesubjectiveassessment.

Long-rangeforecastsconcerningtechnicalinnovationsmaybeobtainedfrom"experts"intherelevantfieldusing,forinstance,thedelphimethod.Surveysofbuyers'intentionsandconsumerconfidenceareconsideredtoprovidesoftdatathatmaybeusefulforpredictingdiscretionarypurchasessuchasconsumerdurables.

CombiningForecasts

Forecastsofthesamevariableobtainedbydifferentmethodsareoftencombined.Inaddition,forecastsobtainedbyexponentialsmoothingmaybeadjustedusingthesubjectiveestimatesofaforecaster.

SelectionofForecastingMethod

Theselectionofanappropriateforecastingtechniqueisfraughtwithdifficulty,dependingasitdoesonforecastinghorizon,thenatureofthedata,theaccuracyrequired,theeaseandcostofuseofdifferentmethods.Practitionersneedtoemployanappropriatetechniqueforthespecificsituation.Forinstance,non-causaltimeseriesmethodssuchasexponentialsmoothingareparticularlysuitableforusebymultiproductorganizationsthatneeddetailedandfrequentshort-termforecastsfortheplanningof

productionandinventories.

Bibliography

Bails,D.G.&Pepper,L.C.(1993).Businessfluctuations:Forecastingtechniqueandapplications(2ndedn).EnglewoodCliffs,NJ:Prentice-Hall.

Box,G.E.P.&Jenkins,G.M.(Eds)(1976).Timeseriesanalysis:Forecastingandcontrol.SanFrancisco:HoldenDay.

MICHAELGREATOREX

Franchises

seeRETAILFRANCHISES

Franchising

Franchisinghasbecome,increasingly,asignificantbusinessformatinrecentyears.Forexample,aboutonethirdofretailsalesintheUSAarenowestimatedtocomefromfranchisearrangements,andmorethanaquarterofallBritishforeignretailinvestmentsareintheformoffranchises.Burger-King,themajorhamburgerrestaurantchain,has7,500outletsin56countries.Benetton,theItalianretailer,hassome6,000outletsinover80countries.Thepopularityoffranchisingasaformofmarketentry(seeINTERNATIONALMARKETENTRYANDDEVELOPMENTSTRATEGIES)isduetothefactthatitentailslessriskandmakeslessdemandsoncapitalthanotheroptionssuchasINTERNATIONALJOINTVENTURESoracquisitions.Advantagestothefranchiseealsoincludearapidinternationalawarenessofbrandsandtrademarksandsalesgrowth,witnessMcDonalds,Benetton,andBodyShopwhohavebeenparticularlysuccessfulat"exporting"theirbusinessconceptstofranchiseesworldwide.

ThereisevidencetosuggestthatfranchiseswhicharesetuptotestabusinessideawithoutpriorMARKETINGRESEARCHarepronetofailure,andthatsuccessfulfranchisesarethoseinwhichacloserelationshipexistsbetweenfranchisorandfranchiseetotheextentthattheircomplementarycompaniesbecomeverticallyintegratedbusinessorganizations.

Bibliography

Daniels,J.D.&Radebaugh,L.H.(1994).Internationalbusiness:Environmentsandoperations.Reading,MA:AddisonWesley.

SomeofthemajorclassificationsintheUKare:ACORN(AClassificationOfResidentialNeighbourhoods);PIN(PinpointIdentificationNeighbourhoods);Mosaic;andSuperprofiles(seeTable1fordetails).Asanexample,ACORNclassificationshavebeendividedintosixmajorcategories,i.e.,Thriving,Expanding,Rising,Settling,Aspiring,andStriving.Thesearefurtherdesegregatedinto17groupsand54types.Forexample,theACORNcategoryThrivingincludesgroupsofWealthyAchieversinSuburbanAreas,AffluentGreysinRuralCommunities,andProsperousPensionersinRetirementAreas,andthusprovidesameansoflocatingwherethesetypesofindividualsarelikelytoreside.

Onequestionwhichhasbeenraisedintheliteratureis:doesitreallymakesensetouseonestandardsegmentationtoolacrossallsortsofindustrysectors,markets,products,andorganizations?Theanswerappearstobethateachgeneralclassificationproductdoesdiscriminate,butthedegreeofdiscriminationvariesaccordingtomarketsectorandthereisnosinglebeststandardgeodemographicproductforallsituationsfromthoseavailable.Twoofthefirstmarket-specificapplicationstobedevisedwereFinancialMosaicandFinpin,whichweredesignedspecificallytosegmentthemarketforfinancialservices.SourcesofdatausedforFinancialMosaicinclude:thenumberofcompanydirectors,thelevelandvalueofshareownership,thelevelofapplicationforvariousfinancialservices,theproportionofmortgagesandoutrighthomeowners,andthefrequencyandvalueofCountyCourtJudgements.Thishasresultedinaclassificationof36FinancialMosaictypes;forexample,YoungEntrepreneurs,WealthyBusinessmen,andCaptainsofIndustryarethreetypeswhicharegroupedunderCapitalAccumulators.Thedemandfor,andsupplyof,tailoredorbespokesegmentationclassificationshasrisenrecently,e.g.,InvestorACORNincorporatesdatafromtheInvestor'sRegister,adatabaseofover1millioninvestors,andArtACORNcombinesdemographicdatawithinformationfromtheboxofficesofartsvenuesthroughoutGreatBritain.Theextensionofthesemoretargetedclassificationsistohaveabespokeclassificationforeachparticularmarket.Iforganizationshavesufficientinformationontheircustomers,thiscanbeusedtocreatebespoke

classificationsforanyproductmarket,e.g.,cars,food,hi-fis,etc.

CCNhasmademajorinroadsintobuildingclassificationswithinmanyEuropeancountries.Euromosaicidentifiestenmajorpan-EuropeantypeswhichareconsistentacrosstheEuropeancountriesof:GreatBritain;theNetherlands;Germany;Spain;Ireland;Sweden;andBelgium.AnexampleofaEuromosaictypeisElitesuburbs.Thesearewell-establishedsuburbanneighborhoodsinlargeandmedium-sizedcities,consistingofresidentialpropertiesinlargegrounds.Thesepeoplearewealthy,butliveinrestrainedluxury.

Themajoradvantagesofgeodemographicsare:theirmulti-facetednature,i.e.,theydonotrelyonunidimensionalclassificationvariables;theireaseofuseandactionability,beinglinkedtothepostcodesystemandcoveringallconsumeraddresseswithintheUK;theirabilitytolinkwithdifferentdatasetswhichhavebeengeodemographicallycodedforabove-the-lineandbelow-the-linemarketingactivities,e.g.,TVaudienceratingdataandregionalpress;andtheirabilitytodescribethetypesofhousespeopleliveinwhichcanhelpthemarketertounderstandhis/hertargetsegment.Theyarenowanessentialpartofretailsiteanalysisandbranch/storeassessment.Forexample,byknowinghowmanyofacertaintypeofcustomerarewithinabranch/storecatchmentarea,amoreaccurateassessmentofalternativebranchlocationsandofmarketandsalestargetscanbeundertaken.Theyareusefulinmediaplanning,sincemediadatasourcessuchastheNationalReadershipSurveyandTargetGroupIndexaregeodemographicallycoded.AdvertisingandpromotionalmessagescanalsobecommunicatedtothetargetaudienceusingDIRECTMAILanddoor-to-doorleafletcampaignswhichcanbegeodemographicallytargeted.Finally,theyareextensivelyusedincustomerprofilingwhichinvolvesgeodemographicallyanalyzingexistingcustomers.

Geodemographicsystemsdohaveseveralweaknesses.First,becausetheCensusinformationisreleasedatanaggregatedlevelofabout150households(EnumerationDistrict),classificationsarenotparticularlygoodattargetingcertaindifferences,e.g.,age,atthehouseholdorpostcodelevel.However,severalproductshavebeendesignedtoovercomethisproblem.

HierarchyofEffectsModel

ThisisamodelofMARKETINGCOMMUNICATIONSdevelopedbyLavidge&Steiner(1961)whichhasanumberofstagesthroughwhichthebuyer/customerpassesfromunawarenessofaproductorservicetopurchase.TheCOGNITIVESTAGEisdenotedbyAWARENESSandknowledge,theAFFECTIVESTAGEbyliking,preference,andCONVICTION,andtheCONATIVE(orbehavioral)STAGEbyapurchase.Measurestakenbeforeandafteraformofcommunicationisusedwillenableobjective(s)tobesetandthesuccessofittobeanalyzed.Logicalprogressionthroughthestagesisnotalwayspossibleindeed,muchdependsontheproductorservicebeingofferedandthetargetgroupofreceivers.

Bibliography

Lavidge,R.J.&Steiner,G.A.(1961).Amodelforpredictivemeasurementsofadvertisingeffectiveness.JournalofMarketing,Oct.,61.

DAVIDYORKE

HighStreetRetailing

Highstreetretailingreferstoretailactivityinthetraditionalshoppingareasoftown,city,urban,andsuburbanlocations.(TraditionalshoppingareasaredescribedbyGuy,1994.)ThistypeofshoppingisfrequentlytermedstriporribboncentersbysomeUSretailers,e.g.,seeLevy&Weitz(1995).Continuedmovementofmajorretailerstonewlydevelopedout-of-town,suburbanlocationsandthegrowthofshoppingmallsandplannedshopping

centershasfueleddebateconcerningthefuturevitalityandviabilityofhighstreetretailing(e.g.,Schiller,1994).

SeealsoShoppingcenters

Bibliography

Guy,C.(1994).Theretaildevelopmentprocess(2ndedn).London:Routledge.

Levy,M.&WeitzB.A.(1995).Retailmanagement(2ndedn).Homewood,IL:Irwin.

Schiller,R.(1994).Vitalityandviability:challengetothetowncentre.InternationalJournalofRetailandDistributionManagement,22(6),4650.

STEVEGREENLAND

HistoricDemand

seeDEMAND

HorizontalIntegration

Thisisregardedasanintegrativegrowthstrategyandinvolvesacquiringcompetitorswithinthesameindustry,asopposedtoaverticallyintegrativestrategywhichmightinvolvetheacquisitionofsuppliers(backwardintegration)orcustomers(forwardintegration).

Horizontalintegrationmaynotnecessarilybeundertakenasameansofgrowth;itmightalsobeemployedtorationalizeanindustry,whichismaturingordeclining,byremovingcapacity.

SeealsoCompetitivestrategy;Verticalintegration

DALELITTLER

Bibliography

Dibb,S.,Simkin,L.,Pride,W.M.&Ferrell,O.C.(1994).Marketing:Conceptsandstrategies(Europeanedn).Boston,MA:HoughtonMifflinCo.Chapter14.

Kotler,P.(1994).Marketingmanagement:Analysis,planning,implementationandcontrol(8thedn).EnglewoodCliffs,NJ:Prentice-Hall.Chapters22,23,24.

DAVIDYORKE

IndustrialMarketing

Thisisthetermoriginallycoinedinthe1960stodescribetheprocessofmarketingbetweenorganizations.Thetermreferredimplicitlytoorganizationsengagedinindustry(especially"smokestack"industries).Duringthe1980sitbecameacceptedthatthetermindustrialmarketingwasinadequatebecauseitfailedtoreflectthefulldiversityofmarketingactivitiesbetweenorganizations,especiallybetweencommercialorganizationssuchasbanks,publishers,distributors,andretailers.ThetermBUSINESS-TO-BUSINESSMARKETINGwasthencoinedasanalternative,thoughnowadaysthetermORGANIZATIONALMARKETINGispreferredbymanyauthoritiesbecauseitrecognizesthattheprinciplesandpracticeofmarketingbetweenorganizationsisnotconfinedto"businesses"butalsoextendstoavastrangeoforganizationssuchashospitals,orchestras,prisons,armedforces,schools,charities,governments,andunions.

DOMINICWILSON

Influencers

InfluencersareactualorpotentialmembersoftheDECISION-MAKINGUNIT(DMU)andarethoseindividualswhomaybeinfluentialinthe

PURCHASINGPROCESSwithoutnecessarilybeingUSERSorDECIDERSorSPECIFIERS.Thisisanimprecisecategorizationbutmightincludeindividualswhoareaffectedbyapurchasingdecisionwithoutbeingdirectlyinvolved.Forexample,securitystaffmightsuggestadditionalfeatures(suchastemporaryelectronictagging)whichwouldmakeitmoredifficultforpersonneltostealcomponentsfromafactory(e.g.,theftofcarradiosfromcarfactories).

SeealsoOrganizationalbuyingbehavior

DOMINICWILSON

InformationSystems

seeMARKETINGINFORMATIONSYSTEMS

Innovation

Innovationinvolvestheintroductionofsomethingnew,suchasproducts,processes,techniques,andorganizationalforms.Schumpeter(1939)highlightedwhatheregardedasitscentralroleineconomicdevelopment,whichhedepictedasaprocessof"creativedestruction"causedbytheintroductionofinnovations,whichunderminedexistingformsandmodesofdoingthings,andtheresponsesofentrepreneurstothem.Theupswingofamajoreconomiccycle(theKondratiefffifty-to-sixty-yearcycle)hasbeenassociatedwithinvestmentinamajorinnovationbypioneeringentrepreneurs.Thesearelaterfollowedbyahostofimitatorswhotemporarilyglutthemarketsuchthatpricedeclinesandprofitscollapse.Somefirmsarebankruptedandbusinessconfidencelost,onlytoberevivedbythenextinnovation.

However.,suchinnovationsarelikelytoberadicalordiscontinuous(seeDISCONTINUOUSINNOVATION),whereasthemajorityofinnovationsarecontinuousorincrementaladjustmentstoexistingprocedures,products,structures,andprocesses(seeCONTINUOUSINNOVATION).

Giventhesignificantchangesthatcanoccurintheenvironment(seeENVIRONMENTALANALYSIS)ofanorganizationduringanyperiod,theneedtobealerttoexternalinnovationshasbeenemphasizedinthestrategicmanagementliterature,aswellasthenecessityforcompanies

themselvestochangeandbeinnovativenotonlytorespondtoandpreemptsuchchanges,butalsotoestablishastrategicagendaoftheirown.Intheirfamousstudyofexcellentcompanies,Peters&Waterman(1982)arguedthat:

...innovativecompaniesareespeciallyadroitatcontinuallyrespondingtochange

capabilitiesforthemselvescheaplyorquickly,butalsofeartheriskoftheirowncorecapabilitiesbeinginternalizedbypartnerswithoutadequaterecompense.Somedegreeofgenuinecooperationisessentialasinter-organizationallearningdictatesaprocessofintensecommunicationanddialoguewhichisonlypossibleifanatmosphereoftrustprevails.Nevertheless,cooperationisameansandnotanendinitself.AsHamel(1991)hasobserved,withinalliancesthereisoftena"racetolearn"betweenthepartners;thosethatlearnmorequicklymayloseinterestinthecontinuationofthealliance.Infact,mostalliancesareseenastransitionalarrangementsbybothpartiesandareterminatedafterafewyears.

Bibliography

Hamel,G.(1991).Competitionforcompetenceandinter-partnerlearningwithininternationalstrategicalliances.StrategicManagementJournal,12,83103.

Mitchell,W.&Singh,K.(1992).Incumbents'useofpre-entryalliancesbeforeexpansionintonewtechnicalsubfields.JournalofEconomicBehaviourandOrganisation,18,347372.

Mody,A.(1993).Learningthroughalliances.JournalofEconomicBehaviourandOrganisation,20,150170.

Pisano,G.,Russo,M.&Teece,D.(1988).Jointventuresandcollaborativearrangementinthetelecommunicationindustry.InD.Mowery(Ed.),InternationalcollaborativeventuresinUSmanufacturing(Chapter2,pp.2369).Cambridge,MA:Balinger.

Sheth,J.(1992).Emergingmarketingstrategiesinachangingmacroeconomicenvironment:Acommentary.InternationalMarketingReview,9(1),5763.

MOYAMIN

InterpersonalCommunications

Interpersonalcommunicationsarethebasisofinformalchannelsof

marketingcommunications,sometimesreferredtoasword-of-mouthcommunications(seeWORD-OF-MOUTHCOMMUNICATIONS),whenconsumers/buyerstalktoeachotheraboutproduct-relatedissues.Tounderstandinterpersonalcommunicationsrequiresconsiderationofpersonalinfluence,groupinfluenceincludingreferencegroups,andopinionleaders.

Personalinfluenceisthechangeinattitudesand/orbehaviorasaresultofinterpersonalcommunications.Personalinfluencecanbeinitiatedbyapotentialconsumerseekingadviceandinformation,orafterpurchaseasaproviderofinformationandopinions.Itisatwo-wayinfluenceunlikethatoftheMASSMEDIA,anditmaybevisualaswellasverbal.

Theoccurrenceofpersonalinfluencedependsonproductvariables(e.g.,visibility,complexity,degreeofperceivedrisk,stageinthediffusionprocess),andconsumervariables(e.g.,lifestage,productexperience,personality).Companiestrytoaffecttheextentofpersonalinfluenceintheiradvertisingandpromotion,personalselling,andsalespromotionactivities.Forexample,intheiradvertisingtheymaysimulatepersonalinfluencewithuserstereotypes,testimonials,andgroupactivities;orstimulateit,e.g.,byencouragingpeopletotalkaboutaproduct.

Intherealmofinterpersonalcommunications,notallindividualswieldequalinfluence.Some,opinionleaders,aremoreinfluentialandothersmayturntothemforinformationandadvice.Katz&Lazerfeld(1955)believethatpeoplearemostinfluencedbythosetheyareincontactwithineverydaylife,i.e.,bypeoplemostlikethemselves,e.g.,doctorsforhealthissuesandclosefriendsforthepurchaseofconsumerdurables.Researchhasnotbeenabletoclearlyidentifyopinionleadertraits,e.g.,withrespecttodemographics,personality,lifestyles,ormediahabits(e.g.,Myers&Robertson,1972).Further,ithasnotbeenpossibletoidentifyopinionleadersacrossproductcategories;opinionleadershipisprimarilyproductspecific(e.g.,King&Summers,1979).

Groupinfluenceisanimportantaspectofsocialinfluence.Allgroupshavevalues,beliefs,andnorms,andexpectindividualmemberstosharetheseandconformtothemandbehaveinappropriateways.Consumersare,therefore,influencedbyanumberofgroupswhichmaybecategorizedasprimary(e.g.,family,friends,neighbors,workassociates)orsecondary

wheretherehasbeensomedeliberatechoiceinbelongingandthereisamoreformalstructureandrules(e.g.,politicalparties,churchaffiliation,leisureandsportingclubs).

Therearepressuresonconsumerstoconformtogroupbeliefs,values,andnorms,and

underwhichtheforeignlicensorempowersthelicenseetomakeuseoftheformer'stechnologicalknow-howinexchangeforfinancialcompensationandaccesstothelicensee'smarket.Acommontypeoflicensingarrangementwouldpermitthelicenseetomanufactureandmarketthelicensor'sproduct,normallyasanexclusiveright,foranagreedperiodoftimeinreturnforanagreedpayment,oftenintheformofaroyaltypayment.Theattractionoflicensingtolicensorsisthatitallowsthemtoestablishaproductionbaseinaforeignmarketwithoutcommittingconsiderableinvestmentsincapitalandlabor.

Beforecommittinghimself,alicensorwill,dependingonthenatureofitsbusiness,endeavortocraftanagreementthatoffersitlegalprotectioninrelationtopatents,copyright,trademarks,andknow-how(whichmightinvolvetradesecrets).Thelicensorwillalsowishtosatisfyitselfthatawould-belicenseecanmeetalltheperformancecriteriapertainingtoproductionandmarketing.Ifthelicenseeisinexperiencedinthesematters,thelicensorwillnormallyundertaketosupportthelicenseethroughtrainingofpersonnelorothermeansofsupport,rangingfromaccesstothelicensor'sdesignandtechnicalresourcestoitsexpertiseinliteratureproductionandMARKETINGRESEARCH.

Inmanyinstancestheknow-howofthelicensorisaheadof,orsuperiorto,thatwhichisavailableinthelicensee'scountry.Hence,licensearrangementshaveprovedtobeapopularformoftechnologyandmarketingknow-howtransfereithertodevelopingcountriesortocountrieswith"technologicalgaps,"suchastheformersocialistcountries.AstrikingexampleofacountrythatrapidlyenhanceditstechnologicalexpertisethroughapolicyofenteringlicenseagreementsandexploitingthemtothefullisJapan:fromtheendoftheWar(1945)until1980Japanhadobtainedsome2,500licenses.Japan,inturn,isnowamajorlicensor,passingonvarioustechnologicalbenefitstoitslicenseesinsectorssuchaselectronicsandautomobileproduction.

Licensingcantakemanyforms;oneparticularformisthejointventure(seeINTERNATIONALJOINTVENTURES).Anotherform,ofteninvolving

thetransferofintangiblessuchasserviceknow-howortrademarks,iscalledFRANCHISING.Inindustriescharacterizedbyfrequenttechnologicalchangesuchaschemicals,informationtechnology,andelectronics,companiesresorttocross-licensing,whichisadeviceforavoidingout-and-outtechnologicalcompetitionwhichcouldberuinoustobothparties.Notsurprisingly,perhaps,thecloserpartiesareintechnologicalparity,themorecomplexisthenegotiationoflicensingagreementsandtheycantakemonthstoarrange,especiallywheretherehastobeanexchangeofsecretinformation.

Astudyoflicensingbehavioroffirmsreveals:evidenceofaconsiderablediversityofmotives;anintentiontotransferknow-howthatis(orisabouttobecome)obsolete;adisplayofacommitmenttoaparticularmarketthatforpoliticalorotherreasonsmaybedifficulttopenetratebyothermeans;amotivetointernationalizebusinessrapidlyandwithcomparativelylowrisk;oraconsolidationofapositioninaforeignmarketwherethecompanyiswellestablishedinotherproductlines.Therearecasesoffirmslicensingknow-howwhichtheirresearchanddevelopmenthasdevelopedbutwhichisnotrelateddirectlytotheirmajorproductportfolio.

NIGELHOLDEN

LifeCycles

seeLIFESTYLES

Lifestyles

Considerationofconsumerlifestylesincorporatesanawarenessofdemographicvariablesandlifecycles.ConsumerbehaviorresearchersandmarketersareinterestedintrendsinconsumerDEMOGRAPHICSwithrespectto:birthratesandageprofiles;marriageanddivorcerates;numberandspacingofchildren;sizeandcompositionofhouseholds/families,andextentofsingle-personhouseholds;incomesandoccupation;levelsofemploymentincludingparticipationofwomeninthelaborforce;andtypeandlocationofresidence.Theseallimpactonconsumerneeds,attitudes,andbehavior,andareoftendiscussedinrelationtolifecyclesandlifestyles.

Thetermlifecyclereferstotheprogressionofstagesthroughwhichindividualsandfamilies

proceedduringtheirlives,withtheconsequentfinancialsituationandneedsforgoodsandservices.Thetraditionallifecyclestageswerefrom:bachelorstagetonewlymarried;fullnest1,2,3;emptynest1,2;solitarysurvivorinlaborforce;andsolitarysurvivorretired(seeWells&Gubar,1966).However,severalmodernizedfamilylifecycleshavebeenputforward(e.g.,Murphy&Staples,1979;Gilly&Enis,1982)inresponsetodemographictrendssuchassmallerfamilysizes,postponementofmarriage,andrisingdivorcerates.

Consumerlifestylereferstoaconsumer'spatternoflivingwhichinfluencesandisreflectedbyconsumptionbehavior.Itistheresultofinteractiveprocessesbetweensocialandpersonalvariablessurroundingindividualsinchildhoodandthroughoutlife,e.g.,family,referencegroups,CULTURE.Itembodiespatternsthatdevelopandemergefromthedynamicsoflivinginasociety.Further,economicinfluencesprovideconstraintsandopportunitiesinthedevelopmentoflifestyle.

Lifestyleencompassesaperson'spatternoflivingintheworldasexpressedintermsofactivities,interests,andopinions(e.g.,seeWells&Tigert,1971).Activitiesrefertohowpeoplespendtheirtime:atwork,home,community,specialactivities,hobbies,clubs,vacation,sport,andentertainment.Interestsrefertowhattheyplaceimportanceonintheirimmediatesurroundings:family,home,job,community,recreation,fashion,andmedia.Opinionsareintermsoftheirviewofthemselvesandtheworldaroundthem:e.g.,socialissues,politics,business,economics,education,andculture.Thesevariablesareconsideredtogetherwithdemographics,andthebasicpremiseoflifestyleresearchisthatthemoremarketersknowandunderstandaboutcustomers,themoreeffectivelytheycancommunicateandmarkettothem.Itprovidesathree-dimensionalviewofcustomers.ThetermPSYCHOGRAPHICSisusedinterchangeablywithlifestyle,butmayalsoincludePERSONALITYvariables.

OneexampleoflifestyleistheVALSframework(seeSolomon,1992),whichisbasedonsome30to40demographicandattitudinalcharacteristics.Fromthis,threebroadgroupsofconsumerareidentified(in

theUSpopulation):need-driven,outer-directed,andinner-directed.Thesearefurtherdividedintoninevaluelifestylegroups:survivors,sustainers,belongers,emulators,"Iamme,"experientals,societallyconscious,andintegratedwithassociatedimpactonconsumerneeds,attitudes,andbehavior.

AnotherexampleoflifestyleisACORN-typing(seeCACI,1993),usedasanindicatorofSOCIALCLASS.Thisincorporatesgeodemographicdata(seeGEODEMOGRAPHICS),fromthemostrecentcensus,toinclude:age,sex,maritalstatus,occupation,economicposition,education,homeownership,andcarownership:toprovideafullandcomprehensivepictureofsocioeconomicstatus.Fromthisdata,andpostcodeinformation,ACORNtypesaredevelopedtoprofileconsumersintermsoftheirattitudesandbehaviorwithrespecttoproductsandservicesbought,leisureactivities,mediahabits,andfinancialposition.

Bibliography

CACI(1993).London:CAtxlCIInformationServices.

Gilly,M.C.&Enis,B.M.(1982).Recyclingthefamilylifecycle:Aproposalforredefinition.InA.Mitchell(Ed.),Advancesinconsumerresearch(vol.9,pp.271276).AnnArbor,MI:AssociationforConsumerResearch.

Hawkins,D.I.,Best,R.J.&Coney,K.A.(1992).Consumerbehavior:Implicationsformarketingstrategy(5thedn).Homewood,IL:Irwin.Chapters3,7,11.

Murphy,P.E.&Staples,W.A.(1979).Amodernisedfamilylifecycle.JournalofConsumerResearch,June,1222.

Plummer,J.(1974).Theconceptandapplicationoflifestylesegmentation.JournalofMarketing,38,Jan.,3337.

Schiele,G.W.(1974).Howtoreachtheyoungcustomer.HarvardBusiness

Review,52,Mar.Apr.,7786.

Solomon,M.R.(1992).Consumerbehavior.NeedhamHeights,MA:Allyn&Bacon.

Wells,W.D.(Ed.)(1974).Lifestyleandpsychographics.Chicago:AmericanMarketingAssociation.

Bibliography

Anderson,E.&Weitz,B.(1986).Make-or-buydecisions.SloanManagementReview,27,Spring,319.

Ford,D.,Cotton,B.,Farmer,D.&Gross,A.(1993).Make-or-buydecisionsandtheirimplications.IndustrialMarketingManagement,22,Aug.,207214.

Venkatesan,R.(1992).Strategicsourcing:Tomakeornottomake.HarvardBusinessReview,70,(6),Nov.Dec.,98107.

DOMINICWILSON

Margin

MarginreferstotheprofitearnedbyaproductorserviceatdifferentstagesoftheVALUECHAINandisusuallyexpressedasapercentage.Marginscanbeaddedateachstageoftheproductionanddistributionprocess(wherethesestagesaretreatedasprofitcenters)inaccordancewiththecompetitivepressuresprevailingateachstage.Thesumofcostsandmarginsforeachstageofthevaluechainisreflectedintheeventualpricetotheenduser(DISCOUNTnotwithstanding)."Margin"isabroadtermandismoreusuallydiscussedundertheslightlymorespecificvariantsofGROSSMARGINandNETMARGIN.

DOMINICWILSON

MarginalPricing

Marginalpricingisatermusedtorefertothoseoccasionswhenpriceiscalculatedtocoveronlythevariablecostsofproductionand/ordistributionandlittleornoCONTRIBUTIONisrequiredtowardsfixedcostsandprofitmargins.Clearly,thisisanunusualanduneconomiclevelforpricesandonewhichcouldnotbesustainedforlong.Marginalpricingmightbeusedduringatemporaryfallindemand(e.g.,duringaneconomicrecessionorapricewar)tokeepassets"tickingover"pendingthereturnofmorenormaltradingconditions.Thealternativeistoreduceradically(orevensuspend)

operationswhichcanleadtoevenlessattractiveconsequencessuchasdeteriorationofskills,reducedcustomerloyalty,lossofreputation,anderosionofbrands.Marginalpricingmightalsobeusedtosecurewhatisexpectedtobeafavoredpositionwithrespecttofuturesales(aswithintroductoryoffers).

DOMINICWILSON

Market

Theterm"market"isclearlyanimportantconceptinthefieldofmarketing,yetwhilemuchdebatehastakenplaceonwhatconstitutesanappropriatedefinitionof"MARKETING,"lessattentionhasbeendirectedinmarketingliteraturetowardthenatureofmarkets.Thisisincreasinglybeingrecognizedasanomission,giventhatmanyanalyticaltechniquesrelyonconceptssuchasMARKETSHAREandMARKETSEGMENTATION(Curran&Goodfellow,1990).

Theoriginaluseoftheterm"market"referredtoaphysicallocationwherebuyersandsellerscometogetherinordertoexchangeproductsandservices.Sincethen,thetermhasbeendevelopedinthefieldofeconomicstorefervariouslytoanynetworkofdealingsbetweenbuyersandsellersofaparticularproduct,ortorefertoproductswhichareregardedasclosesubstitutes.Thelatterisoftenreferredtoasthesubstitutabilitycriteria,twoproductsbeingcontainedinthesamemarketwherethecross-elasticityofdemandbetweenthetwoisgreaterthanapre-assignednumber(x).However,thereislittleagreementinthefieldastothecriteriabywhichxmightbespecified.

Elsewhere,theterm"market"hasbeenusedextensivelytodescribeaggregatedemandforaspecificproduct(the"automobile"market)orinaspecificphysicalarea(the"Europeanmarket'').Marketshavealsobeenviewedinbroader"need"terms(the"transportation"market)anddemographicterms(the"female"market)oranycombinationofthesevariables.

Incontemporarymarketing,however,the"market"ismostcommonlyusedtorefertotheexistingortargetgroupofcustomersforaparticularproductorservice.Forexample:"Allthepotentialcustomerssharingaparticularneedorwantwhomightbewillingorabletoengageinexchangetosatisfy

thatneedorwant"(Kotler,1991,p.8)."Individualswho,inthepast,havepurchasedagivenclassofproduct"(Sissors,1966)."Anaggregateofpeoplewho,as

ModifiedRe-Buy

Robinson,Faris&Wind(1967)suggestadivisionoforganizationalbuyingintothreecategories:NEWTASK,modifiedre-buy,andSTRAIGHTRE-BUY.Thecategoryofmodifiedre-buyreferstothoseoccasionswhentherearesignificantdifferencesinthetermsofthepurchasingcontractunderreview(e.g.,changesinprice,technicalspecifications,deliveryarrangements,packaging,design,quality).Thesignificanceofthesedifferencesmightreflectchangesinthecustomer'srequirements(e.g.,changedspecificationsordeliveryarrangements),orinthecustomer'scompetitiveposition(e.g.,enteringnewmarkets,developingimprovedproducts),orinasupplier'sofferings(e.g.,increasedprice,newproductfeatures),andwillgenerallyrequireasignificantrenegotiationofthecontractthoughnotusuallyachangeofsupplier.

Bibliography

DOMINICWILSON

MultidimensionalScaling

Multidimensionalscalingisagenericnamegiventoanumberofproceduresrelatedtoattitudeandimageresearch.Itsmainusesinmarketingareinattributemapping,productpositioning,andfindingidealbrandpoints.Twotypesofvariablesformthestartingblocksformuchmultidimensionalscaling:perceptions(ofattributes,ofsimilaritiesbetweenbrands,etc.);andpreferences(e.g.,betweenbrands).

Brandsareperceivedbycustomersintermsofattributes,e.g.,forcarstheattributescouldbeperformance,safety,size,style,country-of-origin,price,etc.Differentbrandsmaybeperceivedindifferentways;brandscanberepresentedonmapsandsomebrandswillbeclosetogether(hence,likelytobecompeting),whileotherbrandswillbeapart.Itmaybepossibletodiscoverforindividualbuyerstheiridealpositionsonthesemapsand

hence,takenwiththeproductmap,predictwhichbrandislikelytobepurchased.Theidealpointhasanotherinterpretationasanindicatoroftheimportanceofthedimensionsidentified.Gapsintheofferingstothecustomersmaybespotted,hencehelpingwiththedesignofnewproducts.Dimensionsusedinthemapsindicatetheattributesusedbyrespondentstocharacterizethebrands.

Differenttypesofmeasurementscalesincluderatio,interval,ordinal,andcategoricalscales.Thelattertwoscalesareknownasnon-metricscalesforobviousreasons.Anotherscale,knownasanorderedmetricscale,isusedinthecommonesttypeofmultidimensionalscaling.Inanorderedmetricscale,allpossibleintervalsbetweenpositionsonthescaleareranked.

Thus,onetechniqueofmultidimensionalscalingrequiresallpairsofbrandstoberankedinorderofsimilarity.Thebrandsonofferinamarketarelistedinpairsandtherespondenthastosaywhichpairisthemostsimilar,thenextmostsimilar,andsoonrightdowntotheleastsimilar.Thisinformationisfedintoacomputer,attributemapsarepreparedshowingtherelativepositionsofthebrands,andametricmeasureofthesimilarities(ordifferences)betweenbrandsisobtained,eventhoughoriginallythedataweremerelyanorderedmetricscale.Itmaytakeonlytwodimensionstomapthebrands,whenitiseasytorepresentthemapsgraphically.Whenthreeormoredimensionsaretobeused,severaltwo-dimensionalgraphsareprepared.Thedimensionsarenotnamed;theyhavetobenamedbytheresearcherfromthegroupingofthebrandsandfurtherknowledgeofthebrands'attributes.Thedimensionsidentifytheattributesusedbytherespondenttoevaluateandcomparethebrands.

Theidealpointcanbediscovered,basedupontherespondentbeingabletorankthebrandsinorderofpreferenceeitheroveralloroneachofseveralattributescalesaccordingtotheprogramused.Themaps,basedonsimilaritiesdata,areproducedforeachindividual.Thedimensionsthatarethrownupmaydifferfrommaptomaltisdifficulttoaggregatemapsoverindividuals;thisisunfortunateasitmakesithardtousetheknowledgegainedaboutidealpointstodiscoverclustersofrespondentswithcloseidealpoints.Usually,clusteringtakesplacefirst;thisisfollowedbyobtainingamaptorepresenteachclustereitherforanaverageindividualineachcluster,orbasedonaveragingsimilaritiesdatafromeachcluster.Ideal

pointsforindividualsintheclustercanbemappedin

positiveoutcomeofNPD.Theseinclude:peoplefactors,suchascommitmentofseniormanagers(Maidique&Zirger,1984);organizationalfactors,e.g.,effectiveinterfunctionalcooperation(Pinto&Pinto,1990);andoperationalfactors,suchastheuseofmarketresearch(Johne&Snelson,1988).Marketinghasbeenidentifiedashavingasignificantrole.Rothwell(1977)pointstotheroleofmarketingandpublicityandofunderstanding"userneeds,"andCooper(1994)notesthevalueofhavinga"strongmarketorientationandcustomerfocus."TheconstantinteractionofR&D,design,production,andmarketingfromtheveryearlystagesofNPDtomarketlaunchhavebeenassociatedwithsuccess(e.g.,Cooper&Kleinschmidt,1986).Thepresenceofa"PRODUCTCHAMPION"hasalsobeenacknowledgedasa''success"factor.Productdevelopmentisnotalwaysaboutnewproductsproductmodifications,extensions,andstylechangearealsoaspectsofproductdevelopment.

Todevise,produce,andimplementnewproductsandmodificationstoexistingproductsentailsinputfromdifferentfunctions,notablymarketing,R&D,andproduction.Theirinputhastobeintegratedtoensurethatproductsaremadethatcorrespondwithcustomerneedsandaremadeeconomicallyandwithouttimedelays.Differentapproachestothemanagementofproductdevelopmentactivitieshavebeenidentified."Overthewall"referstoafunctionallydividedorganizationwhereinproductideasarecontinuallypassedbackandforthbetweenfunctions,sothatmarketingundertakessomedevelopmentwork,thenpassesthisontoR&Dwhichcarriesoutmoredevelopmentandthenpassestheideasbacktomarketing,andsoon.Thisprocesscanmeanthattheideastaysindevelopmentforalongtime.Adifferentapproachisthatofthe"rugbyscrum"wherebyproductdevelopmentteamsareformedwithrepresentativesfromeachfunction,allofwhichmakeanongoingcontributiontotheproduct'sdevelopment.Thisorganizationalapproachcanfacilitateaquickertimetomarketthanthe"overthewall"approach(Walshetal.,1992).

DifferentfunctionsmaynotcommunicateeasilywithoneanotherandtheinterfacebetweenR&Dandmarketing,inparticular,hasreceivedattention(Gupta,Raj,&Wileman,1995).Arecentstudyfoundthateffective

interfacebetweenmarketinganddesignwaslikelytooccurinorganizationswithacultureofopenness,closelocationofmarketinganddesignfunctionsandamultidisciplinaryteamapproachtoproductdevelopment(Davies-Cooper&Jones,1995).

Bibliography

Cooper,R.G.(1994).Newproducts:Thefactorsthatdrivesuccess.InternationalMarketingReview,11,(1),6077.

Cooper,R.G.&Kleinschmidt,E.J.(1986).Aninvestigationintothenewproductprocess:Steps,deficienciesandimpact.JournalofProductInnovationManagement,3,(1),7185.

Davies-Cooper,R.&Jones,T.(1995).Theinterfacesbetweendesignandotherkeyfunctionsinproductdevelopment.InM.Bruce&W.Biemans(Eds),Productdevelopment:Meetingthechallengeofthedesignmarketinginterface.Chichester:JohnWiley.

Gupta,A.K.,Raj,S.P.&Wileman,D.(1985).R&Dandmarketingdialogueinhigh-techfirms.IndustrialMarketingManagement,14,289.

Hart,S.(1995).Wherewe'vebeenandwherewe'regoinginnewproductdevelopmentresearch.InM.Bruce&W.Biemans(Eds),Productdevelopment:Meetingthechallengeofthedesignmarketinginterface.(Chapter1)Chichester:JohnWiley.

Johne,F.A.&Snelson,P.(1988).Marketing'sroleinsuccessfulproductdevelopment.JournalofMarketingManagement,3,(3),256268.

Kotler,P.(1984).Marketingmanagement:Analysis,planningandcontrol.(5thedn).EnglewoodCliffs,NJ:Prentice-Hall.Chapter10,p.309.

Maidique,M.A.&Zirger,B.J.(1984).Astudyofsuccessandfailureinproductinnovation:ThecaseoftheUSelectronicsindustry.IEEETransactionsonEngineeringManagement,EM-31,(4),Nov.,192203.

Pinto,M.B.&Pinto,J.K.(1990).Projectteamcommunicationandcrossfunctionalcooperationinnewprogramdevelopment.JournalofProductInnovationManagement,7,200212.

Rothwell,R.(1977).Thecharacteristicsofsuccessfulinnovationsand

technicallyprogressivefirms(withsomecommentsoninnovationresearch).R&DManagement,7,(3),191206.

Walsh,V.,Roy,R.,Bruce,M.&Potter,S.(1992).Winningbydesign:Technology,productdesignandinternationalcompetitiveness.Oxford:BasilBlackwell.Chapters1&5.

MARGARETBRUCE

NewTask

Robinson,Faris&Wind(1967)suggestadivisionoforganizationalbuyingintothreecategories:newtask,MODIFIEDRE-BUY,andSTRAIGHTRE-BUY.Ofthesecategories,newtaskisthemostcomplexandreferstothoseoccasionswhenitisnecessarytoidentifynewsourcesforgoodsorservices.Thismaybebecauseaprevioussourceisnolongersatisfactory,orbecausetherequirementitselfisnew.Inprinciple,allstagesofthePURCHASINGPROCESSwillbeinvolvedinnewtaskbuyingbutinpracticethiswilldependonthescaleandsignificanceofthepurchaseinquestion.Thus,newtaskpurchasinginthedefencesector(e.g.,foranaircraftcarrier)mighttakeyears,whereasnewtaskpurchasingforballpointpens(e.g.,inabank)mightbedoneveryquickly.

Bibliography

DOMINICWILSON

Newspapers

Newspapersareacommunicationsmedium(seeCOMMUNICATIONSMIX),usuallyusingprintbuttheyarealsobeingdevelopedviatheInternet.Newspaperscanbelocal,regional,national,orinternationalintermsofreadersanddistribution;andareusuallypublisheddailyorweekly.TheyareamajorADVERTISINGmedium,themainadvantagesforwhichare:mass,regular,coverageofmajortargetgroups;geographicalflexibilitythroughregionaleditions;positioningopportunities;andveryshortleadtimes.However,somenewspapershavelimitedregionalflexibilityandtheyhavelimitedopportunitiesforcolor,whichisexpensive,andpresentation(i.e.,creativescope);poorreproductionquality;ashortlife;andarelessintrusivethanothermedia,e.g.TELEVISION.Further,measurementofnewspaper"readership"asopposedto"thenumberofcopiessold"isdifficult.

DAVIDYORKE

NoiseusuallyreferstophysicaldisturbancetoacommunicationMESSAGEduringtheprocessofitstransmission.Forexample,amemberoftheSALESFORCEmaybeinterruptedduringapresentation,readersofMAGAZINESorNEWSPAPERSmaybedistracted,and,morebroadlyinthemarketplace,anyoneMARKETINGCOMMUNICATIONStechniquehastocompeteforspaceinabuyer/customer/consumer'smindwithallothers.

Bibliography

Schramm,W.(1971).Howcommunicationworks.InW.Schramm&D.F.Roberts(Eds),Theprocessandeffectsofmasscommunication.Urbana,IL:UniversityofIllinoisPress.

DAVIDYORKE

Non-PriceFactors

Productsareboughtforavarietyofreasonsrelatingtocost,convenience,BRANDLOYALTY,andqualityofthealternatives.Productscompeteonthebasisofpriceandnon-pricefactors.Thenon-pricefactorsarethoserelatedtothequalityandDESIGNofaproduct,suchasreliability,performance,appearance,safety,andmaintenance("intrinsic"non-pricefactors);andthoserelatedtothequalityoftheserviceofferedbythemanufacturerorsupplier,suchasdeliverytime,after-salesservice,andavailabilityofspareparts("associative"non-pricefactors)(Saviottietal.,1980).Non-pricefactors,suchastheenvironmentalimpactoftheproduct,caninfluenceconsumers.Pricefactorsincludefinancialarrangementsforpurchaseorhire,depreciation,runningcosts,servicingandpartscostsaswellasthesalespriceafterdiscount.Iftwoproductsofsimilarqualityareonsalefordifferentprices,thetheoryisthatarationalpurchaserwillchoosethecheaperproduct.However,thischoicewillbeinfluencedbybrandloyalty,companyimage,andadvertising,whichaffecttheconsumer'sperceptionofqualityandprice.Severalstudieshaveinvestigatedpurchasers'decisionstoassesstherelativeimportanceofpriceandnon-pricefactorsanditisclearthatnon-pricefactorsaffectpurchasedecisions

butthesevaryfrommarkettomarket.Rothwell's(1981)studyofagriculturalmachinery,forexample,showedthatevenwhereBritishproductswerecheaper,farmerswereinfavorofmoreexpensive,oftenimported,productsongroundsofsuperiorreliabilityandtechnicalfeatures.Moody(1984)indicatedinhisstudyof

Opportunities

seeSWOTANALYSIS

OrganizationalBuyingBehavior

TheexchangerelationshipbetweenBUYERSandsellers(seeSUPPLIERS)haslongbeenstudiedinthecontextofconsumermarketsandisnowalsorecognizedasbeingcentraltoanunderstandingoforganizationalmarkets,thoughwithsignificantdifferences.Researchintoorganizationalbuyingbehaviorhasdevelopedfromananalysisofindividualpurchasesinorganizationalmarkets,toanexaminationofthebroaderstrategicimplicationsofbuyer/sellerrelationshipsandoftheenvironmental,corporate,andpersonalinfluencespermeatingthepurchasingcontext.

Muchoftheearlyresearchwasconcernedwithattemptstodevelopmodelsoforganizationalbuyingbehaviorandthreemodelsoforganizationalbuyingbehaviorarediscussedhere.ForaconcisereviewofthisresearchseeParkinson&Baker,1986(especiallyChapters4,5&7),whileTurnbullprovidesaconvenientdiscussionoftheSheth,Webster&Windmodel,andinteractionmodels(Turnbull,1994).Itshouldbenotedthatnoneofthese"models"claimstobepredictive;allthreeareattemptstodescribeacomplexprocessasanecessarypreliminarytofurtheranalysis.Consequently,itisdifficultto"test"thetheoreticalstatusofthesemodels.

Webster&Windmodeledtheprocessasasetoffourcontextualinfluences(macroenvironment,organization,group,individual)withparticularemphasisontheroleoforganizationalcultureandindividualsastheultimatedecision-makersinthebuyingprocess(Webster&Wind,1972).AlthoughWebster&Windpresenttheirmodelasasequencewitheachareaofinfluenceleadingprogressivelytothenext,itisimportanttounderstandthattherelationshipbetweentheseinfluencesisgenerallyiterativeratherthansequential.Sheth's(1973)modelincludedtheconceptofmultiplesources(seeSINGLE/MULTIPLESOURCING)andparticipantsinabuyingprocesswhichwasacknowledgedashavingsignificantpsychologicalaspectsaswellasrationalaspects.BoththeShethandthe

Webster&Windmodelstakethebuyingdecisionastheunitofanalysis,yetmuchoftheworkundertakenbytheIMP(IndustrialMarketingandPurchasing)Groupofresearcherssuggeststhatgreaterinsightsintothebuyingprocessmaybeavailablefromtakingtherelationshipbetweenorganizationsastheunitofanalysis(seeINTERACTIONAPPROACH).TheIMPresearchhasdevelopedamodelofbuyingbehaviorinorganizationalmarketsasaninteractionbetweenindividualswithinorganizations,conductedinanatmosphereformedbythecontextandexperienceofpreviousexchangeepisodesandsurroundedbythemacro-environmentalfeaturescommontopreviousmodels(Håkansson,1982;Campbell,1985).Inthispresentation,decisionscouldbethoughtofasthe"punctuation"inacontinuingstreamofinteraction,andbestunderstoodinthelong-termcontextoftherelationship.

Arguably,therearealsomanycontemporarymacro-environmentalandcompetitivedynamicswhichcouldberegardedasstimulitointerorganizationalrelationships,suchasaccelerationofthewidelyrecognizedphenomenaofglobalization,increasingcompetition,environmentalcomplexity(seeMARKETINGENVIRONMENT),andescalatingR&Dcosts.Underthesepressuresaroutinepurchasingrelationshipcanevolveintoastrategicalliance(seeINTERNATIONALSTRATEGICALLIANCES),especiallyasthefoundationforsuchrelationshipsmayhaveasmuchtodowithmutualfamiliarityandtrustasitdoeswithstrategiclogic.Thisencouragesamuchwiderunderstandingofthescopeandsignificanceof"buyingbehavior"inorganizationalmarketsthanhasgenerallybeenrecognizedandemphasizestheimportanceofunderstandingsuchrelationshipsintheirlong-termdynamicandstrategiccontextratherthan,perhaps,asaseriesofrecurringexercisesincostcontrol.Researchintotheprocessofhowsuchrelationshipsdevelopovertime,andtheimplicationsarisingforMARKETINGMANAGEMENT,arethereforeincreasinglyrelevanttoorganizationsseekingtodeveloptheircompetitivenessthroughstrategicalliances.

Buyersellerrelationshipsinorganizationalmarketsarenowacceptedasahighlycomplexareaandoneofconsiderablestrategicimportance.Researchcontinuesintoboththeseaspects:e.g.,theworkofJohnston&Bonoma(1981)examiningtheintricatedynamicsandsystemsatworkintheBUYINGCENTERitself;

CentralandEasternEurope.Convenientthoughitmaybetousesimplespatialgeographytoseparatecomplicatedpurchasingpracticesorexpectations,thevariableusedtosegmentthemarketinthiscaseshouldbepurchasingpractice)notgeographiclocation.Usingsimplegeographyasanythingotherthanadescriptorvariablecanbeproblematiciffurthercriteriaarenotspecified.Forexample,whichgeographicallocationofthebusinessshouldbeused:thesiteofthebuyingoffice,wheretheproductsarereceived,orwheretheyareused?AsGriffith&Pol(1994)pointout,thefirstisofconcerntosalesmanagement,thesecondtologisticsmanagers,andthethirdtofieldservicepeople,installationcrews,etc.

MicroVariables

Theseincludechoicecriteriasuchasproductivityandprice.Thisisakintobenefitsegmentation(seeSEGMENTATIONVARIABLES).DECISION-MAKINGUNIT(DMU)characteristicsidentifythenatureoftheindividualswithintheDMUandthebenefitstheyperceive.Differentmemberswithinanorganizationmayvaluedifferentattributesandbenefits.Thetypeofpurchasingstructureinorganizationscanalsobeimportant,e.g.,centralizedpurchasingisusuallyassociatedwithpurchasingspecialistswhobecomeexpertsinbuyingarangeofproducts.

SeealsoMarketsegmentation;Positioning

Bibliography

Abratt,R.(1993).Marketsegmentationpracticesofindustrialmarketers.IndustrialMarketingManagement,22,7984.

Bonoma,T.V.&Shapiro,B.P.(1984).Segmentingtheindustrialmarket.Lexington,MA:D.C.Heath&Co.

Dibb,S.&Simkin,L.(1994).Implementationproblemsinindustrialmarketsegmentation.IndustrialMarketingManagement,23,5563.

Dickson,P.R.(1994).Marketingmanagement(internationaledn).Orlando,FL:TheDrydenPress.

Dickson,P.R.&Ginter,J.L.(1987).Marketsegmentation,productdifferentiationandmarketingstrategy.JournalofMarketing,51,110.

Griffith,R.L.&Pol,L.G.(1994).Segmentingindustrialmarkets.IndustrialMarketingManagement,23,3946.

VINCEMITCHELL

OriginalEquipmentManufacturer

Anoriginalequipmentmanufacturer(oftenabbreviatedtoOEM)istheoriginalmanufacturerofgoodsandcomponentswhicharesubsequentlysoldtobeincludedwithintheproductsofacustomer.Thus,OEMgoodstendtobe"invisible"totheeventualcustomer.AnexamplewouldbetheuseofOEMdieselenginecomponentsinautomobiles,orOEMmicroprocessorsinwashingmachines.

DOMINICWILSON

OutboundCommunications

CommunicationsinDIRECTMARKETINGmaybeeitherinbound(seeINBOUNDCOMMUNICATIONS)oroutbound.Theformerareinitiatedbythebuyer/customerasaresponsetoastimulusreceivedfromINDIRECTCOMMUNICATIONSinthemedia.Outboundcommunicationsareinitiatedbythesupplierorganization.ThetwoprincipaltechniquesareDIRECTMAILandTELEMARKETING.Eachisdesignedtotargetmembersofaspecificmarketsegmentandtocommunicatedirectlywiththemwiththeintentionofobtainingapositiveresponse.Evaluationofthecost-effectivenessofeachofthetechniquesmaybeintermsofthenumberofpositiveresponses,i.e.,thevolume,orvalueofsalesultimatelygenerated.

Bibliography

DAVIDYORKE

Outsourcing

Thisreferstotheactivityofpurchasinggoodsorservicesfromexternalsources,asopposedtointernalsourcing(eitherbyinternalproductionorbypurchasingfromasubsidiaryoftheorganization).Inpractice,the

consequencesandthosewhichtheyareawareoftheycannotanticipatewithahighdegreeofcertainty.

Consumersmaybeuncertainwithrespecttobuyinggoals;theirnature,acceptancelevels,relativeimportance,andcurrentlevelsofgoalattainment.Theymaybeuncertainastowhichproducts/brandswillbestsatisfyacceptancelevelsofbuyinggoals,i.e.,theproblemofmatchinggoalswithpurchases.Further,consumersmayseeadverseconsequencesifapurchaseismade,ornotmade,andtheresultisafailuretosatisfybuyinggoals.Theseconsequencesrelateto:performancegoals,i.e.,functionalones;psychosocialgoals;andthetime,money,andeffortinvestedtoattainthegoals.Soonecanrefertotypesofriskas:financial,whichisafunctionofprice,lengthofcommitmenttoaproduct;social,relatedtovisibilityofaproduct;andphysiological,e.g.,todowithconsumptionandharmfulphysiologicaleffectsaswithsmoking.Roselius(1971)referstotime,hazard,ego,andmoneylossesorrisks.

Consumersdevelopstrategiestoreduceperceivedrisksothattheycanactwithrelativeeaseandconfidenceinbuyingsituationswhereinformationisinadequateandwheretheconsequencesoftheiractionsareinsomewayunknownorincalculable.Theyeitherincreasecertainty(decreaseuncertainty)byinformationhandling,ordecreasetheamountatstakei.e.,theconsequenceswhichwouldoccur.Typically,riskhandlingislargelyconcernedwithdealingwithuncertaintyandsocanbeequatedwithinformationhandling.Inrespectofbuyinggoalsandneeds,consumersgenerateinformationneedsandtosatisfythemtheyacquire,process,andtransmitinformation.

Informationacquisitionmaybeaccidentalorsoughtfrommarketerdominatedchannels,INTERPERSONALCOMMUNICATIONS,orfromneutralsourcese.g.,consumerreports.Informationprocessinginvolvesevaluationanddecisionswithrespecttouse,storage,andforgetting,followedbypossibletransmissionofinformationtoothers.Alternatively,toreducetheconsequences,consumerscanreduceormodifytheirgoalsandexpectations,avoidorpostponepurchases,orpurchaseandabsorbany

unresolvedrisk.

Numerousstrategiesforreducingriskhavebeenresearched(see,e.g.,Bauer,1967;Cox,1967;andCunningham,1967)andinclude:BRANDLOYALTY,toeconomizeoneffort,substitutehabitfordeliberateaction/decision;relianceonadvertising,togiveconfidence;consumerreports,toprovideobjectiveinformatione.g.,evidenceofgovernmentorprivatetesting;personalinfluence,e.g.,word-of-mouthcommunicationwiththosewithexperienceoftheproduct/brand;groupinfluence,usuallystrongerwhenthewisdomofone'schoiceisdifficulttoassess;impulsebuying,tosuppresspossibleconsequencesfromconsciousnessandrushthroughthebuyingprocess;storeused,itsimage,reputation,andproductrange;mostorleastexpensivebrand;demonstration,e.g.,testdrivingofcars;specialoffers;service,toincludemoney-backguaranteesandexchanges;relianceonwell-knownbrands;andendorsements,e.g.,testimonialsfromexpertsandpersonalities.

Peopleusedifferentstylesintheirchoicebetweenincreasingcertaintyanddecreasingtheconsequencesofpurchases,whichdependontheirbuyinggoals,productsunderconsideration,personality,anddegreeofbuyingmaturityorexperience.Thesemayrelateto:clarifyingthepurchasesituationtypicallyreactingtoambiguitybyseekingnewinformationandincreasingunderstanding;orsimplifyingtypicallyavoidingnewinformationandrelyingonexperienceofotherpeople.

Bibliography

Bauer,R.A.(1967).Consumerbehaviorasrisktaking.InD.F.Cox(Ed.),Risktakingandinformationhandlinginconsumerbehavior.DivisionofResearch,HarvardBusinessSchool.

Cox,D.F.(Ed.)(1967).Risktakingandinformationhandlinginconsumerbehavior.DivisionofResearch,HarvardBusinessSchool.

Cunningham,S.M.(1967).Themajordimensionsofperceivedrisk.InD.F.Cox(Ed.),Risktakingandinformationhandlinginconsumerbehavior.DivisionofResearch,HarvardBusinessSchool.

Roselius,T.(1971).Consumerrankingsofriskreductionmethods.JournalofMarketing,35,Jan.,5661.

Taylor,J.W.(1974).Theroleofriskinconsumerbehavior.JournalofMarketing,Apr.,5460.

BARBARALEWIS

TASK,""MODIFIEDRE-BUY,"and"STRAIGHTRE-BUY")butalsocorrelatedthese"buyclasses"witheight"buyphases''inaBUYGRIDMODELderivedfromtheirempiricalresearch.Theseeight"buy-phases"are:

(1)Anticipationand/orrecognitionofneed

(2)Determinationoffeaturesandquantityofrequireditem

(3)Specificationofpurchaserequirement

(4)Searchforpotentialsources

(5)Acquisitionandanalysisofproposalsfrompotentialsources

(6)Selectionofone(ormore)supplier(s)

(7)Negotiationofpurchasearrangementsandterms

(8)Feedbackandevaluationoftheflowofpurchase

(Robinson,Faris&Wind,1967ascitedinWebster&Wind,1972,24)

Thisrepresentationofthepurchasingprocessasacycleofbuyphasesisusefulfordescriptivepurposesbutitshouldnotbetakenliterallyasamanagerialmodelsinceitlacksanypredictivepowerorcausativeexplanationofbuyingdecisions(Webster&Wind,1972).Norwoulditbeappropriatetoregardthebuygridmodelasnecessarilysequential,orserial,orinvolvingalltheidentifiedstepsandnoothers.Nevertheless,thebuygridmodelisnotwithoutvalue.Itsupportsvariouspracticalobservationsandintuitiveconclusions,suchaswhatRobinsonetal.refertoas"creepingcommitment"(theincreasingreluctanceofcustomerstoconsidernewsuppliersasthepurchasingprocessunfolds);andthedifferentsignificanceofthebuyphasesindifferentbuyclasssituations.

Itmaybemorerealistictoenvisageanextendedpurchasingprocessascontinuingbeyondthestagesof"receipt"and"inspection"throughasubsequentstageof"payment"(astagepronetoitsowncomplexitiesandproblems)andthenthroughperiodic"review"phasestowardseventualre-

buysituations(ifthesupplyhasprovedtobeacceptable)orrevertingtothenewtaskprocess(ifthesupplyisnolongeracceptable).Purchasingpracticecan,ofcourse,beverydifferentfromthetheoreticalandfull-blownprocessdescribedhereforillustrativepurposes.Twelveapproximatelydiscerniblestages(whichmayoverlaporbeomitteddependingoncircumstances)mightbeenvisagedinsuchanextendedpurchasingprocessandthesetwelvestagesarepresentedbelowasanillustrationingeneraltermsofhowtheprocessmightbeobservedformorecomplexnewtaskpurchases:

(1)Perceptionofrequirement

(2)Analysisandassessment(includingestablishmentofprovisionalspecifications,probablesizeandfrequencyoforder,possiblecosts,MAKE/BUYDECISION,profilesofpotentialsuppliers)

(3)Criteriasetting(identificationandrankingofthemostimportantpurchasingcriteria)

(4)Negotiation(includingrequestforquotations,prototypesubmission,pilotstudies,trials,visitstosuppliers'premisesandreferencesites,pursuitofreferences,capacityandliquidityassessment)

(5)Valueengineering(systematicevaluationofthefunctionsoftheshort-listedofferingstoassesswhichoftheofferingsisbestabletoprovidethecustomer'sneedsatthelowestnetcosttakingintoconsiderationallrelevantaspects)

(6)Decision(theoutcomeofthepreviousstagesisconsideredinthecontextofbroaderaspects,whereappropriate,andfinalnegotiationsmaybeconductedatseniorlevelstoadjustanyresidualuncertaintiesuntilagreementisstruckwithonefavoredsupplier)

(7)Deliveryandreceipt(deliveryprocedureswillhavebeenagreedbutreceivingproceduresareoftenoverlooked,canvaryconsiderablyandcanoftenleadtoadministrativeconfusion,frustratingdelays,deteriorationofgoods,andproblemsofdisputedpayment)

(8)Inspection(usuallyonarrivalandbeforereceiptbutthismaynotbepracticablebecauseofweather,natureofpackaging,typeofgood/service,orcongestioninreceivingarea)

(9)Storage(preferablyonlybrieflybutthiswillvaryaccordingtocontractterms,storagelife,costofstorage,safetystocks,andsoon)

(10)Payment

(11)Review(allprocurementarrangementsshouldbesubjecttoreviewwhichshould

mention"theArabWorld,""theIndiansubcontinent,""LatinAmerica,"ornorth-westEurope.Onemayexpect,allthingsbeingequal,thattheindividualcountrieswithintheseregionswouldhavereasontoengageinextensivetradeandeconomictransactionswitheachother.Inpracticeofcourseallthingsarerarelyequaland,forexample,Europeancolonizationintroducedamajordistortionintothestructureoftraderelations.ManycountriesinAsiaandAfrica,forexample,tendedtotrademainlywiththeEuropeancolonialpowersratherthanwitheachotherasthetradinginfrastructure(transportlinks,insuranceetc.)tendedtodiscouragethis.TheUK'spatternoftradewasalsotosomedegreedistortedawayfromitsneighboringcountriesintheEuropeancontinentandtowardstheCommonwealth.

SincetheWar,thedemiseofEuropeancolonialismhasbeenresponsible,alongwithotherfactors,forrestoringthe"natural"regionalpatternofworldtrade.TheregionalizationofinternationaltradehasdevelopedmostfullyinEuropeand,inrecentyears,hasalsoprogressedinEastAsiaandNorthAmerica.However,ithasnotprogressedsomuchinotherregionssuchastheMiddleEastasmanyofthesecountriesarestillpoororhaveeconomiesdominatedbyonecommodity(oil),thedemandforwhichstillcomespredominantlyfromtheWest.Theemergenceofthe"Triad"economiesinWesternEurope,thePacific,andNorthAmericaisthusamanifestationoftheunevenspreadofregionalizationinthesethreeregionscomparedwiththeremainderoftheglobaleconomy.Thesethreeregionshavebecomethenaturalfocusforinternationalbusinessactivities;virtuallyallinnovationsstemfromtheseregions;thebulkofinternationalmerchandisetradeiswithinandbetweentheseregions,andinmorerecentyearstherehasbeenagrowingnumberofalliances(seeINTERNATIONALSTRATEGICALLIANCES)betweenfirmsfromtheseregions(Ohane,1985).

RegionalizationhasimportantconsequencesforthestudyandpracticeofINTERNATIONALMARKETING.Onecaninterpretregionalizationasastepping-stonetoGLOBALIZATION;gainingthecapabilitytopursueapan-Europeanstrategymaybeapreludeorpreparationfordevelopingfull-

blownglobalstrategies.Ontheotherhand,regionalizationmayinfactstultifytheprocessofglobalization.Progresstowardsglobalintegrationcanbereversediftheworldeconomyisdividedintoregionaltradingblocks,eachcenteredonamajorcurrencyandclosedtooutsiders.Regionalblocksmayimposetariffandnon-tariffbarriersthatdepressthevolumeofworldtrade.TheWorldBank'sviewisthattheoverallimpactofregionalizationisliberalizing:"concernsaboutregionalprotectionisttendenciesareeasilyoverstated.Unliketheirpredecessors,thenewblocksgobeyondliberalisationoftradetoincludeliberalisationofinvestment.This,inturn,necessitatestheliberalisationofnationalproductionstandardsthatwouldotherwiseraisethecostofregionallyintegratedproduction"(TheWorldBank,1993,p.364)

Fromthemarketingpractitioner'spointofview,regionalizationisanimportantelementintheemergenceof"borderless"economies(Sheth,1992).Regionalintegrationisbeginningtodilutesomeofthedifferencesbetween"domestic"andinternationalmarketing.Thus,evenforthosefirmswhosemarketinghorizonisbasicallylocal,competitionmayinfactbeinternational.Forthosefirmswhosemarketinghorizonisalreadyinternationalandglobaltoo,regionalintegrationhasimportantimplications.TheintegratedEuropean"single"market,forexample,canbeviewedasatestinggroundfortheviabilityofstandardizationofmarketingprogram.WesternEuropeisprobablythemostintegratedregionintheworldeconomy(unless,ofcourse,oneregardstheUSAasaregionaswellasacountry).Ifacompany'sstandardizationoftheMARKETINGMIXdoesnotworkwithinEurope,itisunlikelythatitwillworkbeyondEurope.

Bibliography

Ohame,K.(1985).Triadpower:Thecomingshapeofglobalcompetition.NewYork:FreePress.

Sheth,J.(1992).Emergingmarketingstrategiesinachangingmacroeconomicenvironment:Acommentary.InternationalMarketingReview,9,(1),5763.

TheWorldBank(1993).TheEastAsianmiracle:Economicgrowthandpublicpolicy.Oxford:OxfordUniversityPress.

MOYAMIN

involvedinawiderangeofactivities.Theseincludestorage,distribution,andsellingaproductorserviceatapricethatiscompetitive,ofaqualitythatisappropriate,atatimethatisconvenient,andatthegreatestpossibleconveniencetothecustomer.

Inordertofulfilthisrole,themostsuccessfulretailershavebecomehighlyeffectiveinanumberofmanagementdisciplines,includingpersonnelmanagement,financialcontrolandaccounting,LOGISTICS,STRATEGYdevelopment,DISTRIBUTION,andMARKETING.Insomecasesretailershavealsobecomeinvolvedinmanufacturing.

Forastore-basedretailer,sitingtheoutletatthebestpossiblelocationisaprimaryconcern.Inordertoachievehighvisibility,andthusachievepassingtrade,thebeststoresiteislikelytobeinthehighstreetofatownorinashoppingmall.Thebetterlocationstendtocommandhigherrents,leavingtheretailerfacedwithatrade-offbetweenhigheroperatingcostsbutpotentiallyhighersales.Forsomestores,notablylargersupermarketsandDIYoutlets,an"out-of-town"sitemaybemoreappropriategiventheimportanceofcar-bornetradeandtheneedforlargecarparkinglots.Otherretailersmaychoosetolocateina"retailpark;"thesetendtoincludeelectricalgoodssuperstores,furniturestores,andcaraccessoryretailers.

Retailcompaniesshouldalsodevelopastrongunderstandingoftheircustomerprofile.Bytargetingdifferentsegmentsofthepopulation,retailersareabletotailortheirofferingscloselytotheneedsofcustomers.Someretailersmayaimthemselvesattheaffluent,fashion-conscioussectionofsociety,whereasothersappealtothelesswellofforthepriceconscious.

Byunderstandingtheircustomers'socio-economicbackground,lifestyles,andbeliefs,retailersareabletodevelopmarketingstrategiesinordertoservetheirtargetcustomersmoreprofitably.Suchstrategiesentailmanipulatingthevariouselementsofthe"MARKETINGMIX"toprovideanimageandserviceappropriatetothecustomer.Therefore,merchandisewouldbeselected,pricinglevelsdecided,storeinteriorsdesigned,andmarketingcommunicationsdeveloped(advertising,promotions,etc.)toappealtothetargetcustomer.

Retailers'performanceinthemarketplaceisheavilyinfluencedbytheforceswithinthebusinessenvironment(seeMARKETINGENVIRONMENT).Theseconsistofeconomic,political,sociocultural,demographic,technological,andphysicalinfluences(Kotler,1988).Inrecentyears,increasingcompetitionandrecessionaryforcesaffectingmanyretailsectorshave,inpart,ledtocostcutting,pricereductions,andloweredprofits.Otherforcesincludethegrowinginternationalizationofretailing,withanumberofoperatorsexpandingoverseasasinternationaltradebecomeslessrestricted.OtherissuessuchasSundaytrading,EPOSandscanningservices,legislationaffectingpart-timeworkers,andpossibleplanningrestrictionsonout-of-townsitesarelikelytocontinuetoimpingeonretailactivity.

Retailcompaniesaretypicallyorganizedintochainsofstoresandmayownseveralhundredoutletsacrossthecountryalltradingunderthesame"fascia."Otherformsoforganizationincludefranchiseagreementswhereatraderpaysaproportionofhisprofitstotheparentretailerinexchangefortradingunderhisname(e.g.,Benetton);concessionsinvolvingaretailertradingfromasmallstoresitedwithinalargerstore;markettraderswhopayalocalauthorityfortheuseofamarketstallsite;andindependentretailerswhomayownoneortwostores(e.g.,thetraditionalcornershop,butcher,orbaker).

Non-storeretailingthroughthemediumofaprintedcatalogisalsoahighlycompetitivebusiness.Inrecentyears,thequalityofsuchpublicationshasincreaseddramaticallyandthemanneroftradinghasvastlyimprovedwithbettercustomerservicethroughtelephoneordering,creditanddebitcardpaymentfacilities,easierexchangepolicies,andquickpostalorvehicledelivery.ThishasbeenlargelyduetotheinnovativepracticesofcompaniessuchasNext,CottonTraders,andRacingGreen,alongwithanumberofoverseasoperatorswhichhavesucceededinsellingorgivingawaycatalogsassupplementstoSundaynewspapers.Salesagentsarestillusedbysomecatalogretailersalthoughrecruiting,motivating,andretainingsuchstaffhasproveddifficult.

Bibliography

Ghosh,A.(1990).Retailmanagement.Chicago:TheDrydenPress.

DAVIDYORKE

Sampling

CensusorSample?

Researchisusuallyundertakentoobtaininformationaboutthecharacteristicsorparametersofapopulation.ApopulationcomprisesalltheindividualsorcasesorelementsthatmakeuptheuniverseofinterestintheMARKETINGRESEARCHproblembeingstudied.Informationaboutthepopulationmaybeobtainedbytakingacensusorasample.Acensusinvolvestakingmeasurementsfromeachandeverymemberofthepopulationandpopulationparameterscanbecomputeddirectlyfromthemeasurementsobtained.Asampleisasubgroupofthepopulationchosentoberepresentativeofthepopulationasawhole.Measurementsaretakenfromeachmemberofthesample,samplecharacteristics,orstatistics,arecomputedforthesample,andthesestatisticsareusedtomakeinferencesortesthypothesesaboutpopulationparametersandcharacteristics.

Shouldacensusofthewholepopulationbecarriedoutorshouldasamplerepresentativeofthepopulationbetaken?Commonsensesuggeststhatwhenpossibleacensusofthewholepopulationisbetterbuttherearecompellingreasonsfortakingsamples.Theseincludecost,time,populationsize,populationvariability,costoferrorsandaccuracyrequiredandthedestructivenatureofsomemeasurements.

TheSamplingProcess

Arequirementofthesamplingprocessisthatthesampleshouldberepresentativeofthepopulationandsopermit,ifotherfactorsarealsosatisfactory,accurateestimatesofthepopulationparametersandcharacteristics.Thestepsinthesamplingprocessare:definitionofthepopulation;specificationofthesamplingframe;selectionofthetypeof

sample;determinationofthesamplesize;andimplementationofthesamplingplan.

Definingthepopulationisoftennotsimple,especiallyinindustrialmarketingresearch.Thepopulationmaybeallorganizationsinaspecifiedindustry,butdefininganindustrypreciselymaybedifficult.Manyorganizationsoperateinseveralestablishmentsatdifferentsites,soisthepopulationtocompriseorganizationsorestablishments?Whoistoprovidetheinformation?Industrialmarketingresearchersareawarethatbuyingdecisionsinorganizationsareoftenmadebyformaldecision-makingunitsmadeupofchangingpersonnel.Willoneindividualbeabletoanswerforthewholegroup?Ifso,whichindividualshouldbeapproached?Orshouldseveralindividualsbequestionedsothatinteractionswithinthegroupandwithsuppliers'personnelcanbestudied?

Thesamplingframeisalistofthepopulation.Examplesofframesincludetheelectoralroll,telephonedirectories,membershiplistsofprofessionalorganizations,andtradedirectorieslistingorganizationsbyactivity,geographicallocation,etc.

Anydiscrepancybetweenthepopulationandthesamplingframewillleadtosamplingframeerror.Forexample,electoralrollsareoftenincompleteevenatthetimeofcompilationduetotheineligibilityofsomemembersofthepopulationtovote(e.g.,thoseunder18yearsofage)andthefailuretoregisterbysomepeople.Internalmigration,deaths,etc.causetherollstobecomeoutofdatequickly.Theelectoralrollmaynotbeanappropriatelistofthespecifiedpopulation,e.g.,thepurchaseofhomeownersinaparticulararea.

Aframeisnotneededfornonprobabilitysamples;ratherthesampleischosenonthebasisofconvenienceorbyreferralinsamplingmethodssuchasquotasampling,purposivesampling,snowballing,etc.

Thereareseveralconsiderationstobearinmindwhenselectingthetypeofsample.Themostimportantconsiderationiswhetherornottouseaprobabilityoranonprobabilitysample.Probabilitysamplesareofvarioustypesbutinvolvetheuseofaframelistingtheentirepopulationofinterestandtheselectionofindividualsforthesampleinsuchawaythatthechanceofeachindividualinthepopulationbeingchosenforthesampleisknown.

Innonprobabilitysamples,methodsotherthanchanceselectionproceduresareused.Probability

carefullyconstructed.Themajordisadvantagesofpostalsurveysarethehighlevelofnon-responseandthelengthoftimeallowedforrespondentstoreply.

Non-responseisaproblemforalltypesofsurveysbutespeciallysoforpostalsurveys.Non-responsecanbereducedinthefirstplacethroughpre-notification,byofferingmonetaryinducementsincludingafreeentrytoaprizedraw,byuseofreply-paidenvelopes,bymakingthequestionnaireinteresting,etc.Follow-upcontactscanbeusedtoincreasetheoverallresponserate.

Thecriticalissueconcerningnon-responseistheextenttowhichtherespondentsandnon-respondentsarealikeontheimportantvariables.Amongthewaysofassessingthisistomakecomparisonsofsuccessivewavesofrespondentsandtosubsampleintensivelynon-respondentsforcomparisonwiththeoriginalrespondents.Unlesscareistakentoassesstheeffectsofnon-responseonrepresentativenessofthesampleobtained,resultsfrompostalsurveysshouldbetreatedcautiously.

Conclusion

Twoproblemsofinterviewingincludetheresponsestosensitivequestionsandbiasescausedbyinterviewereffects.Sinceface-to-faceinterviewsand,toalesserextent,telephoneinterviewsinvolvesocialinteractionbetweeninterviewerandrespondent,itispossiblethatrespondentswillanswersensitivequestionswithsociallyacceptable,ratherthantruthful,answers.Postalandcomputersurveys,whichdonotsufferfromthissocialinteraction,mayyieldmoreaccurateanswerstosensitivequestions.

Interviewersmayvarythewaythattheyposethequestions,bychangingthewordingorsimplyalteringtheirtoneofvoiceorbodylanguage,frominterviewtointerview,withtheresultthateachrespondenthasaslightlydifferentinterview,adisadvantageinsurveyresearch.Theinterviewer'sage,sex,appearance,socialclass,etc.mayaffecttheanswersasrespondentsseektogiveanswersthattheybelievewillbeacceptabletotheinterviewer.Therecordingofanswerstoopen-endedquestionsmaybe

biasedbytheinterviewer'sopinions.Theseinterviewereffectswillbemostpronouncedinpersonalinterviews,leastpronouncedincomputerandpostalinterviews,withtelephoneinterviewssomewhereinbetween.

Bibliography

Tull,D.S.&Hawkins,D.I.(1987).Marketingresearch:Measurementandmethods(4thedn).NewYork:Macmillan.Chapter4.

MICHAELGREATOREX

SWOTAnalysis

AspartoftheSTRATEGICPLANNINGprocess,itisgenerallyprescribedthatorganizationsundertakeanINTERNALAUDIT,aimedatidentifyingtheirmajorskills,technologies,andresources,andexistingandpossiblefuturevulnerabilities;andanENVIRONMENTALANALYSISaimedatidentifyinginteraliaexistingandfuturesocietal(e.g.,demographic),technological,legal,andeconomicdevelopments.Themajorpurposeistoidentifythestrengthsandweaknessesoftheorganization,andthemajoropportunitiesandthreatsopenedupbywhatishappeningandlikelytohappeninitsenvironment;hence,SWOT.ThepurposeoftheSTRATEGICPLANNINGexercise,then,istobuildonthestrengths,andwherepossibleovercomeoravoidtheweaknesses,byexploitingopportunitiesintheenvironmentaswellasdefendingtheorganizationagainstpossiblethreats,orevenconvertingso-calledthreatsintoopportunities.

Inthepositivisttradition,thisanalysisispresentedasthoughobjectivedataabouttheorganizationanditsenvironmentarepresenttobediscovered,ignoringthefactthatindividualshavetheirownvalues,prejudices,andmotiveswhichcanaffecttheirperceptionoftheenvironment.Thus,therecanbedifferingperspectiveson,say,thecompetenciesofanorganizationbecauseoftheintrusionof,forexample,selectiveperception.

Bibliography

Littler,D.&Leverick,F.(1994).Marketingplanninginnewtechnologysectors.InJ.Saunders(ed.),Themarketinginitiative(pp.7291).Prentice-

product,marketersmaywishtoobserveatleastonerepeatpurchasecycleparticularlyinthecaseofconvenienceproductswhereitistheextenttowhichcustomerswillpurchasetheproductagain(andagain!)thatisrelevant.Indecidingonthedurationofthetest,thefollowingshouldbeborneinmind:initialdemandforanewproductwillinevitablyinvolvemuchtrialandexperimentation;manyoftheinitialuserswill,forvariousreasons,oftennotrepurchase;andeventuallysaleswillfalltosomereasonablystablelevelthatreflectsthedegreeofrepeatpurchasingbehavior.

DecideontheMarketingResearchtobeUndertaken

Carefulconsiderationshouldbepaidtothesortsofinformationthatneedtobecollectedbefore,during,andafterthetestmarketingpriortothestartofthetest.Companiesmaydecidetomeasureretailsalesachievedduringthetestmarketing,theawarenessofanattitudetowardstheadvertising,thelevelofdistribution,thesalesperoutlet,andsoon.

Thetestmarketdatamaynot,however,beatrueindicatoroftheresultstobeobtainedfromafullnationallaunch.Thereareanumberofreasonswhythismightbethecase:

Thetestmarketmaynotbefullyrepresentativeofthenationalmarket.

Theremaybe"learningeffects"asaresultofexperiencegainedfromthetestmarket.

Theenvironmentmaychangebetweenthetestmarketingandthefulllaunch;e.g.,newcompetitionmayemerge,andeconomicconditionsmayalter.

Competitionmayhavedisruptedthetestmarketingbyengaginginexceptionalmarketingactivity(suchasseverepricecutting,anddramaticpromotionaloffers).

Bibliography

Dibb,S.,Simkin,L.,Pride,W.&Ferrell,O.C.(1994).Marketing:

conceptsandstrategies(2ndEuropeanedn).Boston,MA:HoughtonMifflinCo.

Kotler,P.(1984).Marketingmanagement:Analysis,planningandcontrol(5thedn).EnglewoodCliffs,NJ:Prentice-Hall.

Littler,D.A.(1984).Marketingandproductdevelopment.Oxford:PhilipAllan.

Urban,G.L.&Hauser,J.R.(1993).Designandmarketingofnewproducts(2ndedn).EnglewoodCliffs,NJ:Prentice-Hall.

MARGARETBRUCE

Threats

seeSWOTANALYSIS

TradeJournals

Tradejournalsarearangeofjournalswhichareaimedatspecificindustriese.g.,footwear,andat"trades"(e.g.,TheCaterer).Theyprovideaconduittoaclearlydefinedtargetaudienceforbothadvertisingandpublicity.Itissuggested(e.g.,byMartilla,1971)thattheycompriseamediumwhichmaybeavaluablesourceofinformationtoOPINIONLEADERSorGATEKEEPERSinorganizationalmarkets(seeORGANIZATIONALBUYINGBEHAVIOR).

Bibliography

Martilla,J.A.(1971).Wordofmouthcommunicationintheindustrialadoptionprocess.JournalofMarketingResearch,8,May,173178.

DALELITTLER

Transaction

Thisisthetransferofownershiporuseofaproductorservicefromonepartytoanotherinreturnforapaymentofsomekind.Foratransactiontooccur,anumberofconditionswouldusuallyhavetobesatisfied:theexistenceoftwothingsofvalue,agreed-uponconditions,atimeofagreement,andaplaceofagreement.Atransactioncanbeseenasbeing

distinguishablefromatransfer,thelatterdescribingasituationwhereonepartygivestoanotherbutreceivesnothinginreturn.

FIONALEVERICK

TransferPricing

Transferpricingreferstothepricingofinternalmovements(or"transfers")ofgoodsandservicesbetweencostcenterswithinanorganizationandisanimportantaspectofcostcontrol(Ward,1993).Transferpricingisanecessaryaspectofmanagementaccounting

butcanbeunethicalorevenillegalwhereitisusedtoevadecorporatetaxation,perhapsinthemovementofgoodsbetweenorganizationalsubsidiariesoperatingwithindifferenttaxationregimes.

Bibliography

Crow,S.&Sauls,E.(1994).Settingtherighttransferprice.ManagementAccounting,76,(6),Dec.,4147.

Ward,K.(1993).Gainingamarketingadvantagethroughthestrategicuseoftransferpricing.JournalofMarketingManagement,9,July,245253.

DOMINICWILSON

AtrialisanelementintheCONATIVESTAGEoftheINNOVATION-ADOPTIONMODELofMARKETINGCOMMUNICATIONS.Apotentialcustomermaywishtouseacertainproductforatrialperiodinordertoevaluateitsabilitytosatisfyaparticularneed,therebyreducingthePERCEIVEDRISKofpurchase.

Bibliography

Rogers,E.M.(1962).Diffusionofinnovations.NewYork:FreePress.(pp.7986).

DAVIDYORKE

TV-BasedHomeShopping

Television-basedhomeshoppinginvolvesthepurchaseofproductsadvertisedontelevisionprogramsandcommercialbreaksbytelephoningordersthroughtotheadvertisednumber.Berman&Evans(1995)indicatethatthischannelrepresentsapproximately10percentoftheUSconsumer

goodsmarket.Whitford(1994)discussestheadvantagesaffordedtotheretailerbythehomeshoppingchannel,namely,wideaudiencereach,theequivalentoffreeadvertising,instantmarketfeedback,highshort-termvolumeofsales,andimmediateresults.Theincreasingnumberoftelevisionchannels,introducedviacableandsatellitetelevisionnetworks,islikelytoincreasetheproportionofretailsalesgeneratedbythisretaildistributionchannel.

SeealsoRetaildistributionchannels

Bibliography

Berman,B.&Evans,J.R.(1995).Retailmanagement.EnglewoodCliffs,NJ:Prentice-Hall.

Levy,M.&Weitz,B.A.(1995).Retailingmanagement.Chicago:Irwin.

Rosenbloom,B.(1991).Marketingchannels.Chicago:TheDrydenPress.

Whitford,D.(1994).TVornotTV,Inc.INO,16,(6),6368.

STEVEGREENLAND

TwoStepFlowModel

ThetwostepflowmodelisconcernedwiththeflowofMARKETINGCOMMUNICATIONSfromtheMASSMEDIA,inparticularADVERTISING,viaOPINIONLEADERStocustomers,oropinion"followers."Opinionleadersareportrayedasdirectreceiversofinformationfromimpersonalmassmediasources,andtheyinterpret,legitimize,andtransmitthisinformationtocustomers,i.e.,theyaremiddlemen.

Thistheoryassumesthatmassmediainfluenceonmassopinionisnotdirect,i.e.,thatthemassmediaalonecannotinfluencethesalesofproducts;thatmassmediacommunicationsaremediatedbyopinionleaders;thatopinionleadersaremoreexposedtomassmediathanthosetheyinfluence;andthatopinionleadersmayaltercommunicationsmessages(i.e.,theyareGATEKEEPERS).

However,thisisnotanaccurateportrayaloftheflowofinformationandinfluence.Modificationstothetheoryacceptthat:massmediaand

interpersonalchannelsofcommunicationsarecomplementarynotcompetitive,i.e.,thatmassmediamayinformbothopinionleadersandfollowers;andopinionleadershipisnotadichotomoustrait,i.e.,thatINTERPERSONALCOMMUNICATIONScanbeinitiatedbybothleadersandfollowers,e.g.,receiversarenotpassiveandmayrequestinformation/advicefromopinionleaders,orseekitdirectlyfromthemassmedia.

SeealsoInterpersonalcommunications;Opinionleaders

anddiscriminantanalysis18

andfactoranalysis62

ingeodemographics69

andmarketsegmentation18,115

seealsomultivariateanalysis

codesofpractice1819

advertising3

cognitivedissonance19

cognitivestage19,20

andAidamodel5

andattention19

andawareness19,75,80

andcomprehension24

andinnovation-adoptionmodel80

andmarketingcommunicationstechniques19,133

seealsoaffectivestage;conativestage;marketingcommunications

Colley,R.H.42

Collins,B.83

commercialmarketingseebusiness-to-businessmarketing

commitment

toemployee21416

toemployer214

communicationseeinboundcommunications;interpersonalcommunications;marketingcommunications;outboundcommunications;word-of-mouthcommunications

communicationobjectives3,20,121

andDAGMARmodel42

andmediaplanningandscheduling1334

communicationsmix6,201,120

andfinancialplanning63

andimagerepositioning157

seealsoadvertising;directmarketing;exhibitions;marketingcommunications;marketingmix;massmedia;message;newspapers;personalselling;posters;publicrelations;publicity;salespromotion;sponsorship

communicationsresearch212

andcreativecontent21

andeffectiveness21

andfocusgroups63

andsaleseffect21

competition,imperfect15,166

competitiveadvantage223

inBCGmatrix7

andcostleadershipstrategy38

andcustomerlinkingcapability23

anddifferentiation22,23,48

indistribution17

andfocusstrategy64

andmarketsegmentation115

andmarketsensingcapability23

andnewproductdevelopment139,170

andpartnershipsourcing151

andproductdifferentiation166

andproductmodification169

resource-basedtheories22

andretailimage63

andretailpositioning190

andservicequality215

sustainable23

competitiveenvironment55

competitiveposition-industrymaturitymix156

competitivestrategy234,68,237

andmarketsegmentation115,117

seealsocorporatestrategy;differentiationstrategy;focusstrategy;strategicplanning;verticalintegration

competitormapping220

comprehension2,24,42

seealsocognitivestage;DAGMARmodel

computersinmarketing245

andcomputer-assistedtelephoneinterviewing23940

andconsumerbehaviorresearch29

anddataanalysis25,42,62,135,137,164

anddescriptivestatistics25,45

anddirectmarketing49

andenvironmentalscanning56

andexpertsystems59

andforecasting25

andhomeshopping193

andmarketingdecisionsupport

andmarketinginformationsystems124

andmediaplanning38

andobservationresearch25

andpoint-of-salescanners25

andquestionnairedesign24,163,179

software27,45,62,135,137,230,238

seealsoMINITAB;StatisticalPackagefortheSocialSciences

andtelephoneinterviewing245

seealsodatabase;electronicdatainterchange;marketinginformationsystems

conativestage1,20,256

andaction25

inAidamodel5

andinnovation-adoptionmodel80,246

andmarketingcommunicationstechniques25

andpurchase75

seealsoaffectivestage;cognitivestage;consumerdecision-makingprocess;hierarchyofeffectsmodel;marketingcommunications

concepttesting26

andadoptionprocess26

andfocusgroups63

monadic/competitivetesting26

andproductdevelopment26

seealsoproductconcept;testmarketing

confidenceintervals267,201,249

seealsosampling

conjointanalysis27,137,182

consortium85

consumerattitudes278

andbrandloyalty11,169

changing26,28

andcognitivedissonance19

components27

influenceson2,4,28

andmarketingcontrol123

aspurchasepredictors28

seealsointerpersonalcommunications;marketingenvironment;massmedia

consumerbuyerbehavior2930

andbrandloyalty10

andbuyercharacteristics30

andbuyingroles29

andconsumershoppingbehavior29

andculture40

anddecision-makingprocess29,30

Dibb,S.,Simkin,L.,Pride,W.M.&Ferrell,O.C.(1994).Marketingconceptsandstrategies(Europeanedn).London:HoughtonMifflinCo.Chapter15.

BARBARALEWIS

AdvertisingAgency

seeAGENCY

AffectiveStage

MARKETINGCOMMUNICATIONSmodels,whichstatethatatargetbuyerorcustomermovesalongaspectrumfromastateofignoranceorunawarenessofanorganizationand/oritsproductsorservicestoultimatelymakingapurchase,comprisethreeprincipalstages,namely,theCOGNITIVE,affective,andCONATIVE(orbehavioral).

Theaffectivestageisthatwhichattemptstocreateapreferenceforoneproduct,brand,orserviceinthetargetbuyer'sorcustomer'smind,inrelationtoallothers.Inotherwords,communicationsattheaffectivestagearedesignedtodevelop,maintain,andreinforcepositiveattitudesinthemindofthetargetbuyer,customer,orconsumer.Investmentofresourcesoftimeandmoneyinattainingsuchanobjectivecanbehuge,butthereisplentyofresearchevidencetosupportthenotionthatitcanbeachieved,e.g.,Volvoissynonymousinmanypeople'smindswithsecurityorsafety,afterspendingmillionsoffinancialresourceandmanyman-hoursbothondevelopingandtestingsafetyfeaturesintheircarsandalsoontellingpotentialcustomersthattheyhaveeffectivelydoneso.Currently,majororganizationsareseeminglyattemptingtoshowthattheyare''environmentally-conscious,"i.e.,thattheirconcernforreducingtheerosionoftheEarth'sresourcesisreflectedintheirproductorserviceofferings.

Bibliography

DAVIDYORKE

Agency

AnorganizationcandevelopitsownADVERTISINGandpromotional(seePROMOTION)skillsorusethoseofanagency,eitherin-house,whichisownedandcontrolledbytheparentcompany,oronethatisindependent.Costisamajorconsiderationbutotherfactors,suchasgeneratinganexternalperspectiveandthefacilitytoofferacompleterangeofservicesfrommarketresearchtodistribution,mayplayaroleintheclient-agencyrelationship.

Advertisingagenciesvary,bothinsizeandinexpertise.Someareinternational,otherslocal,somespecializeine.g.,BUSINESS-TO-BUSINESSMARKETING,RETAILING,fashion,orfinance,othershandleavarietyofaccounts.

Traditionally,agencieshavenotbeenconsideredtobehighlybusiness-oriented,preferringtooffercreativitywithoutthecorrespondingandcomplementarycost-effectiveness.Moreclients,asaresultofgreatercompetitionintheirownmarkets,arenowseekingamoremeasurablereturnfortheresourcesspentbytheiragencies.

Typically,anagencyisorganizedintothreefunctions,namely,clientservices(eachclienthasanaccountmanager),creativeservices(responsiblefordesignandproduction),andmarketingservices(marketresearchandmediabuying).SpecialistagenciesexistformediaADVERTISING,SALESPROMOTION,PUBLICRELATIONS,andPACKAGING.

Bibliography

Crosier,K.(1994).InM.J.Baker(Ed.),Themarketingbook.Oxford:Butterworth-Heinemann.Chapter21.

InstituteofPractitionersinAdvertising(1986).Somesuggestedprovisionsforuseinagency/clientagreements.London.

McCarthy,E.J.&Perreault,W.D.(1993).Basicmarketing(11thedn).Homewood,IL:Irwin.Chapter17.

DAVIDYORKE

AidaModel

ThisisoneofanumberofmodelsofMARKETINGCOMMUNICATIONSwhichshowhowatargetedbuyerorcustomerprogressesfromastateofunawarenessofaproductorservicetopurchaseofit.TheAidamodelisanacronymfor:Attention®Interest®Desire®Action.

BrandEquity

Therehasbeenincreasingcontemporaryconsiderationofbrandvalueorequity.Thiscanberegardedas"theincrementalcashflowresultingfromaproductwiththebrandnamevsthecashflowwhichwouldresultwithoutthebrandname".(Schoker&Weitz,1988)Successfulbrandsgenerallyhaveasetofpowerfulassociationsattributedtothembycustomersthatacttodifferentiatethemclearlyfromcompetingproducts.Thesequalitiesembraceintangiblefactorswhichcollectivelyformtheimageofthebrand,aswellasotheraspectsoftheproduct,suchasperformance,whichgenerallyreinforcethisgeneralbrandimage.

Itisgenerallyarguedthattherehastobecontinuedinvestmentinthebrandthroughadvertisingandproductdevelopmenttoprojectandsupportthebrand'svalues.ThereturnsareintheformofhighermarginsthatcustomersarepreparedtopayfortheparticularbenefitsattributedtothebrandandBRANDLOYALTY,thelatterbeingespeciallyimportantgiventhecostsofreplacinglostcustomers,andtheadditionalrevenuesthatcanbeobtainedoverthelifetimeofexistingcustomersthrough,forexample,cross-sellingofotherproducts.

Somecompanieshaveattemptedtovaluetheirbrandsbuttodatetherehasbeennoagreedmethodologyforincludingthesevaluesincompanies'balancesheets.Firmsoftenseempreparedtopaysignificantamountstoacquirebrands,astheNestletakeoverofRowntreeseemedtoindicate.However,intheacquisitionofbrands,theadditionalvaluepaidfortheperceivedvalueofabrandis,underexistingUKaccountingpractice,writtenoffas"goodwill."Nevertheless,thevalueofthebrandisbeingchallenged.FridayApril2,1993,whichhasgonedowninhistoryas"MarlboroFriday,"appearedtobeapocalypticforthebrand.Underpressurefromcheaper"generic"cigarettes,PhilipMorrisreducedthepriceofMarlborocigarettesbyafifth.Inhindsight,thestrategyappearstohavebeensuccessfulsinceMarlboro'smarketshareandrevenueshavesubsequentlyrecovered.Commentatorshavearguedthatinthiscase,atleast,PhilipMorrishadallowedthepricedifferentialbetweenMarlboroand

itscompetitorstoincreasebeyondalevelthatconsumersregardedasreasonablefortheimagethatMarlborohad.Nevertheless,manyretailersmarketproductsundertheirownnamewhichbenefitfromtheperceivedvaluesassociatedwiththeretailerandwhicharegenerallyofferedatalowerpricethanmanufacturers'brands.Thepowerofmanufacturerstoinfluencethechannelofdistributionthroughtheirownbrandswhichhaveinfluentialcustomerfranchisesisbeingerodedandmoremanufacturers,inordertoensurecontinuedvolumeofoutput,arebeingcompelledtosupplyretailerbrandedmerchandise.

Bibliography

Peters,T.(1988).Thrivingonchaos.NewYork:Macmillan,asquotedinP.Doyle(1994).Branding.InM.J.Baker(Ed.),Themarketingbook(3rdedn).(pp.471483).Oxford:ButterworthHeinemann.

Schoker,A.&Weitz,B.(1988).Aperspectiveonbrandequityprinciplesandissues.InL.Leuthesser(Ed.),Defining,measuringandmanagingbrandequity:aconferencesummary,(pp.88104).Cambridge,MA:MarketingScienceInstitute.

D.LITTLER

BrandImage

seeBRANDLOYALTY

BrandLoyalty

Considerationofconsumerbuyingbehavioroveraperiodoftimeinvolvesanunderstandingofbrandloyaltywhichfollowsfromtheformationofbrandimagesandbrandpreferences.

BRANDIMAGEisasetofassociationsorperceptionsthatconsumershaveforabrand;itisawarenessorrecognition.Italsoimpliesattitudestowardabrand,eitherpositiveornegative,whicharelearnedovertime.

BRANDPREFERENCEisadefiniteexpressionofpositiveattitude.Onewouldnormallyexpectpeopletobuyapreferredbrandorbrands,assumingthattheyareinthemarketfortheproduct.However,thereareoccasionswhentheproductmaynotbeneededortheconsumercannotaffordthe

preferredbrand,orthepreferredbrandmaynotbeavailable.

Brandloyaltyimpliespurchasingthesamebrandmorethanonce,againassumingthatthisisthepreferredbrand,althoughthismaynotnecessarilybethecase.Brandpreferenceandbrandloyaltymayexistinrelationto

Engel,andKollat&Blackwell(seeEngeletal.,1993)

TheHowardandShethmodelisconcernedwithindividualdecision-makingandhasitsrootsinstimulus-responselearningtheory(seeCONSUMERLEARNING).Thefocusisonrepeatbuying,andthereforethemodelincorporatesthedynamicsofpurchasebehaviorovertime.Themodelhasfourcentralparts:inputsorstimulusvariablestoincludeproductsandsocialfactors;perceptualandlearningconstructs;outputresponsevariables;andexogenousvariablestoincludeenvironment,financialstatus,andculture.Fromtheseelements,itispossibletoconsidertheimpactofdecisionmediatorsinconsumermotivationsandbrandchoicedecisions.

Nicosia'smodelisalsofocusedonindividualconsumers'decision-makingandconsiderstherelationbetweenafirmanditspotentialcustomerswithrespecttoanewproduct.Heusedcomputersimulationtechniquestoexplainthestructureofconsumerdecision-making.Theconsumerstartsoffwithnoexperienceoftheproduct,andfromexposuretotheenvironmentandthecompany'smarketingeffortformspredispositions,attitudes,andmotivationswhichlead,viainformationsearchandevaluation,topurchase.

Andreasen'smodelisageneralonebasedonspecificconceptionsaboutattitudeformationandchange;thekeytochangebeingexposuretoinformation,eithervoluntaryorinvoluntary.

Engel,Kollat,&Blackwellfocusonmotivation,perception,andlearninginthebuyingdecisionprocessandtheirmodelhaselementssuchasacentralcontrolunit,informationprocessing,decisionprocess,andenvironmentalinfluences.

Inadditiontothesedescriptivemodelsareotherswhicharealsopredictive,e.g.,stochasticlearningmodelsandqueuingmodels.Stochasticlearningmodelscontainprobabilisticelementsandconsiderbuyingovertime,usuallypurchasesofbrandsinaproductcategory.Thebasicapproachisthatanindividualconsumerlearnsfrompastbehaviorandthedegreeofsatisfactionwillinfluencefuturepurchases.Also,morerecentbuying

experienceswithaparticularbrand/productwillhavegreatereffectthanthosewhichtookplaceatamoredistanttime.Thesemodelsanalyzetherelativepurchasefrequenciesofbrandsinaproductcategoryandestimatetheprobabilitiesofswitchingbrandsonthenextpurchase.Ifsuchprobabilitiesareassumedtobeconstantthenmarketshares,forthefuture,canbecomputed.

Finally,withregardtodecisionmodels:thesehavebeendesignedtoevaluatetheoutcomesfromdifferentdecisions,andtheyincludeoptimizationmodelstofindabestsolution,andheuristiconeswhichuserulesofthumbtofindreasonablygoodsolutions.Theyincorporatedifferentialcalculus,mathematicalprograming,statisticaldecisiontheory,andgametheory.

Bibliography

Andreasen,A.R.(1965).Attitudesandconsumerbehavior:Adecisionmodel.InL.Preston(Ed.),Newresearchinmarketing,(pp.116).Berkeley:InstituteforBusinessandEconomicResearch,UniversityofCalifornia.

Bettman,J.R.(1979).Aninformationprocessingtheoryofconsumerchoice.Reading,MA:AddisonWesley.

Engel,J.F.,Blackwell,R.D.&Miniard,P.W.(1993).Consumerbehavior(7thedn).NewYork:TheDrydenPress.

Howard,J.A.&ShethJ.N.(1969).Thetheoryofbuyerbehavior.NewYork:JohnWiley.

Nicosia,F.M.(1966).Consumerdecisionprocesses.EnglewoodCliffs,NJ:Prentice-Hall.

Sheth,J.N.(Ed.)(1974).Modelsofconsumerbehavior.NewYork:Harper&Row.

BARBARALEWIS

BuyerBehaviorTheories

Asthedisciplineofconsumerbehaviorhasdeveloped,varioustheorieshavecontributedtounderstandingbehavior.Theseincludeeconomictheory.Economistswerethefirstprofessionalgrouptoofferatheoryofbuyerbehavior.TheMarshalliantheoryholdsthatconsumerpurchasingdecisionsarelargelytheresultof"rational"andconsciouseconomiccalculations,i.e.,theindividualseekstospendhisorherincomeongoodsthatwilldeliverthemostlikelyutility(satisfaction)accordingtohisorhertastesandrelativeprices.

Bibliography

DAVIDYORKE

CommunicationsObjectives

TheobjectivesofMARKETINGCOMMUNICATIONSareconcerned,primarily,withinformationandeducationaboutcompaniesandtheirproductsandservicesand,ultimately,withconsumerpurchaseandsatisfaction,togetherwithachievementofcorporategoalssuchasprofits,return-on-investment,growth,andmarketshares.

However,"purchase"behavioristypicallytheendresultoftheCONSUMERDECISION-MAKINGPROCESSandthemarketingcommunicatorwishestomovethetargetaudience(e.g.,buyer/consumer)throughseveralstagesofreadinesstobuy,i.e.,movingthemthroughtheCOGNITIVE,theAFFECTIVE,andtheCONATIVE(orbehavioralresponse)STAGE.

Thus,specificobjectivesmightbeto:provideinformationaboutanewproduct/brandandcreateawarenessoftheproduct/brand;generateinterestintheproductorbrandfromatargetmarket(orsegmentseeMARKETSEGMENTATION);encouragesalesfromnewcustomers;increasesalesamongexistingcustomers;increaseMARKETSHARE;introducepriceconcessions;provideinformationonproductchangesandavailability;andeducatecustomersorthegeneralpublicaboutfeatures/benefitsoftheproduct.Communicationobjectivesmightalsobeconcernedwithprovidinginformationandgeneratingattitudesandresponsesfromotherorganizationsinthedistributionchain,e.g.,encouragingnewdistributorsorimprovingdealerrelationships;orrelatetoconsumers'attitudesandresponsestowardorganizations,e.g.,generatinggoodwillandcreatingacorporateimage.

Marketingcommunicationsobjectiveswhichareconcernedwith

consumers'responsestoproducts/brandsarereflectedinvariousresponsehierarchymodelswhichhavebeenoffered,e.g.,AIDAMODELDAGMARMODEL,HIERARCHYOFEFFECTSMODEL,andINNOVATION-ADOPTIONMODEL.Thesemodelsassumethatabuyermovesthroughthecognitive,affectiveandbehavioralstagesinthatorder,i.e.,the"learn-feel-buy"sequence(seeLEARN-FEEL-BUYMODEL);alternativesequences,dependingontheproductcategoryandconsumerinvolvement,areBUY-FEEL-LEARNandFEEL-BUY-LEARN.

Asaconsequence,communicationsobjectivesmaybesetdependingontheproduct,consumerinvolvement,andstageintheconsumerdecision-makingprocess.

Bibliography

Colley,R.H.(1961).Definingadvertisinggoalsformeasuredadvertisingresults.NewYork:AssociationofNationalAdvertisers.

Lavidge,R.J.&Steiner,G.A.(1961).Amodelforpredictivemeasurementsofadvertisingeffectiveness.JournalofMarketing,25,Oct.,61.

McCarthy,E.J.&Perreault,W.D.Jr(1993).Basicmarketing(11thedn).Homewood,IL:Irwin.Chapter15.

Rogers,E.M.(1962).Diffusionofinnovation.NewYork:TheFreePress,pp.7986.

Semenik,R.J.&Bamossy,G.J.(1994).Principlesofmarketing.Cincinnati,OH:South-WesternPublishingCo.Chapter10.

BARBARALEWIS

CommunicationsMix

ThemarketingcommunicationsmixisasubsetoftheMARKETINGMIXandincludesallthetechniquesavailabletothemarketer,andwhichmaybe"mixed,"inordertodeliveraMESSAGEtothetargetgroupofbuyers,

customers,orconsumers.

Techniques,broadly,maybeclassifiedusingtwodimensionsfirst,whethertheyaredeliveredpersonally(e.g.,PERSONALSELLING,TELEMARKETING)orwhetherthemediumusedisimpersonal(e.g.,ADVERTISING,PACKAGING,SALESPROMOTION,PUBLICRELATIONS);andsecondly,whetherornotthetechniqueinvolvesapaymentbythesponsor.Allofthefirstgrouparethus"commercial."Examplesof"non-commercial"techniquesarePUBLICITYandopinionleaders(seeINTERPERSONALCOMMUNICATIONS).

Differenttechniqueshavedifferentstrengths(andconversely,weaknesses).Thereisaneed

Bibliography

DAVIDYORKE

Coupons

CouponsareaSALESPROMOTIONdevicewhichtrytopersuadebuyers/customerstopurchase.Theymayofferadiscountonthefirstorsubsequentpurchaseofaproduct/serviceortheymayneedtobecollectedinordertoberedeemedagainstafuturepurchaseortoreceivegiftsorcash.Suchredemptionisoftendifficulttocontrolfromthesponsor'spointofviewandretailersoftendonotfavorthemastheyrepresentanadministrativeandtime-consuminginconvenience.

Bibliography

Dibb,S.,Simikin,L.,Pride,W.M.&Ferrell,O.C.(1994).Marketing,conceptsandstrategies(Europeanedn).Boston,MA:HoughtonMifflinCo.Chapter16.

Kotler,P.(1994).Marketingmanagement:Analysisplanning,implementationandcontrol(8thedn).EnglewoodCliffs,NJ:Prentice-Hall.Chapter24.

DAVIDYORKE

CreativeContent

Creativecontentreferstothevisualsandwordsorelementsofthevisual

identitysystemofanorganization.Thecreativecontentoftheseelementsreinforces,forexample,ahospital'sIMAGEthroughtheuseofcolor,symbol,logotype,andtypeface(Bruce&Greyser,1995).Thecreativecontentofabrochureoranadvertisementorapackaretangibleexpressionsoftheorganizationandoffersignalsofitsvalueswhich,inturn,influencetheperceptionsandopinionsofitsvariouspublics.AcorporatecommunicationsbrochureofCaterpillar(1994)pointsoutthatthevisualmaterialcannotjustshowpicturesoftheproductsbut"theyhavetoshowwhatwemakepossibleforourcustomers,wehaveresponsibilitytoshowproductsbeingusedbythetypesofpeoplewhoactuallyusethem."Similarlywiththetext,"wecan'tjustsayCaterpillarproductsandservicesarebest.Wehavetodemonstratetheirsuperiorityintermspeoplefindmeaningfulandimportant...toourmanyaudiences,it'snotwhatwemakethatcounts;it'swhatwemakepossible."So,thecreativecontent(e.g.,thewordsandvisuals)ofanadvertisementorbrochureorotherformofcommunicationusuallycontainsfourelements:theprincipalbenefitofferedbytheproductorservice;thecharacteristicsoftheproductorservice;theimageoftheproductorservice;andtheusesoftheproductorservice.

Bibliography

Bruce,M.&Greyser,S.(1995).Changingcorporateidentity:Thecaseofaregionalhospital.Teachingcase.Boston,MA:DesignManagementInstituteandHarvardBusinessSchool.

Caterpillar,Inc.(1994).CommunicatingCaterpillar:Onevoice.Peoria,IL.

MARGARETBRUCE

Cross-Tabulations

Cross-tabulationsareverypopularintheanalysisofsurveydataandtheyareconcernedwiththequantitativeanalysisofdatawhereseveralvariablesareanalyzedtogether,usuallytoseeifthereareanyrelationshipsbetweenthevariables.

Iftwoofthevariablesaremeasuredonnominal(categorical)scales,cross-

tabulations(cross-tabs)canbeusedtosummarizethesampledata.Across-tabisatablewiththecategories(orvalues)forthetwovariablessetoutonthetwoaxesandthecountsofthenumberoftimeseachpairofvaluesoccursrecordedinthecellsofthetable.Therowandcolumntotalsareusuallycalculatedandpercentagesacrosstherowsand/ordownthecolumnsarealsocomputedtoaidintheinterpretation,description,anddiscussionoftheresults.Cross-tabscanbeformedinmorethantwodimensionswhendataformorethantwocategoricalvariablesareanalyzed,butinterpretationmaybecomedifficultasthe

Palmer,A.&Worthington,I.(1992).Thebusinessandmarketingenvironment.Maidenhead:McGraw-Hill.Chapters9&10.

Pol,L.G.(1986).Marketinganddemographicperspective.JournalofConsumerMarketing,Winter,5664.

UnitedStatesBureauoftheCensus.StatisticalabstractoftheUnitedStates.Austin:ReferencePress.

Wilkie,W.L.(1994).Consumerbehavior(3rdedn).NewYork:JohnWiley,pp.5483.

BARBARALEWIS

DepthInterviews

Depthinterviewingisaqualitativemarketingresearchtechnique(seeQUALITATIVERESEARCH)inwhichahighlyskilledinterviewerconductsanunstructured,direct,personalinterviewwithasinglerespondenttoprobeunderlyingfeelings,motives,opinions,beliefs,andattitudes.Theinterviewerasksquestionsandprobesrelevantresponses.Respondentsanswerquestionsastheyfeelappropriate.

Depthinterviewsareused(1)whenthesubjectunderdiscussionishighlyconfidentialorembarrassing,(2)whenstudyingcomplicatedbehaviorsuchasthatofprofessionalpeopleintheirjobsordiscretionarypurchasesbyhouseholds,and(3)insituationswherefocusgroup(seeFOCUSGROUPS)interviewsarelikelytobiastheresponsesofindividualswhohaveatendencytoconformtogrouppressures.

Aswithotherkindsofdepthinterviews(seeFOCUSGROUPS),theadvantagesofindividualdepthinterviewscenteraroundtheabilityoftheinterviewertoprobeunderlyingfeelingstoagreaterdepththanispossiblewithquestionnairetechniques.Thedisadvantagesincludethegreaterpossibilityofinterviewerbiasandthesubjectivenatureoftheanalysisandinterpretationofthedata.Theshortageofskilledinterviewersandthelimitednumberofinterviewsthateachcanaccomplishusuallymeansthat

samplesaresmallandpossiblyunrepresentative.

Bibliography

MICHAELGREATOREX

DescriptiveStatistics

Unlessthesampleinamarketresearchprojectisverysmallthedatawillbetabulatedandanalyzedusingacomputer.Thesimplestkindofstatisticalanalysisofdatainvolvesdescriptivestatisticswheretheobjectistosummarizethedataanddescribetheresultsforthesample.Thealternativekindofanalysisinvolvesstatisticalinference,andsuchtopicsasCONFIDENCEINTERVALSandHYPOTHESISTESTING.Descriptivestatisticalanalysiscanbecarriedoutonaunivariateorbivariateormultivariatebasis(seeUNIVARIATEANALYSIS,BIVARIATEANALYSIS,MULTIVARIATEMETHODSANALYSIS).

UNIVARIATEANALYSISinvolvesthequantitativeanalysisofdatawhereeachvariableisanalyzedinisolationandisoftenthefirststageintheanalysisofasurvey.Iftheoriginaldataarepresented,thenthereareusuallytoomanynumbersfortheanalysttomakeanysenseofthedata.Thisistrueevenwhenthedataforasinglevariableareconsidered.Thefirststepinthesummarizationprocessisforthedataforeachvariabletakenoneatatimeforthewholeofasampletobetabulatedintoafrequencydistribution,havinggroupedthedata,ifnecessary,intoaconvenientnumberofclasses.Afrequencydistributionmaybeinactualcountsorinpercentages,incumulativeornon-cumulativeform.Thenextstagemaybetopresentthedatainagraphicalform,usingapiediagram,barchart,histogram,ogive,etc.,asrequired.Afinalstageinthesummarizationprocessistocalculateandpresentdescriptivestatisticssuchasmeasuresofaverage,variation,skewness,andkurtosisforeachvariable.Inthisway,surveysyieldingthousandsofnumbersoneachvariablecanbesummarizedintooneortwonumbers(e.g.,anaverageandameasureofvariation)foreachvariable.Thisenablescomparisonstobemademoreeasilywithothersurveysandallowstheresearchertoreporthis/herresultsinacondensedformandtoincorporatetheresultsusingthesummarydescriptivestatisticsintothetext

ofthereport.

BIVARIATEANALYSISisconcernedwiththequantitativeanalysisofdatawherepairsofvariablesareanalyzedtogether,usuallytoseeifthereisanyrelationshipbetweenthevariables.Theanalysisdependsuponthetypesofmeasurements.CROSS-TABULATIONScanbe

Bibliography

Ansoff,H.I.(1965).Corporatestrategy:Ananalyticapproachtobusinesspolicyforgrowthandexpansion.NewYork:McGraw-Hill.Chapter6.

DALELITTLER

DiscontinuousInnovation

ThiscanbeviewedasbeingatthepolarextremeofacontinuumwithCONTINUOUSINNOVATIONattheotherextreme.Itisgenerallyusedwithreferencetotechnologicalinnovation.Itcanbeseenasinvolvingradicalchangesintechnologiesand,consequently,itmayresultinthedevelopmentofnewdemandschedules.

SeealsoContinuousinnovation;Innovation

DALELITTLER

Discount

Discountisthetermusedtorefertoanyreductioninpriceofferedtoacustomer.Discountsareofferedtoencouragecustomerstopurchasewhereitisthoughttheymaynototherwisedoso.Discountingiswidelypracticedinorganizationalmarketswherepriceismoreoftenamatterofnegotiationthaninconsumermarkets(Blois,1994).Theusualreasonsforofferingdiscountsinclude:toencouragepurchaseingreaterquantitythannormal(discountforvolume);torespondtocompetitivedevelopments(e.g.,pricewars,tendering);toacceleratesalesofoutdatedstock(e.g.,discontinuedlines);toencouragepurchaseat"unpopular"times(e.g.,end-of-seasonsales,off-peakelectricitytariffs);toreduceacustomer'sPERCEIVEDRISK(e.g.,introductorydiscountsfornewproducts);toprovideincentivesforanotherproduct(e.g.,membershipdiscounts);and,illegally,todriveoutcompetitionwithaviewtoachievingamonopoly(seePREDATORYPRICING).

Bibliography

Blois,K.J.(1994).Discountsinbusinessmarketingmanagement.IndustrialMarketingManagement,23(2),April,93100.

DOMINICWILSON

DiscretionaryIncome

AnelementintheECONOMICENVIRONMENT,discretionaryincome,i.e.thatpartofhouseholdnetincomewhichremainsafterfixedcommitments,suchasmortgageandloanrepayments,havebeenmade,islikelytovaryfromonemarketsegmenttoanother.Itrepresentsachallengeforallorganizationstobeabletopersuadebuyersandcustomerstospendagreaterproportionoftheirdiscretionaryincomethanhithertoonaparticularproductorservice.Changesindiscretionaryincomenotonlyaffectthoseorganizationssellingdirectlytohouseholds,butalso,ultimately,haverepercussionsonsuppliersofcapitalequipment.

Bibliography

DAVIDYORKE

DiscriminantAnalysis

Discriminantanalysisisusedwhenthereareobservationsfromasampleofapopulationonmanyvariablesforcaseswhichbelongtotwoormoreknowngroups.Thegroupsmaybeownersandnon-ownersofaparticularconsumerdurable,orgoodorbadcreditrisks,orbuyersofthreedifferentbrandsofcoffee,andthevariablescouldbetypicalmarketingresearchvariables,e.g.,socioeconomic,demographic,psychographic,etc.variablesforeachrespondent,ortherespondent'sopinions,perceptions,evaluations,etc.measuredonarangeofRATINGSCALES.Thepurposeofdiscriminantanalysisistousethesedataaboutindividualswhosegroup

membershipisknowntofacilitatetheclassificationofindividualswhosegroupmembershipisunknown,tooneortootherofthegroups.

Inthesituationwheretherearejusttwogroups,alineardiscriminantfunctionofthevariablesisformed,thecoefficientsofthe

SeealsoMarketingenvironment

Bibliography

Day,G.S.&Wensley,R.(1988).Assessingadvantage:Aframeworkfordiagnosingcompetitivesuperiority.JournalofMarketing,52,April,120.

Linstone,H.A.&Turoff,M.(1975).Thedelphimethod:Techniquesandapplication.Reading,MA:AddisonWesley.

Porter,M.E.(1979).Howcompetitiveforcesshapestrategy.HarvardBusinessReview,57,Mar.Apr.,137145.

Schoemaker,P.J.H.(1993).Multiplescenariodevelopment:Itsconceptualandbehavioralfoundation.StrategicManagementJournal,14,193213.

Shapiro,B.P.(1988).Whatthehellismarketoriented.HarvardBusinessReview,66,(6),11925.

Stacey,R.D.(1995).Thescienceofcomplexity:Analternativeperspectiveforstrategicchangeprocesses.StrategicManagementJournal,16,(6),477495.

DOMINICWILSON

EnvironmentalScanning

EnvironmentalscanningistheprocessofexaminingtheMARKETINGENVIRONMENT,usuallywiththeintentionofidentifyingtrendsanddevelopmentsintheenvironmentwhichmayrequireMARKETINGSTRATEGIESortacticstobeadjusted.Thecomplexity,volatility,andpotentialstrategicsignificanceofenvironmentaldevelopmentsare

becomingmoreapparenttomanyorganizationsandthereisincreasingattentiontousinginformationandcommunicationtechnologiestocopewiththerapidlygrowingvolumeofdataconcerningenvironmentaldevelopments.Forexample,therearenowmanycommerciallyavailableMARKETINGINFORMATIONSYSTEMS(MkIS)andexecutiveinformationsystems(EIS)whichclaimtoofferenvironmentalscanningservices.Oncloserexamination,however,thesesystemsoftenonlyscanthoseaspectsoftheenvironmentatwhichtheyare"directed"(throughprogramming)bythesystemsdesignersandmanagersinvolvedandsotheyriskperpetuatingandlegitimizingtheveryperceptualprejudiceswhichtheyaremeanttocorrect.Computersystemsdo,ofcourse,provideavaluableaidtocopingwiththesheerdiversityandvolumeofenvironmentaldata,bothintermsofscanningandintermsofanalysisandmanipulation,butthereisnosubstituteforthehumancharacteristicsofalertness,curiosity,andopenness-to-innovationwhichareessentialinturningenvironmental"scanning"intoenvironmental"understanding."

Bibliography

Brownlie,D.(1994).Environmentalscanning.InM.J.Baker(Ed.),Themarketingbook(3rdedn).London:Heinemann,pp.139192.

Calori,R.(1989).Designingabusinessscanningsystem.LongRangePlanning,22,(113),Feb.,6982.

DOMINICWILSON

EPOSorelectronicpointofsalesystemsrecorddata,concerninggoodssold,viahighlyefficientelectronicscanningequipmentreadingproductbar-codesattheretailercheckout.Theirintroductionhasradicallyimproveddistributionandmerchandisemanagementintheretailsectorbyprovidingdetailedandaccessibleinformationconcerningproductmovementthroughstoresandpurchasingbehavior,dramaticallyreducingthepaperworkassociatedwithinventorycontrol.

Bibliography

Harris,D.&Walters,E.(1992).Retailoperationsmanagement.Prentice-

Rosenbloom,B.(1991).Marketingchannels.Chicago:TheDrydenPress.

STEVEGREENLAND

EthicalIssues

seeMARKETINGETHICS

Exchange

Whileitisoftenseenasthecentralconceptunderpinningmarketing,thereissomedebateoverexactlywhatconstitutesexchange.Atthesimplestlevel,exchangemightbeseenas

conducttheexperiment.However,becausetheexperimentisconductedinanartificialenvironment,thegeneralizabilityoftheresultsoflaboratoryexperimentstotherealworldisreduced.CopytestingofTV(orpress)commercialsisanexampleofexperimentationoftencarriedoutinthelaboratory.

Bibliography

Aaker,D.A.,Kumar,V.&Day,G.S.(1995).Marketingresearch(5thedn).NewYork:JohnWiley.Chapter12.

MICHAELGREATOREX

ExpertOpinion

ExpertSystems

Acomputerprogramthatusesknowledgeandinferencingtosolveproblemscanberegardedasaknowledge-basedsystem.Whenknowledgeandinferenceproceduresaremodeledafterhumanexperts,thensuchaknowledge-basedsystemisanexpertsystem.Inotherwords,anexpertsystemisacomputerprogramthatusesexpertknowledgetosolveproblemsinaspecificdomain.Expertsystemstechnologyincorporatessome"expertise,"someknowledgeinaprogramtoenablearelativelyinexperiencedindividualtomakeaccuratedecisions,ortoprovideabackupdecision-supportsystemperhapstofacilitateorcheckthestagesinadecision-makingprocess.Thus,an"expert's"knowledgecanbedecentralizedandmademorewidelyavailable.Expertsystemsareadvisorysystemsandcanprovideadvicedirectlytotheconsumer,sogeneratinganewproduct.Mainapplicationsincludefire-riskunderwritinginfinancialservices,flightschedulinginthetravelindustry,andgenericmarketinguses,e.g.,thecreationofcustomerprofilesfordatabasemarketingandstafftraining.More"radical''potentialuses,suchasself-serviceholidaybookingsystems,maycomeintoeverydayuseatsomefuturestage.

Bibliography

Moutinho,L.&Rita,P.(1994).Expertsystems.InS.Witt&L.Moutinho(Eds),Tourismmarketingandmanagementhandbook(2ndedn).(pp.554558).HemelHempstead,UK:PrenticeHall.

MARGARETBRUCE

Exporting

Itisnoteasytomakeaclear-cutdistinctionbetweenexportingandINTERNATIONALMARKETING,eitherforconceptualpurposesorintermsofoperationalpractices.However,itcouldbearguedthat,whereasexportingentailssomeelementsofinternationalmarketing,internationalmarketingcanbeunderstoodasabusinessfunctionquiteindependentofexporting.Ininternationalmarketing,theemphasisison:firms'strategydevelopment;themanagementofmarketingfunctionspertainingtofirms'overallinternationalposition;andthedegreeandcomplexityoftheirinvolvementsinforeignmarkets.Exportingmaybeseen,therefore,asoneoftheminimalstagesoffirms'involvementswithforeignmarkets.Thecharacterizationofexportingas"sellinginforeignmarkets"isonlyoflimitedvalue,implyingthatexportingissomewhathit-and-missorunfocused.

Thepointnottobeoverlookedisthatamajorityofallinternationalfirms,nomatterhowgloballyknownanddominanttoday,wereatonetimesmalloratleastsubstantiallysmallerinternationalplayers.Exportingcanthenbeseentobeaelementofthegrowthpathorlearningcurveofinternationalbusinessoperations.Inthe1970sand1980sasubstantialnumberofacademicstudiesexaminedexportingfirmswiththecenterofinterestbeinghowtheybecameexporters.Thereweretwodimensionsofinterest.Thefirstdimensionwasconcernedwiththemotivesthatstimulatednon-exporterstobecomeexporters:thesecondwiththestagesofinternationalization,inotherwordsformsordegreesofdependenceonforeignbusiness.Withrespecttothefirstdimension,themotiveswouldbeclassifiedintermsofinternalandexternalimpulses,ontheonehand,andproactiveandreactivefactors,ontheother,asexemplifiedintable1.

Theseconddimension,whichattractedconsiderablescholarlyattention,positedstagesofinternationalizationofthefirmthroughtheincreasing

extensionofitsexportingactivitiesandtheirsophistication.The1970sand1980sproducedanumberofmodelsinEuropeandtheUSA,basedonindustrysamples.The

weightedaverageofpastobservations;thefactthattheweightsdeclineexponentiallygivesasimpleformulathatenablesthecomputationstobemadeeverytimeanewobservationbecomesavailablethusmakingtimelyuseofup-to-datedata.Simpleexponentialsmoothingisusedfordatathatfluctuateaboutalevel.Datawithatrendrequireaslightlymorecomplicatedprocedure,suchasHolt'smethod,whiledatathatalsocontainaseasonalcyclecanbehandledbyWinters'method(seeBails&Pepper,1993,Chapter8).Itisessentialthatacontrolprocedureisusedwithexponentialsmoothing.Typicalcontrolproceduresarebasedoncumulativesumsoftheerrorsinone-period-aheadforecastsoratrackingproceduresuchasTrigg'strackingsignal.Themainadvantageofexponentialsmoothingmethodsisthesimplicityofthecomputationsandthepotentialflexibilityandresponsivenessofthemethods.

Box&Jenkins(1976)developedatechniquethatexplainedthedataseriesintermsofautoregressiveandmovingaverageprocesses.Potentialmodelsareidentifiedbyexaminingtheautocorrelationandpartialautocorrelationfunctions.Themodelisthenestimatedandaseriesofdiagnosticcheckstesttheadequacyofthemodel.Forecastsarethenobtainedfromanacceptablemodel.

Trendcurveanalysisattemptstofashionarelationshipbetweenthedataseriesandtimeasthesingleexplanatoryvariable.Variousformsofrelationshipsuchaslinear,quadratic,logarithmic,(negative)exponential,Gompertz,etc.arefittedusingleastsquaresregressionwherepossible,otherwisebyusingadhocnumericalmethods.

CausalForecastingMethods.

Causalmodelingattemptstoidentifytheunderlyingdeterminantsofdemand.Therelationshipofthesevariableswithdemandisinvestigatedwithaviewtousingtherelationshiptoobtainforecasts.Thus,aswellasprovidingforecasts,causalmethodscanprovideinsightsintounderlyingprocesses,inparticularintoidentifyingthevariablesthataffectthevariablebeingforecast.Themethodsincludeleadingindicators,multipleregression,econometrics,andinput-outputmethods.

Aleadingindicatorisatimeseriesofdataforanothervariablewhosechangestendtoleadchangesinthevariableofinterestbyafixedperiod.Theremaybeareasonfortherelationship,e.g.,salesofdrainagepipesmayprecedesalesofroofingtilesbyaperiodequivalenttothedifferencebetweenthelayingofthefoundationsinahousingdevelopmentandthebuildingoftheroofs.Themainuseofleadingindicators(ordiffusionindices)istopredicttheoverallleveloftheeconomy.

Inmultipleregression,variationsinadependentvariableareexplainedbyseveralindependentvariables.Timeseriesdataor,sometimes,cross-sectionaldataareusedwiththeleastsquaresmethodtoestimatetherelationship.Anumberofchecksarecarriedouttotesttheapplicabilityoftheleastsquaresmethod.Ifasuitableregressionequationisfound,forecastsofthedependentvariableareforthcomingbutarebasedonvaluesoftheindependentvariableswhichthemselvesmayneedforecasting.Althoughthismaybeadisadvantageoftheregressionmethodasfarasforecastingisconcerned,theinsightintotheunderlyinginfluencesmaybeinvaluable.

Econometricmodelsbuilduponmultipleregressionmethodsandusuallyinvolvespecifyingseveral(sometimesmanydependingontheproblem)simultaneousrelationshipsbetweenthevariablesofinterest.Specialestimationtechniquesforeconometricmodelsareavailable.Whileeconometricmodelsareusedatthecompanylevel,theyarebestknownfortheiruseinmodelingandforecastingatthenationalmacroeconomiclevel.

Input-outputmethodsarebasedmainlyuponthetransactionsbetweenindustriesasmeasuredbygovernmentstatisticiansininput-outputmatrices.Thefocusisoninter-industryflows.Potentially,thisshouldbeagoodbasisforforecasting,especiallyforindustrialmarkets.However,thecollectionofdatauponwhichinput-outputmatricesarebuiltissoslowthatbythetimethetablesarepublishedtheinformationisoutofdateformostpracticalforecastingpurposes.

QualitativeForecastingMethods

Qualitativemethodsrelyon"soft"databasedontheperceptionsandsubjectivejudgementofindividuals.Thesemayinvolvethesubjectiveopinionsofsalespeople,salesmanagers,marketingmanagers,orsubjective

forecasters

'Monica'fromCACIattemptstousetheChristiannamesofhouseholddwellerstoindicatetheirlikelyageband,e.g.,EthelandArthurarenameswhichhaveanolderageprofilethanSimonandAmanda.

Asecondproblem,knownasthe''ecologicalfallacy,"referstotheassumptionthatthebehaviorofallindividualswillbethesamewithinagivengeodemographictype.Sincegeodemographicclassificationsdescribeneighborhoodsratherthanpeople,itisfallacioustoassumethatallthepeoplewithinagivenneighborhoodwillpurchaseinthesameway.Mosaicisonesystemwhichhasattemptedtoaddressboththeageandtheaggregateddataproblembyincorporatingmanyvariableswhicharemeasuredatthepostcode,ratherthanattheEnumerationDistrict,level.Thisallowsmoreprecisetargeting,sincetherearetypicallyonly15householdsperpostcode.Inaddition,PersonafromCCN,isoneofthefirstbehavioraltargetingsystems.Ifingeodemographicterms"youarewhereyoulive,"withPersona,"youarewhatyoudo."DevelopedfromtheNationalShoppingSurvey,itdividesUKhouseholdsintodistinctivebehavioraltypes.Thesetypesrangefromso-called"Bonviveurs"to"NewTeachers"and"Craftsmen"and"HomeMakers."SuchdatacounteranotheroftheweaknessesoftraditionalCensus-basedclassificationsinthattheygivemoreinformationaboutpeople'sincome,assets,leisureactivities,andpurchasingbehavior,whichisnotavailablefromtheCensus.

AfinalproblemwithCensus-basedclassificationsistheageofthedataonwhichtheyarebasedresultingfromthefactthattheCensusisconductedonlyonceeverytenyearsinmostcountriesincludingtheUK.Fifty-sixpercentofthedatacontainedwithinMosaicisnon-Censusinformationandisupdatedregularly;althoughtheMosaictypesthemselvesareonlyupdatedeverytwoyears.Thesenon-Censusdatasourcesallowtheclassificationtobeappliedtonewlybuiltareas.

SeealsoMarketsegmentation;Segmentationvariables

Bibliography

JournalofMarketResearchSociety.(1989).31,(N4),January,Special

issueongeodemographics.

Sleight,P.(1995).Explaininggeodemographics.APMAP,January,No.347,48.

VINCEMITCHELL

GlobalStrategy

Aglobalstrategycanbeconsideredasacoherentoverarchingstrategyforthepartsoftheworldinwhichanorganizationoperates.Yip(1989)suggeststhatitemergesaspartofathree-stageprocess.First,thedevelopmentofacorestrategyoradistinctCOMPETITIVEADVANTAGE,generallyinthefirm'sdomesticmarket.Second,theextensionofthefirm'sgeographicalreachofthecorestrategy,whichwillbeadaptedtomatchlocalfeatures.Third,globalization,viewedastheinternationalmarketingofstandardofferings(seeOFFERING)(Levitt,1983),throughtheintegrationoftheseadaptedstrategiesintoaglobalstrategy.Thisisanobvioussimplificationoftheinternationaldevelopmentoforganizationswhichmaynotinvolvethissequenceofstages.

Aglobalstrategytendstobeseenassynonymouswithastandardstrategyacrossinternationalmarkets.Suchastrategicapproachcanberegardedasyieldingdistinctadvantagesthrough,inparticular,economiesofscale.However,asseveralcommentatorshavenoted,therearemanybarrierstowardsuchastandardglobalstrategy,includingdifferencesinthephysicalenvironmentandCULTURE,andtheyquestionthefeasibilityofaglobalstandardizedBRANDINGstrategy,arguingthatthedifferences,fromlanguagealone,faroutweighanysimilarities.AdaptabilityandvariationinMARKETINGSTRATEGIESacrossgeographicalmarketsarelikelytobethenorm.AsBradley(1991)notes,itmaybeanessentialrequirementtoacknowledgedissimilaritiesbetweencountriesandadjustmarketingstrategiestosuitspecificregionalrequirements.Quelch&Hoff(1986)suggestthatthereisaspectrumofstrategicpossibilitieswithdifferentelements(suchasproductfeatures,advertisingmessagecontent)havinggreaterorsmallerdegreesofhomogeneityacrossmarkets.

Ithasbeensuggested(e.g.,Littler&Schlieper,1995)thatmanymarketsmaybeconvergingundertheinfluencesofmorewidespreadcommunications,themarketDIVERSIFICATIONstrategiesof

manufacturersandretailers

GreenIssues

seeCONSUMERISM

GrossMargin

Grossmargin(usuallyexpressedasapercentageofsales)issalesrevenuesminusthecostsofproduction(e.g.,rawmaterials,components,labor,energy).CalculatingthegrossmarginofaproductorserviceisanimportantstageinassessingitsuniqueCONTRIBUTIONandprofitabilitysincegrossmarginshouldincludethevariablecostsincurredinproduction.Theallocationofsubsequentcosts(mostlyfixedcosts)isoftenheavilyinfluencedbycorporateaccountingpolicyandsomaynotprovideasgoodanindicationofaproduct'sindividualprofitability.

SeealsoMargin

DOMINICWILSON

GroupInfluence

ofanysortintheirenvironment...whentheenvironmentchanges,thesecompanieschangetoo.Astheneedsoftheircustomersshift,theskillsoftheircompetitorsimprove,themoodofthepublicperturbates,theforcesofinternationaltraderealign,andgovernmentregulationsshift,thesecompaniestack,revamp,adjust,transform,andadapt.Inshort,asawholeculture,theyinnovate.(12)

Bibliography

Peters,T.J.&Waterman,R.H.Jr(1982).Insearchofexcellence.NewYork:Harper&Row.

Schumpeter,J.A.(1939).Businesscycles.NewYork:McGraw-Hill.

DALELITTLER

Innovation-AdoptionModel

Theinnovation-adoptionmodelwasdevelopedbyRogers(1962)whopostulatedanumberofstagesthroughwhichatargetedbuyerorcustomerpasses,fromastateofunawareness,throughAWARENESS,INTEREST,evaluation,TRIAL,topurchase/adoption.AwarenessrelatestotheCOGNITIVESTAGEoftheprocess,interestandevaluationtotheAFFECTIVESTAGE,andtrialandadoptiontotheCONATIVEorbehavioralSTAGE.

Progressionthroughthestagesmayormaynotbelogicalandwilldependonfactorssuchas:theproductorservicebeingoffered;stageintheproductlifecycle;andthebuyerstheirneeds,socioeconomicposition,presentproductownership,personalityandperceptionsofrisk,mediahabits,etc.

SeealsoAdoptionprocess;Diffusionprocess;Marketingcommunications

Bibliography

McCarthy,E.J.&Perreault,W.D.Jr(1993).Basicmarketing(11thInternationalstudentedn).Homewood,IL:Irwin.Chapter7&15.

Rogers,E.M.(1962).Diffusionofinnovations.NewYork:FreePress,pp.7986.

DAVIDYORKE

InteractionApproach

ExtensiveresearchbytheIMP(IndustrialMarketingandPurchasing)GroupofresearchersintoEuropeanbuyer-sellerpurchasingrelationshipshasgeneratedsignificantinsightsintohowsuchrelationshipsdevelop(Håkansson,1982;Turnbull&Valla,1986;Ford,1990).TheGroupdescribestheserelationshipsinwhathasbecomeknownastheinteractionapproachtoORGANIZATIONALMARKETING.Inessence,theinteractionapproachregardspurchasinginorganizationalmarketsasamulti-facetedanddynamicphenomenonwherespecificpurchasesareunderstoodas"exchangeepisodes"intheevolvingrelationshipbetweenbuyerandsellerorganizations,andbetweenindividualsintheseorganizations.ThesebilateralexchangesarealsoseenaspartofamuchwiderandmorecomplexNETWORKofmultilateralinteractionswhichbindorganizationsofsuppliersandcustomerstogetherinseamless"markets."

Theinteractionapproachemphasizesstabilityandcontinuityoforganizationalmarketswhichareevolvingthroughmanyinterrelatedbuyer-sellerrelationships,evenwhereasuperficialanalysismaysuggestgreatervolatility.Itisalsoimpliedthatthetextbookdichotomybetween"marketing"(bysuppliers)and"purchasing"(bycustomers)maynotbethemostappropriatewaytodescribewhatisessentiallyaseamlessanditerativeprocess(seePURCHASINGPROCESS).Theinteractionapproachprefersaviewoforganizationalmarketingas,ineffect,themanagementofbuyer-sellerrelationshipswhereitismoreappropriatetodifferentiateparticipantsintermsofpower,expertise,experience,andculturalaffiliationratherthanbroadorganizationalmembership.Thisapproachalsoemphasizestheimportanceof''ATMOSPHERICS"suchaspersonalobjectivesandexpectations,interpersonalfamiliarity,andlevelsofcooperationanddependenceinunderstandingspecific"exchangeepisodes."Theelementsoftheinteractionapproacharesummarizedintheinteractionmodelwhichisdiscussedelsewhere(seeORGANIZATIONALBUYERBEHAVIOR).Acceptanceoftheinteractionapproachhassignificantimplicationsforthemanagementoforganizationalmarketing.Fouroftheseimplicationsarelistedheretoillustratethepracticalsignificanceofthe

interactionapproach:

andincludeLICENSING,subcontracting,FRANCHISINGaswellasINTERNATIONALJOINTVENTURES.

Inter-firmallianceshavealonghistoryininternationalbusiness.Untiltheearly1980s,theseallianceswerefocusedonmarketentry(seeINTERNATIONALMARKETENTRYANDDEVELOPMENTSTRATEGIES)intoparticularmarketsandwerecommonlybetweenfirmsfromdevelopedeconomymarketsandfirmsorgovernmentagenciesinlessdevelopedorcentrallyplannedeconomies.Insucheconomies,theoptionofdirectinvestmentwasoftenruledoutorwasmadeunattractivebygovernmentrestrictionsregardingforeignownershipandcontrol.Togeneralize,these"traditional"allianceswereameansofexploitingtheWesternorJapanesefirms'existingcapabilities(mostoftentechnologicalknow-how,butalsomarketingandorganizationalskills)andinthissensewereessentiallytactical.Anynewskillsorknowledgegeneratedintheprocessweretypicallylocalmarketspecificandofrelativelylittlevaluetotherestoftheorganization.

Recentyearshavewitnessedtherapidgrowthofvarioustypesofinter-firmalliancesthataremotivatedverydifferently.Therecentwaveofalliancesarenotdevicestoavoidorcircumventgovernmentrestrictionbutameansofgainingnewcapabilities.Theyarecommonlybetweenfirmsfromdevelopedcountryeconomiesandtheirfocusisonglobalcompetitivenessratherthanentryintorelativelyunimportantmarketsinlessdevelopedortheex-commandeconomies.Ofcourse,capabilityacquisitionmayrelatetoaneedtoenter,ortoentermorerapidly,amajororstrategicmarketsuchastheUSAortheEuropeanUnion.Forexample,manyofthealliancesinthetelecommunicationsfieldhavetakenplaceinordertogiveparticipatingfirmsthetechnicalandmarketingcapabilitiestoenterandoperateinthederegulatedUStelecommarket(Pisano,Russo&Teece,1988).Similarly,giventechnologicalchangeanduncertainties,analliancemaygivethefirmanopportunityto"testthetechnicalandmarketwaters"ofneworemergingtechnicalfieldsbeforefull,stand-alone,entry(Mody,1993).Thishas,apparently,beenthestrategybehindmanyalliancesbetweenUSandnon-USfirmsinthemedicaldiagnosticandimagingindustry(Mitchell&Singh,

1992).

Whyshouldfirmsrelyonalliancestogainglobalcompetitivecapability?Theanswertothisquestionliesinthefundamentalnewforcesthatareshapingtheglobalcompetitiveenvironment.Sheth(1992)hascharacterizedtheseforcesintermsoftheemergenceof"borderless"marketsandeconomies.ChiefamongtheseforcesisthetremendousgrowthofscientificandtechnologicalknowledgeandthediffusionofthecapabilitiestocommercializethisvaststockofknowledgenotonlywithintheTriadeconomiesbutalsotoemergingcompetitorsinEastAsiancountriessuchasKoreaandTaiwan.AparticularlyimportantdevelopmentinthetechnologyfieldisrapidgrowthandspecializationwithingenerictechnologiessuchasIT,biotechnology,andnewmaterialswhichhaveawidevarietyofapplications.Technologicalinnovation,increasingly,requiresthefusionofalargenumberofspecialismswithingenericandothertechnologiesandeventechnologicallypowerfulfirmsarenotlikelytopossessallofthesethemselves.Infact,toobtainthefullrangeoftechnicalknowledgeandskillsfirmsmayneedtobuildorenteranetworkofalliances.

AnotherdrivingforcebehindstrategicalliancesisgrowingintegrationineconomicallyimportantregionsnotonlyinEurope(whereintegrationhasprogressedfurthest),butalsoinNorthAmericaandEastAsia.WithinEurope,forexample,theestablishmentofthe"single"markethaspersuadedmanyfirmsofthepotentialmeritofcollaborationthrough,forexample,ajointventureand,frequently,fullmergerandacquisition.Intra-EUcollaborativeventuresnotonlyfacilitategreatercross-penetrationofmarketsacrossEurope,butalso,andmoreimportantly,canassistEuropeanfirmstodeveloppan-EuropeancapabilitiesandmeetUSandJapanesecompetitionmoreeffectively.Atthesametime,firmsfromoutsidetheEU,anxioustocreate"beachheads"intotheEuropeanmarket,formallianceswithEUfirmsinordertoachievethis.

Strategicalliancesraisedifficultmanagementissues.Theyaredouble-edgedinasmuchastheycaneitherbeaneffectiveshortcuttoglobalcompetitivenessorbecomeastrategictraArealisticapproachwouldbetoregardthemasthecontinuationofcompetition"byothermeans."Firmsenteralliancesforselfishreasons.Theyseealliancesasameansofgaining

individualsororganisations,haveneedsforproductsinaproductclassandwhohavetheability,willingnessandauthoritytopurchasesuchproducts...peopleseekingproductsinaspecificcategory"(Dibbetal.,1991).ThisviewisendorsedintheliteratureonMARKETSEGMENTATION,theprocessbywhichoverallmarketdefinitionissubdividedintoidentifiablesetsofbuyerssimilarintermsofdemographic,psychographic,orotherprofiles.

Theprevalentviewis,then,oneofmarketsasunitsofanalysiswithclearlydefinedboundaries.Yetperspectivesofferedelsewheresuggestasomewhatmorecomplexunderstandingofmarkets.Strategicmanagementliteratureoffersanumberoffurtherperspectives,Abell(1980),forexample,proposingathree-dimensionalconceptofmarkets,withthedimensionsascustomergroup(whoisbeingservedwithrespecttofactorssuchasdemographics,userindustry,orbuyerbehavior);customerfunction(what"need"isbeingsatisfied);andtechnology(howthecustomerfunctionisbeingsatisfied).A"market"isconsequentlydefinedbytheperformanceofgivenfunctionsingivencustomergroupsandincludesallthesubstitutabletechnologiestoperformthesefunctions.Suchdefinitionsrecognizethatcompetingsuppliersmaydefineamarketindifferentways,asmayindividualsatdifferentlevelswithinthesameorganization,arecognitionsharedbyDay(1981),whoidentifiestwodifferentperspectivesfordefiningmarkets,topdownandbottomuTopdown,orstrategic,definitionsreflecttheneedsofstrategiststounderstandthecapacityandcompetitivepotentialofthebusinessandspecifymarketsintermsoforganizationalcompetitivecapabilitiesandresourcetransferability.Bottomup,oroperational,definitionsreflectthenarrowertacticalconcernofmarketingmanagersanddefinemarketsintermsofpatternsofcustomerrequirements,usagesituations,and"needs,"whichcanbeservedinmanyways.

AnotherdimensionofmarketdefinitionisapparentintheliteratureonBUSINESS-TO-BUSINESSMARKETING,whereitisrecognizedthattheimportanceofindividualcustomersisoftenconsiderableandtherelevanceofaggregatemarketsthereforelessened.Here,theconceptofa"market"mightrefertoonlyasinglecustomer(seeGrönroos,1989,forfurther

discussionofthis).

Anumberofauthorshavealsoidentifiedadisparitybetweenthewaymarketsaredefinedinmarketingliteratureandinpractice.Jenkinsetal.(1994)eliciteddefinitionsoftheterm"market"fromasampleofmarketingmanagersandfoundthatthemajoritytendedtodefinemarketsintermsofproductsorchannels(e.g.,"thefoodretailmarket"),withonlyaminorityofthesampleofferingdefinitionsintermsofgroupsofconsumers.

Itisacceptedbysomeauthorsatleast,then,thattheunderstandingofmarketsislikelytovarytoagreaterorlesserextentfrommarketertomarketerevenwithinaparticularorganization,significantlyfromorganizationtoorganizationwithsimilarofferings,andradicallyfromsectortosector.Othersfurtherassertthat"themarket,"whetherdefinedintermsofexistingorpotentialcustomers,products,ororganizationalcapabilities,isavolatileconcept,whereboundariesarearbitraryandseldomclear-cut,wheredefinitionsaremulti-dimensional,andwhereperspectivesshiftwithchangingindividual,corporate,anduserviewsofproductofferingsandchangesinthenatureandavailabilityoftheseofferings(seeCurran&Goodfellow,1990;Jenkinsetal.,1994).

Bibliography

Abell,D.F.(1980).Definingthebusiness:Thestartingpointofstrategicplanning.EnglewoodCliffs,NJ:Prentice-Hall.

Curran,J.G.M.&Goodfellow,J.H.(1990).Theoreticalandpracticalissuesinthedefinitionofmarketboundaries.EuropeanJournalofMarketing,24,(1),1628.

Day,G.S.(1981).Strategicmarketanalysisanddefinition:Aninternalapproach.StrategicManagementJournal,2,281299.

Dibb,S.,Simkin,L.,Pride,W.M.&Ferrell,O.C.(1991).Marketing:Conceptsandstrategies(Europeanedn).London:HoughtonMifflinCo.

Grönroos,C.(1989).Definingmarketing:Amarket-orientedapproach.EuropeanJournalofMarketing,23,(1),5260.

Jenkins,M.,leCerf,E.&Cole,T.(1994).Howmanagersdefineconsumermarkets.InM.Jenkins&S.Knox(Eds),Advancesinconsumermarketing.

TheCranfieldManagementResearchSeries.London:KoganPage.

Lee,S.(1991).TheRockwaterstory.DesignManagementJournal,Winter,2228.

MARGARETBRUCE

MicroEnvironment

Theenvironmentofanorganizationisgenerallyviewedascomprisingtwocomponents:theMACROENVIRONMENTandthemicroenvironmentwhich,unliketheformer,consistsofelementsoractivitieswithwhichtheorganizationinteractsdirectlyandoverwhichitcanthereforeexertinfluence,ifnotcontrol.Themajoraspectsofthemicroenvironmentare:competitors;SUPPLIERS;CHANNELSOFDISTRIBUTION;CUSTOMERS;andthemedia(seeMASSMEDIA).

DALELITTLER

Minitab

Minitabisacomputersoftwarepackageusedtoanalyzedata,includingdataobtainedinMARKETINGRESEARCHsurveys.Thecomponentsofthepackageconcerndatainput,datamodification,dataanalysis,presentationofresults,andcommunicationwithotherpackages.TherangeofstatisticalproceduresthatcanbespecifiedisverylargeandincludesalltypesofDESCRIPTIVESTATISTICS,HYPOTHESISTESTING,UNIVARIATEANALYSIS,BIVARIATEANALYSIS,andMULTIVARIATEMETHODS(ANALYSIS).

Bibliography

Miller,R.B.(1988).Minitabhandbookforbusinessandeconomics.Boston:PWS-KentPublishing.

MICHAELGREATOREX

MissionStatement

Themissionstatementisgenerallypresentedasthefirststageinthestrategicplanning(seeMARKETINGPLANNING;STRATEGICPLANNING)process,depictedasconsistingofanumberofstages,althoughitmayinfactbeformulatedatanytime.Greenley(1986)suggeststhatthemissionstatementhasseveralaims,including:toprovidethepurposefortheorganization;toexpressthephilosophythatwillguidethebusiness;toarticulatethevisionofwherethefirmwillbeinthefuture;todefinethebusinessdomain,i.e.,thecustomergroupsandneeds,andthetechnologytobeemployed;andtomotivateemployeesbyprovidingthemwithaclearsenseofpurposeanddirection.Campbell&Tawadey(1992)havedevisedtheAshridgeMissionModelwhichhasfourelements:purpose("whythecompanyexists");strategy("thecommercialrationale"whichembracesthebusinessdomaininwhichthefirmisaimingtocompeteandthecompetitiveadvantagesthatitaimstoexploit);standardsandbehaviors("thepoliciesandbehaviorpatternsthatguidehowthecompanyoperates");andvalues("thebeliefsthatunderpintheorganization'smanagementstyle,itsrelationstoemployeesandotherstakeholders,anditsethics'').Overall,themissionstatementmightbeexpectedtoprovideanswerstothequestionsposedbyDrucker(1973):Whatisourbusiness?Whoisthecustomer?Whatisvaluetothecustomer?Whatwillbeourbusiness?Whatshouldourbusinessbe?Itisbelievedthatthemissionstatementshouldbeaspirationalandprovideasharedsenseofpurpose,therebygivingafocusfortheeffortsofallintheorganization.Ithasvariousaudiences,oftenwithdifferentrequirements,includingcustomers,shareholders,employees,andsuppliers.

However,missionstatementsmayoftenbegeneralandbland,perhapsforfearofprovidingcompetitorswithinformationaboutfuturestrategiesandbecausetheyneedtoappealtodifferentconstituencies.Theymayalsoreflectwhatthecompanyhasbeenorisdoing,ratherthanwhatitintendstodo.

Bibliography

Abell,D.(1980).Definingthebusiness:Thestartingpointofstrategicplanning.EnglewoodCliffs,NJ:Prentice-Hall.Chapter3.

Campbell,A.&Tawadey,K.(Eds),(1992).Missionandbusinessphilosophy.Oxford:Butterworth-Heinemann.Chapter1.

Drucker,P.(1973).Management:Tasks,responsibilities,practices.NewYork:Harper&Row.Chapter7.

Greenley,G.E.(1986).Thestrategicandoperationalplanningofmarketing.Maidenhead:McGraw-Hill.

DALELITTLER

andFord's(1984)furtherworkarguingthatskillinthemanagementofsuchrelationshipscanitselfbecomeastrategicassetandanimportantfactorintheselectionofinterorganizationalpartners.Nevertheless,itisdifficulttoavoidtheconclusionthatresearchintoorganizationalbuyingbehaviorseemstohavebeenlessproductivethanthatintoCONSUMERBUYINGBEHAVIOR,perhapsbecauseorganizationalbuyingishighlycomplex,difficulttocategorize(otherthansimplistically),andexplanationsdependonmanypersonalandcontingentvariables.

Bibliography

Campbell,N.C.G.(1985).Aninteractionapproachtoorganizationalbuyingbehaviour.JournalofBusinessResearch,13,(1),3548.

Ford,D.(1984).Buyer-sellerrelationshipsininternationalindustrialmarkets.IndustrialMarketingManagement,13,(2),May,101112.

Håkansson,H.(Ed.)(1982).InternationalmarketingandpurchasingofindustrialgoodsAninteractionapproach.NewYork:JohnWiley.

Johnson,W.J.&Bonoma,T.V.(1981).Thebuyingcentre:Structureandinteractionpatterns.JournalofMarketing,45,Summer,143156.

Parkinson,S.T.&Baker,M.J.(1986).Organisationalbuyingbehaviour:Purchasingandmarketingmanagementimplications.Basingstoke:Macmillan.

Sheth,J.N.(1973).Amodelofindustrialbuyerbehaviour.JournalofMarketing,37,(4),Oct.,5056.

Turnbull,P.W.(1994).Organizationalbuyingbehaviour.InM.J.Baker(Ed.)(1994).Themarketingbook(3rdedn).London:Heinemann,pp.216237.

DOMINICWILSON

OrganizationalMarketing

Organizationalmarketingcanbethoughtofastheactivityofmarketingbetweenorganizations,asopposedtomarketingbetweenorganizationsandindividualcustomers,usuallyreferredtoasCONSUMERMARKETING.However,suchasimpleclarificationmasksmanyproblemsofinterpretationanddefinition.Forexample,theterm"organization"includesmanygroupswhicharenotprimarilyconcernedwithgeneratingprofit,suchascharities,politicalparties,militarygroups,localsocieties,hospitals,andsoon.

Itisworthhighlightingtwocentralissuesinorganizationalmarketingwhichhaveprofoundimplicationsformarketingandforunderstandingorganizationsmoregenerally.Thefirstissueconcernsorganizationalobjectives(seeSTRATEGICOBJECTIVES),theguidinglightofmarketingactivities.Withtheincreasingrealizationofhowwidelymarketingcanbeappliedtoorganizationalactivities,organizationaldevicescannolongerbethoughtofinquitesuchstraightforwardtermsas"profitmaximization"or"shareholderassetgrowth."Forexample,itisclearthat,atleastinprinciple,charitiesareconcernedwithaltruism,thatorchestrashaveculturalobjectivesthatarmiesaimatenforcement,andthatgovernmentagenciesaredirectedatefficientadministrationratherthangeneratingprofits.Nodoubt,manyoftheseobjectivesarealsoapplicabletoconventionalbusinessorganizationsandtheirconstituentsub-units.Itisimportanttoappreciatethismulti-facetedandoverlappingnatureoforganizationalobjectivesbecausethiskaleidoscopeofobjectivesprovidesthedirectionandmomentumformarketingactivities.

Thesecondissueistheimportanceofunderstandingrelationships(seeRELATIONSHIPMARKETING)betweenorganizationsascontinuinginteractions,ratherthanasanepisodicseriesofencounterswhere"manipulativesuppliers"engagewith"suspiciouscustomers"(Hanetal.,1993).Understandinginterorganizationalrelationshipsascontinuinginteractions(seeINTERACTIONAPPROACH)isimportantnotonlytounderstandingorganizationsbutalsotounderstandingthecompetitiveandstrategicdynamicsofmarkets(Håkansson&Snehota,1989).Whiletheideaofacollaborativeinteractiverelationshipisimplicitintheideaof

marketingasamutuallyadvantageousexchange,asChisnall(1995)pointsout,marketing(moreaccurately"selling")inbusinessmarketshaslongbeenpresentedasanantagonisticzero-sumgamewherethecustomer'sgainisthesupplier'sloss.Thisraisesmanyconceptualandpracticalquestions,notleastofwhichisthedifficultyofreconcilingtraditionalviewsoforganizationalrelationshipsasnecessarilycompetitivewiththe

OrganizationalSegmentation

ThegoaloforganizationalsegmentationistodividealargeorganizationalMARKETintosmallercomponentsthataremorehomogeneouswithrespecttoproductneeds.Griffith&Pol(1994)arguethatsegmentingorganizationalmarketsisgenerallyamorecomplexprocessthansegmentingconsumermarketssince:organizationalproductsoftenhavemultipleapplications,organizationalcustomerscanvarygreatlyfromoneanother,anditissometimesdifficulttodecidewhichproductdifferencesareimportant.

Bonoma&Shapiro(1984)identifyageneralapproachtosegmentation,characterizedbyeaseofimplementation,whichreflectsamajortrendinandcriticismoforganizationalsegmentationstudies.Recently,Dibb&Simkin(1994)havereiteratedthecomplaintthatselectionofsegmentationvariablesisrelatedtotheeaseofimplementationratherthantohowvalidthesegmentsareintermsofgroupingcustomerswithsimilarrequirements.WhileacademicsstressVALIDITY,thepriorityofthepractitionerisoftentoidentifysegmentswhichcanbeeffectivelytargetedwithamarketingprogram.Inarecentsurveyofthevariableswhichindustrialmarketersuseinsegmentation,theresultssuggestthatvariablesarechosenmoreforconvenienceandactionabilitythanforgroupingpurchaserswithsimilarneeds.Thesurveyfoundthatgeographicsegmentationbaseswerethemostoftenusedby88percentofthesample.PSYCHOGRAPHICS,e.g.,purchaserriskperceptions,wereusedbyonly50percentofcompanies,whilethemosttheoreticallysoundandmeaningfulbase,thatofbenefitsegmentation,wasusedbyonly38percentofcompanies(Abratt,1993).Bonoma&Shapiro(1984,259)arguethat:"Clearlyabenefits-orientatedapproachisthemoreattractiveinthetheoreticalsense,butmoredifficultformanagerstoimplement...oftenmanagementandresearchersfaceaninteresting'segmentationtension'betweenthetheoreticallydesirableandthemanageriallypossible."

Whileitisacknowledgedthatanystartingpointforsegmentationshouldbeuserrequirementsintheformofneedsandbenefits(seeMARKET

SEGMENTATIONandSEGMENTATIONVARIABLES),thediscussionherefocusesontheadditionaldescriptorvariableswhichareonlyusedinorganizationalmarkets.Thesehavebeengroupedintomacrovariables,basedonorganizationalcharacteristics,andmicrovariablesbasedondecision-makingcharacteristics.

MacroVariables

Theseincludestandardindustrialclassification(SIC),organizationalsize,andgeographiclocation.SICdescribesanorganization'smaintypeofbusiness,e.g.,forestry,andisoneofthemostcommonvariablesusedtodescribebusinesssegments.Althoughthistypeofinformationisquitesuperficial,itiswidelyavailableinastandardizedandcomprehensiveformandallowsafirmtoassessthepotentialsizeofamarketsegment.WhenusingSICcodes,twocautionsmustbenoted.First,allestablishmentswiththesameSICcodedonotnecessarilyengageinthesameactivities.Forexample,inthegrocerystorecategory,largegrocerystoressellmorethanjustgroceryitems.Second,establishmentsinagivencategorydonotnecessarilyaccountforall,orevenalargeproportion,oftheactivityinthatcategory.

Organizationalsizedataintermsoftotalsalesvolumeornumberofemployeescaneasilybeobtainedandrelatedtoanorganization'sneedforsomeproducts,e.g.,insuranceandhealthcareplanswhichcanbemodifieddependingonthenumberofemployeesinanorganization.However,sizecanbemeasuredinmanyways:totalsize,sizebydivision,sizeandnumberofindividualbranches,salesvalue,assetvalue,othertypesofactivitymeasure,andnumberofemployees,whichcansometimesberelatedtangentiallytopurchaserrequirements.Dickson(1994)describestwo"natural"organizationalsegmentationvariablesasbeingthesizeoftheaccountandgrowthpotentialoftheaccount.Ifanorganizationhasmuchofitsbusinesswitharelativelysmallnumberofclients,itcannothelpbutadoptaRELATIONSHIPMARKETINGapproach.Suchindividualrelationshipsegmentationmakesconsiderationofotherbroadersegmentationvariablessomewhatredundant,butnotallcompaniesareinapositiontoadoptthisrelationshipapproach.

Geographiclocationcanindicatepurchaserneedswhentheindustryitselfisdependentuponthegeographyofthearea,forexample,coalminingand

othernaturalresourceindustries.Purchasingpracticesandexpectationsofcompaniesmayalsovarybylocation,e.g.,in

PersonalInfluence

PersonalSelling

Personalsellingistheprocessofinformingcustomersandpotentialcustomersandpersuadingthemtopurchaseproductsandservicesthroughoralpersonalcommunicationinanexchangesituation,eitherfacetofaceoronthetelephone(seeTELEMARKETING).Itisatwo-waychannelofcommunication(seeMARKETINGCOMMUNICATIONS)whichhasanumberofadvantages:customerscaninquire,discuss,orevenbargain;thereisimmediate,interactiveresponse;acompanycangetfeedback;andthecompanycanrelatetospecificconsumerneeds.Personalsellingaidsinthecultivationofbuyer-sellerrelationships(seeRELATIONSHIPMARKETING),especiallyinorganizationalbuying(seeORGANIZATIONALBUYINGBEHAVIOR).

Thecharacteristicsandpersonalityofsalespeopleisimportant,inparticularbecausepersuasiontechniques,includingtheuseofinducements,mayberelevant.Customersmayseepersonalsellingactivitiesasbiasedandreactnegativelytotheirobligationtolistenandtopersuasiontechniques,etc.Itisanexpensiveformofcommunication,andpotentialcustomersmaynotalwaysbeaccessible.

Personalsellingtakesplaceinthehome,instoresandotherorganizations(i.e.,inbusiness-to-businessinteractions)andinvolvestheSALESFORCEandsalespersonswhoaswellasprovidinginformationmaybeactiveintaskssuchasordertaking,delivery,andmarketresearch.

SeealsoCommunicationsmix;Marketingcommunications;Salesmanagement

Bibliography

Dalrymple,D.J.&Cron,W.L.(1995).Salesmanagement:Conceptsandcases.NewYork:JohnWiley.

Lidstone,J.(1994).InM.J.Baker(Ed.),Themarketingbook(3rdedn).Oxford:Butterworth-Heinemann.Chapter19.

DAVIDYORKE

Personality

Personalityreferstothosecharacteristicsthataccountfordifferencesamongpeopleandarepredictiveoftheirbehavior.Suchdifferencesevolvefromheredity,personalexperience,andenvironmentalinfluence.Personalityincludesintelligencebutisusuallydefinedasaccountingfornon-cognitivebehavior,referringchieflytoemotionalandsocialqualitiestogetherwithdrives,sentiments,andinterestscharacteristicssignificantindailylivingandsocialinteractions.Personalityisusuallydescribedintermsoftraitssuchasself-confidence,dominance,autonomy,deference,sociability,defensiveness,andadaptability.Inunderstandingpersonalityanditsresultingimpactonconsumerproductandbrandchoice,mediapreferences,etc.,variousframeworkshavebeenconsidered;theseincludeHorney'sclassificationofcompliant,aggressive,anddetachedpeople(Horney,1958),andReisman'stypologyoftradition,innerandother-directedpeople(Reismanetal.,1960).Further,numerousresearchinvestigationshavefocusedonconsumerpersonalityandproduct/brandchoice(e.g.,Cohen,1967;Kassarjian,1971;Alpert,1972;Villani&Wind,1975;andKassarjian&Sheffet,1991).

Bibliography

Alpert,M.I.(1972).Personalityandthedeterminantsofproductchoice.JournalofMarketingResearch,9,Feb.,8992.

Cohen,J.B.(1967).Aninterpersonalorientationtothestudyofconsumerbehavior.JournalofMarketingResearch,4,Aug.,270278.

Foxall,G.R.&Goldsmith,R.E.(1994).Consumerpsychologyformarketing.London:Routledge.Chapter6.

Horney,K.(1958).Neurosisandhumangrowth.NewYork:Norton.

Kassarjian,H.H.(1971).Personalityandconsumerbehavior:Areview.JournalofMarketingResearch,Nov.,409418.

Kassarjian,H.H.&Sheffet,M.J.(1991).Personalityandconsumerbehavior:Anupdate.InH.H.Kassarjian&T.S.Robertson(Eds),Perspectivesinconsumerbehavior(pp.281303).EnglewoodCliffs,NJ:Prentice-Hall.

organizationswanttheinformationpresentedinthemediatobefavorable,soastostimulateconsumerdemandfortheirproduct/serviceorcreatefavorableattitudestowardthecompany(e.g.,asaresultofcommunityinvolvement).Manyorganizationswill,therefore,preparepublicitymaterial,i.e.,company-andproduct-orientedinformationandnews,whichismadeavailabletothemediaeditors(andsometimesdirectlytoconsumersandotherinterestedparties),inthehopethatthismayreachthecompany'stargetaudience.However,publicityisgenerallycontrolledbytheMASSMEDIAand,therefore,maybefavorableorunfavorablewithrespecttoacompanyanditsproducts(e.g.,inconsumerreports).

Themainadvantageofpublicityforthereceiver/consumerisitscredibility,typicallyattributedtoanindependentsource.

Bibliography

Dibb,S.,Simkin,L.,Pride,W.&Ferrell,O.C.(1994).Marketing:Conceptsandstrategies(Europeanedn).Boston,MA:HoughtonMifflinCo.Chapter15.

DAVIDYORKE

PurchaseDecisions

PurchaseIntentions

Purchasing

Purchasing(sometimesalsoreferredtoasprocurement)istheprofessionalactivityofbuyinggoodsandservicesonbehalfoforganizations.Inpractice,purchasingtendstobemoreprofessionallyorganizedinlargerorganizationsandcanbequiteinformallyorganizedinsmallerorganizations.Theimportanceofaprofessionalapproachtopurchasingisnowwidelyrecognizedasorganizationspayincreasingattentiontoissues

ofcostandqualitycontrolwherepurchasingcanmakeamajorcontribution.Heinritzillustratestheimportanceofprofessionalisminorganizationalpurchasingatthemacroeconomiclevelbypointingoutthatthecombinedpurchasingofthelargest100UScorporationsamountstoabout10percentoftheentireUSeconomy(Heinritz,1991)clearlyitisimportanttomanagesuchavastresponsibilityinanefficientandprofessionalmanner.Atanorganizationallevel,theimportanceofpurchasingcanbeillustratedbynotingthatinatypicalmanufacturingoperationthereislikelytobeaboutthreetimesasmuchinvestmentinmaterials(dependingoninventoryandproductionpolicies)asthereisinlabor.Thus,equalpercentagereductionswouldreturnmuchgreatereconomiesinpurchasingcoststhaninlaborcosts.Nevertheless,muchgreatermanagerialattentionhasgenerallybeenpaid,historically,toachievingeconomiesinthelaborprocessthaninthematerialsideoforganizationalmanagement.Baily&Farmer(1990)suggestthattheimportanceofpurchasinginanorganizationwillsignificantlyincreasewhenthePRODUCTLIFECYCLEoftheorganization'soutputbecomesshorter(e.g.,computersuppliers),orwhentheorganization'smarketsbecomeparticularlyvolatile(e.g.,TVproductioncompanies),orwhenthecostoftheorganization'spurchasesformaparticularlylargeproportionofitsincome(e.g.,armedforces).Otherfactorslikelytoincreasethesignificanceofpurchasingcouldbesuggested,includingeconomicrecession,increasingcompetition,theintroductionofnewtechnology(reductionsoflaborcoststhroughautomationleaveahigherpriorityonmanagingpurchasingcosts),andlegislationrequiringopentendering(asopposedtoroutinere-ordering).

Bibliography

Baily,P.J.H.&Farmer,D.(1990).Purchasingprinciplesandmanagement(6thedn).London:Pitman.

Heinritz,S.(1991).Purchasing:Principlesandapplications(8thedn).Prentice-Hall.

DOMINICWILSON

PurchasingProcess

ThepurchasingprocessorbuyingprocessinORGANIZATIONAL

MARKETINGhasbeenanalyzedandmodeledasacyclewithvarious"phases"or"stages."Robinson,Faris&Wind(1967)notonlydistinguishedthree"buyclasses"(whichtheyrefertoas"NEW

RegressionandCorrelation

Thepossibilityofarelationshipbetweenapairofvariablescanbeinvestigatedinascatterdiagramwhereeachpairofvaluesisplottedasapointonagraphwheretheaxesareusedtorepresentthevariables.

Simplecorrelationmeasuresthestrengthofarelationshipbetweentwovariables.Ifbothvariablesaremeasuredonmetricscales,thebestmeasureisthesimpleproduct-momentcorrelationcoefficientwhichrangesfrom1to+1.Acorrelationcoefficientnumericallyequalto1indicatesaperfectlinearrelationshipwhileavalueofzeroindicatesnorelationshipatallandvaluesinbetweenindicatetheamountofscatteramongthepointsonthescatterdiagram.Highvaluesofcorrelationcoefficientsindicatestronglinearrelationshipswhilelowvaluesindicateweakrelationships.Apositivecorrelationcoefficientindicatesthathighvaluesforonevariableareassociatedwithhighvaluesfortheother,similarlylowvaluesofthetwovariablesoccurtogether;anegativecoefficientindicatesthathighvaluesononevariableareassociatedwithlowvaluesoftheothervariableandviceversa.

CorrelationbetweenpairsofvariablesmeasuredonordinalscalescanbemeasuredusingmeasuressuchasKendall'stauandSpearman'srankcorrelationcoefficient.

Bivariateregressionmeasuresthe(linear)relationshipbetweenapairofvariables;itfitsthestraightlinetothescatterofpointsthatbestrepresentstheformoftherelationshiOnevariable(Y)isdesignatedasthedependentvariableandtheother(X)istheexplanatoryorindependentvariable.TherelationshipisspecifiedasY=a+b*X+uwhereuistheerrortermthataccountsforthescatterofpointsaroundthestraightlineY=a+b*X.The"leastsquares"methodisthebasisoftheprocedureforobtainingnumericalestimatesoftheparametersaandb(seeJain,1994,pp.166167).

Multipleregressionisanextensionofsimpleregressionwheremorethanoneindependentvariableisusedtoexplainvariationsinthedependentvariable.

Regressionequations,whileusuallylinear,maybenon-linear.Thedependentvariablecouldbethesalesofbeer,theseveralexplanatoryvariablescouldbethepriceofbeer,thepriceofwinesandspirits,beeradvertisingexpenditure,consumers'income,andtemperature,withquarterlydatafortenyearsbeingavailableforeachvariable.Relationshipsareestimatedusingcomputerprograms,e.g.,MINITAB,theSTATISTICALPACKAGEFORTHESOCIALSCIENCESorSPSS,etc.Coefficientsareestimated,t-testsandFtestsareusedastestsofsignificancecoveringindividualvariablesorgroupsofvariables,althoughincomplicatedsituationsthesetestsmaybeapproximateonly.Regressionequationscanbebuiltupusingstep-wisemethodsbasedonappropriatetestprocedures.Regressionisprobablythemostfrequentlyusedstatisticaltechnique.Fittingaregressionequationallowsaresearchertoseetheinfluenceofeachindependentvariableonthedependentvariable;inparticularsomevariablesmaybeseentohavelittleornoeffect.Oncearegressionequationhasbeenobtained,predictionsofthedependentvariablecaneasilybeobtainedgivenvaluesoftheindependentvariables.

Regressionworksbestwhenallthevariablesinvolvedaremeasuredonmetricscales,butcanbeadapted,sometimeswithdifficulty,forusewithothertypesofmeasure.Forinstance,avariablemeasuredonanominalscalecanbereplacedbyseveraldummyvariables.

Mathematicalstatisticianshaveshownthattheleastsquaresestimationprocedurehasoptimalpropertiesundercertainassumptions.Amongtheassumptionsarethattheerrorsareindependentofeachother(noauto-correlation),havezeromeanandconstantvariance(noheteroscedasticity),thereisnorelationshipbetweenthedependentvariablesandtheerrors,andthereisnoexactorverystrongrelationshipbetweenthedependentvariables(nomulticollinearity).Inaddition,itisadvantageousiftheerrorsarenormallydistributed.Thecomputerpackagesusedinestimationhaveteststoseeiftheseassumptionsholdandpartoftheskilloftheuseristoknowwhatvariationofthebasicleastsquarestechniqueisappropriateincircumstanceswhereparticularassumptionshavebeenshowntobeinapplicable.

Econometricianshavedevelopedspecialestimationtechniquesformodelsinvolvinginterdependentvariableswherethereareseveralsimultaneous

relationshipstoestimate.Forinstance,salesmaydependuponprices,advertisingexpenditures,andtheweatherbutatthe

RetailService

Retailingisaserviceindustry.Manycompanieshaverecognizedthatgoodcustomerservicecandifferentiatethemfromthecompetition.Providingagoodserviceisdesirableinthatitmayencouragecustomerstoreturn.Thismayentailenhancingtheshoppingexperiencetomakeitmoreenjoyable,relaxing,andrewarding.

Servicetothecustomercanbeincorporatedintoeveryelementofretailactivityfromtheselectionofgoodsforsaletotheconveniencetothecustomerofstorelocationandopeningtimes.

Inordertoprovidealevelofservicedeemedappropriate,theretailermayengageinextensivestafftraining,provideamodernandcomfortablestoreenvironment,anddeveloppoliciesdesignedtoreducecustomerdissatisfaction,suchasmoney-backguaranteesandeasyexchangeofgoods.

Althoughretailingcanbeseenasaservicesectorindustry,bothgoodsandservicescanbepurchasedfromstores.Recently,financialserviceproviderssuchasbanksandbuildingsocietieshavebeguntoseethemselvesasretailers.

Thecurrentuseofself-servicewithinstorescanbeseenasareductionofcustomerservicealthoughitisnotnecessarilyviewednegativelybyconsumers(Bateson,1985).Conversely,retailersarebecomingadeptatprovidingdifferentformsofcustomerservice,themoreinnovativeofwhichareoftencopiedbycompetitors.Theykeyistofindelementsofservicethatarevaluedbyconsumers.

Bibliography

Bateson,J.E.G.(1985).Selfserviceconsumer:Anexploratorystudy.JournalofRetailing,61,(3),4976.

STEVEWORRALL

RetailStrategy

seeRETAILING

RetailerPatronage

Thisistheadoptionofanoutletorsupplierbyacustomer,especiallyonafrequentbasis.UnderstandingthebasisforstorepatronagemayallowretailerstodeveloptheirMARKETINGMIXsuchthattheyincreasetheirattractivenesstotargetcustomergroups,possiblyraisingmarketshareandprofitability.

Thereasonsforpatronizingagivenstorearemanyandvariedandincludetheconvenienceofstorelocation;previousexperiencewiththestore;reputation;pricing;availabilityandsuitabilityofmerchandise;andwordofmouth.

Inadditiontopatronizingacertainstore,theconsumermaydeveloployaltytowardacertainBRANDorproduct.Thesetwoexamplesofshoppingbehaviorshouldnotbeconfused.

Bibliography

Berman,B.&Evans,J.R.(1995).Retailmanagement:Astrategicapproach(6thedn).Prentice-Hall.

Walters,D.(1994).Retailingmanagement:Analysis,planningandcontrol.Basingstoke:Macmillan.Chapter10.

STEVEWORRALL

Retailers

seeRETAILING

Retailing

Thisembracesthoseactivitiesconcernedwithsellinggoodsorservicestothefinalconsumeroranotherpersonactingonhis/herbehalf.

Retailingneednottakeplaceexclusivelyinashopsetting.Homeshoppingviaaprintedcatalogandmailorderisafirmlyestablishedphenomenon.Lesswidelyavailableistelevision-basedshoppingthroughafiberopticcable,althoughthiscontinuestogrow.Thefutureislikelytoseewideruse

ofcomputer-basedshopping"online"withtheuseofamodemandstandardtelephoneline.

Retailingtakesplaceinmanyforms.Thetypicalexamplesincludeeverydayshoppingforclothingandfood,etc.However,retailingisalsothemethodbywhichweacquiremortgagesorinvestmentpoliciesfrombanksandbuildingsocieties.Itisalsothemediumthroughwhichdentaltreatmentisreceivedandpaidfor;airlineorconcertticketsarebookedoverthetelephoneorthroughanagent;softdrinksareboughtfromvendingmachines.

Althoughhighlyvisibletotheconsumeronthehighstreetorthroughcatalogsandhomeshoppingsystems,theretailindustryisheavily

samplesaredifficulttoselectandexpensiveandtime-consumingtousebutarepreferredbystatisticiansasrulesandformulaederivedbymathematicianscanbeusedtoallowresultsfromthesampletoberelatedtothepopulation.Non-probabilitysamplesarequickerandcheapertoimplementandareoftenpreferredbypracticingmarketresearchers.

Thesamplesizedependsonanumberoffactorssuchastheimportanceofthedecisionandthelevelofaccuracydesired,thenumberofvariables,thevariabilityofthedata,theextentofthedecompositionofthesampleinordertostudysegments,andfinally,afactoroftenoverlookedbystatisticians,theresourcesavailabletotheresearcher.

Thesamplingplaninvolvestheimplementationoftheprecedingdecisionsandleadstotheactualselectionofthesample.Theelementsselectedforthesamplearecontactedandmeasurementstaken.Thisinvolvesasubstantialamountofofficeandfieldwork.Data,concerningallthecasesinthesample,arecollectedtogetherandanalyzed.Theresultsareinterpretedandsuggestionsforactionorfurtherresearcharemadeinareportsubmittedtotheclient.

ProbabilitySamples

Inprobabilitysamples,theprobabilitiesoftheindividualelementsinthepopulationbeingselectedforthesampleareknown.

SimpleRandomSamples

Insimplerandomsampling,alloftheindividualelementsinthepopulationhaveanequalchanceofbeingselectedforthesample.Aframeorlistoftheentirepopulationofinterestisessential.Alloftheelementsintheframearegivennumbersandthenumbersoftheelementswhoaretomakeupthesampleareselectedatrandom,bydrawingfromahat,byusingtablesofrandomnumbers,orbyacomputerusingarandomnumbergenerator.Intelephonesampling,thenumbersareselectedanddialledautomaticallyusingatechniquecalledrandomdigitdialing.

Itisimportanttonotethataninterviewerstandingonthestreetand

subjectivelyselectingpeopleastheywalkpastwillnotobtainarandomsample.Suchsamplesshouldnotbecalledrandomorprobabilitysamplesandcouldbetterbedescribedbyanon-technicaltermsuchashaphazardsamples.

SystematicSamples

Thisisveryclosetosimplerandomsampling.Alistofindividualsoritemsinthepopulationisavailable.Thesamplingfraction(ratioofthedesiredsamplesizetothesizeofthepopulation)isdetermined,say,1in20,thenanumberischosenatrandomintherange1to20,say,8:thenthe8thiteminthelistandeverysubsequent20thitem,i.e.,the8th,28th,48th,68th,etc.individualisselectedforthesample.Thisisarandomsampleforattheoutsetoftheprocesseveryindividualinthepopulationhasanequalchanceofselection.Apossibledangeroccursifthereisacyclicalpatterntothelistthatleadstothesamplebeingunrepresentativeofthepopulation,butthisdangerisusuallyslight.Oneadvantageofsystematicsamplingoversimplerandomsamplingisthatthemechanismofselectingtheindividualsforthesampleissimplertherandomselectionisdoneonlyonceandtheeffortrequiredisless.Anotherpossibleadvantageisthatafullydetailedframeisnotrequired.Forinstance,ifevery20thcustomerpassingastoreisinterceptedandinterviewedasystematicrandomsampleofpeoplepassingbythestorecanbeobtainedwithoutknowingthefullsamplingframe.Thus,forsomepopulations,systematicsamplingcanbeusedinshoppingmallsurveys.

StratifiedSamples

Thepopulationisdividedintostrata(theequivalentmarketingtermissegments,)suchthateveryelementofthepopulationisinpreciselyoneofthestrata.Stratifiedsamplingismostsuitablewhenthereismuchsimilaritybetweentheelementswithineachstratumbutdifferencesbetweenelementsindifferentstratum.Aprobabilisticsample,usuallyasimplerandomsample,isselectedfromeachstratum,thusensuringthateachstratumisadequatelyrepresented.Stratifiedsamplingdiffersfromquotasamplinginthatthesampleelementsareselectedprobabilisticallyratherthanbyjudgementorconvenienceasisthecasewithquotasampling.

Stratifiedsamplescanbeoftwokinds,eitherwithuniformorvariable

samplingfractions.Intheformer,thesizesofthesamplesdrawnfromthestrataareproportionatetothesizesofthepopulationsineachstratum,thususinguniform

questionnaire.Surveymethodsareusuallyclassifiedbymodeofadministration,thethreemainmodesbeingpersonal,telephone,andpostalinterviewing.

PersonalInterviews

Personalinterviewsusuallytakeplaceeitherinthehomeoftherespondentorinapublicplacesuchasthestreetorashoppingmall.

Inface-to-faceinterviewsinthehome,itistheinterviewer'sjobtocontacttherespondent,oftenselectedbytheresearchdirectorusingsomeformofprobabilitysampling(seeSAMPLING),posethequestions,andrecordtheanswers.Lengthyinterviewsarepossibleandtheinterviewercanusephysicalstimuliaspartoftheinterviewingprocess.Therespondentisabletoseekclarificationofconfusingquestionsortermsandtheinterviewerisabletoobservetherespondent,forinstance,toseeifthequestionshavebeenunderstood.In-home,ordoor-to-door,interviewingisexpensiveanditsuseisdeclining.

Streetorshoppingmallinterceptinterviewsarethecommonesttypeofpersonalinterview.Interviewersinterceptpassers-byandeitherquestionthemonthespotortakethemtoanearbyfacilitytoconducttheinterview.Itispossibletogetarandomsampleofpassers-bybyselectingeverynthpasser-by.However,itisunlikelythatthepopulationofinterestwillpassbytheplaceswhereinterviewersarelocated.Forthisreasonmallinterceptsurveysarerarelystatisticallyrepresentativeoftherequiredpopulationsandrelyonquotasamplingprocedurestoensuresomeamountofrepresentativeness.Theyarecheaperthandoor-to-doorinterviewsandittakeslesstimetocompleteaninterceptsurvey.

Indirectcomputerinterviewing,thecomputerpresentsthequestionstoarespondentonascreenandtherespondentusesakeyboardoramousetoanswer.Theseareoftenusedinshoppingmallsoratconferencesandtradeshows.Forsomesurveys,respondentsareselectedbyinterviewersasinothertypesofpersonalinterviewingresearch;inothersurveysthecomputerisplacedinaprominentplaceandinterestedpassers-byselectthemselves

asrespondents.Aswellasfreeingtheinterviewerfromposingthequestionsandrecordingtheanswersandreducingdatainputtingtimeandexpenses,thismethodhasanextraadvantageinthatinterviewerbiasislow.

TelephoneInterviews

Telephoneinterviewers,stationedatacentrallocation,presenttheirquestionsusingthetelephonetointervieweesoverawidearea.Computer-assistedtelephoneinterviewing(CATI)isgrowingquickly.Asinothercomputerassistedinterviewingmethodsthequestionnaireisprogramedintothecomputer.Theinterviewerreadsthequestionsfromthescreenandrecordstheanswersdirectlyintothecomputer.Thecomputercanbeprogramedtomakethecalls,forinstanceusingrandomdigitdialing,andsubsequentrecallscanbemadewheninitialcallsareunanswered.

Flexibilityisthemainadvantageofcomputer-presentedquestionnaires.Thequestionscanbevariedaccordingtoearlieranswers,e.g.,buyersofabrandmaybeaskedonesetofquestionsandnon-buyersadifferentset.Also,orderproblemscausedinsomeclosedquestionswherepossibleanswersarepresentedtorespondentscanbeavertedbythecomputervaryingtheanswersfromrespondenttorespondent.

Lowcostandthespeedwithwhichasurveycanbecarriedoutaretwootheradvantagesoftelephoneinterviews.Interimresultsandupdatesareeasytoobtainasthedataarerecordedimmediately.Interviewerbiasislow,respondentscanfeelthattheiranonymityhasbeenmaintained,andsensitivequestionscanbeposedwithlessembarrassmentthaninface-to-faceinterviews.Ontheotherhand,itisdifficulttousephysicalstimuliaspartoftheinterviewalthoughtheuseoffaxmachinescaneasethisproblem.Thefactthatnoteveryhouseholdhasatelephone,thatsomenumbersareex-directory,andthatanindividualmemberofalargehouseholdhasasmallerchanceofbeingchosenthanamemberofasmallhousehold,meansthatasamplemaynotbetrulyrepresentativeofaspecifiedpopulation.

PostalSurveys

Questionnairesaredeliveredtotherespondentswhoreturncompletedquestionnairesbyposttotheresearcher.Postalinterviewsarewidelyused.Theyallowalargesampletobecontactedverycheaplyandtheabsenceof

aninterviewercutsoutinterviewerbias.Ontheotherhand,complexquestionnairesareunsuitableandthequestionnairehastobe

andinternationalmarketingenvironment92

andmarketingstimuli30

andresearch33,107,146

theories14

seealsobuyerbehaviormodels;buyerbehaviortheories

consumerdecision-makingprocess302

andbuyerinvolvement31

andcommunication

andinformationevaluation31

andinformationsearch30

jointdecision-making29

andperceivedrisk1523

andpost-purchaseevaluation31

andproblemrecognition30

andpurchasedecisions31,33

seealsoaffectivestage;cognitivestage;conativestage

consumergroups29

consumerlearning32,167

cognitivetheories32

andstimulus-responsetheory14,32

stochasticmodels14

consumermarketing33

andbusiness-to-businessmarketing12,33

consumermotivationseeconsumerneedsandmotives

consumerneedsandmotives334

andchangingperceptions345

anddecision-makingprocess30,152

andexpectationsofquality219

andlifestyles108

andmarketsegmentation116

andmarketing119,128

andmarketingconcept122

andMaslow'shierarchyofneeds33,173

andnewproductdevelopment140

andrational/irrationalmotives34

consumerpanels34,133,144,164,203

advantages34

disadvantages34

consumerperceptions32,345,111,144

andadvertising2

andawareness6

consumerprotection29,35,106

ConsumerProtectionActof1987(UK)35

consumerism356

andconsumers'BillofRights35

andgreenissues4,36,228

andmarketingconcept35,36

andsocialclass227

andsocialresponsibility228

andsocietalmarketing119

Consumers'Association(UK)36

contingencyplanning36,155,248

seealsouncertainty

continuousinnovation36,50,79,166

dynamicallycontinuous167

seealsodiscontinuousinnovation;innovation;productinnovation

contribution367,112

seealsogrossmargin;profit

conviction2,37,42,75

andaction37

seealsoaffectivestage;DAGMARmodel;hierarchyofeffectsmodel

Cool,K.22

Cooper,R.47

Cooper,R.G.26,140,141

Copulsky,J.R.185

copyright,andlicensingagreements107

corecompetencies

andcompetitiveadvantage22,234

andinternalaudit81

andsourcingdecisions150

corestrategy71

corporategovernance

andmarketing128

andretailbuying187

corporatestrategy378

andcompetitivestrategy37

definition37

andmarketingstrategy132

andpricing159

andretailbuying186

andstrategicbusinessunitstructure233

andstrategiccontrol234

seealsodirectionalmatrix

correlationseeregressionandcorrelation

cost38

variable38,74,112,159

seealsofixedcosts

cost-benefitanalysis

andPareto'srule157

andutilitarianethics125

cost-effectiveness

ofadvertising5,19,134,181,244

ofinboundcommunications78

ofoutboundcommunications149

ofpersonalselling5,17,19

ofservicequality215

ofsponsorship230

oftelemarketing5,19

costleadershipstrategy38,48,68

focused/broad38

costperthousand38,134,157

Cottam,A.209

coupons40,197

Cowell,D.W.213

creativecontent39

criticalincidentsseeserviceencounters

Crittenden,V.L.77

Cronbach'salpha182,186

Cronin,J.J.221

Crosier,K.118,119,122,130

cross-subsidization171

cross-tabulations3940

andbivariateanalysis8,45

andcomputersoftware25

seealsomarketingcommunications

Culliton,J.W.126

culturalenvironment40,55

andinternationalmarketing89,90

seealsoculture;environmentalanalysis;macroenvironment;marketingenvironment

culture401

changesin41

characteristics40

andconsumerbuyerbehavior30

corporate47

definition8990

anddemographics44

andglobalization71

andsubcultures41

seealsoculture,organization;internationalmarketingculture

culture,organization

andbuyingbehavior145

andmarketing128

manufacturers'brands(e.g.,Heinz)anddistributors'brands(e.g.,Safeway),andloyaltymayprevailwithrespecttostores.

Definitionsofbrandloyaltyhaveevolvedandaretypicallyconcernedwithadegreeofconsistencyinthepreferenceforeachbrandbyaconsumer,overaspecifiedperiodoftime.Somedefinitionsalsoreferto"biasedchoicebehavior"withrespecttobrandedmerchandise,or"consistent"purchasingofonebrand,ortheproportionofpurchasesaconsumer(orhousehold)devotestothebrandmostoftenbought.Thereareinherentdangersinlookingatsequencesofpurchasestodefineandmeasureloyaltyasindividualsandhouseholdsmaybebuyingmorethanonebrandonaregularbasis(e.g.,toothpaste,breakfastcereals).

Further,Day(1970)offersatwo-dimensionalconceptofbrandloyalty,bringingtogetherattitudesandbehavior.Heasks"Canbehaviorpatternsbeequatedwithpreferencestoinferloyalty?,"anddistinguishesbetweenspuriousandintentionalloyalty.Spuriousloyaltymayjustbehabitorconsistentpurchaseofonebrandduetonon-availabilityofothers,continuouspricedeals,bettershelfspace,etc.Intentionalloyaltyoccurswhenconsumersbuyapreferredbrand,aswouldbeevidencedbysomeattitudemeasurement.Whenaconsumerisintentionallyloyalandinsistsonaparticularbrand,heorshewillbepreparedtoshoparoundforthisbrand,ordeferpurchaseifthebrandisunavailableratherthanacceptasubstitute.

Researchhasbeenunabletopinpointparticulardeterminantsofbrandloyalty,thoughanumberofempiricalinvestigationshavesuggestedandlookedforrelationshipsbetweenbrandloyaltyand:personalattributes,e.g.,socioeconomicvariables;groupinfluence;levelsofdemand;sensitivitytopromotion;andstorefactors.

Nevertheless,manufacturersanddistributorsareconcernedtoencourageloyaltytotheirbrandsandswitchingawayfromotherbrands.Consumersswitchbrandsforreasonsof:curiositywithrespecttonew/differentbrands;disappointmentwithpresentbrand;reassurancewithrespecttoafavoredbrand;chance;inducement;andavailability.Additionally,consumersmaybemulti-brandbuyersforreasonsof:indifference;perceptionthatbrands

areperfectsubstitutes;forvariety'ssake;severalpreferenceswithinahousehold;andasaresponsetoavailabilityandpromotions.

Bibliography

Carmen,J.M.(1970).Correlatesofbrandloyalty:Somepositiveresults.JournalofMarketingResearch,7,Feb.,6776.

Day,G.S.(1970).Buyerattitudesandbrandchoicebehavior.Chicago:FreePress.

Jacoby,J.&ChestnutR.(1978).Brandloyalty:Measurementandmanagement.NewYork:Ronald/JohnWiley.

BARBARALEWIS

BrandManagers

seeMARKETINGORGANIZATION

BrandPreference

seeBRANDLOYALTY

Branding

seeBRAND

Break-EvenAnalysis

Abreak-evenanalysisismeanttoidentifythebreak-evenpoint,i.e.,thepointintimeatwhichthesumoffixed(or"indirect")costsandvariable(or"direct")costsinvolvedintheproductionanddistributionofagoodorserviceismatchedbythesumofitsaccumulatedsales.Thebreak-evenpointcanbecalculatedbyusingthefollowingformula:

break-evenpoint=fixedcost/(pricevariablecost)

Beyondthisbreak-evenpointtheprofitabilityofthegoodorservicewillbeafunctionoftheexcessofsalesrevenuesovervariablecosts.Break-evenanalysisisanimportantaspectofPRICINGcalculationsinthatitcanhelptoshowtheprofitabilityofaproductovertimeaccordingtodifferentassumptionsaboutprice,demand,andtheallocationofcosts(manycosts,

especiallyfixedcosts,willbesharedbyseveralproductsandallocationcanbeproblematic).Thedifficultyofanticipatingdemandresponsetodifferentpricingpoliciesemphasizes

ketingandPurchasing(IMP)Group(Håkansson,1982&1987;Ford,1990).ThisrecognitionhasledtothedevelopmentoftheINTERACTIONandNETWORKapproachestobusiness-to-businessmarketing,wheretheroleofMARKETINGMANAGEMENTisseenintermsofthemanagementofarangeofindividualbuyerrelationshipsinthecontextofabroadernetworkofinterconnectedsupplier,buyer,andcompetitororganizations.

Thevariousdifferencesinemphasisbetweenbusiness-to-businessmarketingandconsumermarketinghaveledtoattemptstodevelopthescopeoftheMARKETINGCONCEPTandtoreappraisesuchmarketingtoolsastheMARKETINGMIX,whichisseenasinappropriateinitstraditionalform.

SeealsoMarketing;Marketingconcept;Marketingmanagement;Marketingmix;Relationshipmarketing

Bibliography

Alexander,R.S.,Cross,J.S.&Cunningham,R.M.(1961).Industrialmarketing.Homewood,IL:Irwin.

Chisnall,P.M.(1989).Strategicindustrialmarketing(2ndedn).Prentice-Hall.

Ford,D.(Ed.)(1990).Understandingbusinessmarkets:Interaction,relationships,networks.London:AcademicPress.

Gross,A.C.,Banting,P.M.,Meredith,L.N.&Ford,I.D.(1993).Businessmarketing.Boston:HoughtonMiffinCo.

Håkansson,H.(Ed.)(1982).Internationalmarketingandpurchasingofindustrialgoods:Aninteractionapproach.Chichester:JohnWiley.

Håkansson,H.(Ed.)(1987).Industrialtechnologicaldevelopment:Anetworkapproach.London:CroomHelm.

Johnston,W.J.&Bonoma,T.V.(1981).Thebuyingcenter:Structureand

interactionpatterns.JournalofMarketing,45,Summer,143156.

Reeder,R.R.,Brierty,E.G.&Reeder,B.H.(1991).Industrialmarketing(2ndedn).EnglewoodCliffs,NJ:Prentice-Hall.

Robinson,P.J.,Faris,C.W.&Wind,Y.(1967).Industrialbuyingandcreativemarketing.Boston:Allyn&BaconInc.

Webster,F.E.Jr(1991).Industrialmarketingstrategy(3rdedn).NewYork:JohnWiley.

FIONALEVERICK

Buy-Feel-LearnModel

Thebuy-feel-learnmodelinMARKETINGCOMMUNICATIONSsuggeststhatinsomesituationsbuyers/customersdonotfollowthelogicalLEARN-FEEL-BUYsequence.TheBFLmodeltypicallyappliestoIMPULSEPURCHASINGand/orfornewbrands,whereattitudes,knowledge,andliking/preferencearedevelopedafterpurchaseratherthanpriortoit.

SeealsoFeel-buy-learnmodel;Learn-feel-buymodel

Bibliography

DAVIDYORKE

BuyerBehaviorModels

ParalleltothedevelopmentofthoughtaboutthevariablesthatareimportantinunderstandingCONSUMERBUYERBEHAVIORhavebeenattemptstoorganizethevariablesintomodelsofthebuyingprocessand

consumerbehavior.Thepurposeofsuchmodelsistotrytounderstandthebuyingprocessandaidmarketresearch.Modelsservetosimplify,organize,andformalizetherangeofinfluenceswhichaffectpurchasedecisions,andtrytoshowtheextentofinteractionbetweeninfluencingvariables.Somemodelsaredescriptiveandothersdecisionmodels.

Descriptivemodelsaredesignedtocommunicate,explain,andpredict.Theymaypostulateatamacrolevelsomevariablesandtherelationshipsbetweenthem(e.g.,sales,income,price,advertising);or,atamicro-level,considermoredetailedlinksbetweenavariableanditsdeterminants(e.g.,theeffectofadvertisingonsales).Inaddition,amodelatamicro-behaviorallevelmaycreatehypotheticalconsumersanddealerswhointeractwithresultingbehaviorpatternsbeinginvestigated.Thewell-known,available,modelsofconsumerbuyerbehavioraredescriptiveandincludethoseofHoward&Sheth(1969),Nicosia(1966),Andreasen(1965),

forthemarketertodefinethetargetgroups,tosetobjectivesforeach,andtoevaluatethemostcost-effectivemeansofreachingthetarget(s)andattainingtheobjectives.Adifferentmix,forexample,wouldbeemployedatdifferentstagesofthePRODUCTLIFECYCLE.Asimilarsituationexistsforproductsorservicesofhighorlowvalue(wherethedegreeofPERCEIVEDRISKinthetarget'smindwillvary)anddependingonwhetherthetargetgroupisconcentratedordispersed.

SeealsoMarketingcommunications

Bibliography

Crosier,K.(1994).InM.J.Baker(Ed.),Themarketingbook(3rdedn).Oxford:ButterworthHeinemann.

DAVIDYORKE

CommunicationsResearch

CommunicationsresearchisaimedatoptimizingtheeffectivenessofcommunicationsthroughexanteandexpostevaluationsofdifferentelementsoftheCOMMUNICATIONSMIX.ADVERTISINGeffectivenesstendstoreceivemoreemphasisbecauseitusuallycommandsmuchhigherexpendituresthanotherelementsofthecommunicationsmix.Pre-testing(beforethecommunicationisusedonthepublicatlarge)maybeemployedtoassessreactionstodifferentformsofthecommunicationinordertoidentifytheversionwhichislikelytoyieldthemostfavorableresponse.Avarietyofresearchtechniquesmaybeemployed,rangingfromthe

gatheringandanalysisofattitudestolaboratorytestsusingequipmenttomeasurephysiologicalresponses,suchaspupildilation,heartbeat,andbloodpressure.Post-testingcanincludeevaluatingconsumers'abilitytorecallortorecognizecommunications(generallyadvertisements).

Therelationshipbetweensalesandexpenditureoncommunicationsismuchmoredifficulttoascertain.However,bytheuseofcarefullydesignedexperiments(seeEXPERIMENTATION)itmaybepossibletomeasurethesaleseffectof,say,advertising.Forexample,DuPont'sPaintDivisiondividedits56salesareasintohigh,average,andlowMARKETSHAREterritories.Inonethird,DuPontallocatedthenormalamounttoadvertising;inanotherthird,itallocatedtwoandahalftimestheamount;andinthefinalthird,fourtimesthenormalamount.Theexperimentsuggestedthatanincreasedspendonadvertisingincreasedsalesatadiminishingrate,andthatthesalesincreasewasweakerinDuPont'shighmarketshareterritories(Buzzell,1964).Otherresearchoneffectivenesshasattemptedtoidentifyanhistoricalrelationshipbetweensalesand,forexample,theexpenditureonadvertisingusingadvancedstatisticaltechniques.

Generally,though,therearesignificantdifficultiesinassessingtheimpactofcommunicationsonsales.First,withoutcarefullycontrolledexperimentation,onecannotconcludethatthereisanydirectlinkbetweenthecommunicationandthesales/profitssecured;therearetoomanyothervariablesinvolved.Evenifalltheextraneousvariablesarecontrolled,theremightstillbesomeexternalinfluence,unthoughtofbytheexperimenters,thatmayaffecttheresults.

Secondly,thefullimpactofthecommunicationmaybespreadovertime.Takingthecaseofadvertising,somepeoplewhoareacquaintedwiththeadvertisingintheearlystagesofthecampaignmayreactquickly;othersmay,forvariousreasons,delayaresponse.Afurthergroupofpeoplemaynotlearnoftheadvertisingforsometimeafteritstarts.Inthesameway,thefulleffectsofreducingorstoppingadvertisingmaynotbecomeapparentforsometime;theremaywellbea"carryover"effect.Thus,whenconsideringtheimpactofadvertisingatanygiventime,itispossibletohaveadistortedpictureofitsgeneraleffectiveness.Itmaywellbethatthereisasteepriseinsalesstemmingfromtheadvertising,butthismaybe

becausetheadvertisinghasbroughtforwardsalesthat,initsabsence,wouldhavebeenmadesometimeinthefuture;sothetotalsalesmaybeunaffected.Ofcourse,thismaywellbewhattheadvertiserdesiredasheorshewillhavetheadvantageofobtaining,perhaps,ahighermarketshare(and

soundcorporatestrategywillbeinformedbyaclosemonitoringoftheevolvingrequirementsofthevariousconstituenciesthattheorganizationhastosatisfy,andinparticularofitsexistingandpotentialcustomertargets.

Bibliography

Andrews,K.(1971).Theconceptofcorporatestrategy.Homewood,IL:Irwin.

Chandler,A.D.(1962).Strategyandstructure.Cambridge,MA:MITPress.

DALELITTLER

Correlation

seeREGRESSIONANDCORRELATION

Theproductionanddistributionofanygoodorserviceinvolvescostswhichwillvaryoverthelifecycle(seePRODUCTLIFECYCLE)ofthegood/service.Thesecostscanbedividedintofixedcostsandvariablecosts.Fixedcostsarethosewhichareincurredinorderforproductiontotakeplaceandsoare,broadlyspeaking,notdirectlyrelatedtothevolumeofactualproduction(e.g.,costsofR&D,premises,productionassets,basicworkforce),whereasvariablecostsarethosewhichvarydirectlyinproportiontothelevelofactualproduction(e.g.,costsofmaterialsandenergy).Investmentincapitalassets(andthereforetheleveloffixedcosts)isgenerallyhigheratthestartofaproduct'slifecyclethantowardtheend.Itcansometimesbeverydifficulttoidentifythecostsofaproductunambigously,especiallywherefixedcostsaresharedbyawiderangeofproductsatdifferentstagesoftheirlifecycles.Corporateaccountingpolicies(e.g.,indepreciationandassetvaluation)canalsoaffectcostcalculations.However,assessingcostsisobviouslyacrucialpartofassessingprice,despitethemanyproblemsinvolved.

Bibliography

Shim,E.&Sudit,E.F.(1995).Howmanufacturerspriceproducts.ManagementAccounting,76,(8),Feb.,3739.

DOMINICWILSON

CostLeadershipStrategy

ThisisoneoftheGENERICSTRATEGIESproposedbyPorter(1980)(seeCOMPETITIVESTRATEGY).Companieshavingthelowestcostsshouldbeinastrongpositionwithregardto:competitors,becausetheywillalwaysbeabletoundercutthem,whiletakingadvantageofahighermargintoinvestinincreasingmarketshare,newproductdevelopment,andothercorporatedevelopmentpolicies;suppliers,becausetheycanmoreeasilyabsorbincreasesincosts;customers,becausetheyareabletorespondtodemandsforlowerprices;andsubstitutes,becausetheywillbebetterabletoreacttothemintermsofcost.Inordertobeacostleader,thecompanymusthavelowoverheads,behighlyefficient,andgenerallynotdirectresourcestoactivitieswhichareseenasbeingextraneoustoachievingcontinuedlowestcost.Companiesmayfollowafocusedcostleadershipstrategyaimedatparticularcustomersormarketsegments(seeMARKETSEGMENTATION),orabroadmarketcostleadershipstrategy.Thereareriskstotheemphasisoncostleadership,inparticularthebasesofcustomerchoicemaymovetowardNON-PRICEFACTORSandtechnologicalchangemayshifttheCOMPETITIVEADVANTAGEtorivals,includinglateentrants.

Bibliography

PorterM.E.(1980).Competitivestrategy:Techniquesforanalyzingindustriesandcompetitors.NewYork:FreePress.Chapter2.

DALELITTLER

CostPerThousand

Mediaefficiencyisusuallymeasuredintermsofthecostperthousandexposuresamongmembersofthetargetaudience(viewers,listeners,readers).However,thisisoftentoosimple.Thetargetaudiencemayuseavarietyofmediaand,thus,combinationsofmediamustbeconsideredinarrivingatanefficientMEDIASCHEDULE.Unfortunately,evenwithsix

media,anychoiceofthreewillinvolve20potentialdifferentcombinations.ComputermodelsassistinMEDIAPLANNING.

usedtocomparevariablesmeasuredonnominalscalesorevenvariablesmeasuredonintervalscaleswherethecasesaregroupedintoclasses.Attheotherextreme,simplecorrelationandregression(seeREGRESSIONANDCORRELATION)isusefulfordatameasuredonintervalscales.Ifonevariableismeasuredonanominalscaleandtheotheronanintervalscale,thenominalvariablecanbeusedtosplitthesampleintosubsamples,andarithmeticmeansfortheothervariablecanbecalculatedtoenablethesubsamplestobecompared.GRAPHICALREPRESENTATIONSsuchasscatterdiagrams,barcharts,etc.areusefulaidsinbivariatestatisticaldescription.

ThemethodsofMULTIVARIATEMETHODSANALYSIS,includingthosemethodswhichrequireanunderstandingofstatisticalinferenceformaximumappreciation,canbeusedinadescriptive,explorativeway.Methodssuchasmultipleregression(seeREGRESSIONANDCORRELATION),DISCRIMINANTANALYSIS,FACTORANALYSIS,CLUSTERANALYSIS,CONJOINTANALYSIS,andMULTIDIMENSIONALSCALINGareavailableincomputeranalysispackagestohelptheresearcheranalyzethequantitativedataonmanyvariablesobtainedinsurveys.

Bibliography

Tull,D.S.&Hawkins,D.I.(1987).Marketingresearch:Measurementandmethod(4thedn).NewYork:Macmillan.Chapters12&13.

MICHAELGREATOREX

Design

Theterm"design"coversawiderangeofactivitiesarchitecture,interiordesign,graphicdesign,industrialdesign,andengineeringdesign.Designersusuallyspecializeinoneofthesedisciplines.Alldesigntermsinvolvethecreativevisualizationofconcepts,plans,ideas,andtherepresentationofthoseideas(assketches,blueprints,models,orprototypes)soastoenablethemakingofsomethingthatdidnotexistbefore,ornotquiteinthatform.

Marketingmanagerstendtoregarddesignasatooltodifferentiateproducts,toenticeconsumerstobuy;andconsumerswantthedesigntosatisfyagivenneedfun,function,price,etc.

Also,designisreferredtoas"theprocessofseekingtooptimisecustomersatisfactionandcompanyprofitabilitythroughthecreativeuseofmajordesignelements(performance,quality,durability,appearanceandcosts)inconnectionwithproducts,environments,informationandcorporateidentities"(Kotler&Rath,1984).Designactivitiesleadtothecreationofnewproductsorservices,newpacks,corporateidentities,andadvertisements.Itisdesignthattakesthevaluesoftheorganizationandtheideasabouttheproductorserviceandtransformstheseintothedesiredartifacts.TocommunicatetheBodyShop'smissionstatement,"Wewillbethemosthonestcosmeticcompany,"thishastobetranslatedintoastrategyfordesignintermsof:acorporateidentityprogram,theproductpresentation,thelabelingandcontainerdesign,andtheretailoutlets.

Mountingevidencesupportsthecasethatinvestmentindesignexpertisecontributestocommercialperformance(Lorenz,1986;Walshetal.,1992).Walshetal.(1992)carriedoutaninternationalstudyofdifferentindustries,rangingfromelectronicstofurniture,toassesssystematicallytheeconomiceffectofdesigninvestmentonbusinessperformance.Theresultsofthestudyshowedthatdesigninvestmentmadeapositivecontributiontobusinessperformance,butonlyifthedesignresourcewaswellmanagedandintegratedwithothercorporateactivities,notablymarketingandproduction.Anotherstudyofover200Britishfirmsfoundthatinvestmentindesignpositivelyinfluencedprojectperformance.Over90percentofproductslaunchedintothemarketachievedprofitabilityandareturnoninvestmentwithinashorttimeframe(average15months).Criticalfactorsaffectingprojectoutcomeweretop-levelcommitmenttodesigninvestmentandtheabilityofmanagers,particularlymarketing,toliaiseeffectivelywiththedesignresource(Potteretal.,1991).

Bibliography

Kotler,P.&Rath,G.A.(1984).Apowerfulbutneglectedstrategictool.JournalofBusinessStudies,5,(2),1621.

Lorenz,C.(1986).Thedesigndimension.Oxford:BasilBlackwell.

Potter,S.,Roy,R.,Capon,C.,Bruce,M.,Walsh,V.&Lewis,J.(1991).Thebenefitsandcostsof

BARBARALEWIS

DirectMail

DirectmailisapartofDIRECTMARKETINGand,specifically,isADVERTISINGthatissentdirectlytothemailingaddressofatargetcustomer.Thus,itofferstheadvertisertheopportunityforhighaudienceselectivityandTARGETING,andwide-ranginggeographicflexibility.Itcanbepersonalized(viaindividualletters)butmuchdirectmarketingiseitherlackinginpersonalizationorispersonalizedwithcomputerfill-ins,leadingtoa"junkmail"appearance.

Evidenceofthegrowthofdirectmailisseeninthe:generationandsale/purchaseofcomputer-basedmailinglists,i.e.,databases(seeDATABASE),sothatdirectmailmessages(seeMESSAGE)maybecarefullytargetedtocreateconsumerAWARENESSand/ortogenerateACTION;thegrowthofspecializeddirectmailagencies(seeAGENCY);andtheincreasingmarketingorientationofthepostalserviceswithvariousincentivediscounts.

Bibliography

DAVIDYORKE

DirectMarketing

DirectmarketingissometimesconfusedwithDIRECTMAIL.Itisnotamediumbutamarketingtechnique,comprisinganinteractivesystemofmarketing,whichusesoneormorecommunicationsmedia(directmail,print,telephone,i.e.,TELEMARKETING,broadcast)forthepurposeofsolicitingadirectandmeasurableconsumerresponse.Itsobjectiveisto

makeasaleorobtainasalesleadenquiry.

Computersareanindispensabletoolindirectmarketing,inparticularingeneratingpersonalizeddirectmailsources.Indeed,thesuccessofdirectmarketingdependsontheacquisitionandmaintenanceofaDATABASEofcustomersorpotentialcustomers.

Thegrowthofdirectmarketinghasbeenstimulatedbysocio-economicchanges(e.g.,anagingpopulation,single-personorsingle-parenthouseholds,andworkingwomenwithlessshoppingtime),theincreasinguseofcredit,aconsumerconvenienceorientation,risingDISCRETIONARYINCOME,anddevelopingcomputertechnologyandcommunicationsmedia.

Bibliography

Schiffman,L.G.&Kanuk,L.L.(1991).Consumerbehavior(4thedn)pp.292294.Prentice-Hall.

DAVIDYORKE

DirectionalMatrix

Thissummarizesthemajorgrowthstrategies.AsdefinedbyAnsoff(1965),itconsistsoftwoparameters:marketsandtechnologies,subdividedaccordingtowhetherornottheyare"new"or"existing."Thequadrantsare:marketpenetration(existingmarketsandtechnologies)withtheaimbeingtoincreasevolumesalesthrough,forinstance,highermarketshareorgreaterpercapitaconsumptionfrom,forexample,newusesfortheproduct;NEWPRODUCTDEVELOPMENT,involvingtheintroductionofproducts

basedonnewtechnologiesintoexistingmarkets;marketdevelopment,whichinvolvesextendingthegeographicalreachofexistingproducts;andDIVERSIFICATION,theintroductionofproductsbasedonnewtechnologyintonewmarkets.Itisobviousthatthelaststrategyisthemostriskyoption.Althoughoverlysimplisticandgeneral,theframeworkmaybeusefulforpractitionerswhenformulatingspecificdevelopmentstrategies.Itdoesnotdrawthedistinctionbetweenorganic,orinternal,development,andexternaldevelopmentthroughmergersandacquisitions.

SeealsoCorporatestrategy

theactionofvoluntarilytransferringownershipofaproductorservicetoanotherinreturnforanotherobjectdeemedtobeequivalentinvalue.Widerdefinitionsofthescopeofexchangemightnotseepaymentasanecessaryconditionorindeedmightnotrestrictthescopeofexchangetotwopartiesortoproductsandservices.ThedebateisparalleledbythatonthenatureandscopeofmarketingitselfandiswellsummarizedinBagozzi(1975).

Bibliography

Bagozzi,R.P.(1975).Marketingasexchange.JournalofMarketing,39,(4),Oct.,3239.

FIONALEVERICK

Exhibitions

ExhibitionsortradeshowsareanelementinthemarketingCOMMUNICATIONSMIXandareused,primarily,forORGANIZATIONALMARKETINGandareusuallyindustryspecific.Theyaredesignedtopromotesupplierorganizationsandtheirproducts/services,identifyprospectivecustomers,andareintegraltobuildingrelationships(seeRELATIONSHIPMARKETING)withexistingcustomers.

Theirsuccessisoftenevaluatedintermsof''numberofenquiriesreceived"attheevent,asothermeasuressuchas"ordersplaced"maytakeplaceaftertheexhibitionortradeshow,andinanycasemaybeareflectionofothercommunicationactivities.

Bibliography

Bonoma,T.V.(1983).Getmoreoutofyourtradeshows.HarvardBusinessReview,61,7583.

DAVIDYORKE

ExistingDemand

seeDEMAND

ExperienceCurve

Theexperiencecurveisacompositeofseveralfactorsincluding:thelearningcurve,firstobservedintheUSaircraftindustryinthe1930s,bywhichworkersbecomemoreefficientwiththenumberoftimestheyrepeatatask;economiesofscale;thesubstitutionofmoreefficientfactorsofproduction;andthegeneraluseoftechnologicaladvances.Byplottingunitcostsagainstcumulativeproduction,adownwardslopingexperiencecurveisproduced.Itissuggested(Hedley,1976)thatunitcostsdeclineby20to30percentforeachdoublingofcumulativeproduction,butonlythroughorganizationsactivelyseekingtocapitalizeonexperiencecurveeffectsby,forexample,investinginlabor-substitutingtechnologies.

TheexperiencecurveunderpinstheBCGmethodologyforbusinessPORTFOLIOANALYSIS(seeBCGMATRIX)andresultsinanemphasisonstrivingtoachievemaximumMARKETSHARE(sincethissuggestsgreatercumulativeexperience).However,thestrategicimplicationsoftheexperiencecurvecanbequestioned(seePorter,1979).Forinstance,afirm'smarketsharedominance,andthereforeitsallegedgreaterexperience,canbeunderminedbysuperiorinnovativetechnology,whilelaterentrantstoanindustrycanpurchaseplantandequipmentwhichembodiesaccumulatedexperienceintheformof,forexample,latestversionsofthetechnology.

Bibliography

Hedley,B.(1976).Afundamentalapproachtostrategydevelopment.LongRangePlanning,9,(6),211.

Porter,M.E.(1979).Howcompetitiveforcesshapestrategy.HarvardBusinessReview,57,135145.

DALELITTLER

Experimentation

Experimentationisatypeofprimarymarketingresearch(seePRIMARYRESEARCH)inwhichtheexperimentersystematicallymanipulatesthe

valuesofoneormorevariables(theindependentvariables),whilecontrollingthevaluesofothervariables,tomeasuretheeffectofthechangesintheindependentvariablesononeormoreothervariables(thedependentvariables).

Experimentationisoftenusedtoinfercausalrelationships.Causationcannotbeinferredunlessthereisevidencethat(1)thechangeintheindependentvariable(s)occursbeforeorsimultaneouslywiththechangeinthedepen-

dentvariable(s),(2)theeffectsofotherextraneousvariablesaremeasuredorcontrolled,and(3)thereisastrongassociationbetweenthechangesinindependentanddependentvariablesinthewaypredictedbyhypotheses.Unfortunately,thescientificprocessissuchthat,eveniftheseconditionsaresatisfied,onecanneverprovecausation,onlyinferthatacausalrelationshipmayexist.

Theneedtoruleoutothercausalfactorsinordertoinferthatthechangesintheexperimentalvariablescausethechangesinthedependentvariablesisthereasonbehindthecontrolofotherpossiblecausalfactors.Controlisobtainedbydevicessuchas(1)useofacontrolgroupwhichreceivesnotreatment,(2)randomization,wheretestunitsareassignedtodifferentexperimentalandcontrolgroupsatrandom,(3)matching,wheretestunitsarematchedonbackgroundvariablesbeforebeingassignedtogroups,(4)useofalaboratorywhereconditionsarecontrollable,(5)useofspecificexperimentaldesignsthatcontrolextraneousvariables,and(6)measuringandaccountingfortheeffectofextraneousvariablesusingstatisticaltechniquessuchasmultipleregressionoranalysisofcovariance.

Therearemanytypesofexperimentaldesign.Thesimplest,the"after-only"design,involveschangingtheindependentvariable(thetreatment)andfollowingthiswithmeasurementofthedependentvariable.Obviousweaknessesincludethelackofabenchmarkforcomparisonpurposesandfailuretocontrolfortheeffectofextraneousvariables.The"before-after"designwhichtakesmeasurementsofthedependentvariablebothbeforeandafterthetreatmentdoesalloweffectofthetreatmenttobemeasuredbythedifferencebetweenthebeforeandaftermeasurement.Thisdesignsuffersfromalackofcontrolofinterveningvariables.

The"before-afterwithcontrolgroup"design(withcasesassignedtogroupsatrandom)canhelptoovercometheproblemofinterveningvariablesinthatchangestomanyinterveningvariableswillaffectbothgroupsandsotheeffectofthetreatmentcanbemeasuredwhenthebefore-afterdifferencesforthetreatmentgroupandthecontrolgrouparecompared.

Statisticaldesignspermittheeffectofchangestomorethanone

independentvariabletobemeasured.Theyallowtheresearchertocontrolforspecificextraneousvariablesandanefficientdesignwillallowseveraleffectstobemeasuredusingassmallanumberofobservationsaspossible.Arandomizedblockdesignisusefulwhenthereisonemajorextraneousvariableinadditiontothedependentvariableandtreatmentvariable.Theunitsbeingtestedareassignedtogroupsorblocksdefinedbytheextraneousvariable,theexperimentiscarriedoutonthetestunitsandtheresultsanalyzedtoseeifthetreatmenthasaneffectandtoseeiftheeffectisdifferentinthevariousblocks.ALatinsquaredesignissimilartoarandomizedblockdesignexceptthatitallowstheexperimentertospecifyblocksusingtwonon-interactingexternalvariablesthusallowingtheexperimentertocontrolfortwoextraneousvariables.AGraecoLatinsquareallowstheexperimentertocontrolforathirdnon-interactingextraneousvariable.

Afactorialdesignisusedtomeasuretheeffectsoftwoormoreindependentvariables.Factorialdesignsallowinteractioneffectstobemeasured.

Dataobtainedfromsuchexperimentaldesignsareanalyzedusingstatisticalmethodssuchasanalysisofvariance(seeSTATISTICALTESTS).

Experimentscantakeplaceinthefieldorinthelaboratory.Theadvantageoffieldexperimentsisthehighdegreeofrealismthatcanbegenerated.Unfortunately,thereisalackofcontrol,especiallyoverinterveningvariablessuchastheweather,competitors,andtheeconomyatlarge.Whatisworseisthattheresearchermaynotbeawareofchangestothesevariables.Fieldresearchishardertoconcealfromcompetitorswhohaveanopportunityofearlydiscoveryofpossiblenewdevelopments.Fieldresearchoftenturnsouttobetime-consumingandcostly.However,forTESTMARKETINGofnewproductsorformeasuringtheeffectsofadvertising,fieldexperimentsinactualmarketconditionsmaybenecessary.

Laboratoryexperimentsallowtheresearchermorecontrolovernotonlythepossibleextraneousvariablesbutalsothemeasurementofthedependentvariablesandthechangestotheindependentvariables.Itiseasiertouseelectronic/mechanicaldevicestomeasuredependentvariablesinthelaboratoryandthechangestotheindependentvariablescanbespeededuptoreducethetimeneededto

andthedevelopmentoffreetradeareas,suchastheEuropeanUnion,leadingtomorestandardizationacrossmarkets.

Bibliography

Bradley,F.(1991).Internationalmarketingstrategy.Prentice-Hall.

Levitt,T.(1983).Theglobalizationofmarkets.HarvardBusinessReview,61,(3),MayJune,92102.

Littler,D.&Schlieper,K.(1995).ThedevelopmentoftheEurobrand.InternationalMarketingReview,12,(2),2237.

Quelch,J.A.&Hoff,E.J.(1986).Customizingglobalmarkets.HarvardBusinessReview,64,MayJune,5968.

Yip,G.S.(1989).Globalstrategyinaworldofnations?SloanManagementReview,30,Fall,2941.

DALELITTLER

Globalization

Globalizationisbestdescribedasaprocessofdeepeninginternationalization.Themajoractorsintheglobaleconomy,firmsandgovernments,arebothimpactedbythisprocessandalsohavehelpedtoshapeitsdevelopment.Sofarasfirmsareconcerned,internationalizationhasbeenanuninterruptedprocessofincreasingsignificanceandintensitysincethe1950s.Threeaspectsofthisprocessareparticularlynoteworthy.

First,anincreasingnumberoffirmshavebeeninvolvedininternationalproduction.LeadingfirmsfromallmajorcapitalistcountrieshavefollowedtheearlierexampleoftheirUSandUKrivalsandhavebecomemoreandmoreinternationalintheirscope,utilizingnotonlyinternationaltradebutalsodirectforeigninvestment,andotherformsofinternationalproductionsuchasLICENSING,INTERNATIONALJOINTVENTURES,andsubcontracting.

Second,therehasbeenasectoralwideningofinternationalproduction.

Thus,while,duringthe1960s,themostrapidgrowthofinternationalproductiontookplaceinmanufacturing,sincethenithasbeentheservicesectorthathasexperiencedthemostrapidgrowthininternationalization.Thistendencyhasbeenmostprominentinbankingandfinancialservices.Otherbusiness-relatedservicessuchasadvertisingandaccountancyhavealsoexperiencedgrowinginternationalization.

Finally,itisimportanttonotethatinternationalbusinessactivitieshaveexperiencedqualitativeaswellasquantitativeexpansion.Thesequalitativechangesrelatetotheincreasingprocessofintra-firmintegrationofinternationalbusinessactivities.Mostfirmshavechangedfrombeinginternationaltobeingmoremultinationalorevenglobalintheirinternalorganization(Leong&Tan,1993).Aninternationalfirmisoneforwhomitsdomesticmarketisofpredominantimportanceandwhichviewsinternationalbusinessasawayoffurtherexploitingassetsandcapabilitiesdevelopedforthedomesticmarket.Amultinationalfirmtreatsforeignmarketsasbeingequallyimportanttothehomemarket.Aglobalfirmmakeslittledistinctionbetweenforeignanddomesticmarkets.

Althoughdirectparticipationininternationalproductionisstillconfinedtoarelativelysmallnumberoffirms,allfirmsareneverthelessimpactedbytheprocessofinternationalization.Foronething,firmsinalmostallindustriesfacedirectcompetitionfrominternationalrivals.Asanexample,themajorityoffirmsinthefastfoodindustryareverysmallwithonlylocalmarketinghorizons;however,themostfiercecompetitionfacedbysuchfirmscomesfromglobalfirmssuchasMcDonaldsorPizzaHut.Further,technologicalchangeisbreakingdownindustryboundariesand,asaconsequence,firmsexperience(unexpected)competitionwhoseoriginisoftenfromoutsidetheirdomesticmarket.Forexample,traditionalpostalbusinessesareincreasinglybeingimpactedbyelectronicmailandothercomputernetworkservices.

Bibliography

Leong,S.&Tan,C.(1993).Managingacrossborders:anempiricaltestoftheBartlettandGhoshalorganisationaltypology.JournalofInternationalBusiness,24,(3),449464.

MoYAMIN

GraphicalRepresentation

TheresultsofMARKETINGRESEARCHcanbepresentedingraphicalformaspartofthereportingprocedure.Quantitativeanalysis,startingwiththesummarizationproceduresoftheconstructionof

frequencydistributionsorcalculationofmeasuressuchastotalsormeasuresofaverageandvariation,istakenastagefurtherwiththepresentationoftheresultsofquantitativeresearchintheformofpiediagrams,linechartsoftenshowinggraphsovertime,barcharts,histograms,ogives,andscatterdiagrams.

Apiediagramissimplyacircledividedintosectionswitheachsectionrepresentingportionsofatotal.Forinstance,thetotalsalesinamarketcanberepresentedbytheareaofthecirclewithsectionsrepresentingcompetitors'sales,thuspermittingmarketsharestobepresented.Piediagramsallowrelativesizesatanymomenttobepresented.Itispossibletopresentafewpiediagramssidebysidetoshowsharesindifferentsituations,e.g.,attwodifferenttimesorintwodifferentmarkets.Inthiscasethetotalareaofthecircleswouldvarytorepresentthetotalsinthedifferentsituations.

Thelinechartisusefulfordepictingresultsovermanyperiods.Itisthecommontimeseriesgraphwithtimemeasuredonthehorizontalaxisandthevariable(s)ofinterestmeasuredontheverticalaxis.Whenmorethanonevariableispresented,differentcoloredlinesordashedanddottedlinescanbeusedtoidentifytheparticularvariables.Astackedlinechartshowingatotalanditscomponentsstackedoneachothershowshowrelativesizesorshareschangeovertimeandissimilar,yetpreferable,toaseriesofpiediagrams.

Abarcharthasmanyvariations.Themagnitudeofavariableisrepresentedbyabaronagraph.Thesalesofeachofseveralbrandsinaperiodcanberepresentedinabarchartbyhorizontal(orvertical)bars.Anothersimpleversionofabarchartshowsmeasuresofavariableovertimeasaseriesofverticalbarsasanalternativetoalinechartasameansofdepictingatimeseries.Inpictograms,thebarsareconvertedtopictorialrepresentationsofthevariable.Thus,ifthevariableissalesofwine,ahorizontalbarcouldbereplacedbyanumberofbottlesinarow.Ifseveralvariablesaretoberepresentedovertime,asimplebarchartcanbereplacedbyagroupedbarchartinwhichthevaluesofthevariablesforeachperiodarerepresentedby

groupsofbarsplacednexttoeachother,onegroupforeachperiod.Alternatively,iftheseveralvariablesarecomponentsofatotal,astackedbarchartcanbeused.

Oneuseofabarchartistodepictthenumbersoftimeseachvalueoccursforavariablemeasuredonanominalscale,e.g.,thenumbersofmalesandfemalesinasample.Ifthevariableismeasuredonanintervalscalethatissplitintoanumberofcontiguousclasses,thenumbersintheclassescanberepresentedinahistogrambyaseriesofadjacentverticalrectangles,theareasofwhichareproportionaltothefrequencies,andthebasesoftherectanglesaredeterminedbythewidthofeachclass.Thisisthestandardwayofrepresentingfrequencydistributions,e.g.,thedistributionofheightsinasampleoffirst-yearmalecollegestudents.Whenthedataarebasedonasample,thehistogrammaybeaseriesofrectanglesthatgiveaveryroughapproximationtothepopulationdistributionwhichforsomevariablesisthesmoothbell-shapedcurveknownasthenormaldistribution.

Ifthefrequenciesarecumulatedtoshowthenumbersofcasesbelow(orgreaterthan)aseriesofvaluesofthevariable,thenacumulativefrequencycurveorogivecanbeplotted.Whenthevariableisnormallydistributedtheless-thancumulativefrequencycurvewillbeS-shaped.

Therelationshipbetweentwovariablescanalsoberepresentedonascatterdiagram.Ifonevariablecanbeidentifiedasthedependentvariableitwillberepresentedonthevertical(orY)axiswiththeindependentvariableonthehorizontal(orX)axis.EachpairofvaluesisrepresentedonthegraphandascatterofpointsbuildsuIfthepointsarescatteredalloverthegraphthenprimafaciethereislittleornorelationshipbetweenthevariables(alowcorrelationcoefficientwillconfirmthis).Ontheotherhand,ifthereisapatterntothepoints,thentheanalystwillbeabletospotapossiblerelationshipforfurtherinvestigationusingperhapsregressionmethods(seeREGRESSIONANDCORRELATION).

SeealsoTypesofmeasure

Bibliography

Churchill,G.A.(1991).Marketingresearch:Methodologicalfoundations(5thedn).Chicago:TheDrydenPress.Chapter18.

MICHAELGREATOREX

marketingplanningshouldbefocusedonkeycustomersintargetmarkets(includingforeignmarkets)ratherthanjustonproducts/services;

investmentinproductdesignandtechnologyshouldonlybemadewherethisisbasedonanunderstandingofcustomerrequirements;

integratedteamsellingshouldbedevelopedandmanagersshouldbeappointedtocoordinateallaspectsofkeycustomerrelationships;

thesupplier'smarketingfunctionshouldbemorecloselyintegratedwiththecustomer'spurchasingfunction.

Bibliography

Ford,D.(Ed.)(1990).Understandingbusinessmarkets:Interaction,relationshipsandnetworks.London:AcademicPress.

Håkansson,H.(Ed.)(1982).Internationalmarketingandpurchasingofindustrialgoodsaninteractionapproach.NewYork:JohnWiley.

Turnbull,P.W.&Valla,J-P.(Eds)(1986).Strategiesforinternationalindustrialmarketing.Beckenham:CroomHelm.

DOMINICWILSON

InteractionModel

seeINTERACTIONAPPROACH

Interest

Interestisameasureofabuyer's/customer's/consumer'sstateofmindvis-à-visaproductorservice.ItisapartoftheAFFECTIVESTAGEinanumberofmodelsofMARKETINGCOMMUNICATIONSi.e.,thedevelopmentofapositiveattitudeasaprerequisiteofpurchasingtheproductorservice(seeAIDAMODELandINNOVATION-ADOPTIONMODEL).Measuresofevaluationare,aswithmostelementsatthe

affectivestage,difficult.

Bibliography

DAVIDYORKE

InternalAudit

AninternalauditisonepartoftheMARKETINGAUDIT(theotherbeingEXTERNALAUDIT)andinvolvesexaminationoftheinternaloperations,strengths,andweaknessesofanorganization.Therearemanywaystoapproachthisauditbutallmethodsinvolve,inessence,theallocationofallinternaloperationsandassetsintovariouscategorieslabeledjudgementallyaccordingtowhethertheyareperceivedas"good"or"bad"fortheorganization.Thus,onemethodrecommendstheidentificationof"strengths''and"weaknesses"whileanothermethodwouldbetoidentify"core"activitiesand"peripheral"activities(Prahalad&Hamel,1990).Porter(1980)suggeststhatinternalactivitiescanbeanalyzedintermsof"valueadded"(seeVALUECHAIN)withtheimplicationthatoperationswhichaddlittle"value"totheorganization'soutputshouldbeimproved,orminimized(iftheyareunnecessary),orsubcontracted(iftheylieoutsidetheorganization'scorecompetence).Allthesemethodsofidentifyinginternalstrengthsandproblemsrisk,throughdisaggregation,losingsightofthecollectivesynergiesarisingfromtheoperationsoftheorganizationasawhole.Thus,anactivitysuchasanannualChristmasPartyoraweeklynewslettertocustomersmaynotseemtoaddsignificantvaluetotheorganization'sofferingsbutcancellationcouldhaveimportantimplicationsfortheperceptionofanorganization'scommitmenttoitsstakeholders.

Bibliography

Porter,M.E.(1980).Competitivestrategy:Techniquesforanalyzingindustriesandcompetitors.NewYork:FreePress.

Prahalad,C.K.&Hamel,G.(1990).Thecorecompetenceofthecorporation.HarvardBusinessReview,68,(3),MayJune,7991.

DOMINICWILSON

InternalMarketing

Theroleofanorganization'spersonnelinservicequalityhascomeincreasinglytotheforefront,andinvestmentinpeoplebecomesintegraltotheservice-profitchain(seeSchlesinger&Heskett,1991b):

internalservicequality®employeesatisfaction®employeeretention®externalservicequality®customer

isblack").Targetmarketing,bycontrast,startsbyassumingpervasivediversityandsearchesforgroupsorSEGMENTSthatmayhavesimilarpreferencesforaparticularoffering.However,thetensionbetweenstandardizationandadaptionisparticularlyimportantfortheinternationalmarketer,asthepotentialforeconomicbenefitsfromstandardizingacrosscountriescouldbeverysubstantialwhilethediversitiesmaybeverygreatduetosignificantdifferencesincultureandotherenvironmentalconditionsbetweencountries(seeINTERNATIONALMARKETINGENVIRONMENT).

InINTERNATIONALMARKETING,completeprogramstandardizationmeansofferingthesameproductorproductlineatidenticalpricesthroughidenticaldistributionsystemsandpromotionalpoliciestocustomersindifferentcountries.Programstandardizationis,thus,concernedwiththedegreetowhichdifferentelementsintheMARKETINGMIXaretreatedinthesameorasimilarmannerbyafirmthatoperatesinternationally.Processstandardization,ontheotherhand,referstotheuniformityintheapproachchosenbyamultinationalfirminanalyzingmarketpotentialandtheformulationofMARKETINGPLANNINGfordifferentcountries.Thevastmajorityoftheliteratureisconcerned,however,withprogramstandardization.

Themainattractionofstandardizationisclearlythescaleeconomiesthatmayresultfromit,notonlyinproductionbutalsoinR&Dandproductdevelopmentandpossiblyinadvertisingandpromotionalexpenditure.Levitt(1983)putsparticularemphasisontechnologyandscalefactorsinadvocatingstandardization.Anuninterruptedproductionrunfromonecenterwillallowthefirmtomoverapidlyupthelearningcurve,thusreducingper-unitcostveryrapidly.Operatingonalargescalewillalsoprovidesourcingefficiencies,e.g.,purchasinglargeamountsofrawmaterialsandotherinputsgivesamultinationalthepowertobargainwithsuppliers.Doglus&Wind(1987)aremoreskepticalandpointoutthateconomiesofscopeandflexiblemanufacturingincreasinglymakeitfeasibletomakeadaptationwithoutincurringincreasingcostsordiseconomiesofscale.Economiesofscopeariseifitischeapertoproduce

anumberofdifferentproductsorproductvarietiestogetherinoneplantthanitistoproduceeachinaseparateplant.Thebasisforeconomiesofscopeisanumberofinterconnectedtechnicaldevelopmentsknownas"flexible"manufacturingsystems.

Inspiteofmuchdebatebetweentheadvocatesofstandardizationandadaptation,littleisknownregardingtheimpactofstandardizationoncorporateperformanceanduntilrecentlytheperformanceissuehadnotreceivedanyresearchattention.Samiee&Roth's(1992)workisprobablythefirstsystematicinvestigationofthelinkbetweenstandardizationandperformance.Theyfoundnosignificantdifferenceinperformancebetweenfirmsthatstressedstandardizationandthosethatdidnot.

SeealsoInternationalproductadaptation

Bibliography

Doglus,S.&Wind,Y.(1987).Themythofglobalization.ColombiaJournalofWorldBusiness,22,(4),1930.

Levitt,T.(1983).Theglobalizationofmarkets.HarvardBusinessReview,22,May/June,92102.

Samiee,S.&Roth,K.(1992).Theinfluenceofglobalmarketstandardisationonperformance.JournalofMarketing,56,April,117.

MOYAMIN

InternationalStrategicAlliances

Anallianceisanycontractualorcooperativerelationshipbetweentwoorganizationsforaspecificpurpose.Relationshipsbetweenfirmscanbeconceivedofintermsofaspectrumatoneendofwhichis"arm'slength"exchange.Thisispurelyprice-mediatedandinvolvesnocommitmentorpromiseregardingthefuturebehaviorofeitherparty.Attheotherendofthespectrumisamergerorunionbetweentwoorganizations.Alliancesoccupythemid-rangebetweenarm'slengthexchangeandmerger.Thus,anallianceinvolvessomedegreeoflong-termcommitmentbetweenthepartiesmanifestedeitherthroughalegallybindingcontractorthroughamoreinformalagreementtocooperate.Thedurationoftherelationshipinanallianceisindeterminatebut,unlikeamerger,itisnotpermanent.

Particularformsofalliancescanbeveryvaried

Kotler,P.(1991).Marketingmanagement:Analysis,planning,implementationandcontrol(7thedn).EnglewoodCliffs,NJ:Prentice-Hall.

Sissors,J.(1966).Whatisamarket?JournalofMarketing,30,(3),July,1721.

FIONALEVERICK

MarketDemand

Thetermmarketdemandmostusuallyreferstothetotaldemandforaproductorserviceoveraspecificperiodoftime.Itisusedinrelationtoeitherindividualproductsorservicesorproductorservicecategories.

FIONALEVERICK

MarketExchange

seeEXCHANGE

MarketManager

Marketmanagersareresponsibleforthemarketingactivitiesforparticularmarketsorclustersofcustomers.Theymayhaveprofitresponsibility.Amarketmanagerstructureislikelytobeafeatureoforganizationalmarketswherecompaniesaremarketingtoseveral,perhapsdiverse,customergroupswithsomewhatdifferingrequirements.Thus,amanufacturerofpaintwillsellnotonlytoconsumermarkets,butalsotoprofessionaldecoratorsaswellasindustrialuserswhichwillcomprisepossiblyseveralmarkets(maritime,processplant,etc.).

Suchmanagerscanbeexpectedtofosterandmaintaincustomerrelationships(seeRELATIONSHIPMARKETING)withkeycustomers,developanunderstandingoftheirrequirements,and,increasinglyinorganizationalmarkets,developaproblem-solvingcapabilityandprovidea"solutions"package.Theywill,therefore,havetoactasafocusforcoordinatingallthedifferentactivities,bothinternallyandfromexternalparties,involvedinprovidingtheappropriateoffering.Insomeinstances,

managersmaybeappointedforkey,major,customers.Suchanapproachcontrastswiththeproductmanager(seePRODUCTMANAGER)structure.

DALELITTLER

MarketPenetration

ThisisoneofthestrategiesidentifiedinAnsoff's(1965)directionalpolicymatrix(seeDIRECTIONALMATRIX).Itisgenerallyregardedasaimingatincreasingthefirm'sMARKETSHAREwithinitsexistingmarkets.Thiscanbeachievedinatleastoneofthreeways:increasingpurchasesbyexistingcustomers,winningovertheconsumersofcompetitors'offerings,andconvertingnonuserstopurchasersofthefirm'sofferings.

Bibliography

Ansoff,H.I.(1965).Corporatestrategy.NewYork:McGraw-Hill.Chapter6.

DALELITTLER

MarketSegment

seeMARKETSEGMENTATION

MarketSegmentation

Smith(1956)firstdefinedmarketsegmentationas"arationalandmorepreciseadjustmentofproductandmarketingefforttoconsumeroruserrequirements,itconsistsofviewingaheterogenousmarket(onecharacterisedbydivergentdemand)asanumberofsmallerhomogenousmarkets."Ifitisassumed,orknown,thatallconsumersinamarkethavesimilarneedsandwants,thenanundifferentiatedortotalmarketapproachcanbeadoptedbyacompanyusingasingleMARKETINGMIXtosatisfyconsumers.TheCocaColacompany'searlymarketingofonlyonedrink,ofonlyonesize,isanexampleofthisapproach.Ifthemarkethasheterogeneousneeds,thenaTARGETMARKETapproachcanbeadopted.Here,anorganizationattemptstosubdividethemarketintoclustersofcustomerswithsimilarrequirementsandtailoritsmarketingmixtoeachcluster.Thisapproachinvolvesadditionalcostsforproductmodificationsandassociatedadministrative,promotional,andinventorycosts.In

completelyheterogeneousmarkets,whereeachcustomer'srequirementsaredifferent,theonlywaytosatisfyeveryoneisbyofferingtailor-madeorbespokeproducts.Nowadays,thisismoreprevalentinorganizationalmarkets(seeORGANIZATIONALMARKETING).However,insomeconsumermarkets,

FREQUENCY,IMPACT,andcontinuityofadvertisements.Overall,theywishtobecost-effectiveintheirchoiceofmediaandsochoiceswillbecloselyrelatedtotherelativecostsoftheavailablemedia.

SeealsoAdvertising

Bibliography

Rust,R.T.(1986).Advertisingmediamodels:Apracticalguide.Lexington,MA:LexingtonBooks.

DAVIDYORKE

MediaSchedule

AmediascheduleisanoperationalactivitywhichresultsfromMEDIAPLANNING,designedtoachieveparticularobjectiveswithrespecttoREACH,FREQUENCY,andIMPACT.TheschedulerelatestothetimingofADVERTISINGexpenditureswhichdependsontheproduct/service,thestageinitslifecycle,seasonalityofpurchase,andCOMMUNICATIONSOBJECTIVES.

Macroschedulingrelatestochoicesbetweenschedulesoverayearoraseason(e.g.,withrespecttotourismservices),withallowancesforlaggedeffectsandadvertisingcarry-over.Microschedulingisconcernedwithallocationoverashorterperiodoftime,andpossibleadvertisingtimingpatterns,namely,concentrated,continuous,orintermittent,whichinturnrelatestotherateatwhichnewbuyersappearinthemarket,purchasefrequency,andforgettingrates.

Inmakingmediaschedulingdecisions,organizationsareinevitablyalsoconcernedwiththeindividualmediacostsofreachingtargetaudiences(seeCOSTPERTHOUSAND)and,hence,toachieveacost-effectivemixtureofreachandfrequencyofmessageexposure.

Bibliography

Crosier,K.(1994).InM.J.Baker(Ed.),Themarketingbook(3rdedn).

Oxford:Butterworth-Heinemann.Chapter21.

DAVIDYORKE

Message

Messageiscentraltothecommunicationbetweenthesender(theorganization)andthereceiver(thevariouspublics)andcapturesthevaluesthatanorganizationwishestoconveytoitsvariouspublics.Messagesemanatingfromorganizationsproducts,brands,andcorporateidentityareexpressionsoftheir"corporatevoice,"oftheirheritageandpersonalityandservetodifferentiateandsupporttheirPOSITIONINGinthemarketplace.Thechoiceofthecompanyname"Rockwater,"forexample,waschosenbecause"itimpliedstrengthandstability.Itwassubstantial,appropriateinternationallyintheEnglish-speakingoffshoreindustryanddidnothavenegativeconnotationsinotherlanguages.Itsoundedmatureandauthoritativeandgavetheimpressionthatithadalwaysbeenthere"(Lee,1991).

Themessagecanbeconveyedinvariousforms(ormedia),suchasTVadvertisements,printedleaflets,billboards,corporateidentities,electronicallyviamultimediasystems,Internet,andsoon(seeCOMMUNICATIONSMIX).Regardlessoftheformusedtoconveythemessageandreachdifferentpublics,certainorganizationalvalueswillbepresentedandperceptionsandopinionsoftheorganizationformedbythepublicsitreaches.Leviadvertisements,forexample,reinforcethecompany'sheritageanditsAmericanbirthright,theproduct'squalityanddurability,aswellasaprogressive,youthful,andsexualimage.

Ifthemessagescomingfromanorganizationfailtomatchwithexpectations,thenthepublicsmaybeconfusedandcommunicationcanbemademoredifficult.ArecentexampleisLever's"PersilPower"washingliquidwhichwaslaunchedasasafeandeffectiveproduct.However,afternumerouswashesitwasclaimedthattheinnovativeingredienthadadeleteriouseffectoncertainfabrics.Afterafewmonthsinthemarketplace,theproductwaswithdrawnbutatsignificantcost,includingafallinMARKETSHAREofPersilproducts.Leverhadthentobuildupthepublic'sbeliefandtrustthattheirexistingproductswereeffectiveandsafe.Perrierhadfacedasimilarsituationwhenapotentiallyharmfulingredient

wasdiscoveredandtheproductwaswithdrawnfromthemarket.Again,thecompanyhadtoregainthepublic'strustintheproduct.

Bibliography

increasingrepresentationoftheserelationshipsasfundamentallymutuallydependentandcollaborative.

BoththeseissuesareinextricablylinkedalsowiththeroleofthemanagerinSTRATEGICMANAGEMENTasanindividualwithpersonalobjectivesanddiscretionarypowerratherthan,asseemstohavebeenassumedinmuchofthemarketingliterature,asastrictlyrationalorganizationalservantroutinelyenactingcorporateexecutivepolicies(Pettigrew,1975).

Itcouldbeargued,therefore,thatorganizationalmarketingisnotonlyanimportantaspectofmarketingbutalsothatithasraisedissueswithprofoundimplicationsforabetterunderstandingofmarketingandoforganizationsmoregenerally.Inlinewiththesedevelopmentsintheunderstandingoftheroleofmarketing,organizationalmarketingcanbeseennotsimplyasthemarketingofproductsandservicesbetweenorganizationsbutmorebroadlyasthemanagementanddevelopmentofEXCHANGErelationshipsbetweenorganizations.

Asarule,organizationalmarketsaremorecomplexandlargerthanconsumermarkets,ifonlybecauseforeveryconsumermarketthereareusuallyseveralupstreamorganizationalmarketsmanufacturingandsupplyingtheproductsmarketedtoconsumers.Therearealsomanylargeandcomplexorganizationalmarketsprovidingserviceswhereconventionalpaymentmaynotbeinvolved(e.g.,churches,charities,schools,hospitals)orwheretheremaybenodirectconnectionwithconsumersatall(e.g.,militaryforces).

AnotherimportantdistinguishingfeatureoforganizationalmarketsisthenatureofDEMAND.Demandinorganizationalmarketsisderivedfromacombinationofmanyfactors,dependingonthemarketinquestion.Forexample,inindustrialmarketsdemandisderivedfromtherequirementsofdownstreamsuppliersofvariousconsumergoodsandservices.Ingovernmentmarketsdemandmayalsobeafunctionofpoliticalandlegislativecommitments,economiccircumstances,politicalpriorities,andlobbying.Forecastingthisderiveddemandis,therefore,highlycomplexanddependsonunderstandingtheneedsandcircumstancesnotonlyof

immediateorganizationalcustomers,butalsoofsubsequentsupplier/customerexchangesrightdowntheVALUECHAINtotheeventualconsumer.Inevitably,manyorganizationsareunabletodomuchmorethanrespondtotheanticipatedrequirementsoftheirimmediatecustomers.Onepotentiallyusefulapproachtothisproblemofforecastingdemandinorganizationalmarketsistobuildparticularlycloserelationshipswithselectedcustomersinvariouskeysegments.Therecan,ofcourse,bemanyotherreasonsforbuildingsuchrelationshipsbuttheadvantagewithrespecttoforecastingproblemsisthatsuchrelationshipscanprovideintimateinsightsnototherwiseavailableintothecompetitivepositionofstrategiccustomersandsooftheirmarketsandcustomersmorebroadly.(SeealsoRELATIONSHIPMARKETING.)

MuchofthetheorydiscussedaboveseemsmostobviouslyappropriatetothemoreimportantoccasionsoforganizationalmarketingtoNEWTASKpurchasingandmajoraccounts,tocomplexcustomerrequirementsandintenselycompetitivemarkets.However,itshouldnotbeforgottenthatmuchoforganizationalmarketingisconcernedwithroutinepurchasinginrelativelyfamiliarcircumstancesandwithfewimmediateimplicationsforcompetitivepositionsorstrategicdynamics.Onsuchoccasionstheapplicationoftheprocessesandprinciplesdiscussedaboveremainsrelevantbutthepracticeoforganizationalmarketingismorelikelytoreflectcompromisesbasedonexperience,workpriorities,andcommonsense.

Bibliography

Chisnall,P.M.(1995).Strategicbusinessmarketing(3rdedn).EnglewoodCliffs,NJ:Prentice-Hall.

Han,S-L.,Wilson,D.T.&Dant,S.P.(1993).Buyer-supplierrelationshipstoday.IndustrialMarketingManagement,22,(4),Nov.,331338.

Pettigrew,A.M.(1975).Theindustrialpurchasingdecisionasapoliticalprocess.EuropeanJournalofMarketing,5,Feb.,419.

DOMINICWILSON

OrganizationalPurchasing

seeORGANIZATIONALBUYINGBEHAVIOR

Reisman,D,Glazer,N.&Denney,R.(1960).Thelonelycrowd.NewHaven,CT:YaleUniversity.

Villani,K.E.A.&Wind,Y.(1975).Ontheusageof"modified"personalitytraitmeasuresinconsumerresearch.JournalofConsumerResearch,2,Dec.,223226.

BARBARALEWIS

PhysicalDistribution

seeCHANNELSOFDISTRIBUTION

seePROFITIMPACTOFMARKETINGSTRATEGIES

PlanningStyle

Planningistraditionallyassociatedwithaprocess(seeSTRATEGICPLANNING;SWOTANALYSIS)whichinvolvesformalanalysisoftheorganizationanditsenvironmentandthedevelopmentofappropriatemeansofmeetingtheobjectiveswhichtheorganizationhasestablished.Therearesomemajoradvantagesofplanningperse.Quinn(1978)suggeststhatplanningimposesadisciplineonmanagerstolookaheadperiodically;resultsincommunicationof"goals,strategicissues,andresourceallocation;"andhelpstheimplementationofstrategicchanges.Itprovidesabaselineagainstwhichtoassessperformance,whileasLoasby(1967)notes,themajorvalueofformalplanning"isintheraisingandbroadeningofimportantissuesthatareliableotherwisetobeinadequatelyconsidered."

Onepossiblepitfallofmuchplanningistoextrapolateintothefuturewithouttakingaccountofpossiblediscontinuities.SomewouldsuggestthatUNCERTAINTYunderminesmuchformalplanning,althoughthiswouldpointtothenecessityofengaginginCONTINGENCYPLANNINGandof

ensuringthattheplanshavescopeforflexibilitytotakeaccountoftheunexpected.Mintzberg(1973)suggeststhatplanningisoneofthreepossiblestrategicmodes(seeADAPTIVESTRATEGY;ENTREPRENEURIALSTRATEGY)andismostappropriateforstableenvironments.

Bibliography

Loasby,B.J.(1967).Longrangeformalplanninginperspective.TheJournalofManagementStudies,4,Oct.,3008.

Quinn,J.B.(1978).Strategicchange:"LogicalIncrementalism".SloanManagementReview,1,(20),Fall,721.

DALELITTLER

PointofPurchase

Pointofpurchaseistheplaceatwhichthepurchase(byanindividualoragroup)ofaproductorserviceismade.Thismaybe,forexample,inthehome,inaretailstore,orataplaceofwork.IntermsofMARKETINGCOMMUNICATIONS,itisarguedthatthemosteffectivetechniquestobeusedatthepointofpurchasearePERSONALSELLING,SALESPROMOTION,andPACKAGING,aseachcanhaveadirectandimmediateimpactonthedecisiontopurchase.SomeADVERTISING(usuallyinretailstores)mayalsobeused,althoughitseffectivenessisdifficulttomeasure.

Bibliography

Quelch,J.A.&Cannon-Bonventre,K.(1983).Bettermarketingatthepointofpurchase.HarvardBusinessReview,61,Nov.Dec.162169.

DAVIDYORKE

PoliticalEnvironment

ThepoliticalenvironmentisoneoftheelementsoftheMARKETINGENVIRONMENT.Thisaspectisconcernedwithpoliticaldevelopmentssuchasnewandproposedlegislationatlocal,national,regional,andgloballevels,aswellasattemptstoinfluencesuchregulatorydevelopmentsthroughlobbyinganddisseminatinginformation.

DOMINICWILSON

conclusionsbasedupontheresultsofanysinglestudyandreportedreplicationsofstudies,whichwouldallowdiscerniblepatternstobeseen,arefew(seee.g.Novak&MacEvoy,1990).TheconsumerresearchliteraturealsocontainsseveralcriticalarticlesquestioningtheRELIABILITY(andVALIDITY)ofpsychographicconceptsandmeasures(seeLastovicka,1982;Wells,1975).

SeealsoMarketsegmentation;Segmentationvariables

Bibliography

Burger,P.C.&Schott,B.(1972).Canprivatebrandbuyersbeidentified?JournalofMarketingResearch,9,May,219222.

Kahle,L.&Kennedy,P.(1988).Usingthelistofvalues(LOV)tounderstandconsumers.TheJournalofServicesMarketing,2,Fall,4956.

King,C.W.&Sproles,C.B.(1973).Theexplanatoryefficacyofselectedtypesofconsumerprofilevariablesinfashionchangeagentidentification.InstitutePaperNo.425,KrannertGraduateSchoolofIndustrialAdministration,PurdueUniversity.

Lastovicka,L.(1982).Onthevalidityoflifestyletraits:Areviewandillustration.JournalofMarketingResearch,19,Feb.,126138.

Mitchman,R.(1991).Lifestylemarketsegmentation.NewYork:Praeger.

Moschis,G.(1992).Gerontographics:Ascientificapproachtoanalysingandtargetingthematuremarket.JournalofServicesMarketing,6,(3),Summer,1727.

Nelson,A.R.(1969).Anationalstudyofpsychographics.PaperdeliveredattheInternationalMarketingCongress,AmericanMarketingAssociation,June.

Novak,T.P.&MacEvoy,B.(1990).Oncomparingalternativesegmentationschemes:Thelistofvalues(LOV)andlifestyles(VALS).JournalofConsumerResearch,17,June,105109.

Pernica,J.(1974).Thesecondgenerationofmarketsegmentationstudies:Anauditofbuyingmotivation.InW.D.Wells(ed.),Lifestyleandpsychographics(pp.277313).Chicago:AmericanMarketingAssociation.

Puohiniemi,M.(1991).Value-basedsegmentation,socialchangeandconsumingorientations.InESOMARSeminaronTheGrowingIndividualisationofConsumerLifestylesandDemand:HowisMarketingCopingWithIt?HelsinkiProceedings.

Sampson,P.(1992).Peoplearepeopletheworldover:Thecaseforpsychologicalmarketsegmentation.MarketingandResearchToday,Nov.,236245.

Wells,W.(1975).PsychographicsAcriticalreview.JournalofMarketingResearch,12,May,196213.

Wilson,C.L.(1966).HomemakerlivingpatternsandmarketplacebehaviorApsychometricapproach.InJ.S.Wright&J.L.Goldstucker(Eds),Newideasforsuccessfulmarketing(pp.305347).Chicago:AmericanMarketingAssociation.

VINCEMITCHELL

PublicRelations

PublicrelationsisanelementinthemarketingCOMMUNICATIONSMIXandmaybedefinedas"thedeliberate,plannedandsustainedefforttoestablishandmaintainmutualunderstandingbetweenanorganisationanditspublics"(Jenkins,1988).Thus,itisaconsciousandpositiveattempttomaintainanorganization'simage.Groups,orpublics,atwhompublicrelationsactivitiesareaimed,includecustomersandpotentialcustomers,shareholders,employees,competitors,suppliers,andgovernment.Avarietyoftechniquesmaybeusedinimplementingapositivepublicrelationsprogram,includingpressreleases/conferences,newsletters,theproductionofbrochures,posters,andvideos,andthesupportofcommunityactivities.

SeealsoPublicity;Sponsorship

Bibliography

Jenkins,F.(1988).Publicrelationstechniques.London:Heinemann.

DAVIDYORKE

Publicity

Publicityis"non-personalcommunicationsinnewsstoryform,regardinganorganisationand/oritsproductsandservices,thatistransmittedthroughamassmediumatnocharge(totheorganisation)"(Dibbetal.,1994).

Mediaeditorswishtopublishinformationandnewsstoriesaboutorganizationsandtheirproducts,services,etc.toencouragefavorableconsumerresponsetothemediasources(e.g.,sellmorenewspapers).Atthesametime,

sametimepricesmaydependuponsales,competitors'prices,andthecostofproduction;advertisingexpendituremightdependuponlastyear'sprofitsandcompetitors'advertisingexpenditure;andsoon.Todescribethissituation,severalequationsinvolvingsomeofthesamevariablesareneeded.SpecialeconometricestimationtechniquesareavailabletofittheseequationsincomputerpackagessuchasShazaam.

Bibliography

Jain,D.(1994).Regressionanalysisformarketingdecisions.InR.P.Bagozzi(ed.),Principlesofmarketingresearch(Chapter5).Cambridge,MA:Blackwell.

MICHAELGREATOREX

RegulatedPricing

Regulatedpricingisaconvenienttermtorefertothepracticeofsettingpricesexternally,usuallythroughregulatoryagencies(e.g.,legalfines,wagecouncils)orpoliticaldecisions(e.g.,prescriptioncharges,incometax).Somepricescanbeverycloselyinfluencedbysuchexternalagencieswithoutnecessarilybeingcompletelydeterminedbythem(e.g.,interestrates,gastariffs),whileotherpricescanvarywithinarangewhichmaybelimitedbysuchagencies(e.g.,telephoneandelectricitytariffs).Therearealsosomeinternationalregulatoryagencieswhichcanhaveasimilareffectonnationalpricinglevels(e.g.,OPEC,GATT,EEC).

DOMINICWILSON

RelationshipMarketing

RelationshipmarketingcanbeseenasstemmingfromagrowingbodyofliteratureexpressingdissatisfactionwithconventionalmarketingtheorywhenappliedtotheareasofBUSINESS-TO-BUSINESSMARKETINGandSERVICESMARKETING,withBerry(1983)beingoneofthefirstresearcherstointroducetheconcept.Themajorconcernisthatthetraditionalmarketingparadigm,basedonthemarketingmixandthe

conceptofexchange,wasdevelopedusingassumptionsderivedfromstudiesoftheUSmarketforconsumergoodsandtheresultingshort-termtransactionalfocusisinappropriateforbusiness-to-businessandservicesmarketingwhereestablishinglongertermrelationshipswithcustomersiscriticaltoorganizationalsuccess.

Incontemporarymarketing,thetermrelationshipmarketingismostcommonlyusedtodescribealong-termapproachtomarketingstrategy,inwhichdevelopingandmaintainingrelationshipswithindividualcustomersisseenasoffundamentalimportance,ratherthantakinga"onesaleatatime"approach.IthasmanysimilaritieswiththeInternationalMarketingandPurchasing(IMP)Group'sapproachtobusiness-to-businessmarketing(seeBUSINESS-TO-BUSINESSMARKETING),wherethenotionofbuildinglong-termrelationshipswithbusinesscustomersiswelldocumented.Relationshipmarketinghasbeenusedtorefertothedevelopmentandenhancementofrelationshipswithbodiesotherthanexternalcustomers,suchastheorganization'sownstaff(seeINTERNALMARKETING),aswellasitssuppliers,referralsources,influencemarkets,andrecruitmentmarkets.

Writingonrelationshipmarketing,Grönroos(1990)proposedamarketingstrategycontinuum,rangingfrom"transactionmarketing,"whichwasseenasmoresuitableforconsumerpackagedgoods,throughtorelationshipmarketing,whichwasseenasmoresuitableforbusiness-to-businessmarketingand,especially,servicesmarketing.However,therelationshipmarketingconcepthasbeenextendedtotheareaofCONSUMERMARKETING.Copulsky&Wolf(1990),forexample,usetheterminahighlyspecificsensetorefertothebuildingofadatabaseofcurrentandpotentialconsumerswhichrecordsawiderangeofdemographic,purchase,andlifestyleinformation.Thedatabaseisthenusedtoselectsuitablecustomertargetsforthepromotionofproductsorservices(directmailisparticularlycommonlyused),themessagecontainedinthepromotionbeingdifferentiatedaccordingtocustomercharacteristicsandpreferences.Theresponseofeachcustomertothisandanyfurtherpromotionalactivityistrackedtomonitorthecostofacquiringthecustomerandthelifetimevalueofhisorherpurchases.

Therationaleforwardedfortheuseoftherelationshipmarketingconceptin

consumermarketsisthehighdegreeofcorrelation

emphasisplacedontheuseofeachtechniqueshouldbedecidedbytheretailerbaseduponthenature,behavior,andinterestsofthecustomergroupatwhichthepromotionisaimedaswellastheobjectivesofthepromotion,thenatureoftheproducttobepromoted,andanywidermarketconsiderations.

Thepurposeofsuchcommunicationmaybetoencouragesalesbyinformingthecustomeraboutnewproducts,newpricestructures,specialoffers,orotherarrangements,suchasphilanthropiccauseshelpedbythedonationofaproportionofeachsale.

Inordertobeeffective,thecommunicatedmessageshouldbeencodedinamannerunderstoodbythetargetcustomers.Hence,retailpromotionsarecarefullydevisedtoconveythedesiredmeaningtothecustomer.Thismayincludestraightforwardinformationaboutaproductand/orsomeelementofpersuasiontobuy.Ifthismeaningismisunderstood,thecommunicationwillbelostandthepromotionexpensewasted.Inmanysocieties,theconsumeristypicallybombardedwithnumerouscommercialcommunicationsonadailybasis.Therefore,inordertobenoticed,aretailpromotionneedstoattempttoconveysomethingdifferent.Thepromotionalsoneedstoberememberedbytheconsumerwhomayrequirerepeatexposuretoit.

Thepromotionitselfneedstobetargetedatkeycustomergroups,betheyexisting,new,orpotential.Itisunlikelythatablanketpromotionwouldappealtoallcustomersegments.

Themainmeasureofpromotionaleffectivenessisthenumberofextrasalesgainedthatcanbeattributedtoit.

Regulationsforconductingsuchactivityarelaiddownbystatute.

Bibliography

Burnett,J.J.(1993).Promotionmanagement.Boston,MA:HoughtonMifflin.

STEVEWORRALL

RetailSecurity

Retailsecurityconcernsseveralmainareasincludingin-storeshoplifting,staffpilferage,premisessecurityregardingshopbreaking,hold-upsandthepersonalsecurityofstaffmembers,aswellascustomers.Therelativesignificanceandincidenceofeachvariesbetweendifferentretailactivities.Preventionmeasuresinclude,interalia,storedetectives,electronicmerchandisetagsystems,closed-circuittelevision,securitymirrors,chainandloopalarmsonmerchandise,fittingroomtags,securemerchandisingcabinets,well-lithigh-visibilitystorelayouts,strongrooms,securitysystems,frontagegrillesandshutters,externalbollardspreventingramraiding,appropriatesecurityproceduresandpractices,andgeneralstafftrainingonsecuritymatters(Cox,1978;Green,1986).Activitiesinvolvinglarge-volumecashhandlingandtransactions,suchasfinancialservicesretailing,areparticularlyvulnerableandsecurityisanevengreaterandgrowingconcern.ThenumberofarmedraidsonfinancialservicesoutletsintheUKmorethandoubledbetween1989and1992,andappearstobedoublingevery12monthsinLondon(Hughes,1994).Riskofviolencetobothcustomersandstaffmembersarerealworriesandextrasecuritymeasuresandproceduresarerequired.Sincefinancialserviceactivitieshavebecomemoreretailorientated,considerableresearchhasbeenundertakentodevelopmoreflexiblesecuritysystemsrequiredforthemodernopen-planbranchformats,thathavereplacedthemoretraditionalbranch"bunker"securityconcepts.Moreeffectivestaffsecuritytrainingisessential,particularlywiththeincreasingthreatsofviolenceandthefrequencyofhostage-taking.Theuseofhigh-profilesecuritysystems,bullet-proofshopfurnitureandbanditscreens,vacuumtubestransportingcashdirectlytoandfromcounterstostrongrooms,safes,risingsecurityscreensandshuttersthatsealoffthesalesareaareallcommonpractices.Counselingprovisionforvictimsisalsodesirabletocombatanypostraidtrauma.

SeealsoFinancialservicesretailing

Bibliography

Cox,R.(1978).Retailing.Plymouth:Macdonald&Evans.

Green,W.R.(1986).Theretailstore.NewYork:VanNostrandReinhold.

Hughes,M.(1994).Retailbranchsecurity.InP.J.McGoldrick&S.J.Greenland(Eds),Retailingoffinancialservices(pp.154162).Maidenhead:McGraw-Hill.

STEVEGREENLAND

samplingfractionsforeachstratum.Thelattermethod,whenthesamplingfractionsofthedifferentstratavary,canbeusedtoincreasetheefficiencyofthesamplingbyreducingthesamplingerroroftheestimateofthesamplemean.Maximumefficiencyisobtainedwhenthesamplingfractionsofthedifferentstrataareproportionatetothevariancewithineachstratum.Thus,smallsamplingfractionsoccurwhenthereislittlewithin-stratavariation;largersamplingfractionsaretakeninstratawherethereismorevariability.Thismakescommonsenseaswhentheelementswithinastratumareverysimilaronlyasmallsampleneedsbetakentogetanaccuratemeasure,whilelargersamplesarerequiredtogetsimilaraccuracyforstratacontainingmuchvariability.

Stratifiedrandomsamplingwithvariablesamplingfractionsrequiressomeestimatesforthedifferentstrata,e.g.,thevariances,withineachstratum,ofthevariableofinterest.Itmaybepossibletobasesuchestimatesoninformationfromprevioussurveysorontheresultsofpilotsurveys.

ClusterSamples

(Alsoreferredtoasmultistagesamplingandareasampling).Thepopulationisdividedintogroups;againeverymemberofthepopulationbelongstopreciselyonegroup.Clustersamplingworksbestwheneachgroupissimilarandtypicalofthepopulationasawhole.Arandomsampleofthegroupsisselectedandwithineachselectedgrouparandomsampleofindividualsisselected.Theideacanbeextendedtomorethantwostages,butateachstageitisessentialthateachselectionisbyuseofaprobabilitysamplingmethod.

Oftenthedivisionintogroupsisdonegeographicallytoreduceinterviewingcostsbyhavingsamplesofindividualslivingclosetogether.Thus,ifthebasicframeistheelectoralroll,anumberofparliamentaryconstituenciesarechosenatrandom,thenwithinthechosenconstituenciesanumberofwardsarechosenatrandom,thenwithinthechosenwardsanumberofindividualsarechosenatrandom.However,whilethisreducesinterviewingcosts,itislikelythattheclustersdifferfromoneanotherandthusitispossiblethattheclustersselectedatthefirststagearenottypical

ofthepopulationasawhole.

Non-ProbabilitySamples

ConvenienceSamples

Individualsarechosenbecausetheyarehandyfortheresearcher.Forexample,studentsmakeupmanyconveniencesamplesinresearchcarriedoutbyuniversitymarketinglecturers,retailersinterviewtheircustomers,magazinesinvitetheirreaderstousetear-outquestionnaires,etc.Itbecomesdifficulttogeneralizetheresultstoanysensiblepopulationandthereisthedangerthatthesampleisuntypicalofapopulation,shouldtheresearcherhaveactuallyspecifiedapopulationinthefirstplace.

PurposiveSamples

Individualsareselectedwithsomepurposeinmind,e.g.,inresearchconcerninganewcomputer,universitylecturersmaybeselectedbecausetheyare(supposedtobe)intelligent,articulate,opinionleaders,etc.,whoseopinionsmightbemoreusefulthantheviewsofapurelyrandomsampleofthepopulation.

JudgementSamples

Individualsarechosentogetasamplethat,inthejudgementoftheresearcher,istypicalofthepopulation.Thus,examplesofjudgementalsamplesare:(1)thestoresselectedfortestingnewproductpackaging,(2)constituenciesselectedforopinionpolling,and(3)individualstotakepartinfocusgroupsessions.Experiencehasshownthatbiasesinevitablyenterintojudgementandthatthesamplesmaybenon-typicalofthepopulation.

SnowballSamples

Initialrespondentsareselectedandafterbeinginterviewed,theserespondentsareaskedtosuggestotherindividualswhobelongtothetargetpopulation.Theserespondentsinturnareaskedforsuggestionsandthesamplesnowballs.Thismethodhasuseinindustrialbuyer-sellerresearchwherebuyer-sellerrelationshipsarebeingstudied;buyersareaskedtonominatesellerswhonominateotherbuyerswhonominateothersellers,etc.Itisusefulwhentheresearcherhasinitialdifficultyinidentifyingmembersofthetargetpopulationandwithoutsuchamethodmayhave

manyunproductiveinterviews.

QuotaSamples

Theresearcherfirstofallselectsvariablestobeusedascontrolvariables

nowincorporatedintheSTATISTICALPACKAGEFORTHESOCIALSCIENCEorSPSS,andthePROCCALISprocedureinSASandEQS,nowavailableinaPCversion.

Bibliography

Bagozzi,R.P.(1994).Structuralequationmodelsinmarketingresearch:Basicprinciples.InR.P.Bagozzi(Ed.),Principlesofmarketingresearch,(Chapter9).Cambridge,MA:Blackwell.

MICHAELGREATOREX

Suppliers

ItisanaxiomofmarketingthatsuppliersareCUSTOMERStoo(Kotler&Levy,1973).AgraphicillustrationofthispointisprovidedbytheMandarinwordsfor"buy"andfor"sell"whicharevirtuallyidenticalthedifferencebeinginintonation.Itisself-evidentthatanymarketingtransactionrequiresa"supplier"aswellasa''customer"butthelogicalextensionofthisinto"supplierstrategies"aswellas"customerstrategies"hasbeengivenmuchlessattentioninthemarketingliteratureuntilrelativelyrecently.Nowthereiswidespreadrecognitionoftheimportanceoffosteringlong-termrelationshipswithsuitablesuppliersandthereisconsiderableresearchintosuchcrucialissuesas:understandingmarketingstrategyintermsofaNETWORKofsuppliers(Håkansson&Snehota,1989);themanagementofcustomer/supplierrelationships(Hanetal.,1993);andtheadvantagesanddisadvantagesoflong-term"partnership"betweencustomersandsuppliers(Lamming,1993;Matthyssens&VandenBulte,1994).Ratherlessattentionhasbeengiventothecostsandproblemsinvolvedincollaborativerelationshipsbetweensuppliersandcustomers,andtothesituationswhensuchrelationshipsmaybelessappropriate(i.e.,whentherisksofprovidingasupplierwithprivilegedaccessmayexceedthepotentialbenefits).

Bibliography

Kotler,P.&Levy,S.J.(1973).Buyingismarketingtoo.JournalofMarketing,37,(1),Jan,5459.

Han,S-L.,Wilson,D.T.&Dant,S.P.(1993).Buyer-supplierrelationshipstoday.IndustrialMarketingManagement,22,(4),Nov.,331338.

Lamming,R.(1993).Beyondpartnership.Prentice-Hall.

Matthyssens,P.&VandenBulte,C.(1994).Gettingcloserandnicer:Partnershipsinthesupplychain.LongRangePlanning,27,(1),Feb.,7283.

DOMINICWILSON

SurveyResearch

Introduction

SurveyresearchisoneofthefourmainsourcesofPRIMARYDATA,theothersbeingOBSERVATION,QUALITATIVERESEARCH,andexperimentalresearch.Surveyscanprovideinformationonpastandintendedbehavior,attitudes,beliefs,opinions,andpersonalcharacteristics.Whilethedataprovidedbysurveysarebasicallydescriptive,appropriateanalysisofthesurveydatacanprovideevidenceofassociationbetweenvariables.

Surveysinvolveaskingpeople(respondents)questions,eitherverbalorwritten.Thetermsamplesurveyindicatesthatsurveydatahavebeencollectedfromasampleofapopulation.Dataarecollectedwiththeaidofquestionnairesthroughthemailorbymeansofcomputersoradministeredtoindividualsorgroupsinface-to-faceinterviewsinthehomeorinthestreetorusingthetelephone.

Incross-sectionalstudies,dataarecollectedatasinglepointintimefromacross-sectionofthepopulation.Typicalanalysisofcross-sectionalsurveysinvolvesattemptingtomeasurecharacteristicsofthepopulationasawholeand/orbreakingdownthesampleintosubgroupsandseeingifbehavior,opinions,etc.varybetweenthegroups.

Inlongitudinalstudies,respondentsarestudiedatdifferentmomentsintimeinordertoexaminetrendsandchanges,ifany,overtime.

TypesofSurveys

Surveysusuallyinvolvetheuseofstructuredinterviewswiththeinterviewerorrespondentfollowingthewordingandorderprovidedona

customersatisfaction

andinternationalmarketing88

seealsoservicequality

customerserviceseeservicequality

customers41

andcustomerdatabase42

internalseeinternalmarketing

multiplecustomermarkets223

profiling70

rightsseeconsumerprotection

andservicedelivery208

seealsosuppliers

Cyert,R.M.1,235

DAGMARmodel42

andaction42

andawareness6,42

andcomprehension24,42

andconviction37,42

seealsocommunicationobjectives

Dahringer,L.D.84,88,94,96

Daniels,J.D.90,96,97

dataanalysis

cross-tabulation8,25,39,45

descriptivestatistics25,45,135,230,249

factoranalysis46,62,137,173,181

MINITABsystem25,135,137,184,230

andratingscales181

regressionandcorrelation9

univariateanalysis45,135,230,249

seealsobivariateanalysis;clusteranalysis;multivariateanalysis;primarydata;ratingscales;typesofmeasure

database423

ABI/Inform42

customer42,49,59,144

DIALOGnetwork43

andmarketingresearch132,202

NEXISnetwork43

Predicasts(PTS)42

andtelemarketing243

seealsocomputersinmarketing;ProfitImpactofMarketingStrategies(PIMS)

Davis,K.etal.228

Day,G.S.11,22,113,156

deciders12,29,43

seealsobuyingcenter;organizationalbuyingbehavior;purchasingprocess

decisionmaking

adaptivestyle1

centralized96

decision-makingunitsseebuyingcenter

descriptivemodels13

entrepreneurialstyle1

andmarketinginformationsystems124

andmarketingresearch130

stochasticmodels14

anduncertainty248

seealsostrategicdecisions

decision-makingunit(DMU)seebuyingcenter

decisionsupportsystemsseemarketingdecisionsupportsystems

decisiontheory,anddecisionmodels14

delphimethods55,66

demand43

cross-elasticity112

derived12

existing43

historic43,59

latent43

market114

non-pricefactors7,141,166

inorganizationalmarkets147,161

potential43

andpriceelasticity43,98,158,161,166,191

andproductlifecycle167

realizable43

forservices207

demographicenvironment44,55

andservicessectorgrowth224

seealsodemographics;macroenvironment;marketingenvironment

demographics44,111

andsegmentationvariables204,205

andshoppertypologies2,225

trends44,109

seealsogeodemographics;lifestyles

deontology124

depthinterviews45,131,164,178

seealsofocusgroups

deregulation,andserviceprovision215

descriptivestatistics456,230

andbivariateanalysis45

andmultivariateanalysis45

andunivariateanalysis45,249

anduseofcomputers25,45,135

design46

investmentin46

andnewproductdevelopment140

service208

storedesign194,2323

seealsoatmospherics;questionnairedesign

designmanagement47

anddesignaudits47

anddesignbrief47

anddesignsourcing47

''designschool",andstrategy77,236,248

desireseeAidamodel

Dhalla,N.K.167

Dibb,S.148

Dibb,S.etal.169

Dickson,P.R.148,204,205

Dierickx,I.22

differentiationstrategy48,68

andcompetitiveadvantage22,23,48

andretailpositioning190

seealsocompetitivestrategy;genericstrategies

diffusionofinnovationseediffusionprocess

diffusionprocess48

andadoptionprocess2,48

seealsoproductinnovation

directmail1,17,49,49

andcognitivestage19

andconativestage256

anddatabasemarketing42,185

andoutboundcommunications149

andtargeting49,70

directmarketing49

andcomputers49

andconativestage256

growth49

offthepage1,256,144

telemarketing1,5,256,149,243

seealsodirectmail;inboundcommunications;outboundcommunications

directionalmatrix49,68,156

The Blackwell Encyclopedic Dictionary of Marketing

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