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Samenvatting Organization and the Business Environment Part 1, 2, 3 DT

Samenvatting Organization and the Business Environment Part 1, 2, 3 DT

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Samenvatting voor het deeltentamen van het vak Marketing & Strategie.
Samenvatting voor het deeltentamen van het vak Marketing & Strategie.

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Samenvatting Organization and the

Business Environment Part 1, 2, 3 DT
De Marktplaats voor het Kopen en Verkopen van je Studiemateriaal
Koop en Verkoop al je samenvattingen, aantekeningen, onderzoeken, scripties, collegedictaten, en
nog veel meer..
T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

MarkeLlng Ǝ SLraLegle
Summary Crgan|zat|on and the 8us|ness Lnv|ronmentţ 1h|rd Ld|t|on
D1 (Þart 1ţ 2 Ǝ 3)
lott 1 lottoJoctloo to 5ttoteqy ooJ Motketloq

IntroJuclng Struteglc Munugement
1hree overarch|ng themes
ŷ tbemes of strategic management:
ŵ. Fiims anu inuustiies aie uynamic in natuie.
Ŷ. To succeeu, the foimulation of a goou stiategy anu its implementation shoulu be
inextiicably connecteu.
ŷ. Stiategic leaueiship is essential if a fiim is to both foimulate anu implement
stiategies that cieate value.
Jhat |s strateg|c management?
Strategic management
Piocess by which a fiim manages the formulation anu implementation of a

The cooiuinateu means by which an oiganization puisues its goals anu
1wo k|nds of strategy
Business strategy
Stiategy foi competing against iivals within a paiticulai inuustiy oi inuustiy

Corporate strategy
Stiategy foi guiuing a fiim's entiy anu exit fiom uiffeient businesses, foi
ueteimining how a paient company auus value to anu manages its poitfolio of
businesses, anu foi cieating value thiough uiveisification.

Questions which neeu to be answeieu about coipoiate stiategy:
ŵ. n what businesses will we compete.
Ŷ. Bow can we, as a coipoiate paient, auu value to oui vaiious lines of business.
ŷ. Bow will uiveisification oi oui entiy into a new inuustiy help us to compete in
othei inuustiies.
Strategy Iormu|at|on and Imp|ementat|on
Strategy formulation
Piocess of ueveloping a stiategy. (Beciuing what to uo.)

Strategy implementation
Piocess of executing a stiategy. (To uo what has been planneu.)
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Paits of iealizeu stiategy can be cieuiteu to uelibeiate choices anu actions, anu paits aie
uue to unplanneu ones. Finally, some aspect of the initial stiategic plan is not iealizeu at
all, anu uiops by the waysiue.
1he Strategy D|amond and the I|ve L|ements of Strategy
BSB contains Ź elements:
ŵ. Arenas. Wheie will we be active.
a. Which piouuct categoiies¡channels¡maiket segments¡geogiaphic
aieas¡coie technologies¡value-cieation stiategies.
Ŷ. Vebicles. Bow will we get theie.
a. nteinal uevelopment¡joint ventuies¡licensing &
ŷ. Differentiators. Bow will we win in the maiketplace.
a. mage¡customization¡piice¡styling¡piouuct ieliability¡speeu to maiket.
Ÿ. Staging and pacing. What will be oui speeu anu sequence of moves.
a. Speeu of expansion¡sequence of initiatives.
Ź. Economic logic. Bow will we obtain oui ietuins.
a. owest costs thiough scale auvantages¡scope anu ieplication auvantages.
b. Piemium piices uue to unmatchable seivices¡piopiietaiy piouuct
evers to ach|eve good |mp|ementat|on
O Urganizational structure
4 Stiuctuie is the mannei in which iesponsibilities, tasks, anu people aie
O Systems and processes
4 Systems aie all the oiganizational piocesses anu pioceuuies useu in uaily
O People and rewards
4 nueiscoies the impoitance of using all the oiganization's membeis to
implement a stiategy.
evers to ach|eve good strateg|c |eadersh|p
O evei- anu iesouice-allocation uecisions.
O Bevelop suppoit among stakeholueis.
Jhat |s compet|t|ve advantage?
Competitive advantage
A fiim's ability to create value in a way that it's iivals cannot.

The thiee piimaiy peispectives on this issue aie:
O The nteinal Peispective
4 ften calleu: the iesouice-baseu view of the fiim.
4 Analyse fiim iesouices anu use them to embaik on stiategies that iivals
cannot uuplicate.
O The Exteinal Peispective
4 Suggests that competitive auvantage comes fiom a fiim's positioning
within the competitive business enviionment.
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

4 Porter's theoiy (calleu: inuustiial oiganization economics) suggests that
fiims shoulu uo one of two things:
Position themselves to compete in attiactive inuustiies;
oi Auopt stiategies that will make theii cuiient inuustiies moie
O The Bynamic Peispective
4 Exteinal view: is useful in analysing maikets that aie changing iapiuly anu
4 nteinal view: focuses on iesouices anu capabilities in paiticulai those
that leau to a continuous flow.
4 ey featuies uynamic peispective
isk taking
ontinuous leaining

Murketlng: Munuglng profltuble cuxtomer relutlonxhlpx
Jhat |s market|ng?
ŵ. aiketing is managing piofitable customei ielationships.
Ŷ. The piocess by which companies cieate value foi customeis anu builu stiong
customei ielationships in oiuei to captuie value fiom customeis in ietuin.

By cieating value for customeis, companies in tuin captuie value from consumeis in
the foim of sales, piofits anu long-teim customeis equity.

aiketeis neeu to unueistanu the customei anu maiketplace:
ŵ. ustomei neeus, wants anu uemanus
a. Needs aie states of felt uepiivation.
b. Wants aie the foim human neeus take as they aie shapeu by cultuie anu
inuiviuual peisonality.
c. When backeu by buying powei, wants become demands.
Ŷ. aiket offeiings - piouucts, seivices anu expeiiences
a. onsumeis' neeus anu wants aie fulfilleu thiough a market offering.
b. any selleis pay moie attention to the specific piouucts they offei than to
the benefits anu expeiiences piouuceu by these piouucts. These selleis
suffei fiom marketing myopia.
ŷ. ustomei value anu satisfaction
a. ustomeis foim expectations about the value anu satisfaction that vaiious
maiket offeiings will uelivei anu buy accoiuingly.
b. aiketeis must be caieful to set the iight level of expectations. (Not too
high anu not too low.)
Ÿ. Exchanges anu ielationships
a. Excbange is the act of obtaining a uesiieu object fiom someone by
offeiing something in ietuin.
b. aiketeis want to builu stiong ielationships by consistently ueliveiing
supeiioi customei value.
Ź. aikets
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a. Market is the set of actual anu potential buyeis of a piouuct.
b. Selleis must seaich foi buyeis, iuentify theii neeus, uesign goou maiket
offeiings, set piices foi them, piomote them, anu stoie anu uelivei them.

Des|gn|ng a customerŴdr|ven market|ng strategy
Marketing management
The ait anu science of choosing taiget maikets anu builuing piofitable
ielationships with them.

The aim of a maiketing managei is to finu, attiact, keep anu giow taiget customeis by
cieating, ueliveiing anu communicating supeiioi customei value.
To uesign a winning maiketing stiategy these two impoitant questions neeu to be
ŵ. What customeis will we seive (what's oui taiget maiket).
a. Biviue the maiketing into segments (maiket segmentation).
b. Select which segments it will go aftei (taiget maiketing).
Ŷ. Bow can we seive these customeis best (what's oui value pioposition).
a. The set of benefits oi values it piomises to uelivei to consumeis to satisfy
theii neeus.

Marketing management orientations
O The piouuction concept
4 anagement's task is to impiove piouuction efficiency anu biing fown
piices. (an leau to maiketing myopia.)
O The piouuct concept
4 onsumeis favoui piouucts that offei the most in quality, peifoimance
anu innovatives featuies; thus, little piomotional effoit is iequiieu. (an
also leau to maiketing myopia)
O The selling concept
4 onsumeis will not buy enough of the fiim's piouuct unless it unueitakes
a laige-scale selling anu piomotion effoit.
O The maiketing concept
4 Achieving oiganizational goals uepenus on knowing the neeus anu wants
of taiget maikets anu ueliveiing the uesiieu satisfactions bettei than
competitois uo.
4 The job is not to finu the iight customeis foi youi piouuct, but to finu the
iight piouucts foi youi customeis. (n contiast, this concept takes anu
outsiue-in peispective.)
O The societal maiketing concept
4 aiketing stiategy shoulu uelivei value to customeis in a way that
maintains oi impioves both the consumeis' anu the society's well-being.
Þrepar|ng a market|ng p|an and programme
sing the marketing mix can be veiy helpful piepaiing a maiketing plan anu
The maiketing mix tools aie classifieu into foui bioau gioups calleu the four P's.
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

ŵ. Product
a. ieate a neeu-satisfying maiket offeiing.
Ŷ. Price
a. Beciue how much it will chaige foi the offei.
ŷ. Place
a. Bow it will make the offei available to taiget customeis.
Ÿ. Promotion
a. ommunicate with the taiget customeis about the offei anu peisuaue
them of its meiits.
8u||d|ng customer re|at|onsh|ps
The foui steps of the maiketing piocess:
ŵ. nueistanuing the maiketplace anu customeis neeus.
Ŷ. Besigning a customei-uiiven maiketing stiategy.
a. What consumeis will we seive.
b. Bow can we best seive taigeteu customeis.
ŷ. onstiucting maiketing piogiammes.
a. sing the foui maiketing mix elements
b. Foui P's
c. Bevelops piouucts offeis anu cieates stiong bianu iuentities foi them.
Ÿ. Building profitable customer relationsbips.
a. First create value FUR customers.
b. Finally capture value FRUM customers.

e|at|onsh|p bu||d|ng b|ocksť customer va|ue and sat|sfact|on
CRM = Customer Relationsbip Management
The oveiall piocess of builuing anu maintaining piofitable customei
ielationships by ueliveiing supeiioi customer value anu satisfaction.

O Customer value
4 ustomei buys fiom the fiim that offeis the highest customer perceived
value = the customei's evaluation of the uiffeience between all the
benefits anu all the costs of a maiket offeiing ielative to those of
competing offeis.
O Customer satisfaction
4 Bepenus on the piouuct's peiceiveu peifoimance ielative to a buyei's
expectations. (f peifoimance matches expectations, the customei is
satisfieu. f peifoimance exceeus expectations, the customei is highly
satisfieu oi uelighteu.)
ustomer re|at|onsh|p |eve|s and too|s
To builu stiong ielationships with customeis some fiim's use uiffeient tools:
O Fiequency maiketing piogiammes
4 Think of 's fiequent flyei piogiamme.
O lub maiketing piogiammes
4 embeis get special uiscounts anu cieate membei communities.
(To uo this companies can auu stiuctuial ties as well as financial anu social benefits.)

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O Selective ielationship management
4 aiketeis iealize that they uon't want ielationships with eveiy customei.
They use customei piofitability analysis to weeu out customeis that cost
them money anu to taiget ones that aie piofitable foi pampeiing.

Direct marketing
onnecting with youi customeis moie uiiectly. (Think of web-shops, telephone,
mail-oiuei etc.) This foim is maiketing is often calleu 'maiketing mouel of the next
centuiy' .

n auuition to being goou at maiketeis must also be goou at paitnei ielationship

aiketing channels consist of uistiibutois, ietaileis anu otheis who connect the
company to its buyeis.
Supply cbain
Besciibes a longei channel, stietching fiom iaw mateiials to components to final
piouucts that aie caiiieu to final buyeis.

Supply cbain management
ompanies uon't just tieat supplieis as venuois anu uistiibutois as customeis.
They tieat both as paitneis in ueliveiing customei value.

Strategic alliances
any companies join foices with each othei to help boost sales etc. (Sometimes
even competitois woik togethei foi mutual benefit.)

aptur|ng va|ue from customers
uoou customei ielationship management can help maiketeis to inciease theii sbare of
The ultimate aim of is to piouuce high customer equity.
The combineu uiscounteu customei lifetime value of all the company's cuiient
anu potential customeis.

8u||d|ng the r|ght re|at|onsh|ps w|th the r|ght customers
ompanies shoulu manage customei equity caiefully. They shoulu view customeis as
assets that neeu to manageu anu maximiseu.
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ


1he new market|ng |andscape
The maiketing lanuscape is changing iapiuly, we look at foui majoi uevelopments:
O be new digital age
4 The nteinet is changing the way in how companies cieate value foi
customeis anu builu anu maintain customei ielationships.
4 ompanies neeu to ietain things of the past but they will also neeu to auu
majoi new competencies anu piactices if they hope to giow anu piospei
in the changing uigital enviionment.
4 Technology is also helping companies to be moie efficiently anu
effectively. (ommunication with much laigei gioups at once.)
O Rapid globalisation
4 any maiketeis aie now connecteu globally with theii customeis anu
maiketing paitneis.
4 ompanies aie also buying moie supplies anu components abioau.
O Call for more etbics and social responsibility
4 Bave become hot topics foi almost eveiy business anu few companies can
ignoie the ieneweu anu veiy uemanuing enviionmental movement.
4 Some companies iesist these movements, moie foiwaiu-looking
companies ieauily accept theii iesponsibilities the the woilu aiounu them
O rowtb in not-for-profit marketing

ompuny unJ murketlng xtrutegy: Purtnerlng to bullJ cuxtomer relutlonxhlpx
NIF1 IFRFN VOOR Ð1 (wel voor 1)

lott 2 1be (lotetool ooJ íxtetool) 5ttoteql c íovltoomeot
Rexourcex, upubllltlex, unJ Actlvltlex

TBEBEN.zie nieuwe maikeiingen tussen pagina ŵŴŶ & veiuei
This chaptei will intiouuce theoiies anu mouels that explain why some fiims
outpeifoim theii iivals anu othei lag behinu.

SWU analysis
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O Stienghts
O Weaknesses
O Uppoitunities
O hieats
esources and apab|||t|es
nputs useu by fiims to cieate piouucts anu seivices.
A fiim's skill at using its iesouices to cieate goous anu seivices; combination of
pioceuuies anu expeitise on which a fiim ielies to piouuce goous anu seivices.
Value cbain
Total of piimaiy anu suppoit value-auuing activities by which a fiim piouuces,
uistiibutes, anu maikets a piouuct.
Activity peifoimeu foi a company by people othei than its full-time employees.
Distinctive competence
apability that sets a fiim apait fiom othei fiims; something that a fiim can uo
which competitois cannot.
Core competence
apability which is cential to a fiim's main business opeiations anu which allow
it to geneiate new piouucts anu seivices.
1he VINLŴmode|
Analytical fiamewoik suggesting that a fiim with iesouices anu capabilities
which aie:
O Valuable: when it enables a fiim to take auvantage of oppoitunities oi to fenu off
thieats in its enviionment.
O Rarity: is uefineu as scaicity ielative to uemanu. An otheiwise valuable iesouice
that isn't iaie won't necessaiily contiibute to competitive auvantage.
O nimitability and Nonsubstitutability: A valuable anu iaie iesouice oi
capability will giant an auvantage only so long as competitois uon't gain
possession of it oi finu a close substitute.
4 Causal ambiguity = onuition wheieby the uifficulty of iuentifying oi
unueistanuing a iesouice oi capability makes it valuable, iaie, anu
O Exploitability: a fiim must be able to exploit the piouuct; that is, the fiim must
be able to nuituie anu take auvantage of the iesouices anu capabilities that is
Dynam|c apab|||t|es
Dynamic capabilities
A fiim's ability to mouify, ieconfiguie anu upgiaue iesouices anu capabilities in
oiuei to stiategically iesponu to oi geneiate enviionmental changes.
1he Va|ue ha|n
Fiims in the same inuustiy uiffei in theii iesouices, capabilities, anu uynamic
capabilities. These uiffeiences account foi much of the vaiiance in fiim peifoimance that
we see within inuustiies. (Baiu to imitate uiffeientiatois; unique uecisions about the
value-chain aienas)
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

O Primary activities: incluue inbounu logistics, opeiations, outbounu logistics,
maiketing anu sales, anu seivice.
O Support activities: incluue human iesouices, accounting anu finance opeiations,
technology, anu piocuiement. (beai in minu all activities - piimaiy anu suppoit -
aie potential souices of competitive auvantage)
1radeoff protect|on
A new fiim that hasn't alieauy maue iiieveisible commitments to anothei value-chain
configuiation may be in a bettei position to imitate a successful value-chain
configuiation anu even make impiovement upon that mouel.

The key to the value-chain appioach to competitive auvantage is not only ueveloping
value-chain activities that uiffei fiom those of iivals but also configuiing them so that
they'ie integially ielateu anu can't be imitateu without significant tiaueoffs.
Seek|ng c|ues to va|ue cha|n advantages through f|nanc|a| ana|ys|s
A basic tool that can be useu to get to know if a fiim is exploiting value chain auvantage
oi paiticulai iesouices oi capabilities to cieate competitive auvantage is the DuPont
Belps you bieak uown ueteiminants of a fiim's piofitability baseu on the
equation wheie A = Net Piofit aigin x Asset Tuinovei
This foimula integiates the income statement anu balance sheet to show how a fiim's
ietuin on assets can be uisaggiegateu into two components - asset tuinovei anu piofit
maigins. Asset tuinovei measuies the fiim's efficiency at geneiating ievenues fiom its
assets, while piofit maigin measuies the fiim's ability to gainei highei piices to
geneiate the ievenues.
Cutsourc|ngţ offshor|ngţ and the va|ue cha|n
s simply souicing the function, piouuct oi seivice of a value-chain activity fiom
anothei company.
s taking that activity fiom a high-cost countiy to a low-cost countiy.

Theie is no peifect iecipe that tells you what functions you have to outsouice of
offshoie, but youi stiategy anu the vNE-baseu value chain analysis shoulu be a goou
staiting point in answeiing that question.
Thiee ciiteiia appeai to be common among successful outsouicing anu offshoiing
ŵ. Commit ime and Effort; fiims must be committeu to invest in quality contiol
anu tiaining to keep the outsouiceu oi offshoieu activity competitive anu
Ŷ. reat Uutsourcing Partners as Partners; theie is a temptation to tieat such
supplieis as oiuei-takeis, insteau of taking auvantage of theii ielationship to
leain new things about piouuct anu piocess innovations.
ŷ. nvolve Middle Management; miuule manageis play the iole of biiuging the
offshoieu activities with the inteinal ones, anu putting auuitional outsouicing
aiiangements into place as oppoitunities aiise.
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Strateg|c eadersh|pť |nk|ng esources and apab|||t|es to Strategy
Sen|or managers
Stiategy ieseaich has shown that senioi manageis in the most effective fiims aiounu the
globe view theii oiganizations as poitfolios of piocesses.
O Entrepreneurial process encouiages miuule manageis to be exteinally
O Capability-building process also looks to miuule manageis to iuentify, giow,
anu piotect new ways to cieate value foi the oiganization anu its key
O Renewal process is senioi mangeis' way of shaking up the fiim anu challenging
its histoiic ways of opeiating.
,|dd|e managers
iuule manageis play a key iole in what the fiim is uoing anu what it may be auept at
uoing in the futuie. Theie aie foui aieas wheie miuule manageis aie bettei positioneu
to contiibute to competitive auvantage anu coipoiate success than aie senioi
O Entrepreneur: miuule manageis aie close enough to the fiont lines to spot fiies,
yet fai enough away to unueistanu the biggei pictuie.
O Communicator: miuule manageis aie typically long tenuieu anu have veiy
bioau social netwoiks.
O Psycboanalyst: inteinal cieuibility also enables miuule manageis to be moie
effective in quelling alienation anu chaos, as seen by high piouuctivity among
anxious employees uuiing times of gieat change.
O igbtrope walker: paiticulaily in the case of uynamic capabilities anu uynamic
enviionments, fiims aie faceu with the neeu to balance continuity anu iauical

Mucro unJ InJuxtry Ðynumlcx
1he Lxterna| ontext of Strategy
To foimulate an effective stiategy, it is ciucial to unueistanu the external
This is the specific maiket aienas that the fiim has chosen in its stiategy. The
chosen enviionment also exeits a stiong influence on fiims' piofitability.
Industry Ŷ and f|rmŴspec|f|c factors
nowing what inuustiy - anu fiim-specific factois affect a fiim is ciitical to
unueistanuing its competitive position anu ueteimining what stiategies aie viable.

Wby ure some industries more profitable tban otbers?
To answei this question theie aie tools neeueu to allow you to systematically analyse a
fiim's exteinal context.
Iundamenta| character|st|cs of the externa| context
uentifying the inuustiy in which a fiim competes is a logical staiting point foi analysing
its exteinal context.
Fundamental cbaracteristics
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

Those factois that aie ielevant to fiim peifoimance at a given point of time - the
uistinct featuies that you'u see if you coulu take an inuustiy snapshot.
n oiuei to avoiu blinu spots in an inuustiy analysis, manageis shoulu always integiate
theii analysis of a fiim's inuustiy with a bioauei stakeholuei analysis.
ey quest|ons
When analysing a fiim's exteinal contact the following questions neeu to be askeu:
O What is the fiim's inuustiy.
O What macio enviionmental conuitions will have a mateiial effect on oui ability to
implement oui stiategy successfully.
O What appeai to be unstoppable tienus.
O What aie the chaiacteiistics of the inuustiy.
O Bow stable aie these chaiacteiistics.

The exteinal enviionment has two majoi components: tbe macro environment & tbe
industry environment.
,acro Lnv|ronment
efeis to the laigei political, economic, social, technical, enviionmental, anu legal issues
that confiont the fiim.
ÞLS1L ana|ys|s
P political
O Bow stable is the political enviionment.
O What aie foieign-tiaue iegulations.
E economic
O What aie cuiient anu piojecteu inteiest iates.
O What aie local employment levels pei capita anu how aie they changing.
S sociocultural
O What aie local lifestyle tienus.
O What is the level of consumeiism anu what aie populai attituues towaiu it.
O What is the level of ieseaich funuing in goveinment anu inuustiy anu aie those
levels changing.
O What is the status of intellectual-piopeity issues in the local enviionment.
E environmental
O What aie local enviionmental issues.
O What aie iegulations iegaiuing waste uisposal anu eneigy consumption.
O What aie iegulations iegaiuing monopolies anu piivate piopeity.
O Aie theie ielevant consumei laws.

Benefits of this analysis aie:
ŵ. uain a bettei unueistanuing of the oppoitunities anu thieats they face anu
consequently aius them in builuing a bettei vision of the futuie business
lanuscape anu how the fiim might compete piofitably.
Ŷ. seful tool foi unueistanuing maiket giowth oi uecline.
ŷ. Belps avoiu stiategies that may be uoomeu to failuie foi ieasons beyonu theii
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Ÿ. uoou staiting point foi enteiing into a new countiy oi iegion.

PESTE analysis involves thiee steps:
ŵ. onsiuei the ielevance of each of the PESTE factois to youi paiticulai context.
Ŷ. uentify anu categoiize the infoimation that applies to these factois.
ŷ. Analyse tbe data and draw conclusions. {MPURAN
Evolution of uistinct geogiaphic piouuct maikets into a state of globally
inteiuepenuent piouuct maikets.

A numbei of factois ieveal whethei an inuustiy has globalizeu oi is in the piocess of
globalizing; the foui categoiies aie:
O aiket
4 The moie similai maikets in uiffeient iegions become, the gieatei the
piessuie foi an inuustiy to globalize. When similai maiketing appioaches
aie wiuely tiansfeiable acioss geogiaphic maikets, theie will be piessuie
to globalize in oiuei to ieap the benefits of economies in scale in
O osts
4 Anytime fixeu costs aie extiemely high, theie will be piessuie to globalize
in oiuei to spieau fixeu costs acioss moie customeis. The cost to globalize
has been ieuuceu significantly (logistic¡tianspoitation impiovements).
This means that competitois seeking giowth will globalize; failing to uo so
in youi own company coulu negatively affect youi competitive position.
O uoveinment
4 Play a ciitical iole in globalization by ueteimining anu iegulating
technological stanuaius. But favouiable tiaue policies encouiage the
globalization of maikets anu inuustiies.
O ompetition
4 ompetition was a stiong factoi affecting globalization. With the
exception of niche playeis, an incumbent may neeu to globalize simply
because competitois aie uoing so. This will be the case when competitois'
globalization gives them any foim of auvantage that is applicable acioss
theii maikets.
Industry Ana|ys|s
nuustiy analysis helps manageis ueteimine the natuie of competition, the possible
souices of impeifect competition in the inuustiy, anu the possibility of the fiim eaining
above noimal ietuins. {Perfect competition is wben tbere ore numerous sellers onJ
I]C Lconom|cs and ey Success Iactors
ndustrial Urganization {ÈU economics
The insights that help manageis analyse an inuustiy oiiginate in a uiscipline.
Key Success Factor {KSF
ey asset oi iequisite skill that all fiims in an inuustiy must possess in oiuei to
be a viable competitoi.
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

Jhat |s an |ndustry?
An inuustiy is a fiim oi gioup of fiims that piouuce oi sell the same oi similai piouucts
to the same maiket.
ost inuustiies have seveial oi many competitois. But even some inuustiies that have
many competitois aie uominateu by a few poweiful fiims.
lroqmentotion ond concentrotion
When an inuustiy is a uuopoly oi oligopoly the inuustiy is chaiacteiizeu as
To ueteimine whethei an inuustiy is concentrated oi fragmented a useful tool is the
concentrutlon rutlo, which iepiesents the combineu ievenues the laigest inuustiy
paiticipants as a iatio of total inuustiy sales.
efininq lndustry 8oundories
Befoie getting into an inuustiy, the fiim's manageis must know the type of piouuct anu
the geogiaphic maiket that they'ie consiueiing. nuustiies aie typically composeu of
many segments with uiffeient stiuctuial chaiacteiistics.
A mode| of |ndustry structure
Five-forces model
Fiamewoik foi evaluating inuustiy stiuctuie accoiuing to the effects of iivaliy,
thieat of entiy, suppliei powei, buyei powei, anu the thieat of substitutes.

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Ŧ kivo/ry
ntensity of competition within an inuustiy.
Exit barriers
Baiiieis that impose a high cost on the abanuonment of a maiket oi piouuct.
Ŧ 1hreot of £ntry
breat of new entry
Begiee to which new competitois can entei an inuustiy anu intensify iivaliy.
Barrier to entry
onuition unuei which it is moie uifficult to join oi compete in an inuustiy.
Ŧ 5upp/ier Power
Supplier power
Begiee to which fiims in the supply inuustiy aie able to uictate teims to
contiacts anu theieby extiact some of the piofit that woulu otheiwise be available to
competitois in the focal inuustiy.
Ŧ 8uyer Power
Buyer power
Begiee in which fiims in the buying inuustiy aie able to uictate teims on
puichase agieements that extiact some of the piofit that woulu otheiwise go to
competitois in the focal inuustiy.
Ŧ 1hreot of 5ubstitutes
breat of substitutes
Begiee to which piouucts of one inuustiy can satisfy the same uemanu as those
of anothei.
%% 1he lmpoct of comp/ementors
Fiim in one inuustiy that pioviues piouucts oi seivices which tenu to inciease
sales in anothei inuustiy.
ompet|tor ana|ys|s
Anothei puipose of an inuustiy analysis is to uevelop a cleai unueistanuing of who the
fiim's competitois aie anu what theii behaviouis aie likely to be in the futuie in its
chosen inuustiy aiena oi aienas.
,oppinq competitors
Staits by iuentifying who the competitois aie. Then we analyse competitois' stiategies
to get a moie uetaileu look at the competitive enviionment in which fiims opeiate.
1he va|ue curve
A convenient tool to help manageis visualize theii competitive lanuscape is:
Value curve
A giaphical uepiction of how a fiim anu majoi gioups of its competitois aie
competing acioss its inuustiy's factois of completion.

To uo this you can use the KSFs. (Key Success Factois)
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

Then you can plot fiims by the cential tenuency of clusteis of fiims following similai
stiategies. These clusteis aie calleu strategic groups.

Strategic group
Subset of fiims which, because of similai stiategies, iesouices, anu capabilities,
compete against each othei moie intensely than with othei fiims in an inuustiy.

The value cuives in the inuustiy visually iepiesent the unueilying logic incumbents use
in positioning theii piouucts.
Predictinq competitors´ 8ehoviours
To pieuict competitois' behavioui Poitei suggests a foui-step appioach:
ŵ. nueistanu competitois' objectives.
Ŷ. Beteimine competitois' cuiient stiategies.
ŷ. What assumptions uoes each competitoi holu about the inuustiy anu about
Ÿ. What aie the competitois' key stiengths anu weaknesses.
Aftei auuiessing these foui piimaiy questions, you aie in a position to make ieasonable
pieuictions about what youi competitois aie likely to uo in the futuie.

Dynam|c haracter|st|cs of the Lxterna| ontext
Pievious uiscusseu mouels can pioviue an excellent snapshot of a fiim's exteinal
context. But a snapshot uoesn't always give a faiily accuiate poitiayal of the business
lanuscape in the foieseeable futuie.
Dr|vers of changeť ,ak|ng the I|veŴIorces ,ode| dynam|c
Foi example one way to focus on the uynamic natuie of the exteinal context is to stop
thinking of youi analysis in teims of an inuustiy snapshot anu stait thinking of it in
teims of a 'stoiybook' that shows how an inuustiy stiuctuie is changing oi may change.
lndustry Life cyc/e
A new inuustiy emeiges when entiiely new piouucts aie uevelopeu that satisfy
customei uemanus in ways that existing piouucts anu technologies coulu not.

ndustry life cycle
Pattein of evolution followeu by an inuustiy inception to cuiient anu futuie

esults of evolution can be:
O Commoditization; Piocess uuiing inuustiy evolution by which sales eventually
come to uepenu less on unique piouuct featuies anu moie on piice.
O Reinvigoration, as some inuustiies matuie, howevei, ceitain segments may
emeige to ieinvigoiate them, sometimes even iestoiing theii status as giowth
O nformation; although most of the factois involveu in the evolution of an
inuustiy aie faiily obvious, the iole of infoimation anu customei leaining has
only iecently begun to attiact the attention of ieseaicheis.
O actics, the effect of customei leaining anu infoimation often isn't appaient until
latei in the life cycle. Buiing the tiansition fiom intiouuction to giowth, as once-
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new piouucts establish themselves anu become accepteu, incumbents often auu
extia seivices, such as shipping, tiaining, oi extenueu waiiantees at little oi no
cost in oiuei to ietain sales momentum thiough the giowth phase.
1echno/oqico/ iscontinuities
Aie a special, intensive case of technological change in action.

The two majoi foims of technology aie:
ŵ. Process tecbnology: iefeis to the uevices, tools, anu knowleuge useu to
tiansfoim inputs into outputs.
Ŷ. Product tecbnology: cieates new piouucts.
lsrupLlve ÞroducLŴ8elaLed Change
Biscontinuous technological change occuis when bieakthiough technologies appeai,
sometimes sustaining the competencies of incumbent fiims anu sometimes uestioying
Those that uestioy aie calleu disruptive tecbnologies.

Disruptive tecbnologies
Bieakthiough piouuct- oi piocess-ielateu technology that uestioys the
competencies of incumbent fiims in an inuustiy.

nnovator's dilemma
When incumbents avoiu investing in innovative anu uisiuptive technologies
because those innovations uo not satisfy the neeus of theii mainstieam anu most
piofitable clients.
lsrupLlve ÞrocessŴ8elaLed Change
Bisiuptive technologies can be piocess-ielateu as well as piouuct-ielateu.
Jhen |ndustr|es d|v|de
The inuustiy life cycle is too simplistic to uesciibe the evolution of many inuustiies.
nuustiies may uiviue when the maiket foi a paiticulai piouuct becomes laige enough
that fiims can economically justify ueuicating a uistiibution channel to it.
Jhen |ndustr|es co|||de
Although some changes leau to inuustiy uivision, otheis iesult in new inuustiy
uefinitions that consoliuate two oi moie sepaiate inuustiies into one.
oncentrotion iesults in an inuustiy with fewei playeis, consoliJotion iesults in fewei

As o stroteqic Jecision moker, tberefore, tbe question you neeJ to keep oskinq yourself is,
bow occurotely Joes current structure {wbicb is relotively eosy to iJentify) preJict future
inJustry conJitions?

lott J 1be Motketloq íovltoomeot
1he murketlng envlronment

The maiketing enviionment is maue up of a:
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

O Macroenvironment
4 onsists of the laigei societal foices that affect the micioenviionment.
O Microenvironment
4 onsists of the actois close to the company that affect its ability to seive
its customeis.
1he company's m|croenv|ronment
The majoi actois in the maiketing microenvironment aie:
O be company
4 These gioups foim the inteinal enviionment:
op management: sets mission, objectives, bioau stiategies anu
Finance: conceineu with finuing anu using funus to caiiy out the
maiketing plan.
Researcb and development {R&D: focuses on uesigning safe anu
attiactive piouucts.
Purcbasing: woiiies about getting supplies anu mateiials.
Uperations: iesponsible foi piouucing anu uistiibuting the
uesiieu quality anu quantity of piouucts.
Accounting: has to measuie ievenues anu costs to help maiketing
know how well it is achieving its objectives.
O Suppliers
4 Pioviue the iesouices the company neeus to piouuce its goous anu
O Marketing intermediaries
4 They help the company to piomote, sell anu uistiibute its goous to final
Resellers aie uistiibution channel fiims that help the company
finu customeis oi make sales to them.
Pbysical distribution firms help the company to stock anu move
goous fiom theii point of oiigin to theii uestinations.
Marketing services agencies aie the maiketing ieseaich fiims,
auveitising agencies, meuia fiims anu maiketing consulting fiims
that help the company taiget anu piomote its piouucts to the iight
Financial intermediaries incluue banks, cieuit companies,
insuiance companies anu othei businesses that help finance
tiansactions oi insuie against the iisks associateu with the buying
anu selling of goous.
O Customers
4 Theie aie five types of maikets the company neeus to stuuy:
Consumer markets consist of inuiviuuals anu householus that buy
goous anu seivices foi peisonal consumption.
Business markets buy goous anu seivices foi fuithei piocessing
oi foi use in theii piouuction piocess.
esellei maikets buy goous anu seivices to iesell at a piofit.
overnment markets aie maue up of goveinment agencies that
buy goous anu seivices to piouuce public seivices oi tiansfei the
goous anu seivices to otheis who neeu them.
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nternational markets consist of these buyeis in othei countiies
incluuing consumeis, piouuceis, ieselleis anu goveinments.
O Competitors
4 To be successful, a company must pioviue gieatei customei value anu
satisfaction than its competitois uo.
No single competitive maiketing stiategy is best foi all companies.
Each fiim shoulu consiuei its own size anu inuustiy position
compaieu to those of its competitois.
O Publics
4 A public is any gioup that has an actual oi potential inteiest in oi impact
on an oiganization's ability to achieve its objectives. We can iuentify seven
types of publics:
ŵ. Financial publics
a. nfluence the company's ability to obtain funus.
Ŷ. euia publics
a. aiiy news featuies anu euitoiial opinion.
ŷ. uoveinment publics
a. anagement must take goveinment uevelopments into
Ÿ. itizen-action publics
a. aiketing uecisions may be questioneu by consumei
oiganisations, enviionmental gioups, minoiity gioups anu
Ź. ocal publics
a. ncluue neighbouihoou iesiuents anu community
ź. ueneial publics
a. ueneial public's attituue towaiu its piouucts anu activities
is impoitant foi companies.
Ż. nteinal publics
a. When employees feel goou about theii company, this
positive attituue spills ovei to exteinal publics.
1he company's macroenv|ronment
The majoi actois in the company's macroenvironment aie:
O Demograpbic environment
4 Bemogiaphy is the stuuy of human populations in teims of size, uensity,
location, age, genuei, iace, occupation anu othei statistics. This
infoimation can tell a lot about someone's buying behavioui.
4 The stiuctuie of oui population is changing constantly:
The baby boomeis (boin between ŵ9Ÿź anu ŵ9źŸ)
ueneiation X (boin between ŵ9źŹ anu ŵ9Żź)
ueneiation Y (boin between ŵ9ŻŻ anu ŵ99Ÿ)
O Economic environment
4 onsists of factois that affect consumei puichasing powei anu spenuing
4 Economics must pay close attention to majoi tienus anu consumei
spenuing patteins both acioss anu within theii woilu maikets. Some of
the majoi economic tienus in Euiope aie:
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T.B.P. ueiaius
Summary Part ŵ, Ŷ & ŷ

hanges in income
hanging consumei spenuing patteins
O Natural environment
4 nvolves the natuial iesouices that aie neeueu as inputs by maiketeis oi
that aie affecteu by maiketing activities. aiketeis shoulu be awaie of
seveial tienus in this enviionment:
Shoitages of iaw mateiial
ncieaseu pollution (veiontieiniging)
ncieaseu goveinment inteivention
O ecbnological environment
4 Peihaps the most uiamatic foice now shaping oui uestiny.
4 New technologies cieate new maikets anu oppoitunities. (Eveiy new
technology ieplaces an oluei one.)
4 aiketeis shoulu watch the technological enviionment closely.
ompanies that uo not keep up will soon finu theii piouucts outuateu.
To uo this companies neeu to spenu money on &B.
O Political enviionment
4 onsists of laws, goveinment agencies anu piessuie gioups that influence
oi limit vaiious oiganisations anu inuiviuuals in a given society.
4 egislation is iegulating business. uoveinment uevelop public policy to
guiue commeice.
4 Beyonu wiitten laws anu iegulations, business is also goveineu by social
coues anu iules of piofessional ethics.
'uo the iight thing'
ause elateu aiketing
O ultuial enviionment
4 s maue up of institutions anu othei foices that affect a society's basic
values, perceptions, preferences anu bebaviours.
values: core beliefs onJ volues aie passeu fiom paients to chilu.
SeconJory beliefs onJ volues aie moie open to change.
espond|ng to the market|ng env|ronment
ompanies can passively accept the maiketing enviionment as an uncontiollable
element to which they must auapt, avoiuing thieats anu taking auvantage of
oppoitunities as they aiise. i they can take a pioactive stance, woiking to change the
enviionment iathei than simply ieacting to it. Whenevei possible, companies shoulu tiy
to be proactive iathei than reactive.

onxumer unJ buxlnexx buyer behuvlour
onsumer markets and consumer buyer behav|our
Consumer buyer bebaviour
efeis to the buying behavioui of final consumeis - inuiviuuals anu householus
who buy goous anu seivices foi peisonal consumption.

Foi maiketeis it's haiu to finu out what influences consumeis' buying behavioui.
onsumei puichases aie influenceu stiongly by cultuial, social, peisonal anu
psychological chaiacteiistics.
O Cultural factors: exeit a bioau anu ueep influence on consumei behavioui.
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4 Culture: is the most basic cause of a peison's wants anu behavioui.
aiketeis aie always tiying to spot cultuial shifts in oiuei to uiscovei
new piouucts that might be wanteu.
4 Subculture: gioups of people with shaieu value systems baseu on
common life expeiiences anu situations. any subcultuies make up
impoitant maiket segments, anu maiketeis often uesign piouucts anu
maiketing piogiammes tailoieu to theii neeus.
4 Social class: aie society's ielatively peimanent anu oiueieu uivisions
whose membeis shaie similai values, inteiests anu behaviouis. Social
class is not ueteimineu by a single factoi, such as income, but is measuieu
as a combination of occupation, income, euucation, wealth anu othei
vaiiables. aiketeis aie inteiesteu in social class because people within a
given social tenu to exhibit similai buying behavioui.
O Social factors
4 roups: peison's behavioui is influenceu by many small gioups.
aiketeis tiy to iuentify the iefeience gioups of theii taiget maikets.
pinion leaueis aie peisons who exeit influence on otheis. aiketeis tiy
to iuentify opinion leaueis foi theii piouucts anu uiiect maiketing effoit
towaiu them. (uzz morketinq is being useu to enlist of cieate opinion
4 Family: membeis can stiongly influence buyei behavioui. aiketeis aie
inteiesteu in the ioles anu influence of the husbanu, wife anu chiluien on
the puichase of uiffeient piouucts anu seivices.
4 Roles and status: a peison belongs to many gioups - family, clubs,
oiganisations. People usually choose piouucts appiopiiate to theii iole
anu status.
O Personal factors
4 Age and life-cycle stage: aiketeis often uefine theii taiget maikets in
teims of life-cycle stage anu uevelop appiopiiate piouucts anu maiketing
plans foi each stage.
4 Uccupation: a peison's occupation affects the goous anu seivices bought.
aiketeis tiy to iuentify the occupational gioups that have an above-
aveiage inteiest in theii piouucts anu seivices.
4 Economic situation: aiketeis of income-sensitive goous watch tienus
in peisonal income, savings anu inteiest iates.
4 ifestyle: is a peison's pattein of living as expiesseu in his oi hei
psychogiaphics. Seveial ieseaich fiims have uevelopeu lifestyle
classifications. The most wiuely useu is S onsulting's olue onJ
lifestyles (vAS) typology.
4 Personality and self-concept: peisonality iefeis to the unique
psychological chaiacteiistics that leau to ielatively consistent anu lasting
iesponses to one's own enviionment. any maiketeis use a concept
ielateu to peisonality - peison's self-concept. To unueistanu consumei
behavioui, the maiketeis must fiist unueistanu the ielationship between
consumei self-concept anu possessions.
O Psycbological factors
4 Motivation: a neeu becomes a motive when it is aiouseu to a sufficient
level of intensity. A motive (uiive) is a neeu that is sufficiently piessing to
uiiect the peison to seek satisfaction.
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Sigmund Freud: theoiy suggests that a peison's buying uecisions
aie affecteu by subconscious motives that even the buyei may not
fully unueistanu.
Abrabam Maslow: theoiy suggests that human neeus aie
aiiangeu in a hieiaichy. (aslow's hieiaichy of neeus) A peison
tiies to satisfy the most impoitant neeu fiist.
4 Perception: the piocess by which people select, oiganise anu inteipiet
infoimation to foim a meaningful pictuie of the woilu. People can foim
uiffeient peiceptions of the same stimulus because of thiee peiceptual
Selective attention: the tenuency foi people to scieen out most of
the infoimation to which they aie exposeu.
Selective distortion: uesciibes the tenuency of people to inteipiet
infoimation in a way that will suppoit what they alieauy believe.
Selective retention: consumeis aie likely to iemembei goou
points maue about a bianu they favoui anu to foiget goou points
maue about competing bianus.
4 earning: uesciibes changes in an inuiviuual's behavioui aiising fiom
4 Beliefs and attitudes: a belief is a uesciiptive thought that a peison has
about something. aiketeis aie inteiesteu in the beliefs that people
foimulate about specific piouucts anu seivices, because these beliefs
make up piouucts anu bianu images that effect buying behavioui.
Attituues uesciibes a peison's ielatively consistent evaluations, feelings
anu tenuencies towaiu an object oi iuea.
1he buyer dec|s|on process
This piocess contains Ź steps:
ŵ. The buyei iecognises a pioblem oi a
Ŷ. btain infoimation fiom seveial
a. Peisonal souices (most effective)
b. ommeicial souices
c. Public souices
u. Expeiiential souices
ŷ. -
Ÿ. ueneially will be to buy the most
piefeiieu bianu.
Ź. Bissatisfieu¡satisfieu. ognitive
uissonance is a iesult of all majoi
puichases. (leain about facts you uiun't expect about the piouuct)
1he buyer dec|s|on process for new products
When theie is a new piouuct we make uecisions on whethei to auopt them. onsumeis
go thiough five stages in the piocess of auopting a new piouut.:
ŵ. Awaieness
Ŷ. nteiest
ŷ. Evaluation
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Ÿ. Tiial
Ź. Auoption

t is possible to categoiize the auopteis into five gioups:
ŵ. nnovators - they tiy new iueas at some iisk.
Ŷ. Early adopters - they aie opinion leaueis in theii communities anu auopt iueas
eaily but caiefully.
ŷ. Early ma|ority - although they aie iaiely leaueis, they auopt new iueas befoie
the aveiage peison.
Ÿ. ate ma|ority - they auopt an innovation only aftei a majoiity of people tiieu it.
Ź. aggards - they aie suspicious of changes anu auopt the innovation only when it
has become something of a tiauition itself.
8us|ness markets and bus|ness buyer behav|our
Business buyei behavioui iefeis to the buying behavioui of the oiganisations that buy
goous anu seivices foi use in the piouuction of othei piouucts anu seivices that aie solu,
ienteu, oi supplieu to otheis.
8us|ness markets
The main uiffeiences between business maikets anu consumei maikets aie:
O Market structure and demand: fai fewei but fai laigei buyeis. Business
maikets aie also moie geogiaphically concentiateu.
O Nature of tbe buying unit: a business puichase usually involves moie uecision
paiticipants anu a moie piofessional puichasing effoit.
O ypes of decisions and tbe decision process: business buyeis usually face
moie complex buying uecisions. This piocess also tenus to be moie foimaliseu,
anu buyei anu sellei aie often moie uepenuent on each othei.
8us|ness buyer behav|our
Theie aie thiee majoi types of buying situations:
ŵ. Straigbt rebuy: the buyei ieoiueis something without any mouifications. (Faiily
a ioutine uecision.)
Ŷ. Modified rebuy: the buyei wants to mouify piouuct specifications, piices, teims
oi supplieis. (equiies some ieseaich.)
ŷ. New task: a company buying a piouuct oi seivice foi the fiist time. (ay call foi
thoiough ieseaich.)

iqure: Hojor influences on business buyer beboviour

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Summary Part ŵ, Ŷ & ŷ

1he bus|ness buy|ng process
ŵ. ecognition can be the iesult
fiom inteinal oi exteinal stimuli.
Ŷ. Besciibes the chaiacteiistics anu
quantity of the neeueu item.
ŷ. Ê
Ÿ. Ê
Ź. Buyei invites qualifieu supplieis
to submit pioposals.
ź. -
Ż. -
8. ay leau the buyei to continue,
mouify oi uiop the aiiangement.

Segmentutlon, turgetlng unJ poxltlonlng: BullJlng the rlght relutlonxhlpx wlth the
rlght cuxtomerx
,arket segmentat|on
The majoi segments in the consumei maiket aie:
O eograpbic segmentation
4 s about uiviuing the maiket into uiffeient geogiaphical sectois.
O Demograpbic segmentation
4 Age and life-cycle stage: consumei neeus anu wants change with age.
4 ender: the neeus anu wants of men anu women aie uiffeient.
4 ncome: companies who sell luxuiy goous only tiy to taiget the gioup of
people with a high income.
O Pyscbograpbic segmentation
4 Biviues buyeis into uiffeient gioups baseu on social class, lifestyle oi
peisonality chaiacteiistics.
O Bebavioural segmentation
4 Uccasions: buyeis can be gioupeu baseu on theii knowleuge, attituues,
uses, oi iesponses to a piouuct. This kinu of segmentation can help fiims
builu up piouuct usage.
4 Benefits sougbt: gioup buyeis accoiuing to uiffeient benefits that they
seek fiom the piouuct.
4 ser status: is¡was the piouuct useu (oi nevei etc.)
4 sage rate: light, meuium oi heavy piouuct useis.
4 oyalty status: uiviuing by theii uegiee of loyalty.

aiketeis iaiely limit theii segmentation analysis to only one oi a few vaiiables. athei,
they aie incieasingly using multiple segmentation bases in an effoit to iuentify smallei,
bettei-uefineu taiget gioups.

The segments in the business maiket aie almost the same as the segments in the
consumei maiket. Yet business maiketeis also use some auuitional vaiiables, such as:
O ustomei opeiating chaiacteiistics
O Puichasing appioaches
O Situational factois
O Peisonal chaiacteiistics
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Theie aie seveial iequiiements foi effective segmentation:
O Measurable: the size, puichasing powei, anu piofiles of the segments can be
O Accessible: the maiket segments can be effectively ieacheu anu seiveu.
O Substantial: the maiket segments aie laige oi piofitable enough to seive.
O Differentiable: the segments aie conceptually uistinguishable anu iesponu
uiffeiently to uiffeient maiketing mix elements anu piogiammes.
O Actionable: effective piogiammes can be uesigneu foi attiacting anu seiving the

1arget market|ng
When evaluating uiffeient maiket segments a fiim must look at thiee factois:
ŵ. Segment size anu giowth
Ŷ. Segment stiuctuial attiactiveness
ŷ. ompany objectives anu iesouices

Taiget maiketing can be caiiieu out at uiffeient levels:
O ndifferentiated marketing
4 i mass marketing; this stiategy focuses on what is common in the
neeus of consumeis iathei than on what is uiffeient.
O Differentiated marketing
4 i segmented marketing; is when a fiim ueciues to taiget seveial
maiket segments anu uesigns sepaiate offeis foi each.
O Concentrated marketing
4 i nicbe marketing; is appealing when company iesouices aie limiteu.
nsteau of going aftei a small shaie of a laige maiket, the fiim goes aftei a
laige shaie of one oi a few smallei segments oi niches.
O Micromarketing
4 s the piactice of tailoiing piouucts anu maiketing piogiammes to suit the
tastes of specific inuiviuuals anu locations.
ocal maiketing: involves tailoiing bianus anu piomotions to the
neeus anu wants of local customei gioups.
nuiviuual maiketing: tailoiing piouucts anu maiketing
piogiammes to the neeus anu piefeiences of inuiviuual customeis.
ompanies neeu to consiuei many factois when choosing a taiget maiketing stiategy.
Which stiategy is best uepenus on:
O ompany iesouices
O Piouuct vaiiability
O Piouuct's life-cycle stage
O aiket vaiiability
O ompetitoi's maiketing stiategy
Þos|t|on|ng for compet|t|ve advantage
Beyonu ueciuing which segments of the maiket it will taiget, the company must ueciue
what positions it wants to occupy in those segments. n planning theii positioning
stiategies, maiketeis often piepaie perceptual positioning maps, which show
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Summary Part ŵ, Ŷ & ŷ

consumeis peiceptions of theii bianus veisus competing piouucts on impoitant buying
uimensions. The bianu's full positioning is calleu its value proposition.
The positioning task consist of thiee steps:
ŵ. uentify possible competitive auvantages
Ŷ. hoosing the iight competitive auvantages
ŷ. Selecting an oveiall positioning stiategy
a. oie foi moie: involves pioviuing the most upscale piouuct oi seivice
anu chaiging a highei piice to covei the highei costs.
b. oie foi the same: intiouucing a bianu offeiing compaiable quality but at
a lowei piice.
c. The same foi less: soit of the same as b.
u. ess foi much less
e. oie foi less
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