Marketing

Marketing is defined by the AMA as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." [1] This replaces the previous definition, which still appears in the AMA's dictionary: "an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders."[2] It generates the strategy that underlies sales techniques, business communication, and business developments.[3] It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves.[3] Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, marketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature markets and overcapacities in the last 2-3 centuries.[citation needed] The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable.[citation needed] The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions.[4] It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors.[4] The term developed from an original meaning which referred literally to going to a market to buy or sell goods or services. Seen from a systems point of view, sales process engineering marketing is "a set of processes that are interconnected and interdependent with other functions,[5] whose methods can be improved using a variety of relatively new approaches."

Marketing management
Marketing management is the function of business management which identifies the need and demand of the prospective customers and accordingly plan to design and introduce new product in the market . The role of marketing manager to identify the intrinsic need of a customer through marketing research.Marketing management deals with new product development, pricing, promotion and distribution of the product followed by the marketing research to evaluate the product performance in term of meeting the expectation of the customers.

Marketplace
A marketplace is the space, actual, virtual or metaphorical, in which a market operates. The term is also used in a trademark law context to denote the actual consumer environment, ie. the 'real world' in which products and services are provided and consumed. A marketplace is a location where goods and services are exchanged. The traditional market square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation around the whole world.

Marketspace
Marketspace - an information and communication based electronic exchange environment - is a relatively new concept in marketing. Since physical boundaries no longer interfere with buy/sell decisions, the world has grown into several industry specific marketspaces which are integration of marketplaces through sophisticated computer and telecommunication technologies. The term marketspace was introduced by Rayport and Sviokla in 1994[citation needed] (see Rayport, Jeffrey F. and John J. Sviokla, "Managing in the Marketspace," Harvard Business Review, Nov/Dec 1994, Vol. 72, Issue 6, p. 141-150) to distinguish between electronic and conventional markets. In a marketspace, information and/or physical goods are exchanged, and transactions take place through computers and networks. These networks consist of Blogs (and the Comments), Forum threads, and microblogging services like Twitter. Businesses and their customers are enabled to create conversations and two-way communications about products and services. These conversations may also happen outside the sphere of control of a given business, when a marketing campaign or customer-service issue captures the attention of web-savvy consumers.

Meta market
Meta Market is a web-based market centered around an event or an industry, rather than a single product. These are markets of complementary products that are closely related in the minds of consumers, but spread across different industries. The web allows us to match producers' desire for economies of scale, and consumers' desire for variety of choice to satisfy a set of needs. Thus we can have a meta market for a wedding (event) that includes honeymoon recommendations, sources for engagement rings and wedding gowns. Equally we can have a meta market for an entire industry (for example chemical industry) where the industry can trade excess inventory, source new suppliers and find

new vendors. These types of markets are easier to establish in the web world, than they were before the web, and can prove very effective. Edmunds.com is an example of a meta market for the auto industry, the knot for weddings.

Value (marketing)
The value of a product is the mental estimation a consumer makes of it. Formally it may be conceptualized as the relationship between the consumer's perceived benefits in relation to the perceived costs of receiving these benefits. It is often expressed as the equation : Value = Benefits / Cost Value is thus subjective (i.e., a function of consumers' estimation) and relational (i.e., both benefits and cost must be positive values). There are parallels between cultural expectations and consumer expectations. Thus pizza in Japan might be topped with tuna rather than pepperoni, as pizza might be in the United States; the value in the marketplace varies from place to place as well as from market to market.

Customer lifetime value

In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) is the net present value of the cash flows attributed to the relationship with a customer. The use of customer lifetime value as a marketing metric tends to place greater emphasis on customer service and long-term customer satisfaction, rather than on maximizing short-term sales. One of the first accounts of it is in the 1988 book Database Marketing, and includes detailed worked examples.[1][2] Customer lifetime value has intuitive appeal as a marketing concept, because in theory it represents exactly how much each customer is worth in monetary terms, and therefore exactly how much a marketing department should be willing to spend to acquire each customer. In reality, it is difficult to make accurate calculations of customer lifetime value. The specific calculation depends on the nature of the customer relationship. Customer relationships are often divided into two categories. In contractual or retention situations, customers who do not renew are considered "lost for good". Magazine subscriptions and car insurance are examples of customer retention situations. The other category is referred to as customer migration situations. In customer migration situations, a customer who does not buy (in a given period or from a given catalog) is still considered a customer of the firm because she may very well buy at some point in the future. In customer retention situations, the firm knows when the relationship is over.

One of the challenges for firms in customer migration situations is that the firm may not know when the relationship is over (as far as the customer is concerned).[3]

Marketing mix
The marketing mix is a business tool used in marketing products. The marketing mix is often crucial when determining a product or brand's unique selling point (the unique quality that differentiates a product from its competitors), and is often synonymous with the 'four Ps': 'price', 'promotion', 'product', and 'place'. However, in recent times, the 'four Ps' have been expanded to the 'seven Ps' with the addition of 'process', 'physical evidence' and 'people'.[1]

Marketing plan
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use.

Market research
Market research is any organized effort to gather information about markets or customers. It is a very important component of business strategy.[1] The term is commonly interchanged with marketing research; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets.[2] Market research is a key factor to get advantage over competitors. Market research provides important information to identify and analyze the market need, market size and competition. Market research, includes social and opinion research, [and] is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making.[3]

Marketing Metrics
Marketing metrics provides evidence of customer experiences. We quantify customer service delivery. We provide Customer Experience Management tools so customer loyalty can be measured. We present the facts in a simple business dashboard format.

Market Metrics is one of the leading market research firms focusing exclusively on advisor-sold investments and insurance world-wide. For more than a decade we have worked closely with asset managers and insurance companies to provide the information they need to grow. Our expertise is based on more than 20,000 annual surveys of financial advisors, combined with in-depth interviews of several hundred executives at broker/dealers, banks, and BGAs/IMOs. Armed with this data, Market Metrics provides clients with detailed information about exactly what their customers need and how they behave.

Find out about the strategy that makes Market Metrics one of the leading market research firms in the world for advisor-sold investment and insurance products.

Marketing mix modeling

Marketing mix modeling is a term of art for the use of statistical analysis such as multivariate regressions on sales and marketing time series data to estimate the impact of various marketing tactics on sales and then forecast the impact of future sets of tactics. It is often used to optimize advertising mix and promotional tactics with respect to sales revenue or profit. The techniques were developed by econometricians and were first applied to consumer packaged goods, since manufacturers of those goods had access to good data on sales and marketing support. In the recent times MMM has found acceptance as a trustworthy marketing tool among the major consumer marketing companies.

Market Demand
Market demand is defined as the total amount of purchases of a product or family of products within a specified demographic. The demographic may be based on factors such as age or gender, or involve the total amount of sales that are generated in a particular geographic location. Assessing market demand is one of the most important ways that businesses decide what to sell and how to go about selling the products they produce. Properly assessing the market demand for a given product is very important. Failure to accurately project the desirability of a good or service can lead to production levels that are in excess of the number of units that will actually be sold. As a result, the company is left with a huge inventory of finished goods that generate no profit at all. In some cases, failing to project market demand properly is enough to force a company to go out of business.

The most common way to evaluate the desirability of goods and services within a given demographic is to implement a structured market demand analysis. Essentially, this process seeks to identify consumers who are attracted to the products enough to actually purchase them. As part of the market analysis, the research helps to identify the size of the market. This makes it possible to determine if the company needs to cultivate consumer interest in a particular demographic in order to generate new business or cultivate several different markets concurrently as a means of remaining profitable.

market forecast
A market forecast is a core component of a market analysis. It projects the future numbers, characteristics, and trends in your target market. A standard analysis shows the projected number of potential customers divided into segments. This example of a simple market forecast defines two target market segments and projects the potential customers in each of those segments by years, for five years. Market size forecast

In the market forecast, the example numbers indicate that there are 25,000 home offices included in the market, and that number is growing at an estimated five percent per year. There are also 10,000 small businesses in the area, and that number is growing at five percent per year. These numbers are estimates. Nobody really knows, but we all make educated guesses. The developers of the plan researched the market as well as they could and then estimated populations of target users in their area and the annual growth rates for each.

sales quota
Definition
Individual sales target figure assigned to each sales unit such a sales person, dealer, distributor, region, or territory, as a required minimum for a specified period (month,

quarter, year). Sales quotas may be expressed either in dollar figures (monetary terms) or in number of goods or services sold (volume terms). Minimum sales volume goal established by the seller. A sales quota may be expressed in terms of dollars or units sold. Quotas may also be set for sales activity (number of calls per day), sales costs and profitability in addition to sales volume. A sales quota may be required of a salaried or commissioned salesperson or may be a goal set for a brand, a product line, or a company division. Sales quotas are used to ensure that company sales goals are met even though they may exceed an individual salesperson's personal goals or abilities. Sales quotas also ensure that the volume sold will cover the fixed costs of producing the product or service. Sales quotas should be high enough to encourage excellence but not so high as to be unachieveable, thereby discouraging the sales force. Failure to meet sales quotas is an immediate call for action on the part of the seller. If a salesperson fails to meet quota, the salesperson may be given a smaller or less desirable prospect territory or may be terminated. A salesperson may receive a bonus for exceeding the sales quota. See also incentive program. The sales quota is something used in many environments where goods or services are sold. It is essentially a target amount of sales that could be assessed on a daily, weekly or monthly level. Whole selling units (like stores) may have a quota they must try to meet each month and individual salespeople are also likely to have a sales quota. One means of assessing performance in the salesperson is by looking at their ability to hit the target on a regular basis or to exceed it. When people talk of the high-pressure atmosphere of employment in sales, it is often due to this sales quota. The salesperson may know or feel that a job is constantly on the line if they dont sell a certain amount of product or a specific dollar amount each month. Some salespeople additionally work on commission only, which means they dont get paid if they dont sell, or others may work on a draw versus commission basis, where their salary increases if they meet certain quotas. It is certainly true that quotas are used to motivate the salesperson, and actually a whole selling unit, since a store of any kind may have to meet monthly quotas. Failure of one or more people to meet quotas could threaten the jobs of managers in addition to increasing likelihood that salespeople would lose their jobs.

Mass marketing
Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is the type of marketing (or attempting to sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience. By reaching the largest audience possible

exposure to the product is maximized. In theory this would directly correlate with a larger number of sales or buy in to the product. The opposite to Niche marketing as it focuses on high sales and low prices. It aims to provide products and services that will appeal to the whole market.

Niche market
A niche market is the subset of the market on which a specific product is focusing. So the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment and an example would be a bridal shoe shop because there is not very many of them around. Every single product that is on sale can be defined by its market niche. As of special note, the products aimed at a wide demographic audience, with the resulting low price (due to price elasticity of demand), are said to belong to the mainstream nichein practice referred to only as mainstream or of high demand. Narrower demographics lead to elevated prices due to the same principle. So to speak, the Niche Market is the highly specialized market that tries to survive among the competition from numerous super companies. In practice, product vendors and trade businesses are commonly referred as mainstream providers or narrow demographics niche market providers (colloquially shortened to just niche market providers). Small capital providers usually opt for a niche market with narrow demographics as a measure of increasing their gain margins. Nevertheless, the final product quality (low or high) is not dependent on the price elasticity of demand; it is associated more with the specific needs that the product is aimed at satisfy and in some cases with brand recognition with which the vendor wants to be associated (e.g., prestige, practicability, money saving, expensiveness, planet environment conscience, power, &c.).

Local Marketer
The local marketer is an Internet marketer proficient at applying various strategies to achieve search engine rankings, increased traffic, and on site conversion be they leads and / or sales.

The local marketer is not restricted to offer these services locally. He / she can operate their local marketing agency from anywhere in the world, as long they have high-speed Internet access. The use of the web to find local products and services has created a demand for local Internet marketers that far outstrips the supply. Offline businesses are currently scrambling to find qualified Internet marketers who can help them shift from outmoded forms of advertising in order to tap into where people are actually looking for local businesses. The numbers tell the story: a staggering 40% of Google searches are for local products and services!

Megamarketing
Megamarketing is a term coined by U.S. marketing academic, Philip Kotler, to describe the type of marketing activity required when it is necessary to manage elements of the firm's external environment (governments, the media, pressure groups, etc) as well as the marketing variables; Kotler suggests that two more Ps must be added to the marketing mix: public relations and power.

Brand equity
Brand equity is the marketing effects and outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. Fact of the well-known brand name is that, the company can sometimes charge premium prices from the consumer .[1][2][3][4] And, at the root of these marketing effects is consumers' knowledge. In other words, consumers' knowledge about a brand makes manufacturers and advertisers respond differently or adopt appropriately adept measures for the marketing of the brand.[5][6] The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets a company has.[7] Brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one.[8] Elements that can be included in the valuation of brand equity include (but not limited to): changing market share, profit margins, consumer recognition of logos and other visual elements, brand language associations made by consumers, consumers' perceptions of quality and other relevant brand values. "Brand equity is strategically crucial, but famously difficult to quantify. Many experts have developed tools to analyze this asset, but there is no universally accepted way to measure it." In a survey of nearly 200 senior marketing managers, only 26 percent responded that they found the "brand equity" metric very useful.[9]

Strategic group

A strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies. For example, the restaurant industry can be divided into several strategic groups including fast-food and fine-dining based on variables such as preparation time, pricing, and presentation. The number of groups within an industry and their composition depends on the dimensions used to define the groups. Strategic management professors and consultants often make use of a two dimensional grid to position firms along an industry's two most important dimensions in order to distinguish direct rivals (those with similar strategies or business models) from indirect rivals. Strategy is the direction and scope of an organization over the long term which achieves advantages for the organization while business model refers to how the firm will generate revenues or make money. Hunt (1972) coined the term strategic group while conducting an analysis of the appliance industry after he discovered a higher degree of competitive rivalry than suggested by industry concentration ratios. He attributed this to the existence of subgroups within the industry that competed along different dimensions making tacit collusion more difficult. These asymmetrical strategic groups caused the industry to have more rapid innovation, lower prices, higher quality and lower profitability than traditional economic models would predict. Michael Porter (1980) developed the concept and applied it within his overall system of strategic analysis. He explained strategic groups in terms of what he called "mobility barriers". These are similar to the entry barriers that exist in industries, except they apply to groups within an industry. Because of these mobility barriers a company can get drawn into one strategic group or another. Strategic groups are not to be confused with Porter's generic strategies which are internal strategies and do not reflect the diversity of strategic styles within an industry. Originally, the analysis of intra-industry variations in the competitive behaviour and performance of firms was based primarily on the use of secondary financial and accounting data. The study of strategic groups from a cognitive perspective, however, has gained prominence during the past years (Hodgkinson 1997).

Customer relationship management

Customer relationship management (CRM) is a widely implemented strategy for managing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes principally sales activities, but also those for marketing, customer service, and technical support.[1] The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.[2] Customer relationship management describes a company-wide business strategy including customer-interface departments as well as

other departments.[3] Measuring and valuing customer relationships is critical to implementing this strategy.[4]

Vertical market
A vertical market (often referred to simply as a "vertical") is a group of similar businesses and customers that engage in trade based on specific and specialized needs. Often, participants in a vertical market are very limited to a subset of a larger industry (a niche market). An example of this sort of market is the market for point-of-sale terminals, which are often designed specifically for similar customers and are not available for purchase to the general public. Vertical marketing can be witnessed at trade shows. The opposite of vertical marketing is horizontal marketing.

Value Pricing
Value pricing is defined by offering your product at a fair and reasonable price that makes sense to the purchasing customer. as the name itself suggest price of the product/ service is set according to value perceived by the customer. Value is subjective. Value is a benefit but a benefit is not necessarily of value to all customers. For example, a vendor offers free installation and free updates for his software. Customer-A considers "free installation" as "value"' because he has no technical knowledge and this will save him time and effort. Customer-B rates the free installation as "nice to have" but the drawcard or "value" is the free updates that will save him money in the long run. Customers do not assign value to the same benefits.

Online marketing
Internet marketing, also known as web marketing, online marketing, webvertising, or e-marketing, is referred to as the marketing (generally promotion) of products or services over the Internet. iMarketing is used as an abbreviated form for Internet Marketing.[citation needed] Internet marketing is considered to be broad in scope[citation needed] because it not only refers to marketing on the Internet, but also includes marketing done via e-mail and wireless media. Digital customer data and electronic customer relationship management (ECRM) systems are also often grouped together under internet marketing.[1] Internet marketing ties together the creative and technical aspects of the Internet, including design, development, advertising and sales.[2] Internet marketing also refers to the placement of media along many different stages of the customer engagement cycle

through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, email marketing, mobile advertising, and Web 2.0 strategies.[citation
needed]

In 2008, The New York Times, working with comScore, published an initial estimate to quantify the user data collected by large Internet-based companies. Counting four types of interactions with company websites in addition to the hits from advertisements served from advertising networks, the authors found that the potential for collecting data was up to 2,500 times per user per month.[3]

Product life-cycle management (marketing)

Product life-cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its life-cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages. Product life-cycle (PLC) Like human beings, products also have an arc. From birth to death, human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures. To say that a product has a life cycle is to assert three things:

Products have a limited life, Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.

The four main stages of a product's life cycle and the accompanying characteristics are: Stage 1. 2. 3. 4. 5. Characteristics costs are very high slow sales volumes to start little or no competition demand has to be created customers have to be prompted to try the product

1. Market introduction stage

2. Growth stage

6. makes no money at this stage 1. costs reduced due to economies of scale 2. sales volume increases significantly

3. profitability begins to rise 4. public awareness increases 5. competition begins to increase with a few new players in establishing market 6. increased competition leads to price decreases 1. costs are lowered as a result of production volumes increasing and experience curve effects 2. sales volume peaks and market saturation is reached 3. increase in competitors entering the market 4. prices tend to drop due to the proliferation of competing products 5. brand differentiation and feature diversification is emphasized to maintain or increase market share 6. 1. 2. 3. Industrial profits go down costs become counter-optimal sales volume decline prices, profitability diminish

3. Maturity stage

4. Saturation and decline stage

4. profit becomes more a challenge of production/distribution efficiency than increased sales

Market segmentation
A market segment is a classification of potential private or corporate customers by one or more characteristics, in order to identify groups of customers, which have similar needs and demand similar products and/or services concerning the recognized qualities of these products, e.g. functionality, price, design, etc. An ideal market segment meets all of the following criteria:

It is internally homogeneous (potential customers in the same segment prefer the same product qualities). It is externally heterogeneous (potential customers from different segments have basically different quality preferences). It responds similarly to a market stimulus. It can be cost-efficiently reached by market intervention.

The term segmentation is also used when customers with identical product and/or service needs are divided up into groups so they can be charged different amounts for the services. A customer is allocated to one market segment by the customers individual characteristics. Often cluster analysis and other statistical methods are used to figure out

those characteristics, which lead to internally homogeneous and externally heterogeneous market segments. Examples of characteristics used for segmentation:

Gender Price Interests Location Religion Income Size of Household

While there may be theoretically 'ideal' market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, and create Product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage.

SWOT analysis
SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization. Strengths: characteristics of the business, or project team that give it an advantage over others Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others Opportunities: external chances to improve performance (e.g. make greater profits) in the environment Threats: external elements in the environment that could cause trouble for the business or project

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.

Market Opportunity Analysis

Market Opportunity Analysis is concerned with the acquisition, codification, analysis and presentation of market information that describes and predicts the size, distribution and growth of the market opportunity. The opportunity analyst provides this understanding by analyzing customer/market buying behavior and spending on the demand-side as well as our and competitor revenue on the supply-side within the units key market segments. They analyze market, customer, competitor and economic trends and forecasts, and use that information to formulate hypotheses about the parameters that drive demand within their market segments. They build opportunity models that generate opportunity estimates and forecasts based on key parameters such as historic buying patterns, projected industry trends and economic forecasts. Their analyses, models and the estimates are used to help shape and drive business development decisions regarding our by segment - coverage strategy, market selection, revenue and market share performance objectives, and compensation.

Strategic business unit

In essence, the SBU is a profit making area that focuses on a combination of product offer and market segment, requiring its own marketing plan, competitor analysis, and marketing campaign. A Strategic Business Unit emerges at the cross-over between:

A product offering that the company could make and A reachable market segment that has a high value profit potential.

That is to say, if there's a big enough market niche for a product we can supply, then we may want to create a SBU that focuses on that opportunity. Strategic Business Unit or SBU is understood as a business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets. The unique small business unit benefits that a firm aggressively promotes in a consistent manner. When companies become really large, they are best thought of as being composed of a number of businesses (or SBUs). In the broader domain of strategic management, the phrase "Strategic Business Unit" came into use in the 1960s, largely as a result of General Electric's many units. These organizational entities are large enough and homogeneous enough to exercise control over most strategic factors affecting their performance. They are managed as self contained planning units for which discrete business strategies can be developed. A Strategic Business Unit can encompass an entire company, or can simply be a smaller

part of a company set up to perform a specific task. The SBU has its own business strategy, objectives and competitors and these will often be different from those of the parent company. Research conducted in this include the BCG Matrix. This approach entails the creation of business units to address each market in which the company is operating. The organization of the business unit is determined by the needs of the market. An SBU is an sole operating unit or planning focus that does not group a distinct set of products or services, which are sold to a uniform set of customers, facing a well-defined set of competitors. The external (market) dimension of a business is the relevant perspective for the proper identification of an SBU. (See Industry information and Porter five forces analysis.) Therefore, an SBU should have a set of external customers and not just an internal supplier.[1] Companies today often use the word Segmentation or Deviasion when referring to SBU's, or an aggregation of SBU's that share such commonalities.

Strategic alliance
A Strategic Alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations. This form of cooperation lies between M&A and organic growth. Partners may provide the strategic alliance with resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. The alliance is a cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. The alliance often involves technology transfer (access to knowledge and expertise), economic specialization,[1] shared expenses and shared risk.

Partner relationship management (PRM)

Partner relationship management (PRM) is a system of methodologies, strategies, software, and web-based capabilities that help a vendor to manage partner relationships. The general purpose of PRM is to enable vendors to better manage their partners through the introduction of reliable systems, processes and procedures for interacting with them.[1] Web-based PRM systems typically include a Content Management System, a partner and customer contact database, and the notion of a partner portal which allows partners to login and interact with a vendor's sales opportunity database and obtain product, pricing, and training information. There are a number of solution providers who offer PRM software to manufacturers who rely heavily on channel/indirect sales, including:

LogicBay[2] Channeltivity[3] RelayWare[4] Salesforce.com[5] SAP[6] Treehouse Interactive[7] The Planet Group[8]

Management information system

A management information system (MIS) provides information which is needed to manage organizations efficiently and effectively.[1] Management information systems involve three primary resources: people, technology, and information or decision making. Management information systems are distinct from other information systems in that they are used to analyze operational activities in the organization.[2] Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. decision support systems, expert systems, and executive information systems.[2]

Data mining
Data mining (the analysis step of the knowledge discovery in databases process,[1] or KDD), a relatively young and interdisciplinary field of computer science[2][3] is the process of discovering new patterns from large data sets involving methods at the intersection of artificial intelligence, machine learning, statistics and database systems.[2] The goal of data mining is to extract knowledge from a data set in a humanunderstandable structure[2] and involves database and data management, data preprocessing, model and inference considerations, interestingness metrics, complexity considerations, post-processing of found structure, visualization and online updating.[2]

Warehouse
A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns and villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing, or commerce.

Market Intelligence System

A Market Intelligence System (MkIS) is one that systematically gathers and processes critical business information, transforming it into actionable management intelligence for marketing decisions. Note the following points:

Market intelligence is not just about market information, but the whole gamut of external environment information needed to support key strategic decisions about products, prices, investment priorities, entering joint ventures etc. The system is not purely a computer-based system. It is a total system that incorporates human processes for interpreting and processing information into intelligence. The processes must be systematic, since only regular monitoring of key external parameters and integration of disparate snippets of information will give a viable long-term intelligence base.

Brand Development Index

Brand Development Index or (BDI) measures the relative sales strength of a brand within a specific market (e.g. Pepsi brand in 10 - 50 year olds). It is a measure of the relative sales strength of a given brand in a specific market area. Brand Development Index or (BDI) is the index of brand sales to category sales.

Customer perceived value, CPV

(CPV) is the difference between the prospective customers evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Total customer value is the perceived monetary value of the bundle or economic, functional, and psychological benefits customers expect from a given market offering. Total customer cost is the bundle of costs customers expect to incur in evaluating, obtaining , using, and disposing of the given marketing offering.

Customer perceived value

Points-of-parity/points-of-difference
Points of difference and points of parity can be utilized in the positioning (marketing) of a brand for competitive advantage via brand/product.

Definitions
Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competing brand i.e. points where you are claiming superiority or exclusiveness over other products in the category. Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared by other brands i.e. where you can at least match the competitors claimed benefits. While POPs may usually not be the reason to choose a brand, their absence can certainly be a reason to drop a brand. While it is important to establish a POD, it is equally important to nullify the competition by matching them on the POP. As a late entrant into the market, many brands look at

making the competitor's POD into a POP for the category and thereby create a leadership position by introducing a new POD.

Customer Value Hierarchy

Customer value hierarchy is a system of worth that businesses across the country, both large and small, have turned to as a means of determining customer satisfaction. Businesses have shifted focus to a customer satisfaction model as a means of winning repeat sales and a measure of loyalty in a market that provides consumers with many purchasing options. Customer value hierarchy provides a rubric for companies to achieve that goal.

Two-part pricing
A two-part tariff is a price discrimination technique in which the price of a product or service is composed of two parts - a lump-sum fee as well as a per-unit charge. In general, price discrimination techniques only occur in partially or fully monopolistic markets. It is designed to enable the firm to capture more consumer surplus than it otherwise would in a non-discriminating pricing environment. Two-part tariffs may also exist in competitive markets when consumers are uncertain about their ultimate demand. Health club consumers, for example, may be uncertain about their level of future commitment to an exercise regime. Depending on the homogeneity of demand, the lump-sum fee charged varies, but the rational firm will set the per unit charge above or equal to the marginal cost of production, and below or equal to the price the firm would charge in a perfect monopoly. Under competition the per-unit price is set below marginal cost.[1] An important element to remember concerning two-part tariffs is that it is still price discrimination, of which an important feature is that the product or service offered by the firm must be identical to all consumers, hence, price charged may vary, but not due to different costs borne by the firm, as this would infer a differentiated product. Thus, while credit cards which charge an annual fee plus a per-transaction fee is a good example of a two-part tariff, a fixed fee charged by a car rental company in addition to a per-kilometre fuel fee is not so good, because the fixed fee may reflect fixed costs such as registration and insurance which the firm must recoup in this manner. This can make the identification of two-part tariffs difficult.

Market Price skimming

Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time. It is a temporal version of price discrimination/yield management. It allows the firm to recover its sunk costs quickly before competition steps in and lowers the market price. Price skimming is sometimes referred to as riding down the demand curve. The objective of a price skimming strategy is to capture the consumer surplus. If this is done successfully, then theoretically no customer will pay less for the product than the maximum they are willing to pay. In practice, it is almost impossible for a firm to capture all of this surplus.

Activity-based costing
Activity-based costing (ABC) is a special costing model that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. This model assigns more indirect costs (overhead) into direct costs compared to conventional costing models.

Everyday low price

Everyday low price ("EDLP") is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shop. EDLP saves retail stores the effort and expense needed to mark down prices in the store during sale events, and to market these events; and is believed to generate shopper loyalty.[1] It was noted in 1994 that the Wal-Mart retail chain in America, which follows an EDLP strategy, would buy "feature advertisements" in newspapers on a monthly basis, while its competitors would advertise 52 weeks per year.[1][2] Procter & Gamble, Wal-Mart, Food Lion, and Winn-Dixie are firms that have implemented or championed EDLP.[2] One 1992 study stated that 26% of American supermarket retailers pursued some form of EDLP, meaning the other 74% were Hi-Lo promotion-oriented operators.[2] One 1994 study of an 86-store supermarket grocery chain in the United States concluded that a 10% EDLP price decrease in a category increased sales volume by 3%, while a 10% Hi-Lo price increase led to a 3% sales decrease; but that because consumer demand at the supermarket did not respond much to changes in everyday price, an EDLP policy reduced profits by 18%, while Hi-Lo pricing increased profits by 15%.[2]

High-low pricing
High-low pricing (or hi-low pricing) is a type of pricing strategy adopted by companies, usually small and medium sized retail firms. It is a type of pricing where a firm charges a high price for an item and later sell it to customers by giving discounts or through clearance sales. The basic type of customers for the firms adopting high-low price will not have a clear idea about what a product's price would typically be or must have a strong belief that "discount sales = low price" or they must have strong preference in purchasing the products sold in this type or by this certain firm.[1] There are many big firms using this type of pricing strategy (ex: Reebok, Nike, Adidas). The way competition prevails in the shoe industry is through high-low price. Also highlow pricing is extensively used in the fashion industry by companies (ex: Macy's, Nordstrom...)) This pricing strategy is not only in the shoe industry but also in many other industries. But, in these industries one or two firms will not provide discounts and works on fixed rate of earnings those firms will follow everyday low price strategy in order to compete in the market.

Auction type pricing

One of the types of pricing methods, which is growing in popularity in recent years especially with the growth of Internet. A large number of electronic market places are selling a diverse range of products and services by auctioning them though bidding process. One major use of auction is to dispose excess inventories or used books. There are three major types and each has its own separate pricing procedures. These types are: ascending bids, (English auctions) descending bids (Dutch auctions), and sealed bid auctions.

Geographical pricing
Geographical pricing, in marketing, is the practice of modifying a basic list price based on the geographical location of the buyer. It is intended to reflect the costs of shipping to different locations. There are several types of geographic pricing:

FOB origin (Free on Board origin) - The shipping cost from the factory or warehouse is paid by the purchaser. Ownership of the goods is transferred to the buyer as soon as it leaves the point of origin. It can be either the buyer or seller that arranges for the transportation. Uniform delivery pricing - (also called postage stamp pricing) - The same price is charged to all. Zone pricing - Prices increase as shipping distances increase. This is sometimes done by drawing concentric circles on a map with the plant or warehouse at the center and each circle defining the boundary of a price zone. Instead of using

circles, irregularly shaped price boundaries can be drawn that reflect geography, population density, transportation infrastructure, and shipping cost. (The term "zone pricing" can also refer to the practice of setting prices that reflect local competitive conditions, i.e., the market forces of supply and demand, rather than actual cost of transportation.)[citation needed] Zone pricing, as practiced in the gasoline industry in the United States, is the pricing of gasoline based on a complex and secret weighting of factors, such as the number of competing stations, number of vehicles, average traffic flow, population density, and geographic characteristics. This can result in two branded gas stations only a few miles apart selling gasoline at a price differential of as much as $0.50 per gallon.[dubious discuss] Many businesspeople and economists state that gasoline zone pricing merely reflects the costs of doing business in a complex and volatile marketplace. Critics contend that industry monopoly and the ability to control not only industry-owned "corporate" stations, but locally owned or franchise stations, make zone pricing into an excuse to raise gasoline prices virtually at will. Oil industry representatives contend that while they set wholesale and dealer tank wagon prices, individual dealers are free to see whatever prices they wish and that this practice in itself causes widespread price variations outside industry control.[citation
needed]

Basing point pricing - Certain cities are designated as basing points. All goods shipped from a given basis point are charged the same amount. Freight-absorption pricing - The seller absorbs all or part of the cost of transportation. This amounts to a price discount, and is used as a promotional tactic.

Promotional Pricing
Promotional pricing is a sales and marketing technique. It involves reducing the price of a product or service to attract customers. This technique can be effectively used across numerous industries including food services, cosmetics, and household cleaning supplies. Promotional pricing often involves reducing prices to unsustainably low levels. In some cases, products and services may be sold at or below cost. A buy one get one free scheme may even be used. When this is done, interest in goods can be greatly increased, meaning sales are also likely to increase dramatically. This technique may be used by retailers or by producers. When it is used by retailers, the goal is generally to attract attention to the business and to attract regular customers. When the technique is used by producers, the goal is generally to attract customers to a product or brand and to encourage brand loyalty.

For example, a clothing store may offer clothing at prices that are below the manufacturers suggested retail price. Shoppers, attracted by the low prices, are likely to remember that store and visit again when they have apparel needs. A cosmetic company may offer two compacts of eye shadow for the price of one. When women need eye shadow again, it is hoped they will be motivated to buy that brand again.

Product Mix
The product mix of a company, which is generally defined as the total composite of products offered by a particular organization, consists of both product lines and individual products. A product line is a group of products within the product mix that are closely related, either because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. A product is a distinct unit within the product line that is distinguishable by size, price, appearance, or some other attribute. For example, all the courses a university offers constitute its product mix; courses in the marketing department constitute a product line; and the basic marketing course is a product item. Product decisions at these three levels are generally of two types: those that involve width (variety) and depth (assortment) of the product line and those that involve changes in the product mix occur over time. The depth (assortment) of the product mix refers to the number of product items offered within each line; the width (variety) refers to the number of product lines a company carries.

Target costing
Target costing is a pricing method used by firms. It is defined as "a cost management tool for reducing the overall cost of a product over its entire life-cycle with the help of production, engineering, research and design". A target cost is the maximum amount of cost that can be incurred on a product and with it the firm can still earn the required profit margin from that product at a particular selling price. In the traditional cost-plus pricing method materials, labor and overhead costs are measured and a desired profit is added to determine the selling price. Target costing involves setting a target cost by subtracting a desired profit margin from a competitive market price.[1][2] A lengthy but complete definition is "Target Costing is a disciplined process for determining and achieving a full-stream cost at which a proposed product with specified functionality, performance, and quality must be produced in order to generate the desired profitability at the products anticipated selling price over a specified period of time in the future." [3]

This definition encompasses the principal concepts: products should be based on an accurate assessment of the wants and needs of customers in different market segments, and cost targets should be what result after a sustainable profit margin is subtracted from what customers are willing to pay at the time of product introduction and afterwards. These concepts are supported by the four basic steps of Target Costing: (1) Define the Product (2) Set the Price and Cost Targets (3) Achieve the Targets (4) Maintain Competitive Costs. To compete effectively, organizations must continually redesign their products (or services) in order to shorten product life cycles. The planning, development and design stage of a product is therefore critical to an organization's cost management process. Considering possible cost reduction at this stage of a product's life cycle (rather than during the production process) is now one of the most important issues facing management accountants in industry. Here are some examples of decisions made at the design stage which impact on the cost of a product. 1. The number of different components 2. Whether the components are standard or not 3. The ease of changing over tools Japanese companies have developed target costing as a response to the problem of controlling and reducing costs over the product life cycle.

Advertising
Advertising is a form of communication used to encourage or persuade an audience (viewers, readers or listeners) to continue or take some new action. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common. The purpose of advertising may also be to reassure employees or shareholders that a company is viable or successful. Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new media such as websites and text messages. Commercial advertisers often seek to generate increased consumption of their products or services through "Branding," which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers. Noncommercial advertisers who spend money to advertise items other than a consumer product or service include political parties, interest groups, religious organizations and

governmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service announcement (PSA). Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries. In 2010, spending on advertising was estimated at more than $300 billion in the United States[1] and $500 billion worldwide[citation needed]. Internationally, the largest ("big four") advertising conglomerates are Interpublic, Omnicom, Publicis, and WPP.[citation needed]