Behavioral Decision Theory and Behavioral Economics

As you might guess from low-involvement decision making and variety seeking, consumers don’t always process information or make decisions in a deliberate, rational manner. One of the most active academic research areas in marketing over the past three decades has been behavioral decision theory (BDT). Behavioral decision theorists have identified many situations in which

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MARKETING EXCELLENCE DISNEY

Few companies have been able to connect with their audience as well as Disney has. From its founding by brothers Walt and Roy Disney in 1923, the Disney brand has always been synonymous with trust, fun, and qual­ity entertainment for the entire family. Walt Disney once stated, “I am interested in entertaining people, in

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MARKETING EXCELLENCE IKEA

IKEA was founded in 1943 by a 17-year-old Swede named Ingvar Kamprad who sold pens, Christmas cards, and seeds out of a shed on his family’s farm. The name IKEA was derived from Kamprad’s initials (IK) and the first letters of the Elmtaryd farm and the village of Agunnaryd where he grew up (EA).

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What is Organizational Buying?

Frederick E. Webster Jr. and Yoram Wind define organizational buying as the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.4 1. THE BUSINESS MARKET VERSUS THE CONSUMER MARKET The business market consists of all the organizations that acquire

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Participants in the Business Buying Process

Who buys the trillions of dollars’ worth of goods and services needed by business organizations? Purchasing agents are influential in straight-rebuy and modified-rebuy situations, whereas other employees are more influ­ential in new-buy situations. Engineers are usually influential in selecting product components, and purchasing agents dominate in selecting suppliers.15 1. THE BUYING CENTER Webster and

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The Purchasing/Procurement Process

In principle, business buyers seek the highest benefit package (economic, technical, service, and social) in rela­tionship to a market offering’s costs. The strength of their incentive to purchase will be a function of the differ­ence between perceived benefits and perceived costs.27 Business marketers must therefore ensure that customers fully appreciate how the firm’s offerings

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Stages in the Buying Process

We’re ready to describe the general stages in the business buying-decision process. Patrick J. Robinson and his associates identified eight stages and called them buyphases.31 The model in Table 7.1 is the buygrid framework. In modified-rebuy or straight-rebuy situations, some stages are compressed or bypassed. For example, the buyer normally has a favorite supplier

Developing Effective Business-to- Business Marketing Programs

Business-to-business marketers are using every marketing tool at their disposal to attract and retain customers. They are embracing systems selling and adding valuable services to their product offerings and employing cus­tomer reference programs and a wide variety of online and offline communication and branding activities. 1. COMMUNICATION AND BRANDING ACTIVITIES Business marketers are increasingly

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Managing Business-to-Business Customer Relationships

Business suppliers and customers are exploring different ways to manage their relationships.60 Loyalty is driven in part by supply chain management, early supplier involvement, and purchasing alliances.61 Business-to-business marketers are avoiding “spray and pray” approaches to attracting and retaining custom­ers in favor of honing in on their targets and developing one-to-one marketing approaches.62 Nearly

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MARKETING EXCELLENCE ACCENTURE

Accenture was launched as the Administrative Accounting Group in 1942 and was the consulting arm of accounting firm Arthur Andersen. In 1989, it became a separate busi­ness unit focused on IT consulting and bearing the name Andersen Consulting. At that time, though it was earning $1 billion annually, Andersen Consulting had low brand awareness

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MARKETING EXCELLENCE GE

Thomas Edison founded the Edison Electric Light Company in 1878. The company, which soon changed its name to General Electric (GE), became an early pioneer in lightbulbs and electrical appliances and served the electrical needs of various industries, such as transporta­tion, utilities, manufacturing, and broadcasting. GE be­came the acknowledged pioneer in business-to-business marketing in

Competing on a Global Basis

Some companies have long been successful global marketers—firms like Shell, Bayer, and Toshiba have sold around the world for years. In luxury goods such as jewelry, watches, and handbags, where the addressable mar­ket is relatively small, a global profile is essential for firms like Prada, Gucci, and Louis Vuitton to profitably grow. But global

Deciding Whether to Go Abroad

Most companies would prefer to remain domestic if their domestic market were large enough. Managers would not need to learn other languages and laws, deal with volatile currencies, face political and legal uncer­tainties, or redesign their products to suit different customer needs and expectations. Business would be easier and safer. Yet several factors can

Deciding Which Markets to Enter

In deciding to go abroad, the company needs to define its marketing objectives and policies. What proportion of international to total sales will it seek? Most companies start small when they venture abroad. Some plan to stay small; others have bigger plans. 1. HOW MANY MARKETS TO ENTER The company must decide how many

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Deciding How to Enter the Market

Once a company decides to target a particular country, it must choose the best mode of entry with its brands. Its broad choices are indirect exporting, direct exporting, licensing, joint ventures, and direct investment, shown in Figure 8.2. Each succeeding strategy entails more commitment, risk, control, and profit potential. 1. INDIRECT AND DIRECT EXPORT

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Deciding on the Marketing Program

International companies must decide how much to adapt their marketing strategy to local conditions.52 At one extreme is a standardized marketing program worldwide, which promises the lowest costs; Table 8.1 summarizes some pros and cons. At the other extreme is an adapted marketing program in which the company, consistent with the marketing concept, believes

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Country-of-Origin Effects

Country-of-origin perceptions are the mental associations and beliefs triggered by a country. Government offi­cials want to strengthen their country’s image to help domestic marketers that export and to attract foreign firms and investors. Marketers want to use positive country-of-origin perceptions to sell their products and services. 1. BUILDING COUNTRY IMAGES Governments now recognize that

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MARKETING EXCELLENCE TWITTER

Few companies have had such a vast global impact in so short a time as Twitter. The online social networking com­pany was the brainchild of Jack Dorsey, Evan Williams, Biz Snow, and Noah Glass back in 2005. Dorsey thought it would be revolutionary if people could send a text to one number and have

MARKETING EXCELLENCE L’OREAL

When it comes to globalizing beauty, no one does it better than L’Oreal. The company was founded in Paris more than 100 years ago by a young chemist, Eugene Schueller, who sold his patented hair dyes to local hairdressers and salons. By the 1930s, Schueller had invented beauty products like suntan oil and the

Bases for Segmenting Consumer Markets

Market segmentation divides a market into well-defined slices. A market segment consists of a group of customers who share a similar set of needs and wants. The marketer’s task is to identify the appropriate number and nature of market segments and decide which one(s) to target. We use two broad groups of variables to

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