The major ones are: I. Advertising mail - wikipedia, the free Direct mail marketing is under scrutiny by many of its former and current advocates. Direct marketing. The 7 Habits of Highly Successful People. Successful direct marketing methods von bob stone Autor. E In India, people out of 1, own cars.
It is divided into the current and capital accounts. Current accounts include all of the following except: A balance on goods. B portfolio investments. C balance on services. D goods imports. E goods exports. That China has about one half an elevator per thousand people is indicative of: A low product saturation level.
B high product saturation level. C high population level. D high technological level. E low technological level. B a seemingly insatiable consumer demand for imported goods.
C the enormous cost of military operations in the Middle East. D the services trade surplus. E record goods sales to developing countries. B accounting and legal services. C royalties and license fees. D engineering services. In August , the Russian economy imploded. As a result, all of the following listed events happened except: A the ruble plunged in value.
B the government defaulted on its foreign debt obligation. C many Russians faced wage cuts and layoffs. D Russia's economy did not recover from the impact. E savings were wiped out as banks collapsed. B a surplus production of goods and services. C a scarcity of goods and services within the country.
D a need for revaluation of its currency. E time for fluctuating its currency. B Germany. C the United States. D Japan. E Korea. E beef is less expensive in China than in the United States. What is the most likely explanation for this?
A Japan's Central Bank acted to prop up the yen. B Inflation in Japan suddenly spiked upward. C McDonald's headquarters stopped hedging.
B the dollar has depreciated relative to the yen. C the yen has depreciated relative to the dollar. D the dollar has appreciated relative to the yen. E the dollar and yen both remained same in value. B balance the relative value of the dollar compared to the euro. C protect all earnings from foreign-exchange movements. B new profit opportunities.
C lower local currency financing costs. D bad debts occur. E cancellation of aircraft equipment sales. In order to achieve success, based on author William Greider's analysis, what are the realities that executives and marketers should take into account in such a dynamic environment? Answer: a Capital movements have replaced trade as the driving force of the world economy; b production has become "uncoupled" from employment; c the world economy dominates the scene; individual country economies play a subordinate role; d the struggle between capitalism and socialism is largely over; and e the growth of e-commerce diminishes the importance of national barriers and forces companies to reevaluate their business models.
However, due to globalization it is harder to categorize the systems narrowly. What will be more robust descriptive criteria that can be used for classification? Answer: a type of economy; b type of government; c trade and capital flows; d the commanding heights; e services provided by the state and funded through taxes; f institutions; and g markets.
Give examples of countries which follow these systems. Answer: In Centrally Planned Socialism, the state has broad powers to serve the public interest as it sees fit. Ownership of entire industries as well as individual enterprises belongs to the government. The elements of the marketing mix are not used as strategic variables.
In Centrally Planned Capitalism, economic system command resource allocation is utilized extensively in an overall environment of private resource ownership. In Sweden, the government controls two- thirds of all expenditures, and the resource allocation is more "command" oriented than "market" oriented.
This would be an example of centrally planned socialism although it can have elements of capitalism. China is an example of centrally planned socialism. Today much attention is focused on opportunities in Brazil, Russia, India, and China.
Give reasons for this shift using an example of a manufacturer. Experts predict that the BRIC nations will be key players in global trade even as their track records on human rights, environmental protection, and other issues come under closer scrutiny by their trading partners. The BRIC government leaders will also come under pressure at home as their developing market economies create greater income disparity. Difficulty: Difficult Chapter LO: 3 AACSB: Analytical thinking Course LO: Identify and describe the processes and tools of strategic marketing 85 The newly independent countries of the former Soviet Union present an interesting situation: income is declining, and there is considerable economic hardship.
The potential for disruption is certainly high. Are they problem cases, or are they attractive opportunities with good potential for moving out of the low-income category?
Answer: These countries are good example of risk-reward trade-off. Many companies have taken the plunge, but many others are still assessing whether to take risk. Belarus and Turkmenistan are rated quite low in the rankings in terms of economic freedom. Russia itself has slipped within the upper-middle-income category.
However, there are still some former Soviet- dominated countries which have opportunities for economic growth. It much depends on the actions taken by the Soviet republic. For example, the launching of a military action in Georgia creates a ripple effect and causes economic and political instability. Explain these assumptions, giving examples. Answer: 1 The poor have no money. In Bangladesh villagers spend considerable sums to use village phones operated by local entrepreneurs; 2 the poor are too concerned with fulfilling basic needs to "waste" money on nonessential goods.
Consumers who are too poor to purchase a house do buy luxury goods such as televisions and cell phones; 3 the goods sold in developing markets are so inexpensive that there is no room for a new market entrant to make a profit.
Since the poor often pay higher prices for many goods, there is an opportunity for efficient competitors to realize attractive margins by offering quality and low prices; 4 people in BOP markets cannot use advanced technology. Residents of rural areas can and do quickly learn to use cell phones and PCs; and 5 global companies that target BOP markets will be criticized for exploiting the poor.
A global company offering basic goods and services that improve a country's standard of living can earn a reasonable return while benefiting society.
Difficulty: Moderate Chapter LO: 3 AACSB: Analytical thinking Course LO: Identify and describe the processes and tools of strategic marketing 87 Some people believe that marketing is relevant only in affluent, industrialized countries, whereas others believe that the role of marketing is to identify people's needs and wants worldwide, irrespective of the economy.
Giving examples of companies involved in energy conservation and technology, support the latter argument. Answer: People everywhere need affordable and safe drinking water. Competitive advantage in upstream and support activities often grows more out of the entire system of countries in which a firm competes than from its position in any single country. Secondly, in industries where downstream activities or other buyer-tied activities are vital to competitive advantage, there tends to be a more multidomestic pattern of international competition.
In many service industries, for example, not only downstream activities but frequently upstream activities are tied to buyer location, and global strategies are compara- tively less common. In industries where upstream and support activities such as technology development and operations are crucial to competitive advantage, global competition is more common.
For example, there may be a large need in firms to centralize and coordinate the production function worldwide to be able to create rational production units that are able to exploit economies of scale.
Today it is very popular among companies to outsource production to the Far East, e. This will put pressure on the firm to coordinate a European price policy.
This will be discussed further in Chapter The distinctive issues of international strategies, in contrast to domestic, can be summa- rized in two key dimensions of how a firm competes internationally. For example, a company can locate different parts of its value chain in different places — for instance, factories in China, call centres in India and retail shops in Europe.
The second dimension is called coordination, which refers to how identical or linked activities performed in different countries are coordinated with each other Porter, Since its introduction in , this model has dominated the thinking of business executives. Yet a growing number of service businesses, including banks, hospitals, insurance companies, business consulting Value shops services and telecommunications companies, have found that the traditional value chain A model for solving model does not fit the reality of their service industry sectors.
Stabell and Fjeldstad problems in a service identified two new models of value creation — value shops and value networks. Fjeldstad environment, similar to workshops. Value is and Stabell argue that the value chain is a model for making products, while the value shop is created by mobilizing a model for solving customer or client problems in a service environment. The value network resources and deploying is a model for mediating exchanges between customers.
Each model utilizes a different set them to solve a specific customer problem. The main differences between the two types of value chains are illustrated in Table 1. Value networks The formation of several Value shops as in workshops, not retail stores create value by mobilizing resources e. Shops are organized around making and executing decisions — identifying value chain. Value is material and components to products. Customer value is not related to the solution itself but to the value of solving the problem.
Human resource management 5. The traditional value chain consists of primary and The primary activities of a value shop are: support activities.
Primary activities are directly involved 1. Problem-finding: activities associated with the record- in creating and bringing value to customers: upstream ing, reviewing and formulating of the problem to be product development and production and downstream solved and choosing the overall approach to solving the activities marketing and sales and service.
Support problem. Problem-solving: activities associated with generating the primary activities, e. Choice: activities associated with choosing among alter- native problem solutions. Execution: activities associated with communicating, organizing and implementing the chosen solution.
Control and evaluation: activities associated with mea- suring and evaluating to what extent implementation has solved the initial statement. Examples: production and sales of furniture, consumer Examples: banks, hospitals, insurance companies, business food products, electronic products and other mass consulting services and telecommunications companies. Source: based on Stabell and Fjeldstad This model applies to most service- oriented organizations such as building contractors, consultancies and legal organizations.
However, it also applies to organizations that are primarily configured to identify and exploit specific market opportunities, such as developing a new drug, drilling a potential oilfield or designing a new aircraft. Different parts of a typical business may exhibit characteristics of different configura- tions. For example, production and distribution may resemble a value chain; research and development a value shop. Value shops make use of specialized knowledge-based systems to support the task of creating solutions to problems.
Several key technologies and applications are emerging M01 Global Marketing Groupware, intranets, desktop videoconferencing and shared electronic workspaces enhance communication and collaboration between people, essential to mobilizing people and knowledge across value shops. Technologies such as inference engines and neural networks can help to make knowledge about problems and the process for solving them explicit and accessible.
It often refers to a group of companies, each specializing in one piece of the value chain, and linked together in some virtual way to create and deliver products and services. Stabell and Fjelstad define value networks quite differently — not as networks of affiliated companies, but as a business model for a single company that mediates interactions and exchanges across a network of its customers.
This model clearly applies best to telecommunications companies, but also to insurance companies and banks, whose business, essentially, is mediating between customers with different financial needs — some saving, some borrowing, for example.
Some of the most IT-intensive businesses in the world are value networks — banks, air- lines and telecommunications companies, for instance. But the competitive landscape is now shifting beyond automation and efficient transaction process- ing to monitoring and exploiting information about customer behaviour.
The aim is to add more value to customer exchanges through better understanding of usage patterns, exchange opportunities, shared interests and so on. Data mining and visu- alization tools, for example, can be used to identify both positive and negative connections between customers.
Competitive success often depends on more than simply performing your primary model well. It may also require the delivery of additional kinds of complementary value. Adopting attributes of a second value configuration model can be a powerful way to differentiate your value proposition or defend it against competitors pursuing a value model different to your own.
It is essential, however, to pursue another model only in ways that leverage the primary model. Now, with its book recommendations and special interest groups, it is adding the characteristics of a value network. Our research suggests that the value network, in particular, offers opportunities for many existing businesses to add more value to their customers, and for new entrants to capture market share from those who offer less value to their customers.
Combining the product value chain and the service value chain Blomstermo et al. Hard services are those where production and consumption can be decoupled. For example, software services can be transferred into a CD or some other tangible medium, which can be mass-produced, making standardization possible.
With soft services, where production and consumption occur simultaneously, the customer acts as a co-producer, and decoupling is not viable. The soft-service provider must be present abroad from its first day of foreign operations. Most product companies offer services to protect or enhance the value of their product businesses. Cisco, for instance, built its installation, maintenance and network-design ser- vice business to ensure high-quality product support and to strengthen relationships with enterprise and telecom customers.
A company may also find itself drawn into services when it realizes that competitors use its products to offer services of value. If it does nothing, it risks not only the commoditization of its own products — something that is occurring in most product markets, irrespective of the services on offer — but also the loss of customer relationships.
To make existing service groups profitable — or to succeed in launching a new embedded service business — executives of product companies must decide whether the primary focus of service units should be to support existing product businesses or to grow as a new and independent platform. When a company chooses a business design for delivering embedded services to custom- ers, it should remember that its strategic intent affects which elements of the delivery life cycle are most important.
If the aim is to protect or enhance the value of a product, the company should integrate the system for delivering it and the associated services in order to promote the development of product designs that simplify the task of service e. This approach involves minimizing the footprint of service delivery and incorporating support into the product whenever possible.
If the company wants the service business to be an independent growth platform, however, it should focus most of its delivery efforts on constantly reducing unit costs and making the services more productive Auguste et al. This internal brand-building process becomes more challenging as service brands expand internationally, drawing on workers from different global domains.
The interaction shown in Figure 1. Johansson and Jonsson emphasized the knowledge transfer between the product value chain and the value shop, by looking at value creation and utilizing the synergies between them.
This is especially relevant to consider in business to business B2B project selling. This process of generating customer value from a product Customer experience solution, services and finally customer experiences is shown in Figure 1. A customer The use of products experience occurs when a company intentionally uses products in combination with ser- in combination with services to engage the vices to engage individual customers in a way that creates a memorable event Pine and individual customer in a Gilmore, This can be characterized into one global economy.
The term essentially describes marketing initiatives that give customers of four groups: enter- in-depth, tangible experiences in order to provide them with sufficient information to make tainment, educational, a purchasing decision. It has evolved as a response to a perceived transition from a service aesthetic or escapist.
Unless companies want to be in a commoditized business, they will be compelled to upgrade their offerings to the next stage of customer value creation: customer experience.
This applies to both B2C business to consumer and B2B businesses. B2C businesses It is increasingly the case that consumers are involved in the processes of both defining and creating value, and the co-created experience of consumers through the holistic brand value structure becomes the very basis of marketing. This dimension refers to the level of interactivity between the supplier and the customer.
This dimension refers to the strength of feeling towards the interac- tion. Watching a film in the cinema e. We can sort experiences into four broad categories according to where they fall along the spectra of the two dimensions: Entertainment Entertainment can be defined as something that amuses, pleases or diverts especially a performance or show , or as the pleasure afforded by being entertained and amused.
In this zone, participants acquire new skills or increase those they already have. Many company offerings include educational dimen- sions.
This type of experience typically involves active participation by the consumer in educa- tional activities of a stimulating nature, thus ensuring that the event provides an experience. Aesthetic When the element of activity is reduced to a more passive involvement, the event becomes aesthetic.
Admiring the architectural or interior design of designer boutiques, for example, involves a high degree of intensity but it has little effect on its environment. In this category customers are involved in very intense experiences e. Luxury brand activity is of an aesthetic nature, with customers immersing themselves in the experience but with little active participation. Watching a Cirque du Soleil show see case 7.
Escapism Escapism can be defined as a tendency to escape from daily realities or routines by indulging in daydreams, fantasies or entertainment that provide a break from reality. Escapist activi- ties are those that involve a high degree of both involvement and intensity, and are clearly a central feature of much of luxury consumption and lifestyle experiences, often connected to the fitness trend.
This is clearly evident in the luxury tourism and hospitality sector, with the growth of specialized holiday offerings, in which customers are closely involved in co-creating their experiences.
Joining a Zumba dance course see case 3. B2B businesses Like B2C companies, B2B businesses also need to continuously innovate how they attract, engage and excite customers by finding new possibilities for creating value. Leading indus- trial equipment suppliers, for instance, are learning that creation of customer value needs to be based on how customers experience the job they need to do now or how they prepare Mass customization to transform themselves to succeed in the future.
An integrated part of the ties. This combines the mass customization process is the intangible service of helping customers figure out exactly low unit costs of mass what it is they want.
So when B2B companies mass customize a product, they compete in production processes with the flexibility of the service business of helping their individual business customers define their needs, and individual customization.
They want a better business. Customers that are growing and adapting to their markets do not just buy industrial equipment today because they want the equipment; it is always a means to create a better and more profitable business.
CNH manufactures its products agricultural and con- struction equipment and machines in 60 facilities throughout the world and distributes its products in approximately countries through approximately 12, full line dealers and distributors. The Tomahawk Customer Center has been serving customers for more than 60 years. The facility stands on the site of the Drott Manufacturing proving grounds, which date back to the early s.
After acquiring Drott in , Case transformed the property into a world- class facility dedicated to serving Case customers. The outcome? By contrast, virtual reality augmented or supple- replaces the real world with a simulated one. With the help of advanced AR, informa- mented by comput- er-generated sensory tion about the surrounding real world of the user becomes interactive and digitally input such as sound, manipulable. AR technology allows consumers to the end consumer, who will be motivated to make faster and more positive purchasing virtually interact with decisions.
Consequently AR experiential marketing is considered as mainly affecting the three-dimensional pre-purchase stage due to the fact that AR has the most impact at the pre-purchase stage. Furthermore, AR has the potential to provide customers with an experience they appreciate and that they will tell their friends about.
In conclusion, whereas traditional marketing frameworks view consumers as rational decision-makers focused on the functional features and benefits of products, experiential marketing views consumers as emotional beings, focused on achieving memorable expe- riences.
In this connection the use of new technologies, such as social media, has also increased the potential for experiential marketing. This is of particular relevance given the increasing significance of the internet as a communication and distribution channel within the luxury sector. Finally, the more a company engages all five senses in the creation of a customer experi- ence, the more effective and memorable it can be.
Viewers can accelerate their decision-mak- ing by easily dragging an item from the catalogue and placing it anywhere in the simulated space on their smartphone or tablet screen, and then imme- diately taking a screenshot of that selection.
Such technology allows for more personally interactive catalogues and enhances playfulness and conve- nience, as well as stimulating consumers buying IKEA online catalogue based on AR intentions and impressions of a brand.
What have been the driving forces for these changes? In dynamic markets customer needs shift rapidly and it is difficult to forecast such changes. Today, marketers are being chal- Big Data lenged by the huge volume of data Big Data that is well beyond the capacity of their The vast collection of organizations to comprehend and use. The accelerating diversity of market demands must data from traditional and digital sources be met with a set of appropriate and matching capabilities to deal with them.
The greater inside and outside the the mismatch between the increasingly fluctuating demands of the market and the relatively company.
It refers to immobile and homogeneous resources of the firm, the greater the capability gap Day, For example, manufacturers can analyse incoming data and, in some cases, automatically repair software damage. When the customers are then nearing the purchase decision regarding a specific product in the store, the retailer may automatically offer a bun- dle of products cross-selling , together with reward programme benefits.
Researchers can An extension of the con- model the impact of variations in menus, restaurants designs and training, among other ventional value chain, things, on sales and profitability. They show how information in itself can be used to create value. Fundamentally, there are four ways of using data and information to create business value Marchand, : 1. Managing risks. In the twentieth century the evolution of risk management stimulated the growth of functions and professions such as finance, accounting, auditing and controlling.
Reducing costs. Here the focus is on using information as efficiently as possible to achieve the outputs required from business processes and transactions. This process view of information management is closely linked with the re-engineering and con- tinuous improvement movements of the s.
The common elements are focused on eliminating unnecessary and wasteful steps and activities, especially paperwork and information movements, and then simplifying and, if possible, automating the remain- ing processes. Offering products and services. Many service and manufacturing companies focus on building relationships with customers and on demand management as ways of using information. Such strategies have led companies to invest in point-of-sale systems, account management, customer profiling and service management systems.
Inventing new products. Finally, companies can use information to innovate — to invent new products, provide different services and use emerging technologies.
Here, information management is about mobilizing people and collaborative work pro- cesses to share information and promote discovery throughout the company. Every company pursues some combination of the above strategies. In relation to Figure 1. This is the reason for the horizontal double arrows between Artificial intelligence AI the different physical and virtual value chain activities in the figure. In this way information The development of a computer system that can be captured at all stages of the physical value chain.
Obviously such information can is able to perform tasks be used to improve performance at each stage of the physical value chain and to coordinate normally requiring elements across it. However, it can also be analysed and repackaged to build content-based human intelligence.
AI emphasizes the creation products or to create new lines of businesses. The result might be that tradi- tion is turned into cre- ating a more customer tional industry sector boundaries disappear. The CEO of Amazon.
Consequently, AI can improve the customer experience. AI Assistants platforms — voice-controlled 2. Web-based interfaces and smartphone apps — screen-controlled AI assistants and the corresponding platforms can handle personal queries through an audio-only interface between user and AI. The rise of AI Assistants e.
The competition and consolidation among AI platforms will mean that only a few will be left standing, but the remaining will get a lot more power and attention. It is expected that the focus of many brands should shift: From reinforcing direct relationships with consumers to optimizing their positions on AI Assistants platforms. Push marketing getting platforms to promote a brand will become more important, while pull marketing persuading con- sumers to seek products becomes less so Dawar and Bendle, AI helps pinpoint a one-off problem or identify a growing issue faster than individuals manually can do.
This makes it much easier for those teams to focus on key business deci- sions and proactive customer service before there is a PR or social media backlash. AI may help in identifying potential problems quickly and respond accordingly. Some of the new solutions will trigger alerts and automatically respond to customers to solve these issues. Rather than simply responding to random inquiries, companies can build up IA models that anticipate what the consumer wants and subsequently respond proactively.
Once customers purchase a product, companies can present them with similar items that may interest them as well. Companies like Amazon and Netflix have invested a lot of time and money into this kind of personalization and had a lot of success with it Korzeniowski, AI-driven sentiment analysis can not only identify the product, but it can understand the level of customer dissatisfaction, analyze the impact to the brand, notify the internal customer experience team, initiate a remedy, and log all this data automatically.
In the era of influencer marketing, the ability to automatically sense and respond to customer interactions will enable companies with this capability to achieve a competitive advantage. AI can tie this data together to form a true customer forecast and determine how likely a potential buyer is to buy.
AI will not replace the sales team, but it can help your sales reps to carry out responsibil- ities that are time-intensive and help them to perform more effectively. In most cases the supply and distribution value chains are inter- connected, and this whole process needs to be analysed and understood before considering an eventual internationalization of value chain activities. This also involves decisions about configuration and coordination of the worldwide value chain activities.
Value shops create value by mobilizing resources people, knowledge and skills and deploying them to solve specific problems. Value shops are organized around making and executing decisions in the specific service interaction situation with a customer — identifying and assessing service problems or opportunities, developing alternative solutions or approaches, choosing one, executing it and evaluating the results.
This model applies to most service-oriented organizations. Engaging the customer and adding customer experiences are further exemplified by the use of augmented reality AR , which is a digital way of putting the product in the hands of the users and giving them the opportunity to test the product without paying for it.
Conse- quently, AR is especially effective in the pre-purchase stage of the buying process. The use of artificial intelligence AI helps the marketer segment the audience into smaller target groups and it also helps with creating more personalized marketing campaigns and ads for consumers and lead in the market. Case Study 1. Instead of making more their duties. More and more parents are start- Goeben responsible for product and Laurie Hyman ing to look at toys like they look at food.
A toy used responsible for marketing — have different back- to be a plastic thing and parents did not question grounds and competences: what was in it. Now green has gone mainstream, and parents want to know what is in their toys. Barbie and Polly Pocket toys, because of lead-paint At Propellerhead Studios, he worked with many hazards and tiny magnets that could be swallowed.
Before that, he was the founder and that children would not play with any of the recalled managing director of Starter Fluid, a seed-stage toys. Green Toys Inc. He has an MBA from the Uni- its first year on. Hyman also served as the overseas, Green Toys contracts only with compa- director of marketing at Goodcompany. Green Toys can also track the chemical content ern California and a BA in Business from Indiana of toys better than its counterparts.
This helps predominantly female. The largest part of these mothers is well-educated and online. The whole world of bloggers, especially parents who are blog- ging and searching online about products and trends for their children, is huge. In eco-friendly toys generated just Source: Green Toys Inc.
Some of the biggest Green Toys retailers are also selling online. Until now Green Toys has had no plans to move production out of the US. How- ever, in the future it does not exclude the possibil- ity of manufacturing abroad with local sourcing of materials.
The following report explains current and future trends in the global toy industry. Source: Green Toys Inc. As of , in a number of developing countries. They often 0—year-olds made up 26 per cent of the global choose to postpone childbirth, in favour of building population compared with 35 per cent in see a career or simply enjoying their freedom. Table 1. This is expected to fall to 24 per cent in The oldest mothers at first childbirth in the By con- towards smaller family sizes in both developed and trast, the average age of women at first childbirth developing markets.
Regionally, Eastern Europe has in the US is relatively low, at 26 years in This is seen the largest decrease in the child population, at partly due to the importance of the Hispanic popu- an annual average rate of 2 per cent between lation, which tends to have larger families from an and , which is partly due to large-scale migra- earlier age.
This has important and the fast-growing markets of Asia-Pacific, Latin implications for toys and games companies target- America and Middle East and Africa, where children ing parents of 0—year-olds.
The top year-olds rose so this group is forecast to account five countries Germany, UK, France, Japan and US for 10 per cent of the global population. East and Africa are the biggest regions in terms When fewer babies are born into a family, they of 0—year-olds, followed by Latin America. As they get older they are spoilt in different ways, including with mobile 0—14 35 33 30 26 24 phones, education and leisure activities. That said, 15—64 59 61 63 66 66 there are many, especially in rural areas, who are not spoilt at all.
Source: based on euromonitor. They have found that online sites ground. Almost all multinational players, including help them to promote niche brands and gain wider Mattel, Namco Bandai, LEGO and Hasbro, enjoyed market exposure. Online sites also help consum- very high growth in their sales in China. In Japan, the rapid growth of internet retail- dren per household is higher than one, spending on ing has helped drive sales of the newest video game traditional toys and games per child does not exceed releases.
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